PRA Group's Q4 Earnings Beat Estimates on Portfolio Income Strength

Core Insights - PRA Group, Inc. reported fourth-quarter 2024 earnings per share of 47 cents, exceeding the Zacks Consensus Estimate by 4.4% and recovering from a loss of 22 cents per share in the prior-year quarter [1][2] - Total revenues reached $293.2 million, marking a 32.4% year-over-year increase and surpassing the consensus mark by 6% [2][4] - The company experienced strong cash collections and rising portfolio income, contributing to a rebound in net income, which was recorded at$ 22.8 million compared to a loss of $5.9 million in the previous year [2][4] Financial Performance - Cash collections improved by 14.1% year over year to$ 468.1 million, although it fell short of the Zacks Consensus Estimate of $481.9 million [3] - Portfolio income rose 18% year over year to$ 229.7 million, exceeding the consensus mark of $228.4 million [3] - Total operating expenses increased by 13.2% year over year to$ 199.1 million, primarily due to higher legal collection costs and fees [4] Yearly Overview - For the full year 2024, total revenues amounted to $1.1 billion, a significant increase of 38.9% from 2023 [6] - Portfolio income for the year rose 13.2% year over year to$ 857.2 million, with earnings per share improving to $1.79 from a loss of$ 2.13 in 2023 [6] Future Outlook - Management anticipates portfolio investments of $1.2 billion for 2025, with cash collections expected to grow in the high-single digits due to strong portfolio purchases [7] - The cash efficiency ratio is projected to exceed 60% in 2025, with a return on average tangible equity estimated at around 12% [7] Financial Position - As of December 31, 2024, PRA Group had cash and cash equivalents of$ 105.9 million, a decline of 5.9% from the end of 2023 [5] - Total assets increased by 9% to $4.9 billion, while borrowings rose by 14.1% to$ 3.3 billion [5]