Continued Momentum in U.S. Business with Strong Results in Europe
On Track with PRA 3.0 Strategy to Drive Enhanced Results
NORFOLK, Va., May 7, 2026 /PRNewswire/ -- PRA Group, Inc. (NASDAQ:PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2026 ("Q1 2026").
Q1 2026 Highlights (vs. Q1 2025)
Total cash collections of $551.9 million, up 11.0%.
Cash efficiency ratio1 of 61.8%.
Net income attributable to PRA Group, Inc. of $28.2 million, or diluted earnings per share of $0.73.
Adjusted EBITDA2 for the 12 months ended March 31, 2026 of $1.3 billion, up 13.9%, which exceeded cash collections growth.
Total portfolio purchases of $220.9 million, in line with expectations, as we continue to focus on driving higher returns and net income while balancing investments with leverage.
Estimated remaining collections (ERC)3 of $8.5 billion, up 9.5%.
1.
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.
2.
A reconciliation of net income attributable to PRA Group, Inc. to Adjusted EBITDA can be found at the end of this press release.
3.
Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios.
"We had a strong start to 2026, building on the success we achieved last year with continued improvement in our key financial and operational metrics," said Martin Sjolund, president and chief executive officer. "Cash collections grew 11% from the prior-year period, driven by the continued momentum of our operational initiatives, especially in the U.S. legal collections channel, which was supplemented by strong performance in Europe. Our cash efficiency ratio improved to 62%, even with the increase in legal collection costs to support future collections growth. Net income increased to $28 million and Adjusted EBITDA for the last twelve months was up 14%, growing faster than cash collections, as we continued to gain operating leverage."
"Overall, Q1 was another solid quarter, with strong execution across several operational initiatives and improved financial results. Looking ahead to the rest of the year, we plan to continue making progress on our new PRA 3.0 strategy, including modernizing our technology platforms and innovating with our new mobile app in the UK and global AI initiatives. We believe we are in a strong position to continue delivering enhanced results and value for our shareholders, as we transform PRA into a high-performing, technology-enabled global allocator of capital."
Cash Collections and RevenuesThe following table presents cash collections by quarter and by source, as reported and on a constant currency-adjusted basis:
Cash Collection Source
2026
2025
($ in thousands)
Q1
Q4
Q3
Q2
Q1
U.S. Core
$ 268,409
$ 249,322
$ 258,277
$ 253,856
$ 240,467
U.S. Insolvency
20,141
20,223
21,131
21,175
20,589
Europe Core
192,019
188,277
185,910
185,652
164,371
Europe Insolvency
20,547
19,166
22,658
24,609
21,205
Other markets (1)
50,812
54,670
54,268
50,996
50,804
Total cash collections
$ 551,928
$ 531,658
$ 542,244
$ 536,288
$ 497,436
Cash Collection Source -
Constant Currency-Adjusted
2026
2025
($ in thousands)
Q1
Q1
U.S. Core
$ 268,409
$ 240,467
U.S. Insolvency
20,141
20,589
Europe Core
192,019
180,408
Europe Insolvency
20,547
22,720
Other markets (1)
50,812
55,931
Total cash collections
$ 551,928
$ 520,115
1.
Reflects total cash collections in South America, Canada and Australia.
Total cash collections in Q1 2026 increased 11.0% to $551.9 million, compared to $497.4 million in the first quarter of 2025 ("Q1 2025"), driven by the continued increase in cash generation from our investments in the U.S. legal collections channel, as well as strong performance in our European business.
Three Months Ended March 31,
($ in thousands)
2026
2025
Portfolio income
$ 269,579
$ 240,958
Recoveries collected in excess of forecast
22,698
16,500
Changes in expected future recoveries
21,188
11,422
Changes in expected recoveries
43,886
27,922
Total portfolio revenue
$ 313,465
$ 268,880
Portfolio income in Q1 2026 increased 11.9% to $269.6 million, compared to $241.0 million in Q1 2025, driven by strong recent purchases at improved returns.
Changes in expected recoveries in Q1 2026 increased to $43.9 million, compared to $27.9 million in Q1 2025.
Total portfolio revenue in Q1 2026 increased 16.6% to $313.5 million, compared to $268.9 million in Q1 2025.
Expenses
Operating expenses in Q1 2026 increased $16.2 million to $211.3 million, compared to $195.0 million in Q1 2025, driven primarily by a $15.1 million increase in legal collection costs to support future cash collections growth.
Compensation and benefits expense decreased $2.6 million, primarily due to our efforts to right-size our agent headcount, leverage more external collections resources (including offshore agents), and eliminate more than 115 corporate roles in the fourth quarter of 2025.
Communication expense decreased $1.5 million, due to the use of more cost-efficient collection strategies.
Interest expense, net in Q1 2026 increased to $63.5 million, compared to $61.0 million in Q1 2025, primarily reflecting an increase in debt balances.
The effective tax rate for the quarter was 21.6%.
Portfolio Purchases
Portfolio Purchase Source
2026
2025
($ in thousands)
Q1
Q4
Q3
Q2
Q1
U.S. Core
$ 105,469
$ 102,254
$ 119,672
$ 160,193
$ 148,903
U.S. Insolvency
13,043
10,088
14,809
22,134
12,059
Europe Core
86,715
152,375
95,239
142,465
108,390
Europe Insolvency
4,837
4,758
5,934
4,757
4,856
Other markets (1)
10,786
45,326
19,838
16,956
17,494
Total portfolio purchases
$ 220,850
$ 314,801
$ 255,492
$ 346,505
$ 291,702
1.
Reflects total portfolio purchases in South America, Canada and Australia.
2.
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.
The Company purchased $220.9 million in portfolios of nonperforming loans in Q1 2026.
At the end of Q1 2026, the Company had in place estimated forward flow commitments2 of $321.8 million over the next 12 months, comprised of $172.6 million in Europe, $132.2 million in the U.S., and $17.0 million in other markets.
Credit Availability
Total availability under the Company's credit facilities as of March 31, 2026 was $996.0 million, comprised of $714.3 million based on current ERC and subject to debt covenants, and $281.7 million of additional availability subject to borrowing base and debt covenants, including advance rates.
Conference Call InformationPRA 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 May 7, 2027, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 86103# until May 14, 2026.
About PRA Group, Inc.As a global leader in acquiring and collecting nonperforming loan portfolios, 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 StatementsStatements 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 EndedMarch 31,
2026
2025
Revenues
Portfolio income
$ 269,579
$ 240,958
Changes in expected recoveries
43,886
27,922
Total portfolio revenue
313,465
268,880
Other revenue
1,068
739
Total revenues
314,533
269,619
Operating expenses
Compensation and benefits
70,738
73,323
Legal collection costs
48,458
33,394
Legal collection fees
17,071
15,230
Agency fees
24,581
21,368
Professional and outside services
20,884
21,103
Communication
9,019
10,477
Rent and occupancy
3,258
3,480
Depreciation, amortization and impairment of long-lived assets
1,708
3,769
Other operating expenses
15,562
12,898
Total operating expenses
211,279
195,042
Income from operations
103,254
74,577
Other income/(expense)
Interest expense, net
(63,518)
(60,970)
Foreign exchange gain/(loss), net
1,054
(51)
Other
(254)
(180)
Income before income taxes
40,536
13,376
Income tax expense
8,764
4,312
Net income
31,772
9,064
Net income attributable to noncontrolling interests
3,562
5,405
Net income attributable to PRA Group, Inc.
$ 28,210
$ 3,659
Net income per common share attributable to PRA Group, Inc.
Basic
$ 0.74
$ 0.09
Diluted
$ 0.73
$ 0.09
Weighted average number of shares outstanding
Basic
38,368
39,549
Diluted
38,511
39,688
PRA Group, Inc.
Consolidated Balance Sheets
(Amounts in thousands)
(unaudited)
March 31,2026
December 31,2025
ASSETS
Cash and cash equivalents
$ 124,778
$ 104,409
Investments
143,358
66,628
Finance receivables, net
4,637,094
4,688,024
Income taxes receivable
15,700
17,702
Deferred tax assets, net
70,914
76,955
Right-of-use assets
28,715
29,206
Property and equipment, net
24,567
24,886
Goodwill
26,871
26,871
Prepaid expenses and other assets
134,833
68,641
Total assets
$ 5,206,830
$ 5,103,322
LIABILITIES AND EQUITY
Liabilities
Accrued expenses and accounts payable
$ 100,483
$ 131,812
Income taxes payable
30,083
29,845
Deferred tax liabilities, net
18,733
17,064
Lease liabilities
31,595
32,160
Interest-bearing deposits
78,740
106,148
Borrowings
3,779,167
3,697,338
Other liabilities
99,475
48,990
Total liabilities
4,138,276
4,063,357
Equity
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding
—
—
Common stock, $0.01par value, 100,000 shares authorized, 38,141 shares issued and outstanding as of March 31, 2026; 100,000 shares authorized, 38,453 shares issued and outstanding as of December 31, 2025
381
385
Additional paid-in capital
3,289
11,474
Retained earnings
1,283,217
1,255,007
Accumulated other comprehensive loss
(284,599)
(287,015)
Total stockholders' equity - PRA Group, Inc.
1,002,288
979,851
Noncontrolling interests
66,266
60,114
Total equity
1,068,554
1,039,965
Total liabilities and equity
$ 5,206,830
$ 5,103,322
Purchase Price Multiples
as of March 31, 2026
(in thousands, except percentages)
Purchase Period
Purchase Price (1)(2)
Total Estimated Collections (3)
Estimated Remaining Collections (4)
Current Purchase Price Multiple
Original Purchase Price Multiple
U.S. Core
