PRA Group (PRAA) Q2 2024 earnings summary

Executive summary

• Achieved a visible turnaround in U.S. business, with Q2 2024 diluted EPS of $0.54 and net income of $21.5 million, reflecting stabilization and strong execution on financial targets.

• Total portfolio purchases reached $379.4 million, the third-highest in five years, with cash collections up 13% year-over-year to $473.9 million, driven by robust U.S. and European operations.

• Estimated remaining collections (ERC) stood at $6.8 billion at June 30, 2024, up 15% year-over-year, supporting future revenue streams.

• Adjusted EBITDA for the last twelve months was $1.1 billion, reflecting improved profitability and operational execution.

• U.S. and European businesses both contributed to growth, with operational enhancements, expanded legal collections, and diversified presence across 13 countries.

Financial highlights

• Q2 2024 total revenues rose to $284.2 million, up 36% year-over-year, driven by higher portfolio income and changes in expected recoveries.

• Net income attributable to shareholders was $21.5 million, or $0.54 diluted EPS, compared to a net loss of $3.8 million in Q2 2023.

• Cash collections increased 13% year-over-year to $473.9 million, with Americas up 18% and Europe up 6%.

• Portfolio purchases totaled $379.4 million, up 16% year-over-year, with $206.8 million deployed in the U.S.

• Operating expenses increased 19% year-over-year to $195.0 million, mainly due to higher legal collection costs and compensation.

Outlook and guidance

• Management expects strong portfolio investments, double-digit cash collections growth, and a cash efficiency ratio near 60% for full year 2024.

• ROATE is expected to range between 6%-8% for the full year, with potential uplift in 2025.