Company Overview - PRA Group shares have increased by approximately 6.3% over the past month, which is underperforming compared to the S&P 500 [1] - The most recent earnings report indicated a downward trend in estimates, with a consensus estimate shift of -32.84% [2] Performance Metrics - PRA Group has a poor Growth Score of F and a similar score for momentum, while it received a B grade for value, placing it in the second quintile for this investment strategy [3] - The overall aggregate VGM Score for PRA Group is F, which is significant for investors not focused on a single strategy [3] Outlook - The estimates for PRA Group have been trending downward, indicating a negative shift in expectations [4] - The company holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the upcoming months [4] Industry Comparison - PRA Group is part of the Zacks Financial - Miscellaneous Services industry, where Euronet Worldwide has gained 3.2% over the past month [5] - Euronet Worldwide reported revenues of $915.5 million for the last quarter, reflecting a year-over-year increase of +6.8% [5] - For the current quarter, Euronet Worldwide is expected to report earnings of $2.62 per share, indicating a +16.4% change from the previous year [6]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section details the company's financial statements, notes, and management's analysis of financial condition and results [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Consolidated Financial Statements for Q1 2025, including key financial statements and detailed explanatory notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $5.15 billion as of March 31, 2025, from $4.93 billion at year-end 2024, primarily driven by a rise in Finance receivables, net Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total assets** | **$5,148,069** | **$4,931,155** | | Finance receivables, net | $4,308,334 | $4,140,742 | | Goodwill | $420,715 | $396,357 | | **Total liabilities** | **$3,867,551** | **$3,737,548** | | Borrowings | $3,466,075 | $3,326,621 | | **Total equity** | **$1,280,518** | **$1,193,607** | [Consolidated Income Statements](index=5&type=section&id=Consolidated%20Income%20Statements) For the three months ended March 31, 2025, total revenues increased by 5.5% year-over-year to $269.6 million, while net income remained relatively flat at $3.7 million Q1 2025 vs Q1 2024 Income Statement (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $269,619 | $255,586 | | Income from operations | $74,577 | $66,396 | | Interest expense, net | ($60,970) | ($52,278) | | Net income attributable to PRA Group, Inc. | $3,659 | $3,475 | | Diluted EPS | $0.09 | $0.09 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $52.6 million in Q1 2025, while net cash provided by financing activities increased to $85.6 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($52,580) | ($72,999) | | Net cash (used in)/provided by investing activities | ($24,385) | $15,211 | | Net cash provided by financing activities | $85,630 | $52,822 | | Net increase/(decrease) in cash | $22,881 | ($4,105) | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's operations, accounting policies, and financial instrument balances, including increased finance receivables and borrowings - The company's primary business is the purchase, collection, and management of nonperforming loan portfolios across the Americas, Europe, and Australia[21](index=21&type=chunk) - Finance receivables, net, increased to **$4.31 billion** at March 31, 2025, from **$4.14 billion** at year-end 2024, driven by **$291.7 million** in new purchases and positive foreign currency adjustments, partially offset by **$265.1 million** in recoveries[25](index=25&type=chunk) - Changes in expected recoveries for Q1 2025 were **$27.9 million**, a significant decrease from **$51.7 million** in Q1 2024, with the 2025 amount including **$16.5 million** from collections overperformance, mainly in Europe and Brazil[30](index=30&type=chunk)[31](index=31&type=chunk) - The company has one reportable segment: **Accounts Receivable Management (ARM)**[52](index=52&type=chunk) - Subsequent to the quarter end, in April 2025, the company completed the sale of its **11.7%** interest in RCB Investimentos S.A. and expects to record a pre-tax gain of approximately **$38.0 million** in Q2 2025[58](index=58&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q1 2025 results, highlighting an 18.7% increase in portfolio purchases and a 10.7% rise in cash collections year-over-year [Executive Overview](index=21&type=section&id=EXECUTIVE%20OVERVIEW) Q1 2025 saw significant growth in portfolio purchases and cash collections, leading to a record Estimated Remaining Collections (ERC) of $7.8 billion Q1 2025 Key Metrics vs. Q1 2024 | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Portfolio purchases | $291.7 million | +18.7% | | Cash collections | $497.4 million | +10.7% | | Estimated remaining collections (ERC) | $7.8 billion | +20.1% | | Net income attributable to PRA Group, Inc. | $3.7 million | +5.3% | | Diluted EPS | $0.09 | Unchanged | - In the U.S., portfolio purchases were **$161.0 million**, and U.S. legal collections increased **32.6%** YoY to **$111.2 million**, driven by optimization efforts and higher purchasing levels[72](index=72&type=chunk) - In Europe, portfolio purchases increased significantly by **$64.2 million** YoY to **$113.2 million**, and cash collections overperformed expectations, rising **10.8%** to **$185.6 million**[74](index=74&type=chunk) [Results of Operations](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) Comparing Q1 2025 to Q1 2024, total portfolio purchases rose 18.7% to $291.7 million, and total cash collections grew 10.7% to $497.4 million Portfolio Purchases by Region (in thousands) | Region | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Americas and Australia | $178,456 | $196,816 | (9.3)% | | Total Europe | $113,246 | $49,001 | 131.1% | | **Total** | **$291,702** | **$245,817** | **18.7%** | Cash Collections by Region (in thousands) | Region | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Americas and Australia | $311,860 | $282,070 | 10.6% | | Total Europe | $185,576 | $167,448 | 10.8% | | **Total** | **$497,436** | **$449,518** | **10.7%** | - Total portfolio revenue increased by **6.0%** YoY, driven by a **19.3%** increase in portfolio income, but tempered by a **46.0%** decrease in 'Changes in expected recoveries'[80](index=80&type=chunk) - Legal collection costs and fees increased by **25.1%** and **25.7%** respectively, due to increased activity in the U.S. legal collections channel[82](index=82&type=chunk)[83](index=83&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company manages liquidity through cash on hand, borrowings, and operational cash flow, with $918.9 million in total borrowing availability as of March 31, 2025 Borrowing Availability as of March 31, 2025 (in thousands) | Facility | Borrowings | Total Availability | | :--- | :--- | :--- | | North American revolving credit facility | $621,495 | $453,505 | | UK revolving credit facility | $474,091 | $250,909 | | European revolving credit facility | $615,133 | $214,508 | | **Total** | **$3,466,075** | **$918,922** | - The company has forward flow agreements with an estimated purchase price of approximately **$347.0 million** over the next 12 months[127](index=127&type=chunk) - As of March 31, 2025, **$67.7 million** remained available for share repurchases under the existing program, though no repurchases were made in Q1 2025[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate and foreign currency exposure, with no material changes reported since December 31, 2024 - As of March 31, 2025, **58%** of the company's **$3.5 billion** in total borrowings was either fixed rate or hedged to a fixed rate[147](index=147&type=chunk) - Revenues from non-U.S. operations totaled **$133.2 million** in Q1 2025, highlighting the company's exposure to foreign currency fluctuations[148](index=148&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[149](index=149&type=chunk) - No changes occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[150](index=150&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, and equity security sales [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the Consolidated Financial Statements for information regarding legal proceedings, indicating no material developments as of March 31, 2025 - For information on legal proceedings, the report refers to Note 11 of the financial statements[152](index=152&type=chunk) - As of March 31, 2025, there were no material developments in any of the previously disclosed legal proceedings[51](index=51&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in risk factors from those disclosed in the 2024 Form 10-K[153](index=153&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[154](index=154&type=chunk)

Core Insights - PRA Group, Inc. (PRAA) shares fell 30.8% following the release of first-quarter 2025 results, primarily due to increased operating costs and a significant drop in other revenues [1][4] - The company reported earnings per share of nine cents, missing the Zacks Consensus Estimate by 78.1%, while total revenues increased by 5.5% year over year to $269.6 million, but still fell short of expectations by 4.6% [2][3] Financial Performance - Cash collections reached $497.4 million, a 10.7% year-over-year increase, but missed the consensus estimate of $519.2 million [3] - Portfolio income rose 19.3% year over year to $241 million, although it did not meet the consensus mark of $249 million [3] - Other revenues plummeted 60.2% year over year to $0.7 million, missing the consensus estimate of $1.2 million [3] Operating Expenses - Total operating expenses increased by 3.1% year over year to $195 million, driven by higher legal collection costs and fees [4] - Net income for the first quarter was $9.1 million, reflecting a 22.9% decline year over year [4] Asset and Cash Position - The company purchased nonperforming loan portfolios valued at $291.7 million, an 18.7% increase year over year [5] - Cash and cash equivalents at the end of the first quarter were $128.7 million, up 21.4% from the end of 2024 [6] - Total assets increased by 4.4% year over year to $5.1 billion, with borrowings rising 4.2% to $3.5 billion [6] Future Outlook - Management projects portfolio investments of $1.2 billion for 2025 and anticipates high-single-digit growth in cash collections due to strong portfolio purchases [7] - The cash efficiency ratio is expected to exceed 60% in 2025, with a forecasted return on average tangible equity of around 12% [7] Market Position - PRAA currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook in the market [8]

Core Insights - PRA Group reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.41 per share, representing an earnings surprise of -78.05% [1] - The company posted revenues of $269.62 million for the quarter, missing the Zacks Consensus Estimate by 4.61%, compared to year-ago revenues of $255.59 million [2] - PRA Group shares have declined approximately 7.6% since the beginning of the year, underperforming the S&P 500's decline of -3.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.67 on revenues of $290.32 million, and for the current fiscal year, it is $2.26 on revenues of $1.17 billion [7] - The estimate revisions trend for PRA Group is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Financial - Miscellaneous Services industry, to which PRA Group belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Upstart Holdings, is expected to report quarterly earnings of $0.19 per share, reflecting a year-over-year change of +161.3% [9]

Financial Data and Key Metrics Changes - The company reported a 19% growth in portfolio purchases and a 13% growth in trailing twelve months adjusted EBITDA, marking the seventh consecutive quarter of adjusted EBITDA growth [6][7][29] - Net income attributable to the company was $4 million, or $0.09 in diluted earnings per share, which was lower than in recent quarters due to moderated changes in expected recoveries [29][31] - Total revenues for the quarter were $270 million, up 5% year over year, while operating expenses increased by 3% to $195 million [27][29] Business Line Data and Key Metrics Changes - In the U.S. legal collections channel, cash collections increased by 33% year over year to $111 million [8] - Portfolio income was $241 million for the quarter, reflecting a 19% increase due to higher portfolio investments and improved returns [24][29] - The company purchased $292 million of portfolios during the quarter, with $161 million in the U.S. and $113 million in Europe [21][22] Market Data and Key Metrics Changes - The company grew its Estimated Remaining Collections (ERC) to a record $7.8 billion, up 20% year over year and 5% sequentially [22][29] - Cash collections for the quarter were $497 million, an 11% increase from the prior year, with U.S. core cash collections up 20% [23][25] - Approximately half of total collections in Q1 came from outside the U.S., with nearly half of U.S. collections coming from the legal collections channel [23][25] Company Strategy and Development Direction - The company is focused on optimizing investments, operational execution, and managing expenses as part of its three strategic pillars [7][10] - The leadership transition to Martin Sjolund is expected to leverage successful strategies from the European business to enhance global operations [11][15] - The company aims to maintain a disciplined investment approach, avoiding aggressive M&A and focusing on attractive opportunities [17][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while net income was lower, the company maintained profitability and cash efficiency improved by nearly 300 basis points [6][7] - The company remains cautious about the macroeconomic environment but sees continued engagement from customers, reflected in the establishment of payment plans [26][36] - The company expects portfolio supply to remain elevated in the U.S. and stable in Europe, indicating a positive outlook for future cash collections [23][30] Other Important Information - The company completed the sale of its equity interest in Brazil, generating an estimated after-tax gain of approximately $28 million [31][69] - The debt to adjusted EBITDA ratio was 2.93 times as of March 31, within the long-term target range [29][30] - The company has $3.1 billion in total committed capital under credit facilities, with $919 million available for investment [30] Q&A Session Summary Question: What is the state of the consumer and tax refund season? - Management indicated that tax refunds were normal compared to prior years, and consumer engagement remains positive, with no signs of a decline in consumer activity [35][36] Question: Does the reduction in earnings guidance reflect first-quarter performance? - Management clarified that the first quarter's performance was lower than expected, prompting a cautious outlook for the remainder of the year due to macroeconomic uncertainties [42][43] Question: Will legal collection costs continue to be elevated? - Management expects legal collection costs to increase but at a much lower rate than in the previous year, indicating a moderation in spending [66][67] Question: How should noncontrolling interest be modeled? - Noncontrolling interest is primarily from investments in Brazil, with gains recognized from exiting a stake in a servicing company [68][69]

PRA Group Q1 2025 Conference Call Presentation Nasdaq: PRAA Forward-Looking Statements 1 Nasdaq: PRAA Q1 2025 Highlights Started 2025 with Momentum and Delivered Strong Results | Metric ($ in M, except per share amounts) | Q1 2025 | Q1 2024 | Change | | --- | --- | --- | --- | | Portfolio Purchases | $292 | $246 | +19% | | ERC1 | $7,805 | $6,498 | +20% | | Cash Collections | $497 | $450 | +11% | | Cash Efficiency Ratio2 | 60.8% | 58.0% | +284 bps | | Changes in Expected Recoveries | $28 | $52 | (46%) | | Ne ...

Financial Data and Key Metrics Changes - The company reported a 19% growth in portfolio purchases, with net income at $4 million, or $0.09 in diluted earnings per share, which was lower than in recent quarters due to moderated changes in expected recoveries [6][30] - Adjusted EBITDA grew by 13% year over year, marking the seventh consecutive quarter of growth [7][30] - Cash efficiency ratio improved to 61%, up from 58% in the prior year period [29] Business Line Data and Key Metrics Changes - U.S. legal cash collections increased by 33% year over year to $111 million, driven by reduced cycle times and optimized post-judgment activities [8] - Portfolio income for the quarter was $241 million, up 19% year over year, reflecting increased portfolio investments and improved returns [25] - Total portfolio revenue was $269 million for the quarter, with changes in expected recoveries amounting to $28 million [25] Market Data and Key Metrics Changes - The company purchased $292 million of portfolios during the quarter, with $178 million in the Americas and $113 million in Europe [21] - The expected cash collections from the current ERC balance is approximately $1.8 billion over the next twelve months [22] - Cash collections for the quarter were $497 million, up 11% from the prior year, with U.S. core cash collections up 20% [23][26] Company Strategy and Development Direction - The company is focused on optimizing investments, operational execution, and managing expenses as part of its three strategic pillars [7][10] - The leadership transition aims to leverage successful strategies from the European business to enhance global operations [11][15] - The company plans to continue investing judiciously in portfolios while maintaining a disciplined approach to capital deployment [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted a positive level of consumer engagement, with no significant signs of weakening consumer behavior despite a mismatch in cash collection expectations [38][40] - The macroeconomic environment remains uncertain, prompting a cautious approach to future cash generation expectations [44][47] - The company expects portfolio supply to remain elevated in the U.S. and stable in Europe, supporting ongoing investment opportunities [23][58] Other Important Information - The company completed the sale of its equity interest in Brazil, generating an estimated after-tax gain of approximately $28 million [32][70] - The effective tax rate for the quarter was 32%, with expectations for the full year to be in the mid-20s [29] Q&A Session Summary Question: What is the state of the consumer and tax refund season? - Management indicated that tax refunds were normal and consumer engagement remains positive, with no signs of a decline in consumer activity [37][38] Question: What are the implications of the reduction in earnings guidance? - The reduction reflects the first quarter's performance and a cautious outlook due to macroeconomic uncertainties [44][46] Question: Will legal collection costs continue to be elevated? - Legal collection costs are expected to increase but at a much lower level than in the previous year [67][68] Question: How should noncontrolling interest be modeled? - Noncontrolling interest relates to investments in Brazil, with gains recognized from exiting a stake in a servicing company [69][70]

PRA Group Reports First Quarter 2025 Results 19% Growth in Portfolio Purchases Drives Record ERC of $7.8 Billion Strong Portfolio Purchases and Execution of Strategic Initiatives Contributed to Double-Digit Cash Collections Growth "We are confident in the overall trajectory of the business and, at this time, we are not changing our previously provided financial targets, except for the return on average tangible equity, which is likely to be at a lower level than our target of approximately 12%. As we move t ...

Core Insights - PRA Group, Inc. reported a record estimated remaining collections (ERC) of $7.8 billion, reflecting a 20.1% year-over-year increase, driven by a 19% growth in portfolio purchases [1][8] - The company achieved total cash collections of $497.4 million in Q1 2025, marking a 10.7% increase compared to $449.5 million in Q1 2024 [5][8] - The transition to the newly appointed CEO Martin Sjolund is expected to enhance the company's strategic initiatives and operational efficiency [1][4] Financial Performance - Net income attributable to PRA Group, Inc. for Q1 2025 was $3.7 million, a 5.3% increase from $3.5 million in Q1 2024, with diluted earnings per share remaining at $0.09 [4][19] - Total portfolio revenue increased by 6.0% to $268.9 million in Q1 2025, compared to $253.7 million in Q1 2024 [6][8] - Operating expenses rose by 3.1% to $195.0 million in Q1 2025, primarily due to investments in the U.S. legal collections channel [17][19] Cash Collections and Portfolio Purchases - Total portfolio purchases reached $291.7 million in Q1 2025, an 18.7% increase from $245.8 million in Q1 2024 [9][8] - Cash collections from the Americas and Australia Core segment amounted to $288.2 million in Q1 2025, up from $256.9 million in Q1 2024 [5][9] - The company reported a cash efficiency ratio of 60.8%, reflecting an improvement of 284 basis points year-over-year [8] Strategic Outlook - The company maintains its long-term financial targets, with an expectation that the return on average tangible equity will be lower than the previously targeted 12% [4][8] - The management is optimistic about the overall trajectory of the business, emphasizing a commitment to driving growth, profitability, and shareholder value [4][8]

NORFOLK, Va., April 21, 2025 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, will report its first quarter 2025 results after market close on Monday, May 5, 2025, followed by a webcast and conference call at 5 p.m. E.T.To listen to PRA Group's webcast and view the corresponding slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone on May 5, call 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask fo ...