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What changed in PRA GROUP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PRA GROUP INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+315 added−283 removedSource: 10-K (2026-03-02) vs 10-K (2025-02-27)

Top changes in PRA GROUP INC's 2025 10-K

315 paragraphs added · 283 removed · 194 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe purchase nonperforming loans at a discount to face value for both our Core and Insolvency portfolios. 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.
Biggest changeMost of the loans we purchase 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).
Accounts sold close to the filing of the insolvency or bankruptcy plan may take months to generate cash flows, while accounts sold years after the filing of the insolvency or bankruptcy plan typically generate cash flows immediately. Digital channels We utilize digital platforms to support our inbound collection efforts, and where permitted by local regulations, our outbound communications.
Accounts sold close to the filing of the insolvency or bankruptcy plan may take months to generate cash flows, while accounts sold years after the filing of the insolvency or bankruptcy plan typically generate cash flows immediately. Digital We utilize digital platforms to support our inbound collection efforts, and where permitted by local regulations, our outbound communications.
These accounts are managed under the relevant country's insolvency or bankruptcy codes and may have an associated payment plan that generally ranges from three to seven years. Accounts that are purchased while insolvent can be purchased at any stage of the insolvency or bankruptcy plan life cycle.
These types of accounts are managed under the relevant country's insolvency or bankruptcy codes and may have an associated payment plan that generally ranges from three to seven years. Accounts that are purchased while insolvent can be purchased at any stage of the insolvency or bankruptcy plan life cycle.
There are some markets, especially in the Nordic countries, where the collection process follows a prescribed and time-sensitive set of legal actions, but in the majority of instances, we are able to use models and analysis to identify accounts with a higher propensity to pay.
There are some markets, especially in the Nordic countries, where the collection process follows a prescribed and time-sensitive set of legal actions, but in the majority of instances, we are able to use models and analysis to identify accounts with a higher propensity to pay in legal recovery.
Bankruptcy Code, which prohibits certain contacts with consumers after the filing of bankruptcy petitions and dictates what types of claims will or will not be allowed in a bankruptcy proceeding, including how such claims may be discharged. • Americans with Disabilities Act, which requires that telecommunications companies operating in the U.S. take steps to ensure functionally equivalent services are available for their consumers with disabilities and to accommodate consumers with disabilities through, for example, implementation of telecommunications relay services. • Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act"), which restructured the regulation and supervision of the financial services industry in the U.S. and created the CFPB.
Bankruptcy Code, which prohibits certain contacts with consumers after the filing of bankruptcy petitions and dictates what types of claims will or will not be allowed in a bankruptcy proceeding, including how such claims may be discharged. • Americans with Disabilities Act, which requires certain companies operating in the U.S. to take steps to ensure functionally equivalent services are available for their consumers with disabilities and to accommodate consumers with disabilities through, for example, implementation of telecommunications relay services. 6 • Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act"), which restructured the regulation and supervision of the financial services industry in the U.S. and created the CFPB.
At the state and local levels, we are subject to a variety of statutes and regulations. These state and local rules regulate, among other things, collection activity, data collection and use, legal recovery and post-judgment processes, and licensing and bonding.
At the state and local levels, we are subject to a variety of statutes and regulations. These state and local rules regulate, among other things, collection activity, AI, data privacy, data collection and use, legal recovery and post-judgment processes, and licensing and bonding.
In addition, certain of our EU and UK subsidiaries are subject to capital adequacy, liquidity, and other requirements imposed by regulators. HUMAN CAPITAL MANAGEMENT Our Company’s values and culture are central to our ability to attract, hire and retain talented employees.
In addition, certain of our subsidiaries are subject to capital adequacy, liquidity, and other requirements imposed by regulators. HUMAN CAPITAL MANAGEMENT Our Company’s values and culture are central to our ability to attract, hire and retain talented employees.
These accounts fall under insolvency plans such as Individual Voluntary Arrangements ("IVAs") and Trust Deeds in the United Kingdom ("UK"), Consumer Proposals in Canada and various forms of bankruptcy plans in the U.S., Canada, Germany and the UK.
These accounts fall under insolvency plans such as Individual Voluntary Arrangements ("IVAs") and Trust Deeds in the UK, Consumer Proposals in Canada and various forms of bankruptcy plans in the U.S., Canada, Germany and the UK.
Foreign Corrupt Practices Act ("FCPA"), UK Bribery Act and Similar Laws, which prohibit certain payments to governmental officials and other individuals. 6 • International data protection and privacy laws, which include relevant country specific legislation in the UK and other European countries where we operate that regulate the processing of information related to individuals, including the obtaining, holding, use, or disclosure of such information; the Personal Information Protection and Electronic Documents Act, which aims to protect personal information that is collected, used, or disclosed in certain circumstances for purposes of electronic commerce in Canada; the GDPR, which regulates the processing and free movement of personal data within the European Union ("EU") and the transfer of such data outside the EU; and in the UK, the Data Protection Act 2018, which implements the EU General Data Protection Regulation in the UK. • EU Directive 2021/2167 (the "Directive") , which creates a regulatory framework for the sale, purchase, and servicing of EU nonperforming loans and requires "credit servicing" to be subject to authorization and oversight processes.
Foreign Corrupt Practices Act ("FCPA"), UK Bribery Act and similar laws, which prohibit certain payments to, and transactions with, governmental officials and other individuals. • International data protection and privacy laws, which include relevant country specific legislation in the UK and other European countries in which we operate that regulate the processing of information related to individuals, including the obtaining, holding, use or disclosure of such information; the Personal Information Protection and Electronic Documents Act, which aims to protect personal information that is collected, used or disclosed in certain circumstances for purposes of electronic commerce in Canada; the GDPR, which regulates the processing and free movement of personal data within the European Union ("EU") and the transfer of such data outside the EU; and in the UK, the Data Protection Act 2018, which implements requirements similar to those of the EU GDPR in the UK. • EU Directive 2021/2167 (the "Directive") , which creates a regulatory framework for the sale, purchase and servicing of EU nonperforming loans and requires "credit servicing" to be subject to authorization and oversight processes.
The accounts we manage are derived from two sources: (1) purchased portfolios of insolvent nonperforming loans and (2) Core nonperforming loans when our customers file for protection under insolvency or bankruptcy laws after we purchase the accounts.
The accounts we manage are derived from two sources: (1) purchased portfolios of insolvent nonperforming loans and (2) Core accounts when customers file for protection under insolvency or bankruptcy laws after we have purchased the accounts.
We utilize a combination of internal resources (attorneys and supporting staff), external law firms and other third-party vendors to perform legal recovery and judicial collections. 4 Insolvency operation Accounts that are in an insolvent or bankrupt status are managed by our Insolvency operations team.
We utilize a combination of internal resources (attorneys and supporting staff), external law firms and other third-party service providers to perform legal recovery and judicial collections. 4 Insolvency Accounts that are in an insolvent or bankrupt status are managed by our Insolvency operations team.
PORTFOLIO COLLECTIONS Core operation Our collection efforts are driven by a combination of internally staffed call centers and external vendors.
Portfolio collections Core Our Core account collection efforts are driven by a combination of internally staffed call centers and external vendors.
After the recent change in presidential administration, there have been some indications that the regulatory and enforcement activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain.
After the change in U.S. presidential administration in 2025, there have been some indications that the regulatory and enforcement activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain.
PORTFOLIO PURCHASING To identify purchasing opportunities, our global investment team continuously engages with known and potential sellers, including major banks, consumer finance companies, auto finance providers and other creditors. The types of Core and Insolvency nonperforming loans we purchase include general purpose and private label credit cards, consumer loans, auto loans, overdrafts and small business loans.
Portfolio purchasing To identify purchasing opportunities, our investment teams continuously engage with known and potential sellers, including major banks, consumer finance companies, auto finance providers and other creditors. The types of Core and Insolvency loans we purchase include general purpose and private label credit cards, consumer loans, auto loans, overdrafts and small business loans.
Significant laws and regulations applicable to our U.S. business include the following: • Fair Debt Collection Practices Act, which imposes certain obligations and restrictions on the practices of debt collectors, including specific restrictions regarding the time, place and manner of communications. • Fair Credit Reporting Act, which obligates credit information providers to verify the accuracy of information provided to credit reporting agencies and investigate consumer disputes concerning the accuracy of such information. • Gramm-Leach-Bliley Act ("GLBA"), which requires that certain financial institutions, including collection companies, develop policies to protect the privacy of consumers' private financial information and provide notices to consumers advising them of their privacy policies. • Electronic Funds Transfer Act, which regulates electronic fund transfer transactions, including a consumer’s right to stop payments on a pre-approved fund transfer and to receive certain documentation of the transaction. • Telephone Consumer Protection Act, which, along with similar state laws, places certain restrictions on the use of pre-recorded messages and certain automated dialing equipment that places telephone calls to consumers. • Servicemembers Civil Relief Act, which gives U.S. military service personnel relief from credit obligations they may have incurred prior to entering military service and may also apply in certain circumstances to obligations and liabilities incurred by a servicemember while serving on active duty. • Health Insurance Portability and Accountability Act, which provides standards to protect the confidentiality of patients' personal healthcare and financial information in the U.S. • U.S.
Significant laws and regulations applicable to our U.S. business include the following: • Fair Debt Collection Practices Act, which imposes certain obligations and restrictions on the practices of debt collectors, including specific restrictions regarding the time, place and manner of communications. • Fair Credit Reporting Act, which obligates credit information furnishers to verify the accuracy of information provided to credit reporting agencies and investigate consumer disputes concerning the accuracy of such information. • Gramm-Leach-Bliley Act ("GLBA"), which requires that certain financial institutions, including collection companies, develop policies to protect the privacy of consumers' private financial information and provide notices to consumers advising them of their privacy policies. • Electronic Funds Transfer Act, which regulates electronic fund transfer transactions, including a consumer’s right to stop payments on a pre-approved fund transfer. • Telephone Consumer Protection Act, which, along with similar state laws, places certain restrictions on the use of artificial or pre-recorded voice messages and automatic dialing systems that place telephone calls to consumers. • Servicemembers Civil Relief Act, which gives U.S. military and uniformed services personnel relief from credit obligations they may have incurred prior to entering military service and may also apply in certain circumstances to obligations and liabilities incurred by a servicemember while serving on active duty. • U.S.
International Our non-U.S. businesses are also subject to regulation by various regulators, including central banks and other regulatory bodies such as the UK Financial Conduct Authority, Swedish Financial Supervisory Authority, German Federal Financial Supervisory Authority, Bank of Italy, Polish Financial Supervision Authority and Australian Securities & Investments Commission.
Europe and other markets Our international operations are subject to regulation by various regulators, including central banks and other regulatory bodies such as the UK Financial Conduct Authority, Swedish Financial Supervisory Authority, German Federal Financial Supervisory Authority, Bank of Italy, Polish Financial Supervision Authority and Australian Securities & Investments Commission.
Whether accounts are being serviced by internal staff or external vendors, except for accounts placed with a third-party debt collection agency, we utilize our proprietary models to proportionally direct work efforts to those customers most able and willing to pay, and ultimately, to achieve the highest correlation to profitable collections from our call activities.
Except for accounts placed with a third-party debt collection agency, we utilize proprietary models to proportionally direct work efforts to those customers most able and willing to pay, and ultimately, to achieve the highest correlation to profitable collections from our call activities.
EU member states are required to establish regulatory frameworks for authorizations and registrations of all credit servicers and to set standards for consumer protection and fitness and propriety standards for business owners, among other things. • Consumer Credit Act 1974 (and its related regulations); Unfair Terms in Consumer Contracts Regulations of 1999; and the Financial Conduct Authority's Handbook of rules and guidance, which include the: • Consumer Credit Sourcebook, which governs regulated and consumer credit agreements and collection activities in the UK; • Consumer Duty, which sets higher and clearer standards of consumer protection across financial services in the UK and requires firms to act to deliver good outcomes for customers; and • Senior Managers and Certification Regime, which aims to reduce harm to consumers and strengthen market integrity in the UK by imposing additional obligations on certain individuals who have significant control or influence over the management of UK businesses to ensure accountability for their conduct and competence.
EU member states are required to establish regulatory frameworks for authorizations and registrations of all credit servicers and to set standards for consumer protection and fitness and propriety standards for business owners, among other requirements. • Consumer Credit Act 1974 (and its related regulations); Unfair Terms in Consumer Contracts Regulations of 1999; and the Financial Conduct Authority's Handbook of rules and guidance, including the: • Consumer Credit Sourcebook, which governs regulated consumer credit agreements and collection activities in the UK; • Consumer Duty, which sets higher and clearer standards of consumer protection across financial services in the UK and requires firms to act to deliver good outcomes for customers; and • Senior Managers and Certification Regime, which aims to reduce harm to consumers and strengthen market integrity in the UK by imposing additional obligations on certain individuals who have significant control or influence over the management of UK financial services businesses to ensure accountability for their conduct and competence. • EU Regulation 2022/2554 (the Digital Operational Resilience Act ("DORA")) , which establishes a unified framework for information and communication technologies ("ICT") risk management across several categories of financial entities and their critical third-party ICT providers.
Our non-US businesses are subject to the tax laws and regulations of the countries in which they are organized and operate. Foreign governments from time-to-time consider legislation that could impact our business activities or the amount of taxes that we pay.
Our international operations are subject to the tax laws and regulations of the countries in which they are organized and operate. Foreign governments enact legislation that could impact our business activities or the amount of taxes that we pay.
Our digital channels allow us to serve our customers in a way that many of them prefer, providing convenient, user-friendly platforms for receiving information, making payments, accessing account information, viewing documents and contacting account representatives.
Our digital channels allow us to serve our customers in a way that many of them prefer, providing convenient, user-friendly platforms for receiving information, making payments, accessing account information, viewing documents and contacting an account representative. We have expanded collections activity through our digital platforms, which provide an efficient, cost-effective and growing channel for us.
We conduct an annual employee survey to measure engagement and inform action plans to address employee concerns and 7 celebrate accomplishments. We believe that our employees are one of our greatest assets and encourage them to be their best and to be themselves, which fosters an inclusive workplace that values diverse experiences, perspectives and abilities.
We believe that our employees are one of our greatest assets and encourage them to be their best and to be themselves, which fosters an inclusive workplace that values diverse experiences, perspectives and abilities.
United States We are subject to supervision by the CFPB, which has primary regulatory authority over consumer debt collection in the U.S and is responsible for enforcing numerous financial statutes and regulations.
For further discussion about how these regulations may impact our business, refer to Item 1A. Risk Factors. U.S. We are subject to supervision by the CFPB, which has primary regulatory authority over consumer debt collection in the U.S. and is responsible for enforcing numerous financial statutes and regulations.
Our workforce As of December 31, 2024, we employed 3,115 full-time equivalents globally, with approximately 71% of our workforce located in the Americas and Australia and 29% in Europe. None of our employees in North America are represented by a union or covered by a collective bargaining agreement.
Our workforce As of December 31, 2025, we employed 2,615 full-time equivalents globally, with approximately 60% of our workforce located in the U.S., 35% in Europe and 5% in our other markets. None of our employees in the U.S. are represented by a union or covered by a collective bargaining agreement.
For example, in 2021, as part of its Global Anti-Base Erosion Model Rules (Pillar Two), the Organization for Economic Cooperation and Development (“OECD”) recommended a minimum 15% tax on the income of large multinational enterprises in each jurisdiction in which they operate.
Of note, the Global Anti-Base Erosion Model Rules (Pillar Two) issued by the Organization for Economic Cooperation and 7 Development (“OECD”) recommended a minimum 15% tax on the income of large multinational enterprises in each jurisdiction in which they operate, and a number of countries have either enacted Pillar Two rules or are evaluating whether to enact such rules.
Another important component of our collection efforts involves legal recovery and the judicial collection of balances from customers who we generally believe have the ability to settle their obligations, but who are unwilling to pay.
An important component of our collection efforts involves legal recovery and the judicial collection of balances from customers who we believe have the ability to settle their obligations but are unwilling to pay. We do not initiate our collections activity in the legal channel, but consider using it when customers do not engage with us voluntarily.
The information contained on, or that can be accessed through our website, is not, and shall not be deemed to be a part of this Form 10-K or incorporated into any of our other SEC Filings.
The information contained on, or that can be accessed through our website, is not, and shall not be deemed to be a part of this Form 10-K or incorporated into any of our other SEC Filings. 8 Reports filed with, or furnished to, the SEC are also available free of charge upon request by contacting our corporate office at: PRA Group, Inc.
We believe that our competitive strengths include our: • diverse global presence, with portfolios in 18 countries; • strong and longstanding relationships with credit originators globally; • strong capital position; • extensive data set informing our proprietary underwriting process and disciplined approach to bidding; • comprehensive compliance program; • reputation from previous portfolio purchase transactions; • customer service; and • ability to efficiently and effectively collect on various asset types. 5 GOVERNMENT REGULATION We are subject to a variety of federal, state, local and international laws, some of which establish specific guidelines and procedures for the collection, use, retention, security and transfer of personal information that debt collectors must follow when collecting on customer accounts.
We believe that our competitive strengths include our: • diverse global presence, with portfolios in 18 countries; • strong and longstanding relationships with credit originators globally; • strong capital position; • extensive data set informing our proprietary underwriting process and disciplined approach to bidding; • comprehensive compliance program; • reputation from previous portfolio purchase transactions; • customer service; and • ability to efficiently and effectively collect on various asset types.
Seasonality In all of the countries in which we operate, customer payment patterns can be impacted by multiple factors, including seasonal employment trends, income tax refunds and holiday spending habits. COMPETITION Competition is derived primarily from other debt purchasers that either manage their own nonperforming loans or outsource such services.
Seasonality In all of the countries in which we operate, customer payment patterns can be impacted by multiple factors, including seasonal employment trends, income tax refunds and holiday spending habits.
In valuing these loans, we consider several factors, including the type of asset, the age since charge-off, the geographic region, the sellers' selection criteria and collections activity up to the time of sale.
In valuing these loans, we consider several factors, including the type of asset, the age since charge-off, the geographic region, the sellers' selection criteria and collections activity up to the time of sale. Nonperforming loan portfolios are typically sold through formal sales processes in which bids are requested from a group of pre-qualified potential buyers.
We offer tuition reimbursement assistance and have a robust suite of training and development offerings for employees across the globe, many available in multiple languages. Our performance management framework is designed to foster accountability, encourage interactive discussions about performance and expand the skills and capabilities of our employees.
Talent development and engagement We believe that talent development, performance management and the engagement of our employees are key to our future success. We offer tuition reimbursement assistance and have a robust suite of training and development offerings for employees across the globe, many available in multiple languages.
In Brazil, there are a small number of large purchasers of nonperforming loans, whose experience and access to capital creates barriers to entry for new competitors. We compete with other debt purchasers on a number of individual factors, including price, reputation, industry experience and long-term performance.
We compete with other debt purchasers on a number of individual factors, including price, reputation, industry experience and long-term performance.
In addition, forward flow agreements contain provisions establishing specific criteria for the loans to be purchased, and many allow for termination and/or price renegotiation should the underlying quality of the portfolio deteriorate over time. Nonperforming loan portfolios are sold through formal sales processes. Typically, the sellers assemble a portfolio and request prices from specific bidders.
Under forward flows, portfolios are purchased on a periodic basis at a negotiated price over a specified term, typically ranging from six to 12 months. Forward flow agreements establish specific criteria for the loans to be purchased, and many allow for termination and/or price renegotiation should the underlying quality of the portfolio deteriorate over time.
Credit originators sell nonperforming loans in either single portfolio transactions, referred to as spot sales, or through pre-arranged sales of multiple portfolios over time, referred to as forward flow sales. Under forward flows, portfolios are purchased on a periodic basis at a negotiated price over a specified term, typically ranging from six to 12 months.
All of our purchases are subject to approval by the applicable internal investment committee(s). Credit originators sell nonperforming loans in either single portfolio transactions, referred to as spot sales, or through pre-arranged sales of multiple portfolios over time, referred to as forward flow sales.
We leverage our extensive data set and modeling experience to determine the price we bid for a portfolio, which considers projected future cash collections, the estimated cost to collect, financing costs and the current market environment. All purchases are subject to approval by the applicable investment committee(s).
In some cases, portfolios can also be sold on an exclusive basis directly to a seller's preferred buyer. In determining the price we bid for a portfolio, we leverage our extensive data set and modeling experience, which considers various factors, including projected cash collections, the estimated cost to collect and financing costs.
Item 1. Business. OVERVIEW PRA Group Inc. is 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. The accounts we purchase are primarily the unpaid obligations of individuals owed to credit originators.
Item 1. Business. OVERVIEW General We are a specialty finance company headquartered in Norfolk, Virginia and incorporated in Delaware. Our primary business is the purchase, collection and management of nonperforming loan portfolios, and we are a global leader in the industry.
Our Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy or similar proceeding. We also purchase and provide fee-based services for class action claims recoveries in the U.S.
As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S. We are organized on a geographic basis, with our principal markets in the U.S. and Europe, where we have operations in 12 countries and the United Kingdom ("UK").
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The bidders form part of a panel of potential buyers that have qualified to participate through a process that includes review of any or all of the following: experience, reputation, financial standing, operating procedures, business practices, customer treatment and compliance oversight. Portfolios can also be sold on an exclusive basis directly to a seller's preferred buyer.
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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.
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As part of recent initiatives to enhance the performance of our U.S. business, we expanded our use of offshore collectors and conducted a successful work-from-home pilot program for a portion of our collections operations, which led to a planned reduction in the number of collection sites in the U.S. from six to three.
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As part of our focus on driving cost efficiency and optimizing the performance of our U.S. business, we have reduced our onshore call center headcount and moved approximately one-third of our U.S. call center capacity offshore.
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We do not begin our collections activity with the legal collections channel, but consider using it if and when our customers do not engage with us voluntarily, and we determine whether to commence legal action to judicially collect based on the characteristics of an account and the applicable local collection laws.
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STRATEGY AND BUSINESS SEGMENTS Strategy During 2025, we focused on strengthening our U.S. platform, building on the strength and momentum of our European business, executing on our near-term priorities and developing our longer-term strategy. The three components of our global business strategy are the following: 1.
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The most significant government regulations that impact our business are discussed below. For further discussion about how these regulations may impact our business, refer to Item 1A. Risk Factors.
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Capital and investing - invest with discipline and allocate capital to opportunities that align with our return objectives: leverage our geographic diversification; maintain a solid financial profile with a strong and diversified funding base; and allocate capital prudently, prioritizing investments in portfolios. 2.
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Many of the jurisdictions in which we have operations, including the UK, EU, Canada and Australia, have enacted legislation to begin implementing Pillar Two for tax years beginning in 2024. Other jurisdictions, including Brazil, are taking steps to adopt Pillar Two for tax years beginning in 2025.
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Operations, technology and data - advance our core systems and infrastructure, becoming more efficient, flexible and technology - driven: optimize the mix of in-house and external collections capabilities; leverage technology standardization and AI; enhance data and analytics, generating better customer insights; and maintain disciplined cost management. 3.
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In 2024, our U.S. business received the “Safe Workplace Certification” from the Center of Personal Protection and Safety, which demonstrates our commitment to the physical safety of our employees. Talent development and engagement We believe that talent development, performance management and engagement of our employees are key to our future success.
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People and culture - maintain a performance-oriented culture focused on accountability and execution: establish clear objectives and key-result metrics while encouraging an entrepreneurial mindset; continue to align incentives with shareholder interests; and maintain a strong culture of compliance.
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Reports filed with, or furnished to, the SEC are also available free of charge upon request by contacting our corporate office at: PRA Group, Inc. Attn: Investor Relations 120 Corporate Boulevard, Suite 100 Norfolk, Virginia 23502
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Business segments During the fourth quarter of 2025, we reorganized our business segment structure from a single operating segment into two operating and reportable segments, comprised of our U.S. and European businesses. Our operations in South America, Canada and Australia are not operating segments individually or collectively.
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Subject to local regulations and market conditions, all of our businesses are engaged in substantially similar portfolio purchasing and collections activities, as described above.
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For additional information about our reportable business segments, refer to Part I, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Reportable Business Segments" of this Form 10-K and Note 16 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. 5 COMPETITION Competition is derived primarily from other debt purchasers that either manage their own nonperforming loans or outsource such services.
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GOVERNMENT REGULATION We are subject to a variety of federal, state, local and international laws, some of which establish specific guidelines and procedures for the collection, use, retention, security and transfer of personal information that debt collectors must follow when collecting on customer accounts. The most significant government regulations that impact our business are discussed below.
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DORA requires organizations to implement robust ICT risk governance, conduct resilience testing (including advanced penetration tests), promptly report major ICT-related incidents, manage third-party dependencies through due diligence and contractual safeguards and participate in cyber-threat information sharing. • EU Regulation 2024/1689 (the Artificial Intelligence Act ("AI Act")) , which introduces a risk-based framework categorizing AI systems into four tiers: unacceptable risk (banned, e.g., social scoring, manipulative AI); high-risk (subject to strict obligations such as risk assessments, data quality, transparency, human oversight and pre-market conformity assessments); limited-risk (e.g., chatbots requiring transparency notices); and minimal-risk (unregulated).
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It also mandates specific rules for general-purpose AI models, including documentation, incident reporting, cybersecurity measures and dataset transparency. The AI ACT became effective on August 1, 2024, and the enforcement of most of its provisions will begin on August 2, 2026.
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Our performance management framework is designed to foster accountability, encourage interactive discussions about performance and expand the skills and capabilities of our employees. We conduct an annual employee survey to measure engagement and inform action plans to address employee concerns and celebrate accomplishments.
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Attn: Investor Relations 120 Corporate Boulevard, Suite 100 Norfolk, Virginia 23502

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditional risks related to offshoring are further discussed within this section under International Operations Risks. We may not be successful in implementing or realizing the expected benefits from our cash generating and cost savings initiatives in our U.S. business, which could have an adverse impact on our business and results of operations.
Biggest changeWe may not realize the expected benefits from our cash-generating and cost savings initiatives in our U.S. business, which could have an adverse impact on our business and financial results. Our ability to successfully compete depends, in part, on our ability to optimize cash collections in relation to our marginal costs through effective execution.
While we believe we have identified and discussed below the material risk factors affecting our business, these risk factors do not identify all of the risks we face, and there could be additional risks and uncertainties that we do not presently know or that we do not currently believe to be material that could have an adverse effect on our business, results of operations, liquidity, cash flow or financial condition in the future.
While we believe we have identified and discussed below the material risk factors affecting our business, these risk factors do not identify all of the risks we face, and there could be additional risks and uncertainties that we do not presently know of or that we do not currently believe to be material that could have an adverse effect on our business, results of operations, liquidity, cash flow or financial condition in the future.
We continue to streamline and integrate our global IT and telecommunication systems, infrastructure, network and other core applications, with a focus on optimizing our systems to meet our changing business demands and to mitigate the risks of a changing cybersecurity threat landscape.
We continue to streamline and integrate our global IT and telecommunication systems, infrastructure, network and other core applications, with a focus on optimizing our systems to meet our changing business demands and mitigate the risks of a changing cybersecurity threat landscape.
These laws, among others, may limit our ability to recover amounts owed with respect to our nonperforming loans, whether or not we committed any wrongful act or omission in connection with the account.
These laws, among others, may limit our ability to recover the amounts owed with respect to our nonperforming loans, whether or not we committed any wrongful act or omission in connection with the account.
Incurring a substantial amount of indebtedness could have consequences for our business, including: • making it more difficult for us to satisfy our obligations with respect to our debt and to our trade and other creditors; • increasing our vulnerability to adverse changes in economic or industry conditions, including higher interest rate environments; • limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is constrained; • requiring us to use a substantial portion of our cash flows from operations to repay our indebtedness, which reduces our ability to use our cash flows to fund working capital, capital expenditures, acquisitions and general corporate requirements; • increasing the amount of interest expense owed since the indebtedness under our credit facilities bears interest at floating rates, which, if interest rates increase, will result in higher interest expense; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and 15 • placing us at a competitive disadvantage compared to less leveraged competitors.
Incurring a substantial amount of indebtedness could have consequences for our business, including: • making it more difficult for us to satisfy our obligations with respect to our debt and to our trade and other creditors; • increasing our vulnerability to adverse changes in economic or industry conditions, including higher interest rate environments; • limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is constrained; • requiring us to use a substantial portion of our cash flows from operations to repay our indebtedness, which reduces our ability to use our cash flows to fund working capital, capital expenditures, acquisitions and general corporate requirements; • increasing the amount of interest expense owed since the indebtedness under our credit facilities bears interest at floating rates, which, if interest rates increase, will result in higher interest expense; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and • placing us at a competitive disadvantage compared to less leveraged competitors.
Furthermore, we may need to refinance all or a portion of our indebtedness at or before its scheduled maturity, but we may not be able to do so on commercially reasonable terms or at all. We may not be able to generate sufficient cash flow or complete alternative financing plans, including raising additional capital, to meet our debt service obligations.
Furthermore, we may need to refinance all or a portion of our indebtedness at or before its scheduled maturity, but we may not be able to do so on commercially reasonable terms or at all. 16 We may not generate sufficient cash flow or be able to complete alternative financing plans, including raising additional capital, to meet our debt service obligations.
All of these factors could have an adverse effect on our business, results of operations and financial condition. The CFPB has issued civil investigative demands ("CIDs") to many companies that it regulates, including PRA Group, and periodically examines practices regarding the collection of consumer debt.
All of these factors could have an adverse effect on our business, results of operations and financial condition. The CFPB has issued civil investigative demands to many companies that it regulates, including PRA Group, and periodically examines practices regarding the collection of consumer debt.
Some laws, among other things, may limit the interest rates and fees we can impose on our customers, limit the amount of time we have to file legal actions to enforce customer accounts and require specific account information for certain collection activities.
Some laws, among other things, may limit the interest rates and fees we can impose on our customers, limit the amount of time we have to file legal actions to enforce customer accounts and require specific account information for certain collection 14 activities.
These laws and regulations create certain privacy rights for individuals and impose prescriptive operational requirements for covered businesses relating to the processing and protection of personal data, the use of AI and may also impose substantial penalties for non-compliance.
These laws and regulations create certain privacy rights for individuals and 15 impose prescriptive operational requirements for covered businesses relating to the processing and protection of personal data and the use of AI and may also impose substantial penalties for non-compliance.
The application and enforcement of these evolving legal requirements is uncertain and may require us to further change or update 14 our information practices, and could impose additional compliance costs and regulatory scrutiny.
The application and enforcement of these evolving legal requirements is uncertain and may require us to further change or update our information practices and could impose additional compliance costs and regulatory scrutiny.
The availability of nonperforming loan portfolios at prices that generate an appropriate return on our investment depends on a number of factors, including: • consumer debt levels; • sales of nonperforming loan portfolios by credit originators; • competitive factors affecting potential purchasers and credit originators of nonperforming loans; • our ability to obtain and analyze portfolio data efficiently and to accurately predict collectability; and • changes in credit and financial lending laws and regulations.
The availability of nonperforming loan portfolios at prices that generate an appropriate return on our investment depends on a number of factors, including: • consumer debt levels; • the sale of nonperforming loan portfolios by credit originators; • competitive factors affecting potential purchasers and credit originators of nonperforming loans; • our ability to obtain and analyze portfolio data efficiently and to accurately predict loan collectability; and • changes in credit and financial lending laws and regulations.
We may incur significant costs complying with legal obligations and inquiries, investigations or any other government actions related to privacy, cybersecurity, and data protection.
We may incur significant costs in complying with legal obligations and inquiries, investigations or any other government actions related to privacy, cybersecurity and data protection.
We seek to detect and investigate such incidents and to prevent their occurrence where practicable through preventive and remedial measures, but such measures may not be successful. Should a cybersecurity incident occur, we may be required to expend significant resources to notify affected parties, modify our protective measures, or investigate and remediate vulnerabilities or other exposures.
We 11 seek to detect and investigate such incidents and to prevent their occurrence where practicable through preventive and remedial measures, but such measures may not always be successful. Should a cybersecurity incident occur, we may be required to expend significant resources to notify affected parties, modify our protective measures or investigate and remediate vulnerabilities or other exposures.
In April 2023, Portfolio Recovery Associates, LLC, our wholly owned subsidiary, entered into an order with the CFPB settling a previously disclosed investigation of certain debt collection practices (the "2023 Order"). We are currently executing both our redress plan and our compliance plan as required by the 2023 Order.
In April 2023, Portfolio Recovery Associates, LLC, our wholly owned subsidiary, entered into an order with the CFPB settling a previously disclosed investigation of certain debt collection practices (the "2023 Order"), and we are currently executing our compliance plan as required by the 2023 Order.
In such circumstances, authorities may request or seek to impose a range of remedies that could involve potential compensatory or punitive damage claims, fines, restitution payments, sanctions or injunctive relief, that if agreed to or granted, could require us to make payments or incur other expenditures.
In such circumstances, authorities may request or seek to impose a range of penalties that could involve potential compensatory or punitive damage claims, fines, restitution payments, sanctions or injunctive relief, that if agreed to or granted, could require us to make payments or incur other expenditures.
The cadence for the purchase of nonperforming loans by quarter, and by year, has been and may continue to be varied and periodic due in large part to the available supply of portfolios in the markets in which we operate and pricing that meets our return thresholds.
The cadence for the purchase of nonperforming loan portfolios by quarter, and by year, has been and may continue to be varied and periodic due in large part to the available supply of portfolios in the markets in which we operate and pricing that meets our return thresholds.
Our failure to comply with existing licensing requirements, changing interpretations of existing requirements, or the adoption of new licensing requirements, could restrict our ability to collect in certain jurisdictions, subject us to increased regulation, increase our costs, or adversely affect our ability to purchase, own and/or collect on our nonperforming loans.
Our failure to comply with existing licensing requirements, changing interpretations of existing requirements or the adoption of new licensing requirements, could restrict our ability to collect in certain jurisdictions, subject us to increased regulation or higher costs or adversely affect our ability to purchase, own and/or collect on our nonperforming loans.
A variety of jurisdictions in which we operate have laws and regulations concerning privacy, AI, cybersecurity and the protection of personal data, including the EU GDPR, the UK GDPR, the U.S. GLBA, the EU Artificial Intelligence Act, the EU Digital Operational Resilience Act, and the California Consumer Privacy Act of 2018.
A variety of jurisdictions in which we operate have laws and regulations concerning privacy, AI, cybersecurity and the protection of personal data, including the EU GDPR, UK GDPR, U.S. GLBA, EU AI Act, EU Digital Operational Resilience Act and California Consumer Privacy Act of 2018.
If our calls, texts, emails or other communications are blocked through a spam filter, or we are otherwise not able to contact our customers, our ability to collect on their debt through our call center and digital channels may be impacted, and we would need to pursue collections through another channel or not at all, which could impact our results of operations and financial condition.
If our calls, texts, emails or other communications are blocked through a spam filter, or we are otherwise not able to contact our customers, our ability to collect on their debt through our call center and digital channels may be impacted, and we would need to pursue collections through an alternative channel or not at all, which could impact our results of operations and financial condition.
Moreover, there can be no assurance that credit originators will continue to sell their nonperforming loans consistent with historical levels, or at all, or that we will be able to bid competitively for those portfolios.
Moreover, there can be no assurance that credit originators will continue to sell their nonperforming loan portfolios consistent with historical levels, or at all, or that we will be able to bid competitively for those portfolios.
This could expose us to adverse economic, industry and political conditions that may have a negative impact on our ability to manage our international operations, which could have a negative impact on our business, results of operations and financial condition.
This could expose us to adverse economic, industry and political conditions that may adversely affect our ability to manage our international operations, which could have a negative impact on our business, results of operations and financial condition.
In addition, levels of consumer or commercial lending and financing could decline, thus reducing the volume of nonperforming loans available for purchase, which could adversely affect our business and financial results in the markets in which we operate. 8 We may not be able to purchase a sufficient volume of nonperforming loans at favorable pricing, which could adversely impact our profitability.
In addition, levels of consumer or commercial lending and financing could decline, thereby reducing the volume of nonperforming loans available for purchase, which could adversely affect our business and financial results in the markets in which we operate. We may not be able to purchase a sufficient volume of nonperforming loans at favorable pricing, which could adversely impact our profitability.
We rely on these third parties to maintain the security of all software code, information technology ("IT") systems and data provided to them and used while providing their services to us.
We rely on these third parties to maintain the security of all software code, IT systems and data provided to them and used while providing their services to us.
If our third-party service providers fail to perform their service obligations in a timely manner or at a satisfactory quality level, or fail to handle the case volume assigned, the quality of our services and operations, as well as our reputation could be adversely impacted.
If our third-party service providers fail to perform their service obligations in a timely manner or at a satisfactory quality level, or fail to handle the case volumes assigned to them, the quality of our services and operations, as well as our reputation, could be adversely impacted.
Violations of these laws and regulations by us, any of our employees, or our third-party vendors, either inadvertently or intentionally, could result in fines and penalties, criminal sanctions, restrictions on our operations and the inability to offer our services in one or more countries.
Violations of these laws and regulations by us, any of our employees, or our third-party service providers, either inadvertently or intentionally, could result in fines and penalties, criminal sanctions, restrictions on our operations and the inability to offer our services in one or more countries.
The CFPB has the authority to obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief), recover costs, and impose monetary penalties (ranging from $5,000 per day to over $1.0 million per day, depending on the nature and gravity of the violation).
The CFPB has the authority to obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief), recover costs and impose monetary penalties (ranging from $7,000 per day to over $1.4 million per day, depending on the nature and gravity of the violation).
Given the complexity of these laws, there is a risk that we may inadvertently breach certain provisions of these laws, such as through the negligent behavior of an employee, or our failure to comply with certain formal documentation requirements.
Given the complexity of these laws, there is a risk that we may inadvertently breach certain provisions of these laws, such as through the negligence of an employee or our failure to comply with certain formal documentation requirements.
Because of the length of time involved in collecting on acquired portfolios and the variability in the timing of our collections, we may not be able to identify trends and make changes in our purchasing strategies in a timely manner.
Because of the length of time involved in collecting on acquired nonperforming loans and the variability in the timing of our collections, we may not be able to identify trends and make changes to our purchasing strategies in a timely manner.
The global nature of our operations expands the risks and uncertainties described elsewhere in this section, including the following: • changes in geopolitical conditions and the political, economic, social and labor conditions in the markets in which we operate; • foreign exchange controls on currency conversion and the transfer of funds that might prevent us from repatriating cash earned in countries outside the U.S. in a tax-efficient manner; • currency exchange rate fluctuations, currency restructurings, inflation or deflation and our ability to manage these fluctuations through a foreign exchange risk management program; • different employee/employer relationships, laws and regulations, union recognition and the existence of employment tribunals and works councils; • laws and regulations imposed by international governments, including those governing data security, sharing and transfer; • potentially adverse tax consequences resulting from changes in tax laws in the jurisdictions in which we operate, or challenges to our interpretation and application of complex international tax laws; • logistical, communication and other challenges caused by distance and cultural and language differences, each making it harder to do business in certain jurisdictions; • volatility of global credit markets and the availability of consumer credit and financing in our international markets; • uncertainty as to the enforceability of contract rights under local laws; • the potential of forced nationalization of certain industries, or the impact on creditors' rights, consumer disposable income levels, flexibility and availability of consumer credit and the ability to enforce and collect aged or charged-off debts stemming from international governmental actions, whether through austerity or stimulus measures or initiatives, intended to control or influence macroeconomic factors such as wages, unemployment, national output or consumption, inflation, investment, credit, finance, taxation or other economic drivers; • the potential for widening military conflicts; • the potential damage to our reputation due to non-compliance with international and local laws; and • the complexity and necessity of using non-U.S. representatives, consultants and other third-party vendors.
The global nature of our operations expands the risks and uncertainties described elsewhere in this section, including the following: • changes in geopolitical conditions and the political, economic, social and labor conditions in the markets in which we operate; • foreign exchange controls on currency conversion and the transfer of funds that might prevent us from repatriating cash earned in countries outside the U.S. in a tax-efficient manner; • currency exchange rate fluctuations, currency restructurings, inflation or deflation and our ability to manage these fluctuations through a foreign exchange risk management program; • different employee/employer relationships, laws and regulations, union recognition and the existence of employment tribunals and works councils; • laws and regulations imposed by international governments, including those governing the security, sharing and transfer of data; • changes in tax laws in the jurisdictions in which we operate, or challenges to our interpretation and application of complex international tax laws; • logistical, communication and other challenges caused by distance and cultural and language differences, each making it harder to do business in certain jurisdictions; • volatility of global credit markets and the availability of consumer credit and financing in our international markets; • uncertainty as to the enforceability of contract rights under local laws; • the potential of forced nationalization of certain industries, or the impact on creditors' rights, consumer disposable income levels, flexibility and availability of consumer credit and the ability to enforce and collect aged or charged-off debts stemming from international governmental actions, whether through austerity or stimulus measures or initiatives intended to control or influence macroeconomic factors such as wages, unemployment, national output or consumption, inflation, investment, credit, finance, taxation or other economic drivers; • the potential for widening military conflicts; • the potential damage to our reputation due to non-compliance with international and local laws; and • the complexity and necessity of using non-U.S. representatives, consultants and other third-party vendors, including offshore service providers. 13 Any one or more of these factors could adversely affect our business, results of operations, liquidity, cash flow and financial condition.
In our U.S. business, we continue to identify and implement initiatives that we believe will position our business for long-term sustainable growth and profitability by allowing us to achieve a lower marginal cost structure and to execute effectively, particularly in the areas of customer contact strategies and post-judgment legal collections.
In our U.S. business, we continue to identify and implement initiatives that we believe will position our business for long-term sustainable growth and profitability by allowing us to achieve a lower marginal cost structure and to execute effectively, particularly as relates to our customer contact strategies and post-judgment legal collections.
Any such breach or other incident could result in the personal data or other confidential or proprietary information stored on our systems and networks, or our vendors’ systems and networks, being improperly accessed, acquired or modified, publicly disclosed, lost, or stolen, which could subject us to liability to our customers, vendors, business partners and others.
Any such breach or other incident could cause the personal data or other confidential or proprietary information stored on our systems and networks, or our vendors’ systems and networks, to be improperly accessed, acquired or modified, or publicly disclosed, lost or stolen, which could subject us to liability to our customers, vendors, business partners and others.
If any of these third-party service providers fail to implement proper controls to meet our industry’s regulatory requirements, violate laws, do not fulfill their contractual obligations, or act inappropriately in conducting their services on our behalf, our operations and reputation could be negatively impacted and result in regulatory fines and penalties.
If any of these third-party service providers, or the vendors on whom they may depend, fail to implement proper controls to meet our industry’s regulatory requirements, violate laws, do not fulfill their contractual obligations, or act inappropriately in conducting their services on our behalf, our operations and reputation could be negatively impacted and result in regulatory fines and penalties.
Such investigations or reviews could lead to assertions by governmental authorities that we are not complying with applicable laws or regulations.
Such investigations or reviews could lead to assertions by governmental authorities that we are not in compliance with applicable laws or regulations.
Moreover, if we experience operational challenges in our collections processes, we may incur losses on portfolios that would have otherwise been profitable, which could adversely impact our business, financial performance, results of operations and cash flow. We outsource and offshore certain activities related to our business to third parties.
Moreover, if we experience operational challenges in our collections processes, we may incur losses on portfolios that would have otherwise been profitable, which could adversely impact our business, financial performance, results of operations and cash flow.
In 2024, our international operations represented 46% of our total portfolio income. Managing a global business is complex, and our international operations are subject to additional risks that may not exist in the U.S., or may be more significant compared to the U.S.
Managing a global business is complex, and our international operations are subject to additional risks that may not exist in the U.S., or that may be more significant compared to the U.S.
If we are unable to successfully implement some or all of our operational initiatives as planned, or we do not achieve the anticipated cash generating or cost savings improvements as a result of these initiatives, our profitability and cash flows could be adversely impacted. A cybersecurity incident could damage our reputation and adversely impact our business and financial results.
If we are unable to successfully implement some or all of our operational initiatives, or we do not achieve the anticipated cash-generating or cost savings improvements as a result of these initiatives, our profitability and cash flows could be adversely impacted.
Total availability under our credit facilities as of December 31, 2024 was $1.0 billion, comprised of $564.3 million based on current ERC and subject to debt covenants, and $462.0 million of additional availability subject to borrowing base and debt covenants, including advance rates.
Total availability under our credit facilities as of December 31, 2025 was $1.1 billion, comprised of $825.2 million based on current ERC and subject to debt covenants, and $274.3 million of additional availability subject to borrowing base and debt covenants, including advance rates.
Our unsecured indebtedness consisted of the $398.0 million outstanding principal amount of our 8.375% Senior Notes due 2028, $350.0 million outstanding principal amount of our 5.00% Senior Notes due 2029 and $550.0 million outstanding principal amount of our 8.875% Senior Notes due 2030.
Our unsecured indebtedness consisted of $398.0 million outstanding principal amount of our 8.375% senior notes due 2028, $350.0 million outstanding principal amount of our 5.00% senior notes due 2029, $550.0 million outstanding principal amount of our 8.875% senior notes due 2030 and €300.0 million ($352.4 million) outstanding principal amount of our 6.250% senior notes due 2032.
Cybersecurity incidents 9 involving third parties on which we rely, as further discussed below, could negatively affect our reputation, our competitive position and our financial performance, and we could face regulatory scrutiny, investigations, lawsuits and potential liability.
Cybersecurity incidents involving third parties on which we rely, as well as the vendors on whom they may depend, as further discussed below, could negatively affect our reputation, 10 competitive position and financial performance, and we could face regulatory scrutiny, investigations, lawsuits and potential liability.
OPERATIONAL AND INDUSTRY RISKS Volatility and uncertainty in general business and economic conditions or financial markets could adversely impact our business, financial performance, results of operations and cash flow. Our business has been sensitive to, and our financial performance is in part dependent on, the general business and economic conditions in the markets in which we operate.
OPERATIONAL AND INDUSTRY RISKS A deterioration in general business and economic conditions could adversely impact our business and financial results. Our business has been sensitive to, and our financial performance is in part dependent on, the general business and economic conditions in the markets in which we operate.
In addition, local requirements and court rulings in various jurisdictions may affect our ability to collect. 13 Regulations and statutes applicable to our industry further provide that, in some cases, consumers cannot be held liable for, or their liability may be limited with respect to, charges to their debit or credit card accounts that resulted from unauthorized use.
Regulations and statutes applicable to our industry further provide that, in some cases, consumers cannot be held liable for, or their liability may be limited with respect to, charges to their debit or credit card accounts that resulted from unauthorized use.
Investigations, reviews or enforcement actions by governmental authorities may result in changes to our business practices, negatively impact our nonperforming loan portfolio purchasing volume, make collection of nonperforming loans more difficult or expose us to the risk of fines, penalties, restitution payments and litigation .
Investigations, reviews or enforcement actions by governmental authorities, or our inability to effectively manage uncertainties related to the U.S. consumer financial regulatory environment, may result in changes to our business practices, negatively impact our nonperforming loan portfolio purchasing volume, make collection of nonperforming loans more difficult or expose us to the risk of fines, penalties, restitution payments or litigation .
After the recent change in presidential administration, there have been some indications that the regulatory and enforcement activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain.
Following the change in U.S. presidential administration in 2025, there were indications that the regulatory and enforcement priorities and activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain.
We are monitoring the enactment and implementation of Pillar Two legislation to determine the potential impact on our financial results, as well as monitoring U.S. amendments to the U.S. global intangible low-tax income ("GILTI"), if any.
Violations of these laws could also adversely affect our business, reputation, ability to attract and retain employees and our results of operations. We are monitoring the enactment and implementation of Pillar Two legislation to determine the potential impact on our financial results, as well as monitoring U.S. amendments to the U.S. global intangible low-tax income ("GILTI"), if any.
Many of these IT systems contain sensitive and confidential information, including personal data, our trade secrets and proprietary business information, and information and materials owned by or pertaining to our customers, vendors and business partners.
Many of these IT systems contain sensitive and confidential information, including personal data, our trade secrets and proprietary business information, and information and materials owned by or pertaining to our customers, vendors and business partners. The secure maintenance of this information and the IT systems on which they reside is critical to our business strategy, operations and financial performance.
Changes in the financial or credit markets may cause a forward flow agreement to fail to meet our return thresholds, since we have agreed to purchase portfolios at a negotiated price for a specified term, and may end up paying higher prices for portfolios than we would have otherwise agreed to pay for a spot purchase.
Changes in the financial or credit markets may cause an existing forward flow agreement to fail to meet our expected return thresholds, since we are committed to purchasing portfolios at a previously negotiated price over a specified term, and may ultimately pay higher prices for portfolios than we would have otherwise been willing to pay under similar market conditions.
Any one of these factors could adversely affect our business, results of operations, liquidity, cash flow and financial condition. 12 Compliance with complex and evolving international and U.S. laws and regulations governing our international operations could increase our cost of doing business in international jurisdictions.
Compliance with complex and evolving international and U.S. laws and regulations governing our international operations could increase our cost of doing business in international jurisdictions.
Our IT systems and infrastructure may be vulnerable to computer viruses, cyber-attacks, security breaches caused by employee error or malfeasance, or other disruptions. Although we take a number of steps to protect our IT systems, the attacks that companies have experienced have increased in number, sophistication and complexity in recent years, including threats from the malicious use of AI.
Although we take a number of steps to protect our IT systems, the attacks companies have experienced have increased in number, sophistication and complexity in recent years, including emerging threats from the malicious use of AI.
Additionally, such cybersecurity events could cause reputational damage and subject us to fines, penalties, litigation costs and settlements, and financial losses that may not be fully covered by our cybersecurity insurance.
Additionally, such cybersecurity events could cause reputational damage and subject us to fines, penalties, litigation costs and settlements, or other financial losses, that may not be fully covered by our cybersecurity insurance policy. The underperformance or failure of our IT or telecommunication systems could result in a loss in productivity, loss of competitive advantage or business disruption.
An unfavorable resolution of a legal proceeding or claim could adversely impact our business, financial condition, results of operations or liquidity. INTERNATIONAL OPERATIONS RISKS Our international operations expose us to risks, which could harm our business, results of operations and financial condition. We are a global business with operations in 18 countries.
INTERNATIONAL OPERATIONS RISKS Our international operations expose us to risks and uncertainties, which could harm our business, results of operations and financial condition. We are a global business with operations in 18 countries. In 2025, our international operations represented 43% of our total portfolio income.
The credit originators have typically made numerous attempts to recover on these accounts, often using a combination of in-house recovery efforts and third-party collection agencies. These nonperforming loans are difficult to collect, and we may not collect a sufficient amount to cover our investment and the costs of operating our business.
Our principal business consists of purchasing and collecting on nonperforming loans from credit originators that consumers or others have failed to pay. The credit originators have typically made numerous attempts to recover on these accounts, often using a combination of in-house recovery efforts and third-party collection agencies.
We operate on a global basis with offices and activities in a number of jurisdictions in the Americas, Europe and Australia. We face increased exposure to risks inherent in conducting business internationally, including compliance with complex international and U.S. laws and regulations that apply to our international operations, which could increase our cost of doing business in international jurisdictions.
We face increased exposure to risks inherent in conducting business internationally, including compliance with complex international and U.S. laws and regulations that apply to our international operations, which could increase our cost of doing business in international jurisdictions. These laws and regulations relate to consumer debt, taxation, and anti-corruption, including the EU Directive 2021/2167, FCPA and UK Bribery Act.
Additionally, as we shift more employees to work-from-home arrangements, remote access to our systems has increased significantly, which exposes us to additional cybersecurity risks. As a result of our reliance on IT systems, we may suffer data security incidents or other cybersecurity incidents, which could compromise our IT systems and networks, creating disruptions and exploiting vulnerabilities in our services.
As a result of our reliance on IT systems, we may experience data security incidents or other cybersecurity incidents, which could compromise our IT systems and networks, creating disruptions and exploiting vulnerabilities in our IT applications and systems.
Adverse changes in our credit ratings could have a negative impact on our business, results of operations and financial condition. Our ability to access capital markets is important to our ability to operate our business.
Adverse changes in our credit ratings could increase our future borrowing costs and reduce our access to capital. Our ability to access capital markets is important to our ability to operate our business.
Any disruption or failure of these third parties to provide these services could adversely affect our business operations, financial condition and reputation. We rely on third-party service providers to conduct collection and other activities on our behalf through both outsourcing and offshoring arrangements.
We outsource certain activities related to our business to third parties. Any disruption or failure of these third parties to provide their services, or an inability to contract alternative providers for such services, could adversely affect our business operations, financial condition and reputation.
We may not achieve the expected benefits of offshoring a portion of our collection activities, which could adversely affect our business, financial condition and results of operations. To improve our operational and labor efficiencies, we have offshored a portion of our collection and related support activities to third-party service providers located in Asia.
As part of these initiatives, to improve our operational and labor efficiencies in our U.S. business, we have offshored a portion of our collection and related support activities to third-party service providers located in Asia. As a result, we may experience a loss of continuity, loss of accumulated knowledge or inefficiency.
FINANCIAL RISKS We expect to continue to use leverage in executing our business strategy, which may have adverse consequences. We have and may continue to incur a substantial amount of debt in the future. As of December 31, 2024, we had total consolidated indebtedness of $3.3 billion, of which $2.0 billion was secured indebtedness.
Our insurance policies may be insufficient to insure us against such risks, and future escalations in premiums and deductibles under these policies may render them uneconomical. FINANCIAL RISKS We expect to continue to use leverage in executing our business strategy, which may have adverse consequences. We have and may continue to incur a substantial amount of debt in the future.
If we are unable to maintain our business or adapt to changing market needs as well as our current or future competitors, we may experience reduced access to nonperforming loan portfolios at appropriate prices, which could adversely impact our business, liquidity, results of operations and cash flow.
If we are unable to adapt to evolving market demands, or keep pace with our current or future competitors, we may limit our ability to acquire nonperforming loan portfolios at acceptable pricing, or at all, which could adversely impact our business, results of operations and cash flow. 9 We may not be able to collect sufficient amounts to recover our costs and fund our operations.
These third parties include law firms, collection agencies, data providers, tracing service providers, business process outsourcing companies and information technology firms.
We rely on both onshore and offshore third-party service providers who, in turn, may depend on additional vendors (fourth-party and other downstream entities), to conduct collection and other activities on our behalf. These third parties include law firms, collection agencies, data providers, tracing service providers, business process outsourcing companies and information technology firms.
As a result of offshoring some of these activities, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency. We also cannot predict the availability of qualified workers, interruptions in collections or the impact of macroeconomic drivers in the countries we utilize for these activities.
We also cannot predict the availability of qualified workers, interruptions in collections or the impact of macroeconomic drivers in the countries we utilize for these activities. There is inherent risk beyond our control, including exposure to political uncertainty and foreign regulatory restrictions.
Our goodwill impairment testing involves the use of estimates and the exercise of judgment, including judgments regarding expected future business performance and market conditions. Based on our October 1, 2024, impairment test, we concluded that the goodwill of our reporting units was not impaired.
As of December 31, 2025, remaining goodwill of $26.9 million related to our class action claims recoveries ("CCB") reporting unit. Our goodwill impairment testing involves the use of estimates and the exercise of judgment, including judgments regarding expected future business performance and market conditions.
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We may not be able to collect sufficient amounts to fund our operations due to the purchase of nonperforming loans that ultimately prove to be unprofitable. Our principal business consists of purchasing and collecting on nonperforming loans from credit originators that consumers or others have failed to pay.
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These nonperforming loans are difficult to collect, and we may not collect a sufficient amount to recover our investment and fund the costs of operating our business.
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We use statistical models to make cash flow projections as part of our underwriting process, and if they prove to be inaccurate, we may acquire nonperforming loan portfolios that ultimately prove to be below our return thresholds or unprofitable.
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Our reliance on internally developed models and the underlying data used in those models could adversely affect our financial condition and results of operations if the models or data prove to be inaccurate or ineffective.
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There is inherent risk beyond our control, including exposure to political uncertainty and foreign regulatory restrictions.
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We rely on internally developed models across various aspects of our business, including for projecting cash flows as part of the underwriting and ongoing management of our nonperforming loan portfolios and more broadly to support certain strategic and operational decision-making activities.
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Our ability to successfully compete depends, in part, on our ability to optimize cash collections at lower marginal costs through effective execution.
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These models involve significant judgment and are based on assumptions, methodologies and data inputs that may not accurately reflect future conditions or events.
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The secure maintenance of this information, and the IT systems on which they reside, is critical to our business strategy and our operations and financial performance. As our reliance on IT systems increases, maintaining the security of such IT systems and our data becomes more challenging.
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Our models incorporate historical data regarding collections performance and consider, among other inputs, changes in external consumer factors, macroeconomic conditions, portfolio characteristics and information available when we acquire accounts, as well as data obtained from third parties and public sources.
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To date, disruptions to our IT systems, due to outages, security breaches or other causes, including cybersecurity incidents, have not had a material impact on our business, results of operations or financial condition. 10 The failure of our IT or telecommunication systems could result in a loss in productivity, loss of competitive advantage or business disruption.
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These models may not fully identify or appropriately assess all material factors, trends or risks, and our historical experience may not be indicative of current or future results.
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We may not effectively utilize AI, or effectively work with other companies that use AI, which could adversely impact our results of operations and result in a loss of competitive advantage or business disruption. In a rapidly evolving landscape, AI technologies are playing an increasing role within many facets of business.
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In addition, we may not achieve the collection levels forecasted by our models, and changes in economic conditions, consumer behavior, regulatory or legal environments, portfolio mix, collection strategies or business practices may reduce the predictive accuracy of our models over time, even if they have performed reliably in the past.
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Some of our systems, tools and resources use, integrate or could integrate some form of AI, which has the potential to result in bias, miscalculations, data errors and other unintended consequences.
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The effectiveness of our models also depends on the accuracy, completeness, timeliness and continued availability of the data used as inputs. Inaccuracies, errors, omissions, delays, changes in third-party data sources or methodologies, or limitations in internal or external data could cause our models to produce forecasts or estimates that differ materially from actual outcomes.
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As AI technologies become integral to improving operational efficiency, customer engagement and decision-making processes, and are potentially deployed by sellers and service providers, our results of operations, competitiveness and reputation could be harmed if we are unable to adopt, utilize and control these technologies as quickly, efficiently and effectively as our competition, or we were to enter into business relationships with other companies that experience similar challenges.
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Furthermore, limitations in model design, assumptions, calibration, validation or governance processes may impair model performance or result in the use of models that are not appropriately suited for their intended purpose.
Removed
We have a significant amount of goodwill which, if impaired in the future, would adversely impact our results of operations. We have recorded a significant amount of goodwill as a result of our business acquisitions. Goodwill is not amortized, but rather, is tested for impairment at the reporting unit level.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo strengthen our cybersecurity readiness, we have developed a cybersecurity incident management process that incorporates the use of third-party IT resources. Our cybersecurity incident response plan is intended to promptly identify, evaluate, respond, remediate and recover from cybersecurity incidents through the preparation, detection, analysis, communication, eradication and containment of such incidents, including those associated with third-party service providers.
Biggest changeTo strengthen our cybersecurity readiness, we have developed a cybersecurity incident management process that incorporates the use of third-party IT resources. Our cybersecurity incident response plan is intended to promptly identify, evaluate, respond to, remediate and recover from cybersecurity incidents through the preparation, detection, analysis, communication, eradication and containment of such incidents, including those associated with third-party service providers.
Where applicable, we require our third-party service providers, by contract, to implement and maintain such safeguards and periodically evaluate these providers and the continued adequacy of their safeguards based on the risk they present. In addition, we may engage third-party service providers to perform functions associated with our information security program and the assessment of security threats.
Where applicable, we require our third-party service providers, by contract, to implement and maintain such safeguards, and we periodically evaluate these providers and the continued adequacy of their safeguards based on the risk they present. In addition, we may engage third-party service providers to perform functions associated with our information security program and the assessment of security threats.
Item 1C. 16 Risk Management and Strategy We have developed and implemented an information security program predicated on industry practices, frameworks and applicable regulations that are reinforced by policies, processes, procedures, standards, technologies and training designed to protect our IT systems, operations and sensitive business information with administrative, physical and technical safeguards.
Item 1C. Risk Management and Strategy We have developed and implemented an information security program predicated on industry practices, frameworks and applicable regulations that are reinforced by policies, processes, procedures, standards, technologies and training designed to protect our IT systems, operations and sensitive business information with administrative, physical and technical safeguards.
Our information security program is integrated as part of our enterprise risk management framework. We regularly conduct internal risk assessments to identify reasonably foreseeable security risks or threats and to evaluate and categorize those risks or threats based on the likelihood and potential impact to the security, confidentiality and integrity of our IT systems and sensitive business information.
Our information security program is integrated as part of our enterprise risk management framework. 17 We regularly conduct internal risk assessments to identify reasonably foreseeable security risks or threats and to evaluate and categorize those risks or threats based on the likelihood and potential impact to the security, confidentiality and integrity of our IT systems and sensitive business information.
Senior management reviews such assessments, reports any potential threats and vulnerabilities and responds accordingly, including by providing regularly scheduled reports and escalating items, as necessary, to our Disclosure Committee and Risk Committee. 17 Our information security management team is led by a global CIO to whom the CISO reports.
Senior management reviews such assessments, reports any potential threats and vulnerabilities and responds accordingly, including by providing regularly scheduled reports and escalating items, as necessary, to our Disclosure Committee and Risk Committee. Our information security management team is led by a global CIO to whom the CISO reports.
The experience of our information security management spans various job practice analysis areas and is underpinned by relevant education and certifications as well as decades of in-field experience in areas such as information security program development, information security governance, risk management and information security incident management.
The experience of our information security management spans various job practice analysis areas and is underpinned by relevant education and certifications as well as decades of in-field experience in areas such as information security program development, information security governance, risk management and information security incident management. 18
Our CISO has held various positions in the information security field over the past 18 years, including senior level positions across multiple industries with a focus on establishing and executing systems and security strategies to protect corporate data and improve regulatory compliance.
Our CISO has held various positions in the information security field over the past 19 years, including senior level positions across multiple industries with a focus on establishing and executing systems and security strategies to protect corporate data and improve regulatory compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in Norfolk, Virginia. In addition, as of December 31, 2024 , we h a d 10 operational sites in the Americas (eight leased and two owned), eight in Europe (all leased) and one in Australia (leased).
Biggest changeItem 2. Properties. Our corporate headquarters are located in Norfolk, Virginia. As of December 31, 2025, we had five operational sites in our U.S. business (three leased and two owned), eight leased properties in our European business and five leased properties in our other markets.
Added
In December 2025, we entered into a lease for a new talent hub in Charlotte, North Carolina, which will begin operating in March 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRefe r to the " Litigation and Regulatory Matters " section of Note 14 to our Consolidated Financial Statements included in Item 8 of this Form 10-K for information regarding legal proceedings in which we are involved. Item 4. Mine Safety Disclosures. Not applicable. 18 PART II
Biggest changeFor additional information, refer to the " Litigation and Regulatory Matters " section of Note 15 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 19 PART II
Item 3. Legal Proceedings. We and our subsidiaries are from time-to-time subject to a variety of legal and regulatory claims, inquiries and proceedings, most of which are incidental to the ordinary course of our business. We initiate lawsuits against customers and are occasionally countersued by them in such actions.
Item 3. Legal Proceedings. We and our subsidiaries are from time-to-time subject to a variety of legal and regulatory claims, inquiries and proceedings, most of which are incidental to the ordinary course of our business. We initiate lawsuits against customers and are occasionally countersued by them.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare Repurchase Programs 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 more information, refer to Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of this Form 10-K.
Biggest changeShare Repurchase Programs 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. A s of December 31, 2025, $47.7 million remained available for share repurchases under the program.
Any future determination as to the declaration and payment of dividends will be at the discretion of our Board of Directors and will depend on conditions then existing, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors that our Board of Directors may consider relevant. 19 Recent Sales of Unregistered Securities None.
Any future determination as to the declaration and payment of dividends will be at the discretion of our Board of Directors and depend on conditions then existing, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors that our Board of Directors may consider relevant. 20 Recent Sales of Unregistered Securities None.
We do not currently pay regular dividends on our common stock and did not pay dividends during the three years ended December 31, 2024; however, our Board of Directors may determine in the future to declare or pay dividends on our common stock.
We do not currently pay regular dividends on our common stock and did not pay dividends during the three years ended December 31, 2025; however, our Board of Directors may determine in the future to declare or pay dividends on our common stock.
Any dividends paid during the five-year period are assumed to be reinvested. Ticker 2019 2020 2021 2022 2023 2024 PRA Group, Inc.
Any dividends paid during the five-year period are assumed to be reinvested. Ticker 2020 2021 2022 2023 2024 2025 PRA Group, Inc.
Stock Performance The following gra ph and subsequent table compare, from December 31, 2019 to December 31, 2024, cumulative stockholder returns assuming an initial investment of $100 in our common stock (PRAA), the stocks comprising the Nasdaq Financial 100 (IXF) and the stocks comprising the Nasdaq Global Market Composite Index (NQGM) at the beginning of the period.
Stock Performance The following gra ph and subsequent table compare, from December 31, 2020 to December 31, 2025, cumulative stockholder returns assuming an initial investment of $100 in our common stock (PRAA), the stocks comprising the Nasdaq Financial 100 (IXF) and the stocks comprising the Nasdaq Global Market Composite Index (NQGM) at the beginning of the period.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Common Stock Our common stock is traded on the Nasdaq Global Select Market under the symbol "PRAA". Based on information provided by our transfer agent and registrar, as of February 19, 2025 , there were 44 holders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Common Stock Our common stock is traded on the Nasdaq Global Select Market under the symbol "PRAA". Based on information provided by our transfer agent and registrar, as of February 20, 2026 , there w ere 44 hold ers of record.
PRAA $ 100.0 $ 109.3 $ 138.3 $ 93.1 $ 72.2 $ 57.5 Nasdaq Financial 100 IXF $ 100.0 $ 103.7 $ 132.0 $ 100.1 $ 113.3 $ 142.2 Nasdaq Global Market Composite Index NQGM $ 100.0 $ 164.9 $ 139.9 $ 77.4 $ 82.4 $ 88.2 The comparisons of stock performance shown above are not intended to forecast or be indicative of possible future performance of our common stock.
PRAA $ 100.0 $ 126.6 $ 85.2 $ 66.1 $ 52.7 $ 44.6 Nasdaq Financial 100 IXF $ 100.0 $ 127.2 $ 96.5 $ 109.2 $ 137.1 $ 158.2 Nasdaq Global Market Composite Index NQGM $ 100.0 $ 84.8 $ 47.0 $ 50.0 $ 53.5 $ 52.4 The comparisons of stock performance shown above are not intended to forecast or be indicative of possible future performance of our common stock.
Removed
We did not repurchase any common stock during the fourth quarter of the year ended December 31, 2024. Item 6. [Reserved] 20
Added
Share repurchases during the three months ended December 31, 2025 were as follows: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Remaining Purchase Price for Share Repurchases Under the Program (1) Period October 1, 2025 to October 31, 2025 — $ — — $ 57,742 November 1, 2025 to November 30, 2025 639,365 15.64 639,365 47,742 December 1, 2025 to December 31, 2025 — — — 47,742 Total 639,365 $ 15.64 639,365 $ 47,742 (1) Amounts in thousands.
Added
Our credit facilities and the indentures governing our senior notes contain financial and other restrictive covenants, including restrictions on our ability to repurchase our common stock. Item 6. [Reserved] 21

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+70 added−56 removed18 unchanged
Biggest change(3) Non-U.S. amounts are presented at the December 31, 2024 exchange rate. 32 Cash Collections by Year, By Year of Purchase (1) as of December 31, 2024 Amounts in millions Cash Collections Purchase Period Purchase Price (2)(3) 1996-2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total 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 $ 6,564.4 2015 443.1 — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 14.1 17.3 884.5 2016 455.8 — — 138.7 256.5 194.6 140.6 105.9 74.2 38.4 24.9 24.0 997.8 2017 532.9 — — — 107.3 278.7 256.5 192.5 130.0 76.3 43.8 39.2 1,124.3 2018 654.0 — — — — 122.7 361.9 337.7 239.9 146.1 92.9 75.9 1,377.1 2019 581.5 — — — — — 143.8 349.0 289.8 177.7 110.3 77.7 1,148.3 2020 435.7 — — — — — — 132.9 284.3 192.0 125.8 87.0 822.0 2021 435.8 — — — — — — — 85.0 177.3 136.8 98.4 497.5 2022 406.1 — — — — — — — — 67.7 195.4 144.7 407.8 2023 622.5 — — — — — — — — — 108.5 285.9 394.4 2024 823.7 — — — — — — — — — — 145.9 145.9 Subtotal 7,727.9 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 14,364.0 Americas Insolvency 1996-2014 1,414.5 1,949.8 340.8 213.0 122.9 59.1 22.6 5.8 3.3 2.3 1.5 1.3 2,722.4 2015 63.2 — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 0.2 88.2 2016 91.4 — — 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.9 0.6 119.3 2017 275.3 — — — 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 358.3 2018 97.9 — — — — 6.7 27.4 30.5 31.6 24.6 12.7 2.5 136.0 2019 123.1 — — — — — 13.4 31.4 39.1 37.8 28.7 14.6 165.0 2020 62.1 — — — — — — 6.5 16.1 20.4 19.5 17.0 79.5 2021 55.2 — — — — — — — 4.6 17.9 17.5 15.3 55.3 2022 33.4 — — — — — — — — 3.2 9.2 11.1 23.5 2023 91.2 — — — — — — — — — 9.0 25.1 34.1 2024 68.4 — — — — — — — — — — 12.1 12.1 Subtotal 2,375.7 1,949.8 344.2 249.8 222.5 207.9 180.9 155.3 147.4 129.4 104.2 102.3 3,793.7 Total Americas and Australia 10,103.6 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 18,157.7 Europe Core 2012-2014 814.5 195.1 297.5 249.9 224.1 209.6 175.3 151.7 151.0 123.6 108.6 101.7 1,988.1 2015 411.3 — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 33.8 30.4 589.9 2016 333.1 — — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 438.9 2017 252.2 — — — 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 252.2 2018 341.8 — — — — 24.3 88.7 71.3 69.1 50.7 41.6 37.1 382.8 2019 518.6 — — — — — 48.0 125.7 121.4 89.8 75.1 68.2 528.2 2020 324.1 — — — — — — 32.3 91.7 69.0 56.1 50.1 299.2 2021 412.4 — — — — — — — 48.5 89.9 73.0 66.6 278.0 2022 359.4 — — — — — — — — 33.9 83.8 74.7 192.4 2023 410.6 — — — — — — — — — 50.2 103.1 153.3 2024 451.9 — — — — — — — — — — 46.3 46.3 Subtotal 4,629.9 195.1 343.3 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 5,149.3 Europe Insolvency 2014 10.9 — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 0.2 17.2 2015 19.0 — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.4 0.2 26.8 2016 39.3 — — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 61.2 2017 39.2 — — — 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 49.3 2018 44.9 — — — — 0.6 8.4 10.3 11.7 9.8 7.2 3.5 51.5 2019 77.2 — — — — — 5.0 21.1 23.9 21.0 17.5 12.9 101.4 2020 105.4 — — — — — — 6.0 34.6 34.1 29.7 25.5 129.9 2021 53.2 — — — — — — — 5.5 14.4 14.7 15.4 50.0 2022 44.6 — — — — — — — — 4.5 12.4 15.2 32.1 2023 46.7 — — — — — — — — — 4.2 12.7 16.9 2024 43.4 — — — — — — — — — — 9.5 9.5 Subtotal 523.8 — 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 545.8 Total Europe 5,153.7 195.1 350.6 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 5,695.1 Total PRA Group $ 15,257.3 $ 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 $ 23,852.8 (1) Non-U.S. amounts are presented using the average exchange rates during the respective year.
Biggest changeInsolvency 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 2,806.3 2016 67.5 — 10.1 18.9 18.2 16.4 13.0 6.6 1.3 0.6 0.4 0.1 85.6 2017 275.3 — — 49.1 97.3 80.9 58.8 44.0 20.8 4.9 2.5 1.0 359.3 2018 97.9 — — — 6.7 27.4 30.5 31.6 24.6 12.7 2.5 1.0 137.0 2019 120.8 — — — — 13.4 30.9 37.9 36.8 28.0 14.2 2.7 163.9 2020 62.1 — — — — — 6.5 16.1 20.4 19.5 17.0 8.7 88.2 2021 54.9 — — — — — — 4.5 17.7 17.4 15.2 11.8 66.6 2022 33.4 — — — — — — — 3.2 9.2 11.1 10.5 34.0 2023 61.2 — — — — — — — — 4.5 14.8 18.0 37.3 2024 68.2 — — — — — — — — — 12.1 23.1 35.2 2025 59.1 — — — — — — — — — — 5.2 5.2 Subtotal 2,372.8 2,290.4 240.5 210.6 200.8 177.2 153.3 145.2 127.7 98.6 91.2 83.1 3,818.6 Total U.S. 9,854.7 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 17,965.5 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 2,704.9 2016 333.1 — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 27.4 27.1 466.0 2017 252.2 — — 17.9 56.0 44.1 36.1 34.8 25.2 20.2 17.9 15.7 267.9 2018 341.8 — — — 24.3 88.7 71.3 69.1 50.7 41.6 37.1 34.3 417.1 2019 518.6 — — — — 48.0 125.7 121.4 89.8 75.1 68.2 61.7 589.9 2020 324.1 — — — — — 32.3 91.7 69.0 56.1 50.1 45.1 344.3 2021 412.4 — — — — — — 48.5 89.9 73.0 66.6 59.7 337.7 2022 359.4 — — — — — — — 33.9 83.8 74.7 67.8 260.2 2023 410.6 — — — — — — — — 50.2 103.1 93.2 246.5 2024 451.9 — — — — — — — — — 46.3 135.6 181.9 2025 512.5 — — — — — — — — — — 57.1 57.1 Subtotal 5,142.4 538.4 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 623.5 724.2 5,873.5 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 44.3 2016 39.3 — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 0.8 0.6 61.8 2017 39.2 — — 1.2 7.9 9.2 9.8 9.4 6.5 3.8 1.5 1.0 50.3 2018 44.9 — — — 0.6 8.4 10.3 11.7 9.8 7.2 3.5 1.4 52.9 2019 77.2 — — — — 5.0 21.1 23.9 21.0 17.5 12.9 6.1 107.5 2020 105.4 — — — — — 6.0 34.6 34.1 29.7 25.5 15.5 145.4 2021 53.2 — — — — — — 5.5 14.4 14.7 15.4 14.6 64.6 2022 44.6 — — — — — — — 4.5 12.4 15.2 15.2 47.3 2023 46.7 — — — — — — — — 4.2 12.7 15.7 32.6 2024 43.4 — — — — — — — — — 9.5 15.2 24.7 2025 20.8 — — — — — — — — — — 1.9 1.9 Subtotal 544.6 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 97.4 87.6 633.3 Total Europe 5,687.0 545.7 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 720.9 811.8 6,506.8 Total other markets (4) 940.3 33.9 86.5 103.9 83.7 137.0 135.9 125.4 135.0 215.9 220.5 210.7 1,488.4 Total PRA Group $ 16,482.0 $ 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 $ 2,107.5 $ 25,960.7 (1) Non-U.S. amounts are presented using the average exchange rates during the respective year.
Our 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.
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.
These tax laws are complex and subject to different interpretations by the taxpayer and the relevant government taxing authorities. When determining our domestic and non-U.S. income tax expense, we make judgments about the application of these inherently complex laws. We record a tax provision for the anticipated tax consequences of the reported results of operations.
These tax laws are complex and subject to different interpretations by the taxpayer and the relevant government taxing authorities. When determining our U.S. and non-U.S. income tax expense, we make judgments about the application of these inherently complex laws. We record a tax provision for the anticipated tax consequences of the reported results of operations.
If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material. We have determined that the following accounting policies involve critical estimates: Revenue recognition - finance receivables Revenue recognition for finance receivables involves the use of estimates and the exercise of judgment on the part of management.
If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material. We have determined that the following accounting policies involve critical estimates: 38 Revenue recognition - finance receivables Revenue recognition for finance receivables involves the use of estimates and the exercise of judgment on the part of management.
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 of nonperforming loan portfolios and estimated remaining collections. • "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. 39
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. 40 • "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.
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 shareholder return. Average tangible equity is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets.
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.
Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, 34 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.
Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, 36 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.
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 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.
If market factors deteriorate, or if estimates used in our quantitative assessment prove to be inaccurate, we may have to record impairment charges in future periods. Income taxes We are subject to income taxes in the U.S. and in numerous international jurisdictions.
If market factors deteriorate, or if estimates used in our quantitative assessment prove to be inaccurate, we may have to record additional impairment charges in future periods. 39 Income taxes We are subject to income taxes in the U.S. and in numerous international jurisdictions.
(2) Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.
(2) Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our audited financial statements and accompanying notes thereto included in Item 8 of this Form 10-K (see Frequently Used Terms at the end of this Item 7 for certain definitions that may be used throughout this Form 10-K).
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our audited financial statements and accompanying notes thereto included in Item 8 of this Form 10-K. See Frequently Used Terms at the end of this Item 7 for definitions used throughout this Form 10-K.
If we subsequently realize deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings.
If we subsequently realize deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance is reversed, resulting in a positive adjustment to earnings.
Generally, adjustments to cash forecasts result in an adjustment to revenue at an amount less than the impact of the performance in the period due to the effects of discounting. Additionally, cash collection forecast increases result in more revenue being recognized, and cash collection forecast decreases in less revenue being recognized, over the life of the pool.
Generally, adjustments to cash forecasts result in an adjustment to revenue at an amount less than the impact of the performance in the period due to the effects of discounting. Cash collection forecast increases and decreases result in more and less revenue, respectively, being recognized over the life of a pool.
(3) Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase. (4) Non-U.S. amounts are presented at the December 31, 2024 exchange rate.
(3) Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase. (4) Non-U.S. amounts are presented at the December 31, 2025 exchange rate.
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.
PPMs 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 PPM and effective interest rate are generally lower.
For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
For additional information about the unremitted earnings of our foreign subsidiaries, refer to Note 14 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
For additional information about our credit facilities, term loan and senior notes, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. 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.
For additional information about our borrowings, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. 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.
As of December 31, 2024, we had $36.4 million in lease liabilities, of which $9.2 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
As of December 31, 2025, we had $32.2 million in lease liabilities, of which $7.7 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Derivatives We enter into d erivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of December 31, 2024, we had $5.0 million of derivative liabilities, of which $0.2 million matures within the next 12 months. The remaining $4.8 million matures in 2028.
Derivatives We enter into d erivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of December 31, 2025, we had $12.4 million of derivative liabilities, of which $2.1 million matures within the next 12 months.
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.
Certain types of accounts, such as Insolvency accounts, have lower collection costs, and we generally pay more for those types of accounts resulting in lower PPMs but similar net income margins compared to other portfolio purchases.
The discount rate of 8.3% utilized for the DBC reporting unit as of October 1, 2024 was based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics, including assumptions related to the reporting unit's ability to execute on the projected cash flows.
The discount rate was based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics, including assumptions related to the reporting unit's ability to execute on the projected cash flows.
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 ("PPMs") The PPM represents our estimate of total cash collections over the original purchase price of the portfolio.
(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 year in which the portfolio was purchased.
(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 year in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase.
For further information regarding our uncertain tax positions, refer to Note 13 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. 38 Frequently Used Terms We may use the following terminology throughout this Form 10-K: • "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 differences of actual recoveries received when 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.
FREQUENTLY USED TERMS We may use the following terms throughout this Form 10-K: • "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.
(2) Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC. Interest-bearing deposits As of December 31, 2024, interest-bearing deposits totaled $163.4 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $199.0 million U.S. dollars as of December 31, 2024).
(2) Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC. Interest-bearing deposits As of December 31, 2025, interest-bearing deposits totaled $106.1 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($239.2 million as of December 31, 2025).
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.
Estimated remaining collections ("ERC") and Total estimated collections ("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 forecasts with a correlating adjustment to the PPM.
(2) Non-U.S. amounts are presented using the average exchange rates during the current year.
(2) Non-U.S. amounts are presented using the average exchange rates during the current year. (3) Non-U.S. amounts are presented at the December 31, 2025 exchange rate.
Our goodwill evaluation is dependent on a number of factors, both internal and external. The assumptions used in estimating the DBC reporting unit’s fair value were based on currently available data and involved the exercise of judgment. There are inherent uncertainties related to the assumptions used in our evaluation and to our application of those assumptions.
The assumptions used in estimating fair value were based on currently available data and involved the exercise of judgment. There are inherent uncertainties related to the assumptions used in our evaluation and to our application of those assumptions.
For additional information, refer to Note 8 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of this Form 10-K and Note 16 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
If all or part of the deferred tax assets are determined not to be realizable in the future, we would establish a valuation allowance and charge the impact to earnings in the period such a determination is made.
We record interest and penalties related to unresolved tax matters as a component of income tax expense when the more-likely-than-not standards are not met. If all or part of the deferred tax assets are determined not to be realizable in the future, we establish a valuation allowance and charge the impact to earnings in the period such determination is made.
The following table provides a reconciliation of Net income/(loss) attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the years indicated (amounts in thousands): Adjusted EBITDA 2024 2023 2022 Net income/(loss) attributable to PRA Group, Inc. $ 70,601 $ (83,477) $ 117,147 Adjustments: Income tax expense/(benefit) 21,032 (16,133) 36,787 Foreign exchange (gain)/loss 9 (289) (985) Interest expense, net 229,267 181,724 130,677 Other expense (1) 851 1,944 1,325 Depreciation and amortization 10,792 13,376 15,243 Impairment of real estate — 5,239 — Net income attributable to noncontrolling interests 17,972 16,723 851 Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 787,028 887,891 805,942 Adjusted EBITDA $ 1,137,552 $ 1,006,998 $ 1,106,987 (1) Other expense reflects non-operating activities.
Adjusted EBITDA is calculated starting with Net income/(loss) 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; • other expense; • 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. 28 The following table provides a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted EBITDA for the years indicated (in thousands): Adjusted EBITDA Reconciliation 2025 2024 2023 Net income/(loss) attributable to PRA Group, Inc. $ (305,142) $ 70,601 $ (83,477) Adjustments: Income tax expense/(benefit) 46,735 21,032 (16,133) Foreign exchange (gain)/loss (755) 9 (289) Interest expense, net 251,788 229,267 181,724 Other expense (1) 336 851 1,944 Depreciation and amortization 9,035 10,792 13,376 Impairment of real estate 1,404 — 5,239 Goodwill impairment 412,611 — — Net income attributable to noncontrolling interests 15,168 17,972 16,723 Gain on sale of equity method investment (38,403) — — Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 922,697 787,028 887,891 Adjusted EBITDA $ 1,315,474 $ 1,137,552 $ 1,006,998 (1) Reflects non-operating activities.
For additional information about our credit facilities, term loan and senior notes, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Additionally, we repurchased $20.0 million of our common stock in 2025 compared to no repurchases during the prior year. For additional information about our credit facilities, term loan and senior notes, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Goodwill In accordance with Financial Accounting Standards Board ("FASB") ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), we evaluate goodwill for impairment annually as of October 1, and more frequently if circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is below its carrying value.
Goodwill We evaluate goodwill for impairment annually as of October 1 and more frequently if circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is below its carrying value. We determine the fair value of a reporting unit by applying the income approach and market approach.
ROATE is calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by average tangible equity.
(7) ROATE is calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity ("Average tangible equity"). ROATE and Average tangible equity are non-GAAP financial measures. Refer to section " Non-GAAP Financial Measures " below.
Investments As of December 31, 2024, we held $55.8 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB. 35 Cash flow analysis The following table summarizes our cash flow activity for the years ended December 31, 2024 and 2023 (amounts in thousands): 2024 2023 Change Net cash provided by/(used in): Operating activities $ (94,594) $ (97,535) $ 2,941 Investing activities (382,470) (234,860) (147,610) Financing activities 490,837 355,300 135,537 Effect of exchange rates on cash (20,034) 6,029 (26,063) Net increase/(decrease) in cash and cash equivalents $ (6,261) $ 28,934 $ (35,195) 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.
Investments As of December 31, 2025, we held $64.9 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB. 37 Cash flow analysis The following table summarizes our cash flow activity for the years ended December 31, 2025 and 2024 (in thousands): 2025 2024 Change Net cash provided by/(used in): Operating activities $ (85,541) $ (94,594) $ 9,053 Investing activities (59,937) (382,470) 322,533 Financing activities 115,970 490,837 (374,867) Effect of foreign exchange rates 30,720 (20,034) 50,754 Net increase/(decrease) in cash and cash equivalents $ 1,212 $ (6,261) $ 7,473 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.
Cash flow projections are based on management's estimates of a variety of factors, including growth rates and operating margins, which take into consideration industry and market conditions. Under the market approach, we estimate fair value based on market trading multiples and other relevant market transactions involving comparable publicly traded companies with operating and investment characteristics similar to the reporting unit.
Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows and a residual terminal value. Cash flow projections are based on management's estimates of a variety of factors, including growth rates and operating margins, which take into consideration industry and market conditions.
The increase was primarily due to higher income before taxes in 2024. The effective tax rate decreased marginally and was impacted by changes in the mix of income from different taxing jurisdictions and the timing and amount of discrete items. Noncontrolling interests In Brazil, we purchase nonperforming loan portfolios through investment funds in which we hold a majority interest.
Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The effective tax rate for 2025 was further impacted by the goodwill impairment charge. Noncontrolling interests In South America, we purchase nonperforming loan portfolios through investment funds in which we hold a majority interest.
Adjusted EBITDA should not be considered as an alternative to net 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.
The non-GAAP financial measures included below 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.
We may also from time-to-time repurchase senior notes in the open market or otherwise. 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.
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.
(3) Calculated by dividing Net income income/(loss) attributable to PRA Group by average Total stockholders' equity - PRA Group for the year. (4) Return on average tangible equity ("ROATE") is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure.
(8) Adjusted ROATE, which is a non-GAAP financial measure, is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity.
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.
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. For discussion of our significant accounting policies, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
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.
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.
The portion of our Net income/(loss) attributable to noncontrolling interests is reflected in Adjustment for net income attributable to noncontrolling interests in our Consolidated Income Statements, which totaled $18.0 million in 2024 compared to $16.7 million in 2023. 25 Balance sheet Finance receivables, net Finance receivables, net were $4.1 billion as of December 31, 2024, an increase of $484.1 million, or 13.2%, compared to $3.7 billion as of December 31, 2023, driven largely by portfolio purchases of $1.4 billion and changes in expected recoveries of $240.9 million, partially offset by recoveries collected and applied to Finance receivables, net of $1.0 billion.
Consolidated balance sheet Finance receivables, net Finance receivables, net were $4.7 billion as of December 31, 2025, an increase of $547.3 million, or 13.2%, driven largely by portfolio purchases of $1.2 billion and Changes in expected recoveries of $176.5 million, partially offset by recoveries collected and applied to Finance receivables, net of $1.1 billion.
For discussion of our significant accounting policies, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. CRITICAL ACCOUNTING ESTIMATES Our Consolidated Financial Statements have been prepared in accordance with GAAP.
Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position.
Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. For further information regarding our uncertain tax positions, refer to Note 14 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Unless otherwise specified, references to 2024, 2023 and 2022 are for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. Executive Summary We are a global financial services company with operations in the Americas, Europe and Australia.
Unless otherwise specified, references to 2025, 2024 and 2023 are for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. EXECUTIVE OVERVIEW We are a global leader in acquiring and collecting nonperforming loans with 2,615 full-time employees worldwide.
For example, in 2024, we purchased $1.4 billion in nonperforming loan portfolios, which generated $213.6 million of cash collections, representing 11.4% of our total cash collections.
In 2025, we purchased $1.2 billion in nonperforming loan portfolios, which generated $196.6 million of cash collections, representing 9.3% of our total cash collections. Forward flows We enter into forward flow agreements for the purchase of nonperforming loans.
Effect of exchange rates on cash The net effect of exchange rates on cash decreased by $26.1 million in 2024, primarily due to the impact of the valuation of the U.S. dollar on foreign currency denominated borrowings and intercompany balances. 36 Recent Accounting Pronouncements For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Effect of foreign exchange rates The net effect of foreign exchange rates on cash decreased by $50.8 million in 2025, primarily due to the impact of the devaluation of the U.S. dollar on foreign currency denominated borrowings and intercompany balances.
Depending on the availability of public data and suitable comparable transaction data, we may give more weight to the income approach than the market approach.
Under the market approach, we estimate fair value based on market trading multiples and other relevant market transactions involving comparable publicly traded companies with operating and investment characteristics similar to the reporting unit. Depending on the availability of public data and suitable comparable transaction data, we may give more weight to the income approach than the market approach.
Purchase price multiples related to our existing portfolios were based on historical growth rates, while purchase price multiples on future portfolio purchases were based on recent and expected future purchasing metrics.
Forecasted financial results were developed considering several inputs and assumptions, including portfolio purchasing volume, PPMs, ERC growth rate, terminal value and operating expenses. PPMs related to our existing portfolios were based on historical growth rates, while PPMs on projected portfolio purchases were based on recent and expected future purchasing metrics.
Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net income/(loss) attributable to PRA Group, 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.
(5) Calculated by dividing cash receipts less Adjusted operating expenses by cash receipts ("Adjusted cash efficiency ratio"), which is a non-GAAP financial measure. Refer to section " Non-GAAP Financial Measures " below. (6) Calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc.
It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities.
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 by $9.1 million in 2025 due primarily to higher cash collections recognized as income, partially offset by higher cash paid for operating expenses, interest and taxes.
The increase was primarily due to an increase in Americas and Australia Core purchases of $212.2 million, driven by increases in market supply. Additionally, Europe Core purchases, which were spread broadly across our markets, increased $65.7 million due to higher volumes in certain markets and the addition of new sellers.
Core vintage was 2.16x, reflecting a steady increase in recent years. • Europe : Portfolio purchases were distributed broadly across our markets and increased by $10.4 million. Core portfolio purchases increased by $34.1 million due to higher volumes in certain markets and the addition of new sellers, partially offset by a decrease of $23.7 million in Insolvency purchases.
Borrowings As of December 31, 2024, we had the following committed amounts, borrowings and availability under our financing arrangements (amounts in thousands): Availability Committed Amount Borrowings Availability Based on Current ERC (1) Additional Availability (2) Total Availability North American revolving credit $ 1,075,000 $ 519,519 $ 278,539 $ 276,942 $ 555,481 UK revolving credit 725,000 494,185 90,045 $ 140,770 230,815 European revolving credit 795,769 555,726 195,737 $ 44,306 240,043 Term loan 470,111 470,111 — — — Senior notes 1,298,000 1,298,000 — — — Debt premium and issuance costs, net — (10,920) — — — Total $ 4,363,880 $ 3,326,621 $ 564,321 $ 462,018 $ 1,026,339 (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.
Borrowings As of December 31, 2025, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands): Composition of Total Availability Committed Amount Outstanding Borrowings Total Availability Based on Current ERC (1) Additional Availability (2) North American revolving credit facility $ 1,075,000 $ 520,736 $ 554,264 $ 382,986 $ 171,278 North American term loan 460,111 460,111 — — — UK revolving credit facility 725,000 499,848 225,152 122,121 103,031 European revolving credit facility 897,385 577,335 320,050 320,050 — Colombian revolving credit facility 2,611 2,611 — — — Senior notes 1,650,350 1,650,350 — — — Debt premium and issuance costs, net — (13,653) — — — Total $ 4,810,457 $ 3,697,338 $ 1,099,466 $ 825,157 $ 274,309 (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.
Investing activities Net cash used in investing activities increased $147.6 million in 2024, primarily driven by an increase of $246.8 million in purchases of nonperforming loan portfolios, offset by an increase of $110.9 million in recoveries collected and applied to Finance receivables, net.
Investing activities Net cash used in investing activities decreased by $322.5 million in 2025 due primarily to a decrease of $203.3 million in purchases of nonperforming loan portfolios, an increase of $71.3 million in recoveries collected and applied to Finance receivables, net and an increase of $49.2 million in proceeds from sales and maturities of investments.
As of December 31, 2024, we had forward flow agreements in place with an estimated purchase price of approximately $498.9 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 $403.1 million for the Americas and Australia and $95.8 million for Europe.
As of December 31, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $378.0 million over the next 12 months.
Goodwill Goodwill was $396.4 million as of December 31, 2024, a decrease of $35.2 million, or 8.2%, compared to $431.6 million as of December 31, 2023. The decrease was due to foreign currency translation adjustments.
The remaining difference was attributable to foreign currency translation. Goodwill Goodwill was $26.9 million as of December 31, 2025, a decrease of $369.5 million, or 93.2%, due to a goodwill impairment charge.
The increase was primarily driven by increased deposits from customers. 2023 vs. 2022 Refer to Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our 2023 Form 10-K for a discussion of our 2023 results compared to our 2022 results.
Consolidated Results of Operations (2024 and 2023) Refer to Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K for a discussion of our 2024 results compared to our 2023 results. NON-GAAP FINANCIAL MEASURES We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP").
Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes. There were no repurchases during 2024, and as of December 31, 2024, we had $67.7 million remaining for share repurchases under the program. Leases Our leases have remaining terms from one to 11 years.
Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.
The estimated interest, unused fees and principal payments for the next 12 months are $236.0 million, of which $10.0 million rel ates to principal on our term loan. After 12 months, principal payments on our debt are due from betwee n one and five year s.
Accordingly, amounts purchased under these agreements may vary significantly. Borrowings As of December 31, 2025, we had $3.7 billion in outstanding borr owings. The estimated interest, unused fees and principal payments for the next 12 months are $251.7 million, of which $10.0 million rel ates to principal on our term loan.
("RCB"), a servicing company for nonperforming loans in Brazil, and expect to record an estimated net after-tax gain of approximately $25.0 million prior to June 30, 2025 (refer to Note 1 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information).
Of the remaining $10.3 million, $7.6 million matures in 2028 and $2.8 million matures in 2029 and 2030. For additional information, refer to Note 8 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.
Interest expense, net Interest expense, net f or 2024 and 2023 was as follows (amounts in thousands): 2024 2023 $ Change % Change Interest on revolving credit facilities and term loan, and unused line fees $ 139,270 $ 110,684 $ 28,586 25.8 % Interest on senior notes 88,731 69,728 19,003 27.3 Interest on convertible notes — 5,032 (5,032) (100.0) Amortization of debt premium and issuance costs, net 10,567 9,223 1,344 14.6 Interest income (9,301) (12,943) 3,642 (28.1) Interest expense, net $ 229,267 $ 181,724 $ 47,543 26.2 % Interest expense, net was $229.3 million in 2024, an increase of $47.6 million, or 26.2%, compared to $181.7 million in 2023.
The sale did not impact the ownership of our portfolio investments in South America or our existing operations and expected future portfolio investments. 26 Interest expense, net Interest expense, net f or 2025 and 2024 was as follows (in thousands, except percentages): 2025 2024 $ Change % Change Interest on revolving credit facilities and term loan, and unused line fees $ 150,207 $ 139,270 $ 10,937 7.9 % Interest on senior notes 105,150 88,731 16,419 18.5 Amortization of debt premium and issuance costs, net 7,935 10,567 (2,632) (24.9) Interest income (11,504) (9,301) (2,203) 23.7 Interest expense, net $ 251,788 $ 229,267 $ 22,521 9.8 % Our Interest expense, net increased by $22.5 million, or 9.8%, compared to the prior year due primarily to a higher average debt balance in 2025.
Key inputs to the DBC reporting unit’s fair value under the income approach included our forecasted financial results and the discount rate. Forecasted financial results were developed considering several inputs and assumptions, including portfolio purchasing volume, purchase price multiples, ERC growth rate, terminal value multiple, operating expenses and the projected impact of certain strategic and operational initiatives.
We estimated the fair value of the DBC reporting unit based on the income approach and also compared the estimated fair value to our market capitalization. Key inputs to the DBC reporting unit’s fair value under the income approach included our forecasted financial results and the discount rate.
Financing activities Net cash provided by financing activities increased $135.5 million in 2024, primarily driven by $202.4 million in net proceeds from issuances and repayments of senior notes, and in 2023, the retirement of our convertible senior notes, a $61.3 million increase in interest-bearing deposits and a $35.1 million increase in net proceeds obtained under our term loan, offset by a decrease of $153.7 million in net proceeds from our lines of credit.
Financing activities Net cash provided by financing activities decreased by $374.9 million in 2025 due primarily to a decrease of $269.0 million in net proceeds from lines of credit, a $148.0 million decrease related to interest bearing deposits activity and a decrease of $37.6 million in net proceeds from long-term debt, partially offset by a $94.6 million increase in net proceeds from the issuance and repayment of senior notes.
Many of our financing arrangements include covenants with which we must comply, and as of December 31, 2024, we were in compliance with these covenants. On May 20, 2024, we issued $400.0 million in aggregate principal amount of our 2030 Notes.
After 12 months, principal payments on our debt are due from betwee n one and approximately seven year s. Our financing arrangements include covenants with which we must comply, and as of December 31, 2025, we were in compliance with these covenants. On September 30, 2025 , we completed the private offering of our 2032 senior notes.
Income tax expense/(benefit) Income tax expense/(benefit) and our effective tax rate for 2024 and 2023 were as follows (amounts in thousands): 2024 2023 $ Change % Change Income tax expense/(benefit) $ 21,032 $ (16,133) $ 37,165 230.4 % Effective tax rate 19.2 % 19.5 % Income tax expense was $21.0 million in 2024, an increase of $37.1 million, or 230.4%, compared to an income tax benefit of $16.1 million in 2023.
Income tax expense Income tax expense and our effective tax rate for 2025 and 2024 were as follows (in thousands, except percentages): 2025 2024 $ Change % Change Income tax expense $ 46,735 $ 21,032 $ 25,703 122.2 % Effective tax rate (19.2) % 19.2 % Our Income tax expense increased by $25.7 million, or 122.2%, compared to the prior year, while our effective tax rates for the years ended December 31, 2025 and 2024 were (19.2)% and 19.2%, respectively.
The increase was primarily due to net borrowings under senior notes of $252.0 million and incremental net borrowings under our North American revolving credit facility of $127.7 million associated with the increase in purchasing levels during the year.
Borrowings Borrowings were $3.7 billion as of December 31, 2025, an increase of $370.7 million, or 11.1%, due primarily to an increase in amounts outstanding under our senior notes and net borrowings under our European revolving credit facility of $21.6 million.
Operating expenses Operating expenses for 2024 and 2023 were as follows (amounts in thousands): 2024 2023 $ Change % Change Compensation and benefits $ 298,903 $ 288,778 $ 10,125 3.5 % Legal collection costs 124,782 89,131 35,651 40.0 Legal collection fees 56,623 38,072 18,551 48.7 Agency fees 83,334 74,699 8,635 11.6 Professional and outside services 83,218 82,619 599 0.7 Communication 43,433 40,430 3,003 7.4 Rent and occupancy 16,929 17,319 (390) (2.3) Depreciation, amortization and impairment 10,792 18,615 (7,823) (42.0) Other operating expenses 56,778 52,399 4,379 8.4 Total operating expenses $ 774,792 $ 702,062 $ 72,730 10.4 % Compensation and benefits Compensation and benefits expense increased $10.1 million, or 3.5%, due largely to higher wage costs and compensation accruals in the current year, offset by a decrease of $7.3 million in severance related expenses.
Changes in expected recoveries increased by $24.1 million due to a higher net increase in changes in expected future recoveries. 25 Operating expenses Total operating expenses and Adjusted operating expenses for 2025 and 2024 were as follows (in thousands, except percentages): 2025 2024 $ Change % Change Compensation and benefits $ 296,665 $ 298,903 $ (2,238) (0.7) % Legal collection costs (1) 161,647 124,782 36,865 29.5 Legal collection fees (2) 64,319 56,623 7,696 13.6 Agency fees (3) 92,424 83,334 9,090 10.9 Professional and outside services 84,389 83,218 1,171 1.4 Communication (4) 36,704 43,433 (6,729) (15.5) Rent and occupancy 14,517 16,929 (2,412) (14.2) Depreciation, amortization and impairment of long-lived assets 10,439 10,792 (353) (3.3) Goodwill impairment 412,611 — 412,611 100.0 Other operating expenses 58,395 56,778 1,617 2.8 Total operating expenses $ 1,232,110 $ 774,792 $ 457,318 59.0 % Adjusted operating expenses (5) $ 819,499 $ 774,792 $ 44,707 5.8 % (1) Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.
The increase was primarily due to an increase in U.S. Core cash collections of $153.5 million, driven by higher recent purchasing levels and our cash-generating initiatives, particularly in the legal collections channel, which increased by $112.0 million.
Core pools. • Europe : Portfolio revenue increased by $67.0 million due primarily to a $42.9 million increase in portfolio income driven by higher recent purchasing levels in several of our European markets and due, in part, to foreign exchange rate variation.
Sources of liquidity Cash and cash equivalents As of December 31, 2024, cash and cash equivalents totaled $105.9 million, of which $91.1 million consisted of cash related to international operations with indefinitely reinvested earnings.
(4) Reflects all vintages in South America, Canada and Australia. 35 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 December 31, 2025, cash and cash equivalents totaled $104.4 million, of which $93.0 million was held by international operations with indefinitely reinvested earnings.
Removed
Our primary business is the purchase, collection and management of portfolios of nonperforming loans. 2024 highlights • Portfolio purchases of $1.4 billion, an increase of 22.0%. • ERC of $7.5 billion at year-end, an increase of 16.6%. • Cash collections of $1.9 billion, an increase of 12.5%. • Net income attributable to PRA Group, Inc. of $70.6 million. • Diluted earnings per share of $1.79.
Added
Most of the nonperforming loans we purchase 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).
Removed
The past year was one of the most transformational years in our nearly three-decade long history.
Added
During the fourth quarter of 2025, we reorganized our business segment structure from a single operating segment into two operating and reportable segments, comprised of our U.S. and European businesses. On a significantly smaller scale, we also operate in South America, Canada and Australia.
Removed
In 2024, we expanded our senior leadership team, further differentiated our European business, strengthened our capital structure and delivered on our cash-generating and operational initiatives in the U.S, where improvements in our legal collections process helped drive 2024 U.S. legal collections of $376.0 million, an increase of 42.4% compared to the prior year.
Added
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.
Removed
Additionally, we initiated the consolidation of our U.S. collection sites from six to three and expanded our use of third-party offshore collection agencies, resulting in offshore collectors representing more than 30.0% of our overall U.S. collector base as of December 31, 2024.
Added
Results and business trends During 2025, we focused on strengthening our U.S. platform, building on the strength and momentum of our European business, executing on our near-term priorities and developing our longer-term strategy. Our 2025 results included the following: • Net loss attributable to PRA Group, Inc. of $305.1 million.
Removed
We continued to strengthen and expand our seller relationships globally in 2024, leveraging the diversification provided by our global portfolio. With strong execution, and by maintaining focus on our strategic pillars of optimizing investments, driving operational execution and managing expenses, we believe we are well positioned to sustain the momentum in 2025. U.S.
Added
Excluding the impact of Gain on sale of equity method investment and Goodwill impairment, Adjusted net income attributable to PRA of $72.6 million ("Adjusted net income attributable to PRA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below). • Portfolio income, the more stable and predictable yield component of our revenue, increased by 18.2% compared to 2024, outpacing the growth in cash collections and contributing more to our net results. • ERC of $8.6 billion at year-end, an increase of 15.4% compared to 2024, with the U.S. accounting for 42.5% of total ERC and Europe 51.0%. • Maintenance of a diversified capital structure consistent with our targeted leverage and liquidity objectives, completing the issuance of our first Euro-denominated senior notes (€300.0 million) and repurchasing $20.0 million shares of our common stock. • Further progress on our U.S. business initiatives focused on improving cost efficiency and operational flexibility, with a reduction in our U.S. onshore agent headcount of approximately 40% and concurrent increase in U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur intention is to spread our counterparty credit risk across a number of counterparties so that exposure to a single counterparty is mitigated. Interest Rate Risk We are subject to interest rate risk from borrowings on our variable rate credit facilities, as well as our interest-bearing deposits.
Biggest changeInterest rate exposure We are subject to interest rate risk from borrowings on our variable rate credit facilities and from our interest-bearing deposits. As such, our consolidated financial results are subject to fluctuations due to changes in market interest rates.
Foreign currency translation adjustments are included as a component of Other comprehensive income/(loss) in our Consolidated Statements of Comprehensive Income and as a component of Equity in our Consolidated Balance Sheets. We have taken measures to mitigate the impact of foreign currency fluctuations.
Foreign currency translation adjustments are included as a component of Other comprehensive income/(loss) in our Consolidated Statements of Comprehensive Loss and as a component of Equity in our Consolidated Balance Sheets. We have taken measures to mitigate the impact of foreign currency fluctuations.
Our subsidiaries use multiple functional currencies, and weakness in one particular currency might be offset by strength in other currencies over time. In 2024, our revenues from operations outside the U.S. were $520.6 million. Fluctuations in foreign currencies could cause us to incur foreign currency gains and losses, and could affect our comprehensive income and stockholders' equity.
Our subsidiaries use multiple functional currencies, and weakness in one particular currency might be offset by strength in other currencies over time. In 2025, our revenues from operations outside the U.S. were $590.6 million. Fluctuations in foreign currencies could cause us to incur foreign currency gains and losses and could affect our comprehensive income and stockholders' equity.
Borrowings on our variable rate credit facilities were $2.0 billion as of December 31, 2024, and based on our debt structure, assuming a 50 basis point decrease/increase in interest rates, interest expense over the following 12 months would decrease/increase by an estimated $7.0 million. Currency Exchange Risk We operate internationally and enter into transactions denominated in various foreign currencies.
Borrowings on our variable rate credit facilities were $2.1 billion as of December 31, 2025, and based on our debt structure, assuming a 50 basis point decrease/increase in interest rates, interest expense over the following 12 months would decrease/increase by an estimated $6.4 million. Foreign currency exposure We operate internationally and enter into transactions denominated in various foreign currencies.
We have organized our European operations so that portfolio ownership and collections generally occur within the same entity. Additionally, our European and UK credit facilities are multi-currency facilities, allowing us to better match funding and portfolio acquisitions by currency. We actively monitor the value of our finance receivables by currency.
We have organized our European business so that portfolio ownership and collections generally occur within the same entity. Additionally, our European and UK credit facilities are multi-currency facilities, allowing us to better match funding and portfolio acquisitions by currency.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Our business is subject to various financial risks, including market, currency, interest rate, credit, liquidity and cash flow risk. We use various strategies, including derivative financial instruments, to manage these risks; however, they can still impact our Consolidated Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Our business is primarily subject to interest rate and foreign currency risk. We use various strategies, including derivative financial instruments, to manage these risks; however, they may still affect our Consolidated Financial Statements.
Considering these fixed rate borrowings and the interest rate hedges on our variable rate debt, with maturities ranging from five months to five years, as of December 31, 2024, 60% of our total debt was either fixed rate or converted to a fixed rate.
Considering these fixed rate borrowings and the interest rate hedges on our variable rate debt, with maturities ranging from one month to four years, as of December 31, 2025, 66% of our total debt was either fixed rate or converted to a fixed rate.
In the event adjustments are required to our liability composition by currency, we may, from time-to-time, execute re-balancing foreign exchange contracts to more closely align funding and portfolio acquisitions by currency. 40
In the event adjustments are required to our liability composition by currency, we may, from time-to-time, execute re-balancing foreign exchange contracts to more closely align funding and portfolio acquisitions by currency. We also actively monitor the value of our finance receivables by currency. 41
As such, our consolidated financial results are subject to fluctuations due to changes in market interest rates. To reduce our exposure to changes in the market rate of interest, we have entered into interest rate derivative contracts to hedge a portion of our borrowings under floating rate financing arrangements.
To reduce our exposure to changes in the market rate of interest, we have entered into interest rate derivative contracts to hedge a portion of our borrowings under floating rate financing arrangements. Under the terms of the interest rate derivatives, we receive a variable interest rate and pay a fixed interest rate.
Under the terms of the interest rate derivatives, we receive a variable interest rate and pay a fixed interest rate. Of our $3.3 billion in total borrowings as of December 31, 2024, $1.3 billion was fixed rate debt.
Of our $3.7 billion in total borrowings as of December 31, 2025, $1.7 billion was fixed rate debt.
Removed
We do not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed, nor do we enter into or hold derivatives for trading or speculative purposes. Derivative instruments involve, to varying degrees, elements of non-performance or credit risk.
Removed
We do not believe that we currently face a significant risk of loss in the event of non-performance by the counterparties to these instruments, as these transactions were executed with a diversified group of major financial institutions with investment-grade credit ratings.

Other PRAA 10-K year-over-year comparisons