PRA Group NASDAQ: PRAA outlined its strategy, operating trends and capital priorities during a company presentation, highlighting a favorable supply environment for non-performing loan portfolios, ongoing cost reductions and investments in technology.
Chief Executive Officer Martin Sjolund said the company operates in the market for non-performing loans, purchasing charged-off consumer debt portfolios from banks and finance companies and seeking to collect more than it paid for them. PRA Group operates in 18 markets, with operations split roughly evenly between the United States and Europe.
Sjolund said banks can either collect delinquent accounts internally or sell portfolios to debt buyers. PRA uses data, analytics, collection operations and, when warranted, legal channels to pursue recoveries. The company works with customers on repayment arrangements that can include flexible plans and discounts, he said.
Portfolio, market and operating metrics
The company reported estimated remaining collections, or ERC, of $8.9 billion, representing the cash it expects to collect from portfolios it already owns over coming years. Sjolund emphasized that ERC is not the face value of customer obligations, but rather the company’s estimate of future cash collections.
During the second quarter, PRA Group purchased $297 million of portfolios, collected $559 million in cash and generated $58 million of net income, according to the presentation. Last-12-month adjusted EBITDA was $1.4 billion, while net leverage stood at 2.67 times. The company said it had completed seven consecutive quarters of deleveraging.
Sjolund described the U.S. non-performing loan market as the world’s largest, citing U.S. credit card balances of more than $1 trillion. He said charge-off rates had been relatively stable and had trended modestly lower. A weaker economy could increase delinquencies and the supply of portfolios available for purchase, although it could also affect collections on portfolios already owned.
“The overall supply environment is at a pretty good level,” Sjolund said of both the U.S. and European markets. He characterized both markets as competitive, while noting that the U.S. regulatory framework creates barriers to entry because companies must navigate federal, state and, in some cases, city-level requirements.
PRA 3.0 strategy and restructuring actions
The company’s PRA 3.0 strategy centers on disciplined capital deployment, operational and technology modernization, and people and culture. Sjolund said PRA Group is directing capital toward its highest-return opportunities while weighing collection costs, funding costs and the timing of cash flows.
As part of its operating initiatives, the company has undertaken two major cost restructurings in its U.S. business. Those actions included eliminating 215 corporate and overhead positions, a 25% reduction in overhead headcount, as well as 575 call-center positions.
PRA Group expects the measures to produce $35 million in annualized net savings once they reach run-rate toward the end of next year. The company also closed two U.S. call centers and one offshore site during the second quarter, reducing its U.S. call-center footprint from seven locations to one.
Sjolund said PRA Group recently launched a cloud-based customer contact platform in the U.S., after deploying the platform in Europe several years earlier. The company is also building an artificial intelligence team and expanding digital tools intended to make it easier for customers to engage through phones and other channels.
“The main thing is we want to improve our returns,” Sjolund said, identifying net income and return on equity as the company’s principal long-term measures of success. He added that cash efficiency, underwriting performance and investment volumes remain important operating measures.
Financial momentum and capital allocation
Chief Financial Officer Rakesh Sehgal said PRA Group invested $1.4 billion in portfolios in 2024, a company record, followed by $1.2 billion in 2025, its third-highest annual investment total. The company plans to remain disciplined on investments and focus on net returns and profitability through the rest of 2026, he said.
Cash collections have risen 32% since 2023, while cash efficiency has improved by more than 200 basis points, according to Sehgal. Cash EBITDA, which he said is equivalent to adjusted EBITDA, increased 35% and outpaced cash collections.
Sehgal said net leverage had declined from a 2.9-times peak in 2024 to 2.67 times as of June 30. He also noted that adjusted net income was in the low-$70 million range in each of 2024 and 2025, following a portfolio write-down in 2023. The last-12-month figure was elevated by a one-time write-up of the European portfolio, he said.
The company reported about $1 billion of liquidity and no debt maturities until 2028. Its funding includes $3 billion of bank commitments across North America, the U.K. and Europe, plus approximately $1.6 billion of U.S.-dollar and euro-denominated bonds. PRA Group issued its inaugural euro-denominated bond in 2025.
In addition to portfolio purchases and business investments, the company said opportunistic share repurchases are part of its capital-allocation approach. It repurchased $40 million of stock over the prior 15 months, and its board recently authorized a new $150 million share repurchase program.
Sjolund said competitive intensity remains a key risk, even in a healthy portfolio-supply environment. The company reviews investment opportunities across its markets weekly and seeks to shift capital toward opportunities with the strongest expected returns, he said.
About PRA Group (NASDAQ:PRAA)
PRA Group, Inc is a global financial services company that purchases portfolios of accounts receivable from banks, credit unions, consumer finance companies and other creditors. These portfolios generally consist of nonperforming or distressed consumer accounts, including unpaid credit card balances, personal loans and other forms of unsecured debt.
After acquiring receivables, PRA Group works directly with consumers to establish repayment arrangements and resolve outstanding obligations.
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