PRA Group Inc.

05/08/2026 | Press release | Distributed by Public on 05/08/2026 14:36

Quarterly Report for Quarter Ending March 31, 2026 (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, 2025 ("2025 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report. Except as specifically noted, all references to "Notes" in this Item 2 are to Notes to our Consolidated Financial Statements included in Part I, Item 1 of 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:
•a deterioration in general business and economic conditions, including from the ongoing geopolitical conflict and instability in the Middle East;
•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;
•our ability to collect sufficient amounts on our nonperforming loans to recover our costs and fund our operations;
•our reliance on internally developed models and the underlying data used in those models;
•a disruption or failure by any of our third-party service providers, or the vendors on whom they may depend, to meet their obligations and our service level expectations, or an ability to contract alternative providers;
•our ability to realize the expected benefits from our cash-generating and cost savings initiatives in our United States ("U.S.") business;
•changes in the regulatory environment for legal collections or our ability to effectively collect on legal recovery and post-judgment processes;
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;
•our ability to effectively manage change associated with ongoing enhancements to our key operational systems and processes;
•our ability to effectively utilize artificial intelligence ("AI") and machine learning technologies and to adequately safeguard our systems against AI-driven threats;
•our ability to execute our long-term (PRA 3.0) strategy effectively, including the targets related to improving our financial results;
•further impairment of goodwill;
•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 that limit our ability to collect on our nonperforming loans;
•our ability to comply with existing and new regulations of the collection industry;
•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");
•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 2025 Form 10-K and our other filings with the U.S. Securities and Exchange Commission ("SEC").
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was filed with the SEC. 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
We are a global leader in acquiring and collecting nonperforming loans. Most of our purchases are from credit originators who have chosen not to pursue, or have been unsuccessful in collecting, the full balance owed to them ("Core" accounts). To a lesser extent, we also purchase loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts). As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S.
Our operations are organized on a geographic basis, and we have two reportable segments comprised of our U.S. and European businesses. On a significantly smaller scale, we also operate in South America, Canada and Australia. Subject to globally-established parameters for capital allocation, portfolio return thresholds and leverage, each market functions under a similar debt management business model, which is predicated on purchasing nonperforming loans and generating returns through disciplined collection strategies over extended collection periods.
For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of our 2025 Form 10-K and Note 13.
First quarter business trends and results
During the first quarter of 2026, we continued to gain momentum in improving our U.S. business and benefited from the strength of our European business, executing on our near-term priorities and long-term PRA 3.0 strategy. Our results for the first quarter of 2026 included the following:
•Net income attributable to PRA Group, Inc. of $28.2 million, an increase of $24.6 million compared to the prior year period.
•Adjusted EBITDA of $1.3 billion for the last 12 months, an increase of 13.9% compared to the prior 12 month period ("Adjusted EBITDA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).
•Continued geographic diversification, with the U.S. and Europe accounting for 42.7% and 50.7%, respectively, of total ERC of $8.5 billion as of March 31, 2026.
•A diversified capital structure, consistent with our targeted leverage and liquidity objectives. In April 2026, we refinanced our European revolving credit facility for an additional five years with no change to the commitment levels or funding costs (refer to Note 15 for additional details).
Market environment
We expect portfolio supply to remain relatively stable in the U.S. and Europe over the next 12 to 18 months. We observed stability in our customers' payment activity in the U.S. and Europe during the first quarter of 2026, and we continue to monitor the ongoing geopolitical conflict and instability in the Middle East, and in particular, how it has led to elevated energy costs and gas prices.
SELECTED CONSOLIDATED FINANCIAL DATA
As of or for the period ended (in thousands, except per share, ratio and headcount data) First Quarter
2026 2025 % Change
Income statement
Portfolio income $ 269,579 $ 240,958 11.9 %
Changes in expected recoveries 43,886 27,922 57.2
Total revenues 314,533 269,619 16.7
Total operating expenses 211,279 195,042 8.3
Interest expense, net 63,518 60,970 4.2
Net income attributable to PRA Group, Inc. 28,210 3,659 671.0
Diluted earnings per share 0.73 0.09 711.1
Performance data and ratios
Net income/(loss) attributable to PRA Group, Inc. (last 12 months) $ (280,591) $ 70,785 (496.4) %
Adjusted net income attributable to PRA (last 12 months) (1)
97,132 70,785 37.2
Adjusted EBITDA (last 12 months) (2)
1,348,599 1,183,992 13.9
Cash efficiency ratio (3)
61.8 % 60.8 %
Return on average Total stockholders' equity - PRA Group, Inc. ("ROE") (4)
11.4 1.2
Return on average tangible equity ("ROATE") (5)
11.7 1.9
Portfolio volumes
Portfolio purchases $ 220,850 $ 291,702 (24.3) %
Cash collections 551,928 497,436 11.0
Estimated remaining collections (period-end) 8,548,548 7,805,132 9.5
Credit facility availability (period-end)
Based on current ERC $ 714,258 $ 537,839 32.8
Additional availability 281,737 381,083 (26.1)
Total availability 995,995 918,922 8.4
Balance sheet (period-end)
Finance receivables, net $ 4,637,094 $ 4,308,334 7.6 %
Borrowings 3,779,167 3,466,075 9.0
Total stockholders' equity - PRA Group, Inc. 1,002,288 1,219,108 (17.8)
Headcount (period-end)
Full-time equivalents 2,541 2,991 (15.0) %
(1)Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations ("Adjusted net income attributable to PRA"), is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
(2)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
(3)Calculated by dividing cash receipts less operating expenses by cash receipts.
(4)ROE is calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc.
(5)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income attributable to PRA Group, Inc. by Average tangible equity ("Average tangible equity"), which is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
RESULTS OF OPERATIONS
Three months ended March 31, 2026 ("First Quarter 2026" or "Q1 2026") compared to three months ended March 31, 2025 ("First Quarter 2025" or "Q1 2025").
Consolidated and business segment results
Portfolio purchases
Portfolio purchases were as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
U.S. $ 118,512 $ 160,962 $ (42,450) (26.4) %
Europe 91,552 113,246 (21,694) (19.2)
Other markets (1)
10,786 17,494 (6,708) (38.3)
Total portfolio purchases $ 220,850 $ 291,702 $ (70,852) (24.3) %
(1)Reflects portfolio purchases in South America, Canada and Australia.
We use a global investment framework to optimize the deployment of capital across our markets with a focus on net returns. Our total portfolio purchases in Q1 2026 decreased by $70.9 million, or 24.3%, compared to Q1 2025. Total purchases of $220.9 million in Q1 2026 were in-line with our expectations for the quarter, and the PPM for our global Core vintage was 1.96x, slightly lower than the 2.01x for Q1 2025. PPMs can vary due to factors contributing to the cost to collect, including the loan type and age, geography and collections strategy, in addition to competitive and market dynamics. Our focus continued to be on net returns, which considers the amount and timing of the projected cash collections, estimated costs to collect, funding costs, risk and agreement terms.
•U.S.: Portfolio purchases decreased by $42.5 million as we remained disciplined in our purchasing and long-term approach focused on net returns. As of March 31, 2026, the PPM for our 2026 U.S. Core vintage was 2.02x, reflecting a 7% decrease compared to Q1 2025 due to purchases of a higher percentage of portfolios with lower costs to collect.
•Europe: Portfolio purchases decreased by $21.7 million reflecting the occurrence of a large spot purchase in Q1 2025 and continued purchasing discipline in Q1 2026. As of March 31, 2026, the PPM for our 2026 European Core vintage was 1.85x, reflecting a 6% increase compared to Q1 2025.
Cash collections
Cash collections were as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
U.S.
Call center/other $ 127,393 $ 129,255 $ (1,862) (1.4) %
Legal 141,016 111,212 29,804 26.8
Core 268,409 240,467 27,942 11.6
Insolvency 20,141 20,589 (448) (2.2)
Cash collections - U.S. 288,550 261,056 27,494 10.5
Europe
Call center/other 118,049 102,408 15,641 15.3
Legal 73,970 61,963 12,007 19.4
Core 192,019 164,371 27,648 16.8
Insolvency 20,547 21,205 (658) (3.1)
Cash collections - Europe 212,566 185,576 26,990 14.5
Other markets (1)
50,812 50,804 8 -
Total cash collections $ 551,928 $ 497,436 $ 54,492 11.0 %
(1)Reflects cash collections in South America, Canada and Australia.
Our total cash collections in Q1 2026 increased by $54.5 million, or 11.0%, compared to Q1 2025. Total collections of $551.9 million in Q1 2026 exceeded our expectations for the quarter.
•U.S.: Cash collections increased by $27.5 million driven by a $29.8 million increase in legal collections due primarily to an expansion in activity associated with our operational initiatives.
•Europe: Cash collections increased by $27.0 million due to the performance in several markets and in part, to favorable foreign exchange rate variation.
Portfolio revenue
Total portfolio revenue was as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
U.S. 155,986 135,806 20,180 14.9
Europe 125,435 99,986 25,449 25.5
Other markets (1)
32,044 33,088 (1,044) (3.2)
Total portfolio revenue $ 313,465 $ 268,880 $ 44,585 16.6 %
By component
Portfolio income $ 269,579 $ 240,958 $ 28,621 11.9 %
Recoveries collected in excess of forecast 22,698 16,500 6,198 37.6
Changes in expected future recoveries 21,188 11,422 9,766 85.5
Changes in expected recoveries 43,886 27,922 15,964 57.2
Total portfolio revenue $ 313,465 $ 268,880 $ 44,585 16.6 %
(1)Reflects portfolio revenue in South America, Canada and Australia.
Our total portfolio revenue in Q1 2026 increased by $44.6 million, or 16.6%, compared to Q1 2025. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 11.9%.
•U.S.: Portfolio revenue increased by $20.2 million due to increases of $11.1 million in Portfolio income and $9.1 million in Changes in expected recoveries. The increase in Portfolio income was driven largely by higher recent purchasing and improved pricing on the 2025 Core vintage. The increase in Changes in expected recoveries was due to net cash collections overperformance in Q1 2026, driven primarily by the 2024 Core pool, compared to net underperformance in Q1 2025, driven by the 2019-2023 Core pools. This increase was partially offset by a lower net increase in the collections forecasts on certain Core pools compared to Q1 2025 and the impact of changes in the expected timing of collections on certain Core pools in Q1 2026.
•Europe: Portfolio revenue increased by $25.4 million due to increases of $14.1 million in Portfolio income and $11.3 million in Changes in expected recoveries, which were distributed across multiple pools. The increase in Portfolio income was driven by higher purchasing and favorable foreign exchange rate variation. The increase in Changes in expected recoveries was due primarily to a higher net increase in the collections forecasts on certain Core pools in Q1 2026.
Operating expenses
Operating expenses were as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
U.S. $ 135,921 $ 128,543 $ 7,378 5.7 %
Europe 51,702 44,298 7,404 16.7
Other markets (1)
23,656 22,201 1,455 6.6
Total operating expenses $ 211,279 $ 195,042 $ 16,237 8.3 %
By component
Compensation and benefits $ 70,738 $ 73,323 $ (2,585) (3.5) %
Legal collection costs (2)
48,458 33,394 15,064 45.1
Legal collection fees (3)
17,071 15,230 1,841 12.1
Agency fees (4)
24,581 21,368 3,213 15.0
Professional and outside services 20,884 21,103 (219) (1.0)
Communication (5)
9,019 10,477 (1,458) (13.9)
Rent and occupancy 3,258 3,480 (222) (6.4)
Depreciation, amortization and impairment of long-lived assets 1,708 3,769 (2,061) (54.7)
Other operating expenses (6)
15,562 12,898 2,664 20.7
Total operating expenses $ 211,279 $ 195,042 $ 16,237 8.3 %
(1)Reflects operating expenses in South America, Canada and Australia.
(2)Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.
(3)Contingent fees incurred for cash collections generated by our third-party attorney network.
(4)Mainly third-party collection fees.
(5)Mainly correspondence, network and calling costs associated with our collection efforts.
(6)Mainly IT-related costs and subscriptions, other taxes and fees.
Our Total operating expenses increased by $16.2 million, or 8.3%, compared to Q1 2025.
•U.S.: Operating expenses increased by $7.4 million due primarily to an increase in Legal collection costs associated with the expansion in activity in our legal collections channel, partially offset by a decrease in Compensation and benefits driven by continued rationalization of our U.S. call centers, increased use of external collectors, including offshore service providers, and the impact of our corporate headcount reduction in 2025.
•Europe: Operating expenses increased by $7.4 million due primarily to an increase in Compensation and benefits associated with organizational changes and higher non-collector wage costs, and to a lesser extent, an increase in Other operating expenses.
•Other markets: An increase in Agency fees of $3.2 million was due primarily to higher collection fees in South America.
Interest expense, net
Interest expense, net was as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
Interest on revolving credit facilities and term loan, and unused line fees $ 33,978 $ 36,582 $ (2,604) (7.1) %
Interest on senior notes 30,236 24,911 5,325 21.4
Amortization of debt premium and issuance costs, net 2,184 1,901 283 14.9
Interest income (2,880) (2,424) (456) (18.8)
Interest expense, net $ 63,518 $ 60,970 $ 2,548 4.2 %
Our Interest expense, net increased by $2.5 million, or 4.2%, compared to Q1 2025 primarily reflecting a higher average debt balance.
Foreign exchange gain/(loss), net
Foreign exchange gain/(loss), net, includes the remeasurement of our foreign currency transactions and changes in the fair value of foreign exchange forward contracts used to economically hedge a portion of our remeasurement exposure. Foreign exchange gain/(loss), net included the following components (in thousands):
First Quarter
2026 2025 $ Change % Change
Foreign currency transaction losses $ (7,625) $ (1,545) $ (6,080) (393.5) %
Foreign exchange forward gains 8,679 1,494 7,185 480.9 %
Foreign exchange gain/(loss), net $ 1,054 $ (51) $ 1,105 2,166.7 %
In addition to normal rate fluctuations and ongoing execution of our risk management strategies, our net foreign exchange result may be impacted by elevated volatility in the underlying exchange rates.
Income tax expense
Income tax expense and our effective tax rate were as follows (in thousands, except percentages):
First Quarter
2026 2025 $ Change % Change
Income tax expense $ 8,764 $ 4,312 $ 4,452 103.2 %
Effective tax rate 21.6 % 32.2 %
Our Income tax expense increased by $4.5 million, or 103.2%, compared to Q1 2025, and the effective tax rate was 21.6% in Q1 2026 compared to 32.2% in Q1 2025. These results were primarily due to our pretax income, the mix of income from different taxing jurisdictions and the timing and amount of discrete items, including the reversal of a $3.2 million tax accrual in Q1 2026.
Business segment operating income
Our CEO evaluates the profitability of our U.S. and European business segments based primarily on Income from operations excluding goodwill impairment, when applicable, and certain unallocated corporate expenses ("Adjusted segment operating income"). Refer to Note 13 for further information and a reconciliation of Adjusted segment operating income to consolidated Income before income taxes.
Adjusted segment operating income for our U.S. and European businesses was as follows (in thousands, except percentages):
U.S. Europe
Q1 2026 Q1 2025 $ Change % Change Q1 2026 Q1 2025 $ Change % Change
Revenues from external customers $ 156,795 $ 136,381 $ 20,414 15.0 % $ 125,632 $ 100,150 $ 25,482 25.4 %
Segment expenses (1)
Compensation and benefits 39,497 45,493 (5,996) (13.2) 20,704 19,179 1,525 8.0
Legal collection expenses 53,140 36,862 16,278 44.2 9,462 8,639 823 9.5
Professional and outside services 11,812 12,826 (1,014) (7.9) 4,479 4,185 294 7.0
Other segment items (2)
22,157 23,821 (1,664) (7.0) 14,767 11,520 3,247 28.2
Adjusted segment operating income $ 30,189 $ 17,379 $ 12,810 73.7 % $ 76,220 $ 56,627 $ 19,593 34.6 %
(1)Amounts include intersegment and intercompany expenses, which are not material, and exclude certain unallocated corporate personnel, administrative and other overhead expenses.
(2)Primarily reflects Communication expenses, Agency fees and Other operating expenses.
Adjusted segment operating income increased by $12.8 million and $19.6 million in the U.S. and Europe, respectively, both reflecting an increase in segment revenues partially offset by an increase in segment operating expenses (refer to the above discussions of segment portfolio revenue and operating expenses for additional details).
Consolidated balance sheet
Investments
Investments were $143.4 million as of March 31, 2026, an increase of $76.7 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB. Our banking subsidiary is part of our European operations, and it expects to continue to operate with higher levels of liquidity moving forward.
Finance receivables, net
Finance receivables, net were $4.6 billion as of March 31, 2026, decreasing marginally compared to December 31, 2025. Compared to March 31, 2025, Finance receivables, net increased $328.8 million, or 7.6%, due to portfolio purchases of $1.1 billion, Changes in expected recoveries of $192.4 million and foreign currency translation of $120.3 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net.
Prepaid expenses and other assets
Prepaid expenses and other assets were $134.8 million as of March 31, 2026, an increase of $66.2 million compared to December 31, 2025. The increase was driven by the receipt of a derivative settlement payment made in error by the financial institution counterparty on March 31, 2026. The funds were returned the following day.
Borrowings
Borrowings were $3.8 billion as of March 31, 2026, increasing marginally compared to December 31, 2025. Compared to March 31, 2025, Borrowings increased $313.1 million, or 9.0%, primarily to fund portfolio purchases, and to a lesser extent, the purchases of investments discussed above under Investments.
Other liabilities
Other liabilities were $99.5 million as of March 31, 2026, an increase of $50.5 million compared to December 31, 2025. The increase was primarily due to the same payment error discussed above under Prepaid expenses and other assets.
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 the non-GAAP financial measures referred to below, internally to evaluate our performance and set performance goals. Also included below are reconciliations of the most directly comparable financial measures calculated in accordance with GAAP to the corresponding non-GAAP financial measure. These non-GAAP financial measures should not be considered as an alternative to the most directly comparable financial measure determined in accordance with GAAP and may not be comparable to the calculation of similarly titled financial measures reported by other companies.
Adjusted net income attributable to PRA
Adjusted net income attributable to PRA is defined as Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations. The following table provides a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income attributable to PRA for the periods indicated (in thousands):
Last 12 Months
First Quarter March 31,
2026 2025 2026 2025
Net income/(loss) attributable to PRA Group, Inc. $ 28,210 $ 3,659 $ (280,591) $ 70,785
Gain on sale of equity method investment - - (38,403) -
Goodwill impairment - - 412,611 -
Tax effect of adjusting items (1)
- - 3,515 -
Adjusted net income attributable to PRA $ 28,210 $ 3,659 $ 97,132 $ 70,785
(1)Based on the annual effective tax rate and pretax income excluding the effect of the adjusting items.
Adjusted EBITDA
Adjusted EBITDA is calculated as Net income/(loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense; plus depreciation and amortization; plus impairment of real estate; plus goodwill impairment; plus net income attributable to noncontrolling interests; less gain on sale of equity method investment; and plus recoveries collected and applied to Finance receivables, net less Changes in expected recoveries. The following table provides a reconciliation of Net loss attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):
Adjusted EBITDA Reconciliation
Last 12 Months Year Ended
March 31, 2026 December 31, 2025
Net loss attributable to PRA Group, Inc. $ (280,591) $ (305,142)
Adjustments:
Income tax expense 51,187 46,735
Foreign exchange gain (1,860) (755)
Interest expense, net 254,336 251,788
Other expense (1)
410 336
Depreciation and amortization 7,805 9,035
Impairment of real estate 573 1,404
Goodwill impairment 412,611 412,611
Net income attributable to noncontrolling interests 13,325 15,168
Gain on sale of equity method investment (38,403) (38,403)
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 929,206 922,697
Adjusted EBITDA $ 1,348,599 $ 1,315,474
(1)Reflects non-operating expenses.
Return on average tangible equity
ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity, which is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to Average tangible equity and presents our ROE and ROATE for the periods indicated (in thousands, except for ratio data):
Average Tangible Equity Reconciliation (1)
Balance as of Period End First Quarter
March 31, 2026 March 31, 2025 2026 2025
Total stockholders' equity - PRA Group, Inc. $ 1,002,288 $ 1,219,108 $ 991,068 $ 1,177,070
Goodwill 26,871 420,715 26,871 408,536
Other intangible assets 1,344 1,488 1,390 1,471
Average tangible equity $ 962,807 $ 767,063
(1)Amounts represent the average balances for the respective periods.
ROE and ROATE (2)
First Quarter
2026 2025
Net income attributable to PRA Group, Inc. $ 28,210 $ 3,659
ROE 11.4 % 1.2 %
ROATE 11.7 1.9
(2)Based on annualized Net income attributable to PRA Group, Inc.
SUPPLEMENTAL PERFORMANCE DATA
The tables in this section provide supplemental performance data about our:
•ERC by business segment and expected year of collection; and
•nonperforming loan portfolios and collections by business segment, portfolio type and year of purchase.
For additional information about the supplemental data and our nonperforming loan portfolios, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Supplemental Performance Data" in the 2025 Form 10-K and Note 2.
Estimated remaining collections
The following table displays our ERC by year as of March 31, 2026 (in thousands):
U.S.
Europe (1)
Other Markets (2)
Total
2027 $ 1,054,976 $ 717,426 $ 171,378 $ 1,943,780
2028 813,894 590,906 123,298 1,528,098
2029 550,713 491,572 83,252 1,125,537
2030 371,720 415,290 59,185 846,195
2031 254,162 352,508 42,416 649,086
2032 173,709 302,766 28,531 505,006
2033 122,651 262,604 20,325 405,580
2034 87,754 229,145 13,291 330,190
2035 63,666 200,220 7,527 271,413
2036 47,141 176,397 4,547 228,085
Thereafter 106,707 597,936 10,935 715,578
Total ERC $ 3,647,093 $ 4,336,770 $ 564,685 $ 8,548,548
(1)Reflects ERC of $1.7 billion for the UK, $1.1 billion for Central Europe, $1.0 billion for Northern Europe and $564.6 million for Southern Europe.
(2)Reflects ERC in South America, Canada and Australia.
Purchase Price Multiples
as of March 31, 2026
(in thousands, except percentages)
Purchase Period
Purchase Price (1)(2)
Total Estimated Collections (3)
Estimated Remaining Collections (4)
Current Purchase Price Multiple Original Purchase Price Multiple
U.S. Core
1996-2015 $ 2,736,875 $ 7,505,108 $ 94,785 274% 224%
2016 400,545 819,619 32,606 205% 195%
2017 511,902 1,168,721 68,438 228% 193%
2018 604,669 1,373,598 93,421 227% 199%
2019 432,222 1,017,206 70,674 235% 209%
2020 415,384 940,628 88,849 226% 215%
2021 339,885 603,675 118,686 178% 191%
2022 275,433 435,742 140,794 158% 164%
2023 506,319 947,969 447,691 187% 191%
2024 727,672 1,679,170 1,085,766 231% 211%
2025 531,021 1,144,614 975,398 216% 216%
2026 105,469 212,526 209,118 202% 202%
Subtotal 7,587,396 17,848,576 3,426,226
U.S. Insolvency
1996-2015 1,472,385 2,806,689 - 191% 154%
2016 67,454 85,669 21 127% 124%
2017 275,257 359,605 182 131% 125%
2018 97,879 137,302 59 140% 127%
2019 120,845 164,398 174 136% 128%
2020 62,130 90,300 1,584 145% 136%
2021 54,898 74,136 5,237 135% 136%
2022 33,442 47,860 11,718 143% 139%
2023 61,242 80,321 38,358 131% 136%
2024 68,168 99,364 58,508 146% 149%
2025 59,091 93,168 84,236 158% 160%
2026 13,043 20,891 20,790 160% 160%
Subtotal 2,385,834 4,059,703 220,867
Total U.S. 9,973,230 21,908,279 3,647,093
Europe Core
2012-2015 1,225,893 3,516,570 478,195 287% 190%
2016 333,090 601,998 142,105 181% 167%
2017 252,174 366,501 77,563 145% 144%
2018 341,775 574,229 151,942 168% 148%
2019 518,610 888,852 272,541 171% 152%
2020 324,119 609,550 212,981 188% 172%
2021 412,411 732,470 338,322 178% 170%
2022 359,447 600,333 370,631 167% 162%
2023 410,593 709,805 464,760 173% 169%
2024 451,786 821,118 685,317 182% 180%
2025 512,533 951,214 843,307 186% 185%
2026 85,057 157,440 154,812 185% 185%
Subtotal 5,227,488 10,530,080 4,192,476
Europe Insolvency
2014-2015 29,849 49,058 - 164% 135%
2016 39,338 58,616 440 149% 130%
2017 39,235 53,074 402 135% 128%
2018 44,908 53,386 543 119% 123%
2019 77,218 114,419 3,630 148% 130%
2020 105,440 162,032 5,399 154% 129%
2021 53,230 81,302 8,945 153% 134%
2022 44,604 66,962 20,325 150% 137%
2023 46,558 67,060 32,053 144% 138%
2024 43,459 64,128 38,821 148% 147%
2025 20,760 30,329 26,435 146% 145%
2026 4,752 7,346 7,301 155% 155%
Subtotal 549,351 807,712 144,294
Total Europe 5,776,839 11,337,792 4,336,770
Other markets (5)
951,094 2,229,871 564,685 234% 204%
Total PRA Group $ 16,701,163 $ 35,475,942 $ 8,548,548
(1)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.
(2)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period 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 March 31, 2026 exchange rate.
(5)Reflects all vintages in South America, Canada and Australia.
Portfolio Financial Information (1)
(in thousands)
March 31, 2026 (year-to-date) As of March 31, 2026
Purchase Period
Cash
Collections (2)
Portfolio Income (2)
Changes in Expected Recoveries (2)
Total Portfolio Revenue (2)
Net Finance Receivables (3)
U.S. Core
1996-2015 $ 10,384 $ 5,487 $ 2,695 $ 8,182 $ 31,227
2016 2,583 1,544 (84) 1,460 13,786
2017 5,257 3,270 (775) 2,495 27,494
2018 8,281 4,151 (418) 3,733 45,382
2019 6,631 3,457 (608) 2,849 33,983
2020 9,056 4,407 (982) 3,425 44,546
2021 10,372 5,050 (486) 4,564 59,591
2022 11,381 4,636 309 4,945 82,701
2023 39,177 18,207 (5,753) 12,454 241,850
2024 98,754 47,239 14,278 61,517 574,230
2025 63,125 43,364 (2,313) 41,051 500,322
2026 3,408 2,796 140 2,936 104,934
Subtotal 268,409 143,608 6,003 149,611 1,760,046
U.S. Insolvency
1996-2015 235 - 234 234 -
2016 39 1 26 27 19
2017 189 10 112 122 160
2018 134 2 100 102 57
2019 430 6 316 322 168
2020 544 52 86 138 1,401
2021 2,231 191 (97) 94 4,943
2022 2,184 362 (45) 317 10,557
2023 4,590 1,054 (33) 1,021 33,215
2024 5,709 2,188 (318) 1,870 45,042
2025 3,753 2,800 (857) 1,943 57,786
2026 103 143 41 184 13,117
Subtotal 20,141 6,809 (435) 6,374 166,465
Total U.S. 288,550 150,417 5,568 155,985 1,926,511
Europe Core
2012-2015 29,774 16,872 7,948 24,820 141,516
2016 6,773 2,758 5,129 7,887 80,998
2017 3,812 1,290 502 1,792 51,383
2018 7,984 2,910 3,002 5,912 95,137
2019 14,181 4,758 1,506 6,264 183,088
2020 9,918 4,154 1,275 5,429 128,550
2021 14,216 6,146 1,182 7,328 204,281
2022 15,933 6,390 2,068 8,458 233,121
2023 21,308 8,862 4,282 13,144 277,845
2024 29,869 13,672 3,368 17,040 385,315
2025 35,581 17,411 240 17,651 458,722
2026 2,670 937 723 1,660 83,953
Subtotal 192,019 86,160 31,225 117,385 2,323,909
Europe Insolvency
2014-2015 98 - 98 98 -
2016 124 18 102 120 115
2017 176 8 230 238 242
2018 227 10 93 103 424
2019 809 88 (30) 58 3,003
2020 2,039 150 (11) 139 5,075
2021 3,682 263 1,236 1,499 8,218
2022 3,659 542 1,138 1,680 17,622
2023 4,222 863 751 1,614 27,020
2024 4,003 1,307 194 1,501 29,818
2025 1,463 700 229 929 19,481
2026 45 35 33 68 4,747
Subtotal 20,547 3,984 4,063 8,047 115,765
Total Europe 212,566 90,144 35,288 125,432 2,439,674
Other markets (4)
50,812 29,018 3,030 32,048 270,909
Total PRA Group $ 551,928 $ 269,579 $ 43,886 $ 313,465 $ 4,637,094
(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 period.
(3)Non-U.S. amounts are presented at the March 31, 2026 exchange rate.
(4)Reflects all vintages in South America, Canada and Australia.
Cash Collections by Year, By Year of Purchase (1)
as of March 31, 2026
(in millions)
Purchase Period
Purchase Price (2)(3)
1996-2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total
U.S. Core
1996-2015 $ 2,736.9 $ 5,186.4 $ 673.8 $ 479.4 $ 337.7 $ 230.9 $ 149.3 $ 98.2 $ 67.1 $ 51.7 $ 64.7 $ 53.6 $ 10.4 $ 7,403.2
2016 400.5 - 86.1 195.3 160.1 116.6 88.7 59.9 29.1 17.6 18.1 12.9 2.6 787.0
2017 511.9 - - 94.3 264.4 247.1 185.6 124.8 73.1 41.6 37.5 26.6 5.3 1,100.3
2018 604.7 - - - 106.3 320.2 304.7 214.8 131.6 83.2 68.1 42.9 8.3 1,280.1
2019 432.2 - - - - 93.4 282.2 237.4 141.7 86.1 61.8 37.3 6.6 946.5
2020 415.4 - - - - - 127.4 274.7 185.4 121.3 83.6 50.4 9.1 851.9
2021 339.9 - - - - - - 73.8 149.9 115.3 82.8 52.8 10.4 485.0
2022 275.4 - - - - - - - 34.9 102.4 87.8 58.5 11.4 295.0
2023 506.3 - - - - - - - - 63.5 211.8 185.9 39.2 500.4
2024 727.7 - - - - - - - - - 119.8 374.9 98.8 593.5
2025 531.0 - - - - - - - - - - 106.1 63.1 169.2
2026 105.5 - - - - - - - - - - - 3.2 3.2
Subtotal 7,587.4 5,186.4 759.9 769.0 868.5 1,008.2 1,137.9 1,083.6 812.8 682.7 836.0 1,001.9 268.4 14,415.3
U.S. Insolvency
1996-2015 1,472.4 2,290.4 230.4 142.6 78.6 39.1 13.6 4.5 2.9 1.8 1.4 1.0 0.2 2,806.5
2016 67.5 - 10.1 18.9 18.2 16.4 13.0 6.6 1.3 0.6 0.4 0.1 - 85.6
2017 275.3 - - 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 1.0 0.2 359.5
2018 97.9 - - - 6.7 27.4 30.5 31.6 24.6 12.7 2.5 1.0 0.1 137.1
2019 120.8 - - - - 13.4 30.9 37.9 36.8 28.0 14.2 2.7 0.4 164.3
2020 62.1 - - - - - 6.5 16.1 20.4 19.5 17.0 8.7 0.5 88.7
2021 54.9 - - - - - - 4.5 17.7 17.4 15.2 11.8 2.2 68.8
2022 33.4 - - - - - - - 3.2 9.2 11.1 10.5 2.2 36.2
2023 61.2 - - - - - - - - 4.5 14.8 18.0 4.6 41.9
2024 68.2 - - - - - - - - - 12.1 23.1 5.7 40.9
2025 59.1 - - - - - - - - - - 5.2 3.8 9.0
2026 13.0 - - - - - - - - - - - 0.2 0.2
Subtotal 2,385.8 2,290.4 240.5 210.6 200.8 177.2 153.3 145.2 127.7 98.6 91.2 83.1 20.1 3,838.7
Total U.S. 9,973.2 7,476.8 1,000.4 979.6 1,069.3 1,185.4 1,291.2 1,228.8 940.5 781.3 927.2 1,085.0 288.5 18,254.0
Europe Core
2012-2015 1,225.8 538.4 350.2 310.3 290.5 241.4 206.0 202.4 164.3 142.4 132.1 126.9 29.8 2,734.7
2016 333.1 - 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 27.1 6.8 472.8
2017 252.2 - - 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 15.7 3.8 271.7
2018 341.8 - - - 24.3 88.7 71.3 69.1 50.7 41.6 37.1 34.3 8.0 425.1
2019 518.6 - - - - 48.0 125.7 121.4 89.8 75.1 68.2 61.7 14.2 604.1
2020 324.1 - - - - - 32.3 91.7 69.0 56.1 50.1 45.1 9.9 354.2
2021 412.4 - - - - - - 48.5 89.9 73.0 66.6 59.7 14.2 351.9
2022 359.4 - - - - - - - 33.9 83.8 74.7 67.8 15.9 276.1
2023 410.6 - - - - - - - - 50.2 103.1 93.2 21.3 267.8
2024 451.9 - - - - - - - - - 46.3 135.6 29.9 211.8
2025 512.5 - - - - - - - - - - 57.1 35.6 92.7
2026 85.1 - - - - - - - - - - - 2.6 2.6
Subtotal 5,227.5 538.4 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 724.2 192.0 6,065.5
Europe Insolvency
2014-2015 29.9 7.3 8.3 8.2 7.4 5.4 3.7 1.9 0.8 0.6 0.4 0.3 0.1 44.4
2016 39.3 - 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.6 0.1 61.9
2017 39.2 - - 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 1.0 0.2 50.5
2018 44.9 - - - 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.4 0.2 53.1
2019 77.2 - - - - 5.0 21.1 23.9 21.0 17.5 12.9 6.1 0.8 108.3
2020 105.4 - - - - - 6.0 34.6 34.1 29.7 25.5 15.5 2.0 147.4
2021 53.2 - - - - - - 5.5 14.4 14.7 15.4 14.6 3.7 68.3
2022 44.6 - - - - - - - 4.5 12.4 15.2 15.2 3.7 51.0
2023 46.7 - - - - - - - - 4.2 12.7 15.7 4.2 36.8
2024 43.4 - - - - - - - - - 9.5 15.2 4.0 28.7
2025 20.8 - - - - - - - - - - 1.9 1.5 3.4
2026 4.8 - - - - - - - - - - - - -
Subtotal 549.4 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 87.5 20.5 653.8
Total Europe 5,776.9 545.7 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 811.7 212.5 6,719.3
Other markets(4)
951.1 33.9 86.5 103.9 83.7 137.0 135.9 125.4 135.0 215.9 220.5 210.7 50.9 1,539.3
Total PRA Group $ 16,701.2 $ 8,056.4 $ 1,492.0 $ 1,512.7 $ 1,625.2 $ 1,841.3 $ 2,005.6 $ 2,061.8 $ 1,729.0 $ 1,660.7 $ 1,868.6 $ 2,107.4 $ 551.9 $ 26,512.6
(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, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.
(4)Reflects all vintages in South America, Canada and Australia.
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 March 31, 2026, cash and cash equivalents totaled $124.8 million, of which $113.7 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 14 to our Consolidated Financial Statements in the 2025 Form 10-K.
Borrowings
As of March 31, 2026, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):
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 $ 547,059 $ 527,941 $ 355,383 $ 172,558
North American term loan 457,611 457,611 - - -
European revolving credit facility 883,296 660,283 223,013 223,013 -
UK revolving credit facility 725,000 479,959 245,041 135,862 109,179
Colombian revolving credit facility 2,433 2,433 - - -
Senior notes 1,644,560 1,644,560 - - -
Debt premium and issuance costs, net - (12,738) - - -
Total $ 4,787,900 $ 3,779,167 $ 995,995 $ 714,258 $ 281,737
(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 March 31, 2026, interest-bearing deposits totaled $78.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($232.6 million as of March 31, 2026).
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 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 March 31, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $321.8 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 $172.6 million in Europe, $132.2 million in the U.S. and $17.0 million in our other markets. 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.
Borrowings
As of March 31, 2026, we had $3.8 billion in outstanding borrowings. Our estimated interest, unused fees and principal payments for the next 12 months are $251.0 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of March 31, 2026, principal payments on our borrowings have maturity dates ranging from November 2027 through September 2032. Our financing arrangements include covenants with which we must comply, and as of March 31, 2026, we were in compliance with these covenants. For additional information about our borrowings, refer to Note 5.
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. During the first quarter of 2026, we repurchased 546,681 shares of our common stock at an average price of $18.29 for a total of $10.0 million. As of March 31, 2026, we had $37.7 million remaining for share repurchases under the program, subject to the restrictive covenants mentioned above.
Leases
Our leases have remaining terms ranging from one to approximately seven years. As of March 31, 2026, we had $31.6 million in lease liabilities, of which $6.7 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2025 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 March 31, 2026, we had $4.5 million of derivative liabilities, of which $0.9 million matures within the next 12 months and $3.6 million in 2028. For additional information, refer to Note 6.
Investments
As of March 31, 2026, we held $114.8 million in Swedish treasury securities and $27.2 million in Finnish corporate notes to meet liquidity requirements for our banking subsidiary, AK Nordic AB.
Cash flow analysis
The following table summarizes our cash flow activity for the periods indicated (in thousands):
First Quarter
2026 2025
Change
Net cash provided by/(used in):
Operating activities $ 24,937 $ (52,580) $ 77,517
Investing activities (18,439) (24,385) 5,946
Financing activities 60,423 85,630 (25,207)
Effect of foreign exchange rates 10,733 14,216 (3,483)
Net increase in cash, cash equivalents and restricted cash
$ 77,654 $ 22,881 $ 54,773
Operating activities
Net cash provided by/(used in) 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 investing activities. Net cash provided by operating activities increased by $77.5 million in Q1 2026 due primarily to lower cash paid for operating expenses and higher cash collections recognized as income.
Investing activities
Net cash used in investing activities decreased by $5.9 million in Q1 2026 due primarily to a decrease in purchases of nonperforming loan portfolios and an increase in recoveries collected and applied to Finance receivables, net, partially offset by an increase in purchases of investments.
Financing activities
Net cash provided by financing activities decreased by $25.2 million in Q1 2026 due primarily to activity within our interest-bearing deposits and the repurchase of $10.0 million shares of our common stock, partially offset by higher net proceeds from credit lines and lower noncontrolling interest distributions in Q1 2026.
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 2025 Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 14.
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 pools 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 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" or "PPM" 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.
PRA Group Inc. published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 08, 2026 at 20:37 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]