PRA Group, Inc.

What they do

PRA Group purchases nonperforming loan portfolios from banks, consumer finance companies, auto finance providers and other creditors, then collects on them through internal call centers, external vendors and legal channels. Most purchased accounts are 'Core' accounts where the originator stopped or failed to collect the full balance; a smaller portion are 'Insolvency' accounts tied to bankruptcy proceedings. The company operated in 12 countries and the UK with 2,615 full-time employees as of the 2025 10-K, and also runs a smaller fee-based class action claims recovery business in the U.S.

Revenue drivers

• Portfolio income (Core and Insolvency collections) — The main revenue source: finance income recognized on nonperforming loan portfolios as they are collected. Portfolio income was $1.013B in 2025, up 18.2% from $857M in 2024, and total revenue was $1.202B.
• U.S. segment — U.S. Core cash collections were $269.7M and U.S. Insolvency $21.4M in Q2 2026. The U.S. accounted for 42.5% of total ERC at year-end 2025.
• Europe segment — Europe Core cash collections were $200.4M and Europe Insolvency $17.7M in Q2 2026. Europe accounted for 51.0% of total ERC at year-end 2025, and a Q2 2026 portfolio review raised European ERC by roughly $349M.
• Other markets — Smaller operations in South America, Canada and Australia generated $49.4M of cash collections in Q2 2026, down from $51.0M in Q2 2025 on a reported basis.

Recent performance

For Q2 2026, PRA reported total cash collections of $559M, up 4% from Q2 2025, and net income attributable to PRA Group of $58M, or $1.51 per diluted share. Estimated remaining collections were $8.9B, up 7%, and Adjusted EBITDA was $1.4B for the trailing twelve months, up 10%. Total portfolio purchases were $297M in the quarter. The company also repurchased $10M of shares in Q2 2026 and announced a new board authorization for up to $150M of additional repurchases. Full-year 2025 results included a net loss attributable to PRA of $305.1M, driven largely by a $412.6M goodwill impairment, versus net income of $70.6M in 2024.

Strategy

Management is executing a plan called PRA 3.0, focused on improving U.S. cost efficiency and operational flexibility while building on the European business. Under the U.S. initiatives described in the 2025 10-K, onshore agent headcount was cut about 40% while U.S. Core cash collections rose 19.8%, and roughly one-third of U.S. call center capacity has moved offshore. In Q2 2026 the company continued reducing costs, further consolidated its U.S. call center footprint, expanded AI capabilities and repurchased shares. It also issued its first Euro-denominated senior notes (€300.0M) and repurchased $20.0M of stock during 2025 as part of managing its capital structure.

Risks

• Collection and purchase volume dependence — Profitability depends on buying enough nonperforming loans at favorable pricing and collecting more than cost; the 10-K notes purchase cadence has been varied and periodic due to available portfolio supply.
• Economic and consumer credit conditions — A recession, sustained inflation or interest rate uncertainty could reduce consumers' ability to pay, lowering collections and the value of receivable portfolios.
• Regulatory and legal collections exposure — The business faces collection, bankruptcy and tax law changes, CFPB and other government investigations, and GDPR data privacy requirements; legal recovery requires upfront court costs and extended timelines.
• Goodwill and model reliance — The company recorded a $412.6M goodwill impairment in 2025 and warns further impairment is possible, while its collections rely on internally developed models and underlying data.

Outlook

Management said the Q2 2026 European portfolio review, which added roughly $349M to European ERC, should lead to higher portfolio income going forward and more moderate changes in expected recoveries over the long term. Based on current trends and pipeline activity, the 10-K states the company expects portfolio supply to remain relatively stable over the near to medium term, subject to market and economic conditions. Management continues to point to PRA 3.0 execution, including cost reductions, call center consolidation and technology modernization, as the path to improved financial performance and a stronger balance sheet.