PRA GROUP INC

Previous wording

•a deterioration in general business and economic conditions, including from the ongoing geopolitical conflict and instability in the Middle East;

Current wording

•a deterioration in general business and economic conditions, including from ongoing geopolitical conflicts and instability in the Middle East;

Previous wording

First quarter business trends and results

Current wording

Second quarter and year-to-date business trends and results

Previous wording

•Net income attributable to PRA Group, Inc. of $28.2 million, an increase of $24.6 million compared to the prior year period.

Current wording

•Second quarter Net income attributable to PRA Group, Inc. of $57.9 million, an increase of $15.5 million compared to the prior year period.

Previous wording

•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 wording

•Adjusted EBITDA of $1.4 billion for the last 12 months, an increase of 9.6% compared to the prior 12 month period ("Adjusted EBITDA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).

Previous wording

•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 wording

•Maintenance of a diversified capital structure, consistent with our targeted leverage and liquidity objectives. We refinanced our European revolving credit facility in April 2026 for an additional five years and repurchased $10.0 million and $20.0 million shares of our common stock during the second quarter and year-to-date, respectively.

Previous wording

(3)Calculated by dividing cash receipts less operating expenses by cash receipts.

Current wording

(3)Calculated by dividing cash receipts less operating expenses by cash receipts, both of which are determined based on GAAP.

Previous 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.

Current wording

(5)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets ("Average tangible equity"), which is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

Previous 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").

Current wording

Three months ended June 30, 2026 ("Second Quarter 2026" or "Q2 2026") compared to three months ended June 30, 2025 ("Second Quarter 2025" or "Q2 2025"); and six months ended June 30, 2026 ("Year-to-Date 2026") compared to six months ended June 30, 2025 ("Year-to-Date 2025").

Previous wording

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 wording

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 Q2 2026 decreased by $49.9 million, or 14.4%, compared to Q2 2025. Year-to-date 2026 portfolio purchases decreased by $120.8 million, or 18.9%, compared to the prior year period. Total purchases of $296.6 million in Q2 2026 were consistent with our expectations and net return requirements. The Q2 2026 and year-to date 2026 purchase price multiples ("PPMs") for our global Core vintage were 1.99x and 1.98x, respectively. 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 continues 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.

Previous wording

•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 wording

•U.S.: Q2 2026 portfolio purchases decreased by $72.9 million as we remained disciplined in our purchasing and long-term approach focused on net returns. Year-to-date 2026 portfolio purchases decreased by $115.3 million compared to the prior year period. The Q2 2026 PPM for our U.S. Core vintage of 2.16x was an increase compared to the first quarter of 2026. The year-to-date 2026 PPM for our U.S. Core vintage was 2.08x.

Previous wording

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 wording

Our total cash collections in Q2 2026 increased by $22.3 million, or 4.2%, compared to Q2 2025. Year-to-date 2026 cash collections increased by $76.7 million, or 7.4%, compared to the prior year period. Total collections of $558.5 million in Q2 2026 exceeded our expectations for the quarter.

Previous wording

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 wording

Our total portfolio revenue in Q2 2026 increased by $80.5 million, or 28.3%, compared to Q2 2025. Year-to-date 2026 portfolio revenue increased by $125.1 million, or 22.6%, compared to the prior year period. These increases were driven by higher Changes in expected recoveries, which increased by $63.6 million for the quarter and $79.6 million year-to-date, and higher Portfolio income, which increased by $16.9 million for the quarter and $45.5 million year-to-date. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 6.7% for the quarter and 9.2% year-to-date.

Previous wording

•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 wording

•U.S.: Q2 2026 portfolio revenue increased by $9.2 million due to increases of $5.0 million in Portfolio income and $4.2 million in Changes in expected recoveries. The increase in Portfolio income was due primarily to improved pricing. Changes in expected recoveries for Q2 2026 were mainly impacted by decreases in the collections forecasts on the 2022-2025 Core pools. The increase in Changes in expected recoveries was due primarily to a lower net decrease in the collections forecasts for certain U.S. Core pools compared to the prior year period. Net overperformance for Q2 2026 was driven mainly by the 2025 Core pool and net overperformance on the Insolvency pools, partially offset by underperformance on the 2022-2024 Core pools. The decrease in cash collections overperformance was primarily due to lower net overperformance on certain U.S. Core pools compared to the prior year period. Year-to-date 2026 portfolio revenue increased by $29.4 million due to increases of $16.1 million in Portfolio income and $13.3 million in Changes in expected recoveries. The increase in portfolio income was due primarily to improved pricing. The increase in Changes in expected recoveries was due to a lower net decrease in the collections forecasts on certain U.S. Core pools compared to Q2 2025 and net overperformance in Q2 2026 compared to net underperformance in Q2 2025.

Previous wording

•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 wording

•U.S.: Q2 2026 operating expenses increased by $16.7 million due primarily to an increase in Legal collection costs associated with the expansion in activity in our legal collections channel and costs of $4.9 million associated with the reorganization of our U.S. business. The reorganization-related costs consisted of $2.0 million in severance expenses related to a corporate and overhead headcount reduction and $3.0 million in real estate impairment and other expenses related to site consolidation of our onshore owned and leased call centers. These increases were partially offset by a decrease in Compensation and benefits driven by workforce reduction initiatives implemented over the past 12 months and a decrease in Communication costs due to the use of more cost-efficient digital collection strategies. Year-to-date 2026 operating expenses increased by $24.1 million, or 9.3%, due to similar factors.

Previous wording

•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 wording

•Europe: Q2 2026 operating expenses were stable compared to the prior year period. Year-to-date 2026 operating expenses increased by $8.2 million, or 8.8%, driven primarily by increases in Other operating expenses, Legal collection costs and Compensation and benefits expense associated with organizational changes and higher non-collector wage costs.

Previous wording

Foreign exchange gain/(loss), net, includes the remeasurement of our foreign currency transactions and changes in the fair value of foreign exchange forward contracts used to economically hedge a portion of our remeasurement exposure. Foreign exchange gain/(loss), net included the following components (in thousands):

Current wording

Foreign exchange gain/(loss), net, includes the remeasurement of our foreign currency transactions and changes in the fair value of foreign exchange forward contracts used to economically hedge a portion of our remeasurement exposure. Foreign exchange gain/(loss), net included the following components (in thousands, except percentages):

Previous wording

In addition to normal rate fluctuations and ongoing execution of our risk management strategies, our net foreign exchange result may be impacted by elevated volatility in the underlying exchange rates.

Current wording

In addition to normal rate fluctuations and ongoing execution of our risk management strategies, our net foreign exchange result may be impacted by elevated volatility in the underlying exchange rates. For additional information about our foreign exchange forward gains/(losses), refer to Note 6.

Previous wording

Our Income tax expense increased by $4.5 million, or 103.2%, compared to Q1 2025, and the effective tax rate was 21.6% in Q1 2026 compared to 32.2% in Q1 2025. These results were primarily due to our pretax income, the mix of income from different taxing jurisdictions and the timing and amount of discrete items, including the reversal of a $3.2 million tax accrual in Q1 2026.

Current wording

Our Income tax expense increased by $14.0 million, or 90.6%, compared to Q2 2025, and our effective tax rate was 33.3% in Q2 2026 compared to 25.2% in Q2 2025. These results were primarily due to the increase in our pretax income, the mix of income from different taxing jurisdictions and the timing and amount of discrete items. Year-to-date 2026 Income tax expense increased by $18.4 million, or 93.4%, and our year-to-date 2026 effective tax rate was 29.6%, which included the reversal of a $3.2 million tax accrual during the first quarter of 2026.

Previous wording

Adjusted segment operating income increased by $12.8 million and $19.6 million in the U.S. and Europe, respectively, both reflecting an increase in segment revenues partially offset by an increase in segment operating expenses (refer to the above discussions of segment portfolio revenue and operating expenses for additional details).

Current wording

Refer to the above discussions of portfolio revenue and operating expenses for additional information.

Previous wording

Investments were $143.4 million as of March 31, 2026, an increase of $76.7 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB. Our banking subsidiary is part of our European operations, and it expects to continue to operate with higher levels of liquidity moving forward.

Current wording

Investments were $145.5 million as of June 30, 2026, an increase of $78.8 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB. Our banking subsidiary is part of our European operations, and it expects to continue to operate with higher levels of liquidity moving forward.

Previous wording

Finance receivables, net were $4.6 billion as of March 31, 2026, decreasing marginally compared to December 31, 2025. Compared to March 31, 2025, Finance receivables, net increased $328.8 million, or 7.6%, due to portfolio purchases of $1.1 billion, Changes in expected recoveries of $192.4 million and foreign currency translation of $120.3 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net.

Current wording

Finance receivables, net were $4.7 billion as of June 30, 2026, increasing marginally compared to December 31, 2025. Compared to June 30, 2025, Finance receivables, net increased $154.6 million, or 3.4%, due to portfolio purchases of $1.1 billion and Changes in expected recoveries of $256.0 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net, and foreign currency translation of $64.0 million.

Previous wording

Borrowings were $3.8 billion as of March 31, 2026, increasing marginally compared to December 31, 2025. Compared to March 31, 2025, Borrowings increased $313.1 million, or 9.0%, primarily to fund portfolio purchases, and to a lesser extent, the purchases of investments discussed above under Investments.

Current wording

Borrowings were $3.8 billion as of June 30, 2026, an increase of $62.0 million compared to December 31, 2025. Compared to June 30, 2025, Borrowings increased $145.1 million, or 4.0%, primarily to fund portfolio purchases, and to a lesser extent, the purchases of investments.

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 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.

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. We believe these non-GAAP financial measures are useful to investors in evaluating our performance and operational effectiveness and provide for greater comparability. 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. Included below are reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

Previous 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):

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. to Adjusted EBITDA for the periods indicated (in thousands):

Previous wording

Adjusted net income attributable to PRA is defined as 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. The following table provides a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income attributable to PRA for the periods indicated (in thousands):

Current wording

Adjusted net income attributable to PRA is calculated as 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.

Previous 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):

Current wording

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to Average tangible equity, a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and provides our ROE, ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):

Previous 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.

Current wording

(1)Reflects ERC of $1.8 billion for the UK, $1.4 billion for Central Europe, $1.0 billion for Northern Europe and $607.6 million for Southern Europe.

Previous 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.

Current wording

As of June 30, 2026, cash and cash equivalents totaled $132.4 million, of which $119.1 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 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).

Current wording

As of June 30, 2026, interest-bearing deposits totaled $100.5 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($226.8 million as of June 30, 2026).

Previous 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.

Current wording

As of June 30, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $218.7 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 $117.3 million in Europe, $86.1 million in the U.S. and $15.4 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 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.

Current wording

As of June 30, 2026, we had $3.8 billion in outstanding borr owings. Our estimated interest, unused fees and principal payments for the next 12 months are $247.7 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of June 30, 2026, principal payments on our borrowings have maturity dates ranging from February 2028 through September 2032. Our financing arrangements include covenants with which we must comply, and as of June 30, 2026, we were in compliance with these covenants.

Previous wording

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

Current wording

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date; does not obligate us to repurchase any specified amount of shares; remains subject to the discretion of our Board of Directors; is subject to compliance with applicable laws; and may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes. Our Board of Directors approved a new share repurchase program on August 3, 2026. For additional information, refer to Note 15.

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. 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.

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 second quarter of 2026, we repurchased 587,642 shares of our common stock at an average price of $17.02 for a total of $10.0 million. As of June 30, 2026, we had $27.7 million remaining for share repurchases under the program, subject to the restrictive covenants mentioned above.

Previous wording

Our leases have remaining terms ranging from one to approximately seven years. As of March 31, 2026, we had $31.6 million in lease liabilities, of which $6.7 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2025 Form 10-K.

Current wording

Our leases have remaining terms ranging from one to approximately seven years. As of June 30, 2026, we had $30.7 million in lease liabilities, of which $6.6 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2025 Form 10-K.

Previous wording

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of March 31, 2026, we had $4.5 million of derivative liabilities, of which $0.9 million matures within the next 12 months and $3.6 million in 2028. For additional information, refer to Note 6.

Current wording

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of June 30, 2026, we had $8.0 million of derivative liabilities, of which $3.5 million matures within the next 12 months and $4.4 million in 2028. For additional information, refer to Note 6.

Previous wording

As of March 31, 2026, we held $114.8 million in Swedish treasury securities and $27.2 million in Finnish corporate notes to meet liquidity requirements for our banking subsidiary, AK Nordic AB.

Current wording

As of June 30, 2026, we held $117.6 million in Swedish treasury securities and $26.5 million in Finnish corporate notes to meet liquidity requirements for our banking subsidiary, AK Nordic AB.

Previous wording

Net cash provided by/(used in) in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as investing activities. Net cash provided by operating activities increased by $77.5 million in Q1 2026 due primarily to lower cash paid for operating expenses and higher cash collections recognized as income.

Current wording

Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as investing activities. Net cash used in operating activities decreased by $54.1 million compared to the prior year period due primarily to higher cash collections recognized as income and lower cash paid for taxes, partially offset by higher cash paid for operating expenses.

Previous wording

Net cash used in investing activities decreased by $5.9 million in Q1 2026 due primarily to a decrease in purchases of nonperforming loan portfolios and an increase in recoveries collected and applied to Finance receivables, net, partially offset by an increase in purchases of investments.

Current wording

Net cash used in investing activities decreased by $1.9 million compared to the prior year period due primarily to a decrease in purchases of nonperforming loan portfolios, increases in recoveries collected and applied to Finance receivables, net, and proceeds from sales and maturities of investments, partially offset by an increase in purchases of investments and the impact of the proceeds received from the sale of our interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, in the prior year period.

Previous wording

Net cash provided by financing activities decreased by $25.2 million in Q1 2026 due primarily to activity within our interest-bearing deposits and the repurchase of $10.0 million shares of our common stock, partially offset by higher net proceeds from credit lines and lower noncontrolling interest distributions in Q1 2026.

Current wording

Net cash provided by financing activities decreased by $50.8 million compared to the prior year period due primarily to lower net proceeds from credit lines and higher levels of stock repurchases, partially offset by the activity in our interest-bearing deposit customer accounts and lower levels of noncontrolling interest distributions.