PRA Group Inc reported second-quarter 2026 cash collections of $559 million, up 4% YoY, with net income rising to $58 million, or $1.51 per diluted share.

Total revenues rose 29% to $372 million, driven by higher changes in expected recoveries, largely reflecting a $349 million increase in European Expected Recoverable Cash (ERC) following a comprehensive portfolio review. Portfolio income grew 7% to $268 million, representing the largest component of the company's revenue stream. ERC at quarter end reached a record $8.9 billion, up 7% YoY, with Europe accounting for 54% and the U.S. accounting for 40%.

Key financial highlights

The table below summarises PRA Group's key financial metrics for Q2 2026 compared to Q2 2025.

Portfolio purchases and capital allocation

PRA Group invested $297 million in portfolio purchases during the quarter, in line with expectations. Europe accounted for $174 million of purchases while the U.S. contributed $109 million. The Europe core purchase price multiple remained stable sequentially at 1.86 times, while the U.S. core purchase price multiple increased to 2.17 times. The company noted that based on average purchase price multiples for the first half of 2026, it would need to invest $1 billion over the next 12 months to maintain current ERC levels.

During the quarter, PRA Group repurchased $10 million of shares, bringing total repurchases over the last 12 months to approximately $40 million. The board authorized a new share repurchase program for up to $150 million. The company also completed the refinancing of its $730 million European credit facility, maintaining the same commitment level and pricing while extending the maturity by an additional five years. As of June 30, total committed capital under credit facilities stood at $3.1 billion, with total availability of approximately $1 billion.

European ERC review and revenue impact

Europe has exceeded cash collection expectations for 26 consecutive quarters, including a 9% overperformance in the past 12 months. Following a comprehensive review of European portfolios, PRA Group increased European ERC by $349 million. The company expects approximately $260 million of additional portfolio income to be recognized over the remaining life of the European cash curves, translating to an average annualized increase in portfolio income of approximately $25 million in the near term. Changes in expected recoveries totalled $97 million in the quarter, of which $23 million came from cash collected above expectations and $74 million from changes in expected future recoveries.

Operational restructuring and cost reduction

PRA Group's PRA 3.0 strategy is organized around three vectors: Capital and Investing, Operations, Technology and Data, and People and Culture. Under the second wave of cost reductions implemented in Q2 2026, the company eliminated 100 U.S. corporate and overhead roles and 35 offshore roles, expected to generate approximately $20 million of annualized savings on a net basis. Since the start of 2025, more than 215 corporate and overhead roles have been eliminated, a reduction of more than 25%, in addition to reducing more than 575 call center roles. Combined, the first and second cost reduction waves are expected to generate approximately $35 million of annualized savings on a net basis.

Key operational milestones in the quarter included:

• Reduction of U.S. call centers from seven (in 2023) to one, with operations transitioning to a work-from-home model
• Consolidation of two offshore third-party collection sites to one location
• Launch of a cloud-based omnichannel contact platform in the U.S., integrating voice, digital, chat, and email
• Centralization of global AI initiative leadership through a dedicated team based in Charlotte
• Nearly half of new payment plans created during the quarter originated from the digital channel
• U.S. legal channel cash collections grew 26% to $150 million, representing more than half of all U.S. core cash collections

Compensation and benefits expenses decreased 7%, reflecting workforce reduction actions. Communication expenses fell 19%, reflecting a shift toward digital engagement and reduced reliance on letter-based communications. Total operating expenses of $219 million included $5 million of one-time reorganization costs, comprising $2 million in severance and $3 million in site consolidation charges. Net interest expense was $64 million for the quarter, up $2 million YoY. The effective tax rate was approximately 33% for the quarter, with full-year 2026 guidance of approximately 30% depending on income mix.

PRA Group, Inc. (NASDAQ: PRAA) announced that its management team will present to investors at the 2026 Midwest IDEAS Conference in Chicago, Illinois.

The presentation is scheduled for Wednesday, August 26, 2026, at 11:15 am Central time. The global leader in acquiring and collecting nonperforming loan portfolios will use the platform to engage with the investment community.

Presentation Details

Investors unable to attend in person can access a webcast of the presentation along with accompanying slides via PRA Group’s investor relations website. The digital materials will be available post-event for review.

Investor Engagement

For those seeking direct interaction, PRA Group invited stakeholders to schedule one-on-one meetings or request additional information through its investor relations department. Contacts include Najim Mostamand, CFA, Vice President of Investor Relations, reachable at IR@PRAGroup.com or 757-431-7913.

About PRA Group

Headquartered in Norfolk, Virginia, PRA Group specializes in purchasing nonperforming loan portfolios from banks and other creditors. With more than 30 years of experience, the company operates across the U.S., Europe, and other international markets, collaborating with customers to resolve debt obligations.