PRA Group (PRAA) investor relations material

Executive summary

• Cash collections were $536M; LTM adjusted EBITDA rose 9% to $1.378B, while net leverage fell to 2.60x for an eighth consecutive quarter.

• Cost reductions, legal-collections investment, technology modernization and selective portfolio purchases supported execution of long-term priorities.

Financial highlights

• Total revenue was $286.3M; portfolio income rose 5% to $271M, while net income attributable was $14.9M, or $0.39 diluted EPS.

• Portfolio revenue was $285.1M, down 8% YoY as lower changes in expected recoveries offset higher portfolio income; Q3 changes in expected recoveries were $14.3M.

• Adjusted operating expenses were $200.4M, down 6% from $214.1M; Q3 2025 included a $412.6M non-cash goodwill impairment.

• Compensation and benefits expense fell 11% YoY to $66M; net interest expense was $64M, relatively flat YoY.

• Nine-month revenue was $973.0M versus $868.4M; operating income was $342.4M versus an operating loss of $155.9M.

Outlook and guidance

• FY 2026 portfolio investment is tracking within the $1B–$1.3B target; ~$1B of purchases over the next 12 months is estimated to hold ERC constant.

• Estimated forward-flow commitments totaled $438M over the next 12 months, subject to seller delivery, projections and possible FX movements.

• 2026 cash growth is expected to be solid single-digit, with lower growth in H2 after strong Q1 and Q2; legal collection costs are expected to decline in 2027.

• Quarterly compensation and benefits expense is expected to run at ~$70M; the FY 2026 effective tax rate is expected to be ~30%, subject to income mix and other factors.

• Longer-term net leverage objective is 2.5x over two to three years; attractive purchases could cause interim increases. Technology modernization investment is expected to be under $10M over the next few years.