PRA GROUP INC
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
PRAA$12.92-36.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001185348-25-000043
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001185348-26-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 207 previous paragraphs and 192 current paragraphs.
72 unchanged; 49 reworded; 70 added; 76 removed; 10 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (70)
Current report
•a deterioration in general business and economic conditions, including from the ongoing geopolitical conflict and instability in the Middle East;
Current report
•our reliance on internally developed models and the underlying data used in those models;
Current report
•changes in the regulatory environment for legal collections or our ability to effectively collect on legal recovery and post-judgment processes;
Current report
•our ability to effectively manage change associated with ongoing enhancements to our key operational systems and processes;
Current report
•our ability to execute our long-term (PRA 3.0) strategy effectively, including the targets related to improving our financial results;
Current report
•further impairment of goodwill;
Current report
We are a global leader in acquiring and collecting nonperforming loans. Most of our purchases are from credit originators who have chosen not to pursue, or have been unsuccessful in collecting, the full balance owed to them ("Core" accounts). To a lesser extent, we also purchase loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts). As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S.
Current report
Our operations are organized on a geographic basis, and we have two reportable segments comprised of our U.S. and European businesses. On a significantly smaller scale, we also operate in South America, Canada and Australia. Subject to globally-established parameters for capital allocation, portfolio return thresholds and leverage, each market functions under a similar debt management business model, which is predicated on purchasing nonperforming loans and generating returns through disciplined collection strategies over extended collection periods.
Current report
For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of our 2025 Form 10-K and Note 13.
Current report
First quarter business trends and results
Current report
During the first quarter of 2026, we continued to gain momentum in improving our U.S. business and benefited from the strength of our European business, executing on our near-term priorities and long-term PRA 3.0 strategy. Our results for the first quarter of 2026 included the following:
Current report
•Net income attributable to PRA Group, Inc. of $28.2 million, an increase of $24.6 million compared to the prior year period.
Current report
•Adjusted EBITDA of $1.3 billion for the last 12 months, an increase of 13.9% compared to the prior 12 month period ("Adjusted EBITDA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).
Current report
•Continued geographic diversification, with the U.S. and Europe accounting for 42.7% and 50.7%, respectively, of total ERC of $8.5 billion as of March 31, 2026.
Current report
•A diversified capital structure, consistent with our targeted leverage and liquidity objectives. In April 2026, we refinanced our European revolving credit facility for an additional five years with no change to the commitment levels or funding costs (refer to Note 15 for additional details).
Current report
Market environment
Current report
We expect portfolio supply to remain relatively stable in the U.S. and Europe over the next 12 to 18 months. We observed stability in our customers' payment activity in the U.S. and Europe during the first quarter of 2026, and we continue to monitor the ongoing geopolitical conflict and instability in the Middle East, and in particular, how it has led to elevated energy costs and gas prices.
Current report
SELECTED CONSOLIDATED FINANCIAL DATA
Current report
Consolidated and business segment results
Current report
Portfolio purchases were as follows (in thousands, except percentages):
Current report
(1)Reflects portfolio purchases in South America, Canada and Australia.
Current report
We use a global investment framework to optimize the deployment of capital across our markets with a focus on net returns. Our total portfolio purchases in Q1 2026 decreased by $70.9 million, or 24.3%, compared to Q1 2025. Total purchases of $220.9 million in Q1 2026 were in-line with our expectations for the quarter, and the PPM for our global Core vintage was 1.96x, slightly lower than the 2.01x for Q1 2025. PPMs can vary due to factors contributing to the cost to collect, including the loan type and age, geography and collections strategy, in addition to competitive and market dynamics. Our focus continued to be on net returns, which considers the amount and timing of the projected cash collections, estimated costs to collect, funding costs, risk and agreement terms.
Current report
•U.S.: Portfolio purchases decreased by $42.5 million as we remained disciplined in our purchasing and long-term approach focused on net returns. As of March 31, 2026, the PPM for our 2026 U.S. Core vintage was 2.02x, reflecting a 7% decrease compared to Q1 2025 due to purchases of a higher percentage of portfolios with lower costs to collect.
Current report
•Europe: Portfolio purchases decreased by $21.7 million reflecting the occurrence of a large spot purchase in Q1 2025 and continued purchasing discipline in Q1 2026. As of March 31, 2026, the PPM for our 2026 European Core vintage was 1.85x, reflecting a 6% increase compared to Q1 2025.
Current report
Cash collections were as follows (in thousands, except percentages):
Current report
(1)Reflects cash collections in South America, Canada and Australia.
Current report
Our total cash collections in Q1 2026 increased by $54.5 million, or 11.0%, compared to Q1 2025. Total collections of $551.9 million in Q1 2026 exceeded our expectations for the quarter.
Current report
•U.S.: Cash collections increased by $27.5 million driven by a $29.8 million increase in legal collections due primarily to an expansion in activity associated with our operational initiatives.
Current report
•Europe: Cash collections increased by $27.0 million due to the performance in several markets and in part, to favorable foreign exchange rate variation.
Current report
Total portfolio revenue was as follows (in thousands, except percentages):
Current report
(1)Reflects portfolio revenue in South America, Canada and Australia.
Current report
Our total portfolio revenue in Q1 2026 increased by $44.6 million, or 16.6%, compared to Q1 2025. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 11.9%.
Current report
•U.S.: Portfolio revenue increased by $20.2 million due to increases of $11.1 million in Portfolio income and $9.1 million in Changes in expected recoveries. The increase in Portfolio income was driven largely by higher recent purchasing and improved pricing on the 2025 Core vintage. The increase in Changes in expected recoveries was due to net cash collections overperformance in Q1 2026, driven primarily by the 2024 Core pool, compared to net underperformance in Q1 2025, driven by the 2019-2023 Core pools. This increase was partially offset by a lower net increase in the collections forecasts on certain Core pools compared to Q1 2025 and the impact of changes in the expected timing of collections on certain Core pools in Q1 2026.
Current report
•Europe: Portfolio revenue increased by $25.4 million due to increases of $14.1 million in Portfolio income and $11.3 million in Changes in expected recoveries, which were distributed across multiple pools. The increase in Portfolio income was driven by higher purchasing and favorable foreign exchange rate variation. The increase in Changes in expected recoveries was due primarily to a higher net increase in the collections forecasts on certain Core pools in Q1 2026.
Current report
(1)Reflects operating expenses in South America, Canada and Australia.
Current report
(6)Mainly IT-related costs and subscriptions, other taxes and fees.
Current report
Our Total operating expenses increased by $16.2 million, or 8.3%, compared to Q1 2025.
Current report
•U.S.: Operating expenses increased by $7.4 million due primarily to an increase in Legal collection costs associated with the expansion in activity in our legal collections channel, partially offset by a decrease in Compensation and benefits driven by continued rationalization of our U.S. call centers, increased use of external collectors, including offshore service providers, and the impact of our corporate headcount reduction in 2025.
Current report
•Europe: Operating expenses increased by $7.4 million due primarily to an increase in Compensation and benefits associated with organizational changes and higher non-collector wage costs, and to a lesser extent, an increase in Other operating expenses.
Current report
•Other markets: An increase in Agency fees of $3.2 million was due primarily to higher collection fees in South America.
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Removed paragraphs (76)
Previous report
•volatility and uncertainty in general business and economic conditions or financial markets, including the impact of tariffs and tariff speculation on our customers;
Previous report
•our ability to achieve the expected benefits of offshoring a portion of our collection and related support activities;
Previous report
•changes in accounting standards and their interpretations;
Previous report
•the occurrence of goodwill impairment charges;
Previous report
•loss contingency accruals that are inadequate to cover actual losses;
Previous report
•changes in tax provisions or exposure to additional tax liabilities;
Previous report
•adverse outcomes in pending litigation or administrative proceedings;
Previous report
General
Previous report
We are a global financial services company with operations in the Americas, Europe and Australia. Our primary business is the purchase, collection and management of portfolios of nonperforming loans. We also purchase and provide fee-based services for class action claims recoveries in the U.S.
Previous report
The nonperforming loans we acquire are primarily the unpaid obligations of individuals owed to credit originators. Our Core operation specializes in purchasing and collecting nonperforming loans, which are sold by credit originators when they choose not to pursue, or have been unsuccessful in, collecting the full balance owed. Our Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy or similar proceeding.
Previous report
With 2,814 full-time equivalent employees worldwide, we collaborate with customers to help them resolve their debt. For additional information about our business, refer to Part I, Item 1 "Business" in our 2024 10-K.
Previous report
Third quarter of 2025
Previous report
Our focus for the third quarter of 2025 was on executing and delivering against our near-term priorities, which, for the U.S. business, included the reorganization of our leadership and governance structure, establishing a talent hub in Charlotte, North Carolina, and bringing our corporate and support staff back to the office. We strengthened our capital structure through the issuance of €300.0 million aggregate principal amount of senior notes due 2032 ("2032 senior notes"), our first bond offering in Europe. We also made progress on our information technology roadmap and capitalized on an opportunity to increase the ERC on certain portfolios by modifying an existing contract, and shortly after quarter-end, we implemented a cost reduction program in the U.S.
Previous report
Due to a sustained decrease in our stock price and market capitalization, we performed an interim goodwill impairment test during the third quarter and determined that the goodwill in our Debt Buying and Collection ("DBC") reporting unit was fully impaired, which resulted in a non-cash impairment charge of $412.6 million.
Previous report
Overall, we remain focused on executing our strategy and continuing to improve the financial performance of our business. Our financial results for the quarter included the following:
Previous report
SUMMARY OF SELECTED FINANCIAL DATA
Previous report
(3)Calculated by dividing cash receipts less Total operating expenses excluding the impact of Goodwill impairment ("Adjusted operating expenses") by cash receipts ("Adjusted cash efficiency ratio"). Adjusted operating expenses is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total operating expenses, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted operating expenses.
Previous report
Portfolio purchases were as follows for the periods indicated (in thousands):
Previous report
Our portfolio purchases reflect a global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of the opportunities in our markets.
Previous report
Total portfolio purchases were $255.5 million in Q3 2025, a decrease of $94.5 million, or 27.0%, compared to $350.0 million in Q3 2024. Americas and Australia portfolio purchases decreased $119.5 million, while purchases in Europe increased $25.0 million. Q3 2025 purchases reflected a heightened focus on prioritizing net returns over volumes purchased and balancing purchases with our leverage.
Previous report
Total year-to-date portfolio purchases were $893.7 million in 2025, a decrease of $81.5 million, or 8.4%, compared to $975.2 million in 2024. Americas and Australia purchases decreased $163.9 million, while purchases in Europe increased $82.5 million.
Previous report
Cash collections were as follows for the periods indicated (in thousands):
Previous report
Total cash collections were $542.2 million in Q3 2025, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024. U.S. Core collections increased $44.7 million, which included a $26.4 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $27.7 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange variation. These increases were partially offset by a $4.3 million decrease in cash collections in South America, due primarily to lower recent purchasing levels.
Previous report
Total year-to-date cash collections were $1.6 billion in 2025, an increase of $175.5 million, or 12.5%, compared to $1.4 billion in 2024. U.S. Core collections increased $125.2 million, which included a $77.0 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $75.0 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange rate variation. These increases were partially offset by a $19.2 million decrease in cash collections in South America, due primarily to lower recent purchasing levels and unfavorable foreign exchange rate variation.
Previous report
Portfolio revenue was as follows for the periods indicated (in thousands):
Previous report
Total portfolio revenue was $309.9 million in Q3 2025, an increase of $33.2 million, or 12.0%, compared to $276.7 million in Q3 2024. Portfolio income increased $42.4 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $9.3 million, or 15.3%. Recoveries collected in excess of forecast decreased $6.8 million due largely to a one-time payment of $15.0 million to a seller in Q3 2025 to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our South American pools. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $2.4 million due primarily to a lower net increase in the collections forecasts on certain U.S. Core pools. These decreases were partially offset by a net increase in the collections forecasts on our South American pools in Q3 2025 compared to a net decrease in Q3 2024.
Previous report
Total year-to-date portfolio revenue was $863.0 million in 2025, an increase of $49.9 million, or 6.1%, compared to $813.1 million in 2024. Portfolio income increased $123.0 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $73.0 million. Recoveries collected in excess of forecast decreased $40.1 million compared to the prior year period due primarily to lower overperformance on our U.S. pools and the one-time payment of $15.0 million to a seller in the current year period to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our European pools across most of our markets. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $32.9 million due largely to a net decrease in the collections forecast on our U.S. Core pools compared to a net increase in the prior year period. These decreases were partially offset by a higher net increase in the collections forecast on our European pools and a net increase in the collections forecasts on our South American pools compared to a net decrease in the prior year period.
Previous report
In April 2025, we sold our 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, and recorded a gain of $38.4 million in our Consolidated Financial Statements for the second quarter of 2025. The sale did not impact the ownership of our portfolio investments in Brazil or our existing operations and expected future portfolio investments.
Previous report
Compensation and benefits
Previous report
Compensation and benefits expense was $74.2 million in Q3 2025, a decrease of $1.9 million, or 2.5%, compared to Q3 2024, while the year-to-date expense decreased $0.7 million, or 0.3%. These decreases were primarily due to lower collector compensation costs in the U.S., driven by the consolidation of our U.S. call centers and offshoring of a portion of our U.S. collection activities, partially offset by higher non-collector wage costs.
Previous report
Legal collection costs
Previous report
Legal collection fees
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Agency fees
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Communication
Previous report
Goodwill impairment
Previous report
We recorded a goodwill impairment charge of $412.6 million in Q3 2025 related to our DBC reporting unit. For additional information, refer to Note 4 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Previous report
Interest expense, net was $64.1 million in Q3 2025, an increase of $3.0 million, or 5.0%, compared to Q3 2024, while year-to-date expense increased $18.7 million, or 11.1%. These increases were primarily due to higher average debt balances.
Previous report
Income tax expense/(benefit)
Previous report
Income tax expense was $24.4 million in Q3 2025, an increase of $25.0 million compared to an income tax benefit of $0.7 million in Q3 2024, while year-to-date expense increased $33.7 million to $44.1 million. The effective tax rate in Q3 2025 was (6.4)% compared to an effective tax benefit rate of (2.4)% in Q3 2024. Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The change in the effective tax rate for both the quarterly and year-to-date periods was due largely to the goodwill impairment charge in the current year and a $7.7 million prior year reduction in tax expense due to the reversal of a valuation allowance associated with the resolution of a tax matter in Europe.
Previous report
Balance sheet
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Reworded paragraphs (49)
Previous wording
This Quarterly Report should be read in conjunction with our Form 10-K for the year ended December 31, 2024 ("2024 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report.
Current wording
All references in this Quarterly Report on Form 10-Q ("Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries. This Quarterly Report should be read in conjunction with our Form 10-K for the year ended December 31, 2025 ("2025 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report. Except as specifically noted, all references to "Notes" in this Item 2 are to Notes to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Previous wording
•our ability to collect sufficient amounts on our nonperforming loans to fund our operations;
Current wording
•our ability to collect sufficient amounts on our nonperforming loans to recover our costs and fund our operations;
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•a disruption or failure by any of our outsourcing, offshoring or other third-party service providers to meet their obligations and our service level expectations;
Current wording
•a disruption or failure by any of our third-party service providers, or the vendors on whom they may depend, to meet their obligations and our service level expectations, or an ability to contract alternative providers;
Previous wording
•our ability to successfully implement our cash-generating and cost savings initiatives in our United States ("U.S.") business;
Current wording
•our ability to realize the expected benefits from our cash-generating and cost savings initiatives in our United States ("U.S.") business;
Previous wording
•disruptions of business operations caused by cybersecurity incidents or the failure of information technology infrastructure, networks or communication systems;
Current wording
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;
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•our ability to effectively utilize artificial intelligence ("AI");
Current wording
•our ability to effectively utilize artificial intelligence ("AI") and machine learning technologies and to adequately safeguard our systems against AI-driven threats;
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•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws;
Current wording
•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws that limit our ability to collect on our nonperforming loans;
Previous wording
•our ability to comply with existing and new regulations in the collections industry;
Current wording
•our ability to comply with existing and new regulations of the collection industry;
Previous wording
•the "Risk Factors" in Item 1A of our 2024 Form 10-K and our other filings with the Securities and Exchange Commission.
Current wording
•the "Risk Factors" in Item 1A of our 2025 Form 10-K and our other filings with the U.S. Securities and Exchange Commission ("SEC").
Previous wording
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. The future events, developments or results described in, or implied by, this Quarterly Report could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.
Current wording
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was filed with the SEC. Our business, financial condition, results of operations and prospects may have changed since that date. The future events, developments or results described in, or implied by, this Quarterly Report could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.
Previous wording
(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Net (loss)/income attributable to PRA Group, Inc. excluding the impact of certain transactions that are either unusual or infrequent in nature, or both ("Adjusted net income attributable to PRA Group, Inc.").
Current wording
(1)Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations ("Adjusted net income attributable to PRA"), is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Previous wording
(1)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA.
Current wording
(2)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Previous wording
(2)Calculated by dividing cash receipts less operating expenses by cash receipts.
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(3)Calculated by dividing cash receipts less operating expenses by cash receipts.
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(4)Calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.
Current wording
(4)ROE is calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc.
Previous wording
(5)ROATE is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total stockholders' equity - PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity.
Current wording
(5)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income attributable to PRA Group, Inc. by Average tangible equity ("Average tangible equity"), which is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
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Three months ended September 30, 2025 ("Third Quarter 2025" or "Q3 2025") compared to three months ended September 30, 2024 ("Third Quarter 2024" or "Q3 2024"); and nine months ended September 30, 2025 ("Year-to-Date 2025") compared to nine months ended September 30, 2024 ("Year-to-Date 2024").
Current wording
Three months ended March 31, 2026 ("First Quarter 2026" or "Q1 2026") compared to three months ended March 31, 2025 ("First Quarter 2025" or "Q1 2025").
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Operating expenses were as follows for the periods indicated (in thousands):
Current wording
Operating expenses were as follows (in thousands, except percentages):
Previous wording
Legal collection costs consist primarily of costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account. Q3 2025 legal collection costs increased $18.0 million, or 62.5%, compared to Q3 2024, while the year-to-date costs increased $27.0 million, or 29.7%. These increases were driven by an expansion in activity in our U.S. legal collections channel resulting, in large part, from our cash generating initiatives.
Current wording
(2)Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.
Previous wording
Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q3 2025 fees increased $2.1 million, or 14.4%, compared to Q3 2024, while year-to-date fees increased $7.1 million, or 17.5%. These increases mainly reflected higher external legal collections within our U.S. Core portfolio resulting, in large part, from the expansion in activity in our U.S. legal collections channel.
Current wording
(3)Contingent fees incurred for cash collections generated by our third-party attorney network.
Previous wording
Agency fees primarily represent third-party collection fees. Q3 2025 fees increased $3.5 million, or 16.8%, compared to Q3 2024, while year-to-date fees increased $6.9 million, or 11.1%. Higher collection fees in Brazil and increased outsourcing in certain European markets drove the increase for the quarterly period. The increase for the year-to-date period was primarily due to additional fees paid to debt collection agencies in the U.S. and increased outsourcing in Europe.
Current wording
(4)Mainly third-party collection fees.
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Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q3 2025 communication expense decreased $1.7 million, or 16.6%, compared to Q3 2024, while year-to-date expense decreased $5.9 million, or 17.3%. These decreases were primarily due to a mix of lower-cost communications strategies utilized across our U.S. Core operation.
Current wording
(5)Mainly correspondence, network and calling costs associated with our collection efforts.
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Interest expense, net was as follows for the periods indicated (in thousands):
Current wording
Interest expense, net was as follows (in thousands, except percentages):
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Income tax expense/(benefit) and our effective tax rate were as follows for the periods indicated (in thousands):
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Income tax expense and our effective tax rate were as follows (in thousands, except percentages):
Previous wording
We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management also uses certain non-GAAP financial measures, including:
Current wording
We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management also uses certain non-GAAP financial measures, including the non-GAAP financial measures referred to below, internally to evaluate our performance and set performance goals. Also included below are reconciliations of the most directly comparable financial measures calculated in accordance with GAAP to the corresponding non-GAAP financial measure. These non-GAAP financial measures should not be considered as an alternative to the most directly comparable financial measure determined in accordance with GAAP and may not be comparable to the calculation of similarly titled financial measures reported by other companies.
Previous wording
Gain on sale of equity method investment
Current wording
Adjusted EBITDA is calculated as Net income/(loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense; plus depreciation and amortization; plus impairment of real estate; plus goodwill impairment; plus net income attributable to noncontrolling interests; less gain on sale of equity method investment; and plus recoveries collected and applied to Finance receivables, net less Changes in expected recoveries. The following table provides a reconciliation of Net loss attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):
Previous wording
Return on average tangible equity and adjusted return on average tangible equity
Previous wording
The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity and a reconciliation of Net (loss)/income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and presents our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):
Current wording
ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity, which is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to Average tangible equity and presents our ROE and ROATE for the periods indicated (in thousands, except for ratio data):
Previous wording
•ERC by geography, portfolio type and expected year of collection;
Current wording
•ERC by business segment and expected year of collection; and
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•nonperforming loan portfolios and collections by geography, portfolio type and year of purchase.
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•nonperforming loan portfolios and collections by business segment, portfolio type and year of purchase.
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The following table displays our ERC by geography, year and portfolio for the 12 months ending September 30, (in thousands):
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The following table displays our ERC by year as of March 31, 2026 (in thousands):
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(2)Reflects ERC of $1.64 billion for the UK, $1.06 billion for Central Europe, $964.5 million for Northern Europe and $567.7 million for Southern Europe.
Current wording
(1)Reflects ERC of $1.7 billion for the UK, $1.1 billion for Central Europe, $1.0 billion for Northern Europe and $564.6 million for Southern Europe.
Previous wording
(2)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the period-end exchange rate for the respective year of purchase.
Current wording
(2)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.
Previous wording
(2)Non-U.S. amounts are presented using the average exchange rates during the current reporting period.
Current wording
(2)Non-U.S. amounts are presented using the average exchange rates during the current period.
Previous wording
(3)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective period of purchase.
Current wording
(3)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.
Previous wording
As of September 30, 2025, cash and cash equivalents totaled $107.5 million, of which $96.3 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements in the 2024 Form 10-K.
Current wording
As of March 31, 2026, cash and cash equivalents totaled $124.8 million, of which $113.7 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 14 to our Consolidated Financial Statements in the 2025 Form 10-K.
Previous wording
As of September 30, 2025, interest-bearing deposits totaled $139.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.9 million in U.S. dollars as of September 30, 2025).
Current wording
As of March 31, 2026, interest-bearing deposits totaled $78.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($232.6 million as of March 31, 2026).
Previous wording
Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock or senior notes in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.
Current wording
Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.
Previous wording
As of September 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $297.8 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $235.4 million for the Americas and Australia and $62.4 million for Europe. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly. In addition to these agreements, we may also enter into new or renewed forward flow commitments and/or make spot purchases of nonperforming loan portfolios.
Current wording
As of March 31, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $321.8 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $172.6 million in Europe, $132.2 million in the U.S. and $17.0 million in our other markets. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly.
Previous wording
As of September 30, 2025, we had $3.6 billion in outstanding borr owings. The estimated interest, unused fees and principal payments for the next 12 months are $249.8 million. After 12 months, principal payments on our debt are due from between one and seven years. Our financing arrangements include covenants with which we must comply, and as of September 30, 2025, we were in compliance with these covenants. On September 30, 2025, we completed the private offering of our 2032 senior notes.
Current wording
As of March 31, 2026, we had $3.8 billion in outstanding borr owings. Our estimated interest, unused fees and principal payments for the next 12 months are $251.0 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of March 31, 2026, principal payments on our borrowings have maturity dates ranging from November 2027 through September 2032. Our financing arrangements include covenants with which we must comply, and as of March 31, 2026, we were in compliance with these covenants. For additional information about our borrowings, refer to Note 5.
Previous wording
Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. There were no repurchases during the third quarter of 2025, and as of September 30, 2025, we had $57.7 million remaining for share repurchases under the program, subject to the restrictive covenants discussed above.
Current wording
Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. During the first quarter of 2026, we repurchased 546,681 shares of our common stock at an average price of $18.29 for a total of $10.0 million. As of March 31, 2026, we had $37.7 million remaining for share repurchases under the program, subject to the restrictive covenants mentioned above.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Adjusted net income attributable to PRA
Rearranged previous paragraphs (10)
Previous report — wording carried elsewhere
All references in this Quarterly Report on Form 10-Q ("Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries.
Previous report — wording carried elsewhere
Total stockholders' equity - PRA Group, Inc.
Previous report — wording carried elsewhere
•Adjusted EBITDA, to evaluate our performance and to set performance goals;
Previous report — wording carried elsewhere
•income tax expense (or less income tax benefit);
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•foreign exchange loss (or less foreign exchange gain);
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•net income attributable to noncontrolling interests;
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•gain on sale of equity method investment; and
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•recoveries collected and applied to Finance receivables, net less Changes in expected recoveries.
Previous report — wording carried elsewhere
The following table provides a reconciliation of Net (loss)/income attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):
Previous report — wording carried elsewhere
For additional information about our borrowings, refer to Note 5 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.