PRA Group Inc.

11/10/2025 | Press release | Distributed by Public on 11/10/2025 15:32

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
All references in this Quarterly Report on Form 10-Q ("Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries.
This Quarterly Report should be read in conjunction with our Form 10-K for the year ended December 31, 2024 ("2024 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report.
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are forward-looking statements, including statements regarding cash collection trends, operating cost trends, liquidity and capital needs and other statements of expectations, beliefs, future plans, strategies and anticipated events or trends. Our results could differ materially from those expressed or implied by such forward-looking statements, or our forward-looking statements could be wrong, as a result of risks, uncertainties and assumptions, including the following:
•volatility and uncertainty in general business and economic conditions or financial markets, including the impact of tariffs and tariff speculation on our customers;
•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;
•our ability to collect sufficient amounts on our nonperforming loans to fund our operations;
•a disruption or failure by any of our outsourcing, offshoring or other third-party service providers to meet their obligations and our service level expectations;
•our ability to achieve the expected benefits of offshoring a portion of our collection and related support activities;
•our ability to successfully implement our cash-generating and cost savings initiatives in our United States ("U.S.") business;
•disruptions of business operations caused by cybersecurity incidents or the failure of information technology infrastructure, networks or communication systems;
•our ability to effectively utilize artificial intelligence ("AI");
•changes in accounting standards and their interpretations;
•the occurrence of goodwill impairment charges;
•loss contingency accruals that are inadequate to cover actual losses;
•our ability to manage risks associated with our international operations;
•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws;
•our ability to comply with existing and new regulations in the collections industry;
•changes in tax provisions or exposure to additional tax liabilities;
•investigations, reviews, or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");
•our ability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");
•adverse outcomes in pending litigation or administrative proceedings;
•our ability to retain, expand, renegotiate or replace our credit facilities and our ability to comply with the covenants under our financing arrangements;
•our ability to manage our capital and liquidity needs effectively, including as a result of changes in credit or capital markets or adverse changes in our credit ratings, whether due to concerns about our industry in general, the financial condition of our competitors, or other factors;
•changes in interest or exchange rates;
•default by, or failure of, one or more of our counterparty financial institutions; and
•the "Risk Factors" in Item 1A of our 2024 Form 10-K and our other filings with the Securities and Exchange Commission.
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. The future events, developments or results described in, or implied by, this Quarterly Report could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.
EXECUTIVE OVERVIEW
General
We are a global financial services company with operations in the Americas, Europe and Australia. Our primary business is the purchase, collection and management of portfolios of nonperforming loans. We also purchase and provide fee-based services for class action claims recoveries in the U.S.
The nonperforming loans we acquire are primarily the unpaid obligations of individuals owed to credit originators. Our Core operation specializes in purchasing and collecting nonperforming loans, which are sold by credit originators when they choose not to pursue, or have been unsuccessful in, collecting the full balance owed. Our Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy or similar proceeding.
With 2,814 full-time equivalent employees worldwide, we collaborate with customers to help them resolve their debt. For additional information about our business, refer to Part I, Item 1 "Business" in our 2024 10-K.
Third quarter of 2025
Our focus for the third quarter of 2025 was on executing and delivering against our near-term priorities, which, for the U.S. business, included the reorganization of our leadership and governance structure, establishing a talent hub in Charlotte, North Carolina, and bringing our corporate and support staff back to the office. We strengthened our capital structure through the issuance of €300.0 million aggregate principal amount of senior notes due 2032 ("2032 senior notes"), our first bond offering in Europe. We also made progress on our information technology roadmap and capitalized on an opportunity to increase the ERC on certain portfolios by modifying an existing contract, and shortly after quarter-end, we implemented a cost reduction program in the U.S.
Due to a sustained decrease in our stock price and market capitalization, we performed an interim goodwill impairment test during the third quarter and determined that the goodwill in our Debt Buying and Collection ("DBC") reporting unit was fully impaired, which resulted in a non-cash impairment charge of $412.6 million.
Overall, we remain focused on executing our strategy and continuing to improve the financial performance of our business. Our financial results for the quarter included the following:
l Portfolio purchases
$255.5 million
Decrease of 27.0% compared to the prior year period, comprised of $154.3 million in the Americas and $101.2 million in Europe. Purchasing levels reflected selective buying this quarter as we sought to balance portfolio returns and leverage.
l Cash collections
$542.2 million
Increase of 13.7% compared to the prior year period, comprised of $333.7 million in the Americas and $208.6 million in Europe. Collections were well diversified globally and reflected recent purchasing levels and the continued momentum of our global initiatives, especially in our U.S. legal collections channel.
l ERC
$8.4 billion
Increase of 15.2% year-over-year, comprised of $4.2 billion in each of the Americas and Europe. A globally diversified ERC enables us to benefit from the aggregation of individual market risk into a wider global portfolio.
l Core Purchase Price Multiples (year-to-date)
2.14x Americas and Australia
Purchasing discipline continued to drive improved multiples in both the Americas and Europe. We heightened our focus on net returns, supported by a global investment framework that targets achievement of minimum return thresholds.
1.88x Europe
l Loss before income taxes
($379.6) million
Decrease of $407.9 million compared to the prior year period. Increased revenues, driven by higher portfolio income, were offset by the goodwill impairment charge, increased costs in our U.S. legal channel and higher interest expense.
l Net loss attributable to PRA
($407.7) million
Decrease of $434.9 million compared to the prior year period, with diluted EPS of $(10.43). The decrease was driven largely by the tax impact of the goodwill impairment charge and a discrete income tax benefit item recognized in the prior year period.
SUMMARY OF SELECTED FINANCIAL DATA
As of or for the period ended (in thousands, except per share and ratio data) Third Quarter Year-to-Date
2025 2024 % Change 2025 2024 % Change
Income statement
Portfolio income $ 258,549 $ 216,122 19.6 % $ 750,441 $ 627,468 19.6 %
Changes in expected recoveries 51,358 60,614 (15.3) 112,572 185,608 (39.3)
Total revenues 311,140 281,477 10.5 868,447 821,292 5.7
Total operating expenses 626,687 191,499 227.3 1,024,306 575,696 77.9
Interest expense, net 64,087 61,062 5.0 187,418 168,693 11.1
Gain on sale of equity method investment - - - 38,403 - 100.0
(Loss)/income before income taxes (379,605) 28,250 (1443.7) (305,101) 76,205 (500.4)
Income tax expense/(benefit) 24,361 (672) 3725.1 44,088 10,416 323.3
Net (loss)/income attributable to PRA Group, Inc. (407,703) 27,154 (1601.4) (361,670) 52,145 (793.6)
Diluted earnings per share (10.43) 0.69 (1611.6) (9.20) 1.32 (797.0)
Performance data and ratios
Net (loss)/income attributable to PRA Group (last 12 months) $ (343,214) $ 43,363 (891.5) %
Adjusted EBITDA (last 12 months)(1)
1,265,490 1,099,792 15.1
Cash efficiency ratio (2)
(15.4) % 60.1 % 35.2 % 59.0 %
Adjusted cash efficiency ratio (3)
60.6 60.1 61.3 59.0
Return on average Total stockholders' equity - PRA Group ("ROE") (4)
(144.0) 9.2 (41.8) 6.0
Return on average tangible equity ("ROATE") (5)
(181.6) 14.3 (57.9) 9.4
Adjusted return on average tangible equity ("Adjusted ROATE") (6)
9.3 14.3 6.0 9.4
Portfolio volumes
Portfolio purchases $ 255,492 $ 349,978 (27.0) % $ 893,699 $ 975,164 (8.4) %
Cash collections 542,244 477,110 13.7 1,575,968 1,400,510 12.5
Estimated remaining collections (period-end) 8,399,952 7,293,278 15.2
Balance sheet (period-end)
Finance receivables, net $ 4,572,167 $ 4,064,467 12.5 %
Borrowings 3,606,978 3,296,172 9.4
Total stockholders' equity - PRA Group, Inc. 928,493 1,218,882 (23.8)
Credit facility availability (period-end)
Based on current ERC $ 888,904 $ 412,740 115.4 %
Additional availability 301,371 585,920 (48.6)
Total availability 1,190,275 998,660 19.2
(1)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA.
(2)Calculated by dividing cash receipts less operating expenses by cash receipts.
(3)Calculated by dividing cash receipts less Total operating expenses excluding the impact of Goodwill impairment ("Adjusted operating expenses") by cash receipts ("Adjusted cash efficiency ratio"). Adjusted operating expenses is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total operating expenses, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted operating expenses.
(4)Calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.
(5)ROATE is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total stockholders' equity - PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity.
(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Net (loss)/income attributable to PRA Group, Inc. excluding the impact of certain transactions that are either unusual or infrequent in nature, or both ("Adjusted net income attributable to PRA Group, Inc.").
RESULTS OF OPERATIONS
Three months ended September 30, 2025 ("Third Quarter 2025" or "Q3 2025") compared to three months ended September 30, 2024 ("Third Quarter 2024" or "Q3 2024"); and nine months ended September 30, 2025 ("Year-to-Date 2025") compared to nine months ended September 30, 2024 ("Year-to-Date 2024").
Portfolio purchases
Portfolio purchases were as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Americas and Australia Core $ 139,484 $ 263,613 $ (124,129) (47.1) % $ 482,084 $ 637,034 $ (154,950) (24.3) %
Americas Insolvency 14,835 10,162 4,673 46.0 49,974 58,945 (8,971) (15.2)
Total Americas and Australia 154,319 273,775 (119,456) (43.6) 532,058 695,979 (163,921) (23.6)
Europe Core 95,239 71,507 23,732 33.2 346,094 243,495 102,599 42.1
Europe Insolvency 5,934 4,696 1,238 26.4 15,547 35,690 (20,143) (56.4)
Total Europe 101,173 76,203 24,970 32.8 361,641 279,185 82,456 29.5
Total portfolio purchases $ 255,492 $ 349,978 $ (94,486) (27.0) % $ 893,699 $ 975,164 $ (81,465) (8.4) %
Our portfolio purchases reflect a global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of the opportunities in our markets.
Total portfolio purchases were $255.5 million in Q3 2025, a decrease of $94.5 million, or 27.0%, compared to $350.0 million in Q3 2024. Americas and Australia portfolio purchases decreased $119.5 million, while purchases in Europe increased $25.0 million. Q3 2025 purchases reflected a heightened focus on prioritizing net returns over volumes purchased and balancing purchases with our leverage.
Total year-to-date portfolio purchases were $893.7 million in 2025, a decrease of $81.5 million, or 8.4%, compared to $975.2 million in 2024. Americas and Australia purchases decreased $163.9 million, while purchases in Europe increased $82.5 million.
Cash collections
Cash collections were as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Americas and Australia Core $ 310,108 $ 266,977 $ 43,131 16.2 % $ 899,966 $ 787,666 $ 112,300 14.3 %
Americas Insolvency 23,568 26,065 (2,497) (9.6) 71,597 78,244 (6,647) (8.5)
Total Americas and Australia 333,676 293,042 40,634 13.9 971,563 865,910 105,653 12.2
Europe Core 185,910 158,242 27,668 17.5 535,933 460,914 75,019 16.3
Europe Insolvency 22,658 25,826 (3,168) (12.3) 68,472 73,686 (5,214) (7.1)
Total Europe 208,568 184,068 24,500 13.3 604,405 534,600 69,805 13.1
Total cash collections $ 542,244 $ 477,110 $ 65,134 13.7 % $ 1,575,968 $ 1,400,510 $ 175,458 12.5 %
Total cash collections were $542.2 million in Q3 2025, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024. U.S. Core collections increased $44.7 million, which included a $26.4 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $27.7 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange variation. These increases were partially offset by a $4.3 million decrease in cash collections in South America, due primarily to lower recent purchasing levels.
Total 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. U.S. Core collections increased $125.2 million, which included a $77.0 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $75.0 million, spread broadly across most of our markets and due, in part, to favorable foreign
exchange rate variation. These increases were partially offset by a $19.2 million decrease in cash collections in South America, due primarily to lower recent purchasing levels and unfavorable foreign exchange rate variation.
Portfolio revenue
Portfolio revenue was as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Portfolio income $ 258,549 $ 216,122 $ 42,427 19.6 % $ 750,441 $ 627,468 $ 122,973 19.6 %
Recoveries collected in excess of forecast 27,351 34,158 (6,807) (19.9) 84,153 124,256 (40,103) (32.3)
Changes in expected future recoveries 24,007 26,456 (2,449) (9.3) 28,419 61,352 (32,933) (53.7)
Changes in expected recoveries 51,358 60,614 (9,256) (15.3) 112,572 185,608 (73,036) (39.3)
Total portfolio revenue $ 309,907 $ 276,736 $ 33,171 12.0 % $ 863,013 $ 813,076 $ 49,937 6.1 %
Total portfolio revenue was $309.9 million in Q3 2025, an increase of $33.2 million, or 12.0%, compared to $276.7 million in Q3 2024. Portfolio income increased $42.4 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $9.3 million, or 15.3%. Recoveries collected in excess of forecast decreased $6.8 million due largely to a one-time payment of $15.0 million to a seller in Q3 2025 to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our South American pools. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $2.4 million due primarily to a lower net increase in the collections forecasts on certain U.S. Core pools. These decreases were partially offset by a net increase in the collections forecasts on our South American pools in Q3 2025 compared to a net decrease in Q3 2024.
Total year-to-date portfolio revenue was $863.0 million in 2025, an increase of $49.9 million, or 6.1%, compared to $813.1 million in 2024. Portfolio income increased $123.0 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $73.0 million. Recoveries collected in excess of forecast decreased $40.1 million compared to the prior year period due primarily to lower overperformance on our U.S. pools and the one-time payment of $15.0 million to a seller in the current year period to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our European pools across most of our markets. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S.,decreased $32.9 million due largely to a net decrease in the collections forecast on our U.S. Core pools compared to a net increase in the prior year period. These decreases were partially offset by a higher net increase in the collections forecast on our European pools and a net increase in the collections forecasts on our South American pools compared to a net decrease in the prior year period.
Gain on sale of equity method investment
In April 2025, we sold our 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, and recorded a gain of $38.4 million in our Consolidated Financial Statements for the second quarter of 2025. The sale did not impact the ownership of our portfolio investments in Brazil or our existing operations and expected future portfolio investments.
Operating expenses
Operating expenses were as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Compensation and benefits $ 74,237 $ 76,106 $ (1,869) (2.5) % $ 223,284 $ 223,944 $ (660) (0.3) %
Legal collection costs 46,764 28,781 17,983 62.5 117,741 90,746 26,995 29.7
Legal collection fees 16,558 14,479 2,079 14.4 47,413 40,353 7,060 17.5
Agency fees 24,556 21,020 3,536 16.8 68,612 61,751 6,861 11.1
Professional and outside services 22,051 20,452 1,599 7.8 64,225 63,626 599 0.9
Communication 8,377 10,048 (1,671) (16.6) 28,271 34,203 (5,932) (17.3)
Rent and occupancy 3,654 4,175 (521) (12.5) 10,638 12,455 (1,817) (14.6)
Depreciation, amortization and impairment of long-lived assets 2,439 2,469 (30) (1.2) 8,711 7,826 885 11.3
Goodwill impairment 412,611 - 412,611 100.0 412,611 - 412,611 100.0
Other operating expenses 15,440 13,969 1,471 10.5 42,800 40,792 2,008 4.9
Total operating expenses $ 626,687 $ 191,499 $ 435,188 227.3 % $ 1,024,306 $ 575,696 $ 448,610 77.9 %
Compensation and benefits
Compensation and benefits expense was $74.2 million in Q3 2025, a decrease of $1.9 million, or 2.5%, compared to Q3 2024, while the year-to-date expense decreased $0.7 million, or 0.3%. These decreases were primarily due to lower collector compensation costs in the U.S., driven by the consolidation of our U.S. call centers and offshoring of a portion of our U.S. collection activities, partially offset by higher non-collector wage costs.
Legal collection costs
Legal collection costs consist primarily of costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account. Q3 2025 legal collection costs increased $18.0 million, or 62.5%, compared to Q3 2024, while the year-to-date costs increased $27.0 million, or 29.7%. These increases were driven by an expansion in activity in our U.S. legal collections channel resulting, in large part, from our cash generating initiatives.
Legal collection fees
Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q3 2025 fees increased $2.1 million, or 14.4%, compared to Q3 2024, while year-to-date fees increased $7.1 million, or 17.5%. These increases mainly reflected higher external legal collections within our U.S. Core portfolio resulting, in large part, from the expansion in activity in our U.S. legal collections channel.
Agency fees
Agency fees primarily represent third-party collection fees. Q3 2025 fees increased $3.5 million, or 16.8%, compared to Q3 2024, while year-to-date fees increased $6.9 million, or 11.1%. Higher collection fees in Brazil and increased outsourcing in certain European markets drove the increase for the quarterly period. The increase for the year-to-date period was primarily due to additional fees paid to debt collection agencies in the U.S. and increased outsourcing in Europe.
Communication
Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q3 2025 communication expense decreased $1.7 million, or 16.6%, compared to Q3 2024, while year-to-date expense decreased $5.9 million, or 17.3%. These decreases were primarily due to a mix of lower-cost communications strategies utilized across our U.S. Core operation.
Goodwill impairment
We recorded a goodwill impairment charge of $412.6 million in Q3 2025 related to our DBC reporting unit. For additional information, refer to Note 4to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Interest expense, net
Interest expense, net was as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Interest on revolving credit facilities and term loan, and unused line fees $ 40,207 $ 34,006 $ 6,201 18.2 % $ 115,323 $ 101,140 $ 14,183 14.0 %
Interest on senior notes 24,911 25,368 (457) (1.8) 74,734 65,816 8,918 13.5
Amortization of debt premium and issuance costs, net 1,976 3,795 (1,819) (47.9) 5,839 8,326 (2,487) (29.9)
Interest income (3,007) (2,107) (900) 42.7 (8,478) (6,589) (1,889) 28.7
Interest expense, net $ 64,087 $ 61,062 $ 3,025 5.0 % $ 187,418 $ 168,693 $ 18,725 11.1 %
Interest expense, net was $64.1 million in Q3 2025, an increase of $3.0 million, or 5.0%, compared to Q3 2024, while year-to-date expense increased $18.7 million, or 11.1%. These increases were primarily due to higher average debt balances.
Income tax expense/(benefit)
Income tax expense/(benefit) and our effective tax rate were as follows for the periods indicated (in thousands):
Third Quarter Year-to-Date
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Income tax expense/(benefit) $ 24,361 $ (672) $ 25,033 3,725.1 % $ 44,088 $ 10,416 $ 33,672 323.3 %
Effective tax rate (6.4) % (2.4) % (14.5) % 13.7 %
Income tax expense was $24.4 million in Q3 2025, an increase of $25.0 million compared to an income tax benefit of $0.7 million in Q3 2024, while year-to-date expense increased $33.7 million to $44.1 million. The effective tax rate in Q3 2025 was (6.4)% compared to an effective tax benefit rate of (2.4)% in Q3 2024. Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The change in the effective tax rate for both the quarterly and year-to-date periods was due largely to the goodwill impairment charge in the current year and a $7.7 million prior year reduction in tax expense due to the reversal of a valuation allowance associated with the resolution of a tax matter in Europe.
Balance sheet
Finance receivables, net
Finance receivables, net were $4.6 billion as of September 30, 2025, an increase of $431.4 million, or 10.4%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $893.7 million, foreign currency translation adjustments of $252.3 million and Changes in expected recoveries of $112.6 million, partially offset by recoveries collected and applied to Finance receivables, net of $827.2 million.
Goodwill
Goodwill was $26.9 million as of September 30, 2025, a decrease of $369.5 million, or 93.2%, compared to $396.4 million as of December 31, 2024, due to a goodwill impairment charge. As of September 30, 2025, as part of our interim impairment assessment, based on a sustained decrease in our stock price and market capitalization, we determined there to be an indicator of potential goodwill impairment in our DBC reporting unit. As a result, we performed a quantitative impairment test as of September 30, 2025, and determined that the goodwill in our DBC reporting unit was fully impaired. For additional information, refer to Note 4to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report. As of September 30, 2025, goodwill consisted of $26.9 million in our Claims Compensation Bureau, LLC reporting unit.
Borrowings
Borrowings were $3.6 billion as of September 30, 2025, an increase of $280.4 million, or 8.4%, compared to $3.3 billion as of December 31, 2024. On September 30, 2025, we completed the issuance of €300.0 million ($352.0 million) in aggregate principal amount of our 2032 senior notes and initially paid down approximately $172.0 million principal amount of outstanding borrowings under each of our North American and European revolving credit facilities with the net proceeds. Issuance of the 2032 senior notes drove an increase of $352.0 million in borrowings under senior notes, which was partially offset by net payments of $53.3 million on our United Kingdom revolving credit facility.
Total stockholders' equity - PRA Group, Inc.
Total stockholders' equity - PRA Group, Inc. was $928.5 million as of September 30, 2025, a decrease of $206.5 million, or 18.2%, compared to $1.1 billion as of December 31, 2024. The decrease was driven primarily by the net loss for the period, partially offset by foreign currency translation adjustments.
NON-GAAP FINANCIAL MEASURES
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:
•Adjusted EBITDA, to evaluate our performance and to set performance goals;
•Adjusted cash efficiency ratio, to monitor and evaluate operating expenses;
•ROATE, to monitor and evaluate operating performance relative to our equity; and
•Adjusted ROATE, to standardize ROATE across periods by eliminating certain nonrecurring transactions.
Adjusted EBITDA
We present Adjusted EBITDA because we consider it an important supplemental measure of our operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of our operational and financial performance, as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the operations of our business, and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net (loss)/income determined in accordance with GAAP. In addition, our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures presented by other companies. Adjusted EBITDA is calculated starting with our GAAP financial measure, Net (loss)/income attributable to PRA Group, Inc. and is adjusted for:
•income tax expense (or less income tax benefit);
•foreign exchange loss (or less foreign exchange gain);
•interest expense, net (or less interest income, net);
•other expense (or less other income);
•depreciation and amortization;
•impairment of real estate;
•goodwill impairment;
•net income attributable to noncontrolling interests;
•gain on sale of equity method investment; and
•recoveries collected and applied to Finance receivables, net less Changes in expected recoveries.
The following table provides a reconciliation of Net (loss)/income attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):
Adjusted EBITDA Reconciliation
Twelve Months Ended
Year Ended
September 30, 2025 December 31, 2024
Net (loss)/income attributable to PRA Group, Inc. $ (343,214) $ 70,601
Adjustments:
Income tax expense 54,704 21,032
Foreign exchange loss 81 9
Interest expense, net 247,992 229,267
Other expense (1)
308 851
Depreciation and amortization 10,273 10,792
Impairment of real estate 1,404 -
Goodwill impairment 412,611 -
Net income attributable to noncontrolling interests 16,809 17,972
Gain on sale of equity method investment (38,403) -
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 902,925 787,028
Adjusted EBITDA $ 1,265,490 $ 1,137,552
(1)Other expense reflects non-operating activities.
Cash efficiency
We use an Adjusted cash efficiency ratio, which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating expenses, excluding goodwill impairment, relative to our cash collections plus fees and revenue recognized from our class action claims recovery services. Management believes the Adjusted cash efficiency ratio is a useful financial measure for investors in evaluating our management of operating expenses. 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 Adjusted cash efficiency ratios for the periods indicated (in thousands, except for ratio data):
Adjusted Operating Expenses Reconciliation and Adjusted Cash Efficiency Ratio
Third Quarter Year-to-Date
2025 2024 2025 2024
Cash collections $ 542,244 $ 477,110 $ 1,575,968 $ 1,400,510
Fee income 622 3,138 3,745 4,036
Cash receipts 542,866 480,248 1,579,713 1,404,546
Total operating expenses 626,687 191,499 1,024,306 575,696
Less: Goodwill impairment 412,611 - 412,611 -
Adjusted operating expenses 214,076 191,499 611,695 575,696
Cash receipts less Adjusted operating expenses 328,790 288,749 968,018 828,850
Adjusted cash efficiency ratio 60.6 % 60.1 % 61.3 % 59.0 %
Return on average tangible equity and adjusted return on average tangible equity
We use ROATE, which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to our equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of our long-term stockholder return. Average tangible equity is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc. by average tangible equity.
ROATE may include certain items that are not indicative of the ongoing operating results of our business. Accordingly, management also uses Adjusted ROATE to monitor and evaluate operating performance relative to our equity. Management believes Adjusted ROATE is a useful financial measure for investors because it excludes the impact of certain transactions that are either unusual or infrequent in nature, or both. Adjusted ROATE is calculated by dividing Adjusted net income attributable to PRA Group, Inc. by average tangible equity.
The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity and a reconciliation of Net (loss)/income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and presents our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):
Average Tangible Equity Reconciliation (1)
Balance as of Period End Third Quarter Year-to-Date
September 30, 2025 September 30, 2024 2025 2024 2025 2024
Total stockholders' equity - PRA Group, Inc. (2)
$ 928,493 $ 1,218,882 $ 1,132,709 $ 1,182,173 $ 1,154,889 $ 1,165,196
Less: Goodwill 26,871 423,011 233,160 419,329 320,848 420,517
Less: Other intangible assets 1,470 1,620 1,506 1,609 1,488 1,656
Average tangible equity $ 898,043 $ 761,235 $ 832,553 $ 743,023
(1)Amounts represent the average balances for the respective periods.
(2)Amounts not adjusted for Gain on sale of equity method investment due to the de minimus effect.
ROATE (3)
Third Quarter Year-to-Date
2025 2024 2025 2024
Net (loss)/income attributable to PRA Group, Inc. $ (407,703) $ 27,154 $ (361,670) $ 52,145
ROATE (181.6) % 14.3 % (57.9) % 9.4 %
(3)Based on annualized Net (loss)/income attributable to PRA Group, Inc.
Adjusted Net Income Attributable to PRA Group, Inc. Reconciliation and Adjusted ROATE (4)
Third Quarter Year-to-Date
2025 2024 2025 2024
Net (loss)/income attributable to PRA Group, Inc. $ (407,703) $ 27,154 $ (361,670) $ 52,145
Less: Gain on sale of equity method investment, net of tax --- --- (29,686) -
Plus: Goodwill impairment, net of tax 428,580 - 428,580 -
Adjusted net income attributable to PRA Group, Inc. 20,877 27,154 37,224 52,145
Adjusted ROATE 9.3 % 14.3 % 6.0 % 9.4 %
(4)Based on annualized Adjusted net income attributable to PRA Group, Inc.
SUPPLEMENTAL PERFORMANCE DATA
The tables in this section provide supplemental performance data about our:
•ERC by geography, portfolio type and expected year of collection;
•Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections; and
•nonperforming loan portfolios and collections by geography, portfolio type and year of purchase.
The collections data presented reflects gross cash collections and does not reflect any costs to collect; therefore, it may not represent relative profitability. The past performance of pools within certain geographies and portfolio types may not be comparable with other locations and portfolio types or indicative of future results. Customer payment patterns in all of the countries in which we operate can be affected by various factors, including general business and economic conditions, seasonal employment trends, income tax refunds and holiday spending habits.
Purchasing
We purchase portfolios of nonperforming loans from a variety of creditors, or acquire portfolios through strategic acquisitions, and segregate them into our Core or Insolvency portfolios, based on the status of the account upon acquisition. In addition, the accounts are segregated into geographical regions based upon where the account was acquired and, as applicable, foreign currency exchange rates are fixed for purposes of comparability in future periods. Ultimately, accounts are aggregated into annual pools based on portfolio type, geography and year of acquisition. Portfolios of accounts that were in an insolvency status at the time of acquisition are represented under Insolvency headings in the tables below. All other acquisitions of portfolios of accounts are included under Core headings. Once an account is initially segregated, it is not later transferred from an Insolvency pool to a Core pool, or vice versa.
Purchase price multiple
The purchase price multiple represents our estimate of total cash collections over the original purchase price of the portfolio. Purchase price multiples can vary over time due to a variety of factors, including pricing competition, supply levels, age of the accounts acquired, type and mix of portfolios purchased, expected costs to collect and returns, and changes in operational efficiency and effectiveness. When we pay more for a portfolio, the purchase price multiple and effective interest rate are generally lower. Certain types of accounts, such as Insolvency accounts, have lower collection costs, and we generally pay more for those types of accounts, which results in lower purchase price multiples but similar net income margins compared to other portfolio purchases.
ERC and TEC
Depending on the level of performance and expected future impacts from our operations, we may update ERC and TEC levels based on the results of our cash forecasting with a correlating adjustment to the purchase price multiple. We follow an established process to evaluate ERC, and we typically do not adjust our ERC and TEC until we gain sufficient collection experience with a pool of accounts. Over time, our TEC has often increased as pools have aged resulting in the ratio of TEC to purchase price for any given year of buying to gradually increase.
For additional information about our nonperforming loan portfolios, refer to Note 2to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Estimated remaining collections
The following table displays our ERC by geography, year and portfolio for the 12 months ending September 30, (in thousands):
ERC By Geography, Year and Portfolio
Americas and Australia Core Americas Insolvency
Total Americas and Australia (1)
Europe Core Europe Insolvency
Total Europe (2)
Total
2026 $ 1,121,962 $ 83,141 $ 1,205,103 $ 635,647 $ 63,600 $ 699,247 $ 1,904,350
2027 860,631 67,524 928,155 536,158 44,596 580,754 1,508,909
2028 592,397 47,649 640,046 450,425 29,390 479,815 1,119,861
2029 405,389 27,712 433,101 386,865 17,170 404,035 837,136
2030 281,785 12,658 294,443 334,663 7,938 342,601 637,044
2031 196,881 2,042 198,923 290,693 2,966 293,659 492,582
2032 138,488 48 138,536 253,674 1,171 254,845 393,381
2033 98,226 3 98,229 222,348 577 222,925 321,154
2034 67,799 1 67,800 195,158 271 195,429 263,229
2035 48,629 - 48,629 172,063 109 172,172 220,801
Thereafter 107,576 - 107,576 593,706 223 593,929 701,505
Total ERC $ 3,919,763 $ 240,778 $ 4,160,541 $ 4,071,400 $ 168,011 $ 4,239,411 $ 8,399,952
(1)Reflects ERC of $3.6 billion for the U.S. and $515.8 million for other Americas and Australia.
(2)Reflects ERC of $1.64 billion for the UK, $1.06 billion for Central Europe, $964.5 million for Northern Europe and $567.7 million for Southern Europe.
Cash collections
The following table displays our cash collections by geography and portfolio, Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections for the periods indicated (in thousands):
Cash Collections by Geography and Portfolio
Third Quarter Year-to-Date
2025 2024 2025 2024
Americas and Australia
Call center and other $ 167,822 54.1% $ 150,103 56.2% $494,812 55.0% $454,250 57.7%
Legal 142,286 45.9 116,874 43.8 405,154 45.0 333,416 42.3
Core 310,108 100% 266,977 100% 899,966 100% 787,666 100%
Insolvency 23,568 26,065 71,597 78,244
Total Americas and Australia $ 333,676 $ 293,042 $971,563 $865,910
Europe
Call center and other $ 113,330 61.0% $ 98,287 62.1% $324,619 60.6% $286,294 62.1%
Legal 72,580 39.0 59,955 37.9 211,314 39.4 174,620 37.9
Core 185,910 100% 158,242 100% 535,933 100% 460,914 100%
Insolvency 22,658 $ 25,826 68,472 $ 73,686
Total Europe $ 208,568 $ 184,068 $ 604,405 $ 534,600
Total Company
Call center and other 281,152 56.7% 248,390 58.4% 819,431 57.1% 740,544 59.3%
Legal 214,866 43.3 176,829 41.6 616,468 42.9 508,036 40.7
Core 496,018 100% 425,219 100% 1,435,899 100% 1,248,580 100%
Insolvency 46,226 51,891 140,069 151,930
Total cash collections $ 542,244 $ 477,110 $ 1,575,968 $ 1,400,510
Total cash collections adjusted(1)
$ 542,244 $ 487,294 $ 1,575,968 $ 1,407,785
(1)Total cash collections adjusted refers to prior period foreign currency cash collections remeasured at average U.S. dollar exchange rates for the current period.
Purchase Price Multiples
as of September 30, 2025
In thousands
Purchase Period
Purchase Price (1)(2)
Total Estimated Collections (3)
Estimated Remaining Collections (4)
Current Purchase Price Multiple
Original Purchase Price Multiple (5)
Americas and Australia Core
1996-2014 $ 2,336,839 $ 6,698,114 $ 84,642 287% 228%
2015 443,114 920,784 28,969 208% 205%
2016 455,767 1,104,447 48,732 242% 201%
2017 532,851 1,234,254 76,722 232% 193%
2018 653,975 1,561,810 114,403 239% 202%
2019 581,476 1,336,705 104,678 230% 206%
2020 435,668 975,474 109,706 224% 213%
2021 435,846 734,910 191,471 169% 191%
2022 406,082 713,779 237,056 176% 179%
2023 622,583 1,217,624 620,578 196% 197%
2024 823,662 1,794,207 1,341,743 218% 211%
2025 483,333 1,033,958 961,063 214% 214%
Subtotal 8,211,196 19,326,066 3,919,763
Americas Insolvency
1996-2014 1,414,476 2,723,230 2 193% 155%
2015 63,170 88,214 3 140% 125%
2016 91,442 118,571 51 130% 123%
2017 275,257 359,423 362 131% 125%
2018 97,879 137,065 143 140% 127%
2019 123,077 167,787 447 136% 128%
2020 62,130 90,248 3,060 145% 136%
2021 55,187 74,696 10,147 135% 136%
2022 33,442 47,948 16,283 143% 139%
2023 91,282 119,910 62,374 131% 135%
2024 68,391 99,788 70,538 146% 149%
2025 50,001 80,059 77,368 160% 160%
Subtotal 2,425,734 4,106,939 240,778
Total Americas and Australia 10,636,930 23,433,005 4,160,541
Europe Core
1996-2014 814,553 2,705,950 384,326 332% 205%
2015 411,340 768,527 120,755 187% 160%
2016 333,090 590,863 144,627 177% 167%
2017 252,174 364,846 84,606 145% 144%
2018 341,775 563,250 159,355 165% 148%
2019 518,610 876,312 292,208 169% 152%
2020 324,119 602,714 229,314 186% 172%
2021 412,411 728,081 359,607 177% 170%
2022 359,447 593,532 399,825 165% 162%
2023 410,593 699,868 503,908 170% 169%
2024 451,786 817,307 752,460 181% 180%
2025 357,530 671,159 640,409 188% 188%
Subtotal 4,987,428 9,982,409 4,071,400
Europe Insolvency
2014 10,876 19,233 - 177% 129%
2015 18,973 29,622 - 156% 139%
2016 39,338 58,382 497 148% 130%
2017 39,235 52,653 335 134% 128%
2018 44,908 53,300 871 119% 123%
2019 77,218 114,458 5,579 148% 130%
2020 105,440 162,059 9,883 154% 129%
2021 53,230 79,535 14,261 149% 134%
2022 44,604 65,672 26,299 147% 137%
2023 46,558 66,278 39,858 142% 138%
2024 43,459 64,128 47,281 148% 147%
2025 15,888 24,112 23,147 152% 152%
Subtotal 539,727 789,432 168,011
Total Europe 5,527,155 10,771,841 4,239,411
Total PRA Group $ 16,164,085 $ 34,204,846 $ 8,399,952
(1)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.
(2)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the period-end exchange rate for the respective year of purchase.
(3)Non-U.S. amounts are presented at the period-end exchange rate for the respective period of purchase.
(4)Non-U.S. amounts are presented at the September 30, 2025 exchange rate.
(5)The original purchase price multiple represents the purchase price multiple at the end of the period of acquisition.
Portfolio Financial Information(1)
In thousands
September 30, 2025 (year-to-date) As of September 30, 2025
Purchase Period
Cash
Collections (2)
Portfolio Income (2)
Changes in Expected Recoveries (2)
Total Portfolio Revenue (2)
Net Finance Receivables (3)
Americas and Australia Core
1996-2014 $ 33,116 $ 15,076 $ 14,539 $ 29,615 $ 25,383
2015 10,292 6,159 (3,525) 2,634 12,630
2016 14,478 8,358 1,599 9,957 17,005
2017 21,888 11,477 5,393 16,870 31,608
2018 38,675 16,918 8,963 25,881 56,671
2019 37,963 16,735 4,280 21,015 53,085
2020 42,193 17,485 4,356 21,841 57,455
2021 49,989 26,763 (10,142) 16,621 93,816
2022 72,183 31,861 (9,887) 21,974 135,737
2023 182,901 89,871 (33,376) 56,495 332,260
2024 323,633 187,571 26,891 214,462 708,555
2025 72,655 56,814 8,544 65,358 475,270
Subtotal 899,966 485,088 17,635 502,723 1,999,475
Americas Insolvency
1996-2014 716 16 715 731 -
2015 83 5 72 77 2
2016 221 14 120 134 46
2017 827 78 381 459 318
2018 829 29 425 454 134
2019 2,269 78 713 791 425
2020 7,739 670 (1,131) (461) 2,791
2021 9,227 1,250 314 1,564 9,401
2022 8,178 1,636 478 2,114 14,339
2023 21,637 6,212 498 6,710 52,274
2024 17,177 8,236 (1,177) 7,059 52,606
2025 2,694 2,971 1,335 4,306 50,889
Subtotal 71,597 21,195 2,743 23,938 183,225
Total Americas and Australia 971,563 506,283 20,378 526,661 2,182,700
Europe Core
1996-2014 73,218 43,776 19,058 62,834 86,025
2015 21,742 9,043 7,080 16,123 59,498
2016 20,097 8,757 4,139 12,896 81,902
2017 11,764 4,277 (1,251) 3,026 56,212
2018 26,250 9,330 1,789 11,119 102,423
2019 46,787 14,952 12,991 27,943 196,370
2020 34,169 13,046 10,509 23,555 138,912
2021 45,708 19,334 6,760 26,094 216,925
2022 51,788 20,379 3,229 23,608 251,939
2023 70,508 28,642 5,439 34,081 300,972
2024 103,453 44,540 5,065 49,605 420,530
2025 30,449 14,420 3,954 18,374 343,433
Subtotal 535,933 230,496 78,762 309,258 2,255,141
Europe Insolvency
2014 135 - 135 135 -
2015 119 - 119 119 -
2016 413 62 328 390 128
2017 787 34 501 535 210
2018 1,247 70 311 381 728
2019 5,073 498 433 931 4,745
2020 13,206 988 2,212 3,200 9,221
2021 11,394 1,269 4,102 5,371 12,901
2022 11,855 2,183 2,759 4,942 22,487
2023 11,830 3,225 1,314 4,539 32,904
2024 11,455 4,610 1,020 5,630 35,178
2025 958 723 198 921 15,824
Subtotal 68,472 13,662 13,432 27,094 134,326
Total Europe 604,405 244,158 92,194 336,352 2,389,467
Total PRA Group $ 1,575,968 $ 750,441 $ 112,572 $ 863,013 $ 4,572,167
(1) Includes the nonperforming loan portfolios that were acquired through our business acquisitions.
(2)Non-U.S. amounts are presented using the average exchange rates during the current reporting period.
(3)Non-U.S. amounts are presented at the September 30, 2025 exchange rate.
Cash Collections by Year, By Year of Purchase (1)
as of September 30, 2025
In millions
Cash Collections
Purchase Period
Purchase Price (2)(3)
1996-2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
Americas and Australia Core
1996-2014 $ 2,336.8 $ 4,371.9 $ 727.8 $ 470.0 $ 311.2 $ 222.5 $ 155.0 $ 96.6 $ 68.8 $ 51.0 $ 40.2 $ 49.4 $ 33.1 $ 6,597.5
2015 443.1 - 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 14.1 17.3 10.3 894.8
2016 455.8 - - 138.7 256.5 194.6 140.6 105.9 74.2 38.4 24.9 24.0 14.5 1,012.3
2017 532.9 - - - 107.3 278.7 256.5 192.5 130.0 76.3 43.8 39.2 21.9 1,146.2
2018 654.0 - - - - 122.7 361.9 337.7 239.9 146.1 92.9 75.9 38.7 1,415.8
2019 581.5 - - - - - 143.8 349.0 289.8 177.7 110.3 77.7 38.0 1,186.3
2020 435.7 - - - - - - 132.9 284.3 192.0 125.8 87.0 42.2 864.2
2021 435.8 - - - - - - - 85.0 177.3 136.8 98.4 50.0 547.5
2022 406.1 - - - - - - - - 67.7 195.4 144.7 72.2 480.0
2023 622.5 - - - - - - - - - 108.5 285.9 182.9 577.3
2024 823.7 - - - - - - - - - - 145.9 323.6 469.5
2025 483.3 - - - - - - - - - - - 72.6 72.6
Subtotal 8,211.2 4,371.9 844.8 837.1 860.9 945.1 1,141.4 1,271.8 1,206.9 946.0 892.7 1,045.4 900.0 15,264.0
Americas Insolvency
1996-2014 1,414.5 1,949.8 340.8 213.0 122.9 59.1 22.6 5.8 3.3 2.3 1.5 1.3 0.7 2,723.1
2015 63.2 - 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 0.2 0.1 88.3
2016 91.4 - - 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.9 0.6 0.2 119.5
2017 275.3 - - - 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 0.8 359.1
2018 97.9 - - - - 6.7 27.4 30.5 31.6 24.6 12.7 2.5 0.8 136.8
2019 123.1 - - - - - 13.4 31.4 39.1 37.8 28.7 14.6 2.3 167.3
2020 62.1 - - - - - - 6.5 16.1 20.4 19.5 17.0 7.7 87.2
2021 55.2 - - - - - - - 4.6 17.9 17.5 15.3 9.2 64.5
2022 33.4 - - - - - - - - 3.2 9.2 11.1 8.2 31.7
2023 91.2 - - - - - - - - - 9.0 25.1 21.6 55.7
2024 68.4 - - - - - - - - - - 12.1 17.2 29.3
2025 50.0 - - - - - - - - - - - 2.8 2.8
Subtotal 2,425.7 1,949.8 344.2 249.8 222.5 207.9 180.9 155.3 147.4 129.4 104.2 102.3 71.6 3,865.3
Total Americas and Australia 10,636.9 6,321.7 1,189.0 1,086.9 1,083.4 1,153.0 1,322.3 1,427.1 1,354.3 1,075.4 996.9 1,147.7 971.6 19,129.3
Europe Core
1996-2014 814.5 195.1 297.5 249.9 224.1 209.6 175.3 151.7 151.0 123.6 108.6 101.7 73.2 2,061.3
2015 411.3 - 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 33.8 30.4 21.7 611.6
2016 333.1 - - 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 20.1 459.0
2017 252.2 - - - 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 11.8 264.0
2018 341.8 - - - - 24.3 88.7 71.3 69.1 50.7 41.6 37.1 26.2 409.0
2019 518.6 - - - - - 48.0 125.7 121.4 89.8 75.1 68.2 46.8 575.0
2020 324.1 - - - - - - 32.3 91.7 69.0 56.1 50.1 34.2 333.4
2021 412.4 - - - - - - - 48.5 89.9 73.0 66.6 45.7 323.7
2022 359.4 - - - - - - - - 33.9 83.8 74.7 51.8 244.2
2023 410.6 - - - - - - - - - 50.2 103.1 70.5 223.8
2024 451.9 - - - - - - - - - - 46.3 103.5 149.8
2025 357.5 - - - - - - - - - - - 30.4 30.4
Subtotal 4,987.4 195.1 343.3 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 535.9 5,685.2
Europe Insolvency
2014 10.9 - 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 0.2 0.1 17.3
2015 19.0 - 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.4 0.2 0.1 26.9
2016 39.3 - - 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.4 61.6
2017 39.2 - - - 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 0.8 50.1
2018 44.9 - - - - 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.2 52.7
2019 77.2 - - - - - 5.0 21.1 23.9 21.0 17.5 12.9 5.1 106.5
2020 105.4 - - - - - - 6.0 34.6 34.1 29.7 25.5 13.2 143.1
2021 53.2 - - - - - - - 5.5 14.4 14.7 15.4 11.4 61.4
2022 44.6 - - - - - - - - 4.5 12.4 15.2 11.9 44.0
2023 46.7 - - - - - - - - - 4.2 12.7 11.8 28.7
2024 43.4 - - - - - - - - - - 9.5 11.5 21.0
2025 15.9 - - - - - - - - - - - 1.0 1.0
Subtotal 539.7 - 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 68.5 614.3
Total Europe 5,527.1 195.1 350.6 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 604.4 6,299.5
Total PRA Group $ 16,164.0 $ 6,516.8 $ 1,539.6 $ 1,492.0 $ 1,512.6 $ 1,625.2 $ 1,841.2 $ 2,005.6 $ 2,061.9 $ 1,728.9 $ 1,660.4 $ 1,868.6 $ 1,576.0 $ 25,428.8
(1)Non-U.S. amounts are presented at the average exchange rates during the cash collections period.
(2)Includes the acquisition date finance receivables portfolios acquired through our business acquisitions.
(3)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective period of purchase.
LIQUIDITY AND CAPITAL RESOURCES
We actively manage our liquidity to meet our business needs and financial obligations.
Sources of liquidity
Cash and cash equivalents
As of September 30, 2025, cash and cash equivalents totaled $107.5 million, of which $96.3 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements in the 2024 Form 10-K.
Borrowings
As of September 30, 2025, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):
September 30, 2025
Composition of Total Availability
Committed Amounts Outstanding Borrowings Total Availability
Based on Current ERC (1)
Additional Availability (2)
North American revolving credit facility $ 1,075,000 $ 514,039 $ 560,961 $ 383,739 $ 177,222
North American term loan 462,611 462,611 - - -
UK revolving credit facility 725,000 440,864 284,136 159,987 124,149
European revolving credit facility 896,509 551,331 345,178 345,178 -
Colombian revolving credit facility 2,465 2,465 - - -
Senior notes 1,649,990 1,649,990 - - -
Debt premium and issuance costs, net - (14,322) - - -
Total $ 4,811,575 $ 3,606,978 $ 1,190,275 $ 888,904 $ 301,371
(1)Available borrowings after calculation of borrowing base, subject to the committed amounts and debt covenants, which may be used for general corporate purposes, including portfolio purchases.
(2)Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC.
Interest-bearing deposits
As of September 30, 2025, interest-bearing deposits totaled $139.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.9 million in U.S. dollars as of September 30, 2025).
Uses of liquidity and material cash requirements
We believe that funds generated from our business activities, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets, will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases for at least the next 12 months. Our long-term capital requirements will depend in large part on the level of nonperforming loan portfolios that we purchase.
Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock or senior notes in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.
Forward flows
We enter into forward flow agreements for the purchase of nonperforming loans. These agreements typically have terms ranging from six to 12 months, or they can be open-ended, and establish purchase prices and specific criteria for the accounts to be purchased. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, however, very few agreements establish a minimum contractual obligation, and many of the contracts contain early termination provisions allowing either party to cancel the agreements in accordance with a specified notice period.
As of September 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $297.8 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 $235.4 million for the Americas and Australia and $62.4 million for Europe. 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. In addition to these agreements, we may also enter into new or renewed forward flow commitments and/or make spot purchases of nonperforming loan portfolios.
Borrowings
As of September 30, 2025, we had $3.6 billionin outstanding borrowings. The estimated interest, unused fees and principal payments for the next 12 months are $249.8 million. After 12 months, principal payments on our debt are due from between one and seven years. Our financing arrangements include covenants with which we must comply, and as of September 30, 2025, we were in compliance with these covenants. On September 30, 2025, we completed the private offering of our 2032 senior notes.
For additional information about our borrowings, refer to Note 5to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Share repurchases
On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.
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. There were no repurchases during the third quarter of 2025, and asof September 30, 2025, we had $57.7 million remaining for share repurchases under the program, subject to the restrictive covenants discussed above.
Leases
Our leases have remaining terms from one to 7 years. As of September 30, 2025, we had $31.2 million in lease liabilities, of which $7.2 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2024 Form 10-K.
Derivatives
We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of September 30, 2025, we had $9.1 million of derivative liabilities, of which $1.5 million matures within the next 12 months. The remaining $7.5 million matures in 2028 and later. For additional information, refer to Note 6to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Investments
As of September 30, 2025, we held $63.2 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.
Cash flow analysis
The following table summarizes our cash flow activity for the periods indicated (in thousands):
Year-to-Date
2025 2024
Change
Net cash provided by/(used in):
Operating activities $ (75,622) $ (137,524) $ 61,902
Investing activities (16,975) (183,833) 166,858
Financing activities 74,562 347,073 (272,511)
Effect of foreign exchange rates 21,431 3,024 18,407
Net increase in cash, cash equivalents and restricted cash
$ 3,396 $ 28,740 $ (25,344)
Operating activities
Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities. Net cash used in operating activities decreased $61.9 million compared to the prior year period, primarily due to higher cash collections recognized as income, partially offset by higher cash paid for interest and taxes.
Investing activities
Net cash used in investing activities decreased $166.9 million compared to the prior year period. The decrease was primarily due to a decrease of $84.9 million in purchases of nonperforming loan portfolios, an increase of $49.2 million in proceeds from sales and maturities of investments and an increase of $42.9 million in recoveries collected and applied to Finance receivables.
Financing activities
Net cash provided by financing activities decreased $272.5 million compared to the prior year period. The decrease was primarily due to a $441.6 million decrease in net proceeds from lines of credit and a $65.7 million decrease related to interest-bearing deposits activity, partially offset by a $250.0 million increase in net proceeds from the issuance and retirement of senior notes. Additionally, we repurchased $10.0 million of our common stock year-to-date 2025 compared to no repurchases during the prior year period.
Effect of foreign exchange rates
The net effect of exchange rates on cash increased $18.4 million compared to the prior year period. The increase was primarily due to the impact of a weakening of the U.S. dollar relative to other currencies on our foreign currency denominated borrowings and intercompany balances.
CRITICAL ACCOUNTING ESTIMATES
Our Consolidated Financial Statements have been prepared in accordance with GAAP. Some of our significant accounting policies require that we use estimates, assumptions and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. We consider accounting estimates to be critical if they (1) involve a significant level of estimation uncertainty and (2) have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material.
Our critical accounting estimates include revenue recognition on finance receivables, goodwill and income taxes. For a detailed description of our critical accounting estimates, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in the 2024 Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 13to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
FREQUENTLY USED TERMS
We may use the following terms throughout this Quarterly Report:
•"Buybacks" refers to purchase price refunded by the seller due to the return of ineligible nonperforming loan accounts.
•"Cash collections" refers to collections on our nonperforming loan portfolios.
•"Cash receipts" refers to cash collections on our nonperforming loan portfolios, fees and revenue recognized from our class action claims recovery services.
•"Changes in expected recoveries" refers to the difference between actual recoveries collected compared to expected recoveries and the net present value of changes in estimated remaining collections.
•"Core" accounts or portfolios refer to accounts or portfolios that are nonperforming loans and are not in an insolvent status upon acquisition. These accounts are aggregated separately from insolvency accounts.
•"Estimated remaining collections" or "ERC" refers to the sum of all future projected cash collections on our nonperforming loan portfolios.
•"Finance receivables" or "receivables" refers to the negative allowance for expected recoveries recorded on our balance sheet as an asset.
•"Insolvency" accounts or portfolios refer to accounts or portfolios of nonperforming loans that are in an insolvent status when we purchase them and, as such, are purchased as a pool of insolvent accounts. These accounts include IVAs, Trust Deeds in the UK, Consumer Proposals in Canada and bankruptcy accounts in the U.S., Canada, Germany and the UK.
•"Negative allowance" refers to the present value of cash flows expected to be collected on our finance receivables.
•"Portfolio acquisitions" refers to all nonperforming loan portfolios acquired as a result of a purchase or added as a result of a business acquisition.
•"Portfolio purchases" refers to all nonperforming loan portfolios purchased in the normal course of business and excludes those added as a result of business acquisitions.
•"Portfolio income" reflects revenue recorded due to the passage of time using the effective interest rate calculated based on the purchase price and estimated remaining collections of nonperforming loan portfolios.
•"Purchase price" refers to the cash paid to a seller to acquire nonperforming loans.
•"Purchase price multiple" refers to the total estimated collections on our nonperforming loan portfolios divided by purchase price.
•"Recoveries collected" refers to cash collections plus buybacks and other adjustments.
•"Total estimated collections" or "TEC" refers to actual cash collections plus estimated remaining collections on our nonperforming loan portfolios.
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