Double-Digit Growth in Cash-Based Metrics with Disciplined Purchases Focused on Maximizing Value Creation
Non-Cash $413 Million Goodwill Impairment Charge Resulted in Q3 Net Loss of $408 Million
Excluding the Non-Cash Charge, the Company Delivered Adjusted Net Income of $21 Million
PRA Group, Inc. (Nasdaq: PRAA) (the “Company”), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the third quarter of 2025 (“Q3 2025”).
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Q3 2025 Highlights (vs. Q3 2024)
— Total cash collections of $542.2 million, up 13.7%.
— Net loss attributable to PRA Group, Inc. of $407.7 million, or diluted earnings per share of ($10.43), which includes a $412.6 million non-recurring, non-cash goodwill impairment charge.
— Excluding the goodwill impairment charge, adjusted net income attributable to PRA Group, Inc.1 of $20.9 million, or diluted earnings per share of $0.53.
— Cash efficiency ratio2 of (15.4)%. Excluding the goodwill impairment charge, adjusted cash efficiency ratio2 of 60.6%.
— Adjusted EBITDA3 for the 12 months ended September 30, 2025 of $1.3 billion, up 15.1%.
— Total portfolio purchases of $255.5 million, down year-over-year, reflecting our focus on being selective and maximizing value. The Company remains on track to achieve its 2025 portfolio purchases target of $1.2 billion.
— Record estimated remaining collections (ERC)4 of $8.4 billion, up 15.2%.
1. A reconciliation of net (loss)/income attributable to PRA Group, Inc. to adjusted net income attributable to PRA Group, Inc. can be found at the end of this press release.2. Cash efficiency ratio is calculated by dividing cash receipts less operating expenses by cash receipts. Cash receipts refers to cash collections on the Company's nonperforming loan portfolios, fees and revenue recognized from the Company's class action claims recovery services. Adjusted cash efficiency ratio is calculated by dividing cash receipts less operating expenses, excluding the effect of goodwill impairment, by cash receipts. A calculation of adjusted cash efficiency can be found at the end of this press release.3. 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 can be found at the end of this press release4. Refers to the sum of all future projected cash collections on the Company'snonperforming loan portfolios.
“It has now been just over 100 days since I have stepped into the CEO role, and my focus has been on accelerating what is working well and tackling areas of our business that need to be improved,” said MartinSjolund, president and chief executive officer. “During this time, we achieved significant progress against our strategic priorities for the U.S. business that we shared last quarter, including driving cost efficiency, reorganizing our U.S. operations, creating a new talent hub, bringing our headquarters corporate and support staff back to the office, and developing our IT modernization roadmap. I am very pleased with how the team has responded and how fast we have been executing against these priorities.”
“Q3 represented another step forward for PRA and our ability to create value for our stakeholders. Cash collections grew 14% year-over-year, reflecting recent purchases, the continued strong performance of our European business, and growing momentum in our U.S. operational initiatives. In particular, we have been ramping up our investments in the U.S. legal collections channel, which led to a 27% increase in U.S. legal cash collections for the quarter.”
“During the quarter, we recorded a non-recurring, non-cash impairment charge of goodwill related to our Debt Buying and Collection reporting unit. This unit's goodwill was primarily attributed to a European acquisition we made in 2014. The Q3 impairment test was triggered by a sustained decline in our stock price. The impairment charge had no impact on our operations, portfolio valuations, or ERC, and I would like to point out that our European business outperformed our cash collections expectations by 11% year-to-date, and it continues to perform strongly. Overall, we are heading in the right direction and are focused on continuing to improve the financial performance of our business.”
Cash Collections and Revenues The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:
Cash Collection Source 2025 2024($ in thousands) Q3 Q2 Q1 Q4 Q3Americas and Australia Core $ 310,108 $ 301,698 $ 288,160 $ 257,711 $ 266,977Americas Insolvency 23,568 24,329 23,700 24,067 26,065Europe Core 185,910 185,652 164,371 162,564 158,242Europe Insolvency 22,658 24,609 21,205 23,724 25,826Total cash collections $ 542,244 $ 536,288 $ 497,436 $ 468,066 $ 477,110Cash Collection Source -Constant Currency-Adjusted 2025 2024($ in thousands) Q3 Q3Americas and Australia Core $ 310,108 $ 267,649Americas Insolvency 23,568 26,040Europe Core 185,910 166,803Europe Insolvency 22,658 26,802Total cash collections $ 542,244 $ 487,294
— Total cash collections in Q3 2025 increased 13.7% to $542.2 million, compared to $477.1 million in the third quarter of 2024 (“Q3 2024”), driven by higher levels of recent portfolio purchases, strong performance in our European business, and an increase in cash generation from our investments in the U.S. legal collections channel.
Three Months Ended Sept 30, Nine Months Ended Sept 30,($ in thousands) 2025 2024 2025 2024Portfolio income $ 258,549 $ 216,122 $ 750,441 $ 627,468Recoveries collected in excess of forecast $ 27,351 $ 34,158 $ 84,153 $ 124,256Changes in expected future recoveries 24,007 26,456 28,419 61,352Changes in expected recoveries $ 51,358 $ 60,614 $ 112,572 $ 185,608Total portfolio revenue $ 309,907 $ 276,736 $ 863,013 $ 813,076
— Portfolio income in Q3 2025 increased 19.6% to $258.5 million, compared to $216.1 million in Q3 2024, due to strong recent purchases at improved returns.
— Recoveries collected in excess of forecast of $27.4 million included a $15.0 million one-time purchase price adjustment payment to a seller that modified the terms and conditions of an existing contract and increases ERC for the related portfolios acquired.
— Total portfolio revenue in Q3 2025 increased 12.0% to $309.9 million, compared to $276.7 million in Q3 2024.
Expenses
— Operating expenses in Q3 2025 increased to $626.7 million, compared to $191.5 million in Q3 2024. This included a $412.6 million non-recurring, non-cash goodwill impairment charge. Excluding the goodwill impairment charge, adjusted operating expenses were $214.1 million.
— Interest expense, net in Q3 2025 increased to $64.1 million, compared to $61.1 million in Q3 2024, primarily reflecting an increase in debt balances.
Portfolio Purchases
Portfolio Purchase Source 2025 2024($ in thousands) Q3 Q2 Q1 Q4 Q3Americas & Australia Core $ 139,484 $ 177,097 $ 165,503 $ 194,063 $ 263,613Americas Insolvency 14,835 22,186 12,953 9,460 10,162Europe Core 95,239 142,465 108,390 220,875 71,507Europe Insolvency 5,934 4,757 4,856 8,272 4,696Total portfolio acquisitions $ 255,492 $ 346,505 $ 291,702 $ 432,670 $ 349,978
— The Company purchased $255.5 million in portfolios of nonperforming loans in Q3 2025.
— At the end of Q3 2025, the Company had in place estimated forward flow commitments1 of $297.8 million over the next 12 months, comprised of $235.4 million in the Americas and Australia and $62.4 million in Europe.
1. Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming loan portfolios at pre-established prices. 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.
Credit Availability
— Total availability under the Company's credit facilities as of September 30, 2025 was $1.2 billion, comprised of $888.9 million based on currentERC and subject to debt covenants, and $301.4 million of additional availability subject to borrowing base and debt covenants, including advance rates.
Conference Call Information PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss its financial and operational results. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call, either visit the same website until November 3, 2026, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 30359# until November 10, 2025.
About PRA Group, Inc. As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe, and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.
About Forward Looking Statements Statements made herein that are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that the Company's expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including the risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission, including PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
PRA Group, Inc.Unaudited Consolidated Income Statements(Amounts in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024RevenuesPortfolio income $ 258,549 $ 216,122 $ 750,441 $ 627,468Changes in expected recoveries 51,358 60,614 112,572 185,608Total portfolio revenue 309,907 276,736 863,013 813,076Other revenue 1,233 4,741 5,434 8,216Total revenues 311,140 281,477 868,447 821,292Operating expensesCompensation and benefits 74,237 76,106 223,284 223,944Legal collection costs 46,764 28,781 117,741 90,746Legal collection fees 16,558 14,479 47,413 40,353Agency fees 24,556 21,020 68,612 61,751Professional and outside services 22,051 20,452 64,225 63,626Communication 8,377 10,048 28,271 34,203Rent and occupancy 3,654 4,175 10,638 12,455Depreciation, amortization and impairment of long-lived assets 2,439 2,469 8,711 7,826Goodwill impairment 412,611 – 412,611 -Other operating expenses 15,440 13,969 42,800 40,792Total operating expenses 626,687 191,499 1,024,306 575,696(Loss)/income from operations (315,547) 89,978 (155,859) 245,596Other income/(expense)Interest expense, net (64,087) (61,062) (187,418) (168,693)Gain on sale of equity method investment – – 38,403 -Foreign exchange gain, net 67 10 66 138Other (38) (676) (293) (836)(Loss)/income before income taxes (379,605) 28,250 (305,101) 76,205Income tax expense/(benefit) 24,361 (672) 44,088 10,416Net (loss)/income (403,966) 28,922 (349,189) 65,789Net income attributable to noncontrolling interests 3,737 1,768 12,481 13,644Net (loss)/income attributable to PRA Group, Inc. $ (407,703) $ 27,154 $ (361,670) $ 52,145Net (loss)/income per common share attributable to PRA Group, Inc.Basic $ (10.43) $ 0.69 $ (9.20) $ 1.33Diluted $ (10.43) $ 0.69 $ (9.20) $ 1.32Weighted average number of shares outstandingBasic 39,078 39,421 39,316 39,353Diluted 39,078 39,492 39,316 39,495
PRA Group, Inc.Consolidated Balance Sheets(Amounts in thousands) (unaudited) September 30, December 31, 2025 2024ASSETSCash and cash equivalents $ 107,454 $ 105,938Investments 64,915 66,304Finance receivables, net 4,572,167 4,140,742Income taxes receivable 17,397 19,559Deferred tax assets, net 93,872 75,134Right-of-use assets 28,135 32,173Property and equipment, net 25,119 29,498Goodwill 26,871 396,357Other assets 63,279 65,450Total assets $ 4,999,209 $ 4,931,155LIABILITIES AND EQUITYLiabilitiesAccrued expenses and accounts payable $ 115,518 $ 141,211Income taxes payable 48,782 28,584Deferred tax liabilities, net 17,663 16,813Lease liabilities 31,175 36,437Interest-bearing deposits 139,671 163,406Borrowings 3,606,978 3,326,621Other liabilities 55,450 24,476Total liabilities 4,015,237 3,737,548EquityPreferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding – -Common stock, $0.01 par value, 100,000 shares authorized, 39,083 shares issued and 391 395outstanding as of September 30, 2025; 100,000 shares authorized, 39,510 shares issued andoutstanding as of December 31, 2024Additional paid-in capital 17,981 17,882Retained earnings 1,198,479 1,560,149Accumulated other comprehensive loss (288,358) (443,394)Total stockholders' equity – PRA Group, Inc. 928,493 1,135,032Noncontrolling interests 55,479 58,575Total equity 983,972 1,193,607Total liabilities and equity $ 4,999,209 $ 4,931,155
Purchase Price Multiplesas of September 30, 2025Amounts in thousandsPurchase Period Purchase Price (1)(2) Total Estimated Estimated Current Purchase Original Purchase Collections (3) Remaining Price Multiple Price Multiple (5) Collections (4)Americas and Australia Core1996-2014 $ 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 3,919,763Americas Insolvency1996-2014 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 4,106,939 240,778Total Americas and Australia 10,636,930 23,433,005 4,160,541Europe Core1996-2014 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 4,071,400Europe Insolvency2014 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 539,727 789,432 168,011Total Europe 5,527,155 10,771,841 4,239,411Total 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 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 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)Amounts in thousands September 30, 2025 (year-to-date) As of September 30, 2025Purchase Period Cash Portfolio Changes in Total Portfolio Net Finance Receivables (3) Collections (2) Income (2) Expected Revenue (2) Recoveries (2)Americas and Australia Core1996-2014 $ 33,116 $ 15,076 $ 14,539 $ 29,615 $ 25,3832015 10,292 6,159 (3,525) 2,634 12,6302016 14,478 8,358 1,599 9,957 17,0052017 21,888 11,477 5,393 16,870 31,6082018 38,675 16,918 8,963 25,881 56,6712019 37,963 16,735 4,280 21,015 53,0852020 42,193 17,485 4,356 21,841 57,4552021 49,989 26,763 (10,142) 16,621 93,8162022 72,183 31,861 (9,887) 21,974 135,7372023 182,901 89,871 (33,376) 56,495 332,2602024 323,633 187,571 26,891 214,462 708,5552025 72,655 56,814 8,544 65,358 475,270Subtotal 899,966 485,088 17,635 502,723 1,999,475Americas Insolvency1996-2014 716 16 715 731 -2015 83 5 72 77 22016 221 14 120 134 462017 827 78 381 459 3182018 829 29 425 454 1342019 2,269 78 713 791 4252020 7,739 670 (1,131) (461) 2,7912021 9,227 1,250 314 1,564 9,4012022 8,178 1,636 478 2,114 14,3392023 21,637 6,212 498 6,710 52,2742024 17,177 8,236 (1,177) 7,059 52,6062025 2,694 2,971 1,335 4,306 50,889Subtotal 71,597 21,195 2,743 23,938 183,225Total Americas and Australia 971,563 506,283 20,378 526,661 2,182,700Europe Core1996-2014 73,218 43,776 19,058 62,834 86,0252015 21,742 9,043 7,080 16,123 59,4982016 20,097 8,757 4,139 12,896 81,9022017 11,764 4,277 (1,251) 3,026 56,2122018 26,250 9,330 1,789 11,119 102,4232019 46,787 14,952 12,991 27,943 196,3702020 34,169 13,046 10,509 23,555 138,9122021 45,708 19,334 6,760 26,094 216,9252022 51,788 20,379 3,229 23,608 251,9392023 70,508 28,642 5,439 34,081 300,9722024 103,453 44,540 5,065 49,605 420,5302025 30,449 14,420 3,954 18,374 343,433Subtotal 535,933 230,496 78,762 309,258 2,255,141Europe Insolvency2014 135 – 135 135 -2015 119 – 119 119 -2016 413 62 328 390 1282017 787 34 501 535 2102018 1,247 70 311 381 7282019 5,073 498 433 931 4,7452020 13,206 988 2,212 3,200 9,2212021 11,394 1,269 4,102 5,371 12,9012022 11,855 2,183 2,759 4,942 22,4872023 11,830 3,225 1,314 4,539 32,9042024 11,455 4,610 1,020 5,630 35,1782025 958 723 198 921 15,824Subtotal 68,472 13,662 13,432 27,094 134,326Total Europe 604,405 244,158 92,194 336,352 2,389,467Total 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, 2025Amounts in millions Cash CollectionsPurchase Period Purchase 1996-2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Price (2)(3)Americas and Australia Core1996-2014 $ 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 $ 6,597.52015 443.1 – 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 14.1 17.3 10.3 894.82016 455.8 – – 138.7 256.5 194.6 140.6 105.9 74.2 38.4 24.9 24.0 14.5 1012.32017 532.9 – – – 107.3 278.7 256.5 192.5 130.0 76.3 43.8 39.2 21.9 1146.22018 654.0 – – – – 122.7 361.9 337.7 239.9 146.1 92.9 75.9 38.7 1415.82019 581.5 – – – – – 143.8 349.0 289.8 177.7 110.3 77.7 38.0 1186.32020 435.7 – – – – – – 132.9 284.3 192.0 125.8 87.0 42.2 864.22021 435.8 – – – – – – – 85.0 177.3 136.8 98.4 50.0 547.52022 406.1 – – – – – – – – 67.7 195.4 144.7 72.2 480.02023 622.5 – – – – – – – – – 108.5 285.9 182.9 577.32024 823.7 – – – – – – – – – – 145.9 323.6 469.52025 483.3 – – – – – – – – – – – 72.6 72.6Subtotal 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 15,264.0Americas Insolvency1996-2014 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 2,723.12015 63.2 – 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 0.2 0.1 88.32016 91.4 – – 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.9 0.6 0.2 119.52017 275.3 – – – 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 0.8 359.12018 97.9 – – – – 6.7 27.4 30.5 31.6 24.6 12.7 2.5 0.8 136.82019 123.1 – – – – – 13.4 31.4 39.1 37.8 28.7 14.6 2.3 167.32020 62.1 – – – – – – 6.5 16.1 20.4 19.5 17.0 7.7 87.22021 55.2 – – – – – – – 4.6 17.9 17.5 15.3 9.2 64.52022 33.4 – – – – – – – – 3.2 9.2 11.1 8.2 31.72023 91.2 – – – – – – – – – 9.0 25.1 21.6 55.72024 68.4 – – – – – – – – – – 12.1 17.2 29.32025 50.0 – – – – – – – – – – – 2.8 2.8Subtotal 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 3,865.3Total 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 19,129.3Europe Core1996-2014 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 2,061.32015 411.3 – 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 33.8 30.4 21.7 611.62016 333.1 – – 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 20.1 459.02017 252.2 – – – 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 11.8 264.02018 341.8 – – – – 24.3 88.7 71.3 69.1 50.7 41.6 37.1 26.2 409.02019 518.6 – – – – – 48.0 125.7 121.4 89.8 75.1 68.2 46.8 575.02020 324.1 – – – – – – 32.3 91.7 69.0 56.1 50.1 34.2 333.42021 412.4 – – – – – – – 48.5 89.9 73.0 66.6 45.7 323.72022 359.4 – – – – – – – – 33.9 83.8 74.7 51.8 244.22023 410.6 – – – – – – – – – 50.2 103.1 70.5 223.82024 451.9 – – – – – – – – – – 46.3 103.5 149.82025 357.5 – – – – – – – – – – – 30.4 30.4Subtotal 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 5,685.2Europe Insolvency2014 10.9 – 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 0.2 0.1 17.32015 19.0 – 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.4 0.2 0.1 26.92016 39.3 – – 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.4 61.62017 39.2 – – – 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 0.8 50.12018 44.9 – – – – 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.2 52.72019 77.2 – – – – – 5.0 21.1 23.9 21.0 17.5 12.9 5.1 106.52020 105.4 – – – – – – 6.0 34.6 34.1 29.7 25.5 13.2 143.12021 53.2 – – – – – – – 5.5 14.4 14.7 15.4 11.4 61.42022 44.6 – – – – – – – – 4.5 12.4 15.2 11.9 44.02023 46.7 – – – – – – – – – 4.2 12.7 11.8 28.72024 43.4 – – – – – – – – – – 9.5 11.5 21.02025 15.9 – – – – – – – – – – – 1.0 1.0Subtotal 539.7 – 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 68.5 614.3Total 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 6,299.5Total 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.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP).However, management uses certain non-GAAP financial measures, includingAdjusted EBITDA, internally to evaluate the Company's performance and to set performance goals.Adjusted EBITDA is calculated as net (loss)/income attributable to PRA Group, Inc. plus income tax expense; 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. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. The Company presents Adjusted EBITDA because the Company considers it an important supplemental measure of its operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of the Company's 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 the Company's 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 attributable to PRA Group, Inc. determined in accordance with GAAP. Set forth below is 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 for the last twelve months (LTM) ended September 30, 2025 and for the year ended December 31, 2024. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.
LTM Year EndedAdjusted EBITDA Reconciliation ($ in thousands) September 30, 2025 December 31, 2024Net (loss)/income attributable to PRA Group, Inc. $ (343,214) $ 70,601Adjustments:Income tax expense 54,704 21,032Foreign exchange loss 81 9Interest expense, net 247,992 229,267Other expense 308 851Depreciation and amortization 10,273 10,792Impairment of real estate 1,404 -Goodwill impairment 412,611 -Net income attributable to noncontrolling interests 16,809 17,972Gain on sale of equity method investment (38,403) -Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 902,925 787,028Adjusted EBITDA $ 1,265,490 $ 1,137,552
The Company uses 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 (“Adjusted operating expenses”), relative to 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 the Company's 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 the Company's 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 2024Cash collections $ 542,244 $ 477,110 $ 1,575,968 $ 1,400,510Fee income 622 3,138 3,745 4,036Cash receipts 542,866 480,248 1,579,713 1,404,546Total operating expenses 626,687 191,499 1,024,306 575,696Less: Goodwill impairment 412,611 – 412,611 -Adjusted operating expenses 214,076 191,499 611,695 575,696Cash receipts less Adjusted operating expenses 328,790 288,749 968,018 828,850Adjusted cash efficiency ratio 60.6% 60.1% 61.3% 59.0%
In addition, the Company uses return on average tangible equity (“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 the Company's equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of its 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 the Company's business. Accordingly, the Company also uses Adjusted ROATE to monitor and evaluate operating performance relative to the Company's equity. Management believes that 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 net income attributable to PRA Group, Inc.”). 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 provides the Company's 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, September 30, 2025 2024 2025 2024 2025 2024Total stockholders' equity – PRA Group, Inc. (2) $ 928,493 $ 1,218,882 $ 1,132,709 $ 1,182,173 $ 1,154,889 $ 1,165,196Less: Goodwill 26,871 423,011 233,160 419,329 320,848 420,517Less: Other intangible assets 1,470 1,620 1,506 1,609 1,488 1,656Average tangible equity $ 898,043 $ 761,235 $ 832,553 $ 743,023 ROATE (3) Third Quarter Year-to-Date 2025 2024 2025 2024Net (loss)/income attributable to PRA Group, Inc. $ (407,703) $ 27,154 $ (361,670) $ 52,145Return on average tangible equity (181.6)% 14.3% (57.9)% 9.4% Adjusted Net Income Attributable to PRA Group, Inc. Reconciliation and Adjusted ROATE (4) Third Quarter Year-to-Date 2025 2024 2025 2024Net (loss)/income attributable to PRA Group, Inc. $ (407,703) $ 27,154 $ (361,670) $ 52,145Less: 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 52,145Adjusted ROATE 9.3% 14.3% 6.0% 9.4%
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.3. Based on annualized Net (loss)/income attributable to PRA Group, Inc.4. Based on annualized Adjusted net income attributable to PRA Group, Inc.
Investor Contact:Najim Mostamand, CFAVice President, Investor Relations757-431-7913IR@PRAGroup.com
Media Contact:Allison HermanManager, Public Relations and Strategic Communication(757) 381-5205mediainquiries@pragroup.com
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