PRA Group - 10-Q quarterly report FY2025 Q2

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2025

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________ to ________

Commission File Number: 000-50058

PRA Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware

75-3078675

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

120 Corporate Boulevard

Norfolk, Virginia 23502

(Address of principal executive offices)

(888) 772-7326

(Registrant's Telephone No., including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PRAA	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of the registrant's common stock outstanding as of July 31, 2025 was 39,073,697.

PRA Group, Inc.

Form 10-Q for the Quarterly Period Ended June 30, 2025

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		Page

Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Income Statements	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
	Note 1. Organization and Business	9

	Note 2. Finance Receivables, net	9
	Note 3. Investments	12
	Note 4. Goodwill	12

	Note 5. Borrowings	13
	Note 6. Derivatives	13
	Note 7. Fair Value	14
	Note 8. Accumulated Other Comprehensive Loss	16
	Note 9. Earnings per Share	17
	Note 10. Income Taxes	17
	Note 11. Commitments and Contingencies	17
	Note 12. Segments	18
	Note 13. Recently Issued Accounting Standards	18

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	39

Signatures		41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PRA Group, Inc.

Consolidated Balance Sheets

June 30, 2025 and December 31, 2024

(In thousands)


	(unaudited)
	June 30, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	131,592	$	105,938

Investments	66,500		66,304
Finance receivables, net	4,562,576		4,140,742

Income taxes receivable	24,136		19,559
Deferred tax assets, net	92,226		75,134
Right-of-use assets	26,268		32,173
Property and equipment, net	26,391		29,498
Goodwill	439,449		396,357
Other assets	65,629		65,450
Total assets	$	5,434,767	$	4,931,155
LIABILITIES AND EQUITY
Liabilities
Accrued expenses and accounts payable	$	124,103	$	141,211

Income taxes payable	37,549		28,584
Deferred tax liabilities, net	22,460		16,813
Lease liabilities	29,453		36,437
Interest-bearing deposits	168,656		163,406
Borrowings	3,614,208		3,326,621
Other liabilities	41,727		24,476
Total liabilities	4,038,156		3,737,548

Equity
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $0.01 par value; 100,000 shares authorized, 39,074 shares issued and outstanding as of June 30, 2025; 100,000 shares authorized, 39,510 shares issued and outstanding as of December 31, 2024	391		395
Additional paid-in capital	14,086		17,882
Retained earnings	1,606,182		1,560,149
Accumulated other comprehensive loss	(283,734)		(443,394)
Total stockholders' equity - PRA Group, Inc.	1,336,925		1,135,032
Noncontrolling interests	59,686		58,575
Total equity	1,396,611		1,193,607
Total liabilities and equity	$	5,434,767	$	4,931,155

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Income Statements

For the Six Months Ended June 30, 2025 and 2024

(In thousands, except per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues
Portfolio income	$	250,934	$	209,290	$	491,892	$	411,346
Changes in expected recoveries	33,292		73,320		61,214		124,994
Total portfolio revenue	284,226		282,610		553,106		536,340
Other revenue	3,462		1,619		4,201		3,475
Total revenues	287,688		284,229		557,307		539,815

Operating expenses
Compensation and benefits	75,724		74,241		149,047		147,838
Legal collection costs	37,583		35,274		70,977		61,965
Legal collection fees	15,625		13,762		30,855		25,874
Agency fees	22,688		21,008		44,056		40,731
Professional and outside services	21,071		18,124		42,174		43,174
Communication	9,417		11,577		19,894		24,155
Rent and occupancy	3,504		4,136		6,984		8,280
Depreciation, amortization and impairment	2,503		2,637		6,272		5,357
Other operating expenses	14,462		14,248		27,360		26,823

Total operating expenses	202,577		195,007		397,619		384,197
Income from operations	85,111		89,222		159,688		155,618
Other income/(expense)

Interest expense, net	(62,361)		(55,353)		(123,331)		(107,631)
Gain on sale of equity method investment	38,403		—		38,403		—
Foreign exchange (loss)/gain, net	50		(99)		(1)		128
Other	(75)		46		(255)		(160)
Income before income taxes	61,128		33,816		74,504		47,955

Income tax expense	15,415		8,702		19,727		11,088
Net income	45,713		25,114		54,777		36,867
Net income attributable to noncontrolling interests	3,339		3,598		8,744		11,876
Net income attributable to PRA Group, Inc.	$	42,374	$	21,516	$	46,033	$	24,991

Net income per common share attributable to PRA Group, Inc.
Basic	$	1.08	$	0.55	$	1.17	$	0.64
Diluted	$	1.08	$	0.54	$	1.16	$	0.63
Weighted average number of shares outstanding
Basic	39,323		39,364		39,436		39,319
Diluted	39,385		39,546		39,536		39,497

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Comprehensive Income

For the Six Months Ended June 30, 2025 and 2024

(In thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	45,713	$	25,114	$	54,777	$	36,867
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments	90,041		(14,258)		175,339		(62,449)
Cash flow hedges	(6,297)		(1,293)		(8,239)		1,515
Debt securities available-for-sale	148		65		(33)		111
Other comprehensive income/(loss)	83,892		(15,486)		167,067		(60,823)
Total comprehensive income/(loss)	129,605		9,628		221,844		(23,956)
Comprehensive income attributable to noncontrolling interests	6,052		(3,097)		16,151		2,962
Comprehensive income/(loss) attributable to PRA Group, Inc.	$	123,553	$	12,725	$	205,693	$	(26,918)

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2025

(In thousands)

(unaudited)


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive		Noncontrolling		Total
	Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance as of December 31, 2024	39,510	$	395	$	17,882	$	1,560,149	$	(443,394)	$	58,575	$	1,193,607
Components of comprehensive income, net of tax
Net income	—	—		—		3,659		—		5,405		9,064
Foreign currency translation adjustments	—	—		—		—		80,604		4,694		85,298
Cash flow hedges	—	—		—		—		(1,942)		—		(1,942)
Debt securities available-for-sale	—	—		—		—		(181)		—		(181)
Distributions to noncontrolling interests	—	—		—		—		—		(7,264)		(7,264)
Vesting of restricted stock	142	2		(2)		—		—		—		—
Share-based compensation expense	—	—		3,788		—		—		—		3,788
Employee stock relinquished for payment of taxes	—	—		(1,852)		—		—		—		(1,852)
Balance as of March 31, 2025	39,652	$	397	$	19,816	$	1,563,808	$	(364,913)	$	61,410	$	1,280,518
Components of comprehensive income, net of tax:
Net income	—	—		—		42,374		—		3,339		45,713
Foreign currency translation adjustments	—	—		—		—		87,328		2,713		90,041
Cash flow hedges	—	—		—		—		(6,297)		—		(6,297)
Debt securities available-for-sale	—	—		—		—		148		—		148
Distributions to noncontrolling interests	—	—		—		—		—		(7,776)		(7,776)
Vesting of restricted stock	82	1		(1)		—		—		—		—
Repurchase and cancellation of common stock	(660)	(7)		(9,993)		—		—		—		(10,000)
Share-based compensation expense	—	—		4,464		—		—		—		4,464
Employee stock relinquished for payment of taxes	—	—		(200)		—		—		—		(200)
Balance as of June 30, 2025	39,074	$	391	$	14,086	$	1,606,182	$	(283,734)	$	59,686	$	1,396,611

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2024

(In thousands)

(unaudited)


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive		Noncontrolling		Total
	Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance as of December 31, 2023	39,247	$	392	$	7,071	$	1,489,548	$	(329,899)	$	72,264	$	1,239,376
Components of comprehensive income, net of tax
Net income	—	—		—		3,475		—		8,278		11,753
Foreign currency translation adjustments	—	—		—		—		(45,973)		(2,218)		(48,191)
Cash flow hedges	—	—		—		—		2,808		—		2,808
Debt securities available-for-sale	—	—		—		—		46		—		46
Distributions to noncontrolling interests	—	—		—		—		—		(11,332)		(11,332)
Vesting of restricted stock	98	1		(1)		—		—		—		—

Share-based compensation expense	—	—		3,327		—		—		—		3,327
Employee stock relinquished for payment of taxes	—	—		(1,469)		—		—		—		(1,469)
Balance as of March 31, 2024	39,345	$	393	$	8,928	$	1,493,023	$	(373,018)	$	66,992	$	1,196,318
Components of comprehensive income, net of tax:
Net income	—	—		—		21,516		—		3,598		25,114
Foreign currency translation adjustments	—	—		—		—		(7,563)		(6,695)		(14,258)
Cash flow hedges	—	—		—		—		(1,293)		—		(1,293)
Debt securities available-for-sale	—	—		—		—		65		—		65
Distributions to noncontrolling interests	—	—		—		—		—		(6,080)		(6,080)
Contributions from noncontrolling interests	—	—		—		—		—		—		—
Vesting of restricted stock	72	1		(1)		—		—		—		—
Repurchase and cancellation of common stock	—	—		—		—		—		—		—
Share-based compensation expense	—	—		3,555		—		—		—		3,555
Employee stock relinquished for payment of taxes	—	—		(143)		—		—		—		(143)
Balance as of June 30, 2024	39,417	$	394	$	12,339	$	1,514,539	$	(381,809)	$	57,815	$	1,203,278

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2025 and 2024

(In thousands)

(unaudited)


	Six Months Ended June 30,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	54,777	$	36,867
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	8,252		6,882
Depreciation, amortization and impairment	6,272		5,357

Gain on sale of equity method investment	(38,403)		—

Amortization of debt premium and issuance costs	3,863		4,531
Changes in expected recoveries	(61,214)		(124,994)

Deferred income taxes	(2,733)		(2,073)
Net unrealized foreign currency transaction gain	(13,055)		(11,215)

Other	935		(1,027)

Changes in operating assets and liabilities:
Other assets	(6,451)		(1,046)

Accrued expenses, accounts payable and other liabilities	(17,733)		(15,770)




Net cash used in operating activities	(65,490)		(102,488)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net	(2,178)		(1,832)

Purchases of nonperforming loan portfolios	(633,308)		(625,186)
Recoveries collected and applied to Finance receivables, net	554,715		520,940
Purchases of investments	(57,898)		(48,247)
Proceeds from sales and maturities of investments	105,261		58,130



Net cash used in investing activities	(33,408)		(96,195)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines of credit	407,127		435,341
Principal payments on lines of credit	(245,297)		(604,938)
Principal payments on long-term debt	(5,000)		(7,500)
Proceeds from issuance of Senior Notes due 2030	—		400,000


Repurchases of common stock	(10,000)		—

Payments of origination costs and fees	(878)		(5,111)
Tax withholdings related to share-based payments	(2,052)		(1,612)
Distributions to noncontrolling interests	(15,040)		(17,412)


Net increase/(decrease) in interest-bearing deposits	(22,960)		5,058


Net cash provided by financing activities	105,900		203,826
Effect of foreign exchange rates	20,885		1,082
Net increase in cash, cash equivalents and restricted cash	27,887		6,225
Cash, cash equivalents and restricted cash, beginning of period	107,431		113,692
Cash, cash equivalents and restricted cash, end of period	$	135,318	$	119,917

Supplemental disclosure of cash flow information
Cash paid for interest	$	132,590	$	116,575
Cash paid for income taxes	19,551		15,326
Reconciliation to Balance Sheet accounts
Cash and cash equivalents	$	131,592	$	118,865
Restricted cash included in Other assets	3,726		1,052
Cash, cash equivalents and restricted cash	$	135,318	$	119,917

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Business

As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries.

Nature of operations

PRA Group, Inc., a Delaware corporation headquartered in Norfolk, Virginia, is a global financial services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also purchases and provides fee-based services for class action claims recoveries in the United States ("U.S.").

Basis of presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the instructions for Quarterly Reports on Form 10-Q of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for a fair presentation have been included. The unaudited Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed. Realized results could differ from those estimates and assumptions. These unaudited Consolidated Financial Statements may not be indicative of future results and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K").

Prior period reclassifications

In the Consolidated Statements of Cash Flows, certain prior period amounts have been reclassified for consistency with the current period presentation.

Note 2. Finance Receivables, net

Finance receivables, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025		December 31, 2024
Amortized cost	$	—	$	—
Negative allowance for expected recoveries	4,562,576		4,140,742
Balance as of end of period	$	4,562,576	$	4,140,742

Changes in Finance receivables, net by portfolio type for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Balance as of beginning of period	$	3,986,864	$	321,470	$	4,308,334	$	3,298,092	$	352,103	$	3,650,195
Initial negative allowance for expected recoveries on current period purchases (1)	319,562		26,943		346,505		326,752		52,617		379,369
Recoveries collected and applied to Finance receivables, net (2)	(251,657)		(37,940)		(289,597)		(226,247)		(43,033)		(269,280)
Changes in expected recoveries (3)	25,342		7,950		33,292		65,747		7,573		73,320
Foreign currency translation adjustment	154,158		9,884		164,042		(13,623)		205		(13,418)
Balance as of end of period	$	4,234,269	$	328,307	$	4,562,576	$	3,450,721	$	369,465	$	3,820,186


	Six Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Balance as of beginning of period	$	3,809,723	$	331,019	$	4,140,742	$	3,295,214	$	361,384	$	3,656,598
Initial negative allowance for expected recoveries on current period purchases (1)	593,455		44,752		638,207		545,409		79,777		625,186
Recoveries collected and applied to Finance receivables, net (2)	(483,140)		(71,575)		(554,715)		(441,463)		(79,477)		(520,940)
Changes in expected recoveries (3)	51,667		9,547		61,214		115,311		9,683		124,994
Foreign currency translation adjustment	262,564		14,564		277,128		(63,750)		(1,902)		(65,652)
Balance as of end of period	$	4,234,269	$	328,307	$	4,562,576	$	3,450,721	$	369,465	$	3,820,186

(1) Initial negative allowance for expected recoveries on current period purchases

The initial negative allowance for expected recoveries on current period purchases for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):


	Three Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Allowance for credit losses at acquisition	$	(1,635,702)	$	(87,742)	$	(1,723,444)	$	(1,758,462)	$	(203,614)	$	(1,962,076)
Writeoffs, net	1,635,702		87,742		1,723,444		1,758,462		203,614		1,962,076
Expected recoveries	319,562		26,943		346,505		326,752		52,617		379,369
Initial negative allowance for expected recoveries on current period purchases	$	319,562	$	26,943	$	346,505	$	326,752	$	52,617	$	379,369


	Six Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Allowance for credit losses at acquisition	$	(3,053,673)	$	(161,334)	$	(3,215,007)	$	(3,017,051)	$	(277,228)	$	(3,294,279)
Writeoffs, net	3,053,673		161,334		3,215,007		3,017,051		277,228		3,294,279
Expected recoveries	593,455		44,752		638,207		545,409		79,777		625,186
Initial negative allowance for expected recoveries on current period purchases	$	593,455	$	44,752	$	638,207	$	545,409	$	79,777	$	625,186

The purchase price on current period purchases for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):


	Three Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Face value	$	2,269,417	$	129,842	$	2,399,259	$	2,402,148	$	279,417	$	2,681,565
Noncredit discount	(314,153)		(15,157)		(329,310)		(316,934)		(23,186)		(340,120)
Allowance for credit losses at acquisition	(1,635,702)		(87,742)		(1,723,444)		(1,758,462)		(203,614)		(1,962,076)
Purchase price	$	319,562	$	26,943	$	346,505	$	326,752	$	52,617	$	379,369


	Six Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Face value	$	4,235,481	$	231,316	$	4,466,797	$	4,110,779	$	393,633	$	4,504,412
Noncredit discount	(588,353)		(25,230)		(613,583)		(548,319)		(36,628)		(584,947)
Allowance for credit losses at acquisition	(3,053,673)		(161,334)		(3,215,007)		(3,017,051)		(277,228)		(3,294,279)
Purchase price	$	593,455	$	44,752	$	638,207	$	545,409	$	79,777	$	625,186

(2) Recoveries collected and applied to Finance receivables, net

Recoveries collected and applied to Finance receivables, net for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected (a)	$	491,074	$	49,457	$	540,531	$	423,659	$	54,911	$	478,570
Amounts reclassified to portfolio income (b)	(239,417)		(11,517)		(250,934)		(197,412)		(11,878)		(209,290)
Recoveries collected and applied to Finance receivables, net	$	251,657	$	37,940	$	289,597	$	226,247	$	43,033	$	269,280


	Six Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected (a)	$	952,043	$	94,564	$	1,046,607	$	829,972	$	102,314	$	932,286
Amounts reclassified to portfolio income (b)	468,903		22,989		491,892		388,509		22,837		411,346
Recoveries collected and applied to Finance receivables, net	$	483,140	$	71,575	$	554,715	$	441,463	$	79,477	$	520,940

(a)Includes cash collections, buybacks and other cash-based adjustments.

(b)Reclassifications from Finance receivables, net to Portfolio income based on the effective interest rate of the underlying account pools.

(3) Changes in expected recoveries

Changes in expected recoveries for the three months ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected in excess of forecast	$	32,316	$	7,986	$	40,302	$	46,830	$	7,430	$	54,260
Changes in expected future recoveries	(6,974)		(36)		(7,010)		18,917		143		19,060
Changes in expected recoveries	$	25,342	$	7,950	$	33,292	$	65,747	$	7,573	$	73,320

Changes in expected recoveries for the three months ended June 30, 2025 were $33.3 million, which included $40.3 million in recoveries collected in excess of forecast (cash collections overperformance) and a $7.0 million negative adjustment in changes in expected future recoveries. Recoveries collected in excess of forecast were largely due to cash collections overperformance in Europe, U.S., and Brazil. Changes in expected future recoveries were primarily due to a decrease to the collections forecast on the 2023 U.S. Core pool, which was partially offset by the impact of increases to the Company's collections forecasts in Europe.

Changes in expected recoveries for the three months ended June 30, 2024 were $73.3 million, which included $54.3 million in recoveries collected in excess of forecast, due mainly to collections performance in the U.S., driven in large part by the Company's cash-generating initiatives, coupled with collections performance in Europe. Changes in expected future recoveries of $19.1 million mainly reflect the Company's assessment of certain pools in the U.S. and Europe, resulting in an increase to the expected cash flows based primarily on overperformance in recent periods. The increase in expected cash flows was driven in large part by forecast increases to the 2013 to 2019 U.S. Core pools, as well as increases to a number of pools in Europe.

Changes in expected recoveries for the six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Six Months Ended June 30,
	2025						2024
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected in excess of forecast	$	46,606	$	10,196	$	56,802	$	80,748	$	9,350	$	90,098
Changes in expected future recoveries	5,061		(649)		4,412		34,563		333		34,896
Changes in expected recoveries	$	51,667	$	9,547	$	61,214	$	115,311	$	9,683	$	124,994

Changes in expected recoveries for the six months ended June 30, 2025 were $61.2 million, which included $56.8 million in recoveries collected in excess of forecast (cash collections overperformance) and $4.4 million in changes in expected future recoveries. Recoveries collected in excess of forecast were largely due to cash collections overperformance in Europe and Brazil. Changes in expected future recoveries were primarily due to the impact of increases to the Company's collections forecasts on certain European pools, which was partially offset by decreases to the Company's collections forecasts on the 2023 U.S. Core pool.

Changes in expected recoveries for the six months ended June 30, 2024 were $125.0 million, which included $90.1 million in recoveries received in excess of forecast, due mainly to collections performance in the U.S., driven in large part by the Company's cash-generating initiatives, coupled with collections performance in Brazil and Europe. Changes in expected future recoveries of $34.9 million mainly reflect the Company's assessment of certain pools in the U.S. and Europe, resulting in an increase to the expected cash flows based primarily on overperformance in recent periods. The increase in expected cash flows was driven in large part by forecast increases to the 2013 to 2019 U.S. Core pools, as well as increases to a number of pools in Europe.

Note 3. Investments

Investments consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025		December 31, 2024


Debt securities



Available-for-sale	$	64,774	$	55,762


Equity securities
Private equity funds	1,726		1,848
Equity method investment	—		8,694

Total investments	$	66,500	$	66,304

Debt securities

As of June 30, 2025, the Company's debt securities consisted of Swedish treasury securities maturing within one year. As of June 30, 2025 and December 31, 2024, the amortized cost and fair value of these investments were as follows (in thousands):


	June 30, 2025						December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Aggregate Fair Value			Amortized Cost		Gross Unrealized Gains		Aggregate Fair Value



Debt securities	$	64,600	$	174	$	64,774		$	55,556	$	206	$	55,762

Equity method investment

The Company's equity method investment of 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing company for nonperforming loans in Brazil, was sold in April 2025. The Company recorded a $38.4 million pretax gain on sale in its Consolidated Financial Statements for the three months ended June 30, 2025. The sale does not impact the Company's ownership of existing portfolio investments in Brazil, nor its existing operations or future portfolio investments in Brazil.

Note 4. Goodwill

Changes in goodwill for the three and six months ended June 30, 2025 and 2024, were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Balance as of beginning of period	$	420,715	$	411,846	$	396,357	$	431,564






Foreign currency translation	18,734		3,800		43,092		(15,918)
Balance as of end of period	$	439,449	$	415,646	$	439,449	$	415,646

The Company performs an annual review of goodwill as of October 1 of each year, or more frequently if indicators of impairment exist. The Company evaluated whether any triggering events had occurred as of June 30, 2025, which included consideration of market conditions, and determined that an interim impairment test of goodwill did not need to be performed.

Note 5. Borrowings

Borrowings consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025		December 31, 2024
North American revolving credit facility (1)	$	667,875	$	519,519
North American term loan (2)	465,111		470,111
United Kingdom revolving credit facility (3)	479,282		494,185
European revolving credit facility (4)	713,529		555,726
Credit facility borrowings	2,325,797		2,039,541
2028 senior notes	398,000		398,000
2029 senior notes	350,000		350,000
2030 senior notes	550,000		550,000
Senior notes	1,298,000		1,298,000
Credit facility borrowings and senior notes	3,623,797		3,337,541
Unamortized debt premium and issuance costs, net	(9,589)		(10,920)
Total borrowings	$	3,614,208	$	3,326,621

(1)Revolving credit facility under the Company's North American credit agreement with a combined domestic and Canadian limit of $1.1 billion (subject to the borrowing base and debt covenants, including advance rates), maturing on October 28, 2029.

(2)Term loan under the Company's North American credit agreement, with a final maturity date of October 28, 2029.

(3)Revolving credit facility with a limit of $725.0 million (subject to the borrowing base and debt covenants, including advance rates), maturing on October 30, 2029.

(4)Revolving credit facility with an aggregate limit of approximately €730.0 million (subject to the borrowing base and debt covenants, including advance rates), maturing on November 23, 2027.

For additional information about the North American revolving credit facility and term loan, United Kingdom revolving credit facility, European revolving credit facility and the Company's senior notes, refer to Note 7 to the Consolidated Financial Statements in the 2024 Form 10-K.

On April 24, 2025, the European revolving credit facility was amended and restated; however, the terms have not changed substantially from the terms described in the 2024 Form 10-K.

The Company was in compliance with the covenants contained in its financing arrangements as of June 30, 2025.

Note 6. Derivatives

The Company periodically enters into interest rate swaps and foreign exchange contracts to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The fair value of these instruments as of June 30, 2025 and December 31, 2024 was as follows (in thousands):

June 30, 2025

December 31, 2024

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Designated as hedging instruments:

Interest rate swaps

Other assets

2,508

Other assets

8,514

Interest rate swaps

Other liabilities

10,904

Other liabilities

4,797

Not designated as hedging instruments:

Foreign exchange contracts

Other assets

256

Other assets

2,209

Foreign exchange contracts

Other liabilities

3,167

Other liabilities

166

Derivatives designated as hedging instruments

The effects of interest rate swaps designated as cash flow hedging instruments for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Gain/(loss) recognized in OCI, net of tax
	Three Months Ended June 30,				Six Months Ended June 30,
Hedging instrument	2025		2024		2025		2024
Interest rate swaps	$	(4,086)	$	2,860	$	(4,010)	$	9,930

	Gain reclassified from OCI into income
	Three Months Ended June 30,				Six Months Ended June 30,
Income statement location	2025		2024		2025		2024
Interest expense, net	$	2,914	$	5,532	$	5,577	$	11,206

As of June 30, 2025 and December 31, 2024, the notional amount of outstanding interest rate swaps was $908.8 million and $800.7 million, respectively. These swaps remained highly effective as of June 30, 2025 and have remaining terms ranging from seven months to five years. As of June 30, 2025, the amounts of derivative gains and losses included in other comprehensive income ("OCI") that are estimated to be reclassified into earnings within the next 12 months net to $0.

Derivatives not designated as hedging instruments

The effects of foreign exchange contracts not designated as hedging instruments for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):



			Three Months Ended June 30,						Six Months Ended June 30,
Income statement location		2025			2024			2025			2024
	Foreign exchange (loss)/gain, net		$	(17,190)		$	726		$	(15,696)		$	826
	Interest expense, net		150			117			(1)			309

As of June 30, 2025 and December 31, 2024, the notional amount of outstanding foreign exchange contracts was $477.6 million and $376.4 million, respectively.

Note 7. Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

Financial instruments carried at fair value

As of June 30, 2025 and December 31, 2024, financial instruments measured at fair value on a recurring basis were as follows (in thousands):


	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total
June 30, 2025
Assets

Government securities	$	64,774	$	—	$	—	$	64,774


Derivatives (1)	—		2,764		—		2,764
Liabilities
Derivatives (1)	—		14,071		—		14,071


December 31, 2024
Assets

Government securities	$	55,762	$	—	$	—	$	55,762


Derivatives (1)	—		10,723		—		10,723
Liabilities
Derivatives (1)	—		4,963		—		4,963

(1)Fair value of derivatives is estimated using industry standard valuation models, which project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves and other factors.

Financial instruments not carried at fair value

As of June 30, 2025 and December 31, 2024, the estimated fair value and carrying amount of financial instruments not carried at fair value were as follows (in thousands):


	Estimated Fair Value
	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Carrying Value
June 30, 2025
Financial assets
Cash and cash equivalents	$	131,592	$	—	$	—	$	131,592


Finance receivables, net (1)	—		—		4,338,291		4,562,576
Financial liabilities
Interest-bearing deposits (2)	—		168,656		—		168,656
Revolving lines of credit (3)	—		1,860,686		—		1,860,686
Term loan (3) (5)	—		465,111		—		465,111
Senior notes (4) (5)	—		1,303,947		—		1,298,000
December 31, 2024
Financial assets
Cash and cash equivalents	$	105,938	$	—	$	—	$	105,938


Finance receivables, net (1)	—		—		3,523,949		4,140,742
Financial liabilities
Interest-bearing deposits (2)	—		163,406		—		163,406
Revolving lines of credit (3)	—		1,569,430		—		1,569,430
Term loan (3) (5)	—		470,111		—		470,111
Senior notes (4) (5)	—		1,301,244		—		1,298,000

(1)Fair value is estimated using the proprietary pricing models the Company utilizes to make portfolio acquisition decisions.

(2)Fair value is based on quoted prices for similar instruments in active markets and approximates carrying value due to the short-term deposit periods.

(3)Fair value is based on quoted prices for similar instruments in active markets and approximates carrying value due to the short-term interest rate periods.

(4)Fair value is based on quoted market prices obtained from secondary market broker quotes.

(5)The carrying amounts and fair values do not include debt issuance costs.

Note 8. Accumulated Other Comprehensive Income/Loss

Reclassifications out of Accumulated other comprehensive loss for the three and six months ended June 30, 2025 and 2024, were as follows (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
Cash flow hedges	Income Statement location	2025		2024			2025		2024
Interest rate swaps	Interest expense, net	$	2,914	$	5,532		$	5,577	$	11,206
Income tax effect (1)	Income tax expense	(703)		(1,378)			(1,348)		(2,790)
Total gain on cash flow hedges		$	2,211	$	4,154		$	4,229	$	8,416

(1)Income tax effects are released from Accumulated other comprehensive loss contemporaneously with the related gross pretax amount.

Changes in Accumulated other comprehensive loss by component, after tax, for the three and six months ended June 30, 2025 and 2024, were as follows (in thousands):


	Three Months Ended June 30,
	2025								2024
	Debt Securities		Cash		Currency		Accumulated		Debt Securities		Cash		Currency		Accumulated
	Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss		Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)
Balance as of beginning of period	$	24	$	169	$	(365,106)	$	(364,913)	$	111	$	9,405	$	(382,534)	$	(373,018)
Other comprehensive gain/(loss) before reclassifications	148		(4,086)		87,328		83,390		65		2,861		(7,563)		(4,637)
Reclassifications, net	—		(2,211)		—		(2,211)		—		(4,154)		—		(4,154)
Net current period other comprehensive gain/(loss)	148		(6,297)		87,328		81,179		65		(1,293)		(7,563)		(8,791)
Balance as of end of period	$	172	$	(6,128)	$	(277,778)	$	(283,734)	$	176	$	8,112	$	(390,097)	$	(381,809)

(1)Net of deferred taxes for unrealized (gains)/losses from cash flow hedges of $(2.0) million and $0.4 million for the three months ended June 30, 2025 and 2024, respectively


	Six Months Ended June 30,
	2025								2024
	Debt Securities		Cash		Currency		Accumulated		Debt Securities		Cash		Currency		Accumulated
	Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)		Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)
Balance at beginning of period	$	205	$	2,111	$	(445,710)	$	(443,394)	$	65	$	6,597	$	(336,561)	$	(329,899)
Other comprehensive gain/(loss) before reclassifications	(33)		(4,010)		167,932		163,889		111		9,931		(53,536)		(43,494)
Reclassifications, net	—		(4,229)		—		(4,229)		—		(8,416)		—		(8,416)
Net current period other comprehensive gain/(loss)	(33)		(8,239)		167,932		159,660		111		1,515		(53,536)		(51,910)
Balance at end of period	$	172	$	(6,128)	$	(277,778)	$	(283,734)	$	176	$	8,112	$	(390,097)	$	(381,809)

(1)Net of deferred taxes for unrealized (gains)/losses from cash flow hedges $(2.0) million and $(2.7) million for the six months ended June 30, 2025 and 2024, respectively.

Note 9. Earnings per Share

The following tables provide a reconciliation between basic earnings per share ("EPS") and diluted EPS for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts):


	Three Months Ended June 30,
	2025					2024
	Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS		Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS
Basic EPS	$	42,374	39,323	$	1.08	$	21,516	39,364	$	0.55
Dilutive effect of nonvested share awards			62	—				182	(0.01)

Diluted EPS	$	42,374	39,385	$	1.08	$	21,516	39,546	$	0.54

	Six Months Ended June 30,
	2025					2024
	Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS		Net Loss Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS
Basic EPS	$	46,033	39,436	$	1.17	$	24,991	39,319	$	0.64
Dilutive effect of nonvested share awards			100	—				178	(0.01)
Diluted EPS	$	46,033	39,536	$	1.16	$	24,991	39,497	$	0.63

Basic EPS are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS are computed using the same components as basic EPS, with the denominator adjusted for nonvested share awards, if dilutive. Share-based awards that are contingent upon the attainment of performance goals are included in the computation of diluted EPS if the effect is dilutive.

In February 2022, the Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $150.0 million of its outstanding common stock. During the three months ended June 30, 2025, the Company repurchased 660,395 shares of its common stock for an aggregate cost of approximately $10.0 million at an average price of $15.14 per share. As of June 30, 2025, there was $57.7 million remaining for share repurchases under the program. The Company's practice is to retire the shares it repurchases. Repurchases are subject to restrictive covenants contained in the Company's credit facilities and the indentures that govern its senior notes.

Note 10. Income Taxes

The Company's effective tax rate for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Income before income taxes	$	61,128		$	33,816		$	74,504		$	47,955
Income tax expense	$	15,415		$	8,702		$	19,727		$	11,088
Effective tax rate	25.2		%	25.7		%	26.5		%	23.1		%

The relationship between Income before income taxes and Income tax expense for the three and six months ended June 30, 2025 and 2024 was impacted by changes in the mix of income from different taxing jurisdictions and the timing of certain discrete items.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. The Company is evaluating the impact this law may have on its income taxes.

Note 11. Commitments and Contingencies

Forward flow agreements

The Company enters into forward flow agreements for the purchase of nonperforming loans. These agreements typically have terms ranging from six to 12 months, or they can be open-ended, and establish purchase prices and specific criteria for the accounts to be purchased. Some of the agreements establish a volume reference for the contract term in the form of a target or

maximum, however, very few agreements establish a minimum contractual obligation, and many of the contracts contain early termination provisions allowing either party to cancel the agreements in accordance with a specified notice period. The amounts purchased are also dependent on actual delivery by the sellers, and while purchases under these agreements comprise a significant portion of the Company's overall purchases, as of June 30, 2025, the estimated minimum contractual purchase obligation under forward flow agreements was not significant.

Litigation and regulatory matters

The Company and its subsidiaries are from time-to-time subject to a variety of legal and regulatory claims, inquiries, proceedings, and other matters, including those described in Note 14 to the Consolidated Financial Statements in the 2024 Form 10-K. The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These estimates involve significant judgment, and accordingly, the Company's estimates will change from time-to-time, and actual expenses could exceed the current estimates. As of June 30, 2025, there were no material developments in any of the previously disclosed legal proceedings.

Note 12. Segments

The Company has determined that it is managed on a consolidated basis under a single operating segment, Accounts Receivable Management ("ARM"), and accordingly, it has one reportable segment. The ARM segment is comprised of the Company's primary business, Debt Buying and Collection ("DBC"), which generates revenue through the purchase, collection and management of portfolios of nonperforming loans, and Claims Compensation Bureau, LLC ("CCB"), which generates revenue through the purchase of, and provision of fee-based services for, class action claims recoveries in the U.S. The chief operating decision maker ("CODM") is the Company’s chief executive officer, who assesses performance based on the Company's consolidated results prepared in accordance with GAAP.

Segment revenue, significant segment expenses and profit or loss

ARM segment revenue is presented in the Company's Consolidated Income Statements under Total revenues. Significant segment expenses regularly considered by the CODM are those most directly related to the Company's revenue generating activities, including Compensation and benefits, Legal collection costs, Legal collection fees, Agency fees, Professional and outside services and Communication. All other operating expenses appearing in the Consolidated Income Statements constitute other segment items. ARM segment profit or loss is presented in the Company's Consolidated Income Statements under Net Income/(loss) attributable to PRA Group, Inc.

Segment assets

ARM segment assets are presented in the Company's Consolidated Balance Sheets under Total assets.

Other significant segment items

Other significant segment items not presented in the Company's Consolidated Income Statements or Consolidated Balance Sheets for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Interest expense	$	65,407	$	57,757	$	128,802	$	112,114
Interest income	3,046		2,404		5,471		4,483
Depreciation and amortization	2,503		2,637		5,441		5,357


					June 30, 2025		December 31, 2024
Equity method investment					—		8,694

Note 13. Recently Issued Accounting Standards

Recently issued accounting standards not yet adopted:

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which requires enhanced annual disclosures with respect to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis, with early adoption permitted. The Company is evaluating the impact ASU 2023-09 will have on its disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). Subsequently, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 provides guidance that will expand disclosures related to the disaggregation of income statement expenses and is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the impact these ASUs will have on its disclosures.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

All references in this Quarterly Report on Form 10-Q ("Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries.

This Quarterly Report should be read in conjunction with our Form 10-K for the year ended December 31, 2024 ("2024 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report.

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are forward-looking statements, including statements regarding cash collection trends, operating cost trends, liquidity and capital needs and other statements of expectations, beliefs, future plans, strategies and anticipated events or trends. Our results could differ materially from those expressed or implied by such forward-looking statements, or our forward-looking statements could be wrong, as a result of risks, uncertainties and assumptions, including the following:

•volatility and uncertainty in general business and economic conditions or financial markets, including the impact of tariffs and tariff speculation on our customers;

•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;

•our ability to collect sufficient amounts on our nonperforming loans to fund our operations;

•a disruption or failure by any of our outsourcing, offshoring or other third-party service providers to meet their obligations and our service level expectations;

•our ability to achieve the expected benefits of offshoring a portion of our collection and related support activities;

•our ability to successfully implement our cash-generating and cost savings initiatives in our United States ("U.S.") business;

•disruptions of business operations caused by cybersecurity incidents or the failure of information technology infrastructure, networks or communication systems;

•our ability to effectively utilize artificial intelligence ("AI");

•changes in accounting standards and their interpretations;

•the occurrence of goodwill impairment charges;

•loss contingency accruals that are inadequate to cover actual losses;

•our ability to manage risks associated with our international operations;

•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws;

•our ability to comply with existing and new regulations in the collections industry;

•changes in tax provisions or exposure to additional tax liabilities;

•investigations, reviews, or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");

•our ability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");

•adverse outcomes in pending litigation or administrative proceedings;

•our ability to retain, expand, renegotiate or replace our credit facilities and our ability to comply with the covenants under our financing arrangements;

•our ability to manage our capital and liquidity needs effectively, including as a result of changes in credit or capital markets or adverse changes in our credit ratings, whether due to concerns about our industry in general, the financial condition of our competitors, or other factors;

•changes in interest or exchange rates;

•default by, or failure of, one or more of our counterparty financial institutions; and

•the "Risk Factors" in Item 1A of our 2024 Form 10-K and our other filings with the Securities and Exchange Commission.

You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. The future events, developments or results described in, or implied by, this Quarterly Report could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.

EXECUTIVE OVERVIEW

We are a global financial services company with operations in the Americas, Europe and Australia. Our primary business is the purchase, collection and management of portfolios of nonperforming loans. Our Core operation specializes in purchasing and collecting nonperforming loans, which are sold by credit originators when they choose not to pursue, or have been unsuccessful in, collecting the full balance owed. Our Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy or similar proceeding. Our global investment team leverages our deep seller relationships to identify purchasing opportunities, and we make purchasing offers based upon proprietary models backed by over 25 years of data. We develop collections strategies and execute on collections activity via call center, digital, and legal channels (where appropriate) and single payment or payment plans (short duration, long duration or hardship accommodation).

Financial highlights

Second Quarter of 2025

June 30, 2025 Year-to-Date

Portfolio purchases of $346.5 million.

Portfolio purchases of $638.2 million.

–Americas and Australia: $199.3 million.

–Americas and Australia: $377.7 million.

–Europe: $147.2 million.

–Europe: $260.5 million.

–8.7% decrease compared to Q2 2024.

–2.1% increase compared to prior year period.

Cash collections of $536.3 million.

Cash collections of $1,033.7 million.

–Americas and Australia: $326.0 million.

–Americas and Australia: $637.9 million.

–Europe: $210.3 million.

–Europe: $395.8 million.

–13.2% increase compared to Q2 2024.

–11.9% increase compared to prior year period.

Net income attributable to PRA of $42.4 million.

Net income attributable to PRA of $46.0 million.

–Diluted earnings per share: $1.08.

–Diluted earnings per share: $1.16.

–96.9% increase compared to Q2 2024.

–84.2% increase compared to prior year period.

With continued focus on disciplined portfolio purchasing, in the second quarter of 2025 we purchased $346.5 million of finance receivables at attractive purchase price multiples and recorded a 19.9% increase in portfolio income over the same quarter last year. Under the direction of our new Chief Executive Officer, Martin Sjolund, we plan to continue the transformation of our U.S. business by focusing on our three strategic pillars – optimizing investments, operational execution, and managing expenses.

As of June 30, 2025, estimated remaining collections of $8.3 billion represented an increase of 11.2% compared to December 31, 2024 and 21.9% compared to June 30, 2024, with $4.1 billion related to the Americas and Australia and $4.2 billion to Europe.

Operating expenses of $202.6 million in the second quarter of 2025 represented an increase of 3.9% compared to the second quarter of 2024. For the year-to-date period, operating expenses were $397.6 million, an increase of 3.5% over the prior year's period.

During the second quarter, we completed the previously announced sale of our 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing company for nonperforming loans in Brazil, for a pre-tax gain on the sale of $38.4 million. The proceeds were used for portfolio purchases and general corporate needs. The sale does not impact our ownership of existing portfolio investments in Brazil, nor our existing operations or future portfolio investments in Brazil.

SUMMARY OF SELECTED FINANCIAL DATA


As of or for the period ended (in thousands, except per share, ratio, headcount data or where otherwise noted)	Second Quarter								Year-to-Date
	2025			2024			% Change		2025			2024			% Change
Income statement
Portfolio income	$	250,934		$	209,290		19.9	%	$	491,892		$	411,346		19.6	%

Changes in expected recoveries	33,292			73,320			(54.6)		61,214			124,994			(51.0)
Total revenues	287,688			284,229			1.2		557,307			539,815			3.2
Total operating expenses	202,577			195,007			3.9		397,619			384,197			3.5

Interest expense, net	62,361			55,353			12.7		123,331			107,631			14.6

Gain on sale of equity method investment	38,403			—			—		38,403			—			—
Income before income taxes	61,128			33,816			80.8		74,504			47,955			55.4
Income tax expense	15,415			8,702			77.1		19,727			11,088			77.9

Net income attributable to PRA Group, Inc.	42,374			21,516			96.9		46,033			24,991			84.2

Diluted earnings per share	$	1.08		$	0.54		100.0	%	$	1.16		$	0.63		84.1	%
Performance data and ratios
Net income/(loss) attributable to PRA Group (last 12 months)	$	91,643		$	3,945		2223.0	%
Adjusted EBITDA (last 12 months) (1)	1,240,092			1,065,186			16.4	%
Cash efficiency ratio (2)	62.4		%	58.9		%			61.7		%	58.4		%


Return on average Total stockholders' equity - PRA Group (3)	13.3			7.6					7.5			4.4
Return on average tangible equity (4)	20.0			11.9					11.4			6.9
Adjusted return on average tangible equity (5)	6.0			11.9					4.0			6.9





Portfolio volumes
Portfolio purchases	$	346,505		$	379,369		(8.7)	%	$	638,207		$	625,186		2.1	%
Cash collections	536,288			473,882			13.2		1,033,724			923,400			11.9
Estimated remaining collections (period-end)	8,294,310			6,802,246			21.9
Balance sheet (period-end)
Finance receivables, net	$	4,562,576		$	3,820,186		19.4	%
Borrowings	3,614,208			3,113,777			16.1
Total stockholders' equity - PRA Group, Inc.	1,336,925			1,145,463			16.7
Credit facility availability (period-end)
Based on current ERC	$	521,613		$	741,927		(29.7)	%
Additional availability	319,057			706,614			(54.8)
Total availability	840,670			1,448,541			(42.0)
Headcount (period-end)
Full-time equivalents	2,897			3,158			(8.3)	%

(1)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA.

(2)Calculated by dividing cash receipts less operating expenses by cash receipts.

(3)Calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.

(4)Return on average tangible equity ("ROATE") is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total stockholders' equity - PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity.

(5)Adjusted return on average tangible equity is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted net income attributable to PRA Group, Inc.

RESULTS OF OPERATIONS

Three months ended June 30, 2025 ("Second Quarter 2025" or "Q2 2025") compared to three months ended June 30, 2024 ("Second Quarter 2024" or "Q2 2024"); and six months ended June 30, 2025 ("Year-to-Date 2025") compared to six months ended June 30, 2024 ("Year-to-Date 2024").

Portfolio purchases

Portfolio purchases were as follows for the periods indicated (in thousands):


	Second Quarter								Year-to-Date
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Americas and Australia Core	$	177,097	$	198,761	$	(21,664)	(10.9)	%	$	342,600	$	373,421	$	(30,821)	(8.3)	%
Americas Insolvency	22,186		26,627		(4,441)		(16.7)		35,139		48,783		(13,644)		(28.0)
Total Americas and Australia	199,283		225,388		(26,105)		(11.6)		377,739		422,204		(44,465)		(10.5)
Europe Core	142,465		127,991		14,474		11.3		250,855		171,988		78,867		45.9
Europe Insolvency	4,757		25,990		(21,233)		(81.7)		9,613		30,994		(21,381)		(69.0)
Total Europe	147,222		153,981		(6,759)		(4.4)		260,468		202,982		57,486		28.3
Total portfolio purchases	$	346,505	$	379,369	$	(32,864)	(8.7)	%	$	638,207	$	625,186	$	13,021	2.1	%

Total portfolio purchases were $346.5 million in Q2 2025, a decrease of $32.9 million, or 8.7%, compared to $379.4 million in Q2 2024. Europe portfolio purchases decreased $6.8 million and Americas and Australia portfolio purchases decreased $26.1 million.

Total year-to-date portfolio purchases were $638.2 million in 2025, an increase of $13.0 million, or 2.1%, compared to $625.2 million in 2024. An increase in Europe portfolio purchases of $57.5 million was partially offset by a decrease in Americas and Australia purchases of $44.5 million. Our portfolio purchases reflect our global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of opportunities in our markets.

Cash collections

Cash collections were as follows for the periods indicated (in thousands):


	Second Quarter								Year-to-Date
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Americas and Australia Core	$	301,698	$	263,828	$	37,870	14.4	%	$	589,858	$	520,689	$	69,169	13.3	%
Americas Insolvency	24,329		26,971		(2,642)		(9.8)		48,029		52,179		(4,150)		(8.0)
Total Americas and Australia	326,027		290,799		35,228		12.1		637,887		572,868		65,019		11.3
Europe Core	185,652		156,739		28,913		18.4		350,023		302,672		47,351		15.6
Europe Insolvency	24,609		26,344		(1,735)		(6.6)		45,814		47,860		(2,046)		(4.3)
Total Europe	210,261		183,083		27,178		14.8		395,837		350,532		45,305		12.9
Total cash collections	$	536,288	$	473,882	$	62,406	13.2	%	$	1,033,724	$	923,400	$	110,324	11.9	%

Total cash collections were $536.3 million in Q2 2025, an increase of $62.4 million, or 13.2%, compared to $473.9 million in Q2 2024. The increase was primarily due to an increase in U.S. and Europe Core cash collections, mainly due to higher recent purchasing levels. U.S. Core collections increased $40.9 million. Europe Core collections increased $28.9 million, spread broadly across most of our markets. These increases were partially offset by an $8.2 million decrease in cash collections in Brazil, due in large part to variation in the foreign exchange rate and lower recent purchasing levels.

Total year-to-date cash collections were $1.03 billion in 2025, an increase of $110.3 million, or 11.9%, compared to $923.4 million in 2024. The increase was primarily due to an increase in U.S. and Europe Core cash collections mainly due to higher recent purchasing levels. U.S. Core collections increased $80.5 million. Europe Core collections increased $47.4 million, spread broadly across most of our markets. These increases were partially offset by an $18.8 million decrease in cash collections in Brazil, due in large part to variation in the foreign exchange rate and lower recent purchasing levels.

Portfolio revenue

Portfolio revenue was as follows for the periods indicated (in thousands):


	Second Quarter								Year-to-Date
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Portfolio income	$	250,934	$	209,290	$	41,644	19.9	%	$	491,892	$	411,346	$	80,546	19.6	%
Recoveries collected in excess of forecast	40,302		54,260		(13,958)		(25.7)		56,802		90,098		(33,296)		(37.0)
Changes in expected future recoveries	(7,010)		19,060		(26,070)		(136.8)		4,412		34,896		(30,484)		(87.4)
Changes in expected recoveries	33,292		73,320		(40,028)		(54.6)		61,214		124,994		(63,780)		(51.0)
Total portfolio revenue	$	284,226	$	282,610	$	1,616	0.6	%	$	553,106	$	536,340	$	16,766	3.1	%

Total portfolio revenue was $284.2 million in Q2 2025, an increase of $1.6 million, or 0.6%, compared to $282.6 million in Q2 2024. Portfolio income increased $41.6 million, or 19.9%, driven largely by the impact of higher purchasing and improved pricing in the U.S. beginning in 2023, while changes in expected recoveries decreased $40.0 million. Recoveries collected in excess of forecast decreased $14.0 million due primarily to lower overperformance in Q2 2025 on most U.S. Core pools compared to Q2 2024. This decrease was partially offset by higher overperformance on our European pools. Changes in expected future recoveries decreased $26.1 million due largely to a decrease to the collections forecast on the 2023 U.S. Core pool.

Total year-to-date portfolio revenue was $553.1 million in 2025, an increase of $16.8 million, or 3.1%, compared to $536.3 million in 2024. Portfolio income increased $80.5 million, or 19.6%, driven largely by the impact of higher purchasing and improved pricing in the U.S. beginning in 2023, while changes in expected recoveries decreased $63.8 million. Recoveries collected in excess of forecast decreased $33.3 million due primarily to lower overperformance in 2025 on most U.S. Core pools compared to 2024. This decrease was partially offset by higher overperformance on our European pools. Changes in expected future recoveries decreased $30.5 million due largely to decreases to our collections forecasts on certain U.S. Core pools.

Operating expenses were as follows for the periods indicated (in thousands):


	Second Quarter								Year-to-Date
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Compensation and benefits	$	75,724	$	74,241	$	1,483	2.0	%	$	149,047	$	147,838	$	1,209	0.8	%
Legal collection costs	37,583		35,274		2,309		6.5		70,977		61,965		9,012		14.5
Legal collection fees	15,625		13,762		1,863		13.5		30,855		25,874		4,981		19.3
Agency fees	22,688		21,008		1,680		8.0		44,056		40,731		3,325		8.2
Professional and outside services	21,071		18,124		2,947		16.3		42,174		43,174		(1,000)		(2.3)
Communication	9,417		11,577		(2,160)		(18.7)		19,894		24,155		(4,261)		(17.6)
Rent and occupancy	3,504		4,136		(632)		(15.3)		6,984		8,280		(1,296)		(15.7)
Depreciation, amortization and impairment	2,503		2,637		(134)		(5.1)		6,272		5,357		915		17.1

Other operating expenses	14,462		14,248		214		1.5		27,360		26,823		537		2.0
Total operating expenses	$	202,577	$	195,007	$	7,570	3.9	%	$	397,619	$	384,197	$	13,422	3.5	%

Compensation and benefits

Compensation and benefits expense was $75.7 million in Q2 2025, an increase of $1.5 million, or 2.0%, compared to Q2 2024. Year-to-date compensation and benefits expense increased $1.2 million, or 0.8%, compared to the 2024 period. The increases were primarily due to higher non-collector wage costs in the current year periods, partially offset by a decrease in our collector compensation as we continue to leverage third parties and offshore call centers.

Legal collection costs

Legal collection costs consist primarily of costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account. Q2 2025 legal collection costs increased $2.3 million, or 6.5%, compared to Q2 2024, primarily due to increased activity in our U.S. legal collections channel. The growth of legal collections activity in the U.S. also drove the $9.0 million, or 14.5%, increase for the year-to-date 2025 period.

Legal collection fees

Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q2 2025 fees increased $1.9 million, or 13.5%, compared to Q2 2024, mainly reflecting higher external legal collections within our U.S. Core portfolio. Increased external legal collections in the U.S. were also the primary driver of the $5.0 million, or 19.3%, increase for the year-to-date 2025 period.

Agency fees

Agency fees primarily represent third-party collection fees. Higher fees paid to third-party debt collection agencies in the U.S. and Europe drove both the Q2 2025 increase of $1.7 million, or 8.0%, compared to Q2 2024, and the year-to-date 2025 increase of $3.3 million, or 8.2%.

Professional and outside services

Professional and outside services expense includes expenses related to third-party service providers and corporate legal activities. Q2 2025 expense increased $2.9 million, or 16.3%, compared to Q2 2024, primarily due to increased investment in call center offshoring to provide greater operating flexibility. Year-to-date 2025 expenses decreased $1.0 million, or 2.3%, compared to 2024, mainly reflecting lower legal expenses and consulting fees in the U.S., partially offset by increased investment in call center offshoring.

Communication

Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q2 2025 communication expense decreased $2.2 million, or 18.7%, compared to Q2 2024, primarily due to a mix of lower-cost communications strategies utilized in our U.S. business. The use of lower-cost communications strategies utilized in our U.S. business was also primarily responsible for the decrease of $4.3 million, or 17.6% in the year-to-date 2025 period.

Interest expense, net

Interest expense, net was as follows for the periods indicated (in thousands):


	Second Quarter								Year-to-Date
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Interest on revolving credit facilities and term loan, and unused line fees	$	38,534	$	33,180	$	5,354	16.1	%	$	75,116	$	67,135	$	7,981	11.9	%
Interest on senior notes	24,911		22,246		2,665		12.0		49,823		40,448		9,375		23.2
Amortization of debt premium and issuance costs, net	1,962		2,331		(369)		(15.8)		3,863		4,531		(668)		(14.7)
Interest income	(3,046)		(2,404)		(642)		26.7		(5,471)		(4,483)		(988)		22.0
Interest expense, net	$	62,361	$	55,353	$	7,008	12.7	%	$	123,331	$	107,631	$	15,700	14.6	%

Interest expense, net was $62.4 million in Q2 2025, an increase of $7.0 million, or 12.7%, compared to Q2 2024. Year-to-date 2025 interest expense, net increased 14.6% to $123.3 million. The increases in both the quarterly and year-to-date periods were primarily due to a higher average debt balance in the current year period to support higher levels of portfolio investments.

Income tax expense

Income tax expense was as follows for the periods indicated (in thousands):


	Second Quarter										Year-to-Date
	2025			2024			$ Change		% Change		2025			2024			$ Change		% Change
Income tax expense	$	15,415		$	8,702		$	6,713	77.1	%	$	19,727		$	11,088		$	8,639	77.9	%
Effective tax rate	25.2		%	25.7		%					26.5		%	23.1		%

Income tax expense was $15.4 million in Q2 2025, an increase of $6.7 million, or 77.1%, compared to Q2 2024. The effective tax rate in Q2 2025 was 25.2% compared to 25.7% in Q2 2024. Year-to-date 2025 income tax expense increased 77.9% to $19.7 million. The changes in the effective tax rates in both the quarterly and year-to-date periods were primarily due to changes in the mix of income from different taxing jurisdictions and the timing and amount of discrete items.

Balance sheet

Finance receivables, net

Finance receivables, net were $4.6 billion as of June 30, 2025, an increase of $421.8 million, or 10.2%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $638.2 million and foreign currency translation adjustments of $277.1 million, partially offset by recoveries collected and applied to Finance receivables, net of $554.7 million.

Goodwill

Goodwill was $439.4 million as of June 30, 2025, an increase of $43.1 million, or 10.9%, compared to $396.4 million as of December 31, 2024, due to foreign currency translation adjustments. As of June 30, 2025, goodwill consisted primarily of $412.6 million in our Debt Buying and Collection ("DBC") reporting unit. We performed our most recent annual impairment review of the DBC reporting unit as of October 1, 2024, and concluded that goodwill was not impaired. As of June 30, 2025, we did not identify the occurrence of any triggering events requiring us to perform an interim assessment of goodwill. However, consistent with our most recent annual assessment, the goodwill in our DBC reporting unit may be at-risk for future impairment. If our stock price does not return to higher levels on a sustained basis, this market indicator could be a triggering event indicating possible impairment. Additionally, if our cash flow projections are not met or if other market factors utilized in the impairment test were to deteriorate, including adverse changes in the debt sales market that impact our estimated purchasing volumes and purchase price multiples and an increase in the discount rate, this reporting unit could become impaired.

Borrowings

Borrowings were $3.6 billion as of June 30, 2025, an increase of $287.6 million, or 8.6%, compared to $3.3 billion as of December 31, 2024. The increase was primarily due to incremental net borrowings under our North American and European revolving credit facilities of $147.4 million and $157.8 million, respectively, offset by net payments of $14.9 million on our United Kingdom ("UK") revolving credit facility.

NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management also uses certain non-GAAP financial measures, including:

•Adjusted EBITDA, to evaluate our performance and to set performance goals;

•ROATE, to monitor and evaluate operating performance relative to our equity; and

•Adjusted ROATE, to standardize ROATE across periods by eliminating certain nonrecurring transactions.

Adjusted EBITDA

We present Adjusted EBITDA because we consider it an important supplemental measure of our operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of our 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 our 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 income determined in accordance with GAAP. In addition, our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures presented by other companies. Adjusted EBITDA is calculated starting with our GAAP financial measure, Net income attributable to PRA Group, Inc. and is adjusted for:

•income tax expense (or less income tax benefit);

•foreign exchange loss (or less foreign exchange gain);

•interest expense, net (or less interest income, net);

•other expense (or less other income);

•depreciation and amortization;

•impairment of real estate;

•net income attributable to noncontrolling interests;

•gain on sale of equity method investment; and

•recoveries collected and applied to Finance receivables, net less Changes in expected recoveries.

The following table provides a reconciliation of Net income attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):


	Adjusted EBITDA Reconciliation
	Twelve Months Ended		Year Ended
	June 30, 2025		December 31, 2024
Net income attributable to PRA Group, Inc.	$	91,643	$	70,601
Adjustments:
Income tax expense	29,671		21,032
Foreign exchange loss	138		9
Interest expense, net	244,967		229,267
Other expense (1)	946		851
Depreciation and amortization	10,876		10,792
Impairment of real estate	831		—
Net income attributable to noncontrolling interests	14,840		17,972
Gain on sale of equity method investment	(38,403)		—
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries	884,583		787,028
Adjusted EBITDA	$	1,240,092	$	1,137,552

(1)Other expense reflects non-operating activities.

Return on average tangible equity and adjusted return on average tangible equity

We use 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 our equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of our long-term shareholder 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 Net income attributable to PRA Group, Inc. by average tangible equity.

ROATE may include certain items that are not indicative of the operating results of our portfolios of nonperforming loans. Accordingly, management believes that Adjusted ROATE is a useful financial measure for investors because it excludes the impact of gains/losses that are not indicative of the operating results of our portfolios of nonperforming loans.

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity. The table also provides a reconciliation of Net income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc. and provides our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):


					Average Tangible Equity Reconciliation (1)
	Balance as of Period End				Second Quarter						Year-to-Date
	June 30, 2025		June 30, 2024		2025			2024			2025			2024
Total stockholders' equity - PRA Group, Inc.	$	1,336,925	$	1,145,463	$	1,278,016		$	1,137,395		$	1,230,355		$	1,147,300
Less: Goodwill	439,449		415,646		430,082			413,746			418,840			419,685
Less: Other intangible assets	1,541		1,597		1,515			1,632			1,494			1,668
Average tangible equity					$	846,419		$	722,017		$	810,021		$	725,947

(1)Amounts represent the average balances for the respective periods. Equity balances are not adjusted for gain on sale of equity method investment, which would have de minimus effect on Adjusted ROATE.
					ROATE (2)
					Second Quarter						Year-to-Date
					2025			2024			2025			2024
Net income attributable to PRA Group, Inc.					$	42,374		$	21,516		$	46,033		$	24,991
Return on average tangible equity					20.0		%	11.9		%	11.4		%	6.9		%
(2)Based on annualized Net income attributable to PRA Group, Inc.

					Adjusted ROATE(3)
					Second Quarter						Year-to-Date
					2025			2024			2025			2024
Net income attributable to PRA Group, Inc.					$	42,374		$	21,516		$	46,033		$	24,991
Less: Gain on sale of equity method investment, net of tax					(29,686)			—			(29,686)			—
Adjusted net income attributable to PRA Group, Inc.					$	12,688		$	21,516		$	16,347		$	24,991
Adjusted ROATE					6.0		%	11.9		%	4.0		%	6.9		%
(3) Based on annualized Adjusted net income attributable to PRA Group, Inc.

SUPPLEMENTAL PERFORMANCE DATA

The tables in this section provide supplemental performance data about our:

•ERC by geography, portfolio type and expected year of collection;

•Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections; and

•nonperforming loan portfolios and collections by geography, portfolio type and year of purchase.

The collections data presented reflects gross cash collections and does not reflect any costs to collect; therefore, it may not represent relative profitability. The past performance of pools within certain geographies and portfolio types may not be comparable with other locations and portfolio types or indicative of future results. Customer payment patterns in all of the countries in which we operate can be affected by various factors, including general business and economic conditions, seasonal employment trends, income tax refunds and holiday spending habits.

Purchasing

We purchase portfolios of nonperforming loans from a variety of creditors, or acquire portfolios through strategic acquisitions, and segregate them into our Core or Insolvency portfolios, based on the status of the account upon acquisition. In addition, the accounts are segregated into geographical regions based upon where the account was acquired and, as applicable, foreign currency exchange rates are fixed for purposes of comparability in future periods. Ultimately, accounts are aggregated into annual pools based on portfolio type, geography and year of acquisition. Portfolios of accounts that were in an insolvency status at the time of acquisition are represented under Insolvency headings in the tables below. All other acquisitions of portfolios of accounts are included under Core headings. Once an account is initially segregated, it is not later transferred from an Insolvency pool to a Core pool, or vice versa.

Purchase price multiple

The purchase price multiple represents our estimate of total cash collections over the original purchase price of the portfolio. Purchase price multiples can vary over time due to a variety of factors, including pricing competition, supply levels, age of the accounts acquired, type and mix of portfolios purchased, expected costs to collect and returns, and changes in operational efficiency and effectiveness. When we pay more for a portfolio, the purchase price multiple and effective interest rate are generally lower. Certain types of accounts, such as Insolvency accounts, have lower collection costs, and we generally pay more for those types of accounts, which results in lower purchase price multiples but similar net income margins compared to other portfolio purchases.

ERC and TEC

Depending on the level of performance and expected future impacts from our operations, we may update ERC and TEC levels based on the results of our cash forecasting with a correlating adjustment to the purchase price multiple. We follow an established process to evaluate ERC, and we typically do not adjust our ERC and TEC until we gain sufficient collection experience with a pool of accounts. Over time, our TEC has often increased as pools have aged resulting in the ratio of TEC to purchase price for any given year of buying to gradually increase.

For additional information about our nonperforming loan portfolios, refer to Note 2 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Estimated remaining collections

The following table displays our ERC by geography, year and portfolio for the 12 months ending June 30, (in thousands):


	ERC By Geography, Year and Portfolio
	Americas and Australia Core		Americas Insolvency		Total Americas and Australia (1)		Europe Core		Europe Insolvency		Total Europe (2)		Total
2026	$	1,090,592	$	84,949	$	1,175,541	$	643,089	$	67,040	$	710,129	$	1,885,670
2027	855,863		66,765		922,628		537,670		48,064		585,734		1,508,362
2028	594,957		47,164		642,121		450,788		32,258		483,046		1,125,167
2029	403,661		27,199		430,860		385,578		19,016		404,594		835,454
2030	276,960		11,658		288,618		333,111		8,732		341,843		630,461
2031	190,725		1,902		192,627		289,058		3,115		292,173		484,800
2032	129,633		36		129,669		251,978		1,200		253,178		382,847
2033	88,879		3		88,882		220,531		605		221,136		310,018
2034	58,778		2		58,780		193,465		339		193,804		252,584
2035	39,591		—		39,591		170,192		115		170,307		209,898
Thereafter	81,961		—		81,961		586,845		243		587,088		669,049
Total ERC	$	3,811,600	$	239,678	$	4,051,278	$	4,062,305	$	180,727	$	4,243,032	$	8,294,310

(1)Reflects ERC of $3.5 billion for the U.S. and $513.4 million for other Americas and Australia.

(2)Reflects ERC of $1.7 billion for the UK, $1,079.9 million for Central Europe, $950.8 million for Northern Europe and $509.6 million for Southern Europe.

Cash collections

The following table displays our cash collections by geography and portfolio, Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections, for the periods indicated (in thousands):


	Cash Collections by Geography and Portfolio
	Second Quarter							Year-to-Date
	2025			2024				2025			2024
Americas and Australia
Call center and other	$	166,739	55.3%		$	149,693	56.7%		$326,990			55.4%	$304,146		58.4%
Legal	134,959		44.7		114,135		43.3		262,868			44.6	216,543		41.6
Core	301,698		100%		263,828		100%		589,858			100%	520,689		100%
Insolvency	24,329				26,971				48,029				52,180
Total Americas and Australia	$	326,027			$	290,799			$637,887				$572,869

Europe
Call center and other	$	108,881	58.6%		$	94,784	60.5%		$211,289			60.4%	$188,007		62.1%
Legal	76,771		41.4		61,955		39.5		138,734			39.6	114,665		37.9
Core	185,652		100%		156,739		100%		350,023			100%	302,672		100%
Insolvency	24,609				$	26,344			45,814				$	47,859
Total Europe	$	210,261			$	183,083			$	395,837			$	350,531

Total Company
Call center and other	275,620		56.6%		244,477		58.1%		538,279			57.3%	492,153		59.8%
Legal	211,730		43.4		176,090		41.9		401,602			42.7	331,208		40.2
Core	487,350		100%		420,567		100%		939,881			100%	823,361		100%
Insolvency	48,938				53,315				93,843				100,039
Total cash collections	$	536,288			$	473,882			$	1,033,724			$	923,400
Total cash collections adjusted (1)	$	536,288			$	481,528			$	1,033,724			$	920,492

(1)Total cash collections adjusted refers to prior period foreign currency cash collections remeasured at average U.S. dollar exchange rates for the current period.


Purchase Price Multiples as of June 30, 2025 In thousands
Purchase Period	Purchase Price (1)(2)		Total Estimated Collections (3)		Estimated Remaining Collections (4)		Current Purchase Price Multiple	Original Purchase Price Multiple (5)
Americas and Australia Core
1996-2014	$	2,336,839	$	6,681,453	$	78,176	286%	228%
2015	443,114		927,720		39,069		209%	205%
2016	455,767		1,100,505		50,637		241%	201%
2017	532,851		1,228,005		77,204		230%	193%
2018	653,975		1,547,865		112,494		237%	202%
2019	581,476		1,320,124		100,069		227%	206%
2020	435,668		961,557		108,427		221%	213%
2021	435,846		736,580		207,580		169%	191%
2022	406,082		720,041		264,772		177%	179%
2023	622,583		1,214,966		676,089		195%	197%
2024	823,662		1,734,516		1,394,320		211%	211%
2025	343,542		733,858		702,763		214%	214%
Subtotal	8,071,405		18,907,190		3,811,600
Americas Insolvency
1996-2014	1,414,476		2,723,019		2		193%	155%
2015	63,170		88,194		6		140%	125%
2016	91,442		118,534		75		130%	123%
2017	275,257		359,352		521		131%	125%
2018	97,879		136,921		203		140%	127%
2019	123,077		167,454		682		136%	128%
2020	62,130		90,738		5,352		146%	136%
2021	55,187		74,574		12,891		135%	136%
2022	33,442		47,809		18,764		143%	139%
2023	91,282		119,901		69,577		131%	135%
2024	68,391		99,619		76,563		146%	149%
2025	35,189		55,793		55,042		159%	159%
Subtotal	2,410,922		4,081,908		239,678
Total Americas and Australia	10,482,327		22,989,098		4,051,278
Europe Core
1996-2014	814,553		2,694,589		400,652		331%	205%
2015	411,340		766,350		127,274		186%	160%
2016	333,090		588,053		149,219		177%	167%
2017	252,174		364,311		89,269		144%	144%
2018	341,775		562,173		169,822		164%	148%
2019	518,610		872,535		307,692		168%	152%
2020	324,119		596,976		237,210		184%	172%
2021	412,411		723,959		372,728		176%	170%
2022	359,447		589,618		415,912		164%	162%
2023	410,593		695,957		527,680		170%	169%
2024	451,786		816,563		794,892		181%	180%
2025	264,668		481,332		469,955		182%	182%
Subtotal	4,894,566		9,752,416		4,062,305
Europe Insolvency
2014	10,876		19,178		—		176%	129%
2015	18,973		29,587		—		156%	139%
2016	39,338		58,295		528		148%	130%
2017	39,235		52,549		396		134%	128%
2018	44,908		53,277		1,134		119%	123%
2019	77,218		114,367		7,026		148%	130%
2020	105,440		161,278		13,288		153%	129%
2021	53,230		77,420		16,550		145%	134%
2022	44,604		64,543		29,617		145%	137%
2023	46,558		66,232		44,836		142%	138%
2024	43,459		64,128		52,365		148%	147%
2025	10,186		15,399		14,987		151%	151%
Subtotal	534,025		776,253		180,727
Total Europe	5,428,591		10,528,669		4,243,032
Total PRA Group	$	15,910,918	$	33,517,767	$	8,294,310

(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 year 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 June 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)
In thousands
	June 30, 2025 (year-to-date)								As of June 30, 2025
Purchase Period	Cash Collections (2)		Portfolio Income (2)		Changes in Expected Recoveries (2)		Total Portfolio Revenue (2)		Net Finance Receivables (3)
Americas and Australia Core
1996-2014	$	23,044	$	10,330	$	10,120	$	20,450	$	26,393
2015	7,178		4,293		(718)		3,575		16,724
2016	9,619		5,698		955		6,653		18,634
2017	15,270		7,890		3,210		11,100		32,512
2018	26,944		11,767		3,909		15,676		58,310
2019	26,477		11,886		(2,579)		9,307		52,962
2020	29,633		12,447		(2,096)		10,351		58,619
2021	34,910		18,512		(3,173)		15,339		107,468
2022	49,942		21,982		(59)		21,923		157,702
2023	124,806		62,995		(24,093)		38,902		369,079
2024	211,045		128,793		8,423		137,216		732,714
2025	30,990		23,444		4,794		28,238		340,417
Subtotal	589,858		320,037		(1,307)		318,730		1,971,534
Americas Insolvency
1996-2014	501		13		494		507		—
2015	60		4		52		56		4
2016	162		11		84		95		67
2017	596		57		309		366		463
2018	624		23		280		303		189
2019	1,701		63		378		441		644
2020	5,937		533		(504)		29		5,083
2021	6,362		915		193		1,108		11,809
2022	5,559		1,154		339		1,493		16,338
2023	14,789		4,316		487		4,803		57,511
2024	10,990		5,672		(1,370)		4,302		56,047
2025	748		1,019		512		1,531		35,689
Subtotal	48,029		13,780		1,254		15,034		183,844
Total Americas and Australia	637,887		333,817		(53)		333,764		2,155,378
Europe Core
1996-2014	48,559		29,327		12,846		42,173		90,532
2015	14,747		6,024		5,641		11,665		62,911
2016	13,241		5,837		2,311		8,148		84,225
2017	7,861		2,879		(1,468)		1,411		59,384
2018	17,709		6,247		1,880		8,127		109,923
2019	31,282		9,921		10,728		20,649		207,280
2020	23,120		8,660		7,602		16,262		144,188
2021	30,880		12,868		5,256		18,124		225,257
2022	35,193		13,631		975		14,606		261,956
2023	47,512		19,141		3,134		22,275		315,245
2024	68,963		29,804		1,798		31,602		442,315
2025	10,956		4,527		2,271		6,798		259,519
Subtotal	350,023		148,866		52,974		201,840		2,262,735
Europe Insolvency
2014	82		—		82		82		—
2015	87		—		87		87		—
2016	289		42		233		275		136
2017	626		24		398		422		261
2018	976		52		288		340		972
2019	3,678		362		339		701		6,034
2020	9,302		728		1,440		2,168		12,348
2021	7,341		898		2,087		2,985		14,880
2022	7,844		1,505		1,514		3,019		25,059
2023	7,721		2,191		1,075		3,266		36,493
2024	7,472		3,113		660		3,773		38,113
2025	396		294		90		384		10,167
Subtotal	45,814		9,209		8,293		17,502		144,463
Total Europe	395,837		158,075		61,267		219,342		2,407,198
Total PRA Group	$	1,033,724	$	491,892	$	61,214	$	553,106	$	4,562,576

(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 June 30, 2025 exchange rate.


Cash Collections by Year, By Year of Purchase (1) as of June 30, 2025 In millions
			Cash Collections
Purchase Period	Purchase Price (2)(3)		1996-2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		2025		Total
Americas and Australia Core
1996-2014	$	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	$	23.0	$	6,587.4
2015	443.1		—		117.0		228.4		185.9		126.6		83.6		57.2		34.9		19.5		14.1		17.3		7.2		891.7
2016	455.8		—		—		138.7		256.5		194.6		140.6		105.9		74.2		38.4		24.9		24.0		9.6		1,007.4
2017	532.9		—		—		—		107.3		278.7		256.5		192.5		130.0		76.3		43.8		39.2		15.3		1,139.6
2018	654.0		—		—		—		—		122.7		361.9		337.7		239.9		146.1		92.9		75.9		26.9		1,404.0
2019	581.5		—		—		—		—		—		143.8		349.0		289.8		177.7		110.3		77.7		26.5		1,174.8
2020	435.7		—		—		—		—		—		—		132.9		284.3		192.0		125.8		87.0		29.6		851.6
2021	435.8		—		—		—		—		—		—		—		85.0		177.3		136.8		98.4		34.9		532.4
2022	406.1		—		—		—		—		—		—		—		—		67.7		195.4		144.7		49.9		457.7
2023	622.5		—		—		—		—		—		—		—		—		—		108.5		285.9		124.8		519.2
2024	823.7		—		—		—		—		—		—		—		—		—		—		145.9		211.0		356.9
2025	343.5		—		—		—		—		—		—		—		—		—		—		—		31.0		31.0
Subtotal	8,071.4		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		589.7		14,953.7
Americas Insolvency
1996-2014	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		0.5		2,722.9
2015	63.2		—		3.4		17.9		20.1		19.8		16.7		7.9		1.3		0.6		0.3		0.2		0.1		88.3
2016	91.4		—		—		18.9		30.4		25.0		19.9		14.4		7.4		1.8		0.9		0.6		0.2		119.5
2017	275.3		—		—		—		49.1		97.3		80.9		58.8		44.0		20.8		4.9		2.5		0.6		358.9
2018	97.9		—		—		—		—		6.7		27.4		30.5		31.6		24.6		12.7		2.5		0.6		136.6
2019	123.1		—		—		—		—		—		13.4		31.4		39.1		37.8		28.7		14.6		1.7		166.7
2020	62.1		—		—		—		—		—		—		6.5		16.1		20.4		19.5		17.0		5.9		85.4
2021	55.2		—		—		—		—		—		—		—		4.6		17.9		17.5		15.3		6.4		61.7
2022	33.4		—		—		—		—		—		—		—		—		3.2		9.2		11.1		5.6		29.1
2023	91.2		—		—		—		—		—		—		—		—		—		9.0		25.1		14.8		48.9
2024	68.4		—		—		—		—		—		—		—		—		—		—		12.1		11.0		23.1
2025	35.2		—		—		—		—		—		—		—		—		—		—		—		0.7		0.7
Subtotal	2,410.9		1,949.8		344.2		249.8		222.5		207.9		180.9		155.3		147.4		129.4		104.2		102.3		48.1		3,841.8
Total Americas and Australia	10,482.3		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		637.8		18,795.5
Europe Core
1996-2014	814.5		195.1		297.5		249.9		224.1		209.6		175.3		151.7		151.0		123.6		108.6		101.7		48.6		2,036.7
2015	411.3		—		45.8		100.3		86.2		80.9		66.1		54.3		51.4		40.7		33.8		30.4		14.7		604.6
2016	333.1		—		—		40.4		78.9		72.6		58.0		48.3		46.7		36.9		29.7		27.4		13.2		452.1
2017	252.2		—		—		—		17.9		56.0		44.1		36.1		34.8		25.2		20.2		17.9		7.9		260.1
2018	341.8		—		—		—		—		24.3		88.7		71.3		69.1		50.7		41.6		37.1		17.7		400.5
2019	518.6		—		—		—		—		—		48.0		125.7		121.4		89.8		75.1		68.2		31.3		559.5
2020	324.1		—		—		—		—		—		—		32.3		91.7		69.0		56.1		50.1		23.1		322.3
2021	412.4		—		—		—		—		—		—		—		48.5		89.9		73.0		66.6		30.9		308.9
2022	359.4		—		—		—		—		—		—		—		—		33.9		83.8		74.7		35.2		227.6
2023	410.6		—		—		—		—		—		—		—		—		—		50.2		103.1		47.5		200.8
2024	451.9		—		—		—		—		—		—		—		—		—		—		46.3		69.0		115.3
2025	264.7		—		—		—		—		—		—		—		—		—		—		—		11.0		11.0
Subtotal	4,894.6		195.1		343.3		390.6		407.1		443.4		480.2		519.7		614.6		559.7		572.1		623.5		350.1		5,499.4
Europe Insolvency
2014	10.9		—		4.3		3.9		3.2		2.6		1.5		0.8		0.3		0.2		0.2		0.2		0.1		17.3
2015	19.0		—		3.0		4.4		5.0		4.8		3.9		2.9		1.6		0.6		0.4		0.2		0.1		26.9
2016	39.3		—		—		6.2		12.7		12.9		10.7		7.9		6.0		2.7		1.3		0.8		0.3		61.5
2017	39.2		—		—		—		1.2		7.9		9.2		9.8		9.4		6.5		3.8		1.5		0.6		49.9
2018	44.9		—		—		—		—		0.6		8.4		10.3		11.7		9.8		7.2		3.5		1.0		52.5
2019	77.2		—		—		—		—		—		5.0		21.1		23.9		21.0		17.5		12.9		3.7		105.1
2020	105.4		—		—		—		—		—		—		6.0		34.6		34.1		29.7		25.5		9.3		139.2
2021	53.2		—		—		—		—		—		—		—		5.5		14.4		14.7		15.4		7.3		57.3
2022	44.6		—		—		—		—		—		—		—		—		4.5		12.4		15.2		7.8		39.9
2023	46.7		—		—		—		—		—		—		—		—		—		4.2		12.7		7.7		24.6
2024	43.4		—		—		—		—		—		—		—		—		—		—		9.5		7.5		17.0
2025	10.2		—		—		—		—		—		—		—		—		—		—		—		0.4		0.4
Subtotal	534.0		—		7.3		14.5		22.1		28.8		38.7		58.8		93.0		93.8		91.4		97.4		45.8		591.6
Total Europe	5,428.6		195.1		350.6		405.1		429.2		472.2		518.9		578.5		707.6		653.5		663.5		720.9		395.9		6,091.0
Total PRA Group	$	15,910.9	$	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	$	1,033.7	$	24,886.5

(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. In addition, any 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.

LIQUIDITY AND CAPITAL RESOURCES

We actively manage our liquidity to meet our business needs and financial obligations.

Sources of liquidity

Cash and cash equivalents

As of June 30, 2025, cash and cash equivalents totaled $131.6 million, of which $117.4 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements in the 2024 Form 10-K.

Borrowings

As of June 30, 2025, we had the following committed amounts, borrowings and availability under our financing arrangements (in thousands):


					Availability
	Committed Amount		Borrowings		Based on Current ERC (1)		Additional Availability (2)		Total Availability
North American revolving credit facility	$	1,075,978	$	667,875	$	190,200	$	217,903	$	408,103
UK revolving credit facility	725,000		479,282		144,564		101,154		245,718
European revolving credit facility	900,378		713,529		186,849		—		186,849
North American term loan	465,111		465,111		—		—		—
Senior notes	1,298,000		1,298,000		—		—		—

Debt premium and issuance costs, net	—		(9,589)		—		—		—
Total	$	4,464,467	$	3,614,208	$	521,613	$	319,057	$	840,670

(1)Available borrowings after calculation of borrowing base, subject to the committed amounts and debt covenants, which may be used for general corporate purposes, including portfolio purchases.

(2)Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC.

Interest-bearing deposits

As of June 30, 2025, interest-bearing deposits totaled $168.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.0 million in U.S. dollars as of June 30, 2025).

Uses of liquidity and material cash requirements

We believe that funds generated from our business activities, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets, will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases for at least the next 12 months. Our long-term capital requirements will depend in large part on the level of nonperforming loan portfolios that we purchase.

Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.

Forward flows

We enter into forward flow agreements for the purchase of nonperforming loans. These agreements typically have terms ranging from six to 12 months, or they can be open-ended, and establish purchase prices and specific criteria for the accounts to be purchased. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, however, very few agreements establish a minimum contractual obligation, and many of the contracts contain early termination provisions allowing either party to cancel the agreements in accordance with a specified notice period.

As of June 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $311.2 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $210.6 million for the Americas and Australia and $100.5 million for Europe. 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. In addition to these agreements, we may also enter into new or renewed forward flow commitments and/or close on spot purchase transactions.

Borrowings

As of June 30, 2025, we had $3.6 billion in outstanding borrowings. The estimated interest, unused fees and principal payments for the next 12 months are $249.3 million. After 12 months, principal payments on our debt are due from between one and five years. Many of our financing arrangements include covenants with which we must comply, and as of June 30, 2025, we were in compliance with these covenants.

For additional information about our borrowings, refer to Note 5 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Share repurchases

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time.

Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. During the second quarter of 2025, we repurchased 660,395 shares of our common stock for an aggregate cost of approximately $10.0 million at an average price of $15.14 per share. As of June 30, 2025, we had $57.7 million remaining for share repurchases under the program. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

Leases

Our leases have remaining terms from one to 8 years. As of June 30, 2025, we had $29.5 million in lease liabilities, of which $7.5 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2024 Form 10-K.

Derivatives

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of June 30, 2025, we had $14.1 million of derivative liabilities, of which $3.2 million matures within the next 12 months. The remaining $10.9 million matures in 2028 and later. For additional information, refer to Note 6 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Investments

As of June 30, 2025, we held $64.8 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.

Cash flow analysis

The following table summarizes our cash flow activity for the periods indicated (in thousands):


	Year-to-Date
	2025		2024		Change
Net cash provided by/(used in):
Operating activities	$	(65,490)	$	(102,488)	$	36,998
Investing activities	(33,408)		(96,195)		62,787
Financing activities	105,900		203,826		(97,926)
Effect of foreign exchange rates	20,885		1,082		19,803
Net increase in cash, cash equivalents and restricted cash	$	27,887	$	6,225	$	21,662

Operating activities

Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities. Net cash used in operating activities decreased $37.0 million compared to the prior year period, primarily due to higher cash collections recognized as income and a positive impact from foreign currency exchange rates, partially offset by higher cash paid for operating expenses and interest.

Investing activities

Net cash used in investing activities decreased $62.8 million compared to the prior year period. The decrease was primarily due to an increase of $33.8 million in recoveries collected and applied to Finance receivables, net. This was partially offset by an increase of $8.1 million in purchases of nonperforming loan portfolios and an $8.7 million decrease in net cash flows from purchases and disposals of investments.

Financing activities

Net cash provided by financing activities decreased $97.9 million compared to the prior year period. The decrease was primarily due to the $400.0 million of senior notes issued during the 2024 period and a $28.0 million increase in interest-bearing deposits. These amounts were partially offset by a $331.4 million increase in net proceeds from (payments on) lines of credit.

Effect of foreign exchange rates

The net effect of exchange rates on cash increased $19.8 million compared to the prior year period. The increase was primarily due to the impact of a weakening of the U.S. dollar relative to other currencies on our foreign currency denominated borrowings and intercompany balances.

CRITICAL ACCOUNTING ESTIMATES

Our Consolidated Financial Statements have been prepared in accordance with GAAP. Some of our significant accounting policies require that we use estimates, assumptions and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. We consider accounting estimates to be critical if they (1) involve a significant level of estimation uncertainty and (2) have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material.

Our critical accounting estimates include revenue recognition on finance receivables, goodwill and income taxes. For a detailed description of our critical accounting estimates, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in the 2024 Form 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS

For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 13 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

FREQUENTLY USED TERMS

We may use the following terms throughout this Quarterly Report:

•"Buybacks" refers to purchase price refunded by the seller due to the return of ineligible nonperforming loan accounts.

•"Cash collections" refers to collections on our nonperforming loan portfolios.

•"Cash receipts" refers to cash collections on our nonperforming loan portfolios, fees and revenue recognized from our class action claims recovery services.

•"Changes in expected recoveries" refers to the difference between actual recoveries collected compared to expected recoveries and the net present value of changes in estimated remaining collections.

•"Core" accounts or portfolios refer to accounts or portfolios that are nonperforming loans and are not in an insolvent status upon acquisition. These accounts are aggregated separately from insolvency accounts.

•"Estimated remaining collections" or "ERC" refers to the sum of all future projected cash collections on our nonperforming loan portfolios.

•"Finance receivables" or "receivables" refers to the negative allowance for expected recoveries recorded on our balance sheet as an asset.

•"Insolvency" accounts or portfolios refer to accounts or portfolios of nonperforming loans that are in an insolvent status when we purchase them and, as such, are purchased as a pool of insolvent accounts. These accounts include IVAs, Trust Deeds in the UK, Consumer Proposals in Canada and bankruptcy accounts in the U.S., Canada, Germany and the UK.

•"Negative allowance" refers to the present value of cash flows expected to be collected on our finance receivables.

•"Portfolio acquisitions" refers to all nonperforming loan portfolios acquired as a result of a purchase or added as a result of a business acquisition.

•"Portfolio purchases" refers to all nonperforming loan portfolios purchased in the normal course of business and excludes those added as a result of business acquisitions.

•"Portfolio income" reflects revenue recorded due to the passage of time using the effective interest rate calculated based on the purchase price and estimated remaining collections of nonperforming loan portfolios.

•"Purchase price" refers to the cash paid to a seller to acquire nonperforming loans.

•"Purchase price multiple" refers to the total estimated collections on our nonperforming loan portfolios divided by purchase price.

•"Recoveries collected" refers to cash collections plus buybacks and other adjustments.

•"Total estimated collections" or "TEC" refers to actual cash collections plus estimated remaining collections on our nonperforming loan portfolios.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our business is subject primarily to interest rate and foreign currency risk. Our exposure to these risks, as described in Part II, Item 7A in the 2024 Form 10-K, has not changed materially since December 31, 2024.

Interest rate exposure

Of our $3.6 billion in total borrowings as of June 30, 2025, $1.3 billion was fixed rate debt. Considering these fixed rate borrowings and the interest rate hedges on our variable rate debt, with maturities ranging from seven months to five years, as of June 30, 2025, 58% of our total debt was either fixed rate or converted to a fixed rate.

Foreign currency exposure

We operate internationally and enter into transactions denominated in various foreign currencies. During Q2 2025, our revenues from operations outside the U.S. were $150.2 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. We conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, the principal executive officer and principal financial officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings as of June 30, 2025, refer to Note 11 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of the 2024 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchase Programs

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. For more information, see Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in this Quarterly Report.

The following table provides information about our common stock purchased during the second quarter of 2025.


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Remaining Purchase Price for Share Repurchases Under the Program (1)
Period
April 1, 2025 to April 30, 2025	—	$	—	—	$	67,742
May 1, 2025 to May 31, 2025	660,395	$	15.14	660,395	57,742
June 1, 2025 to June 30, 2025	—	—		—	57,742
Total	660,395	$	15.14	660,395	$	57,742

(1) Dollars in thousands.

Our credit facilities and the indentures governing our senior notes contain financial and other restrictive covenants, including restrictions on certain types of transactions and our ability to pay dividends to our stockholders and repurchase our common stock.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement during the second quarter of 2025.

Item 6. Exhibits


3.1			Fifth Amended and Restated Certificate of Incorporation of PRA Group, Inc. (Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
3.2			Amended and Restated By-Laws of PRA Group, Inc. (Incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
4.1			Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Registration Statement on Form S-1 filed October 15, 2002 (Registration No. 333-99225)).
4.2			Form of Warrant (Incorporated by reference to Exhibit 4.2 of Amendment No. 2 to the Registration Statement on Form S-1 filed October 30, 2002 (Registration No. 333-99225)).
4.3			Indenture, dated as of September 22, 2021 among PRA Group Inc., the domestic subsidiaries of PRA Group Inc., party thereto and Regions Banks, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 24, 2021 (File No. 000-50058)).
4.4			Indenture, dated as of February 6, 2023, among PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc., party thereto and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 6, 2023 (File No. 000-50058)).


4.5			Indenture, dated as of May 20, 2024, among PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc. party thereto and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed May 20, 2024 (File No. 000-50058)).
4.6			Description of the Registrant's Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.3 of the Annual Report on Form 10-K filed February 26, 2021 (File No. 000-50058)).






10.1			Amendment and Restatement Agreement, dated April 24, 2025, to the Multicurrency Revolving Credit Facility Agreement by and among PRA Group Europe Holding S.à.r.l., acting through its Swiss branch office PRA Group Europe Holding S.à.r.l., Luxembourg, Zug Branch, Horyzont Niestandaryzowany Fundusz Wierzytelności Fundusz Inwestycyjny Zamknięty, and DNB Bank ASA (filed herewith).
10.2*			Amended Service Agreement, effective as of June 17, 2025, between PRA Group, Inc. and Martin Sjolund (filed herewith).
1 0.3*			Contract of Employment, effective as of October 13, 2023, between PRA Group (UK) Ltd and R. Owen James (filed herewith).
10.4 *			Amended Contract of Employment, effective as of June 17, 2025, between PRA Group, Inc. and R. Owen James (filed herewith).
31.1			Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
31.2			Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
32.1			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkable Document
101.LAB			XBRL Taxonomy Extension Label Linkable Document
101.PRE			XBRL Taxonomy Extension Presentation Linkable Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Denotes management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	PRA Group, Inc.
	(Registrant)

August 6, 2025	By:	/s/ Martin Sjolund
		Martin Sjolund
		President and Chief Executive Officer
		(Principal Executive Officer)




August 6, 2025	By:	/s/ Rakesh Sehgal
		Rakesh Sehgal
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

PRA Group - 10-Q quarterly report FY2025 Q2

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