Aug 6, 2026, 4:07 PM ETFinancial Services

PRA Group — Q2 2026 Earnings Summary

PRAAPRA GROUP INC

Financial Performance

Net income attributable to PRA Group, Inc. was $58 million ($1.51 diluted EPS), compared to $42 million ($1.08 diluted EPS) in Q2 2025.
Total cash collections reached $559 million, a 4% increase from $536 million in Q2 2025.
Total portfolio revenue increased 28% to $365 million, driven by $268 million in portfolio income (up 7%) and $97 million in changes in expected recoveries (up from $33 million).
Adjusted EBITDA was $1.4 billion for the trailing twelve months ended June 30, 2026, up 10% from the prior year period.
Operating expenses increased $16 million to $219 million, primarily due to a $15 million rise in legal collection costs; compensation and benefits decreased $5 million.
Interest expense, net rose to $64 million from $62 million in Q2 2025.
The effective tax rate for the quarter was 33%.
Estimated remaining collections (ERC) increased 7% to $8.9 billion.
Cash efficiency ratio was 61%.

Management expects higher levels of portfolio income going forward following a comprehensive European portfolio review that aligned ERC with historical overperformance.
The company anticipates more moderate levels of changes in expected recoveries over the long term.
Forward flow commitments totaled $219 million for the next 12 months, comprising $117 million in Europe, $86 million in the U.S., and $15 million in other markets.

U.S. Core cash collections were $270 million; Europe Core cash collections were $200 million.
Portfolio purchases totaled $297 million, in line with expectations, with $165 million in Europe Core and $90 million in U.S. Core.
A comprehensive review of European portfolios resulted in an approximately $349 million increase in European ERC, reflecting over six years of sustained cash overperformance.
The company consolidated its U.S. call center footprint and expanded AI capabilities.
$5 million in expenses were incurred to reorganize the U.S. business, including $2 million in severance and $3 million in real estate impairment.

Growth in cash collections was driven by strength in U.S. legal and digital collections channels and the European business.
The company maintains a disciplined approach to capital allocation, prioritizing portfolio purchases at attractive returns.
Total availability under credit facilities was $998 million as of June 30, 2026, consisting of $733 million based on current ERC and $265 million subject to borrowing base and debt covenants.

Changes in expected recoveries are subject to fluctuations based on portfolio performance and analytical forecasting.
Non-U.S. amounts are subject to foreign exchange rate fluctuations which may impact reported figures.
Forward flow commitments are dependent on actual delivery by sellers and may vary significantly.

CEO Martin Sjolund stated the company continued to execute against the PRA 3.0 strategy, delivering higher earnings and record ERC levels.
CFO Rakesh Sehgal emphasized a disciplined capital allocation framework prioritizing portfolio purchases and opportunistic share repurchases.
Management expressed confidence in the long-term trend of European portfolio overperformance and the alignment of ERC with this trend.

The company repurchased $10 million of outstanding common stock during the quarter.
On August 3, 2026, the Board of Directors authorized a new share repurchase program of up to $150 million with no stated expiration date.
Return on average tangible equity (ROATE) for the second quarter of 2026 was 23.3%, compared to 20.0% in the prior year period.
Return on equity (ROE) for the second quarter of 2026 was 22.6%, compared to 13.3% in the prior year period.
Adjusted ROATE for the second quarter of 2026 was 23.3%, compared to 6.0% in the prior year period.