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PRA Group
PRAA
#6596
Rank
$0.68 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$17.50
Share price
1.51%
Change (1 day)
-15.13%
Change (1 year)
๐Ÿ’ณ Financial services
Categories
  1. PRA Group
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q3

PRA Group - 10-Q quarterly report FY2025 Q3


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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 September 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 Logo.jpg
PRA Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware75-3078675
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per sharePRAANASDAQ 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 November 6, 2025 was 39,015,442.


PRA Group, Inc.
Form 10-Q for the Quarterly Period Ended September 30, 2025
TABLE OF CONTENTS

Page
Item 1.
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
14
Note 7. Fair Value
15
Note 8. Accumulated Other Comprehensive Loss
16
Note 9. Earnings per Share
17
Note 10. Income Taxes
18
Note 11. Commitments and Contingencies
18
Note 12. Segments
18
Note 13. Recently Issued Accounting Standards
19
Item 2.
20
Item 3.
39
Item 4.
39
Item 1.
40
Item 1A.
40
Item 2.
40
Item 3.
40
Item 4.
40
Item 5.
40
Item 6.
40
42
2


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PRA Group, Inc.
Consolidated Balance Sheets
September 30, 2025 and December 31, 2024
(In thousands)
(unaudited)
September 30,
2025		December 31,
2024
ASSETS
Cash and cash equivalents$107,454 $105,938 
Investments64,915 66,304 
Finance receivables, net4,572,167 4,140,742 
Income taxes receivable17,397 19,559 
Deferred tax assets, net93,872 75,134 
Right-of-use assets28,135 32,173 
Property and equipment, net25,119 29,498 
Goodwill26,871 396,357 
Other assets63,279 65,450 
Total assets$4,999,209 $4,931,155 
LIABILITIES AND EQUITY
Liabilities
Accrued expenses and accounts payable$115,518 $141,211 
Income taxes payable48,782 28,584 
Deferred tax liabilities, net17,663 16,813 
Lease liabilities31,175 36,437 
Interest-bearing deposits139,671 163,406 
Borrowings3,606,978 3,326,621 
Other liabilities55,450 24,476 
Total liabilities4,015,237 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, 39,083 shares issued and outstanding as of September 30, 2025; 100,000 shares authorized, 39,510 shares issued and outstanding as of December 31, 2024
391 395 
Additional paid-in capital17,981 17,882 
Retained earnings1,198,479 1,560,149 
Accumulated other comprehensive loss(288,358)(443,394)
Total stockholders' equity - PRA Group, Inc.928,493 1,135,032 
Noncontrolling interests55,479 58,575 
Total equity983,972 1,193,607 
Total liabilities and equity$4,999,209 $4,931,155 
The accompanying notes are an integral part of these Consolidated Financial Statements.
3


PRA Group, Inc.
Consolidated Income Statements
For the Three and Nine Months Ended September 30, 2025 and 2024
(In thousands, except per share amounts)
(unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Revenues
Portfolio income$258,549 $216,122 $750,441 $627,468 
Changes in expected recoveries51,358 60,614 112,572 185,608 
Total portfolio revenue309,907 276,736 863,013 813,076 
Other revenue1,233 4,741 5,434 8,216 
Total revenues311,140 281,477 868,447 821,292 
Operating expenses
Compensation and benefits74,237 76,106 223,284 223,944 
Legal collection costs46,764 28,781 117,741 90,746 
Legal collection fees16,558 14,479 47,413 40,353 
Agency fees24,556 21,020 68,612 61,751 
Professional and outside services22,051 20,452 64,225 63,626 
Communication8,377 10,048 28,271 34,203 
Rent and occupancy3,654 4,175 10,638 12,455 
Depreciation, amortization and impairment of long-lived assets2,439 2,469 8,711 7,826 
Goodwill impairment412,611 — 412,611 — 
Other operating expenses15,440 13,969 42,800 40,792 
Total operating expenses626,687 191,499 1,024,306 575,696 
    (Loss)/income from operations(315,547)89,978 (155,859)245,596 
Other income/(expense)
Interest expense, net(64,087)(61,062)(187,418)(168,693)
Gain on sale of equity method investment— — 38,403 — 
Foreign exchange gain, net67 10 66 138 
Other(38)(676)(293)(836)
(Loss)/income before income taxes(379,605)28,250 (305,101)76,205 
Income tax expense/(benefit)24,361 (672)44,088 10,416 
Net (loss)/income(403,966)28,922 (349,189)65,789 
Net income attributable to noncontrolling interests3,737 1,768 12,481 13,644 
Net (loss)/income attributable to PRA Group, Inc.$(407,703)$27,154 $(361,670)$52,145 
Net (loss)/income per common share attributable to PRA Group, Inc.
Basic$(10.43)$0.69 $(9.20)$1.33 
Diluted$(10.43)$0.69 $(9.20)$1.32 
Weighted average number of shares outstanding
Basic39,078 39,421 39,316 39,353 
Diluted39,078 39,492 39,316 39,495 
The accompanying notes are an integral part of these Consolidated Financial Statements.
4


PRA Group, Inc.
Consolidated Statements of Comprehensive Income
For the Three and Nine Months Ended September 30, 2025 and 2024
(In thousands)
(unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Net (loss)/income$(403,966)$28,922 $(349,189)$65,789 
Other comprehensive (loss)/income, net of tax
Foreign currency translation adjustments(6,394)52,979 168,945 (9,470)
Cash flow hedges2,815 (8,503)(5,424)(6,988)
Debt securities available-for-sale(24)246 (57)357 
Other comprehensive (loss)/income(3,603)44,722 163,464 (16,101)
Total comprehensive (loss)/income(407,569)73,644 (185,725)49,688 
Comprehensive income attributable to noncontrolling interests4,759 3,301 20,910 6,263 
Comprehensive (loss)/income attributable to PRA Group, Inc.$(412,328)$70,343 $(206,635)$43,425 
The accompanying notes are an integral part of these Consolidated Financial Statements.
5


PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2025
(In thousands)
(unaudited)

Common StockAdditional Paid-InRetainedAccumulated Other ComprehensiveNoncontrollingTotal
SharesAmountCapitalEarningsLossInterestsEquity
Balance as of December 31, 202439,510 $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 stock142 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, 202539,652 $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 stock82 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, 202539,074 $391 $14,086 $1,606,182 $(283,734)$59,686 $1,396,611 
Components of comprehensive income, net of tax:
Net (loss)/income— — — (407,703)— 3,737 (403,966)
Foreign currency translation adjustments— — — — (7,415)1,021 (6,394)
Cash flow hedges— — — — 2,815 — 2,815 
Debt securities available-for-sale— — — — (24)— (24)
Distributions to noncontrolling interests— — — — — (8,965)(8,965)
Vesting of restricted stock9 — — — — — — 
Share-based compensation expense— — 4,027 — — — 4,027 
Employee stock relinquished for payment of taxes— — (132)— — — (132)
Balance as of September 30, 202539,083 $391 $17,981 $1,198,479 $(288,358)$55,479 $983,972 

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








6


PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2024
(In thousands)
(unaudited)

Common StockAdditional Paid-InRetainedAccumulated Other ComprehensiveNoncontrollingTotal
SharesAmountCapitalEarningsLossInterestsEquity
Balance as of December 31, 202339,247 $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 stock98 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, 202439,345 $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)
Vesting of restricted stock72 1 (1)— — — — 
Share-based compensation expense— — 3,555 — — — 3,555 
Employee stock relinquished for payment of taxes— — (143)— — — (143)
Balance as of June 30, 202439,417 $394 $12,339 $1,514,539 $(381,809)$57,815 $1,203,278 
Components of comprehensive income, net of tax:
Net income— — — 27,154 — 1,768 28,922 
Foreign currency translation adjustments— — — — 51,446 1,533 52,979 
Cash flow hedges— — — — (8,503)— (8,503)
Debt securities available-for-sale— — — — 246 — 246 
Distributions to noncontrolling interests— — — — — (602)(602)
Contributions from noncontrolling interests— — — — — 2,396 2,396 
Vesting of restricted stock9 — — — — — — 
Share-based compensation expense— — 3,251 — — — 3,251 
Employee stock relinquished for payment of taxes— — (175)— — — (175)
Balance as of September 30, 202439,426 $394 $15,415 $1,541,693 $(338,620)$62,910 $1,281,792 

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



7


PRA Group, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2025 and 2024
(In thousands)
(unaudited)
Nine Months Ended September 30,
20252024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)/income$(349,189)$65,789 
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Share-based compensation12,279 10,133 
Depreciation, amortization and impairment of long-lived assets8,711 7,826 
Goodwill impairment412,611 — 
Gain on sale of equity method investment(38,403)— 
Amortization of debt premium and issuance costs5,839 8,326 
Changes in expected recoveries(112,572)(185,608)
Deferred income taxes(10,420)(7,277)
Net unrealized foreign currency transaction gain(11,015)(16,593)
Other629 (234)
Changes in operating assets and liabilities:
Other assets(4,293)(201)
Accrued expenses, accounts payable and other liabilities10,201 (19,685)
Net cash used in operating activities(75,622)(137,524)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net(3,392)(2,881)
Purchases of nonperforming loan portfolios(890,241)(975,164)
Recoveries collected and applied to Finance receivables, net827,190 784,329 
Purchases of investments(57,898)(48,247)
Proceeds from sales and maturities of investments107,366 58,130 
Net cash used in investing activities(16,975)(183,833)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines of credit739,727 958,636 
Principal payments on lines of credit(916,273)(693,622)
Principal payments on long-term debt(7,500)(10,000)
Proceeds from issuance of 2032 senior notes351,990 — 
Proceeds from issuance of 2030 senior notes— 400,000 
Retirement of 2025 senior notes— (298,000)
Repurchases of common stock(10,000)— 
Payments of origination costs and fees(4,878)(5,926)
Tax withholdings related to share-based payments(2,184)(1,787)
Distributions to noncontrolling interests(24,005)(18,014)
Contributions from noncontrolling interests— 2,396 
Net (decrease)/increase in interest-bearing deposits(52,315)13,390 
Net cash provided by financing activities74,562 347,073 
Effect of foreign exchange rates21,431 3,024 
Net increase in cash, cash equivalents and restricted cash3,396 28,740 
Cash, cash equivalents and restricted cash, beginning of period107,431 113,692 
Cash, cash equivalents and restricted cash, end of period$110,827 $142,432 
Supplemental disclosure of cash flow information
Cash paid for interest$213,888 $176,537 
Cash paid for income taxes33,042 15,460 
Reconciliation to Balance Sheet accounts
Cash and cash equivalents$107,454 $141,135 
Restricted cash included in Other assets3,373 1,297 
Cash, cash equivalents and restricted cash$110,827 $142,432 

The accompanying notes are an integral part of these Consolidated Financial Statements.
8
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. These 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, and 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 Balance Sheets and 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 September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025December 31, 2024
Amortized cost$— $— 
Negative allowance for expected recoveries4,572,167 4,140,742 
Balance as of end of period$4,572,167 $4,140,742 
Changes in Finance receivables, net by portfolio type for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Balance as of beginning of period$4,234,269 $328,307 $4,562,576 $3,450,721 $369,465 $3,820,186 
Initial negative allowance for expected recoveries on current period purchases (1)
234,724 20,768 255,492 335,120 14,858 349,978 
Recoveries collected and applied to Finance receivables, net (2)
(237,624)(34,851)(272,475)(222,960)(40,429)(263,389)
Changes in expected recoveries (3)
44,730 6,628 51,358 55,992 4,622 60,614 
Foreign currency translation adjustment(21,483)(3,301)(24,784)87,496 9,582 97,078 
Balance as of end of period$4,254,616 $317,551 $4,572,167 $3,706,369 $358,098 $4,064,467 
9

Nine Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
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)
828,179 65,520 893,699 880,529 94,635 975,164 
Recoveries collected and applied to Finance receivables, net (2)
(720,764)(106,426)(827,190)(664,423)(119,906)(784,329)
Changes in expected recoveries (3)
96,397 16,175 112,572 171,303 14,305 185,608 
Foreign currency translation adjustment241,081 11,263 252,344 23,746 7,680 31,426 
Balance as of end of period$4,254,616 $317,551 $4,572,167 $3,706,369 $358,098 $4,064,467 
(1) Initial negative allowance for expected recoveries on current period purchases
The initial negative allowance for expected recoveries on purchases made during the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):
Three Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Allowance for credit losses at acquisition$(1,354,100)$(75,733)$(1,429,833)$(3,071,252)$(53,164)$(3,124,416)
Writeoffs, net1,354,100 75,733 1,429,833 3,071,252 53,164 3,124,416 
Expected recoveries234,724 20,768 255,492 335,120 14,858 349,978 
Initial negative allowance for expected recoveries on current period purchases$234,724 $20,768 $255,492 $335,120 $14,858 $349,978 
Nine Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Allowance for credit losses at acquisition$(4,407,773)$(237,067)$(4,644,840)$(6,088,303)$(330,392)$(6,418,695)
Writeoffs, net4,407,773 237,067 4,644,840 6,088,303 330,392 6,418,695 
Expected recoveries828,179 65,520 893,699 880,529 94,635 975,164 
Initial negative allowance for expected recoveries on current period purchases$828,179 $65,520 $893,699 $880,529 $94,635 $975,164 
The purchase price for purchases made during the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):
Three Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Face value$1,841,010 $108,649 $1,949,659 $3,739,494 $75,859 $3,815,353 
Noncredit discount(252,186)(12,148)(264,334)(333,122)(7,837)(340,959)
Allowance for credit losses at acquisition(1,354,100)(75,733)(1,429,833)(3,071,252)(53,164)(3,124,416)
Purchase price$234,724 $20,768 $255,492 $335,120 $14,858 $349,978 
Nine Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Face value$6,076,491 $339,965 $6,416,456 $7,850,273 $469,492 $8,319,765 
Noncredit discount(840,539)(37,378)(877,917)(881,441)(44,465)(925,906)
Allowance for credit losses at acquisition(4,407,773)(237,067)(4,644,840)(6,088,303)(330,392)(6,418,695)
Purchase price$828,179 $65,520 $893,699 $880,529 $94,635 $975,164 
10

(2) Recoveries collected and applied to Finance receivables, net
Recoveries collected and applied to Finance receivables, net for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Recoveries collected (a)
$484,305 $46,719 $531,024 $426,574 $52,937 $479,511 
Amounts reclassified to portfolio income (b)
(246,681)(11,868)(258,549)(203,614)(12,508)(216,122)
Recoveries collected and applied to Finance receivables, net$237,624 $34,851 $272,475 $222,960 $40,429 $263,389 
Nine Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Recoveries collected (a)
$1,436,348 $141,283 $1,577,631 $1,256,546 $155,251 $1,411,797 
Amounts reclassified to portfolio income (b)
(715,584)(34,857)(750,441)(592,123)(35,345)(627,468)
Recoveries collected and applied to Finance receivables, net$720,764 $106,426 $827,190 $664,423 $119,906 $784,329 
(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 September 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Recoveries collected in excess of forecast$21,406 $5,945 $27,351 $29,133 $5,025 $34,158 
Changes in expected future recoveries 23,324 683 24,007 26,859 (403)26,456 
Changes in expected recoveries$44,730 $6,628 $51,358 $55,992 $4,622 $60,614 
Changes in expected recoveries for the three months ended September 30, 2025 were $51.4 million, which included $27.4 million in recoveries collected in excess of forecast and a $24.0 million positive adjustment to changes in expected future recoveries. Recoveries collected in excess of forecast were due largely to cash collections overperformance in Europe, and also included overperformance in South America and the U.S. Collections overperformance in the U.S. was net of a one-time payment of $15.0 million to a seller to modify the terms and conditions of certain previously purchased portfolios to allow for increased use of legal collections. Changes in expected future recoveries were driven by the results of the Company's forecasting models, combined with evaluations of recent performance, and were due in large part to increases in the collections forecasts for certain European and South American pools and the 2024 U.S. Core pool (driven by the increase in estimated remaining collections resulting from the above-mentioned contract modification) and 2017 to 2020 U.S. Core pools. These increases were partially offset by negative changes in expected future recoveries on the 2021 to 2023 U.S. Core pools, a portion of which was driven by changes in the expected timing of the recoveries.
Changes in expected recoveries for the three months ended September 30, 2024 were $60.6 million, which included $34.2 million in recoveries collected in excess of forecast, due primarily to collections performance in the U.S. and Europe. Changes in expected future recoveries of $26.5 million mainly reflect the Company's assessment of the 2013 to 2020 U.S. Core pools and a number of pools in Europe, which resulted in increases to the expected cash flows considering that recent performance of those pools is expected to continue.




11

Changes in expected recoveries for the nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Nine Months Ended September 30,
20252024
CoreInsolvencyTotalCoreInsolvencyTotal
Recoveries collected in excess of forecast$68,012 $16,141 $84,153 $109,881 $14,375 $124,256 
Changes in expected future recoveries28,385 34 28,419 61,422 (70)61,352 
Changes in expected recoveries$96,397 $16,175 $112,572 $171,303 $14,305 $185,608 
Changes in expected recoveries for the nine months ended September 30, 2025 were $112.6 million, which included $84.2 million in recoveries collected in excess of forecast and a $28.4 million positive adjustment to changes in expected future recoveries. Recoveries collected in excess of forecast were primarily due to cash collections overperformance in Europe, South America, and to a lesser extent the U.S., where collections overperformance was impacted by a one-time payment of $15.0 million to a seller to modify the terms and conditions of certain previously purchased portfolios to allow for increased use of legal collections. Changes in expected future recoveries were driven by the results of the Company's forecasting models, combined with evaluations of recent performance, and were due in large part to increases in the collections forecasts for certain European and South American pools and the U.S. 2024 Core pool (driven by the increase in estimated remaining collections resulting from the above-mentioned contract modification). These increases were partially offset by negative changes in expected future recoveries on the 2021 to 2023 U.S. Core pools, a portion of which was driven by changes in the expected timing of the recoveries.
Changes in expected recoveries for the nine months ended September 30, 2024 were $185.6 million, which included $124.3 million in recoveries collected in excess of forecast, due primarily to collections performance in the U.S. and Europe. Changes in expected future recoveries of $61.4 million mainly reflect the Company's assessment of the 2013 to 2020 U.S. Core pools and a number of pools in Europe, which resulted in increases to the expected cash flows considering that recent performance of those pools is expected to continue.
Note 3. Investments
Investments consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025December 31, 2024
Debt securities
Available-for-sale$63,226 $55,762 
Equity securities
Private equity funds1,689 1,848 
Equity method investment— 8,694 
Total investments$64,915 $66,304 
Debt securities
As of September 30, 2025, the Company's debt securities consisted of Swedish treasury securities maturing within one year. As of September 30, 2025 and December 31, 2024, the amortized cost and fair value of these investments were as follows (in thousands):
September 30, 2025December 31, 2024
Amortized CostGross Unrealized GainsAggregate Fair ValueAmortized CostGross Unrealized GainsAggregate Fair Value
Debt securities$63,076 $150 $63,226 $55,556 $206 $55,762 
Equity method investment
The Company sold its 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, in April 2025.


12

Note 4. Goodwill
Changes in goodwill for the three and nine months ended September 30, 2025 and 2024, were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Balance as of beginning of period$439,449 $415,646 $396,357 $431,564 
Goodwill impairment(412,611)— (412,611)— 
Foreign currency translation33 7,365 43,125 (8,553)
Balance as of end of period$26,871 $423,011 $26,871 $423,011 
The Company performs an annual impairment test of goodwill as of October 1 of each year, or more frequently if indicators of impairment exist. As of September 30, 2025, as part of the Company’s interim impairment assessment, based on a sustained decrease in its stock price and market capitalization, the Company determined there to be an indicator of potential goodwill impairment in its Debt Buying and Collection (“DBC”) reporting unit. As a result, the Company performed a quantitative impairment test of the DBC reporting unit as of September 30, 2025, using the income approach, and also compared the estimated fair value to the Company’s market capitalization.
The Company estimates fair value based on the present value of estimated future cash flows and a residual terminal value. Forecasted financial results for the DBC reporting unit are developed considering several inputs and assumptions, including portfolio purchasing volume, purchase price multiples, ERC growth rate, terminal value and operating expenses.
Based on the quantitative impairment test performed as of September 30, 2025, driven in large part by the comparison to market capitalization and the impact on estimated fair value of a decrease in the terminal value assumption and an increase in the discount rate assumption since the most recent annual impairment test, the Company determined that the goodwill in its DBC reporting unit was fully impaired, and as a result, recorded a goodwill impairment charge of $412.6 million in the Consolidated Income Statement for the three months ended September 30, 2025.
As of September 30, 2025, goodwill of $26.9 million related to the Company’s Claims Compensation Bureau, LLC (“CCB”) reporting unit, and the Company determined there were no indicators of impairment related to this reporting unit as of September 30, 2025.
Note 5. Borrowings
Borrowings consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025December 31, 2024
North American revolving credit facility (1)
$514,039 $519,519 
North American term loan (2)
462,611 470,111 
United Kingdom revolving credit facility (3)
440,864 494,185 
European revolving credit facility (4)
551,331 555,726 
Colombian revolving credit facility2,465 — 
Credit facility borrowings1,971,310 2,039,541 
2028 senior notes398,000 398,000 
2029 senior notes350,000 350,000 
2030 senior notes550,000 550,000 
2032 senior notes351,990 — 
Senior notes1,649,990 1,298,000 
Credit facility borrowings and senior notes3,621,300 3,337,541 
Unamortized debt premium and issuance costs, net(14,322)(10,920)
Total borrowings$3,606,978 $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.
13

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 and description of the 2032 senior notes below.
The Company was in compliance with the covenants contained in its financing arrangements as of September 30, 2025.
2032 senior notes
On September 30, 2025, the Company completed the private offering of €300.0 million ($352.0 million) in aggregate principal amount of its 6.250% senior notes due September 30, 2032 through its wholly-owned subsidiary, PRA Group Europe Holding II S.à r.l. ("Issuer"). The notes are senior unsecured obligations of the Issuer and are guaranteed on a senior unsecured basis by the Company and all of the Company's existing and future domestic restricted subsidiaries that guarantee the North American revolving credit facility, subject to certain exceptions. Interest on the notes is payable semi-annually, in arrears, on March 31 and September 30 of each year.
Prior to September 30, 2028, the Issuer may redeem the notes, in whole or in part, at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus the applicable "make whole" premium. On or before September 30, 2028, the Issuer may redeem up to 40% of the aggregate principal amount of the notes at a redemption price of 106.250% plus accrued and unpaid interest with the net cash proceeds of a public offering of common stock of the Company provided, that at least 60% in aggregate principal amount of the notes remains outstanding immediately after the occurrence of such redemption and that such redemption will occur within 90 days of the date of the closing of such public offering.
In addition, on or after September 30, 2028, the Issuer may redeem the notes, in whole or in part, at a price equal to 103.1250% of the aggregate principal amount of the notes being redeemed. The applicable redemption price changes if redeemed during the 12 months beginning September 30 of each year to 101.5625% for 2029 and then 100% for 2030 and thereafter.
In the event of a change of control, each holder will have the right to require the Issuer to repurchase all or any part of such holder's notes at an offer price equal to 101% of the aggregate principal amount plus accrued and unpaid interest. If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company will be required to make an offer to repurchase the notes at 100% of their principal amount plus accrued and unpaid interest.
The related indenture contains customary terms and covenants, including certain events of default after which the notes may be due and payable immediately.
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 September 30, 2025 and December 31, 2024 was as follows (in thousands):
September 30, 2025December 31, 2024
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Designated as hedging instruments:
Interest rate swapsOther assets$2,664 Other assets$8,514 
Interest rate swapsOther liabilities7,530 Other liabilities4,797 
Not designated as hedging instruments:
Foreign exchange contractsOther assets785 Other assets2,209 
Foreign exchange contractsOther liabilities1,525 Other liabilities166 
14

Derivatives designated as hedging instruments
The effects of interest rate swaps designated as cash flow hedging instruments for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Gain/(loss) recognized in OCI, net of tax
Three Months Ended September 30,Nine Months Ended September 30,
Hedging instrument2025202420252024
Interest rate swaps$3,647 $(4,321)$(364)$5,609 
Gain reclassified from OCI into income
Three Months Ended September 30,Nine Months Ended September 30,
Income statement location2025202420252024
Interest expense, net$1,100 $5,568 $6,675 $16,774 
As of September 30, 2025 and December 31, 2024, the notional amount of outstanding interest rate swaps was $886.7 million and $800.7 million, respectively. These swaps remained highly effective as of September 30, 2025 and have remaining terms ranging from four months to five years. As of September 30, 2025, the Company estimates that $0.7 million of net derivative losses included in other comprehensive income ("OCI") will be reclassified into earnings within the next 12 months.
Derivatives not designated as hedging instruments
The effects of foreign exchange contracts not designated as hedging instruments for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Income statement location2025202420252024
Foreign exchange gain/(loss), net$5,079 $(8,718)$(10,617)$(7,893)
Interest expense, net271 200 270 509 
As of September 30, 2025 and December 31, 2024, the notional amount of outstanding foreign exchange contracts was $423.1 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 September 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)Total
September 30, 2025
Assets
Government securities$63,226 $— $63,226 
Derivatives (1)
— 3,449 3,449 
Liabilities
Derivatives (1)
— 9,055 9,055 
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.
15

Financial instruments not carried at fair value
As of September 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
September 30, 2025
Financial assets
Cash and cash equivalents$107,454 $— $— $107,454 
Finance receivables, net (1)
— — 4,366,959 4,572,167 
Financial liabilities
Interest-bearing deposits (2)
— 139,671 — 139,671 
Revolving lines of credit (3)
— 1,508,699 — 1,508,699 
Term loan (3) (5)
— 462,611 — 462,611 
Senior notes (4) (5)
— 1,649,953 — 1,649,990 
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.
During the three months ended September 30, 2025, the Company assessed the goodwill in its DBC reporting unit for impairment and determined that the goodwill was fully impaired. The estimated fair value of the DBC reporting unit represents a Level 3 nonrecurring fair value measurement. Refer to Note 4 in these Consolidated Financial Statements for additional information.
Note 8. Accumulated Other Comprehensive Income/Loss
Reclassifications out of Accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024, were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Cash flow hedgesIncome Statement location2025202420252024
Interest rate swapsInterest expense, net$1,100 $5,568 $6,675 $16,774 
Income tax effect (1)
Income tax expense/(benefit)(269)(1,387)(1,615)(4,177)
Total gain on cash flow hedges$831 $4,181 $5,060 $12,597 
(1)Income tax effects are released from Accumulated other comprehensive loss contemporaneously with the related gross pretax amount.




16

Changes in Accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024, were as follows (in thousands):
Three Months Ended September 30,
20252024
Debt SecuritiesCashCurrencyAccumulatedDebt SecuritiesCashCurrencyAccumulated
Available-for-saleFlow HedgesTranslation AdjustmentsOther Comp. LossAvailable-for-saleFlow HedgesTranslation Adjustments
Other Comp. Loss (1)
Balance as of beginning of period$172 $(6,128)$(277,778)$(283,734)$176 $8,112 $(390,097)$(381,809)
Other comprehensive gain/(loss) before reclassifications(24)3,646 (7,415)(3,793)246 (4,322)51,446 47,370 
Reclassifications, net— (831)— (831)— (4,181)— (4,181)
Net current period other comprehensive gain/(loss)(24)2,815 (7,415)(4,624)246 (8,503)51,446 43,189 
Balance as of end of period$148 $(3,313)$(285,193)$(288,358)$422 $(391)$(338,651)$(338,620)
(1)Net of deferred taxes for unrealized (gains)/losses from cash flow hedges of $(0.9) million and $2.8 million for the three months ended September 30, 2025 and 2024, respectively.
Nine Months Ended September 30,
20252024
Debt SecuritiesCashCurrencyAccumulatedDebt SecuritiesCashCurrencyAccumulated
Available-for-saleFlow HedgesTranslation Adjustments
Other Comp. Loss (1)
Available-for-saleFlow HedgesTranslation 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(57)(364)160,517 160,096 357 5,609 (2,090)3,876 
Reclassifications, net— (5,060)— (5,060)— (12,597)— (12,597)
Net current period other comprehensive gain/(loss)(57)(5,424)160,517 155,036 357 (6,988)(2,090)(8,721)
Balance at end of period$148 $(3,313)$(285,193)$(288,358)$422 $(391)$(338,651)$(338,620)
(1)Net of deferred taxes for unrealized (gains)/losses from cash flow hedges $1.1 million and $0.1 million for the nine months ended September 30, 2025 and 2024, respectively.
Note 9. Earnings per Share
The following tables provide a reconciliation between basic earnings per share ("EPS") and diluted EPS for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts):
Three Months Ended September 30,
20252024
Net Loss Attributable to PRA Group, Inc.Weighted
Average
Common Shares		EPSNet Income Attributable to PRA Group, Inc.Weighted
Average
Common Shares		EPS
Basic EPS$(407,703)39,078 $(10.43)$27,154 39,421 $0.69 
Dilutive effect of nonvested share awards— — 71 — 
Diluted EPS$(407,703)39,078 $(10.43)$27,154 39,492 $0.69 
Nine Months Ended September 30,
20252024
Net Loss Attributable to PRA Group, Inc.Weighted
Average
Common Shares		EPSNet Income Attributable to PRA Group, Inc.Weighted
Average
Common Shares		EPS
Basic EPS$(361,670)39,316 $(9.20)$52,145 39,353 $1.33 
Dilutive effect of nonvested share awards— — 142 (0.01)
Diluted EPS$(361,670)39,316 $(9.20)$52,145 39,495 $1.32 
17

Basic EPS are computed by dividing net (loss)/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. For the three and nine months ended September 30, 2025, approximately 0.1 million and 0.2 million antidilutive shares were excluded from the computation of diluted EPS, respectively.
Note 10. Income Taxes
The Company's effective tax rate for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(Loss)/income before income taxes$(379,605)$28,250$(305,101)$76,205
Income tax expense/(benefit)$24,361$(672)$44,088$10,416
Effective tax rate(6.4)%(2.4)%(14.5)%13.7 %
The relationship between (Loss)/income before income taxes and Income tax expense/(benefit) for the three and nine months ended September 30, 2025 was mainly impacted by the goodwill impairment charge.
The relationship between (Loss)/income before income taxes and Income tax expense/(benefit) for the three and nine months ended September 30, 2024 was impacted by a $7.7 million reduction in tax expense due to the reversal of a valuation allowance associated with the resolution of a tax matter in Europe.
Recently enacted tax legislation
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law in the U.S. The OBBBA introduced a broad range of tax reform provisions affecting businesses, including the expansion of bonus depreciation and revisions to the U.S. taxation of profits derived from international operations. The legislation has multiple effective dates, with certain provisions effective in fiscal year 2025 and others implemented through fiscal year 2027.
The Company does not expect the relevant provisions of the OBBBA will have a material impact on its 2025 income tax expense and is currently assessing the impact on future periods, which it expects will depend, in large part, on the amount and composition of taxable income generated by the Company.
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 September 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 September 30, 2025, there were no material developments in any of the previously disclosed legal proceedings.

18

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, DBC, which generates revenue through the purchase, collection and management of portfolios of nonperforming loans, and 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 (loss)/income attributable to PRA Group, Inc.
Segment assets
ARM segment assets are presented in the Company's Consolidated Balance Sheets under Total assets.
Other segment information
ARM segment profit or loss and segment assets for three and nine months ended September 30, 2025 and 2024 include the following amounts (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Interest expense$67,094 $63,169 $195,896 $175,282 
Interest income3,007 2,107 8,478 6,589 
Depreciation and amortization1,866 2,469 7,307 7,826 
Goodwill impairment412,611 — 412,611 — 
Gain on sale of equity method investment— — 38,403 — 
September 30, 2025December 31, 2024
Equity method investment— 8,694 
Note 13. Recently Issued Accounting Pronouncements
Recently issued accounting pronouncements 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 plans to adopt ASU 2023-09 on a prospective basis in its annual financial statements for the year ending December 31, 2025 and is currently evaluating the impact on its income tax 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.
All other recently issued accounting pronouncements not yet adopted have been deemed either immaterial or not applicable.
19

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.
20

EXECUTIVE OVERVIEW
General
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. We also purchase and provide fee-based services for class action claims recoveries in the U.S.
The nonperforming loans we acquire are primarily the unpaid obligations of individuals owed to credit originators. 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.
With 2,814 full-time equivalent employees worldwide, we collaborate with customers to help them resolve their debt. For additional information about our business, refer to Part I, Item 1 "Business" in our 2024 10-K.
Third quarter of 2025
Our focus for the third quarter of 2025 was on executing and delivering against our near-term priorities, which, for the U.S. business, included the reorganization of our leadership and governance structure, establishing a talent hub in Charlotte, North Carolina, and bringing our corporate and support staff back to the office. We strengthened our capital structure through the issuance of €300.0 million aggregate principal amount of senior notes due 2032 ("2032 senior notes"), our first bond offering in Europe. We also made progress on our information technology roadmap and capitalized on an opportunity to increase the ERC on certain portfolios by modifying an existing contract, and shortly after quarter-end, we implemented a cost reduction program in the U.S.
Due to a sustained decrease in our stock price and market capitalization, we performed an interim goodwill impairment test during the third quarter and determined that the goodwill in our Debt Buying and Collection ("DBC") reporting unit was fully impaired, which resulted in a non-cash impairment charge of $412.6 million.
Overall, we remain focused on executing our strategy and continuing to improve the financial performance of our business. Our financial results for the quarter included the following:
lPortfolio purchases
$255.5 million
Decrease of 27.0% compared to the prior year period, comprised of $154.3 million in the Americas and $101.2 million in Europe. Purchasing levels reflected selective buying this quarter as we sought to balance portfolio returns and leverage.
lCash collections
$542.2 million
Increase of 13.7% compared to the prior year period, comprised of $333.7 million in the Americas and $208.6 million in Europe. Collections were well diversified globally and reflected recent purchasing levels and the continued momentum of our global initiatives, especially in our U.S. legal collections channel.
lERC
$8.4 billion
Increase of 15.2% year-over-year, comprised of $4.2 billion in each of the Americas and Europe. A globally diversified ERC enables us to benefit from the aggregation of individual market risk into a wider global portfolio.
lCore Purchase Price Multiples (year-to-date)
2.14x Americas and Australia
Purchasing discipline continued to drive improved multiples in both the Americas and Europe. We heightened our focus on net returns, supported by a global investment framework that targets achievement of minimum return thresholds.
1.88x Europe
lLoss before income taxes
($379.6) million
Decrease of $407.9 million compared to the prior year period. Increased revenues, driven by higher portfolio income, were offset by the goodwill impairment charge, increased costs in our U.S. legal channel and higher interest expense.
lNet loss attributable to PRA
($407.7) million
Decrease of $434.9 million compared to the prior year period, with diluted EPS of $(10.43). The decrease was driven largely by the tax impact of the goodwill impairment charge and a discrete income tax benefit item recognized in the prior year period.


21

SUMMARY OF SELECTED FINANCIAL DATA
As of or for the period ended (in thousands, except per share and ratio data)Third QuarterYear-to-Date
20252024% Change20252024% Change
Income statement
Portfolio income$258,549$216,12219.6 %$750,441$627,46819.6 %
Changes in expected recoveries51,35860,614(15.3)112,572185,608(39.3)
Total revenues311,140281,47710.5 868,447821,2925.7 
Total operating expenses626,687191,499227.3 1,024,306575,69677.9 
Interest expense, net64,08761,0625.0 187,418168,69311.1 
Gain on sale of equity method investment——— 38,403—100.0 
(Loss)/income before income taxes(379,605)28,250(1443.7)(305,101)76,205(500.4)
Income tax expense/(benefit)24,361(672)3725.1 44,08810,416323.3 
Net (loss)/income attributable to PRA Group, Inc.(407,703)27,154(1601.4)(361,670)52,145(793.6)
Diluted earnings per share(10.43)0.69(1611.6)(9.20)1.32(797.0)
Performance data and ratios
Net (loss)/income attributable to PRA Group (last 12 months)$(343,214)$43,363(891.5)%
Adjusted EBITDA (last 12 months) (1)
1,265,4901,099,79215.1 
Cash efficiency ratio (2)
(15.4)%60.1 %35.2 %59.0 %
Adjusted cash efficiency ratio (3)
60.6 60.1 61.3 59.0 
Return on average Total stockholders' equity - PRA Group ("ROE") (4)
(144.0)9.2 (41.8)6.0 
Return on average tangible equity ("ROATE") (5)
(181.6)14.3 (57.9)9.4 
Adjusted return on average tangible equity ("Adjusted ROATE") (6)
9.3 14.3 6.0 9.4 
Portfolio volumes
Portfolio purchases$255,492$349,978(27.0)%$893,699$975,164(8.4)%
Cash collections542,244477,11013.7 1,575,9681,400,51012.5 
Estimated remaining collections (period-end)8,399,9527,293,27815.2 
Balance sheet (period-end)
Finance receivables, net$4,572,167$4,064,46712.5 %
Borrowings3,606,9783,296,1729.4 
Total stockholders' equity - PRA Group, Inc.928,4931,218,882(23.8)
Credit facility availability (period-end)
Based on current ERC$888,904$412,740115.4 %
Additional availability301,371585,920(48.6)
Total availability1,190,275998,66019.2 
(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 (loss)/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 cash receipts less Total operating expenses excluding the impact of Goodwill impairment ("Adjusted operating expenses") by cash receipts ("Adjusted cash efficiency ratio"). Adjusted operating expenses is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total operating expenses, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted operating expenses.
(4)Calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.
(5)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.
(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Net (loss)/income attributable to PRA Group, Inc. excluding the impact of certain transactions that are either unusual or infrequent in nature, or both ("Adjusted net income attributable to PRA Group, Inc.").
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RESULTS OF OPERATIONS
Three months ended September 30, 2025 ("Third Quarter 2025" or "Q3 2025") compared to three months ended September 30, 2024 ("Third Quarter 2024" or "Q3 2024"); and nine months ended September 30, 2025 ("Year-to-Date 2025") compared to nine months ended September 30, 2024 ("Year-to-Date 2024").
Portfolio purchases
Portfolio purchases were as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Americas and Australia Core$139,484 $263,613 $(124,129)(47.1)%$482,084 $637,034 $(154,950)(24.3)%
Americas Insolvency14,835 10,162 4,673 46.0 49,974 58,945 (8,971)(15.2)
Total Americas and Australia154,319 273,775 (119,456)(43.6)532,058 695,979 (163,921)(23.6)
Europe Core95,239 71,507 23,732 33.2 346,094 243,495 102,599 42.1 
Europe Insolvency5,934 4,696 1,238 26.4 15,547 35,690 (20,143)(56.4)
Total Europe101,173 76,203 24,970 32.8 361,641 279,185 82,456 29.5 
Total portfolio purchases$255,492 $349,978 $(94,486)(27.0)%$893,699 $975,164 $(81,465)(8.4)%
Our portfolio purchases reflect a global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of the opportunities in our markets.
Total portfolio purchases were $255.5 million in Q3 2025, a decrease of $94.5 million, or 27.0%, compared to $350.0 million in Q3 2024. Americas and Australia portfolio purchases decreased $119.5 million, while purchases in Europe increased $25.0 million. Q3 2025 purchases reflected a heightened focus on prioritizing net returns over volumes purchased and balancing purchases with our leverage.
Total year-to-date portfolio purchases were $893.7 million in 2025, a decrease of $81.5 million, or 8.4%, compared to $975.2 million in 2024. Americas and Australia purchases decreased $163.9 million, while purchases in Europe increased $82.5 million.
Cash collections
Cash collections were as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Americas and Australia Core$310,108 $266,977 $43,131 16.2 %$899,966 $787,666 $112,300 14.3 %
Americas Insolvency23,568 26,065 (2,497)(9.6)71,597 78,244 (6,647)(8.5)
Total Americas and Australia333,676 293,042 40,634 13.9 971,563 865,910 105,653 12.2 
Europe Core185,910 158,242 27,668 17.5 535,933 460,914 75,019 16.3 
Europe Insolvency22,658 25,826 (3,168)(12.3)68,472 73,686 (5,214)(7.1)
Total Europe208,568184,06824,500 13.3 604,405534,60069,805 13.1 
Total cash collections$542,244 $477,110 $65,134 13.7 %$1,575,968 $1,400,510 $175,458 12.5 %
Total cash collections were $542.2 million in Q3 2025, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024. U.S. Core collections increased $44.7 million, which included a $26.4 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $27.7 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange variation. These increases were partially offset by a $4.3 million decrease in cash collections in South America, due primarily to lower recent purchasing levels.
Total year-to-date cash collections were $1.6 billion in 2025, an increase of $175.5 million, or 12.5%, compared to $1.4 billion in 2024. U.S. Core collections increased $125.2 million, which included a $77.0 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $75.0 million, spread broadly across most of our markets and due, in part, to favorable foreign
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exchange rate variation. These increases were partially offset by a $19.2 million decrease in cash collections in South America, due primarily to lower recent purchasing levels and unfavorable foreign exchange rate variation.
Portfolio revenue
Portfolio revenue was as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Portfolio income$258,549 $216,122 $42,427 19.6 %$750,441 $627,468 $122,973 19.6 %
Recoveries collected in excess of forecast27,351 34,158 (6,807)(19.9)84,153 124,256 (40,103)(32.3)
Changes in expected future recoveries24,007 26,456 (2,449)(9.3)28,419 61,352 (32,933)(53.7)
Changes in expected recoveries51,358 60,614 (9,256)(15.3)112,572 185,608 (73,036)(39.3)
Total portfolio revenue$309,907 $276,736 $33,171 12.0 %$863,013 $813,076 $49,937 6.1 %
Total portfolio revenue was $309.9 million in Q3 2025, an increase of $33.2 million, or 12.0%, compared to $276.7 million in Q3 2024. Portfolio income increased $42.4 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $9.3 million, or 15.3%. Recoveries collected in excess of forecast decreased $6.8 million due largely to a one-time payment of $15.0 million to a seller in Q3 2025 to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our South American pools. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $2.4 million due primarily to a lower net increase in the collections forecasts on certain U.S. Core pools. These decreases were partially offset by a net increase in the collections forecasts on our South American pools in Q3 2025 compared to a net decrease in Q3 2024.
Total year-to-date portfolio revenue was $863.0 million in 2025, an increase of $49.9 million, or 6.1%, compared to $813.1 million in 2024. Portfolio income increased $123.0 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $73.0 million. Recoveries collected in excess of forecast decreased $40.1 million compared to the prior year period due primarily to lower overperformance on our U.S. pools and the one-time payment of $15.0 million to a seller in the current year period to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our European pools across most of our markets. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $32.9 million due largely to a net decrease in the collections forecast on our U.S. Core pools compared to a net increase in the prior year period. These decreases were partially offset by a higher net increase in the collections forecast on our European pools and a net increase in the collections forecasts on our South American pools compared to a net decrease in the prior year period.
Gain on sale of equity method investment
In April 2025, we sold our 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, and recorded a gain of $38.4 million in our Consolidated Financial Statements for the second quarter of 2025. The sale did not impact the ownership of our portfolio investments in Brazil or our existing operations and expected future portfolio investments.
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Operating expenses
Operating expenses were as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Compensation and benefits$74,237 $76,106 $(1,869)(2.5)%$223,284 $223,944 $(660)(0.3)%
Legal collection costs46,764 28,781 17,983 62.5 117,741 90,746 26,995 29.7 
Legal collection fees16,558 14,479 2,079 14.4 47,413 40,353 7,060 17.5 
Agency fees24,556 21,020 3,536 16.8 68,612 61,751 6,861 11.1 
Professional and outside services22,051 20,452 1,599 7.8 64,225 63,626 599 0.9 
Communication8,377 10,048 (1,671)(16.6)28,271 34,203 (5,932)(17.3)
Rent and occupancy3,654 4,175 (521)(12.5)10,638 12,455 (1,817)(14.6)
Depreciation, amortization and impairment of long-lived assets2,439 2,469 (30)(1.2)8,711 7,826 885 11.3 
Goodwill impairment412,611 — 412,611 100.0 412,611 — 412,611 100.0 
Other operating expenses15,440 13,969 1,471 10.5 42,800 40,792 2,008 4.9 
Total operating expenses$626,687 $191,499 $435,188 227.3 %$1,024,306 $575,696 $448,610 77.9 %
Compensation and benefits
Compensation and benefits expense was $74.2 million in Q3 2025, a decrease of $1.9 million, or 2.5%, compared to Q3 2024, while the year-to-date expense decreased $0.7 million, or 0.3%. These decreases were primarily due to lower collector compensation costs in the U.S., driven by the consolidation of our U.S. call centers and offshoring of a portion of our U.S. collection activities, partially offset by higher non-collector wage costs.
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. Q3 2025 legal collection costs increased $18.0 million, or 62.5%, compared to Q3 2024, while the year-to-date costs increased $27.0 million, or 29.7%. These increases were driven by an expansion in activity in our U.S. legal collections channel resulting, in large part, from our cash generating initiatives.
Legal collection fees
Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q3 2025 fees increased $2.1 million, or 14.4%, compared to Q3 2024, while year-to-date fees increased $7.1 million, or 17.5%. These increases mainly reflected higher external legal collections within our U.S. Core portfolio resulting, in large part, from the expansion in activity in our U.S. legal collections channel.
Agency fees
Agency fees primarily represent third-party collection fees. Q3 2025 fees increased $3.5 million, or 16.8%, compared to Q3 2024, while year-to-date fees increased $6.9 million, or 11.1%. Higher collection fees in Brazil and increased outsourcing in certain European markets drove the increase for the quarterly period. The increase for the year-to-date period was primarily due to additional fees paid to debt collection agencies in the U.S. and increased outsourcing in Europe.
Communication
Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q3 2025 communication expense decreased $1.7 million, or 16.6%, compared to Q3 2024, while year-to-date expense decreased $5.9 million, or 17.3%. These decreases were primarily due to a mix of lower-cost communications strategies utilized across our U.S. Core operation.
Goodwill impairment
We recorded a goodwill impairment charge of $412.6 million in Q3 2025 related to our DBC reporting unit. For additional information, refer to Note 4 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
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Interest expense, net
Interest expense, net was as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Interest on revolving credit facilities and term loan, and unused line fees$40,207 $34,006 $6,201 18.2 %$115,323 $101,140 $14,183 14.0 %
Interest on senior notes24,911 25,368 (457)(1.8)74,734 65,816 8,918 13.5 
Amortization of debt premium and issuance costs, net1,976 3,795 (1,819)(47.9)5,839 8,326 (2,487)(29.9)
Interest income(3,007)(2,107)(900)42.7 (8,478)(6,589)(1,889)28.7 
Interest expense, net$64,087 $61,062 $3,025 5.0 %$187,418 $168,693 $18,725 11.1 %
Interest expense, net was $64.1 million in Q3 2025, an increase of $3.0 million, or 5.0%, compared to Q3 2024, while year-to-date expense increased $18.7 million, or 11.1%. These increases were primarily due to higher average debt balances.
Income tax expense/(benefit)
Income tax expense/(benefit) and our effective tax rate were as follows for the periods indicated (in thousands):
Third QuarterYear-to-Date
20252024$ Change% Change20252024$ Change% Change
Income tax expense/(benefit)$24,361 $(672)$25,033 3,725.1 %$44,088 $10,416 $33,672 323.3 %
Effective tax rate(6.4)%(2.4)%(14.5)%13.7 %
Income tax expense was $24.4 million in Q3 2025, an increase of $25.0 million compared to an income tax benefit of $0.7 million in Q3 2024, while year-to-date expense increased $33.7 million to $44.1 million. The effective tax rate in Q3 2025 was (6.4)% compared to an effective tax benefit rate of (2.4)% in Q3 2024. Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The change in the effective tax rate for both the quarterly and year-to-date periods was due largely to the goodwill impairment charge in the current year and a $7.7 million prior year reduction in tax expense due to the reversal of a valuation allowance associated with the resolution of a tax matter in Europe.
Balance sheet
Finance receivables, net
Finance receivables, net were $4.6 billion as of September 30, 2025, an increase of $431.4 million, or 10.4%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $893.7 million, foreign currency translation adjustments of $252.3 million and Changes in expected recoveries of $112.6 million, partially offset by recoveries collected and applied to Finance receivables, net of $827.2 million.
Goodwill
Goodwill was $26.9 million as of September 30, 2025, a decrease of $369.5 million, or 93.2%, compared to $396.4 million as of December 31, 2024, due to a goodwill impairment charge. As of September 30, 2025, as part of our interim impairment assessment, based on a sustained decrease in our stock price and market capitalization, we determined there to be an indicator of potential goodwill impairment in our DBC reporting unit. As a result, we performed a quantitative impairment test as of September 30, 2025, and determined that the goodwill in our DBC reporting unit was fully impaired. For additional information, refer to Note 4 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report. As of September 30, 2025, goodwill consisted of $26.9 million in our Claims Compensation Bureau, LLC reporting unit.
Borrowings
Borrowings were $3.6 billion as of September 30, 2025, an increase of $280.4 million, or 8.4%, compared to $3.3 billion as of December 31, 2024. On September 30, 2025, we completed the issuance of €300.0 million ($352.0 million) in aggregate principal amount of our 2032 senior notes and initially paid down approximately $172.0 million principal amount of outstanding borrowings under each of our North American and European revolving credit facilities with the net proceeds. Issuance of the 2032 senior notes drove an increase of $352.0 million in borrowings under senior notes, which was partially offset by net payments of $53.3 million on our United Kingdom revolving credit facility.
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Total stockholders' equity - PRA Group, Inc.
Total stockholders' equity - PRA Group, Inc. was $928.5 million as of September 30, 2025, a decrease of $206.5 million, or 18.2%, compared to $1.1 billion as of December 31, 2024. The decrease was driven primarily by the net loss for the period, partially offset by foreign currency translation adjustments.

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;
•Adjusted cash efficiency ratio, to monitor and evaluate operating expenses;
•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 (loss)/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 (loss)/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;
•goodwill impairment;
•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.










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The following table provides a reconciliation of Net (loss)/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
September 30, 2025December 31, 2024
Net (loss)/income attributable to PRA Group, Inc.$(343,214)$70,601 
Adjustments:
Income tax expense54,704 21,032 
Foreign exchange loss81 9 
Interest expense, net247,992 229,267 
Other expense (1)
308 851 
Depreciation and amortization10,273 10,792 
Impairment of real estate1,404 — 
Goodwill impairment412,611 — 
Net income attributable to noncontrolling interests16,809 17,972 
Gain on sale of equity method investment(38,403)— 
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries902,925 787,028 
Adjusted EBITDA$1,265,490 $1,137,552 
(1)Other expense reflects non-operating activities.
Cash efficiency
We use an Adjusted cash efficiency ratio, which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating expenses, excluding goodwill impairment, relative to our cash collections plus fees and revenue recognized from our class action claims recovery services. Management believes the Adjusted cash efficiency ratio is a useful financial measure for investors in evaluating our management of operating expenses. The Adjusted cash efficiency ratio is calculated by dividing cash receipts less Adjusted operating expenses by cash receipts. The following table provides a reconciliation of Total operating expenses to Adjusted operating expenses and presents our Adjusted cash efficiency ratios for the periods indicated (in thousands, except for ratio data):
Adjusted Operating Expenses Reconciliation and Adjusted Cash Efficiency Ratio
Third QuarterYear-to-Date
2025202420252024
Cash collections$542,244$477,110$1,575,968$1,400,510
Fee income6223,1383,7454,036
Cash receipts542,866480,2481,579,7131,404,546
Total operating expenses626,687191,4991,024,306575,696
Less: Goodwill impairment412,611—412,611—
Adjusted operating expenses214,076191,499611,695575,696
Cash receipts less Adjusted operating expenses328,790288,749968,018828,850
Adjusted cash efficiency ratio60.6 %60.1 %61.3 %59.0 %
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 stockholder 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 annualized Net (loss)/income attributable to PRA Group, Inc. by average tangible equity.
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ROATE may include certain items that are not indicative of the ongoing operating results of our business. Accordingly, management also uses Adjusted ROATE to monitor and evaluate operating performance relative to our equity. Management believes Adjusted ROATE is a useful financial measure for investors because it excludes the impact of certain transactions that are either unusual or infrequent in nature, or both. Adjusted ROATE is calculated by dividing Adjusted net income attributable to PRA Group, Inc. by average tangible equity.
The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity and a reconciliation of Net (loss)/income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and presents our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):
Average Tangible Equity Reconciliation (1)
Balance as of Period EndThird QuarterYear-to-Date
September 30, 2025September 30, 20242025202420252024
Total stockholders' equity - PRA Group, Inc. (2)
$928,493 $1,218,882 $1,132,709$1,182,173 $1,154,889 $1,165,196 
Less: Goodwill26,871 423,011 233,160419,329320,848420,517
Less: Other intangible assets1,470 1,620 1,5061,6091,4881,656
Average tangible equity$898,043$761,235$832,553 $743,023
(1)Amounts represent the average balances for the respective periods.
(2)Amounts not adjusted for Gain on sale of equity method investment due to the de minimus effect.
ROATE (3)
Third QuarterYear-to-Date
2025202420252024
Net (loss)/income attributable to PRA Group, Inc.$(407,703)$27,154$(361,670)$52,145
ROATE(181.6)%14.3 %(57.9)%9.4 %
(3)Based on annualized Net (loss)/income attributable to PRA Group, Inc.
Adjusted Net Income Attributable to PRA Group, Inc. Reconciliation and Adjusted ROATE (4)
Third QuarterYear-to-Date
2025202420252024
Net (loss)/income attributable to PRA Group, Inc.$(407,703)$27,154$(361,670)$52,145
Less: Gain on sale of equity method investment, net of tax-—--—-(29,686)—
Plus: Goodwill impairment, net of tax428,580—428,580—
Adjusted net income attributable to PRA Group, Inc.20,87727,15437,22452,145
Adjusted ROATE9.3 %14.3 %6.0 %9.4 %
(4)Based on annualized Adjusted net income attributable to PRA Group, Inc.















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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.







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Estimated remaining collections
The following table displays our ERC by geography, year and portfolio for the 12 months ending September 30, (in thousands):
ERC By Geography, Year and Portfolio
Americas and Australia CoreAmericas Insolvency
Total Americas and Australia (1)
Europe CoreEurope Insolvency
Total Europe (2)
Total
2026$1,121,962 $83,141 $1,205,103 $635,647 $63,600 $699,247 $1,904,350 
2027860,631 67,524 928,155 536,158 44,596 580,754 1,508,909 
2028592,397 47,649 640,046 450,425 29,390 479,815 1,119,861 
2029405,389 27,712 433,101 386,865 17,170 404,035 837,136 
2030281,785 12,658 294,443 334,663 7,938 342,601 637,044 
2031196,881 2,042 198,923 290,693 2,966 293,659 492,582 
2032138,488 48 138,536 253,674 1,171 254,845 393,381 
203398,226 3 98,229 222,348 577 222,925 321,154 
203467,799 1 67,800 195,158 271 195,429 263,229 
203548,629 — 48,629 172,063 109 172,172 220,801 
Thereafter107,576 — 107,576 593,706 223 593,929 701,505 
Total ERC$3,919,763 $240,778 $4,160,541 $4,071,400 $168,011 $4,239,411 $8,399,952 
(1)Reflects ERC of $3.6 billion for the U.S. and $515.8 million for other Americas and Australia.
(2)Reflects ERC of $1.64 billion for the UK, $1.06 billion for Central Europe, $964.5 million for Northern Europe and $567.7 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
Third QuarterYear-to-Date
2025202420252024
Americas and Australia
Call center and other$167,822 54.1%$150,103 56.2%$494,81255.0%$454,25057.7%
Legal142,286 45.9116,874 43.8405,15445.0333,41642.3
Core310,108 100%266,977 100%899,966100%787,666100%
Insolvency23,568 26,065 71,59778,244
Total Americas and Australia$333,676 $293,042 $971,563$865,910
Europe
Call center and other$113,330 61.0%$98,287 62.1%$324,61960.6%$286,29462.1%
Legal72,580 39.059,955 37.9211,31439.4174,62037.9
Core185,910 100%158,242 100%535,933100%460,914100%
Insolvency22,658 $25,826 68,472 $73,686 
Total Europe$208,568 $184,068 $604,405 $534,600 
Total Company
Call center and other281,152 56.7%248,390 58.4%819,43157.1%740,54459.3%
Legal214,866 43.3176,829 41.6616,46842.9508,03640.7
Core496,018 100%425,219 100%1,435,899100%1,248,580100%
Insolvency46,226 51,891 140,069 151,930 
Total cash collections$542,244 $477,110 $1,575,968 $1,400,510 
Total cash collections adjusted (1)
$542,244 $487,294 $1,575,968 $1,407,785 
(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.
31

Purchase Price Multiples
as of September 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 $6,698,114 $84,642 287%228%
2015443,114 920,784 28,969 208%205%
2016455,767 1,104,447 48,732 242%201%
2017532,851 1,234,254 76,722 232%193%
2018653,975 1,561,810 114,403 239%202%
2019581,476 1,336,705 104,678 230%206%
2020435,668 975,474 109,706 224%213%
2021435,846 734,910 191,471 169%191%
2022406,082 713,779 237,056 176%179%
2023622,583 1,217,624 620,578 196%197%
2024823,662 1,794,207 1,341,743 218%211%
2025483,333 1,033,958 961,063 214%214%
Subtotal8,211,196 19,326,066 3,919,763 
Americas Insolvency
1996-20141,414,476 2,723,230 2 193%155%
201563,170 88,214 3 140%125%
201691,442 118,571 51 130%123%
2017275,257 359,423 362 131%125%
201897,879 137,065 143 140%127%
2019123,077 167,787 447 136%128%
202062,130 90,248 3,060 145%136%
202155,187 74,696 10,147 135%136%
202233,442 47,948 16,283 143%139%
202391,282 119,910 62,374 131%135%
202468,391 99,788 70,538 146%149%
202550,001 80,059 77,368 160%160%
Subtotal2,425,734 4,106,939 240,778 
Total Americas and Australia10,636,930 23,433,005 4,160,541 
Europe Core
1996-2014814,553 2,705,950 384,326 332%205%
2015411,340 768,527 120,755 187%160%
2016333,090 590,863 144,627 177%167%
2017252,174 364,846 84,606 145%144%
2018341,775 563,250 159,355 165%148%
2019518,610 876,312 292,208 169%152%
2020324,119 602,714 229,314 186%172%
2021412,411 728,081 359,607 177%170%
2022359,447 593,532 399,825 165%162%
2023410,593 699,868 503,908 170%169%
2024451,786 817,307 752,460 181%180%
2025357,530 671,159 640,409 188%188%
Subtotal4,987,428 9,982,409 4,071,400 
Europe Insolvency
201410,876 19,233 — 177%129%
201518,973 29,622 — 156%139%
201639,338 58,382 497 148%130%
201739,235 52,653 335 134%128%
201844,908 53,300 871 119%123%
201977,218 114,458 5,579 148%130%
2020105,440 162,059 9,883 154%129%
202153,230 79,535 14,261 149%134%
202244,604 65,672 26,299 147%137%
202346,558 66,278 39,858 142%138%
202443,459 64,128 47,281 148%147%
202515,888 24,112 23,147 152%152%
Subtotal539,727 789,432 168,011 
Total Europe5,527,155 10,771,841 4,239,411 
Total PRA Group$16,164,085 $34,204,846 $8,399,952 
(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 September 30, 2025 exchange rate.
(5)The original purchase price multiple represents the purchase price multiple at the end of the period of acquisition.
32


Portfolio Financial Information (1)
In thousands
September 30, 2025 (year-to-date)As of September 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$33,116 $15,076 $14,539 $29,615 $25,383 
201510,292 6,159 (3,525)2,634 12,630 
201614,478 8,358 1,599 9,957 17,005 
201721,888 11,477 5,393 16,870 31,608 
201838,675 16,918 8,963 25,881 56,671 
201937,963 16,735 4,280 21,015 53,085 
202042,193 17,485 4,356 21,841 57,455 
202149,989 26,763 (10,142)16,621 93,816 
202272,183 31,861 (9,887)21,974 135,737 
2023182,901 89,871 (33,376)56,495 332,260 
2024323,633 187,571 26,891 214,462 708,555 
202572,655 56,814 8,544 65,358 475,270 
Subtotal899,966 485,088 17,635 502,723 1,999,475 
Americas Insolvency
1996-2014716 16 715 731 — 
201583 5 72 77 2 
2016221 14 120 134 46 
2017827 78 381 459 318 
2018829 29 425 454 134 
20192,269 78 713 791 425 
20207,739 670 (1,131)(461)2,791 
20219,227 1,250 314 1,564 9,401 
20228,178 1,636 478 2,114 14,339 
202321,637 6,212 498 6,710 52,274 
202417,177 8,236 (1,177)7,059 52,606 
20252,694 2,971 1,335 4,306 50,889 
Subtotal71,597 21,195 2,743 23,938 183,225 
Total Americas and Australia971,563 506,283 20,378 526,661 2,182,700 
Europe Core
1996-201473,218 43,776 19,058 62,834 86,025 
201521,742 9,043 7,080 16,123 59,498 
201620,097 8,757 4,139 12,896 81,902 
201711,764 4,277 (1,251)3,026 56,212 
201826,250 9,330 1,789 11,119 102,423 
201946,787 14,952 12,991 27,943 196,370 
202034,169 13,046 10,509 23,555 138,912 
202145,708 19,334 6,760 26,094 216,925 
202251,788 20,379 3,229 23,608 251,939 
202370,508 28,642 5,439 34,081 300,972 
2024103,453 44,540 5,065 49,605 420,530 
202530,449 14,420 3,954 18,374 343,433 
Subtotal535,933 230,496 78,762 309,258 2,255,141 
Europe Insolvency
2014135 — 135 135 — 
2015119 — 119 119 — 
2016413 62 328 390 128 
2017787 34 501 535 210 
20181,247 70 311 381 728 
20195,073 498 433 931 4,745 
202013,206 988 2,212 3,200 9,221 
202111,394 1,269 4,102 5,371 12,901 
202211,855 2,183 2,759 4,942 22,487 
202311,830 3,225 1,314 4,539 32,904 
202411,455 4,610 1,020 5,630 35,178 
2025958 723 198 921 15,824 
Subtotal68,472 13,662 13,432 27,094 134,326 
Total Europe604,405 244,158 92,194 336,352 2,389,467 
Total PRA Group$1,575,968 $750,441 $112,572 $863,013 $4,572,167 
(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 September 30, 2025 exchange rate.


33

Cash Collections by Year, By Year of Purchase (1)
as of September 30, 2025
In millions
Cash Collections
Purchase Period
Purchase Price (2)(3)
1996-201420152016201720182019202020212022202320242025Total
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 $33.1 $6,597.5 
2015443.1 — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 14.1 17.3 10.3 894.8 
2016455.8 — — 138.7 256.5 194.6 140.6 105.9 74.2 38.4 24.9 24.0 14.5 1,012.3 
2017532.9 — — — 107.3 278.7 256.5 192.5 130.0 76.3 43.8 39.2 21.9 1,146.2 
2018654.0 — — — — 122.7 361.9 337.7 239.9 146.1 92.9 75.9 38.7 1,415.8 
2019581.5 — — — — — 143.8 349.0 289.8 177.7 110.3 77.7 38.0 1,186.3 
2020435.7 — — — — — — 132.9 284.3 192.0 125.8 87.0 42.2 864.2 
2021435.8 — — — — — — — 85.0 177.3 136.8 98.4 50.0 547.5 
2022406.1 — — — — — — — — 67.7 195.4 144.7 72.2 480.0 
2023622.5 — — — — — — — — — 108.5 285.9 182.9 577.3 
2024823.7 — — — — — — — — — — 145.9 323.6 469.5 
2025483.3 — — — — — — — — — — — 72.6 72.6 
Subtotal8,211.2 4,371.9 844.8 837.1 860.9 945.1 1,141.4 1,271.8 1,206.9 946.0 892.7 1,045.4 900.0 15,264.0 
Americas Insolvency
1996-20141,414.5 1,949.8 340.8 213.0 122.9 59.1 22.6 5.8 3.3 2.3 1.5 1.3 0.7 2,723.1 
201563.2 — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 0.2 0.1 88.3 
201691.4 — — 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.9 0.6 0.2 119.5 
2017275.3 — — — 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 0.8 359.1 
201897.9 — — — — 6.7 27.4 30.5 31.6 24.6 12.7 2.5 0.8 136.8 
2019123.1 — — — — — 13.4 31.4 39.1 37.8 28.7 14.6 2.3 167.3 
202062.1 — — — — — — 6.5 16.1 20.4 19.5 17.0 7.7 87.2 
202155.2 — — — — — — — 4.6 17.9 17.5 15.3 9.2 64.5 
202233.4 — — — — — — — — 3.2 9.2 11.1 8.2 31.7 
202391.2 — — — — — — — — — 9.0 25.1 21.6 55.7 
202468.4 — — — — — — — — — — 12.1 17.2 29.3 
202550.0 — — — — — — — — — — — 2.8 2.8 
Subtotal2,425.7 1,949.8 344.2 249.8 222.5 207.9 180.9 155.3 147.4 129.4 104.2 102.3 71.6 3,865.3 
Total Americas and Australia10,636.9 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 1,147.7 971.6 19,129.3 
Europe Core
1996-2014814.5 195.1 297.5 249.9 224.1 209.6 175.3 151.7 151.0 123.6 108.6 101.7 73.2 2,061.3 
2015411.3 — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 33.8 30.4 21.7 611.6 
2016333.1 — — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 20.1 459.0 
2017252.2 — — — 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 11.8 264.0 
2018341.8 — — — — 24.3 88.7 71.3 69.1 50.7 41.6 37.1 26.2 409.0 
2019518.6 — — — — — 48.0 125.7 121.4 89.8 75.1 68.2 46.8 575.0 
2020324.1 — — — — — — 32.3 91.7 69.0 56.1 50.1 34.2 333.4 
2021412.4 — — — — — — — 48.5 89.9 73.0 66.6 45.7 323.7 
2022359.4 — — — — — — — — 33.9 83.8 74.7 51.8 244.2 
2023410.6 — — — — — — — — — 50.2 103.1 70.5 223.8 
2024451.9 — — — — — — — — — — 46.3 103.5 149.8 
2025357.5 — — — — — — — — — — — 30.4 30.4 
Subtotal4,987.4 195.1 343.3 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 535.9 5,685.2 
Europe Insolvency
201410.9 — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 0.2 0.1 17.3 
201519.0 — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.4 0.2 0.1 26.9 
201639.3 — — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.4 61.6 
201739.2 — — — 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 0.8 50.1 
201844.9 — — — — 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.2 52.7 
201977.2 — — — — — 5.0 21.1 23.9 21.0 17.5 12.9 5.1 106.5 
2020105.4 — — — — — — 6.0 34.6 34.1 29.7 25.5 13.2 143.1 
202153.2 — — — — — — — 5.5 14.4 14.7 15.4 11.4 61.4 
202244.6 — — — — — — — — 4.5 12.4 15.2 11.9 44.0 
202346.7 — — — — — — — — — 4.2 12.7 11.8 28.7 
202443.4 — — — — — — — — — — 9.5 11.5 21.0 
202515.9 — — — — — — — — — — — 1.0 1.0 
Subtotal539.7 — 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 68.5 614.3 
Total Europe5,527.1 195.1 350.6 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 604.4 6,299.5 
Total PRA Group$16,164.0 $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 $1,576.0 $25,428.8 
(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. 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.

34

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 September 30, 2025, cash and cash equivalents totaled $107.5 million, of which $96.3 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 September 30, 2025, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):
September 30, 2025
Composition of Total Availability
Committed AmountsOutstanding BorrowingsTotal Availability
Based on Current ERC (1)
Additional Availability (2)
North American revolving credit facility$1,075,000 $514,039 $560,961 $383,739 $177,222 
North American term loan462,611 462,611 — — — 
UK revolving credit facility725,000 440,864 284,136 159,987 124,149 
European revolving credit facility896,509 551,331 345,178 345,178 — 
Colombian revolving credit facility2,465 2,465 — — — 
Senior notes1,649,990 1,649,990 — — — 
Debt premium and issuance costs, net— (14,322)— — — 
Total$4,811,575 $3,606,978 $1,190,275 $888,904 $301,371 
(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 September 30, 2025, interest-bearing deposits totaled $139.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.9 million in U.S. dollars as of September 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 or senior notes 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.

35

As of September 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $297.8 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 $235.4 million for the Americas and Australia and $62.4 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 make spot purchases of nonperforming loan portfolios.
Borrowings
As of September 30, 2025, we had $3.6 billion in outstanding borrowings. The estimated interest, unused fees and principal payments for the next 12 months are $249.8 million. After 12 months, principal payments on our debt are due from between one and seven years. Our financing arrangements include covenants with which we must comply, and as of September 30, 2025, we were in compliance with these covenants. On September 30, 2025, we completed the private offering of our 2032 senior notes.
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 are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.
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. There were no repurchases during the third quarter of 2025, and as of September 30, 2025, we had $57.7 million remaining for share repurchases under the program, subject to the restrictive covenants discussed above.
Leases
Our leases have remaining terms from one to 7 years. As of September 30, 2025, we had $31.2 million in lease liabilities, of which $7.2 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 September 30, 2025, we had $9.1 million of derivative liabilities, of which $1.5 million matures within the next 12 months. The remaining $7.5 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 September 30, 2025, we held $63.2 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.





36

Cash flow analysis
The following table summarizes our cash flow activity for the periods indicated (in thousands):
Year-to-Date
20252024
Change
Net cash provided by/(used in):
Operating activities$(75,622)$(137,524)$61,902 
Investing activities(16,975)(183,833)166,858 
Financing activities74,562 347,073 (272,511)
Effect of foreign exchange rates21,431 3,024 18,407 
Net increase in cash, cash equivalents and restricted cash
$3,396 $28,740 $(25,344)
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 $61.9 million compared to the prior year period, primarily due to higher cash collections recognized as income, partially offset by higher cash paid for interest and taxes.
Investing activities
Net cash used in investing activities decreased $166.9 million compared to the prior year period. The decrease was primarily due to a decrease of $84.9 million in purchases of nonperforming loan portfolios, an increase of $49.2 million in proceeds from sales and maturities of investments and an increase of $42.9 million in recoveries collected and applied to Finance receivables.
Financing activities
Net cash provided by financing activities decreased $272.5 million compared to the prior year period. The decrease was primarily due to a $441.6 million decrease in net proceeds from lines of credit and a $65.7 million decrease related to interest-bearing deposits activity, partially offset by a $250.0 million increase in net proceeds from the issuance and retirement of senior notes. Additionally, we repurchased $10.0 million of our common stock year-to-date 2025 compared to no repurchases during the prior year period.
Effect of foreign exchange rates
The net effect of exchange rates on cash increased $18.4 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.
37

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.

38

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our business is subject primarily to interest rate and foreign currency risk. Except for the issuance of our 2032 senior notes, as further discussed below, 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 September 30, 2025, $1.6 billion was fixed rate debt. Considering these fixed rate borrowings and the interest rate hedges on our variable rate debt, with maturities ranging from four months to five years, as of September 30, 2025, 67% of our total debt was either fixed rate or converted to a fixed rate. This represents an increase in our percentage of fixed rate debt compared to recent quarters, driven in large part by the issuance of our 2032 senior notes.
Foreign currency exposure
We operate internationally and enter into transactions denominated in various foreign currencies. During Q3 2025, our revenues from operations outside the U.S. were $152.3 million. Our 2032 senior notes expose us to foreign currency gains and losses on the remeasurement of the notes and interest payments thereon to the U.S. dollar. We hold certain Euro-denominated assets whose foreign currency gains and losses partially offset this exposure.
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 September 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 September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
39

PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings as of September 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
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 additional information, refer to Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of this Quarterly Report.
We did not repurchase any of our common stock during the third quarter of 2025. 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 third quarter of 2025.
Item 6. Exhibits
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)).
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)).
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)).
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)).
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)).
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)).
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)).
Indenture, dated as of September 30, 2025, among PRA Group Europe Holding II S.à r.l, PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc., party thereto and U.S. Bank Trustees Limited, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed October 1, 2025 (File No. 000-50058)).
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)).
First Amendment to the Second Amended and Restated Credit Agreement dated October 28, 2024 to the Amended and Restated Credit Agreement dated May 5, 2017 by and among PRA Group Inc. and PRA Group Canada Inc., the Guarantors, the Lenders party thereto and Truist Bank as Administrative Agent (filed herewith).
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
40

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
101.INSXBRL 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.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkable Document
101.LABXBRL Taxonomy Extension Label Linkable Document
101.PREXBRL Taxonomy Extension Presentation Linkable Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
104Cover 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.
41

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)
November 10, 2025By:/s/ Martin Sjolund
Martin Sjolund
President and Chief Executive Officer
(Principal Executive Officer)
November 10, 2025By:/s/ Rakesh Sehgal
Rakesh Sehgal
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)


42

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