PRA (US:PRAA)2025-11-10 21:31Financial Performance - Portfolio income for Q3 2025 was $258.5 million, a 19.6% increase compared to Q3 2024[89] - Total revenues for Q3 2025 were $311.1 million, a 10.5% increase from $281.5 million in Q3 2024[89] - The company reported a net loss of $407.7 million for Q3 2025, a decrease of $434.9 million compared to the prior year[88] - Adjusted net income attributable to PRA Group, Inc. for Q3 2025 was $20,877,000, compared to $27,154,000 in Q3 2024, reflecting a decrease of 23.4%[127] - The adjusted ROATE for Q3 2025 was 9.3%, down from 14.3% in Q3 2024, indicating a decline in return on adjusted tangible equity[127] Cash Collections - Cash collections reached $542.2 million, reflecting a 13.7% increase year-over-year, with $333.7 million from the Americas and $208.6 million from Europe[88] - Total cash collections in Q3 2025 were $542.2 million, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024[98] - Year-to-date cash collections were $1.6 billion in 2025, an increase of $175.5 million, or 12.5%, compared to $1.4 billion in 2024[99] - Core cash collections in the Americas and Australia for Q3 2025 were $310,108,000, representing a 16.1% increase from $266,977,000 in Q3 2024[136] - The company reported a total cash collection adjusted for foreign currency at $542,244,000 for Q3 2025, compared to $487,294,000 in Q3 2024[136] Operating Expenses - Total operating expenses surged to $626.7 million, a 227.3% increase compared to the prior year period[89] - Total operating expenses in Q3 2025 were $626.7 million, an increase of $435.2 million, or 227.3%, compared to $191.5 million in Q3 2024[104] - Compensation and benefits expense was $74.2 million in Q3 2025, a decrease of $1.9 million, or 2.5%, compared to Q3 2024[105] - Legal collection costs in Q3 2025 increased by $18.0 million, or 62.5%, compared to Q3 2024, driven by expansion in U.S. legal collections[106] Goodwill and Impairment - Goodwill impairment charge of $412.6 million was recorded in Q3 2025 due to a sustained decrease in stock price[88] - A goodwill impairment charge of $412.6 million was recorded in Q3 2025 related to the DBC reporting unit[110] - Goodwill decreased by $369.5 million, or 93.2%, to $26.9 million as of September 30, 2025, due to the goodwill impairment charge[114] Debt and Equity - The company issued €300 million in senior notes due 2032, marking its first bond offering in Europe[87] - Total stockholders' equity decreased by 23.8% to $928.5 million compared to the previous year[89] - Total stockholders' equity decreased by $206.5 million, or 18.2%, to $928.5 million as of September 30, 2025, primarily due to the net loss for the period[116] - Borrowings increased by $280.4 million, or 8.4%, to $3.6 billion as of September 30, 2025, following the issuance of €300.0 million in senior notes[115] Collections and Portfolio Performance - Total estimated remaining collections (ERC) for the company reached $8.4 billion, with $3.6 billion from the U.S. and $515.8 million from other Americas and Australia[135] - Total estimated collections for the Americas and Australia Core from 1996 to 2025 amount to $19,326,066, with a current purchase price multiple of 287% for the 1996-2014 period[137] - The total estimated collections for Europe Core from 1996 to 2025 are $10,771,841, with a current purchase price multiple of 332% for the 1996-2014 period[137] - The total PRA Group's estimated collections amount to $34,204,846, with total cash collections of $1,575,968 in 2025[137] Liquidity and Cash Management - The company actively manages liquidity to meet business needs and financial obligations, ensuring financial stability[148] - As of September 30, 2025, cash and cash equivalents totaled $107.5 million, with $96.3 million held by international operations[149] - The company had $3.6 billion in outstanding borrowings, with estimated interest, unused fees, and principal payments for the next 12 months amounting to $249.8 million[157] - Forward flow agreements for the purchase of nonperforming loans are estimated at approximately $297.8 million over the next 12 months, with $235.4 million for the Americas and Australia and $62.4 million for Europe[156] Foreign Exchange and Other Financial Effects - The net effect of foreign exchange rates on cash increased by $18.4 million compared to the prior year, primarily due to the weakening of the U.S. dollar[168]