PRA Group (PRAA) Q4 2025 earnings summary

Executive summary

• Achieved 13% year-over-year growth in cash collections to $2.1 billion and $1.2 billion in portfolio purchases, the third highest annual level, with strong U.S. legal and European performance.

• Adjusted net income rose 3% to $73 million, and adjusted EBITDA increased 16% to $1.3 billion, outpacing cash collections growth.

• Net leverage declined to 2.73x by year-end 2025, reflecting improved EBITDA and disciplined capital management.

• Reported a net loss of $305 million for 2025, primarily due to a $413 million non-cash goodwill impairment in Q3.

• Strengthened U.S. operations, enhanced European business, and launched technology initiatives including PRA 3.0 and AI pilots.

Financial highlights

• Total revenue increased 8% to $1.2 billion in 2025 compared to 2024.

• Adjusted EBITDA reached $1.315 billion, up 16% year-over-year.

• Adjusted cash efficiency ratio improved to 61.3% in 2025.

• U.S. legal cash collections rose 28% year-over-year, now 48% of U.S. core collections.

• ERC at year-end was $8.6 billion, up 15% year-over-year, diversified across U.S. and Europe.

Outlook and guidance

• Portfolio supply expected to remain stable, with investments projected in the $1 billion–$1.3 billion range annually and 2026 expected to be similar to 2025.

• Targeting annualized adjusted net income in the $1.0–$1.3 billion range over the next 2–3 years, assuming stable macro and regulatory conditions.

• Adjusted EBITDA anticipated to continue growing faster than cash collections, with net leverage targeted to decline to the mid-2x area.

• Focus remains on disciplined capital allocation, operational efficiency, and leveraging technology for growth.

• PRA 3.0 strategy aims to evolve into a high-performing, technology-enabled global allocator of capital.