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, 2025 ("2025 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report. Except as specifically noted, all references to "Notes" in this Item 2 are to Notes to our Consolidated Financial Statements included in Part I, Item 1 of 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:
•a deterioration in general business and economic conditions, including from ongoing geopolitical conflicts and instability in the Middle East;
•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;
•our ability to collect sufficient amounts on our nonperforming loans to recover our costs and fund our operations;
•our reliance on internally developed models and the underlying data used in those models;
•a disruption or failure by any of our third-party service providers, or the vendors on whom they may depend, to meet their obligations and our service level expectations, or an ability to contract alternative providers;
•our ability to realize the expected benefits from our cash-generating and cost savings initiatives in our United States ("U.S.") business;
•changes in the regulatory environment for legal collections or our ability to effectively collect on legal recovery and post-judgment processes;
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;
•our ability to effectively manage change associated with ongoing enhancements to our key operational systems and processes;
•our ability to effectively utilize artificial intelligence ("AI") and machine learning technologies and to adequately safeguard our systems against AI-driven threats;
•our ability to execute our long-term (PRA 3.0) strategy effectively, including the targets related to improving our financial results;
•further impairment of goodwill;
•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 that limit our ability to collect on our nonperforming loans;
•our ability to comply with existing and new regulations of the collection industry;
•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");
•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 2025 Form 10-K and our other filings with the U.S. Securities and Exchange Commission ("SEC").
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was filed with the SEC. 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.
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EXECUTIVE OVERVIEW
We are a global leader in acquiring and collecting nonperforming loans. Most of our purchases are from credit originators who have chosen not to pursue, or have been unsuccessful in collecting, the full balance owed to them ("Core" accounts). To a lesser extent, we also purchase loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts). As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S.
Our operations are organized on a geographic basis, and we have two reportable segments comprised of our U.S. and European businesses. On a significantly smaller scale, we also operate in South America, Canada and Australia. Subject to globally-established parameters for capital allocation, portfolio return thresholds and leverage, each market functions under a similar debt management business model, which is predicated on purchasing nonperforming loans and generating returns through disciplined collection strategies over extended collection periods.
For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of our 2025 Form 10-K and Note 13.
Second quarter and year-to-date business trends and results
During the second quarter of 2026, we continued to execute against our PRA 3.0 strategic plan and generated continued cash collections growth while maintaining disciplined cost management and investing in future growth initiatives. We purchased $296.6 million in portfolios during the quarter and generated higher net income. Our results for the period included the following:
•Second quarter Net income attributable to PRA Group, Inc. of $57.9 million, an increase of $15.5 million compared to the prior year period.
•Year-to-date Net income attributable to PRA Group, Inc. of $86.1 million, an increase of $40.1 million compared to the prior year period.
•Adjusted EBITDA of $1.4 billion for the last 12 months, an increase of 9.6% compared to the prior 12 month period ("Adjusted EBITDA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).
•Continued geographic diversification, with the U.S. and Europe accounting for 40.4% and 54.0%, respectively, of June 30, 2026 total estimated remaining collections ("ERC") of $8.9 billion. Driven by sustained cash collections overperformance, we updated the forecasts for the majority of our European pools as of June 30, 2026, which contributed to an increase in European ERC of $348.5 million (refer to Note 2).
•A second wave of cost reductions to simplify our U.S. business and drive further savings; and further consolidation of our U.S. call center footprint and offshore third-party collection agencies.
•Maintenance of a diversified capital structure, consistent with our targeted leverage and liquidity objectives. We refinanced our European revolving credit facility in April 2026 for an additional five years and repurchased $10.0 million and $20.0 million shares of our common stock during the second quarter and year-to-date, respectively.
Market environment
In the U.S., credit card balances have remained elevated and charge-off rates continued to support portfolio supply. In Europe, there has been an increase in portfolio supply, and we continued to observe stability in customer payment activity in both the U.S. and Europe during the second quarter of 2026.
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SELECTED CONSOLIDATED FINANCIAL DATA
As of or for the period ended (in thousands, except per share, ratio and headcount data) Second Quarter Year-to-Date
2026 2025 % Change 2026 2025 % Change
Income statement
Portfolio income $ 267,799 $ 250,934 6.7 % $ 537,378 $ 491,892 9.2 %
Changes in expected recoveries 96,924 33,292 191.1 140,810 61,214 130.0
Total revenues 372,174 287,688 29.4 686,707 557,307 23.2
Total operating expenses 218,892 202,577 8.1 430,171 397,619 8.2
Interest expense, net 64,363 62,361 3.2 127,881 123,331 3.7
Net income attributable to PRA Group, Inc. 57,917 42,374 36.7 86,127 46,033 87.1
Adjusted net income attributable to PRA (1) 57,917 12,688 356.5 86,127 16,347 426.9
Diluted earnings per share 1.51 1.08 39.8 2.24 1.16 93.1
Performance data and ratios
Net income/(loss) attributable to PRA Group, Inc. (last 12 months) $ (265,048) $ 91,643 (389.2)%
Adjusted net income attributable to PRA (last 12 months) (1) 142,361 61,957 129.8
Adjusted EBITDA (last 12 months) (2) 1,358,913 1,240,092 9.6
Cash efficiency ratio (3) 61.2 % 62.4 % 61.5 % 61.7 %
Return on average Total stockholders' equity - PRA Group, Inc. ("ROE") (4) 22.6 13.3 17.1 7.5
Return on average tangible equity ("ROATE") (5) 23.3 20.0 17.6 11.4
Adjusted return on average tangible equity ("Adjusted ROATE") (6) 23.3 6.0 17.6 4.0
Portfolio volumes
Portfolio purchases $ 296,571 $ 346,505 (14.4) % $ 517,421 $ 638,207 (18.9) %
Cash collections 558,545 536,288 4.2 1,110,473 1,033,724 7.4
Estimated remaining collections (period-end) 8,894,515 8,294,310 7.2
Credit facility availability (period-end)
Based on current ERC $ 733,096 $ 521,613 40.5%
Additional availability 265,372 319,057 (16.8)
Total availability 998,468 840,670 18.8
Balance sheet (period-end)
Finance receivables, net $ 4,717,204 $ 4,562,576 3.4%
Borrowings 3,759,353 3,614,208 4.0
Total stockholders' equity - PRA Group, Inc. 1,045,469 1,336,925 (21.8)
Headcount (period-end)
Full-time equivalents 2,417 2,897 (16.6) %
(1)Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations ("Adjusted net income attributable to PRA"), is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
(2)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
(3)Calculated by dividing cash receipts less operating expenses by cash receipts, both of which are determined based on GAAP.
(4)ROE is calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc.
(5)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets ("Average tangible equity"), which is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.
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RESULTS OF OPERATIONS
Three months ended June 30, 2026 ("Second Quarter 2026" or "Q2 2026") compared to three months ended June 30, 2025 ("Second Quarter 2025" or "Q2 2025"); and six months ended June 30, 2026 ("Year-to-Date 2026") compared to six months ended June 30, 2025 ("Year-to-Date 2025").
Consolidated and business segment results
Portfolio purchases
Portfolio purchases were as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
U.S. $ 109,447 $ 182,326 $ (72,879) (40.0) % $ 227,959 $ 343,288 $ (115,329) (33.6) %
Europe 174,437 147,222 27,215 18.5 265,989 260,468 5,521 2.1
Other markets (1) 12,687 16,957 (4,270) (25.2) 23,473 34,451 (10,978) (31.9)
Total portfolio purchases $ 296,571 $ 346,505 $ (49,934) (14.4) % $ 517,421 $ 638,207 $ (120,786) (18.9) %
(1)Reflects portfolio purchases in South America, Canada and Australia.
We use a global investment framework to optimize the deployment of capital across our markets with a focus on net returns. Our total portfolio purchases in Q2 2026 decreased by $49.9 million, or 14.4%, compared to Q2 2025. Year-to-date 2026 portfolio purchases decreased by $120.8 million, or 18.9%, compared to the prior year period. Total purchases of $296.6 million in Q2 2026 were consistent with our expectations and net return requirements. The Q2 2026 and year-to date 2026 purchase price multiples ("PPMs") for our global Core vintage were 1.99x and 1.98x, respectively. PPMs can vary due to factors contributing to the cost to collect, including the loan type and age, geography and collections strategy, in addition to competitive and market dynamics. Our focus continues to be on net returns, which considers the amount and timing of the projected cash collections, estimated costs to collect, funding costs, risk and agreement terms.
•U.S.: Q2 2026 portfolio purchases decreased by $72.9 million as we remained disciplined in our purchasing and long-term approach focused on net returns. Year-to-date 2026 portfolio purchases decreased by $115.3 million compared to the prior year period. The Q2 2026 PPM for our U.S. Core vintage of 2.16x was an increase compared to the first quarter of 2026. The year-to-date 2026 PPM for our U.S. Core vintage was 2.08x.
•Europe: Q2 2026 portfolio purchases increased by $27.2 million as we continued to invest in portfolios that met our return requirements. Year-to-date 2026 portfolio purchases increased by $5.5 million compared to the prior year period. The Q2 2026 and year-to-date 2026 PPMs for our European Core vintage were 1.87x.
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Cash collections
Cash collections were as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
U.S.
Call center/other $ 119,537 $ 134,801 $ (15,264) (11.3) % $ 246,929 $ 264,056 $ (17,127) (6.5) %
Legal 150,141 119,055 31,086 26.1 291,158 230,267 60,891 26.4
Core 269,678 253,856 15,822 6.2 538,087 494,323 43,764 8.9
Insolvency 21,434 21,175 259 1.2 41,575 41,764 (189) (0.5)
Cash collections - U.S. 291,112 275,031 16,081 5.8 579,662 536,087 43,575 8.1
Europe
Call center/other 118,377 108,881 9,496 8.7 236,426 211,289 25,137 11.9
Legal 82,043 76,772 5,271 6.9 156,013 138,734 17,279 12.5
Core 200,420 185,653 14,767 8.0 392,439 350,023 42,416 12.1
Insolvency 17,658 24,609 (6,951) (28.2) 38,205 45,814 (7,609) (16.6)
Cash collections - Europe 218,078 210,262 7,816 3.7 430,644 395,837 34,807 8.8
Other markets (1) 49,355 50,995 (1,640) (3.2) 100,167 101,800 (1,633) (1.6)
Total cash collections $ 558,545 $ 536,288 $ 22,257 4.2 % $ 1,110,473 $ 1,033,724 $ 76,749 7.4 %
(1)Reflects cash collections in South America, Canada and Australia.
Our total cash collections in Q2 2026 increased by $22.3 million, or 4.2%, compared to Q2 2025. Year-to-date 2026 cash collections increased by $76.7 million, or 7.4%, compared to the prior year period. Total collections of $558.5 million in Q2 2026 exceeded our expectations for the quarter.
•U.S.: Q2 2026 cash collections increased by $16.1 million driven by a $31.1 million increase in legal collections due to higher volume, partially offset by a net decrease of $15.3 million from call center and other channels. Digital cash collections continued to increase driven by an expansion of our customer engagement within this channel. Year-to-date 2026 cash collections increased by $43.6 million driven by a $60.9 million increase in legal collections, partially offset by a net decrease of $17.1 million from call center and other channels.
•Europe: Q2 2026 cash collections increased by $7.8 million driven by increases distributed broadly across our markets and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 cash collections in Europe increased by $34.8 million due to similar factors.
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Portfolio revenue
Total portfolio revenue was as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
U.S. $ 143,327 $ 134,081 $ 9,246 6.9 % $ 299,313 $ 269,887 $ 29,426 10.9 %
Europe 216,402 119,353 97,049 81.3 341,837 219,339 122,498 55.8
Other markets (1) 4,994 30,792 (25,798) (83.8) 37,038 63,880 (26,842) (42.0)
Total portfolio revenue $ 364,723 $ 284,226 $ 80,497 28.3 % $ 678,188 $ 553,106 $ 125,082 22.6 %
By component
Portfolio income $ 267,799 $ 250,934 $ 16,865 6.7 % $ 537,378 $ 491,892 $ 45,486 9.2 %
Recoveries collected in excess of forecast 22,742 40,302 (17,560) (43.6) 45,440 56,802 (11,362) (20.0)
Changes in expected future recoveries 74,182 (7,010) 81,192 (1158.2) 95,370 4,412 90,958 2061.6
Changes in expected recoveries 96,924 33,292 63,632 191.1 140,810 61,214 79,596 130.0
Total portfolio revenue $ 364,723 $ 284,226 $ 80,497 28.3 % $ 678,188 $ 553,106 $ 125,082 22.6 %
(1)Reflects portfolio revenue in South America, Canada and Australia.
Our total portfolio revenue in Q2 2026 increased by $80.5 million, or 28.3%, compared to Q2 2025. Year-to-date 2026 portfolio revenue increased by $125.1 million, or 22.6%, compared to the prior year period. These increases were driven by higher Changes in expected recoveries, which increased by $63.6 million for the quarter and $79.6 million year-to-date, and higher Portfolio income, which increased by $16.9 million for the quarter and $45.5 million year-to-date. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 6.7% for the quarter and 9.2% year-to-date.
•U.S.: Q2 2026 portfolio revenue increased by $9.2 million due to increases of $5.0 million in Portfolio income and $4.2 million in Changes in expected recoveries. The increase in Portfolio income was due primarily to improved pricing. Changes in expected recoveries for Q2 2026 were mainly impacted by decreases in the collections forecasts on the 2022-2025 Core pools. The increase in Changes in expected recoveries was due primarily to a lower net decrease in the collections forecasts for certain U.S. Core pools compared to the prior year period. Net overperformance for Q2 2026 was driven mainly by the 2025 Core pool and net overperformance on the Insolvency pools, partially offset by underperformance on the 2022-2024 Core pools. The decrease in cash collections overperformance was primarily due to lower net overperformance on certain U.S. Core pools compared to the prior year period. Year-to-date 2026 portfolio revenue increased by $29.4 million due to increases of $16.1 million in Portfolio income and $13.3 million in Changes in expected recoveries. The increase in portfolio income was due primarily to improved pricing. The increase in Changes in expected recoveries was due to a lower net decrease in the collections forecasts on certain U.S. Core pools compared to Q2 2025 and net overperformance in Q2 2026 compared to net underperformance in Q2 2025.
•Europe: Q2 2026 portfolio revenue increased by $97.0 million due to increases of $88.4 million in Changes in expected recoveries and $8.6 million in Portfolio income. Changes in expected recoveries were impacted by net increases in the collections forecasts in most markets in both Q2 2026 and Q2 2025. The higher net increase in the current year period was driven by updates to the forecasts for a majority of the pools in our European markets (for additional information, refer to Note 2). This increase was partially offset by lower net overperformance in Q2 2026 compared to Q2 2025 in certain European markets. The increase in Portfolio income was driven by increases in several markets due to higher recent purchasing and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 portfolio revenue increased by $122.5 million due to similar factors, reflecting increases of $99.8 million in Changes in expected recoveries and $22.7 million in Portfolio income.
•Other Markets: Q2 2026 and year-to-date 2026 portfolio revenue decreased by $25.8 million and $26.8 million, respectively, due primarily to higher net decreases in in the collections forecasts on certain pools within these markets.
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Operating expenses
Operating expenses were as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
U.S. $ 146,245 $ 129,543 $ 16,702 12.9 % $ 282,166 $ 258,086 $ 24,080 9.3 %
Europe 50,335 49,499 836 1.7 102,037 93,797 8,240 8.8
Other markets (1) 22,312 23,535 (1,223) (5.2) 45,968 45,736 232 0.5
Total operating expenses $ 218,892 $ 202,577 $ 16,315 8.1 % $ 430,171 $ 397,619 $ 32,552 8.2 %
By component
Compensation and benefits $ 70,377 $ 75,724 $ (5,347) (7.1) % $ 141,115 $ 149,047 $ (7,932) (5.3) %
Legal collection costs (2) 52,525 37,583 14,942 39.8 100,983 70,977 30,006 42.3
Legal collection fees (3) 18,386 15,625 2,761 17.7 35,457 30,855 4,602 14.9
Agency fees (4) 23,214 22,688 526 2.3 47,795 44,056 3,739 8.5
Professional and outside services 22,512 21,071 1,441 6.8 43,396 42,174 1,222 2.9
Communication (5) 7,664 9,417 (1,753) (18.6) 16,683 19,894 (3,211) (16.1)
Rent and occupancy 3,730 3,504 226 6.4 6,988 6,984 4 0.1
Depreciation, amortization and impairment of long-lived assets 4,724 2,503 2,221 88.7 6,432 6,272 160 2.6
Other operating expenses (6) 15,760 14,462 1,298 9.0 31,322 27,360 3,962 14.5
Total operating expenses $ 218,892 $ 202,577 $ 16,315 8.1 % $ 430,171 $ 397,619 $ 32,552 8.2 %
(1)Reflects operating expenses in South America, Canada and Australia.
(2)Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.
(3)Contingent fees incurred for cash collections generated by our third-party attorney network.
(4)Mainly third-party collection fees.
(5)Mainly correspondence, network and calling costs associated with our collection efforts.
(6)Mainly IT-related costs and subscriptions, other taxes and fees.
Our Total operating expenses increased by $16.3 million, or 8.1%, compared to Q2 2025. Year-to-date 2026 operating expenses increased by $32.6 million, or 8.2%, compared to the prior year period.
•U.S.: Q2 2026 operating expenses increased by $16.7 million due primarily to an increase in Legal collection costs associated with the expansion in activity in our legal collections channel and costs of $4.9 million associated with the reorganization of our U.S. business. The reorganization-related costs consisted of $2.0 million in severance expenses related to a corporate and overhead headcount reduction and $3.0 million in real estate impairment and other expenses related to site consolidation of our onshore owned and leased call centers. These increases were partially offset by a decrease in Compensation and benefits driven by workforce reduction initiatives implemented over the past 12 months and a decrease in Communication costs due to the use of more cost-efficient digital collection strategies. Year-to-date 2026 operating expenses increased by $24.1 million, or 9.3%, due to similar factors.
•Europe: Q2 2026 operating expenses were stable compared to the prior year period. Year-to-date 2026 operating expenses increased by $8.2 million, or 8.8%, driven primarily by increases in Other operating expenses, Legal collection costs and Compensation and benefits expense associated with organizational changes and higher non-collector wage costs.
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Interest expense, net
Interest expense, net was as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
Interest on revolving credit facilities and term loan, and unused line fees $ 35,325 $ 38,534 $ (3,209) (8.3) % $ 69,303 $ 75,116 $ (5,813) (7.7) %
Interest on senior notes 30,265 24,911 5,354 21.5 60,501 49,823 10,678 21.4
Amortization of debt premium and issuance costs, net 2,055 1,962 93 4.7 4,239 3,863 376 9.7
Interest income (3,282) (3,046) (236) (7.7) (6,162) (5,471) (691) 12.6
Interest expense, net $ 64,363 $ 62,361 $ 2,002 3.2 % $ 127,881 $ 123,331 $ 4,550 3.7 %
Our Interest expense, net increased by $2.0 million, or 3.2%, compared to Q2 2025. Year-to-date 2026 interest expense increased by $4.6 million, or 3.7%, compared to the prior year period. These increases were due primarily to higher average debt balances.
Foreign exchange gain/(loss), net
Foreign exchange gain/(loss), net, includes the remeasurement of our foreign currency transactions and changes in the fair value of foreign exchange forward contracts used to economically hedge a portion of our remeasurement exposure. Foreign exchange gain/(loss), net included the following components (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
Foreign currency transaction gains/(losses) $ (710) $ 17,240 $ (17,950) (104.1) % $ (8,335) $ 15,695 $ (24,030) (153.1) %
Foreign exchange forward gains/(losses) 209 (17,190) 17,399 101.2 8,888 (15,696) 24,584 156.6
Foreign exchange gain/(loss), net $ (501) $ 50 $ (551) (1,102.0) % $ 553 $ (1) $ 554 55,400.0 %
In addition to normal rate fluctuations and ongoing execution of our risk management strategies, our net foreign exchange result may be impacted by elevated volatility in the underlying exchange rates. For additional information about our foreign exchange forward gains/(losses), refer to Note 6.
Income tax expense
Income tax expense and our effective tax rate were as follows (in thousands, except percentages):
Second Quarter Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
Income tax expense $ 29,385 $ 15,415 $ 13,970 90.6 % $ 38,149 $ 19,727 $ 18,422 93.4 %
Effective tax rate 33.3 % 25.2 % 29.6 % 26.5 %
Our Income tax expense increased by $14.0 million, or 90.6%, compared to Q2 2025, and our effective tax rate was 33.3% in Q2 2026 compared to 25.2% in Q2 2025. These results were primarily due to the increase in our pretax income, the mix of income from different taxing jurisdictions and the timing and amount of discrete items. Year-to-date 2026 Income tax expense increased by $18.4 million, or 93.4%, and our year-to-date 2026 effective tax rate was 29.6%, which included the reversal of a $3.2 million tax accrual during the first quarter of 2026.
Business segment operating income
Our CEO evaluates the profitability of our U.S. and European business segments based primarily on Income from operations excluding goodwill impairment, when applicable, and certain unallocated corporate expenses ("Adjusted segment operating income"). Refer to Note 13 for further information and a reconciliation of Adjusted segment operating income to consolidated Income before income taxes.
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Adjusted segment operating income for our U.S. and European businesses was as follows (in thousands, except percentages):
U.S. Europe
Second Quarter Second Quarter
2026 2025 $ Change % Change 2026 2025 $ Change % Change
Revenues from external customers $ 150,476 $ 137,448 $ 13,028 9.5 % $ 216,613 $ 119,447 $ 97,166 81.3 %
Segment expenses (1)
Compensation and benefits 39,197 45,403 (6,206) (13.7) 17,494 20,235 (2,741) (13.5)
Legal collection expenses 57,237 40,717 16,520 40.6 10,400 9,406 994 10.6
Professional and outside services 12,912 13,676 (764) (5.6) 5,061 4,536 525 11.6
Other segment items (2) 23,815 20,141 3,674 18.2 15,512 14,547 965 6.6
Adjusted segment operating income $ 17,315 $ 17,511 $ (196) (1.1) % $ 168,146 $ 70,723 $ 97,423 137.8 %
U.S. Europe
Year-to-Date Year-to-Date
2026 2025 $ Change % Change 2026 2025 $ Change % Change
Revenues from external customers $ 307,271 $ 273,829 $ 33,442 12.2 % $ 342,245 $ 219,597 $ 122,648 55.9 %
Segment expenses (1)
Compensation and benefits 78,694 90,896 (12,202) (13.4) 38,198 39,414 (1,216) (3.1)
Legal collection expenses 110,377 77,579 32,798 42.3 19,862 18,045 1,817 10.1
Professional and outside services 24,724 26,502 (1,778) (6.7) 9,540 8,721 819 9.4
Other segment items (2) 45,972 43,962 2,010 4.6 30,279 26,067 4,212 16.2
Adjusted segment operating income $ 47,504 $ 34,890 $ 12,614 36.2 % $ 244,366 $ 127,350 $ 117,016 91.9 %
(1)Amounts include intersegment and intercompany expenses, which are not material, and exclude certain unallocated corporate personnel, administrative and other overhead expenses.
(2)Primarily reflects Communication expenses, Agency fees and Other operating expenses.
•U.S.: Q2 2026 Adjusted segment operating income was stable compared to the prior year period, reflecting an increase in segment revenues, partially offset by an increase in segment expenses. Year-to-date 2026 Adjusted segment operating income increased by $12.6 million, or 36.2%, due to similar factors.
•Europe: Q2 2026 Adjusted segment operating income increased by $97.4 million due primarily to an increase in segment revenues. Year-to-date 2026 Adjusted segment operating income increased by $117.0 million, or 91.9%, reflecting an increase in segment revenues, partially offset by an increase in segment expenses.
Refer to the above discussions of portfolio revenue and operating expenses for additional information.
Consolidated balance sheet
Investments
Investments were $145.5 million as of June 30, 2026, an increase of $78.8 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB. Our banking subsidiary is part of our European operations, and it expects to continue to operate with higher levels of liquidity moving forward.
Finance receivables, net
Finance receivables, net were $4.7 billion as of June 30, 2026, increasing marginally compared to December 31, 2025. Compared to June 30, 2025, Finance receivables, net increased $154.6 million, or 3.4%, due to portfolio purchases of $1.1 billion and Changes in expected recoveries of $256.0 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net, and foreign currency translation of $64.0 million.
Borrowings
Borrowings were $3.8 billion as of June 30, 2026, an increase of $62.0 million compared to December 31, 2025. Compared to June 30, 2025, Borrowings increased $145.1 million, or 4.0%, primarily to fund portfolio purchases, and to a lesser extent, the purchases of investments.
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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 the non-GAAP financial measures referred to below, internally to evaluate our performance and set performance goals. We believe these non-GAAP financial measures are useful to investors in evaluating our performance and operational effectiveness and provide for greater comparability. These non-GAAP financial measures should not be considered as an alternative to the most directly comparable financial measure determined in accordance with GAAP and may not be comparable to the calculation of similarly titled financial measures reported by other companies. Included below are reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
Adjusted EBITDA
Adjusted EBITDA is calculated as Net income/(loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense; plus depreciation and amortization; plus impairment of real estate; plus goodwill impairment; plus net income attributable to noncontrolling interests; less gain on sale of equity method investment; and plus recoveries collected and applied to Finance receivables, net less Changes in expected recoveries. The following table provides a reconciliation of Net loss attributable to PRA Group, Inc. to Adjusted EBITDA for the periods indicated (in thousands):
Adjusted EBITDA Reconciliation
Last 12 Months Year Ended
June 30, 2026 December 31, 2025
Net loss attributable to PRA Group, Inc. $ (265,048) $ (305,142)
Adjustments:
Income tax expense 65,157 46,735
Foreign exchange gain (1,309) (755)
Interest expense, net 256,338 251,788
Other expense (1) 427 336
Depreciation and amortization 7,188 9,035
Impairment of real estate 3,411 1,404
Goodwill impairment 412,611 412,611
Net income attributable to noncontrolling interests 11,010 15,168
Gain on sale of equity method investment — (38,403)
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 869,128 922,697
Adjusted EBITDA $ 1,358,913 $ 1,315,474
(1)Reflects non-operating expenses.
Adjusted net income attributable to PRA, ROATE and Adjusted ROATE
Adjusted net income attributable to PRA is calculated as Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations.
ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity. Adjusted ROATE is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity.
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The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to Average tangible equity, a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and provides our ROE, ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):
Average Tangible Equity Reconciliation (1)
Balance as of Period End Second Quarter Year-to-Date
June 30, 2026 June 30, 2025 2026 2025 2026 2025
Total stockholders' equity - PRA Group, Inc. $ 1,045,469 $ 1,336,925 $ 1,023,879 $ 1,278,016 $ 1,009,202 $ 1,230,355
Goodwill 26,871 439,449 26,871 430,082 26,871 418,840
Other intangible assets 1,282 1,541 1,313 1,515 1,354 1,494
Average tangible equity $ 995,695 $ 846,419 $ 980,977 $ 810,021
(1)Amounts represent the average balances for the respective periods.
ROE and ROATE (2)
Second Quarter Year-to-Date
2026 2025 2026 2025
Net income attributable to PRA Group, Inc. $ 57,917 $ 42,374 $ 86,127 $ 46,033
ROE 22.6 % 13.3 % 17.1 % 7.5 %
ROATE 23.3 20.0 17.6 11.4
(2)Based on annualized Net income attributable to PRA Group, Inc.
Adjusted Net Income Attributable to PRA Group, Inc. Reconciliation
Adjusted ROATE (3)
Last 12 Months Second Quarter Year-to-Date
June 30, 2026 June 30, 2025 2026 2025 2026 2025
Net income/(loss) attributable to PRA Group, Inc. $ (265,048) $ 91,643 $ 57,917 $ 42,374 $ 86,127 $ 46,033
Gain on sale of equity method investment — (38,403) — (38,403) — (38,403)
Goodwill impairment 412,611 — — — — —
Tax effect of adjusting items (4) (5,202) 8,717 — 8,717 — 8,717
Adjusted net income attributable to PRA Group, Inc. $ 142,361 $ 61,957 $ 57,917 $ 12,688 $ 86,127 $ 16,347
Adjusted ROATE 23.3 % 6.0 % 17.6 % 4.0 %
(3) Based on annualized Adjusted net income attributable to PRA Group, Inc.
(4) Based on the annual effective tax rate and pretax income excluding the
the effect of the adjusting items.
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SUPPLEMENTAL PERFORMANCE DATA
The tables in this section provide supplemental performance data about our:
•ERC by business segment and expected year of collection; and
•nonperforming loan portfolios and collections by business segment, portfolio type and year of purchase.
For additional information about the supplemental data and our nonperforming loan portfolios, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Supplemental Performance Data" in the 2025 Form 10-K and Note 2.
Estimated remaining collections
The following table displays our ERC by year as of June 30, 2026 (in thousands):
U.S. Europe (1) Other Markets (2) Total
2027 $ 1,051,285 $ 760,658 $ 158,795 $ 1,970,738
2028 793,932 638,802 110,487 1,543,221
2029 527,207 542,071 74,452 1,143,730
2030 360,952 459,957 52,232 873,141
2031 250,556 392,347 36,246 679,149
2032 173,088 338,569 23,947 535,604
2033 122,927 295,510 16,555 434,992
2034 89,005 259,369 9,561 357,935
2035 65,206 228,619 5,290 299,115
2036 48,311 202,831 2,930 254,072
Thereafter 110,352 687,449 5,017 802,818
Total ERC $ 3,592,821 $ 4,806,182 $ 495,512 $ 8,894,515
(1)Reflects ERC of $1.8 billion for the UK, $1.4 billion for Central Europe, $1.0 billion for Northern Europe and $607.6 million for Southern Europe.
(2)Reflects ERC in South America, Canada and Australia.
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Purchase Price Multiples
as of June 30, 2026
(in thousands, except percentages)
Purchase Period Purchase Price (1)(2) Total Estimated Collections (3) Estimated Remaining Collections (4) Current Purchase Price Multiple Original Purchase Price Multiple
U.S. Core
1996-2015 $ 2,736,875 $ 7,509,514 $ 88,885 274% 223%
2016 400,545 820,678 31,073 205% 195%
2017 511,902 1,168,691 63,472 228% 193%
2018 604,669 1,376,064 87,769 228% 199%
2019 432,222 1,017,231 64,379 235% 209%
2020 415,384 940,625 80,613 226% 215%
2021 339,885 602,989 108,705 177% 191%
2022 275,433 429,264 124,219 156% 164%
2023 506,319 942,514 405,841 186% 191%
2024 727,672 1,679,034 993,374 231% 211%
2025 531,021 1,160,216 920,909 218% 216%
2026 195,696 407,198 392,750 208% 208%
Subtotal 7,677,623 18,054,018 3,361,989
U.S. Insolvency
1996-2015 1,472,385 2,806,860 — 191% 154%
2016 67,454 85,680 12 127% 124%
2017 275,257 359,737 126 131% 125%
2018 97,879 137,413 34 140% 127%
2019 120,845 164,637 90 136% 128%
2020 62,130 90,396 1,343 145% 136%
2021 54,898 73,841 3,209 135% 136%
2022 33,442 48,002 9,676 144% 139%
2023 61,242 80,697 33,878 132% 136%
2024 68,168 99,458 52,263 146% 149%
2025 59,091 93,346 79,735 158% 160%
2026 32,264 51,036 50,466 158% 158%
Subtotal 2,405,055 4,091,103 230,832
Total U.S. 10,082,678 22,145,121 3,592,821
Europe Core
2012-2015 1,225,893 3,793,428 693,140 309% 190%
2016 333,090 636,868 169,208 191% 167%
2017 252,174 375,695 82,828 149% 144%
2018 341,775 589,860 158,170 173% 148%
2019 518,610 917,830 287,242 177% 152%
2020 324,119 617,610 208,905 191% 172%
2021 412,411 743,743 334,084 180% 170%
2022 359,447 593,873 344,363 165% 162%
2023 410,593 750,983 482,569 183% 169%
2024 451,786 812,676 641,676 180% 180%
2025 512,533 938,291 790,093 183% 185%
2026 247,303 461,433 447,812 187% 187%
Subtotal 5,389,734 11,232,290 4,640,090
Europe Insolvency
2014-2015 29,849 49,127 — 165% 135%
2016 39,338 60,180 2,051 153% 130%
2017 39,235 54,033 1,161 138% 128%
2018 44,908 53,667 622 120% 123%
2019 77,218 115,235 3,878 149% 130%
2020 105,440 162,142 4,144 154% 129%
2021 53,230 82,097 7,770 154% 134%
2022 44,604 68,715 19,227 154% 137%
2023 46,558 74,356 35,647 160% 138%
2024 43,459 72,755 44,187 167% 147%
2025 20,760 30,862 25,485 149% 145%
2026 14,420 22,458 21,920 156% 156%
Subtotal 559,019 845,627 166,092
Total Europe 5,948,753 12,077,917 4,806,182
Other markets (5) 963,416 2,208,916 495,513 229% 204%
Total PRA Group $ 16,994,847 $ 36,431,954 $ 8,894,515
(1)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.
(2)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.
(3)Non-U.S. amounts are presented at the period-end exchange rate for the respective period of purchase.
(4)Non-U.S. amounts are presented at the June 30, 2026 exchange rate.
(5)Reflects all vintages in South America, Canada and Australia.
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Portfolio Financial Information (1)
(in thousands)
June 30, 2026 (year-to-date) As of June 30, 2026
Purchase Period Cash Collections (2) Portfolio Income (2) Changes in Expected Recoveries (2) Total Portfolio Revenue (2) Net Finance Receivables (3)
U.S. Core
1996-2015 $ 20,689 $ 10,589 $ 6,121 $ 16,710 $ 29,450
2016 5,175 2,958 340 3,298 13,032
2017 10,193 6,227 (1,249) 4,978 25,041
2018 16,399 7,906 1,328 9,234 42,763
2019 12,951 6,560 (771) 5,789 30,599
2020 17,289 8,301 (1,029) 7,272 40,157
2021 19,667 9,619 (1,052) 8,567 54,296
2022 21,478 8,915 (4,280) 4,635 72,290
2023 75,573 34,498 (10,805) 23,693 216,652
2024 191,009 91,298 9,645 100,943 521,294
2025 133,216 84,546 1,459 86,005 474,993
2026 14,448 13,730 (632) 13,098 194,158
Subtotal 538,087 285,147 (925) 284,222 1,714,725
U.S. Insolvency
1996-2015 406 — 405 405 —
2016 59 2 38 40 11
2017 376 17 243 260 111
2018 270 4 211 215 33
2019 754 10 556 566 88
2020 880 94 168 262 1,186
2021 3,965 321 (384) (63) 3,053
2022 4,368 668 96 764 8,821
2023 9,447 1,999 343 2,342 29,679
2024 12,048 4,187 46 4,233 41,062
2025 8,432 5,485 (613) 4,872 55,943
2026 570 1,005 188 1,193 32,709
Subtotal 41,575 13,792 1,297 15,089 172,696
Total U.S. 579,662 298,939 372 299,311 1,887,421
Europe Core
2012-2015 61,643 33,175 63,974 97,149 180,405
2016 13,511 5,487 20,775 26,262 91,080
2017 7,298 2,534 3,658 6,192 52,160
2018 16,225 5,781 5,941 11,722 92,394
2019 28,033 9,302 17,828 27,130 188,972
2020 19,976 8,144 5,302 13,446 125,429
2021 28,007 12,137 6,374 18,511 199,304
2022 31,880 12,504 (1,447) 11,057 217,449
2023 42,435 17,442 21,478 38,920 279,253
2024 59,650 26,827 164 26,991 362,683
2025 69,949 34,057 (6,091) 27,966 430,938
2026 13,831 5,543 1,770 7,313 240,509
Subtotal 392,438 172,933 139,726 312,659 2,460,576
Europe Insolvency
2014-2015 162 — 162 162 —
2016 207 36 393 429 337
2017 332 18 748 766 610
2018 430 17 322 339 454
2019 1,399 158 586 744 3,111
2020 3,433 258 (6) 252 3,825
2021 5,687 470 1,798 2,268 7,025
2022 6,740 1,027 2,744 3,771 16,675
2023 8,348 1,644 6,984 8,628 29,984
2024 7,937 2,505 6,769 9,274 33,743
2025 2,987 1,378 610 1,988 19,038
2026 543 361 197 558 14,391
Subtotal 38,205 7,872 21,307 29,179 129,193
Total Europe 430,643 180,805 161,033 341,838 2,589,769
Other markets (4) 100,168 57,634 (20,595) 37,039 240,014
Total PRA Group $ 1,110,473 $ 537,378 $ 140,810 $ 678,188 $ 4,717,204
(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 period.
(3)Non-U.S. amounts are presented at the June 30, 2026 exchange rate.
(4)Reflects all vintages in South America, Canada and Australia.
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Cash Collections by Year, By Year of Purchase (1)
as of June 30, 2026
(in millions)
Purchase Period Purchase Price (2)(3) 1996-2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total
U.S. Core
1996-2015 $ 2,736.9 $ 5,186.4 $ 673.8 $ 479.4 $ 337.7 $ 230.9 $ 149.3 $ 98.2 $ 67.1 $ 51.7 $ 64.7 $ 53.6 $ 20.7 $ 7,413.5
2016 400.5 — 86.1 195.3 160.1 116.6 88.7 59.9 29.1 17.6 18.1 12.9 5.2 789.6
2017 511.9 — — 94.3 264.4 247.1 185.6 124.8 73.1 41.6 37.5 26.6 10.2 1,105.2
2018 604.7 — — — 106.3 320.2 304.7 214.8 131.6 83.2 68.1 42.9 16.4 1,288.2
2019 432.2 — — — — 93.4 282.2 237.4 141.7 86.1 61.8 37.3 13.0 952.9
2020 415.4 — — — — — 127.4 274.7 185.4 121.3 83.6 50.4 17.3 860.1
2021 339.9 — — — — — — 73.8 149.9 115.3 82.8 52.8 19.7 494.3
2022 275.4 — — — — — — — 34.9 102.4 87.8 58.5 21.5 305.1
2023 506.3 — — — — — — — — 63.5 211.8 185.9 75.6 536.8
2024 727.7 — — — — — — — — — 119.8 374.9 191.0 685.7
2025 531.0 — — — — — — — — — — 106.1 133.2 239.3
2026 195.7 — — — — — — — — — — — 14.3 14.3
Subtotal 7,677.6 5,186.4 759.9 769.0 868.5 1,008.2 1,137.9 1,083.6 812.8 682.7 836.0 1,001.9 538.1 14,685.0
U.S. Insolvency
1996-2015 1,472.4 2,290.4 230.4 142.6 78.6 39.1 13.6 4.5 2.9 1.8 1.4 1.0 0.4 2,806.7
2016 67.5 — 10.1 18.9 18.2 16.4 13.0 6.6 1.3 0.6 0.4 0.1 0.1 85.7
2017 275.3 — — 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 1.0 0.4 359.7
2018 97.9 — — — 6.7 27.4 30.5 31.6 24.6 12.7 2.5 1.0 0.3 137.3
2019 120.8 — — — — 13.4 30.9 37.9 36.8 28.0 14.2 2.7 0.8 164.7
2020 62.1 — — — — — 6.5 16.1 20.4 19.5 17.0 8.7 0.9 89.1
2021 54.9 — — — — — — 4.5 17.7 17.4 15.2 11.8 4.0 70.6
2022 33.4 — — — — — — — 3.2 9.2 11.1 10.5 4.4 38.4
2023 61.2 — — — — — — — — 4.5 14.8 18.0 9.4 46.7
2024 68.2 — — — — — — — — — 12.1 23.1 12.0 47.2
2025 59.1 — — — — — — — — — — 5.2 8.4 13.6
2026 32.3 — — — — — — — — — — — 0.5 0.5
Subtotal 2,405.1 2,290.4 240.5 210.6 200.8 177.2 153.3 145.2 127.7 98.6 91.2 83.1 41.6 3,860.2
Total U.S. 10,082.7 7,476.8 1,000.4 979.6 1,069.3 1,185.4 1,291.2 1,228.8 940.5 781.3 927.2 1,085.0 579.7 18,545.2
Europe Core
2012-2015 1,225.8 538.4 350.2 310.3 290.5 241.4 206.0 202.4 164.3 142.4 132.1 126.9 61.6 2,766.5
2016 333.1 — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 27.1 13.5 479.5
2017 252.2 — — 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 15.7 7.3 275.2
2018 341.8 — — — 24.3 88.7 71.3 69.1 50.7 41.6 37.1 34.3 16.2 433.3
2019 518.6 — — — — 48.0 125.7 121.4 89.8 75.1 68.2 61.7 28.0 617.9
2020 324.1 — — — — — 32.3 91.7 69.0 56.1 50.1 45.1 20.0 364.3
2021 412.4 — — — — — — 48.5 89.9 73.0 66.6 59.7 28.0 365.7
2022 359.4 — — — — — — — 33.9 83.8 74.7 67.8 31.9 292.1
2023 410.6 — — — — — — — — 50.2 103.1 93.2 42.4 288.9
2024 451.9 — — — — — — — — — 46.3 135.6 59.7 241.6
2025 512.5 — — — — — — — — — — 57.1 69.9 127.0
2026 247.3 — — — — — — — — — — — 13.9 13.9
Subtotal 5,389.7 538.4 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 724.2 392.4 6,265.9
Europe Insolvency
2014-2015 29.9 7.3 8.3 8.2 7.4 5.4 3.7 1.9 0.8 0.6 0.4 0.3 0.2 44.5
2016 39.3 — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.6 0.2 62.0
2017 39.2 — — 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 1.0 0.3 50.6
2018 44.9 — — — 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.4 0.4 53.3
2019 77.2 — — — — 5.0 21.1 23.9 21.0 17.5 12.9 6.1 1.4 108.9
2020 105.4 — — — — — 6.0 34.6 34.1 29.7 25.5 15.5 3.4 148.8
2021 53.2 — — — — — — 5.5 14.4 14.7 15.4 14.6 5.7 70.3
2022 44.6 — — — — — — — 4.5 12.4 15.2 15.2 6.7 54.0
2023 46.7 — — — — — — — — 4.2 12.7 15.7 8.3 40.9
2024 43.4 — — — — — — — — — 9.5 15.2 7.9 32.6
2025 20.8 — — — — — — — — — — 1.9 3.0 4.9
2026 14.4 — — — — — — — — — — — 0.7 0.7
Subtotal 559.0 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 87.5 38.2 671.5
Total Europe 5,948.7 545.7 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 811.7 430.6 6,937.4
Other markets(4) 963.4 33.9 86.5 103.9 83.7 137.0 135.9 125.4 135.0 215.9 220.5 210.7 100.2 1,588.6
Total PRA Group $ 16,994.8 $ 8,056.4 $ 1,492.0 $ 1,512.7 $ 1,625.2 $ 1,841.3 $ 2,005.6 $ 2,061.8 $ 1,729.0 $ 1,660.7 $ 1,868.6 $ 2,107.4 $ 1,110.5 $ 27,071.2
(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, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.
(4)Reflects all vintages in South America, Canada and Australia.
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LIQUIDITY AND CAPITAL RESOURCES
We actively manage our liquidity to meet our business needs and financial obligations.
Sources of liquidity
Cash and cash equivalents
As of June 30, 2026, cash and cash equivalents totaled $132.4 million, of which $119.1 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 14 to our Consolidated Financial Statements in the 2025 Form 10-K.
Borrowings
As of June 30, 2026, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):
Composition of Total Availability
Committed Amounts Outstanding Borrowings Total Availability Based on Current ERC (1) Additional Availability (2)
North American revolving credit facility $ 1,075,000 $ 565,092 $ 509,908 $ 318,207 $ 191,701
North American term loan 455,111 455,111 — — —
European revolving credit facility 873,733 618,227 255,506 255,506 —
UK revolving credit facility 725,000 491,946 233,054 159,383 73,671
Colombian revolving credit facility 245 245 — — —
Senior notes 1,640,630 1,640,630 — — —
Debt premium and issuance costs, net — (11,898) — — —
Total $ 4,769,719 $ 3,759,353 $ 998,468 $ 733,096 $ 265,372
(1)Available borrowings after calculation of borrowing base, subject to the committed amounts and debt covenants, which may be used for general corporate purposes, including portfolio purchases.
(2)Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC.
Interest-bearing deposits
As of June 30, 2026, interest-bearing deposits totaled $100.5 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($226.8 million as of June 30, 2026).
Uses of liquidity and material cash requirements
We believe that funds generated from our business activities, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets, will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases for at least the next 12 months. Our long-term capital requirements will depend in large part on the level of nonperforming loan portfolios that we purchase.
Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.
Forward flows
We enter into forward flow agreements for the purchase of nonperforming loans. These agreements typically have terms ranging from six to 12 months, or they can be open-ended, and establish purchase prices and specific criteria for the accounts to be purchased. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, however, very few agreements establish a minimum contractual obligation, and many of the contracts contain early termination provisions allowing either party to cancel the agreements in accordance with a specified notice period.
37
As of June 30, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $218.7 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 $117.3 million in Europe, $86.1 million in the U.S. and $15.4 million in our other markets. 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.
Borrowings
As of June 30, 2026, we had $3.8 billion in outstanding borrowings. Our estimated interest, unused fees and principal payments for the next 12 months are $247.7 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of June 30, 2026, principal payments on our borrowings have maturity dates ranging from February 2028 through September 2032. Our financing arrangements include covenants with which we must comply, and as of June 30, 2026, we were in compliance with these covenants.
We amended and extended our European revolving credit facility on April 30, 2026, resulting in the extension of the maturity date from November 23, 2027 to April 30, 2031; the reduction of the maximum ERC ratio (as defined in the agreement) from 45.0% to 40.0%; and, subject to certain conditions, the ability of the borrowers to make investments in, or loans to, joint ventures up to an aggregate amount of €100 million.
For additional information about our borrowings, refer to Note 5.
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; does not obligate us to repurchase any specified amount of shares; remains subject to the discretion of our Board of Directors; is subject to compliance with applicable laws; and 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. Our Board of Directors approved a new share repurchase program on August 3, 2026. For additional information, refer to Note 15.
Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. During the second quarter of 2026, we repurchased 587,642 shares of our common stock at an average price of $17.02 for a total of $10.0 million. As of June 30, 2026, we had $27.7 million remaining for share repurchases under the program, subject to the restrictive covenants mentioned above.
Leases
Our leases have remaining terms ranging from one to approximately seven years. As of June 30, 2026, we had $30.7 million in lease liabilities, of which $6.6 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2025 Form 10-K.
Derivatives
We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of June 30, 2026, we had $8.0 million of derivative liabilities, of which $3.5 million matures within the next 12 months and $4.4 million in 2028. For additional information, refer to Note 6.
Investments
As of June 30, 2026, we held $117.6 million in Swedish treasury securities and $26.5 million in Finnish corporate notes to meet liquidity requirements for our banking subsidiary, AK Nordic AB.
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Cash flow analysis
The following table summarizes our cash flow activity for the periods indicated (in thousands):
Year-to-Date
2026 2025 $ Change
Net cash provided by/(used in):
Operating activities $ (11,344) $ (65,490) $ 54,146
Investing activities (31,510) (33,408) 1,898
Financing activities 55,094 105,900 (50,806)
Effect of foreign exchange rates 14,796 20,885 (6,089)
Net increase in cash, cash equivalents and restricted cash $ 27,036 $ 27,887 $ (851)
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 investing activities. Net cash used in operating activities decreased by $54.1 million compared to the prior year period due primarily to higher cash collections recognized as income and lower cash paid for taxes, partially offset by higher cash paid for operating expenses.
Investing activities
Net cash used in investing activities decreased by $1.9 million compared to the prior year period due primarily to a decrease in purchases of nonperforming loan portfolios, increases in recoveries collected and applied to Finance receivables, net, and proceeds from sales and maturities of investments, partially offset by an increase in purchases of investments and the impact of the proceeds received from the sale of our interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, in the prior year period.
Financing activities
Net cash provided by financing activities decreased by $50.8 million compared to the prior year period due primarily to lower net proceeds from credit lines and higher levels of stock repurchases, partially offset by the activity in our interest-bearing deposit customer accounts and lower levels of noncontrolling interest distributions.
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 2025 Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 14.
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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 pools 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 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" or "PPM" 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.
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