PRA GROUP INC
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
View on SEC.govAbout this filing
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.
Sep 30, 2026 · Filed Nov 9, 2026
PRAA$12.71-1.6%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001185348-26-000028
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001185348-26-000036
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 194 previous paragraphs and 202 current paragraphs.
133 unchanged; 48 reworded; 21 added; 12 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 20 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 (21)
Current report
•Third quarter Adjusted net income attributable to PRA of $14.9 million, a decrease of $6.0 million compared to the prior year period. Year-to-date Adjusted net income attributable to PRA of $101.0 million, an increase of $63.8 million compared to the prior year period ("Adjusted net income attributable to PRA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).
Current report
•Third quarter Cash efficiency and Adjusted cash efficiency ratios of 62.6%; an improvement of more than 200 basis points in the Adjusted cash efficiency ratio compared to the prior year period, which reflected workforce reductions, organizational simplification and other cost initiatives implemented as part of our PRA 3.0 strategy ("Adjusted cash efficiency ratio" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).
Current report
•Maintenance of a diversified capital structure, consistent with our targeted leverage and liquidity objectives. Subsequent to quarter-end, we issued $400.0 million of 8.500% senior notes due October 15, 2033, further extending our debt maturity profile (refer to Note 15).
Current report
We observed heightened competition in the U.S. market, while credit card balances have remained elevated and charge-off rates continued to support portfolio supply. In Europe, portfolio supply continued to trend higher, and we expect that trend will continue into the fourth quarter. Consistent with our PRA 3.0 strategy, we remained focused on deploying capital globally where we see the most attractive net returns.
Current report
(1)Total operating expenses excluding the impact of Goodwill impairment ("Adjusted operating expenses") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Current report
(5)Calculated by dividing cash receipts less Adjusted operating expenses by cash receipts ("Adjusted cash efficiency ratio"), which is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Current report
•Europe: Q3 2026 portfolio revenue decreased by $7.2 million due to a decrease of $20.6 million in Changes in expected recoveries, partially offset by an increase of $13.5 million in Portfolio income. The decrease in Changes in expected recoveries was due to lower net overperformance and lower net increases in the collections forecasts compared to Q3 2025. Overperformance in Europe moderated following the update to the forecasts for the majority of our European pools as of June 30, 2026. The increase in Portfolio income was due primarily to higher recent purchasing in several markets. Year-to-date 2026 portfolio revenue increased by $115.3 million, due to increases of $79.1 million in Changes in expected recoveries, driven by the June 30, 2026 forecast updates, and $36.2 million in Portfolio income, due to higher recent purchasing and favorable foreign exchange rate variation.
Current report
Our Total operating expenses decreased by $426.3 million, or 68.0%, compared to Q3 2025. Year-to-date 2026 operating expenses decreased by $393.8 million, or 38.4%, compared to the prior year period. These decreases were due largely to the goodwill impairment charge of $412.6 million recognized in Q3 2025.
Current report
•U.S.: Q3 2026 operating expenses decreased by $25.9 million compared to Q3 2025 due primarily to $15.8 million of goodwill impairment allocated to the U.S. in Q3 2025 and an $8.8 million decrease in Compensation and benefits, driven by workforce reductions, organizational simplification and other cost initiatives implemented as part of our PRA 3.0 strategy; and to lower Professional and outside services. Year-to-date 2026 operating expenses decreased by $1.8 million due primarily to a decrease of $18.0 million in Compensation and benefits and the goodwill impairment allocated to the U.S. in 2025. These decreases were partially offset by increases of $26.8 million in Legal collection costs and $6.5 million in Legal collection fees, both associated with the expansion of activity in our legal collections channel.
Current report
•Europe: Q3 2026 operating expenses decreased by $359.4 million compared to Q3 2025 due largely to $361.2 million of goodwill impairment allocated to Europe in Q3 2025, partially offset by an increase in Legal collection costs. Year-to-date 2026 operating expenses decreased by $351.1 million due primarily to the goodwill impairment allocated to Europe in 2025, partially offset by increases in Legal collection costs; Other operating expenses, reflecting a value added tax reimbursement in the prior year period; Agency fees, reflecting higher outsourced collections; and Compensation and benefits.
Current report
•Other markets: Q3 2026 and year-to-date 2026 operating expenses decreased by $41.0 million and $40.8 million, respectively, due primarily to the goodwill impairment charge in Q3 2025.
Current report
Our Interest expense, net decreased by $0.3 million, or 0.4%, compared to Q3 2025. Year-to-date 2026 Interest expense, net increased by $4.3 million, or 2.3%, compared to the prior year period. Both periods reflect higher interest on senior notes following the issuance of our 2032 senior notes in September 2025, the proceeds of which were used to repay borrowings under our revolving credit facilities. In Q3 2026, this increase was offset by lower interest on our revolving credit facilities and term loan, along with higher interest income. Year-to-date 2026, the increase in interest on our senior notes was partially offset by these same factors.
Current report
Interest-bearing deposits were $152.5 million as of September 30, 2026, an increase of $46.4 million compared to December 31, 2025. The increase reflects net deposit inflows at our banking subsidiary, AK Nordic AB, partially offset by foreign exchange rate variation.
Current report
Borrowings of $3.7 billion as of September 30, 2026, were stable compared to December 31, 2025, as net borrowings of $34.7 million under our revolving credit facilities were largely offset by the impact of foreign currency translation on our euro-denominated senior notes and principal payments of $7.5 million on our term loan. Compared to September 30, 2025, borrowings increased by $107.8 million, or 3.0%, due primarily to net borrowings under our UK and North American revolving credit facilities, partially offset by principal payments of $10.0 million on our term loan and the impact of foreign currency translation on our euro-denominated senior notes.
Current report
The Adjusted cash efficiency ratio is calculated by dividing cash receipts less Adjusted operating expenses by cash receipts. The following table provides a reconciliation of Total operating expenses to Adjusted operating expenses and presents our cash efficiency and Adjusted cash efficiency ratios for the periods indicated (in thousands, except for ratio data):
Current report
The following table provides a reconciliation of Diluted earnings per share to Adjusted diluted earnings per share for the periods indicated:
Current report
(1)Impact of the non-GAAP adjusting items and dilutive effect of all potential shares of common stock.
Current report
On October 2, 2026, the Company completed the private offering of $400.0 million in aggregate principal amount of 8.500% senior notes due October 15, 2033. Refer to Note 15 for additional information.
Current report
The amount and timing of any share repurchases under the new share repurchase program also depend on several other factors, including our capital allocation priorities; financial performance; leverage and liquidity levels; and the price of our common stock. As of September 30, 2026, we had $150.0 million remaining for share repurchases under the new program, subject to the restrictive covenants mentioned above.
Removed paragraphs (12)
Previous report
•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 report
•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 report
•A second wave of cost reductions to simplify our U.S. business and drive further savings; and further consolidation of our U.S. call center footprint and offshore third-party collection agencies.
Previous report
•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 report
In the U.S., credit card balances have remained elevated and charge-off rates continued to support portfolio supply. In Europe, there has been an increase in portfolio supply, and we continued to observe stability in customer payment activity in both the U.S. and Europe during the second quarter of 2026.
Previous report
•Europe: Q2 2026 portfolio revenue increased by $97.0 million due to increases of $88.4 million in Changes in expected recoveries and $8.6 million in Portfolio income. Changes in expected recoveries were impacted by net increases in the collections forecasts in most markets in both Q2 2026 and Q2 2025. The higher net increase in the current year period was driven by updates to the forecasts for a majority of the pools in our European markets (for additional information, refer to Note 2). This increase was partially offset by lower net overperformance in Q2 2026 compared to Q2 2025 in certain European markets. The increase in Portfolio income was driven by increases in several markets due to higher recent purchasing and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 portfolio revenue increased by $122.5 million due to similar factors, reflecting increases of $99.8 million in Changes in expected recoveries and $22.7 million in Portfolio income.
Previous report
Our Total operating expenses increased by $16.3 million, or 8.1%, compared to Q2 2025. Year-to-date 2026 operating expenses increased by $32.6 million, or 8.2%, compared to the prior year period.
Previous report
•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 report
•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 report
Our Interest expense, net increased by $2.0 million, or 3.2%, compared to Q2 2025. Year-to-date 2026 interest expense increased by $4.6 million, or 3.7%, compared to the prior year period. These increases were due primarily to higher average debt balances.
Previous report
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 report
We amended and extended our European revolving credit facility on April 30, 2026, resulting in the extension of the maturity date from November 23, 2027 to April 30, 2031; the reduction of the maximum ERC ratio (as defined in the agreement) from 45.0% to 40.0%; and, subject to certain conditions, the ability of the borrowers to make investments in, or loans to, joint ventures up to an aggregate amount of €100 million.
Reworded paragraphs (48)
Previous wording
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;
Current wording
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology infrastructure, networks or communication systems;
Previous wording
•investigations, reviews or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");
Current wording
•investigations, reviews or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau;
Previous wording
•our ability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");
Current wording
•our ability to comply with data privacy regulations such as the General Data Protection Regulation;
Previous wording
Second quarter and year-to-date business trends and results
Current wording
Third quarter and year-to-date business trends and results
Previous wording
During the second quarter of 2026, we continued to execute against our PRA 3.0 strategic plan and generated continued cash collections growth while maintaining disciplined cost management and investing in future growth initiatives. We purchased $296.6 million in portfolios during the quarter and generated higher net income. Our results for the period included the following:
Current wording
During the third quarter of 2026, we continued to execute against our PRA 3.0 strategic plan, generating higher portfolio income and lower operating expenses while continuing to invest in our legal collections channel, technology modernization and other initiatives. We purchased $228.7 million in portfolios and collected $535.6 million during the quarter. Our results also included the following:
Previous wording
•Year-to-date Net income attributable to PRA Group, Inc. of $86.1 million, an increase of $40.1 million compared to the prior year period.
Current wording
•Third quarter Net income attributable to PRA Group, Inc. of $14.9 million, an increase of $422.6 million compared to the prior year period, which included a pretax goodwill impairment charge of $412.6 million. Year-to-date Net income attributable to PRA Group, Inc. of $101.0 million, an increase of $462.7 million compared to the prior year period, which included a pretax goodwill impairment charge of $412.6 million.
Previous wording
•Continued geographic diversification, with the U.S. and Europe accounting for 40.4% and 54.0%, respectively, of June 30, 2026 total estimated remaining collections ("ERC") of $8.9 billion. Driven by sustained cash collections overperformance, we updated the forecasts for the majority of our European pools as of June 30, 2026, which contributed to an increase in European ERC of $348.5 million (refer to Note 2).
Current wording
•Continued geographic diversification, with the U.S. and Europe accounting for 40.0% and 54.8%, respectively, of September 30, 2026 total estimated remaining collections ("ERC") of $8.8 billion.
Previous 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.
Current wording
(2)Net income/(loss) attributable to PRA Group, Inc. and Diluted earnings per share excluding the impact of certain items that management does not consider indicative of our ongoing operations ("Adjusted net income attributable to PRA" and "Adjusted diluted earnings per share", respectively), are non-GAAP financial measures. Refer to section "Non-GAAP Financial Measures" below.
Previous 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.
Current wording
(3)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
(3)Calculated by dividing cash receipts less operating expenses by cash receipts, both of which are determined based on GAAP.
Current wording
(4)Calculated by dividing cash receipts less operating expenses by cash receipts, both of which are determined based on GAAP.
Previous wording
(4)ROE is calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc.
Current wording
(6)ROE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc.
Previous 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.
Current wording
(7)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income/(loss) 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
(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Current wording
(8)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
Previous 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").
Current wording
Three months ended September 30, 2026 ("Third Quarter 2026" or "Q3 2026") compared to three months ended September 30, 2025 ("Third Quarter 2025" or "Q3 2025"); and nine months ended September 30, 2026 ("Year-to-Date 2026") compared to nine months ended September 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 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.
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 Q3 2026 decreased by $26.7 million, or 10.5%, compared to Q3 2025. Total purchases of $228.7 million in Q3 2026 reflected the allocation of a greater portion of our capital to Europe, where we observed better relative returns in select markets. Year-to-date 2026 portfolio purchases decreased by $147.5 million, or 16.5%, compared to the prior year period. The Q3 2026 and year-to-date 2026 purchase price multiples ("PPMs") for our global Core vintage were 1.94x and 1.97x, 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.: 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.
Current wording
•U.S.: Q3 2026 portfolio purchases decreased by $42.2 million as pricing remained competitive and we remained disciplined in our purchasing and long-term approach focused on net returns. Year-to-date 2026 portfolio purchases decreased by $157.5 million compared to the prior year period. The Q3 2026 PPM for our U.S. Core vintage of 2.20x was an increase compared to the second quarter of 2026. The year-to-date 2026 PPM for our U.S. Core vintage was 2.10x.
Previous wording
•Europe: Q2 2026 portfolio purchases increased by $27.2 million as we continued to invest in portfolios that met our return requirements. Year-to-date 2026 portfolio purchases increased by $5.5 million compared to the prior year period. The Q2 2026 and year-to-date 2026 PPMs for our European Core vintage were 1.87x.
Current wording
•Europe: Q3 2026 portfolio purchases increased by $28.8 million as we continued to invest in portfolios that met our return requirements. Year-to-date 2026 portfolio purchases increased by $34.3 million compared to the prior year period. The Q3 2026 and year-to-date 2026 PPMs for our European Core vintage were 1.76x and 1.84x, respectively. The decrease in the Q3 2026 PPM reflected purchase of a higher mix of portfolios with a lower cost to collect.
Previous 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.
Current wording
Our total cash collections of $535.6 million in Q3 2026 were slightly above our expectations for the quarter and decreased by $6.6 million, or 1.2%, compared to Q3 2025, reflecting lower levels of portfolio purchases over the past 18 months, consistent with our focus on net returns. Year-to-date 2026 cash collections increased by $70.1 million, or 4.5%, compared to the prior year period.
Previous wording
•U.S.: Q2 2026 cash collections increased by $16.1 million driven by a $31.1 million increase in legal collections due to higher volume, partially offset by a net decrease of $15.3 million from call center and other channels. Digital cash collections continued to increase driven by an expansion of our customer engagement within this channel. Year-to-date 2026 cash collections increased by $43.6 million driven by a $60.9 million increase in legal collections, partially offset by a net decrease of $17.1 million from call center and other channels.
Current wording
•U.S.: Q3 2026 cash collections decreased by $4.6 million driven by a net decrease of $26.9 million from call center and other channels, partially offset by a $23.5 million increase in legal collections due to higher volume. Legal collections represented 58.2% of Core cash collections. Year-to-date 2026 cash collections increased by $39.0 million driven by an $84.4 million increase in legal collections, partially offset by a net decrease of $44.0 million from call center and other channels.
Previous wording
•Europe: Q2 2026 cash collections increased by $7.8 million driven by increases distributed broadly across our markets and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 cash collections in Europe increased by $34.8 million due to similar factors.
Current wording
•Europe: Q3 2026 cash collections increased by $4.5 million driven by an increase of $9.6 million in Core collections distributed broadly across our markets, partially offset by a decrease of $5.1 million in Insolvency collections. Year-to-date 2026 cash collections in Europe increased by $39.3 million driven by an increase of $52.0 million in Core collections, partially offset by a decrease of $12.7 million in Insolvency collections, and was due, in part, to favorable foreign exchange rate variation.
Previous 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.
Current wording
Our total portfolio revenue in Q3 2026 decreased by $24.8 million, or 8.0%, compared to Q3 2025, driven by lower Changes in expected recoveries, which decreased by $37.1 million, partially offset by higher Portfolio income, which increased by $12.2 million. The decrease in Changes in expected recoveries reflected lower recoveries collected in excess of forecast and lower changes in expected future recoveries following the June 30, 2026 update to the forecasts for the majority of our European pools, which reflected sustained cash collections overperformance across multiple markets, among other factors. The increase in Portfolio income was driven primarily by recent portfolio purchases in Europe. Year-to-date 2026 portfolio revenue increased by $100.3 million, or 11.6%, compared to the prior year period, driven by higher Portfolio income, which increased by $57.7 million, and higher Changes in expected recoveries, which increased by $42.5 million. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 4.7% for the quarter and 7.7% year-to-date.
Previous 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.
Current wording
•U.S.: Q3 2026 portfolio revenue decreased by $8.2 million due primarily to a decrease of $7.4 million in Changes in expected recoveries, reflecting lower net increases in the collections forecasts compared to the prior year period and net underperformance in Q3 2026 compared to net overperformance in Q3 2025. Q3 2026 Changes in expected recoveries were mainly impacted by an increase in the collections forecasts and the impact of timing adjustments on the 2024 and 2025 Core pools, partially offset by decreases in the collections forecasts on the 2021-2023 Core pools. Net underperformance in Q3 2026 was driven mainly by the 2021-2024 Core pools, partially offset by overperformance on the 2020 and earlier Core pools and the 2025 Core pool. Year-to-date 2026 portfolio revenue increased by $21.2 million due to increases of $15.3 million in Portfolio income and $5.9 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 primarily to higher net overperformance, reflecting the absence of a one-time payment of $15.0 million to a seller in Q3 2025 to modify the terms and conditions of certain previously purchased portfolios, and a net decrease in the collections forecasts on certain U.S. Core pools in the prior year period.
Previous wording
•Other Markets: Q2 2026 and year-to-date 2026 portfolio revenue decreased by $25.8 million and $26.8 million, respectively, due primarily to higher net decreases in in the collections forecasts on certain pools within these markets.
Current wording
•Other markets: Q3 2026 and year-to-date 2026 portfolio revenue decreased by $9.4 million and $36.3 million, respectively. The quarterly decrease reflected lower net overperformance and net decreases in the collections forecasts in Q3 2026 compared to net increases in Q3 2025. The year-to-date decrease reflected net decreases in the collections forecasts on certain pools within these markets.
Previous 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.
Current wording
Our Income tax expense decreased by $20.9 million, or 85.8%, compared to Q3 2025, and our effective tax rate was 15.7% in Q3 2026 compared to (6.4)% in Q3 2025. Year-to-date 2026 Income tax expense decreased by $2.5 million, or 5.6%, and our year-to-date 2026 effective tax rate was 27.6% compared to (14.5)% in the prior year period. The negative effective tax rates in the prior year periods were due primarily to the impact of the goodwill impairment recognized in Q3 2025. The current year effective tax rates reflect 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 during the first quarter of 2026. The effective tax rate for the three months ended September 30, 2026, reflects a decrease in the forecasted annual effective tax rate due to changes in the forecasted mix of income across jurisdictions.
Previous wording
•U.S.: Q2 2026 Adjusted segment operating income was stable compared to the prior year period, reflecting an increase in segment revenues, partially offset by an increase in segment expenses. Year-to-date 2026 Adjusted segment operating income increased by $12.6 million, or 36.2%, due to similar factors.
Current wording
•U.S.: Q3 2026 Adjusted segment operating income increased by $0.9 million, reflecting a decrease in segment expenses, partially offset by a decrease in segment revenues. Year-to-date 2026 Adjusted segment operating income increased by $13.5 million, or 21.3%, reflecting an increase in segment revenues, partially offset by an increase in segment expenses.
Previous wording
•Europe: Q2 2026 Adjusted segment operating income increased by $97.4 million due primarily to an increase in segment revenues. Year-to-date 2026 Adjusted segment operating income increased by $117.0 million, or 91.9%, reflecting an increase in segment revenues, partially offset by an increase in segment expenses.
Current wording
•Europe: Q3 2026 Adjusted segment operating income decreased by $8.0 million, or 11.5%, due primarily to a decrease in segment revenues. Year-to-date 2026 Adjusted segment operating income increased by $109.0 million, or 55.5%, reflecting an increase in segment revenues, partially offset by an increase in segment expenses.
Previous 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.
Current wording
Investments were $160.0 million as of September 30, 2026, an increase of $93.4 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB, which is part of our European operations and is expected to continue to operate with similarly higher levels of liquidity moving forward.
Previous 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.
Current wording
Finance receivables, net of $4.7 billion as of September 30, 2026, were stable compared to December 31, 2025. Compared to September 30, 2025, Finance receivables, net increased by $111.4 million, or 2.4%, due to portfolio purchases of $1.1 billion and Changes in expected recoveries of $219.0 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net, and foreign currency translation of $50.0 million.
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. 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.
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, operational effectiveness and management of operating expenses 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. 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 income/(loss) attributable to PRA Group, Inc. to Adjusted EBITDA for the periods indicated (in thousands):
Previous wording
Adjusted net income attributable to PRA, ROATE and Adjusted ROATE
Current wording
Adjusted net income attributable to PRA, Adjusted diluted earnings per share, ROATE and Adjusted ROATE
Previous 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.
Current wording
Adjusted net income attributable to PRA is calculated as Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain items that management does not consider indicative of our ongoing operations. Calculation of Adjusted diluted earnings per share excludes those same items and, if dilutive based on Adjusted net income attributable to PRA, may also include the impact of additional potentially dilutive shares.
Previous wording
ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity. Adjusted ROATE is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity.
Current wording
ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity. Adjusted ROATE is calculated by dividing annualized Adjusted net income attributable to PRA by 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, 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):
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, and provides our ROE, ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):
Previous wording
The following table displays our ERC by year as of June 30, 2026 (in thousands):
Current wording
The following table displays our ERC by year for the 12 months ending September 30, (in thousands):
Previous 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.
Current wording
(1)Reflects ERC of $1.9 billion for the UK, $1.4 billion for Central Europe, $1.0 billion for Northern Europe and $583.6 million for Southern Europe.
Previous 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.
Current wording
As of September 30, 2026, cash and cash equivalents totaled $139.1 million, of which $127.7 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 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).
Current wording
As of September 30, 2026, interest-bearing deposits totaled $152.5 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($219.9 million as of September 30, 2026).
Previous 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.
Current wording
As of September 30, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $438.5 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 $175.5 million in Europe, $247.3 million in the U.S. and $15.7 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 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.
Current wording
As of September 30, 2026, we had $3.7 billion in outstanding borr owings. Our estimated interest, unused fees and principal payments for the next 12 months are $251.7 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of September 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 September 30, 2026, we were in compliance with these covenants.
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Previous report — wording carried elsewhere
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.