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Revenues
 9 Months Ended
Sep. 30, 2024
Revenues [Abstract]  
Revenues Revenues
The following tables disaggregate our revenue for the periods ended September 30, 2024 and 2023:
 Three Months Ended September 30, 2024
 Acima
Rent-A-Center
MexicoFranchisingConsolidated
(in thousands)
Rentals and fees$442,463 $417,327 $18,041 $— $877,831 
Merchandise sales123,299 26,707 746 — 150,752 
Installment sales— 14,416 — — 14,416 
Franchise merchandise sales— — — 18,195 18,195 
Royalty income and fees— — — 5,863 5,863 
Other421 293 243 845 1,802 
Total revenues$566,183 $458,743 $19,030 $24,903 $1,068,859 
 Nine Months Ended September 30, 2024
 Acima
Rent-A-Center
MexicoFranchisingConsolidated
(in thousands)
Rentals and fees$1,301,874 $1,277,477 $56,996 $— $2,636,347 
Merchandise sales377,389 96,701 2,600 — 476,690 
Installment sales— 44,333 — — 44,333 
Franchise merchandise sales— — — 60,136 60,136 
Royalty income and fees— — — 18,539 18,539 
Other1,060 888 869 2,474 5,291 
Total revenues$1,680,323 $1,419,399 $60,465 $81,149 $3,241,336 
 Three Months Ended September 30, 2023
 Acima
Rent-A-Center
MexicoFranchisingConsolidated
(in thousands)
Rentals and fees$375,202 $413,051 $18,513 $— $806,766 
Merchandise sales99,857 26,819 888 — 127,564 
Installment sales— 13,444 — — 13,444 
Franchise merchandise sales— — — 24,082 24,082 
Royalty income and fees— — — 5,813 5,813 
Other157 318 241 713 1,429 
Total revenues$475,216 $453,632 $19,642 $30,608 $979,098 
 Nine Months Ended September 30, 2023
 Acima
Rent-A-Center
MexicoFranchisingConsolidated
(in thousands)
Rentals and fees$1,107,943 $1,260,745 $52,351 $— $2,421,039 
Merchandise sales314,741 97,905 2,610 — 415,256 
Installment sales— 45,191 — — 45,191 
Franchise merchandise sales— — — 69,778 69,778 
Royalty income and fees— — — 18,636 18,636 
Other737 990 565 2,130 4,422 
Total revenues$1,423,421 $1,404,831 $55,526 $90,544 $2,974,322 
Lease Purchase Agreements
Rentals and Fees. Rental merchandise is leased to customers pursuant to lease-to-own agreements, which provide for weekly, bi-weekly, semi-monthly or monthly terms with non-refundable lease payments. At the expiration of each lease term, customers may renew the lease-to-own agreement for the next lease term. The customer has the right to acquire title of the merchandise either through an early purchase option or through payment of all optional lease renewal terms. Customers can terminate the lease-to-own agreement and return the product at the end of any lease term without penalty. Therefore, lease-to-own agreements are accounted for as operating leases.
Lease payments received at our Rent-A-Center stores, certain Acima locations formerly operating under the Acceptance Now brand, and Mexico stores must be prepaid in advance of the next lease renewal term. Under the Acima Holdings business model, in certain cases revenues may be earned prior to the lease payment due date, in which case revenue is accrued prior to receipt of the lease payment, net of estimated returns and uncollectible renewal payments. Under both models, rental revenue is recognized over the lease term. See Note 4 for additional information regarding accrued lease revenue.
Cash received for rental payments, including fees, prior to the period in which it should be recognized, is deferred and recognized according to the lease term. At September 30, 2024 and December 31, 2023, we had $62.7 million and $68.6 million, respectively, in deferred revenue included in accrued liabilities related to our lease-to-own agreements. Revenue related to various payment, reinstatement or late fees is recognized when paid by the customer at the point service is provided. Rental merchandise in our Rent-A-Center stores, certain Acima locations formerly operating under the Acceptance Now brand, and Mexico stores is depreciated using the income forecasting method and recognized in cost of rentals and fees in our Condensed Consolidated Statements of Operations over the lease term. Lease merchandise under Acima Holdings is depreciated over the lease term using a straight-line depreciation method. Under the income forecasting method, the consumption of lease merchandise occurs during periods of rental and depreciation directly coincides with the receipt of rental revenue over the lease-to-own contract period. Depreciation under the straight-line method is recognized each period over the term of the lease-to-own contract irrespective of receipt of revenue payments from the customer.
We also offer additional optional product plans along with our lease-to-own agreements which provide customers with liability protection against significant damage or loss of a product, and club membership benefits, including various discount programs and product service and replacement benefits in the event merchandise is damaged or lost, and payment waivers in the event eligible customers become unemployed. Customers renew product plans in conjunction with their lease term renewals, and can cancel the plans at any time. Revenue for product plans is recognized over the term of the plan. Costs incurred related to product plans are primarily recognized in cost of revenues.
Revenue from contracts with customers
Merchandise Sales. Merchandise sales include payments received for the exercise of the early purchase options offered through our lease-to-own agreements or merchandise sold through point-of-sale transactions. Revenue for merchandise sales is recognized when payment is received and ownership of the merchandise passes to the customer. The remaining net value of merchandise sold is recorded to cost of merchandise sold at the time of the transaction.
Installment Sales. Revenue from the sale of merchandise in our retail installment stores is recognized when the installment note is signed and control of the merchandise has passed to the customer. The cost of merchandise sold through installment agreements is recognized in cost of installment sales at the time of the transaction. We offer optional extended service plans with our installment agreements which are administered by third parties and provide customers with product maintenance beyond the term of the installment agreement. Payments received for extended service plans are deferred and recognized, net of
related costs, when the installment payment plan is complete and the service plan goes into effect. Customers can cancel extended service plans at any time during the installment agreement period and receive a refund for payments previously made towards the plan. At September 30, 2024 and December 31, 2023, we had $0.6 million and $1.1 million, respectively, in deferred revenue included in accrued liabilities related to extended service plans.
Franchise Merchandise Sales. Revenue from the sale of rental merchandise is recognized upon shipment of the merchandise to the franchisee.
Royalty Income and Fees. Franchise royalties, including franchisee contributions to corporate advertising funds, represent sales-based royalties calculated as a percentage of gross rental payments and sales. Royalty revenue is accrued and recognized as rental payments and merchandise sales occur. Franchise fees are initial fees charged to franchisees for new or converted franchise stores. Franchise fee revenue is recognized on a straight-line basis over the term of the franchise agreement. At September 30, 2024 and December 31, 2023, we had $2.9 million and $3.0 million, respectively, in deferred revenue included in accrued liabilities related to franchise fees.
Other. Other revenue consists of revenue generated by other miscellaneous product plans offered to our rental and installment customers. Revenue for other product plans is recognized in accordance with the terms of the applicable plan agreement.