PRA Group (PRAA) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw portfolio purchases rise 18.7% year-over-year to $291.7 million, driving record estimated remaining collections (ERC) of $7.8 billion, up 20.1% year-over-year.

• Cash collections increased 10.7% to $497.4 million, marking the fourth consecutive quarter of double-digit growth.

• Adjusted EBITDA for the last twelve months was $1.2 billion, up 13.5% year-over-year, with seven consecutive quarters of growth.

• Net income attributable was $4 million, or $0.09 per diluted share, up 5.3% year-over-year but lower than prior quarters due to moderated changes in expected recoveries.

• Leadership transition underway, with Martin Sjolund appointed as President and CEO, leveraging European and global experience.

Financial highlights

• Portfolio purchases totaled $292 million in Q1 2025: $178 million in the Americas and $113 million in Europe.

• ERC reached a record $7.8 billion, up 20% year-over-year and 5% sequentially.

• Cash collections were $497 million, up 11% year-over-year; US Core Cash collections up 20%.

• Total revenues were $270 million, up 5% year-over-year; operating expenses were $195 million, up 3%.

• Cash efficiency ratio improved to 60.8% from 58% a year ago, despite higher legal collection costs.

Outlook and guidance

• Portfolio supply expected to remain elevated in the US and stable in Europe for the rest of 2025.

• No change to previously provided financial targets except for return on average tangible equity, now expected below the 12% target.

• Legal collection costs expected to increase at a much lower rate than in 2024, with moderation anticipated in 2025.

• Management expects sufficient liquidity for operations, capital expenditures, and portfolio purchases for at least the next 12 months.

• Proceeds from the RCB sale will be used for general corporate purposes; continued investment in Brazil anticipated.