PRA Group (PRAA) investor relations material

Executive summary

• Cash collections grew 4% year-over-year to $559 million, with strong performance in U.S. legal and digital channels and Europe, and a 61% cash efficiency ratio.

• Adjusted EBITDA for the last 12 months rose 10% year-over-year to $1.4 billion, supporting a decline in net leverage to 2.67x.

• Net income reached $58 million in Q2 2026, up from $42 million, driven by a $349 million increase in European ERC after a comprehensive portfolio review and strong long-term performance.

• Portfolio purchases totaled $297 million in Q2, with disciplined capital allocation based on global return thresholds.

• Achieved significant milestones under the PRA 3.0 strategy, including cost reductions, call center consolidation, and technology modernization.

Financial highlights

• Total revenues increased 29% year-over-year to $372 million, driven by a $349 million increase in European ERC and portfolio income growth.

• U.S. legal cash collections grew 26% to $150 million, now representing over half of U.S. core cash collections.

• Operating expenses rose to $219 million, up $16 million year-over-year, mainly due to higher legal collection costs and $5 million in one-time reorganization expenses.

• Adjusted net income rose to $58 million from $13 million in Q2 2025, with adjusted ROATE improving to 23.3%.

• Record ERC at quarter end reached $8.9 billion, up 7% year-over-year.

Outlook and guidance

• Expect approximately $260 million of additional portfolio income over the remaining life of European cash curves, translating to an average annualized increase of $25 million in the near term.

• Forward flow commitments total $219 million over the next 12 months, with $117 million in Europe and $86 million in the U.S.

• Focus remains on deploying $1.0–$1.3 billion in purchases per year, growing adjusted EBITDA, and further reducing net leverage.

• Legal collection costs are expected to grow more moderately in 2026 compared to prior years.

• Operating expenses for the second half of 2026 are expected to be in line with Q2, excluding one-time charges.