A month has gone by since the last earnings report for PRA Group (PRAA) . Shares have added about 8.6% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is PRA Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.PRA Group Q2 Earnings ...

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Key Takeaways PRAA posted Q2 EPS of $1.08, up from $0.54 and 74.2% above the Zacks Consensus Estimate.PRAA's revenues rose 1.2% to $287.7M, driven by higher cash collections and portfolio income growth.Cash collections hit $536.3M, up 13.2%, with strength across both U.S. and European markets.PRA Group, Inc. (PRAA) reported second-quarter 2025 earnings per share (EPS) of $1.08, which beat the Zacks Consensus Estimate by 74.2%. The bottom line rose from 54 cents per share a year ago.Total revenues improved 1 ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Unaudited consolidated financial statements for Q2 and H1 2025, including balance sheets, income, equity, cash flows, and detailed notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Q2 and H1 2025, with detailed notes on key financial items and accounting policies [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------------- | :------------ | :---------------- | :--------- | | Total assets | $5,434,767 | $4,931,155 | 10.2% | | Finance receivables, net | $4,562,576 | $4,140,742 | 10.2% | | Goodwill | $439,449 | $396,357 | 10.9% | | Total liabilities | $4,038,156 | $3,737,548 | 8.0% | | Borrowings | $3,614,208 | $3,326,621 | 8.6% | | Total equity | $1,396,611 | $1,193,607 | 17.0% | [Consolidated Income Statements](index=5&type=section&id=Consolidated%20Income%20Statements) Reports the company's financial performance, including revenues, expenses, and net income, for the three and six months ended June 30, 2025 and 2024 Consolidated Income Statement Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :------------------------------------ | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Total revenues | $287,688 | $284,229 | 1.2% | $557,307 | $539,815 | 3.2% | | Income from operations | $85,111 | $89,222 | (4.6)% | $159,688 | $155,618 | 2.6% | | Income before income taxes | $61,128 | $33,816 | 80.8% | $74,504 | $47,955 | 55.4% | | Net income attributable to PRA Group, Inc. | $42,374 | $21,516 | 96.9% | $46,033 | $24,991 | 84.2% | | Diluted EPS | $1.08 | $0.54 | 100.0% | $1.16 | $0.63 | 84.1% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Details net income and other comprehensive income components, such as foreign currency translation adjustments, for Q2 and H1 2025 and 2024 Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $45,713 | $25,114 | $54,777 | $36,867 | | Other comprehensive income/(loss) | $83,892 | $(15,486) | $167,067 | $(60,823) | | Total comprehensive income/(loss) | $129,605 | $9,628 | $221,844 | $(23,956) | | Comprehensive income/(loss) attributable to PRA Group, Inc. | $123,553 | $12,725 | $205,693 | $(26,918) | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines changes in total equity, including net income, foreign currency adjustments, and stock repurchases, for the six months ended June 30, 2025 Key Changes in Equity (Six Months Ended June 30, 2025, in thousands) | Item | Amount | | :------------------------------------ | :------- | | Balance as of December 31, 2024 | $1,193,607 | | Net income attributable to PRA Group, Inc. | $46,033 | | Foreign currency translation adjustments | $175,339 | | Cash flow hedges | $(8,239) | | Repurchase and cancellation of common stock | $(10,000) | | Balance as of June 30, 2025 | $1,396,611 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net cash used in operating activities | $(65,490) | $(102,488) | $36,998 | | Net cash used in investing activities | $(33,408) | $(96,195) | $62,787 | | Net cash provided by financing activities | $105,900 | $203,826 | $(97,926) | | Net increase in cash, cash equivalents and restricted cash | $27,887 | $6,225 | $21,662 | | Cash, cash equivalents and restricted cash, end of period | $135,318 | $119,917 | $15,401 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the consolidated financial statements, covering accounting policies and specific financial items [Note 1. Organization and Business](index=10&type=section&id=Note%201.%20Organization%20and%20Business) Describes PRA Group's global financial services business, focusing on nonperforming loan portfolios and class action claims recoveries - PRA Group, Inc. is a global financial services company primarily focused on the purchase, collection, and management of nonperforming loan portfolios across the Americas, Europe, and Australia. It also provides fee-based services for class action claims recoveries in the U.S[23](index=23&type=chunk) [Note 2. Finance Receivables, net](index=10&type=section&id=Note%202.%20Finance%20Receivables,%20net) Details the composition and changes in finance receivables, net, including expected recoveries and foreign currency adjustments Finance Receivables, net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Balance as of end of period | $4,562,576 | $4,140,742 | Changes in Finance Receivables, net (Six Months Ended June 30, in thousands) | Item | 2025 | 2024 | | :---------------------------------------------------- | :--------- | :--------- | | Balance as of beginning of period | $4,140,742 | $3,656,598 | | Initial negative allowance for expected recoveries on current period purchases | $638,207 | $625,186 | | Recoveries collected and applied to Finance receivables, net | $(554,715) | $(520,940) | | Changes in expected recoveries | $61,214 | $124,994 | | Foreign currency translation adjustment | $277,128 | $(65,652) | | Balance as of end of period | $4,562,576 | $3,820,186 | - Changes in expected recoveries for the six months ended June 30, 2025, were **$61.2 million**, primarily due to **$56.8 million** in cash collections overperformance in Europe and Brazil, partially offset by decreases to collections forecasts on the 2023 U.S. Core pool[35](index=35&type=chunk) [Note 3. Investments](index=13&type=section&id=Note%203.%20Investments) Outlines the company's investment portfolio, including debt securities, private equity funds, and significant investment sales Investments (in thousands) | Type | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Debt securities | $64,774 | $55,762 | | Private equity funds | $1,726 | $1,848 | | Equity method investment | $— | $8,694 | | Total investments | $66,500 | $66,304 | - The Company sold its **11.7%** interest in RCB Investimentos S.A. in April 2025, recording a **$38.4 million** pretax gain. This sale does not affect existing or future portfolio investments and operations in Brazil[39](index=39&type=chunk) [Note 4. Goodwill](index=13&type=section&id=Note%204.%20Goodwill) Reports the balance and changes in goodwill, primarily due to foreign currency translation, and discusses impairment risk Goodwill (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Balance as of end of period | $439,449 | $396,357 | Changes in Goodwill (Six Months Ended June 30, in thousands) | Item | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Balance as of beginning of period | $396,357 | $431,564 | | Foreign currency translation | $43,092 | $(15,918) | | Balance as of end of period | $439,449 | $415,646 | - Goodwill increased by **$43.1 million** due to foreign currency translation. The company determined that an interim impairment test was not required as of June 30, 2025, but noted that goodwill in the Debt Buying and Collection (DBC) reporting unit may be at-risk for future impairment if market indicators or cash flow projections deteriorate[40](index=40&type=chunk) [Note 5. Borrowings](index=14&type=section&id=Note%205.%20Borrowings) Details the company's various borrowing facilities, including revolving credit and senior notes, and compliance with covenants Borrowings (in thousands) | Type | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | North American revolving credit facility | $667,875 | $519,519 | | North American term loan | $465,111 | $470,111 | | United Kingdom revolving credit facility | $479,282 | $494,185 | | European revolving credit facility | $713,529 | $555,726 | | 2028 senior notes | $398,000 | $398,000 | | 2029 senior notes | $350,000 | $350,000 | | 2030 senior notes | $550,000 | $550,000 | | Total borrowings | **$3,614,208** | $3,326,621 | - Total borrowings increased by **$287.6 million** to **$3.6 billion** as of June 30, 2025, primarily due to incremental net borrowings under North American and European revolving credit facilities. The Company was in compliance with all financing arrangement covenants[41](index=41&type=chunk)[44](index=44&type=chunk) [Note 6. Derivatives](index=14&type=section&id=Note%206.%20Derivatives) Presents the fair value and notional amounts of interest rate swaps and foreign exchange contracts used for hedging Fair Value of Derivatives (in thousands) | Type | Balance Sheet Location | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------- | :--------------------- | :----------------------- | :----------------------- | | Interest rate swaps (assets) | Other assets | $2,508 | $8,514 | | Interest rate swaps (liabilities) | Other liabilities | $10,904 | $4,797 | | Foreign exchange contracts (assets) | Other assets | $256 | $2,209 | | Foreign exchange contracts (liabilities) | Other liabilities | $3,167 | $166 | - The notional amount of outstanding interest rate swaps increased to **$908.8 million** as of June 30, 2025, from **$800.7 million** at December 31, 2024. The notional amount of outstanding foreign exchange contracts increased to **$477.6 million** from **$376.4 million** over the same period[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 7. Fair Value](index=15&type=section&id=Note%207.%20Fair%20Value) Discloses the fair value measurements for financial instruments, categorized by valuation levels, as of June 30, 2025 Financial Instruments Carried at Fair Value (June 30, 2025, in thousands) | Asset/Liability | Level 1 | Level 2 | Level 3 | Total | | :-------------------- | :------ | :------ | :------ | :------ | | Government securities | $64,774 | $— | $— | $64,774 | | Derivatives (assets) | $— | $2,764 | $— | $2,764 | | Derivatives (liabilities) | $— | $14,071 | $— | $14,071 | Financial Instruments Not Carried at Fair Value (June 30, 2025, in thousands) | Asset/Liability | Carrying Value | Estimated Fair Value (Level 3) | | :-------------------------- | :------------- | :----------------------------- | | Finance receivables, net | $4,562,576 | $4,338,291 | [Note 8. Accumulated Other Comprehensive Loss](index=17&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20Loss) Details changes in accumulated other comprehensive loss, including debt securities, cash flow hedges, and currency translation adjustments Changes in Accumulated Other Comprehensive Loss (Six Months Ended June 30, 2025, in thousands) | Component | Balance at Beginning of Period | Other Comprehensive Gain/(Loss) before Reclassifications | Reclassifications, net | Net Current Period Other Comprehensive Gain/(Loss) | Balance at End of Period | | :-------------------------- | :----------------------------- | :------------------------------------------------------- | :--------------------- | :------------------------------------------------- | :----------------------- | | Debt Securities Available-for-sale | $205 | $(33) | $— | $(33) | $172 | | Cash Flow Hedges | $2,111 | $(4,010) | $(4,229) | $(8,239) | $(6,128) | | Currency Translation Adjustments | $(445,710) | $167,932 | $— | $167,932 | $(277,778) | | Total Accumulated Other Comp. Loss | $(443,394) | $163,889 | $(4,229) | $159,660 | $(283,734) | [Note 9. Earnings per Share](index=18&type=section&id=Note%209.%20Earnings%20per%20Share) Provides basic and diluted earnings per share calculations and information on common stock repurchases Earnings Per Share (Six Months Ended June 30, in thousands, except per share amounts) | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Net income attributable to PRA Group, Inc. | $46,033 | $24,991 | | Basic EPS | $1.17 | $0.64 | | Diluted EPS | $1.16 | $0.63 | | Weighted average number of shares outstanding (Diluted) | 39,536 | 39,497 | - During Q2 2025, the Company repurchased **660,395** shares of common stock for approximately **$10.0 million** at an average price of **$15.14** per share. As of June 30, 2025, **$57.7 million** remained authorized under the share repurchase program[56](index=56&type=chunk) [Note 10. Income Taxes](index=18&type=section&id=Note%2010.%20Income%20Taxes) Details income tax expense and effective tax rates, explaining changes due to jurisdictional income mix and discrete items Income Tax Expense and Effective Tax Rate (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income before income taxes | $61,128 | $33,816 | $74,504 | $47,955 | | Income tax expense | $15,415 | $8,702 | $19,727 | $11,088 | | Effective tax rate | **25.2%** | **25.7%** | **26.5%** | **23.1%** | - The effective tax rate changes were primarily due to shifts in the mix of income from different taxing jurisdictions and the timing/amount of discrete items. The Company is evaluating the impact of the recently signed One Big Beautiful Bill Act in the U.S[57](index=57&type=chunk)[58](index=58&type=chunk) [Note 11. Commitments and Contingencies](index=18&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) Discusses contractual purchase obligations and confirms no material developments in legal proceedings as of June 30, 2025 - The estimated minimum contractual purchase obligation under forward flow agreements was not significant as of June 30, 2025, as most agreements lack minimums and include early termination provisions[59](index=59&type=chunk)[60](index=60&type=chunk) - There were no material developments in previously disclosed legal proceedings as of June 30, 2025[61](index=61&type=chunk) [Note 12. Segments](index=19&type=section&id=Note%2012.%20Segments) Identifies the company's single reportable segment, Accounts Receivable Management, and its components - The Company operates as a single reportable segment, Accounts Receivable Management (ARM), which includes Debt Buying and Collection (DBC) and Claims Compensation Bureau, LLC (CCB). The CEO assesses performance based on consolidated GAAP results[62](index=62&type=chunk) [Note 13. Recently Issued Accounting Standards](index=19&type=section&id=Note%2013.%20Recently%20Issued%20Accounting%20Standards) Outlines recently issued FASB accounting standards and the company's evaluation of their potential disclosure impact - The FASB issued ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), which will require enhanced annual disclosures. The Company is evaluating the impact of these ASUs on its disclosures[66](index=66&type=chunk)[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition and results for Q2 and H1 2025, including revenues, expenses, balance sheet, non-GAAP measures, and performance data [Executive Overview](index=23&type=section&id=Executive%20Overview) Summarizes PRA Group's business, strategic focus, and key financial highlights for Q2 and H1 2025, including portfolio purchases and cash collections - PRA Group's primary business is purchasing, collecting, and managing nonperforming loan portfolios globally. The company focuses on optimizing investments, operational execution, and managing expenses under its new CEO[74](index=74&type=chunk)[75](index=75&type=chunk) Financial Highlights (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :------------------------------------ | :-------- | :-------- | :--------- | | Portfolio purchases | $346.5M | $379.4M | (8.7)% | | Cash collections | $536.3M | $473.9M | 13.2% | | Net income attributable to PRA | $42.4M | $21.5M | 96.9% | | Diluted earnings per share | $1.08 | $0.54 | 100.0% | Financial Highlights (YTD June 30, 2025 vs YTD June 30, 2024) | Metric | YTD 2025 | YTD 2024 | Change (%) | | :------------------------------------ | :--------- | :--------- | :--------- | | Portfolio purchases | $638.2M | $625.2M | 2.1% | | Cash collections | $1,033.7M | $923.4M | 11.9% | | Net income attributable to PRA | $46.0M | $25.0M | 84.2% | | Diluted earnings per share | $1.16 | $0.63 | 84.1% | - Estimated remaining collections (ERC) increased by **11.2%** to **$8.3 billion** as of June 30, 2025, compared to December 31, 2024[76](index=76&type=chunk) - The Company completed the sale of its **11.7%** interest in RCB Investimentos S.A. for a pre-tax gain of **$38.4 million**, with proceeds used for portfolio purchases and general corporate needs[77](index=77&type=chunk) [Summary of Selected Financial Data](index=24&type=section&id=Summary%20of%20Selected%20Financial%20Data) Presents key financial metrics for Q2 and H1 2025, including revenues, expenses, net income, EPS, portfolio purchases, and cash collections Summary of Selected Financial Data (Q2 2025 vs Q2 2024, in thousands, except per share/ratio) | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :--------- | :--------- | :--------- | | Portfolio income | $250,934 | $209,290 | 19.9% | | Changes in expected recoveries | $33,292 | $73,320 | (54.6)% | | Total revenues | $287,688 | $284,229 | 1.2% | | Total operating expenses | $202,577 | $195,007 | 3.9% | | Interest expense, net | $62,361 | $55,353 | 12.7% | | Net income attributable to PRA Group, Inc. | $42,374 | $21,516 | 96.9% | | Diluted earnings per share | $1.08 | $0.54 | 100.0% | | Portfolio purchases | $346,505 | $379,369 | (8.7)% | | Cash collections | $536,288 | $473,882 | 13.2% | | Estimated remaining collections (period-end) | $8,294,310 | $6,802,246 | 21.9% | | Total stockholders' equity - PRA Group, Inc. | $1,336,925 | $1,145,463 | 16.7% | | Credit facility availability (Total) | $840,670 | $1,448,541 | (42.0)% | | Full-time equivalents | 2,897 | 3,158 | (8.3)% | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Analyzes the company's operational performance, detailing trends in portfolio purchases, cash collections, revenues, and expenses for Q2 and H1 2025 [Portfolio purchases](index=25&type=section&id=Portfolio%20purchases) Examines portfolio purchase trends by region for Q2 and H1 2025, highlighting changes in Americas and Australia versus Europe Portfolio Purchases (in thousands) | Region | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :---------------------- | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Americas and Australia | $199,283 | $225,388 | $(26,105) | (11.6)% | $377,739 | $422,204 | $(44,465) | (10.5)% | | Europe | $147,222 | $153,981 | $(6,759) | (4.4)% | $260,468 | $202,982 | $57,486 | 28.3% | | Total | $346,505 | $379,369 | $(32,864) | (8.7)% | $638,207 | $625,186 | $13,021 | 2.1% | - Total portfolio purchases decreased by **8.7%** in Q2 2025 compared to Q2 2024, driven by decreases in both Americas and Australia and Europe. However, year-to-date purchases increased by **2.1%** due to a significant increase in Europe, partially offset by a decrease in Americas and Australia[83](index=83&type=chunk)[84](index=84&type=chunk) [Cash collections](index=25&type=section&id=Cash%20collections) Analyzes cash collection performance by region for Q2 and H1 2025, noting drivers like U.S. and Europe Core collections Cash Collections (in thousands) | Region | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :---------------------- | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Americas and Australia | $326,027 | $290,799 | $35,228 | 12.1% | $637,887 | $572,868 | $65,019 | 11.3% | | Europe | $210,261 | $183,083 | $27,178 | 14.8% | $395,837 | $350,532 | $45,305 | 12.9% | | Total | $536,288 | $473,882 | $62,406 | 13.2% | $1,033,724 | $923,400 | $110,324 | 11.9% | - Total cash collections increased by **13.2%** in Q2 2025 and **11.9%** year-to-date, primarily driven by higher U.S. and Europe Core cash collections due to increased recent purchasing levels. This was partially offset by a decrease in Brazil due to foreign exchange rate variations and lower recent purchasing[85](index=85&type=chunk)[86](index=86&type=chunk) [Portfolio revenue](index=26&type=section&id=Portfolio%20revenue) Details portfolio revenue components, including portfolio income and changes in expected recoveries, for Q2 and H1 2025 Portfolio Revenue (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Portfolio income | $250,934 | $209,290 | $41,644 | 19.9% | $491,892 | $411,346 | $80,546 | 19.6% | | Changes in expected recoveries | $33,292 | $73,320 | $(40,028) | (54.6)% | $61,214 | $124,994 | $(63,780) | (51.0)% | | Total portfolio revenue | $284,226 | $282,610 | 1.616 | 0.6% | $553,106 | $536,340 | $16,766 | 3.1% | - Total portfolio revenue increased slightly by **0.6%** in Q2 2025 and **3.1%** year-to-date. Portfolio income saw strong growth (**19.9%** in Q2, **19.6%** YTD) due to higher purchasing and improved pricing in the U.S. since 2023, but this was largely offset by a significant decrease in changes in expected recoveries[88](index=88&type=chunk)[89](index=89&type=chunk) [Operating expenses](index=26&type=section&id=Operating%20expenses) Breaks down operating expenses by category for Q2 and H1 2025, identifying key drivers like legal costs and agency fees Operating Expenses (in thousands) | Expense Category | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :------------------------------------ | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Compensation and benefits | $75,724 | $74,241 | $1,483 | 2.0% | $149,047 | $147,838 | $1,209 | 0.8% | | Legal collection costs | $37,583 | $35,274 | $2,309 | 6.5% | $70,977 | $61,965 | $9,012 | 14.5% | | Legal collection fees | $15,625 | $13,762 | $1,863 | 13.5% | $30,855 | $25,874 | $4,981 | 19.3% | | Agency fees | $22,688 | $21,008 | $1,680 | 8.0% | $44,056 | $40,731 | $3,325 | 8.2% | | Professional and outside services | $21,071 | $18,124 | $2,947 | 16.3% | $42,174 | $43,174 | $(1,000) | (2.3)% | | Communication | $9,417 | $11,577 | $(2,160) | (18.7)% | $19,894 | $24,155 | $(4,261) | (17.6)% | | Total operating expenses | $202,577 | $195,007 | $7,570 | 3.9% | $397,619 | $384,197 | $13,422 | 3.5% | - Total operating expenses increased by **3.9%** in Q2 2025 and **3.5%** year-to-date. Key drivers include higher legal collection costs and fees due to increased U.S. legal activity, increased agency fees, and higher professional services expenses from call center offshoring. Communication expenses decreased due to lower-cost strategies in the U.S[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Interest expense, net](index=27&type=section&id=Interest%20expense,%20net) Analyzes net interest expense for Q2 and H1 2025, attributing changes primarily to higher average debt balances Interest Expense, Net (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Interest on revolving credit facilities and term loan, and unused line fees | $38,534 | $33,180 | $5,354 | 16.1% | $75,116 | $67,135 | $7,981 | 11.9% | | Interest on senior notes | $24,911 | $22,246 | $2,665 | 12.0% | $49,823 | $40,448 | $9,375 | 23.2% | | Interest expense, net | $62,361 | $55,353 | $7,008 | 12.7% | $123,331 | $107,631 | $15,700 | 14.6% | - Net interest expense increased by **12.7%** in Q2 2025 and **14.6%** year-to-date, primarily due to a higher average debt balance supporting increased portfolio investments[97](index=97&type=chunk) [Income tax expense](index=27&type=section&id=Income%20tax%20expense) Details income tax expense and effective tax rates for Q2 and H1 2025, explaining changes due to jurisdictional income mix Income Tax Expense (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | YTD 2025 | YTD 2024 | $ Change | % Change | | :-------------------- | :-------- | :-------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Income tax expense | $15,415 | $8,702 | $6,713 | 77.1% | $19,727 | $11,088 | $8,639 | 77.9% | | Effective tax rate | **25.2%** | **25.7%** | | | **26.5%** | **23.1%** | | | - Income tax expense increased significantly (**77.1%** in Q2, **77.9%** YTD) due to changes in the mix of income from different taxing jurisdictions and the timing/amount of discrete items[98](index=98&type=chunk) [Balance sheet](index=28&type=section&id=Balance%20sheet) Reviews key balance sheet items, including finance receivables, goodwill, and borrowings, as of June 30, 2025 [Finance receivables, net](index=28&type=section&id=Finance%20receivables,%20net) Analyzes the increase in finance receivables, net, driven by portfolio acquisitions and foreign currency adjustments - Finance receivables, net, increased by **$421.8 million** (**10.2%**) to **$4.6 billion** as of June 30, 2025, primarily driven by portfolio acquisitions (**$638.2 million**) and foreign currency translation adjustments (**$277.1 million**), partially offset by recoveries collected (**$554.7 million**)[99](index=99&type=chunk) [Goodwill](index=28&type=section&id=Goodwill) Discusses the increase in goodwill due to foreign currency translation and potential future impairment risks - Goodwill increased by **$43.1 million** (**10.9%**) to **$439.4 million** as of June 30, 2025, due to foreign currency translation adjustments. The company noted that goodwill in its Debt Buying and Collection (DBC) reporting unit may be at-risk for future impairment[100](index=100&type=chunk) [Borrowings](index=28&type=section&id=Borrowings) Details the increase in borrowings, primarily from revolving credit facilities, as of June 30, 2025 - Borrowings increased by **$287.6 million** (**8.6%**) to **$3.6 billion** as of June 30, 2025, mainly due to incremental net borrowings under North American and European revolving credit facilities[101](index=101&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) Presents and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted Return on Average Tangible Equity [Adjusted EBITDA](index=28&type=section&id=Adjusted%20EBITDA) Explains Adjusted EBITDA as a non-GAAP measure for evaluating operational and financial performance - Adjusted EBITDA is a non-GAAP measure used by management to evaluate operational and financial performance, excluding items whose fluctuations do not necessarily correspond to business operations[102](index=102&type=chunk) Adjusted EBITDA Reconciliation (Twelve Months Ended, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------------------------- | :------------ | :---------------- | | Net income attributable to PRA Group, Inc. | $91,643 | $70,601 | | Adjustments (Income tax, FX, Interest, Depreciation, etc.) | $1,148,449 | $1,066,951 | | Adjusted EBITDA | $1,240,092 | $1,137,552 | [Return on average tangible equity and adjusted return on average tangible equity](index=30&type=section&id=Return%20on%20average%20tangible%20equity%20and%20adjusted%20return%20on%20average%20tangible%20equity) Defines ROATE and Adjusted ROATE as non-GAAP measures for monitoring operating performance relative to equity - Return on average tangible equity (ROATE) and Adjusted ROATE are non-GAAP measures used to monitor operating performance relative to equity, with Adjusted ROATE standardizing performance by excluding non-recurring transactions[106](index=106&type=chunk)[107](index=107&type=chunk) ROATE and Adjusted ROATE (Six Months Ended June 30, in thousands, except ratio data) | Metric | YTD 2025 | YTD 2024 | | :------------------------------------------ | :--------- | :--------- | | Average tangible equity | $810,021 | $725,947 | | Net income attributable to PRA Group, Inc. | $46,033 | $24,991 | | Return on average tangible equity (ROATE) | **11.4%** | **6.9%** | | Adjusted net income attributable to PRA Group, Inc. | $16,347 | $24,991 | | Adjusted ROATE | **4.0%** | **6.9%** | [Supplemental Performance Data](index=32&type=section&id=Supplemental%20Performance%20Data) Provides additional performance data, including details on purchasing, estimated remaining collections (ERC), and cash collections [Purchasing](index=32&type=section&id=Purchasing) Explains the company's classification of purchased nonperforming loan portfolios and factors influencing purchase price multiples - The Company segregates purchased nonperforming loan portfolios into Core (non-insolvent) or Insolvency (bankruptcy/similar proceedings) based on account status at acquisition, and further by geographical regions and year of acquisition[114](index=114&type=chunk) - Purchase price multiple represents estimated total cash collections over the original purchase price, influenced by factors like pricing competition, supply levels, account age, and expected collection costs[115](index=115&type=chunk) [ERC and TEC](index=32&type=section&id=ERC%20and%20TEC) Defines Estimated Remaining Collections (ERC) and Total Estimated Collections (TEC) and their updates based on collection experience - Estimated Remaining Collections (ERC) is the sum of all future projected cash collections, while Total Estimated Collections (TEC) includes actual cash collections plus ERC. These are updated based on collection experience and cash forecasting[116](index=116&type=chunk)[159](index=159&type=chunk) [Estimated remaining collections](index=33&type=section&id=Estimated%20remaining%20collections) Presents a detailed breakdown of Estimated Remaining Collections (ERC) by geography and portfolio type as of June 30, 2025 Total Estimated Remaining Collections (ERC) by Geography and Portfolio (as of June 30, 2025, in thousands) | Region | Core | Insolvency | Total | | :---------------------- | :--------- | :--------- | :--------- | | Americas and Australia | $3,811,600 | $239,678 | $4,051,278 | | Europe | $4,062,305 | $180,727 | $4,243,032 | | Total ERC | | | $8,294,310 | [Cash collections](index=33&type=section&id=Cash%20collections) Provides a detailed breakdown of cash collections by geography and portfolio type for the six months ended June 30, 2025 Cash Collections by Geography and Portfolio (YTD June 30, 2025, in thousands) | Region | Call center and other | Legal | Core Total | Insolvency | Total | | :---------------------- | :-------------------- | :------ | :--------- | :--------- | :--------- | | Americas and Australia | $326,990 | $262,868 | $589,858 | $48,029 | $637,887 | | Europe | $211,289 | $138,734 | $350,023 | $45,814 | $395,837 | | Total Company | $538,279 | $401,602 | $939,881 | $93,843 | $1,033,724 | [Purchase Price Multiples](index=34&type=section&id=Purchase%20Price%20Multiples) Details current and original purchase price multiples by portfolio type, reflecting estimated total cash collections over purchase price Purchase Price Multiples (as of June 30, 2025) | Portfolio Type | Current Purchase Price Multiple | Original Purchase Price Multiple | | :-------------------------- | :------------------------------ | :------------------------------- | | Americas and Australia Core | **234%** | **202%** | | Americas Insolvency | **169%** | **135%** | | Europe Core | **199%** | **165%** | | Europe Insolvency | **145%** | **133%** | | Total PRA Group | **211%** | **179%** | [Portfolio Financial Information](index=36&type=section&id=Portfolio%20Financial%20Information) Presents comprehensive portfolio financial data, including cash collections, income, and net finance receivables, by purchase period Portfolio Financial Information (YTD June 30, 2025, in thousands) | Purchase Period | Cash Collections | Portfolio Income | Changes in Expected Recoveries | Total Portfolio Revenue | Net Finance Receivables (as of June 30, 2025) | | :-------------------------- | :--------------- | :--------------- | :----------------------------- | :---------------------- | :-------------------------------------------- | | Americas and Australia Core | $589,858 | $320,037 | $(1,307) | $318,730 | $1,971,534 | | Americas Insolvency | $48,029 | $13,780 | $1,254 | $15,034 | $183,844 | | Europe Core | $350,023 | $148,866 | $52,974 | $201,840 | $2,262,735 | | Europe Insolvency | $45,814 | $9,209 | $8,293 | $17,502 | $144,463 | | Total PRA Group | $1,033,724 | $491,892 | $61,214 | $553,106 | $4,562,576 | [Cash Collections by Year, By Year of Purchase](index=38&type=section&id=Cash%20Collections%20by%20Year,%20By%20Year%20of%20Purchase) Illustrates historical cash collection patterns by year of purchase and collection, showing long-term performance across vintages and geographies - The table provides a detailed breakdown of historical cash collections by the year of purchase and the year of collection, illustrating the long-term collection patterns across different portfolio vintages and geographies[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Outlines the company's primary market risks, including interest rate and foreign currency exposure, confirming no material changes since December 31, 2024 - As of June 30, 2025, **58%** of the Company's total debt (**$3.6 billion**) was either fixed rate or converted to a fixed rate through interest rate hedges[161](index=161&type=chunk) - Revenues from operations outside the U.S. were **$150.2 million** during Q2 2025, indicating significant foreign currency exposure[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of disclosure controls and procedures, confirming their effectiveness and no material changes in internal control over financial reporting for Q2 2025 - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[163](index=163&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the quarter ended June 30, 2025[164](index=164&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents other required information, including legal proceedings, risk factors, equity sales, and exhibits, for the reporting period [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 11 for legal proceedings information, confirming no material developments as of June 30, 2025 - No material developments in legal proceedings were reported as of June 30, 2025[166](index=166&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to the company's risk factors since those disclosed in the 2024 Form 10-K - No material changes in risk factors were reported from those disclosed in the 2024 Form 10-K[167](index=167&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the company's share repurchase program, including Q2 2025 repurchases and remaining authorization Common Stock Repurchases (Q2 2025, in thousands, except per share) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Remaining Purchase Price for Share Repurchases Under the Program | | :------------------------------ | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | | May 1, 2025 to May 31, 2025 | 660,395 | $15.14 | $57,742 | | Total | 660,395 | $15.14 | $57,742 | - The Board of Directors authorized a **$150.0 million** share repurchase program in February 2022, with **$57.7 million** remaining as of June 30, 2025[168](index=168&type=chunk)[170](index=170&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Indicates this item is not applicable, signifying no defaults upon senior securities - This item is not applicable[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates this item is not applicable, signifying no mine safety disclosures - This item is not applicable[173](index=173&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) Confirms no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q2 2025 - None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement during the second quarter of 2025[174](index=174&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) Provides a comprehensive list of all exhibits filed with the Form 10-Q, including corporate documents, indentures, and certifications - The exhibits include corporate governance documents (Certificate of Incorporation, By-Laws), common stock certificates, indentures for senior notes, and various certifications (CEO, CFO, Sarbanes Oxley Act)[175](index=175&type=chunk)[176](index=176&type=chunk) [Signatures](index=48&type=section&id=Signatures) Contains official signatures of PRA Group, Inc.'s CEO and CFO, certifying the filing of the report - The report is signed by Martin Sjolund, President and Chief Executive Officer, and Rakesh Sehgal, Executive Vice President and Chief Financial Officer, on August 6, 2025[180](index=180&type=chunk)

PRA Group specializes in buying portfolios of nonperforming loans -- debts that original lenders have been unable to collect -- at a discount from face value. These portfolios are typically sold by banks and other financial firms. Once acquired, PRA Group seeks to recover as much as it can through its own collection channels, using a mix of call centers, digital tools, and legal processes to reach debtors. The company's profitability rests on two factors: how well it buys these portfolios, and how efficient ...

PRA Group (PRAA) came out with quarterly earnings of $1.08 per share, beating the Zacks Consensus Estimate of $0.62 per share. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +74.19%. A quarter ago, it was expected that this debt collector would post earnings of $0.41 per share when it actually produced earnings of $0.09, delivering a surprise of -78.05%.Over the last four quarters, the compa ...

PRA Group (PRAA) Q2 2025 Earnings Call August 04, 2025 05:00 PM ET Company ParticipantsNajim Mostamand - VP - IRMartin Sjolund - President, CEO & DirectorRakesh Sehgal - EVP & CFORobert Dodd - Director - FinanceConference Call ParticipantsDavid Scharf - AnalystMark Hughes - AnalystOperatorEvening, and welcome to PRA Group Second Quarter twenty twenty five Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note th ...

PRA Group (PRAA) Q2 2025 Earnings Call August 04, 2025 05:00 PM ET Speaker0Evening, and welcome to PRA Group Second Quarter twenty twenty five Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference call over to Mr.Najeeb Mostamad, Vice President, Investor Relations for PRA Group. Please go ahead.Speaker1Thank you, operator. Good evening, every ...

Financial Performance - PRA Group achieved net income of $42 million in Q2 2025, or $13 million excluding the after-tax gain from the RCB sale in Brazil[24] - The company's revenues increased by 1% to $288 million in Q2 2025[25] - Adjusted EBITDA grew by 16% year-over-year[29] Portfolio and Investments - The company's purchase price multiples (PPMs) have improved, with 1H 2025 PPMs at 1.82x for Purchases and 2.14x for ERC[16] - Total cash collections increased by 13%[19] - Portfolio income is growing, with a 14% increase in Q1 2025 and a 20% increase in Q2 2025[22] Capital Structure and Strategy - PRA Group has no debt maturities until 2027[12] - The company repurchased $10 million of shares during the quarter[32, 34] - The company has $841 million available under its credit facilities as of June 30, 2025[34]