praa-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________ to ________

Commission File Number: 000-50058

PRA Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware

75-3078675

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

120 Corporate Boulevard

Norfolk, Virginia 23502

(Address of principal executive offices)

(888) 772-7326

(Registrant's Telephone No., including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PRAA	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of the registrant's common stock outstanding as of July 31, 2026 was 37,648,006.

PRA Group, Inc.

Form 10-Q for the Quarterly Period Ended June 30, 2026

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		Page

Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Income Statements	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
	Note 1. Organization and Business	9

	Note 2. Finance Receivables, net	9
	Note 3. Investments	12
	Note 4. Goodwill	12

	Note 5. Borrowings	13
	Note 6. Derivatives	14
	Note 7. Fair Value	15
	Note 8. Accumulated Other Comprehensive Loss	16
	Note 9. Stockholders' Equity	17
	Note 10. Earnings per Share	17
	Note 11. Income Taxes	17
	Note 12. Commitments and Contingencies	18
	Note 13. Business Segments	18
	Note 14. Recent Accounting Pronouncements	20
	Note 15. Subsequent Event	21
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42

Signatures		44

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PRA Group, Inc.

Consolidated Balance Sheets

June 30, 2026 and December 31, 2025

(in thousands)


	(unaudited)
	June 30, 2026		December 31, 2025
ASSETS
Cash and cash equivalents	$	132,431	$	104,409

Investments	145,473		66,628
Finance receivables, net	4,717,204		4,688,024

Income taxes receivable	20,912		17,702
Deferred tax assets, net	64,936		76,955
Right-of-use assets	27,836		29,206
Property and equipment, net	22,213		24,886
Goodwill	26,871		26,871
Prepaid expenses and other assets	80,891		68,641
Total assets	$	5,238,767	$	5,103,322
LIABILITIES AND EQUITY
Liabilities
Accrued expenses and accounts payable	$	129,175	$	131,812

Income taxes payable	36,356		29,845
Deferred tax liabilities, net	32,240		17,064
Lease liabilities	30,681		32,160
Interest-bearing deposits	100,460		106,148
Borrowings	3,759,353		3,697,338
Other liabilities	37,605		48,990
Total liabilities	4,125,870		4,063,357

Equity
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $0.01 par value; 100,000 shares authorized, 37,648 shares issued and outstanding as of June 30, 2026; 100,000 shares authorized, 38,453 shares issued and outstanding as of December 31, 2025	376		385
Additional paid-in capital	—		11,474
Retained earnings	1,338,814		1,255,007
Accumulated other comprehensive loss	(293,721)		(287,015)
Total stockholders' equity - PRA Group, Inc.	1,045,469		979,851
Noncontrolling interests	67,428		60,114
Total equity	1,112,897		1,039,965
Total liabilities and equity	$	5,238,767	$	5,103,322

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Income Statements

For the Three and Six Months Ended June 30, 2026 and 2025

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Revenues
Portfolio income	$	267,799	$	250,934	$	537,378	$	491,892
Changes in expected recoveries	96,924		33,292		140,810		61,214
Total portfolio revenue	364,723		284,226		678,188		553,106
Other revenue	7,451		3,462		8,519		4,201
Total revenues	372,174		287,688		686,707		557,307

Operating expenses
Compensation and benefits	70,377		75,724		141,115		149,047
Legal collection costs	52,525		37,583		100,983		70,977
Legal collection fees	18,386		15,625		35,457		30,855
Agency fees	23,214		22,688		47,795		44,056
Professional and outside services	22,512		21,071		43,396		42,174
Communication	7,664		9,417		16,683		19,894
Rent and occupancy	3,730		3,504		6,988		6,984
Depreciation, amortization and impairment of long-lived assets	4,724		2,503		6,432		6,272

Other operating expenses	15,760		14,462		31,322		27,360

Total operating expenses	218,892		202,577		430,171		397,619
Income from operations	153,282		85,111		256,536		159,688
Other income/(expense)

Interest expense, net	(64,363)		(62,361)		(127,881)		(123,331)
Gain on sale of equity method investment	—		38,403		—		38,403
Foreign exchange gain/(loss), net	(501)		50		553		(1)
Other	(92)		(75)		(346)		(255)
Income before income taxes	88,326		61,128		128,862		74,504

Income tax expense	29,385		15,415		38,149		19,727
Net income	58,941		45,713		90,713		54,777
Net income attributable to noncontrolling interests	1,024		3,339		4,586		8,744
Net income attributable to PRA Group, Inc.	$	57,917	$	42,374	$	86,127	$	46,033

Net income per common share attributable to PRA Group, Inc.
Basic	$	1.52	$	1.08	$	2.25	$	1.17
Diluted	$	1.51	$	1.08	$	2.24	$	1.16
Weighted average number of shares outstanding
Basic	38,104		39,323		38,236		39,436
Diluted	38,303		39,385		38,407		39,536

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2026 and 2025

(in thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net income	$	58,941	$	45,713	$	90,713	$	54,777
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments	(6,094)		90,041		(8,582)		175,339
Cash flow hedges	(2,198)		(6,297)		6,138		(8,239)
Debt securities available-for-sale	128		148		(12)		(33)
Other comprehensive income/(loss)	(8,164)		83,892		(2,456)		167,067
Total comprehensive income	50,777		129,605		88,257		221,844
Comprehensive income attributable to noncontrolling interests	1,980		6,052		8,835		16,151
Comprehensive income attributable to PRA Group, Inc.	$	48,797	$	123,553	$	79,422	$	205,693

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2026

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive		Noncontrolling		Total
	Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance as of December 31, 2025	38,453	$	385	$	11,474	$	1,255,007	$	(287,015)	$	60,114	$	1,039,965

Net income	—	—		—		28,210		—		3,562		31,772
Other comprehensive income, net of tax	—	—		—		—		2,416		3,292		5,708



Distributions to noncontrolling interests	—	—		—		—		—		(702)		(702)
Vesting of restricted stock	235	1		(1)		—		—		—		—
Repurchase and cancellation of common stock	(547)	(5)		(9,995)		—		—		—		(10,000)
Share-based compensation expense	—	—		4,513		—		—		—		4,513
Employee stock relinquished for payment of taxes	—	—		(2,702)		—		—		—		(2,702)
Balance as of March 31, 2026	38,141	$	381	$	3,289	$	1,283,217	$	(284,599)	$	66,266	$	1,068,554

Net income	—	—		—		57,917		—		1,024		58,941
Other comprehensive income/(loss), net of tax	—	—		—		—		(9,122)		958		(8,164)



Distributions to noncontrolling interests	—	—		—		—		—		(820)		(820)

Vesting of restricted stock	95	1		(1)		—		—		—		—
Repurchase and cancellation of common stock	(588)	(6)		(7,674)		(2,320)		—		—		(10,000)
Share-based compensation expense	—	—		4,589		—		—		—		4,589
Employee stock relinquished for payment of taxes	—	—		(203)		—		—		—		(203)
Balance as of June 30, 2026	37,648	$	376	$	—	$	1,338,814	$	(293,721)	$	67,428	$	1,112,897

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2025

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive		Noncontrolling		Total
	Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance as of December 31, 2024	39,510	$	395	$	17,882	$	1,560,149	$	(443,394)	$	58,575	$	1,193,607

Net income	—	—		—		3,659		—		5,405		9,064
Other comprehensive income, net of tax	—	—		—		—		78,481		4,694		83,175



Distributions to noncontrolling interests	—	—		—		—		—		(7,264)		(7,264)
Vesting of restricted stock	142	2		(2)		—		—		—		—
Share-based compensation expense	—	—		3,788		—		—		—		3,788
Employee stock relinquished for payment of taxes	—	—		(1,852)		—		—		—		(1,852)
Balance as of March 31, 2025	39,652	$	397	$	19,816	$	1,563,808	$	(364,913)	$	61,410	$	1,280,518

Net income	—	—		—		42,374		—		3,339		45,713
Other comprehensive income, net of tax	—	—		—		—		81,179		2,713		83,892



Distributions to noncontrolling interests	—	—		—		—		—		(7,776)		(7,776)
Vesting of restricted stock	82	1		(1)		—		—		—		—
Repurchase and cancellation of common stock	(660)	(7)		(9,993)		—		—		—		(10,000)
Share-based compensation expense	—	—		4,464		—		—		—		4,464
Employee stock relinquished for payment of taxes	—	—		(200)		—		—		—		(200)
Balance as of June 30, 2025	39,074	$	391	$	14,086	$	1,606,182	$	(283,734)	$	59,686	$	1,396,611

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2026 and 2025

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	90,713	$	54,777
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	9,103		8,252
Depreciation, amortization and impairment of long-lived assets	6,432		6,272

Gain on sale of equity method investment	—		(38,403)

Amortization of debt premium and issuance costs	4,239		3,863
Changes in expected recoveries	(140,810)		(61,214)

Deferred income taxes	23,967		(2,733)
Net unrealized foreign currency transaction gain	(943)		(13,055)

Other	(608)		935

Changes in operating assets and liabilities:
Prepaid expenses and other assets	(6,105)		(6,451)

Accrued expenses, accounts payable and other liabilities	2,668		(17,733)




Net cash used in operating activities	(11,344)		(65,490)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net	(3,810)		(2,178)

Purchases of nonperforming loan portfolios	(521,713)		(633,308)
Recoveries collected and applied to Finance receivables, net	580,742		554,715
Purchases of investments	(152,233)		(57,898)
Proceeds from sales and maturities of investments	65,504		105,261



Net cash used in investing activities	(31,510)		(33,408)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines of credit	357,948		407,127
Principal payments on lines of credit	(264,810)		(245,297)
Principal payments on long-term debt	(5,000)		(5,000)




Repurchases of common stock	(20,000)		(10,000)

Payments of origination costs and fees	(7,748)		(878)
Tax withholdings related to share-based payments	(2,905)		(2,052)
Distributions to noncontrolling interests	(1,522)		(15,040)


Net decrease in interest-bearing deposits	(869)		(22,960)


Net cash provided by financing activities	55,094		105,900
Effect of foreign exchange rates	14,796		20,885
Net increase in cash, cash equivalents and restricted cash	27,036		27,887
Cash, cash equivalents and restricted cash, beginning of period	108,643		107,431
Cash, cash equivalents and restricted cash, end of period	$	135,679	$	135,318

Supplemental disclosure of cash flow information
Cash paid for interest	$	126,959	$	132,590
Cash paid for income taxes	8,264		19,551
Reconciliation to Balance Sheet accounts
Cash and cash equivalents	$	132,431	$	131,592
Restricted cash included in Prepaid expenses and other assets	3,248		3,726
Cash, cash equivalents and restricted cash	$	135,679	$	135,318

The accompanying notes are an integral part of these Consolidated Financial Statements.

PRA Group, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Business

As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries.

Nature of operations

PRA Group, Inc. is a specialty finance company headquartered in Norfolk, Virginia and incorporated in Delaware. The Company's primary business is the purchase, collection and management of nonperforming loan portfolios. Most of the Company's purchases 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, it also purchases loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts). The Company's principal markets are the United States (“U.S.”) and Europe, and on a significantly smaller scale, it also operates in South America, Canada and Australia. As part of an ancillary business, the Company purchases and provides fee-based services for class action claims recoveries in the U.S.

Basis of presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the instructions for Quarterly Reports on Form 10-Q of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for a fair presentation have been included. These unaudited Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed, and realized results could differ from those estimates and assumptions.

These unaudited Consolidated Financial Statements may not be indicative of future results and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K").

Prior period reclassifications

In the Consolidated Statements of Changes in Equity, certain prior period amounts have been reclassified for consistency with the current period presentation.

Note 2. Finance Receivables, net

Finance receivables, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):


	June 30, 2026		December 31, 2025
Amortized cost	$	—	$	—
Negative allowance for expected recoveries	4,717,204		4,688,024
Balance as of end of period	$	4,717,204	$	4,688,024

Changes in Finance receivables, net for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Balance as of beginning of period	$	4,344,825	$	292,269	$	4,637,094	$	3,986,864	$	321,470	$	4,308,334
Initial negative allowance for expected recoveries on current period purchases (1)	267,517		29,054		296,571		319,562		26,943		346,505
Recoveries collected and applied to Finance receivables, net (2)	(262,920)		(30,231)		(293,151)		(251,657)		(37,940)		(289,597)
Changes in expected recoveries (3)	77,772		19,152		96,924		25,342		7,950		33,292
Foreign currency translation adjustment	(20,231)		(3)		(20,234)		154,158		9,884		164,042
Balance as of end of period	$	4,406,963	$	310,241	$	4,717,204	$	4,234,269	$	328,307	$	4,562,576


	Six Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Balance as of beginning of period	$	4,383,201	$	304,823	$	4,688,024	$	3,809,723	$	331,019	$	4,140,742
Initial negative allowance for expected recoveries on current period purchases (1)	470,467		46,954		517,421		593,455		44,752		638,207
Recoveries collected and applied to Finance receivables, net (2)	(518,826)		(61,916)		(580,742)		(483,140)		(71,575)		(554,715)
Changes in expected recoveries (3)	118,126		22,684		140,810		51,667		9,547		61,214
Foreign currency translation adjustment	(46,005)		(2,304)		(48,309)		262,564		14,564		277,128
Balance as of end of period	$	4,406,963	$	310,241	$	4,717,204	$	4,234,269	$	328,307	$	4,562,576

(1) Initial negative allowance for expected recoveries on current period purchases

The initial negative allowance for expected recoveries on purchases made during the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Allowance for credit losses at acquisition	$	(1,453,783)	$	(100,406)	$	(1,554,189)	$	(1,635,702)	$	(87,742)	$	(1,723,444)
Writeoffs, net	1,453,783		100,406		1,554,189		1,635,702		87,742		1,723,444
Expected recoveries	267,517		29,054		296,571		319,562		26,943		346,505
Initial negative allowance for expected recoveries on current period purchases	$	267,517	$	29,054	$	296,571	$	319,562	$	26,943	$	346,505


	Six Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Allowance for credit losses at acquisition	$	(2,644,455)	$	(162,128)	$	(2,806,583)	$	(3,053,673)	$	(161,334)	$	(3,215,007)
Writeoffs, net	2,644,455		162,128		2,806,583		3,053,673		161,334		3,215,007
Expected recoveries	470,467		46,954		517,421		593,455		44,752		638,207
Initial negative allowance for expected recoveries on current period purchases	$	470,467	$	46,954	$	517,421	$	593,455	$	44,752	$	638,207

The purchase price for purchases made during the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Face value	$	1,983,813	$	145,792	$	2,129,605	$	2,269,417	$	129,842	$	2,399,259
Noncredit discount	(262,513)		(16,332)		(278,845)		(314,153)		(15,157)		(329,310)
Allowance for credit losses at acquisition	(1,453,783)		(100,406)		(1,554,189)		(1,635,702)		(87,742)		(1,723,444)
Purchase price	$	267,517	$	29,054	$	296,571	$	319,562	$	26,943	$	346,505


	Six Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Face value	$	3,571,664	$	235,878	$	3,807,542	$	4,235,481	$	231,316	$	4,466,797
Noncredit discount	(456,742)		(26,796)		(483,538)		(588,353)		(25,230)		(613,583)
Allowance for credit losses at acquisition	(2,644,455)		(162,128)		(2,806,583)		(3,053,673)		(161,334)		(3,215,007)
Purchase price	$	470,467	$	46,954	$	517,421	$	593,455	$	44,752	$	638,207

(2) Recoveries collected and applied to Finance receivables, net

Recoveries collected and applied to Finance receivables, net for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected (a)	$	519,393	$	41,557	$	560,950	$	491,074	$	49,457	$	540,531
Amounts reclassified to portfolio income (b)	(256,473)		(11,326)		(267,799)		(239,417)		(11,517)		(250,934)
Recoveries collected and applied to Finance receivables, net	$	262,920	$	30,231	$	293,151	$	251,657	$	37,940	$	289,597


	Six Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected (a)	$	1,033,547	$	84,573	$	1,118,120	$	952,043	$	94,564	$	1,046,607
Amounts reclassified to portfolio income (b)	514,721		22,657		537,378		468,903		22,989		491,892
Recoveries collected and applied to Finance receivables, net	$	518,826	$	61,916	$	580,742	$	483,140	$	71,575	$	554,715

(a)Includes cash collections, buybacks and other cash-based adjustments.

(b)Reclassifications from Finance receivables, net to Portfolio income based on the effective interest rate of the underlying account pools.

(3) Changes in expected recoveries

Changes in expected recoveries for the three months ended June 30, 2026 and 2025 were as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected in excess of forecast	$	19,138	$	3,604	$	22,742	$	32,316	$	7,986	$	40,302
Changes in expected future recoveries	58,634		15,548		74,182		(6,974)		(36)		(7,010)
Changes in expected recoveries	$	77,772	$	19,152	$	96,924	$	25,342	$	7,950	$	33,292

Changes in expected recoveries for the three months ended June 30, 2026 were $96.9 million, which included a $74.2 million positive adjustment to changes in expected future recoveries and $22.7 million in recoveries collected in excess of forecast (cash collections overperformance). The Company updated the forecasts for a majority of the pools in its European markets as part of the June 30, 2026 quarterly assessment and calculation of expected future recoveries, which resulted in a positive adjustment to changes in expected future recoveries of approximately $105 million. These forecasts reflected sustained cash collections overperformance across multiple markets; analysis of historical collection trends and expected collection patterns; the increased depth of our data sets; and enhancements made to our analytical processes and forecasting capabilities. This increase in changes in expected future recoveries was partially offset by decreases in the collections forecasts on multiple pools within the Company's other markets and the 2022-2025 U.S. Core pools. Recoveries collected in excess of forecast were due primarily to cash collections overperformance in Europe.

Changes in expected recoveries for the three months ended June 30, 2025 were $33.3 million, which included $40.3 million in recoveries collected in excess of forecast (cash collections overperformance) and a $7.0 million negative adjustment in changes in expected future recoveries. Recoveries collected in excess of forecast were largely due to cash collections overperformance in Europe, U.S., and Brazil. Changes in expected future recoveries were primarily due to a decrease to the collections forecast on the 2023 U.S. Core pool, which was partially offset by the impact of increases to the Company's collections forecasts in Europe.

Changes in expected recoveries for the six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Six Months Ended June 30,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected in excess of forecast	$	38,330	$	7,110	$	45,440	$	46,606	$	10,196	$	56,802
Changes in expected future recoveries	79,796		15,574		95,370		5,061		(649)		4,412
Changes in expected recoveries	$	118,126	$	22,684	$	140,810	$	51,667	$	9,547	$	61,214

Changes in expected recoveries for the six months ended June 30, 2026 were $140.8 million, which included a $95.4 million positive adjustment to changes in expected future recoveries and $45.4 million in recoveries received in excess of forecast. As described above, the Company updated the forecasts for a majority of the pools within its European markets as of June 30, 2026, resulting in a positive adjustment to changes in expected future recoveries of approximately $105 million. This increase was partially offset by decreases in the collections forecasts on multiple pools within the Company's other markets. Recoveries collected in excess of forecast were due mainly to collections performance in Europe.

Changes in expected recoveries for the six months ended June 30, 2025 were $61.2 million, which included $56.8 million in recoveries collected in excess of forecast and $4.4 million in changes in expected future recoveries. Recoveries collected in excess of forecast were largely due to cash collections overperformance in Europe and Brazil. Changes in expected future recoveries were primarily due to the impact of increases to the Company's collections forecasts on certain European pools, which was partially offset by decreases to the Company's collections forecasts on the 2023 U.S. Core pool.

Note 3. Investments

Investments consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):


	June 30, 2026		December 31, 2025


Debt securities (available-for-sale)
Swedish treasury securities	$	117,635	$	64,934
Finnish corporate notes	26,483		—



Equity securities
Private equity funds	1,355		1,694


Total investments	$	145,473	$	66,628

Debt securities

As of June 30, 2026, the Company's investments in debt securities consisted of Swedish treasury securities maturing within one year and Finnish corporate notes maturing in approximately two years. As of June 30, 2026 and December 31, 2025, the amortized cost and fair value of these investments were as follows (in thousands):


	June 30, 2026								December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value		Amortized Cost		Gross Unrealized Gains		Aggregate Fair Value



Swedish treasury securities	$	117,538	$	97	$	—	$	117,635	$	64,825	$	109	$	64,934
Finnish corporate notes	26,544		—		(61)		26,483		—		—		—

Note 4. Goodwill

Changes in goodwill for the three and six months ended June 30, 2026 and 2025, were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Goodwill	$	439,482	$	420,715	$	439,482	$	396,357
Accumulated impairment loss	(412,611)		—		(412,611)		—
Balance as of beginning of period	26,871		420,715		26,871		396,357

Activity during the period



Foreign currency translation	—		18,734		—		43,092

Goodwill	439,482		439,449		439,482		439,449
Accumulated impairment loss	(412,611)		—		(412,611)		—
Balance as of end of period	$	26,871	$	439,449	$	26,871	$	439,449

The Company performs an annual impairment test of goodwill as of October 1 of each year, or more frequently if indicators of impairment exist. As of June 30, 2026, the Company determined there were no indicators that goodwill was more-likely-than-not impaired.

Note 5. Borrowings

Borrowings consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):


	June 30, 2026		December 31, 2025
North American revolving credit facility (1)	$	565,092	$	520,736
North American term loan (2)	455,111		460,111
United Kingdom revolving credit facility (3)	491,946		499,848
European revolving credit facility (4)	618,227		577,335
Colombian revolving credit facility	245		2,611
Credit facility borrowings	2,130,621		2,060,641
2028 senior notes	398,000		398,000
2029 senior notes	350,000		350,000
2030 senior notes	550,000		550,000
2032 senior notes	342,630		352,350
Senior notes	1,640,630		1,650,350
Credit facility borrowings and senior notes	3,771,251		3,710,991
Unamortized debt premium and issuance costs, net	(11,898)		(13,653)
Total borrowings	$	3,759,353	$	3,697,338

(1)Revolving credit facility under the Company's North American credit agreement with a combined domestic and Canadian limit of $1.1 billion (subject to the borrowing base and debt covenants, including advance rates), maturing on October 28, 2029.

(2)Term loan under the Company's North American credit agreement with a maturity date of October 28, 2029.

(3)Revolving credit facility with a limit of $725.0 million (subject to the borrowing base and debt covenants, including advance rates), maturing on October 30, 2029.

(4)Revolving credit facility with an aggregate limit of approximately €730.0 million (subject to the borrowing base and debt covenants, including advance rates), maturing on April 30, 2031.

European revolving credit facility

The Company amended and extended its European revolving credit facility on April 30, 2026, resulting in the extension of the maturity date from November 23, 2027 to April 30, 2031; the reduction of the maximum ERC ratio (as defined in the agreement) from 45.0% to 40.0%; and, subject to certain conditions, the ability of the borrowers to make investments in, or loans to, joint ventures up to an aggregate amount of €100 million.

For additional information about the Company's credit facilities, term loan and senior notes, refer to Note 7 to the Consolidated Financial Statements in the 2025 Form 10-K. The Company was in compliance with the covenants contained in its financing arrangements as of June 30, 2026.

Note 6. Derivatives

The Company periodically enters into interest rate swaps to reduce its exposure to fluctuations in interest rates on variable-rate debt (cash flow hedges) and foreign exchange forward contracts to reduce its exposure to foreign currency exchange rates (economic hedges).

The line-items and fair values for these instruments included in the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 was as follows (in thousands):


	June 30, 2026		December 31, 2025
Interest rate swaps (designated as hedging instruments)
Prepaid expenses and other assets	$	4,537	$	2,190
Other liabilities	4,449		10,323
Foreign exchange forward contracts (not designated as hedging instruments)
Prepaid expenses and other assets	1,247		914
Other liabilities	3,538		2,062

Derivatives designated as hedging instruments

The effects of interest rate swaps designated as cash flow hedging instruments for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Gain/(loss) recognized in OCI, net of tax
	Three Months Ended June 30,				Six Months Ended June 30,
Hedging instrument	2026		2025		2026		2025
Interest rate swaps	$	(2,653)	$	(4,086)	$	5,430	$	(4,010)

	Gain/(loss) reclassified from OCI into income
	Three Months Ended June 30,				Six Months Ended June 30,
Included in Income statement line-item	2026		2025		2026		2025
Interest expense, net	$	(604)	$	2,914	$	(940)	$	5,577

As of June 30, 2026 and December 31, 2025, the notional amount of outstanding interest rate swaps was $723.1 million and $883.0 million, respectively. These swaps remained highly effective as of June 30, 2026 and have remaining terms ranging from seven months to approximately four years. As of June 30, 2026, the Company estimates that approximately $0.6 million net derivative losses included in other comprehensive income ("OCI") will be reclassified into earnings within the next 12 months.

Derivatives not designated as hedging instruments

The effects of foreign exchange forward contracts not designated as hedging instruments for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):



			Three Months Ended June 30,						Six Months Ended June 30,
Included in Income Statement line-item		2026			2025			2026			2025
	Foreign exchange gain/(loss), net		$	209		$	(17,190)		$	8,888		$	(15,696)
	Interest expense, net		268			150			619			(1)

As of June 30, 2026 and December 31, 2025, the notional amount of outstanding foreign exchange forward contracts was $443.7 million and $444.2 million, respectively.

Offsetting

The Company's policy is to report derivative asset and liability positions on a gross basis. As of June 30, 2026, none of the open derivative positions would have been eligible for offsetting under the terms of the Company's netting agreements.

Note 7. Fair Value

Financial instruments carried at fair value

As of June 30, 2026 and December 31, 2025, financial instruments measured at fair value on a recurring basis were as follows (in thousands):


	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total
June 30, 2026
Assets

Government securities	$	117,635	$	—	$	117,635
Corporate notes	26,483		—		26,483
Derivatives (1)	—		5,784		5,784
Liabilities
Derivatives (1)	—		7,987		7,987


December 31, 2025
Assets

Government securities	$	64,934	$	—	$	64,934


Derivatives (1)	—		3,104		3,104
Liabilities
Derivatives (1)	—		12,385		12,385

(1)Fair value of derivatives is estimated using industry standard valuation models, which project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves and other factors.

Financial instruments not carried at fair value

As of June 30, 2026 and December 31, 2025, the estimated fair value and carrying amount of financial instruments not carried at fair value were as follows (in thousands):


	Estimated Fair Value
	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Carrying Value
June 30, 2026
Financial assets
Cash and cash equivalents	$	132,431	$	—	$	—	$	132,431


Finance receivables, net (1)	—		—		4,474,437		4,717,204
Financial liabilities
Interest-bearing deposits (2)	—		100,460		—		100,460
Revolving lines of credit (3)	—		1,675,510		—		1,675,510
Term loan (3) (4)	—		455,111		—		455,111
Senior notes (4) (5)	—		1,642,097		—		1,640,630
December 31, 2025
Financial assets
Cash and cash equivalents	$	104,409	$	—	$	—	$	104,409


Finance receivables, net (1)	—		—		4,394,028		4,688,024
Financial liabilities
Interest-bearing deposits (2)	—		106,148		—		106,148
Revolving lines of credit (3)	—		1,600,530		—		1,600,530
Term loan (3) (4)	—		460,111		—		460,111
Senior notes (4) (5)	—		1,652,451		—		1,650,350

(1)Fair value is estimated using the proprietary pricing models the Company utilizes to make portfolio acquisition decisions.

(2)Fair value is based on quoted prices for similar instruments in active markets and approximates carrying value due to the short-term deposit periods.

(3)Fair value is based on quoted prices for similar instruments in active markets and approximates carrying value due to the short-term interest rate periods.

(4)The carrying amounts and fair values do not include debt issuance costs.

(5)Fair value is based on quoted market prices obtained from secondary market broker quotes.

Due to the inherent uncertainty of determining the fair value of Level 3 financial instruments, the fair value of these instruments may differ significantly from the values that would have been used had a ready market or observable inputs existed for such instruments and may differ materially from the values that may ultimately be received or settled.

Note 8. Accumulated Other Comprehensive Loss

Reclassifications out of Accumulated other comprehensive loss for the three and six months ended June 30, 2026 and 2025, were as follows (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
Cash flow hedges	Included in Income Statement line-item	2026		2025			2026		2025
Interest rate swaps	Interest expense, net	$	(604)	$	2,914		$	(940)	$	5,577
Income tax effect (1)	Income tax expense	149		(703)			232		(1,348)
Total gain/(loss) on cash flow hedges		$	(455)	$	2,211		$	(708)	$	4,229

(1)Income tax effects are released from Accumulated other comprehensive loss contemporaneously with the related gross pretax amount.

Changes in Accumulated other comprehensive loss for the three and six months ended June 30, 2026 and 2025, were as follows (in thousands):


	Three Months Ended June 30,
	2026								2025
	Debt Securities		Cash		Currency		Accumulated		Debt Securities		Cash		Currency		Accumulated
	Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)		Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)
Balance as of beginning of period	$	(14)	$	2,605	$	(287,190)	$	(284,599)	$	24	$	169	$	(365,106)	$	(364,913)
Other comprehensive gain/(loss) before reclassifications	128		(2,653)		(7,052)		(9,577)		148		(4,086)		87,328		83,390
Reclassifications, net	—		455		—		455		—		(2,211)		—		(2,211)
Net current period other comprehensive gain/(loss)	128		(2,198)		(7,052)		(9,122)		148		(6,297)		87,328		81,179
Balance as of end of period	$	114	$	407	$	(294,242)	$	(293,721)	$	172	$	(6,128)	$	(277,778)	$	(283,734)

(1)Net of deferred taxes for unrealized (gains)/losses from cash flow hedges of $0.7 million and $(2.0) million for the three months ended June 30, 2026 and 2025, respectively.


	Six Months Ended June 30,
	2026								2025
	Debt Securities		Cash		Currency		Accumulated		Debt Securities		Cash		Currency		Accumulated
	Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)		Available-for-sale		Flow Hedges		Translation Adjustments		Other Comp. Loss (1)
Balance as of beginning of period	$	126	$	(5,731)	$	(281,410)	$	(287,015)	$	205	$	2,111	$	(445,710)	$	(443,394)
Other comprehensive gain/(loss) before reclassifications	(12)		5,430		(12,832)		(7,414)		(33)		(4,010)		167,932		163,889
Reclassifications, net	—		708		—		708		—		(4,229)		—		(4,229)
Net current period other comprehensive gain/(loss)	(12)		6,138		(12,832)		(6,706)		(33)		(8,239)		167,932		159,660
Balance as of end of period	$	114	$	407	$	(294,242)	$	(293,721)	$	172	$	(6,128)	$	(277,778)	$	(283,734)

(1)Net of deferred taxes for unrealized gains from cash flow hedges of $(0.1) million and $(2.0) million for the six months ended June 30, 2026 and 2025, respectively.

9. Stockholders' Equity

In February 2022, the Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $150.0 million of its outstanding common stock. During the three months ended June 30, 2026, the Company repurchased 587,642 shares of its common stock at an average price of $17.02 per share for a total of $10.0 million. During the six months ended June 30, 2026, the Company repurchased 1,134,323 shares of its common stock at an average price of $17.63 per share for a total of $20.0 million. Share repurchases are subject to restrictive covenants contained in the Company's credit facilities and the indentures that govern its senior notes. The Company's practice is to retire the shares it repurchases. As of June 30, 2026, there was $27.7 million remaining for share repurchases under the program. The Company's Board of Directors approved a new share repurchase program on August 3, 2026. For additional information, refer to Note 15.

Note 10. Earnings per Share

The following tables provide a reconciliation between basic earnings per share ("EPS") and diluted EPS for the three and six months ended June 30, 2026 and 2025 (in thousands, except per share amounts):


	Three Months Ended June 30,
	2026					2025
	Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS		Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS
Basic EPS	$	57,917	38,104	$	1.52	$	42,374	39,323	$	1.08
Dilutive effect of nonvested share awards			199	(0.01)				62	—

Diluted EPS	$	57,917	38,303	$	1.51	$	42,374	39,385	$	1.08

	Six Months Ended June 30,
	2026					2025
	Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS		Net Income Attributable to PRA Group, Inc.		Weighted Average Common Shares	EPS
Basic EPS	$	86,127	38,236	$	2.25	$	46,033	39,436	$	1.17
Dilutive effect of nonvested share awards			171	(0.01)				100	(0.01)
Diluted EPS	$	86,127	38,407	$	2.24	$	46,033	39,536	$	1.16

Basic EPS are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS are computed using the same components as basic EPS, with the denominator adjusted for nonvested share awards, if dilutive. Share-based awards that are contingent upon the attainment of performance goals are included in the computation of diluted EPS if the effect is dilutive.

Note 11. Income Taxes

The Company's effective tax rate for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands, except percentages):


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Income before income taxes	$	88,326		$	61,128		$	128,862		$	74,504
Income tax expense	29,385			15,415			38,149			19,727
Effective tax rate	33.3		%	25.2		%	29.6		%	26.5		%

The relationship between Income before income taxes and Income tax expense for the three and six months ended June 30, 2026 and 2025 was impacted by the Company's pretax income, mix of income from different taxing jurisdictions and the timing and amount of discrete items.

Each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projections for the remainder of the year. Since the Company operates in foreign countries with varying tax rates, the Company’s quarterly effective tax rate is dependent, in part, on the level of income or loss from its international operations.

Note 12. Commitments and Contingencies

Forward flow agreements

The Company enters 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. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, 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. The amounts purchased are also dependent on actual delivery by the sellers, and while purchases under these agreements comprise a significant portion of the Company's overall purchases, as of June 30, 2026, the estimated minimum contractual purchase obligation under forward flow agreements was not significant.

Litigation and regulatory matters

The Company and its subsidiaries are from time-to-time subject to a variety of legal and regulatory claims, inquiries, proceedings, and other matters, including those described in Note 15 to the Consolidated Financial Statements in the 2025 Form 10-K. The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These estimates involve significant judgment, and accordingly, the Company's estimates will change from time-to-time, and actual expenses could exceed the current estimates.

As of June 30, 2026, there were no material developments in the legal proceeding disclosed in the 2025 Form 10-K.

Note 13. Business Segments

The Company has determined that its U.S. and European businesses are reportable segments. The U.S. reportable segment includes the operating results of the Company's class action claims recoveries business, which are not material to the segment as a whole.

The chief operating decision maker ("CODM") is the Company’s chief executive officer ("CEO"). The primary profitability measure used by the CEO to evaluate performance and allocate resources is Income from operations excluding goodwill impairment, when applicable, and certain unallocated corporate expenses ("Adjusted segment operating income"). The Company does not report a measure of segment assets as that information is not regularly provided to the CEO. Intersegment and other intercompany transactions are executed on an arms-length basis. All prior period disclosures have been recast to reflect the reportable segment reorganization that occurred as of December 31, 2025.

Segment financial information

Segment operating results and reconciliations to the consolidated totals for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Three Months Ended June 30,
	2026						2025
	U.S.		Europe		Total		U.S.		Europe		Total
Revenues from external customers	$	150,476	$	216,613	$	367,089	$	137,448	$	119,447	$	256,895
All other revenues (1)					5,085						30,793
Total consolidated revenues					$	372,174					$	287,688


Segment expenses (2)
Compensation and benefits	39,197		17,494		56,691		45,403		20,235		65,638
Legal collection expenses	57,237		10,400		67,637		40,717		9,406		50,123
Professional and outside services	12,912		5,061		17,973		13,676		4,536		18,212
Other segment items (3)	23,815		15,512		39,327		20,141		14,547		34,688
Adjusted segment operating income	17,315		168,146		185,461		17,511		70,723		88,234

Reconciliation to consolidated totals
All other operating income and corporate expenses (4)					(32,179)						(3,123)

Income from operations					153,282						85,111
Interest expense, net					(64,363)						(62,361)
Gain on sale of equity method investment					—						38,403
Other, net					(593)						(25)
Income before income taxes					$	88,326					$	61,128


	Six Months Ended June 30,
	2026						2025
	U.S.		Europe		Total		U.S.		Europe		Total
Revenues from external customers	$	307,271	$	342,245	$	649,516	$	273,829	$	219,597	$	493,426
All other revenues (1)					37,191						63,881
Total consolidated revenues					$	686,707					$	557,307


Segment expenses (2)
Compensation and benefits	78,694		38,198		116,892		90,896		39,414		130,310
Legal collection expenses	110,377		19,862		130,239		77,579		18,045		95,624
Professional and outside services	24,724		9,540		34,264		26,502		8,721		35,223
Other segment items (3)	45,972		30,279		76,251		43,962		26,067		70,029
Adjusted segment operating income	47,504		244,366		291,870		34,890		127,350		162,240

Reconciliation to consolidated totals
All other operating income and corporate expenses (4)					(35,334)						(2,552)

Income from operations					256,536						159,688
Interest expense, net					(127,881)						(123,331)
Gain on sale of equity method investment					—						38,403
Other, net					207						(256)
Income before income taxes					$	128,862					$	74,504

(1)Reflects revenues from external customers in South America, Canada and Australia.

(2)Amounts include intersegment and intercompany expenses, which are not material.

(3)Primarily reflects Communication expenses, Agency fees and Other operating expenses.

(4)Includes operating income in South America, Canada and Australia and certain unallocated corporate personnel, administrative and other overhead expenses.

Other segment balances and reconciliations to the consolidated totals for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	U.S.		Europe		All Other (1)		Consolidated Total
Three months ended June 30, 2026
Interest expense, net	$	35,186	$	30,756	$	(1,579)	$	64,363
Depreciation and amortization	927		932		27		1,886
Income tax expense/(benefit)	(2,422)		30,694		1,113		29,385
Three months ended June 30, 2025
Interest expense, net	$	38,610	$	25,095	$	(1,344)	$	62,361
Depreciation and amortization	1,671		800		32		2,503
Income tax expense/(benefit)	(4,726)		7,641		12,500		15,415


	U.S.		Europe		All Other (1)		Consolidated Total
Six months ended June 30, 2026
Interest expense, net	$	76,292	$	54,349	$	(2,760)	$	127,881
Depreciation and amortization	1,781		1,754		59		3,594
Income tax expense/(benefit)	(2,720)		39,554		1,315		38,149
Six months ended June 30, 2025
Interest expense, net	$	76,549	$	48,862	$	(2,080)	$	123,331
Depreciation and amortization	3,887		1,480		74		5,441
Income tax expense/(benefit)	(6,967)		12,862		13,832		19,727

(1)Reflects activity in South America, Canada and Australia. Interest expense, net also includes elimination of intersegment and intercompany interest.

Note 14. Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements" ("ASU 2025-09"), which enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: (1) similar risk assessment for cash flow hedges; (2) hedging forecasted interest payments on choose-your-rate debt instruments; (3) cash flow hedges of nonfinancial forecasted transactions; (4) net written options as hedging instruments; and (5) foreign currency denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. The Company early adopted this ASU during the three months ended June 30, 2026, by applying the guidance prospectively without cumulative effect adjustment and amending existing hedge documentation to allow for selection among the different interest rates and tenors available under the Company's cash flow hedges of its variable-rate debt.

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). Subsequently, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the impact of this ASU on its Consolidated Financial Statements and the related disclosures; however, it does not expect there will be a material impact upon adoption.

In November 2025, the FASB issued ASU 2025-08, "Financial Instruments – Credit Losses (Topic 326): Purchased Loans” ("ASU 2025-08"), under which loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” will be considered purchased seasoned loans and accounted for using the gross-up approach at acquisition. This ASU is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company

currently applies the PCD accounting model to the loans it acquires and is evaluating the impact this ASU could have on its Consolidated Financial Statements; however, it does not expect there will be a material impact upon adoption.

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements" (“ASU 2025-11"), which improves the guidance of Topic 270, Interim Reporting, by providing clarity on the current interim reporting requirements. This ASU provides additional guidance on what disclosures should be provided in interim reporting periods and adds a principle to Topic 270 requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the reporting entity. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 31, 2027. Early adoption is permitted, and this ASU can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact of this ASU on its Consolidated Financial Statements and the related disclosures.

All other recently issued accounting pronouncements not yet adopted have been deemed either immaterial or not applicable.

Note 15. Subsequent Event

On August 3, 2026, the Company's Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase up to $150 million of its outstanding common stock. Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934 or other methods, subject to market and/or other conditions, applicable regulatory requirements and the restrictive covenants contained in the Company's credit facilities and the indentures that govern its senior notes. The new share repurchase program does not obligate the Company to repurchase any specified amount of shares, remains subject to the discretion of the Board of Directors and may be modified, suspended or discontinued at any time.

The amount and timing of any share repurchases under the new share repurchase program also depend on several other factors, including the Company's capital allocation priorities; financial performance; leverage and liquidity levels; the price of the Company's common stock; and market conditions.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

All references in this Quarterly Report on Form 10-Q ("Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries. This Quarterly Report should be read in conjunction with our Form 10-K for the year ended December 31, 2025 ("2025 10-K"). See Frequently Used Terms at the end of this Item 2 for certain definitions that may be used in this Quarterly Report. Except as specifically noted, all references to "Notes" in this Item 2 are to Notes to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are forward-looking statements, including statements regarding cash collection trends, operating cost trends, liquidity and capital needs and other statements of expectations, beliefs, future plans, strategies and anticipated events or trends. Our results could differ materially from those expressed or implied by such forward-looking statements, or our forward-looking statements could be wrong, as a result of risks, uncertainties and assumptions, including the following:

•a deterioration in general business and economic conditions, including from ongoing geopolitical conflicts and instability in the Middle East;

•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;

•our ability to collect sufficient amounts on our nonperforming loans to recover our costs and fund our operations;

•our reliance on internally developed models and the underlying data used in those models;

•a disruption or failure by any of our third-party service providers, or the vendors on whom they may depend, to meet their obligations and our service level expectations, or an ability to contract alternative providers;

•our ability to realize the expected benefits from our cash-generating and cost savings initiatives in our United States ("U.S.") business;

•changes in the regulatory environment for legal collections or our ability to effectively collect on legal recovery and post-judgment processes;

•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;

•our ability to effectively manage change associated with ongoing enhancements to our key operational systems and processes;

•our ability to effectively utilize artificial intelligence ("AI") and machine learning technologies and to adequately safeguard our systems against AI-driven threats;

•our ability to execute our long-term (PRA 3.0) strategy effectively, including the targets related to improving our financial results;

•further impairment of goodwill;

•our ability to manage risks associated with our international operations;

•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws that limit our ability to collect on our nonperforming loans;

•our ability to comply with existing and new regulations of the collection industry;

•investigations, reviews or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");

•our ability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");

•our ability to retain, expand, renegotiate or replace our credit facilities and our ability to comply with the covenants under our financing arrangements;

•our ability to manage our capital and liquidity needs effectively, including as a result of changes in credit or capital markets or adverse changes in our credit ratings, whether due to concerns about our industry in general, the financial condition of our competitors, or other factors;

•changes in interest or exchange rates;

•default by, or failure of, one or more of our counterparty financial institutions; and

•the "Risk Factors" in Item 1A of our 2025 Form 10-K and our other filings with the U.S. Securities and Exchange Commission ("SEC").

You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was filed with the SEC. Our business, financial condition, results of operations and prospects may have changed since that date. The future events, developments or results described in, or implied by, this Quarterly Report could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.

EXECUTIVE OVERVIEW

We are a global leader in acquiring and collecting nonperforming loans. Most of our purchases 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). As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S.

Our operations are organized on a geographic basis, and we have two reportable segments comprised of our U.S. and European businesses. 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.

For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of our 2025 Form 10-K and Note 13.

Second quarter and year-to-date business trends and results

During the second quarter of 2026, we continued to execute against our PRA 3.0 strategic plan and generated continued cash collections growth while maintaining disciplined cost management and investing in future growth initiatives. We purchased $296.6 million in portfolios during the quarter and generated higher net income. Our results for the period included the following:

•Second quarter Net income attributable to PRA Group, Inc. of $57.9 million, an increase of $15.5 million compared to the prior year period.

•Year-to-date Net income attributable to PRA Group, Inc. of $86.1 million, an increase of $40.1 million compared to the prior year period.

•Adjusted EBITDA of $1.4 billion for the last 12 months, an increase of 9.6% compared to the prior 12 month period ("Adjusted EBITDA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).

•Continued geographic diversification, with the U.S. and Europe accounting for 40.4% and 54.0%, respectively, of June 30, 2026 total estimated remaining collections ("ERC") of $8.9 billion. Driven by sustained cash collections overperformance, we updated the forecasts for the majority of our European pools as of June 30, 2026, which contributed to an increase in European ERC of $348.5 million (refer to Note 2).

•A second wave of cost reductions to simplify our U.S. business and drive further savings; and further consolidation of our U.S. call center footprint and offshore third-party collection agencies.

•Maintenance of a diversified capital structure, consistent with our targeted leverage and liquidity objectives. We refinanced our European revolving credit facility in April 2026 for an additional five years and repurchased $10.0 million and $20.0 million shares of our common stock during the second quarter and year-to-date, respectively.

Market environment

In the U.S., credit card balances have remained elevated and charge-off rates continued to support portfolio supply. In Europe, there has been an increase in portfolio supply, and we continued to observe stability in customer payment activity in both the U.S. and Europe during the second quarter of 2026.

SELECTED CONSOLIDATED FINANCIAL DATA


As of or for the period ended (in thousands, except per share, ratio and headcount data)	Second Quarter								Year-to-Date
	2026			2025			% Change		2026			2025			% Change
Income statement
Portfolio income	$	267,799		$	250,934		6.7	%	$	537,378		$	491,892		9.2	%


Changes in expected recoveries	96,924			33,292			191.1		140,810			61,214			130.0
Total revenues	372,174			287,688			29.4		686,707			557,307			23.2
Total operating expenses	218,892			202,577			8.1		430,171			397,619			8.2

Interest expense, net	64,363			62,361			3.2		127,881			123,331			3.7




Net income attributable to PRA Group, Inc.	57,917			42,374			36.7		86,127			46,033			87.1
Adjusted net income attributable to PRA (1)	57,917			12,688			356.5		86,127			16,347			426.9
Diluted earnings per share	1.51			1.08			39.8		2.24			1.16			93.1
Performance data and ratios
Net income/(loss) attributable to PRA Group, Inc. (last 12 months)	$	(265,048)		$	91,643		(389.2)%
Adjusted net income attributable to PRA (last 12 months) (1)	142,361			61,957			129.8
Adjusted EBITDA (last 12 months) (2)	1,358,913			1,240,092			9.6
Cash efficiency ratio (3)	61.2		%	62.4		%			61.5		%	61.7		%

Return on average Total stockholders' equity - PRA Group, Inc. ("ROE") (4)	22.6			13.3					17.1			7.5
Return on average tangible equity ("ROATE") (5)	23.3			20.0					17.6			11.4
Adjusted return on average tangible equity ("Adjusted ROATE") (6)	23.3			6.0					17.6			4.0





Portfolio volumes
Portfolio purchases	$	296,571		$	346,505		(14.4)	%	$	517,421		$	638,207		(18.9)	%
Cash collections	558,545			536,288			4.2		1,110,473			1,033,724			7.4
Estimated remaining collections (period-end)	8,894,515			8,294,310			7.2
Credit facility availability (period-end)
Based on current ERC	$	733,096		$	521,613		40.5%
Additional availability	265,372			319,057			(16.8)
Total availability	998,468			840,670			18.8
Balance sheet (period-end)
Finance receivables, net	$	4,717,204		$	4,562,576		3.4%
Borrowings	3,759,353			3,614,208			4.0
Total stockholders' equity - PRA Group, Inc.	1,045,469			1,336,925			(21.8)
Headcount (period-end)
Full-time equivalents	2,417			2,897			(16.6)	%

(1)Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations ("Adjusted net income attributable to PRA"), is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(2)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(3)Calculated by dividing cash receipts less operating expenses by cash receipts, both of which are determined based on GAAP.

(4)ROE is calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc.

(5)ROATE is a non-GAAP financial measure calculated by dividing annualized Net income attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets ("Average tangible equity"), which is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(6)Adjusted ROATE is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

RESULTS OF OPERATIONS

Three months ended June 30, 2026 ("Second Quarter 2026" or "Q2 2026") compared to three months ended June 30, 2025 ("Second Quarter 2025" or "Q2 2025"); and six months ended June 30, 2026 ("Year-to-Date 2026") compared to six months ended June 30, 2025 ("Year-to-Date 2025").

Consolidated and business segment results

Portfolio purchases

Portfolio purchases were as follows (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
U.S.	$	109,447	$	182,326	$	(72,879)	(40.0)	%	$	227,959	$	343,288	$	(115,329)	(33.6)	%
Europe	174,437		147,222		27,215		18.5		265,989		260,468		5,521		2.1

Other markets (1)	12,687		16,957		(4,270)		(25.2)		23,473		34,451		(10,978)		(31.9)
Total portfolio purchases	$	296,571	$	346,505	$	(49,934)	(14.4)	%	$	517,421	$	638,207	$	(120,786)	(18.9)	%

(1)Reflects portfolio purchases in South America, Canada and Australia.

We use a global investment framework to optimize the deployment of capital across our markets with a focus on net returns. Our total portfolio purchases in Q2 2026 decreased by $49.9 million, or 14.4%, compared to Q2 2025. Year-to-date 2026 portfolio purchases decreased by $120.8 million, or 18.9%, compared to the prior year period. Total purchases of $296.6 million in Q2 2026 were consistent with our expectations and net return requirements. The Q2 2026 and year-to date 2026 purchase price multiples ("PPMs") for our global Core vintage were 1.99x and 1.98x, respectively. PPMs can vary due to factors contributing to the cost to collect, including the loan type and age, geography and collections strategy, in addition to competitive and market dynamics. Our focus continues to be on net returns, which considers the amount and timing of the projected cash collections, estimated costs to collect, funding costs, risk and agreement terms.

•U.S.: Q2 2026 portfolio purchases decreased by $72.9 million as we remained disciplined in our purchasing and long-term approach focused on net returns. Year-to-date 2026 portfolio purchases decreased by $115.3 million compared to the prior year period. The Q2 2026 PPM for our U.S. Core vintage of 2.16x was an increase compared to the first quarter of 2026. The year-to-date 2026 PPM for our U.S. Core vintage was 2.08x.

•Europe: Q2 2026 portfolio purchases increased by $27.2 million as we continued to invest in portfolios that met our return requirements. Year-to-date 2026 portfolio purchases increased by $5.5 million compared to the prior year period. The Q2 2026 and year-to-date 2026 PPMs for our European Core vintage were 1.87x.

Cash collections

Cash collections were as follows (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
U.S.
Call center/other	$	119,537	$	134,801	$	(15,264)	(11.3)	%	$	246,929	$	264,056	$	(17,127)	(6.5)	%
Legal	150,141		119,055		31,086		26.1		291,158		230,267		60,891		26.4
Core	269,678		253,856		15,822		6.2		538,087		494,323		43,764		8.9
Insolvency	21,434		21,175		259		1.2		41,575		41,764		(189)		(0.5)
Cash collections - U.S.	291,112		275,031		16,081		5.8		579,662		536,087		43,575		8.1
Europe
Call center/other	118,377		108,881		9,496		8.7		236,426		211,289		25,137		11.9
Legal	82,043		76,772		5,271		6.9		156,013		138,734		17,279		12.5
Core	200,420		185,653		14,767		8.0		392,439		350,023		42,416		12.1
Insolvency	17,658		24,609		(6,951)		(28.2)		38,205		45,814		(7,609)		(16.6)
Cash collections - Europe	218,078		210,262		7,816		3.7		430,644		395,837		34,807		8.8
Other markets (1)	49,355		50,995		(1,640)		(3.2)		100,167		101,800		(1,633)		(1.6)
Total cash collections	$	558,545	$	536,288	$	22,257	4.2	%	$	1,110,473	$	1,033,724	$	76,749	7.4	%

(1)Reflects cash collections in South America, Canada and Australia.

Our total cash collections in Q2 2026 increased by $22.3 million, or 4.2%, compared to Q2 2025. Year-to-date 2026 cash collections increased by $76.7 million, or 7.4%, compared to the prior year period. Total collections of $558.5 million in Q2 2026 exceeded our expectations for the quarter.

•U.S.: Q2 2026 cash collections increased by $16.1 million driven by a $31.1 million increase in legal collections due to higher volume, partially offset by a net decrease of $15.3 million from call center and other channels. Digital cash collections continued to increase driven by an expansion of our customer engagement within this channel. Year-to-date 2026 cash collections increased by $43.6 million driven by a $60.9 million increase in legal collections, partially offset by a net decrease of $17.1 million from call center and other channels.

•Europe: Q2 2026 cash collections increased by $7.8 million driven by increases distributed broadly across our markets and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 cash collections in Europe increased by $34.8 million due to similar factors.

Portfolio revenue

Total portfolio revenue was as follows (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change





U.S.	$	143,327	$	134,081	$	9,246	6.9	%	$	299,313	$	269,887	$	29,426	10.9	%





Europe	216,402		119,353		97,049		81.3		341,837		219,339		122,498		55.8
Other markets (1)	4,994		30,792		(25,798)		(83.8)		37,038		63,880		(26,842)		(42.0)
Total portfolio revenue	$	364,723	$	284,226	$	80,497	28.3	%	$	678,188	$	553,106	$	125,082	22.6	%

By component
Portfolio income	$	267,799	$	250,934	$	16,865	6.7	%	$	537,378	$	491,892	$	45,486	9.2	%
Recoveries collected in excess of forecast	22,742		40,302		(17,560)		(43.6)		45,440		56,802		(11,362)		(20.0)
Changes in expected future recoveries	74,182		(7,010)		81,192		(1158.2)		95,370		4,412		90,958		2061.6
Changes in expected recoveries	96,924		33,292		63,632		191.1		140,810		61,214		79,596		130.0
Total portfolio revenue	$	364,723	$	284,226	$	80,497	28.3	%	$	678,188	$	553,106	$	125,082	22.6	%

(1)Reflects portfolio revenue in South America, Canada and Australia.

Our total portfolio revenue in Q2 2026 increased by $80.5 million, or 28.3%, compared to Q2 2025. Year-to-date 2026 portfolio revenue increased by $125.1 million, or 22.6%, compared to the prior year period. These increases were driven by higher Changes in expected recoveries, which increased by $63.6 million for the quarter and $79.6 million year-to-date, and higher Portfolio income, which increased by $16.9 million for the quarter and $45.5 million year-to-date. Portfolio income, the yield component of our revenue, which is more predictable than Changes in expected recoveries, increased by 6.7% for the quarter and 9.2% year-to-date.

•U.S.: Q2 2026 portfolio revenue increased by $9.2 million due to increases of $5.0 million in Portfolio income and $4.2 million in Changes in expected recoveries. The increase in Portfolio income was due primarily to improved pricing. Changes in expected recoveries for Q2 2026 were mainly impacted by decreases in the collections forecasts on the 2022-2025 Core pools. The increase in Changes in expected recoveries was due primarily to a lower net decrease in the collections forecasts for certain U.S. Core pools compared to the prior year period. Net overperformance for Q2 2026 was driven mainly by the 2025 Core pool and net overperformance on the Insolvency pools, partially offset by underperformance on the 2022-2024 Core pools. The decrease in cash collections overperformance was primarily due to lower net overperformance on certain U.S. Core pools compared to the prior year period. Year-to-date 2026 portfolio revenue increased by $29.4 million due to increases of $16.1 million in Portfolio income and $13.3 million in Changes in expected recoveries. The increase in portfolio income was due primarily to improved pricing. The increase in Changes in expected recoveries was due to a lower net decrease in the collections forecasts on certain U.S. Core pools compared to Q2 2025 and net overperformance in Q2 2026 compared to net underperformance in Q2 2025.

•Europe: Q2 2026 portfolio revenue increased by $97.0 million due to increases of $88.4 million in Changes in expected recoveries and $8.6 million in Portfolio income. Changes in expected recoveries were impacted by net increases in the collections forecasts in most markets in both Q2 2026 and Q2 2025. The higher net increase in the current year period was driven by updates to the forecasts for a majority of the pools in our European markets (for additional information, refer to Note 2). This increase was partially offset by lower net overperformance in Q2 2026 compared to Q2 2025 in certain European markets. The increase in Portfolio income was driven by increases in several markets due to higher recent purchasing and was due, in part, to favorable foreign exchange rate variation. Year-to-date 2026 portfolio revenue increased by $122.5 million due to similar factors, reflecting increases of $99.8 million in Changes in expected recoveries and $22.7 million in Portfolio income.

•Other Markets: Q2 2026 and year-to-date 2026 portfolio revenue decreased by $25.8 million and $26.8 million, respectively, due primarily to higher net decreases in in the collections forecasts on certain pools within these markets.

Operating expenses

Operating expenses were as follows (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
U.S.	$	146,245	$	129,543	$	16,702	12.9	%	$	282,166	$	258,086	$	24,080	9.3	%
Europe	50,335		49,499		836		1.7		102,037		93,797		8,240		8.8
Other markets (1)	22,312		23,535		(1,223)		(5.2)		45,968		45,736		232		0.5
Total operating expenses	$	218,892	$	202,577	$	16,315	8.1	%	$	430,171	$	397,619	$	32,552	8.2	%

By component
Compensation and benefits	$	70,377	$	75,724	$	(5,347)	(7.1)	%	$	141,115	$	149,047	$	(7,932)	(5.3)	%
Legal collection costs (2)	52,525		37,583		14,942		39.8		100,983		70,977		30,006		42.3
Legal collection fees (3)	18,386		15,625		2,761		17.7		35,457		30,855		4,602		14.9
Agency fees (4)	23,214		22,688		526		2.3		47,795		44,056		3,739		8.5
Professional and outside services	22,512		21,071		1,441		6.8		43,396		42,174		1,222		2.9
Communication (5)	7,664		9,417		(1,753)		(18.6)		16,683		19,894		(3,211)		(16.1)
Rent and occupancy	3,730		3,504		226		6.4		6,988		6,984		4		0.1
Depreciation, amortization and impairment of long-lived assets	4,724		2,503		2,221		88.7		6,432		6,272		160		2.6

Other operating expenses (6)	15,760		14,462		1,298		9.0		31,322		27,360		3,962		14.5
Total operating expenses	$	218,892	$	202,577	$	16,315	8.1	%	$	430,171	$	397,619	$	32,552	8.2	%

(1)Reflects operating expenses in South America, Canada and Australia.

(2)Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.

(3)Contingent fees incurred for cash collections generated by our third-party attorney network.

(4)Mainly third-party collection fees.

(5)Mainly correspondence, network and calling costs associated with our collection efforts.

(6)Mainly IT-related costs and subscriptions, other taxes and fees.

Our Total operating expenses increased by $16.3 million, or 8.1%, compared to Q2 2025. Year-to-date 2026 operating expenses increased by $32.6 million, or 8.2%, compared to the prior year period.

•U.S.: Q2 2026 operating expenses increased by $16.7 million due primarily to an increase in Legal collection costs associated with the expansion in activity in our legal collections channel and costs of $4.9 million associated with the reorganization of our U.S. business. The reorganization-related costs consisted of $2.0 million in severance expenses related to a corporate and overhead headcount reduction and $3.0 million in real estate impairment and other expenses related to site consolidation of our onshore owned and leased call centers. These increases were partially offset by a decrease in Compensation and benefits driven by workforce reduction initiatives implemented over the past 12 months and a decrease in Communication costs due to the use of more cost-efficient digital collection strategies. Year-to-date 2026 operating expenses increased by $24.1 million, or 9.3%, due to similar factors.

•Europe: Q2 2026 operating expenses were stable compared to the prior year period. Year-to-date 2026 operating expenses increased by $8.2 million, or 8.8%, driven primarily by increases in Other operating expenses, Legal collection costs and Compensation and benefits expense associated with organizational changes and higher non-collector wage costs.

Interest expense, net

Interest expense, net was as follows (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
Interest on revolving credit facilities and term loan, and unused line fees	$	35,325	$	38,534	$	(3,209)	(8.3)	%	$	69,303	$	75,116	$	(5,813)	(7.7)	%
Interest on senior notes	30,265		24,911		5,354		21.5		60,501		49,823		10,678		21.4
Amortization of debt premium and issuance costs, net	2,055		1,962		93		4.7		4,239		3,863		376		9.7
Interest income	(3,282)		(3,046)		(236)		(7.7)		(6,162)		(5,471)		(691)		12.6
Interest expense, net	$	64,363	$	62,361	$	2,002	3.2	%	$	127,881	$	123,331	$	4,550	3.7	%

Our Interest expense, net increased by $2.0 million, or 3.2%, compared to Q2 2025. Year-to-date 2026 interest expense increased by $4.6 million, or 3.7%, compared to the prior year period. These increases were due primarily to higher average debt balances.

Foreign exchange gain/(loss), net

Foreign exchange gain/(loss), net, includes the remeasurement of our foreign currency transactions and changes in the fair value of foreign exchange forward contracts used to economically hedge a portion of our remeasurement exposure. Foreign exchange gain/(loss), net included the following components (in thousands, except percentages):


	Second Quarter								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change



Foreign currency transaction gains/(losses)	$	(710)	$	17,240	$	(17,950)	(104.1)	%	$	(8,335)	$	15,695	$	(24,030)	(153.1)	%



Foreign exchange forward gains/(losses)	209		(17,190)		17,399		101.2		8,888		(15,696)		24,584		156.6



Foreign exchange gain/(loss), net	$	(501)	$	50	$	(551)	(1,102.0)	%	$	553	$	(1)	$	554	55,400.0	%

In addition to normal rate fluctuations and ongoing execution of our risk management strategies, our net foreign exchange result may be impacted by elevated volatility in the underlying exchange rates. For additional information about our foreign exchange forward gains/(losses), refer to N ote 6.

Income tax expense

Income tax expense and our effective tax rate were as follows (in thousands, except percentages):


	Second Quarter										Year-to-Date
	2026			2025			$ Change		% Change		2026			2025			$ Change		% Change
Income tax expense	$	29,385		$	15,415		$	13,970	90.6	%	$	38,149		$	19,727		$	18,422	93.4	%
Effective tax rate	33.3		%	25.2		%					29.6		%	26.5		%

Our Income tax expense increased by $14.0 million, or 90.6%, compared to Q2 2025, and our effective tax rate was 33.3% in Q2 2026 compared to 25.2% in Q2 2025. These results were primarily due to the increase in our pretax income, the mix of income from different taxing jurisdictions and the timing and amount of discrete items. Year-to-date 2026 Income tax expense increased by $18.4 million, or 93.4%, and our year-to-date 2026 effective tax rate was 29.6%, which included the reversal of a $3.2 million tax accrual during the first quarter of 2026.

Business segment operating income

Our CEO evaluates the profitability of our U.S. and European business segments based primarily on Income from operations excluding goodwill impairment, when applicable, and certain unallocated corporate expenses ("Adjusted segment operating income"). Refer to Note 13 for further information and a reconciliation of Adjusted segment operating income to consolidated Income before income taxes.

Adjusted segment operating income for our U.S. and European businesses was as follows (in thousands, except percentages):


	U.S.								Europe
	Second Quarter								Second Quarter
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
Revenues from external customers	$	150,476	$	137,448	$	13,028	9.5	%	$	216,613	$	119,447	$	97,166	81.3	%
Segment expenses (1)
Compensation and benefits	39,197		45,403		(6,206)		(13.7)		17,494		20,235		(2,741)		(13.5)
Legal collection expenses	57,237		40,717		16,520		40.6		10,400		9,406		994		10.6
Professional and outside services	12,912		13,676		(764)		(5.6)		5,061		4,536		525		11.6
Other segment items (2)	23,815		20,141		3,674		18.2		15,512		14,547		965		6.6
Adjusted segment operating income	$	17,315	$	17,511	$	(196)	(1.1)	%	$	168,146	$	70,723	$	97,423	137.8	%


	U.S.								Europe
	Year-to-Date								Year-to-Date
	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
Revenues from external customers	$	307,271	$	273,829	$	33,442	12.2	%	$	342,245	$	219,597	$	122,648	55.9	%
Segment expenses (1)
Compensation and benefits	78,694		90,896		(12,202)		(13.4)		38,198		39,414		(1,216)		(3.1)
Legal collection expenses	110,377		77,579		32,798		42.3		19,862		18,045		1,817		10.1
Professional and outside services	24,724		26,502		(1,778)		(6.7)		9,540		8,721		819		9.4
Other segment items (2)	45,972		43,962		2,010		4.6		30,279		26,067		4,212		16.2
Adjusted segment operating income	$	47,504	$	34,890	$	12,614	36.2	%	$	244,366	$	127,350	$	117,016	91.9	%

(1)Amounts include intersegment and intercompany expenses, which are not material, and exclude certain unallocated corporate personnel, administrative and other overhead expenses.

(2)Primarily reflects Communication expenses, Agency fees and Other operating expenses.

•U.S.: Q2 2026 Adjusted segment operating income was stable compared to the prior year period, reflecting an increase in segment revenues, partially offset by an increase in segment expenses. Year-to-date 2026 Adjusted segment operating income increased by $12.6 million, or 36.2%, due to similar factors.

•Europe: Q2 2026 Adjusted segment operating income increased by $97.4 million due primarily to an increase in segment revenues. Year-to-date 2026 Adjusted segment operating income increased by $117.0 million, or 91.9%, reflecting an increase in segment revenues, partially offset by an increase in segment expenses.

Refer to the above discussions of portfolio revenue and operating expenses for additional information.

Consolidated balance sheet

Investments

Investments were $145.5 million as of June 30, 2026, an increase of $78.8 million compared to December 31, 2025. The increase reflects purchases of government securities and corporate notes by our banking subsidiary, AK Nordic AB. Our banking subsidiary is part of our European operations, and it expects to continue to operate with higher levels of liquidity moving forward.

Finance receivables, net

Finance receivables, net were $4.7 billion as of June 30, 2026, increasing marginally compared to December 31, 2025. Compared to June 30, 2025, Finance receivables, net increased $154.6 million, or 3.4%, due to portfolio purchases of $1.1 billion and Changes in expected recoveries of $256.0 million, partially offset by $1.1 billion of recoveries collected and applied to Finance receivables, net, and foreign currency translation of $64.0 million.

Borrowings

Borrowings were $3.8 billion as of June 30, 2026, an increase of $62.0 million compared to December 31, 2025. Compared to June 30, 2025, Borrowings increased $145.1 million, or 4.0%, primarily to fund portfolio purchases, and to a lesser extent, the purchases of investments.

NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management also uses certain non-GAAP financial measures, including the non-GAAP financial measures referred to below, internally to evaluate our performance and set performance goals. We believe these non-GAAP financial measures are useful to investors in evaluating our performance and operational effectiveness and provide for greater comparability. These non-GAAP financial measures 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. Included below are reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

Adjusted EBITDA

Adjusted EBITDA is calculated as Net income/(loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense; plus depreciation and amortization; plus impairment of real estate; plus goodwill impairment; plus net income attributable to noncontrolling interests; less gain on sale of equity method investment; and plus recoveries collected and applied to Finance receivables, net less Changes in expected recoveries. The following table provides a reconciliation of Net loss attributable to PRA Group, Inc. to Adjusted EBITDA for the periods indicated (in thousands):


	Adjusted EBITDA Reconciliation
	Last 12 Months		Year Ended
	June 30, 2026		December 31, 2025
Net loss attributable to PRA Group, Inc.	$	(265,048)	$	(305,142)
Adjustments:
Income tax expense	65,157		46,735
Foreign exchange gain	(1,309)		(755)
Interest expense, net	256,338		251,788
Other expense (1)	427		336
Depreciation and amortization	7,188		9,035
Impairment of real estate	3,411		1,404
Goodwill impairment	412,611		412,611
Net income attributable to noncontrolling interests	11,010		15,168
Gain on sale of equity method investment	—		(38,403)
Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries	869,128		922,697
Adjusted EBITDA	$	1,358,913	$	1,315,474

(1)Reflects non-operating expenses.

Adjusted net income attributable to PRA, ROATE and Adjusted ROATE

Adjusted net income attributable to PRA is calculated as Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations.

ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity. Adjusted ROATE is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity.

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to Average tangible equity, a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and provides our ROE, ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):


					Average Tangible Equity Reconciliation (1)
	Balance as of Period End				Second Quarter						Year-to-Date
	June 30, 2026		June 30, 2025		2026			2025			2026			2025
Total stockholders' equity - PRA Group, Inc.	$	1,045,469	$	1,336,925	$	1,023,879		$	1,278,016		$	1,009,202		$	1,230,355
Goodwill	26,871		439,449		26,871			430,082			26,871			418,840
Other intangible assets	1,282		1,541		1,313			1,515			1,354			1,494
Average tangible equity					$	995,695		$	846,419		$	980,977		$	810,021
(1)Amounts represent the average balances for the respective periods.

					ROE and ROATE (2)
					Second Quarter						Year-to-Date
					2026			2025			2026			2025
Net income attributable to PRA Group, Inc.					$	57,917		$	42,374		$	86,127		$	46,033
ROE					22.6		%	13.3		%	17.1		%	7.5		%
ROATE					23.3			20.0			17.6			11.4
(2)Based on annualized Net income attributable to PRA Group, Inc.

	Adjusted Net Income Attributable to PRA Group, Inc. Reconciliation
					Adjusted ROATE (3)
	Last 12 Months				Second Quarter						Year-to-Date
	June 30, 2026		June 30, 2025		2026			2025			2026			2025
Net income/(loss) attributable to PRA Group, Inc.	$	(265,048)	$	91,643	$	57,917		$	42,374		$	86,127		$	46,033
Gain on sale of equity method investment	—		(38,403)		—			(38,403)			—			(38,403)
Goodwill impairment	412,611		—		—			—			—			—
Tax effect of adjusting items (4)	(5,202)		8,717		—			8,717			—			8,717
Adjusted net income attributable to PRA Group, Inc.	$	142,361	$	61,957	$	57,917		$	12,688		$	86,127		$	16,347
Adjusted ROATE					23.3		%	6.0		%	17.6		%	4.0		%

(3) Based on annualized Adjusted net income attributable to PRA Group, Inc.
(4) Based on the annual effective tax rate and pretax income excluding the
the effect of the adjusting items.

SUPPLEMENTAL PERFORMANCE DATA

The tables in this section provide supplemental performance data about our:

•ERC by business segment and expected year of collection; and

•nonperforming loan portfolios and collections by business segment, portfolio type and year of purchase.

For additional information about the supplemental data and our nonperforming loan portfolios, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Supplemental Performance Data" in the 2025 Form 10-K and Note 2.

Estimated remaining collections

The following table displays our ERC by year as of June 30, 2026 (in thousands):



	U.S.		Europe (1)		Other Markets (2)		Total
2027	$	1,051,285	$	760,658	$	158,795	$	1,970,738
2028	793,932		638,802		110,487		1,543,221
2029	527,207		542,071		74,452		1,143,730
2030	360,952		459,957		52,232		873,141
2031	250,556		392,347		36,246		679,149
2032	173,088		338,569		23,947		535,604
2033	122,927		295,510		16,555		434,992
2034	89,005		259,369		9,561		357,935
2035	65,206		228,619		5,290		299,115
2036	48,311		202,831		2,930		254,072
Thereafter	110,352		687,449		5,017		802,818
Total ERC	$	3,592,821	$	4,806,182	$	495,512	$	8,894,515

(1)Reflects ERC of $1.8 billion for the UK, $1.4 billion for Central Europe, $1.0 billion for Northern Europe and $607.6 million for Southern Europe.

(2)Reflects ERC in South America, Canada and Australia.


Purchase Price Multiples
as of June 30, 2026
(in thousands, except percentages)
Purchase Period	Purchase Price (1)(2)		Total Estimated Collections (3)		Estimated Remaining Collections (4)		Current Purchase Price Multiple	Original Purchase Price Multiple
U.S. Core
1996-2015	$	2,736,875	$	7,509,514	$	88,885	274%	223%
2016	400,545		820,678		31,073		205%	195%
2017	511,902		1,168,691		63,472		228%	193%
2018	604,669		1,376,064		87,769		228%	199%
2019	432,222		1,017,231		64,379		235%	209%
2020	415,384		940,625		80,613		226%	215%
2021	339,885		602,989		108,705		177%	191%
2022	275,433		429,264		124,219		156%	164%
2023	506,319		942,514		405,841		186%	191%
2024	727,672		1,679,034		993,374		231%	211%
2025	531,021		1,160,216		920,909		218%	216%
2026	195,696		407,198		392,750		208%	208%
Subtotal	7,677,623		18,054,018		3,361,989
U.S. Insolvency
1996-2015	1,472,385		2,806,860		—		191%	154%
2016	67,454		85,680		12		127%	124%
2017	275,257		359,737		126		131%	125%
2018	97,879		137,413		34		140%	127%
2019	120,845		164,637		90		136%	128%
2020	62,130		90,396		1,343		145%	136%
2021	54,898		73,841		3,209		135%	136%
2022	33,442		48,002		9,676		144%	139%
2023	61,242		80,697		33,878		132%	136%
2024	68,168		99,458		52,263		146%	149%
2025	59,091		93,346		79,735		158%	160%
2026	32,264		51,036		50,466		158%	158%
Subtotal	2,405,055		4,091,103		230,832
Total U.S.	10,082,678		22,145,121		3,592,821
Europe Core
2012-2015	1,225,893		3,793,428		693,140		309%	190%
2016	333,090		636,868		169,208		191%	167%
2017	252,174		375,695		82,828		149%	144%
2018	341,775		589,860		158,170		173%	148%
2019	518,610		917,830		287,242		177%	152%
2020	324,119		617,610		208,905		191%	172%
2021	412,411		743,743		334,084		180%	170%
2022	359,447		593,873		344,363		165%	162%
2023	410,593		750,983		482,569		183%	169%
2024	451,786		812,676		641,676		180%	180%
2025	512,533		938,291		790,093		183%	185%
2026	247,303		461,433		447,812		187%	187%
Subtotal	5,389,734		11,232,290		4,640,090
Europe Insolvency
2014-2015	29,849		49,127		—		165%	135%
2016	39,338		60,180		2,051		153%	130%
2017	39,235		54,033		1,161		138%	128%
2018	44,908		53,667		622		120%	123%
2019	77,218		115,235		3,878		149%	130%
2020	105,440		162,142		4,144		154%	129%
2021	53,230		82,097		7,770		154%	134%
2022	44,604		68,715		19,227		154%	137%
2023	46,558		74,356		35,647		160%	138%
2024	43,459		72,755		44,187		167%	147%
2025	20,760		30,862		25,485		149%	145%
2026	14,420		22,458		21,920		156%	156%
Subtotal	559,019		845,627		166,092
Total Europe	5,948,753		12,077,917		4,806,182
Other markets (5)	963,416		2,208,916		495,513		229%	204%
Total PRA Group	$	16,994,847	$	36,431,954	$	8,894,515

(1)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.

(2)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.

(3)Non-U.S. amounts are presented at the period-end exchange rate for the respective period of purchase.

(4)Non-U.S. amounts are presented at the June 30, 2026 exchange rate.

(5)Reflects all vintages in South America, Canada and Australia.


	Portfolio Financial Information (1)
	(in thousands)
	June 30, 2026 (year-to-date)								As of June 30, 2026
Purchase Period	Cash Collections (2)		Portfolio Income (2)		Changes in Expected Recoveries (2)		Total Portfolio Revenue (2)		Net Finance Receivables (3)
U.S. Core
1996-2015	$	20,689	$	10,589	$	6,121	$	16,710	$	29,450
2016	5,175		2,958		340		3,298		13,032
2017	10,193		6,227		(1,249)		4,978		25,041
2018	16,399		7,906		1,328		9,234		42,763
2019	12,951		6,560		(771)		5,789		30,599
2020	17,289		8,301		(1,029)		7,272		40,157
2021	19,667		9,619		(1,052)		8,567		54,296
2022	21,478		8,915		(4,280)		4,635		72,290
2023	75,573		34,498		(10,805)		23,693		216,652
2024	191,009		91,298		9,645		100,943		521,294
2025	133,216		84,546		1,459		86,005		474,993
2026	14,448		13,730		(632)		13,098		194,158
Subtotal	538,087		285,147		(925)		284,222		1,714,725
U.S. Insolvency
1996-2015	406		—		405		405		—
2016	59		2		38		40		11
2017	376		17		243		260		111
2018	270		4		211		215		33
2019	754		10		556		566		88
2020	880		94		168		262		1,186
2021	3,965		321		(384)		(63)		3,053
2022	4,368		668		96		764		8,821
2023	9,447		1,999		343		2,342		29,679
2024	12,048		4,187		46		4,233		41,062
2025	8,432		5,485		(613)		4,872		55,943
2026	570		1,005		188		1,193		32,709
Subtotal	41,575		13,792		1,297		15,089		172,696
Total U.S.	579,662		298,939		372		299,311		1,887,421
Europe Core
2012-2015	61,643		33,175		63,974		97,149		180,405
2016	13,511		5,487		20,775		26,262		91,080
2017	7,298		2,534		3,658		6,192		52,160
2018	16,225		5,781		5,941		11,722		92,394
2019	28,033		9,302		17,828		27,130		188,972
2020	19,976		8,144		5,302		13,446		125,429
2021	28,007		12,137		6,374		18,511		199,304
2022	31,880		12,504		(1,447)		11,057		217,449
2023	42,435		17,442		21,478		38,920		279,253
2024	59,650		26,827		164		26,991		362,683
2025	69,949		34,057		(6,091)		27,966		430,938
2026	13,831		5,543		1,770		7,313		240,509
Subtotal	392,438		172,933		139,726		312,659		2,460,576
Europe Insolvency
2014-2015	162		—		162		162		—
2016	207		36		393		429		337
2017	332		18		748		766		610
2018	430		17		322		339		454
2019	1,399		158		586		744		3,111
2020	3,433		258		(6)		252		3,825
2021	5,687		470		1,798		2,268		7,025
2022	6,740		1,027		2,744		3,771		16,675
2023	8,348		1,644		6,984		8,628		29,984
2024	7,937		2,505		6,769		9,274		33,743
2025	2,987		1,378		610		1,988		19,038
2026	543		361		197		558		14,391
Subtotal	38,205		7,872		21,307		29,179		129,193
Total Europe	430,643		180,805		161,033		341,838		2,589,769
Other markets (4)	100,168		57,634		(20,595)		37,039		240,014
Total PRA Group	$	1,110,473	$	537,378	$	140,810	$	678,188	$	4,717,204

(1) Includes the nonperforming loan portfolios that were acquired through our business acquisitions.

(2)Non-U.S. amounts are presented using the average exchange rates during the current period.

(3)Non-U.S. amounts are presented at the June 30, 2026 exchange rate.

(4)Reflects all vintages in South America, Canada and Australia.


Cash Collections by Year, By Year of Purchase (1)
as of June 30, 2026
(in millions)
Purchase Period	Purchase Price (2)(3)		1996-2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		2025		2026		Total
U.S. Core
1996-2015	$	2,736.9	$	5,186.4	$	673.8	$	479.4	$	337.7	$	230.9	$	149.3	$	98.2	$	67.1	$	51.7	$	64.7	$	53.6	$	20.7	$	7,413.5
2016	400.5		—		86.1		195.3		160.1		116.6		88.7		59.9		29.1		17.6		18.1		12.9		5.2		789.6
2017	511.9		—		—		94.3		264.4		247.1		185.6		124.8		73.1		41.6		37.5		26.6		10.2		1,105.2
2018	604.7		—		—		—		106.3		320.2		304.7		214.8		131.6		83.2		68.1		42.9		16.4		1,288.2
2019	432.2		—		—		—		—		93.4		282.2		237.4		141.7		86.1		61.8		37.3		13.0		952.9
2020	415.4		—		—		—		—		—		127.4		274.7		185.4		121.3		83.6		50.4		17.3		860.1
2021	339.9		—		—		—		—		—		—		73.8		149.9		115.3		82.8		52.8		19.7		494.3
2022	275.4		—		—		—		—		—		—		—		34.9		102.4		87.8		58.5		21.5		305.1
2023	506.3		—		—		—		—		—		—		—		—		63.5		211.8		185.9		75.6		536.8
2024	727.7		—		—		—		—		—		—		—		—		—		119.8		374.9		191.0		685.7
2025	531.0		—		—		—		—		—		—		—		—		—		—		106.1		133.2		239.3
2026	195.7		—		—		—		—		—		—		—		—		—		—		—		14.3		14.3
Subtotal	7,677.6		5,186.4		759.9		769.0		868.5		1,008.2		1,137.9		1,083.6		812.8		682.7		836.0		1,001.9		538.1		14,685.0
U.S. Insolvency
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		0.4		2,806.7
2016	67.5		—		10.1		18.9		18.2		16.4		13.0		6.6		1.3		0.6		0.4		0.1		0.1		85.7
2017	275.3		—		—		49.1		97.3		80.9		58.8		44.0		20.8		4.9		2.5		1.0		0.4		359.7
2018	97.9		—		—		—		6.7		27.4		30.5		31.6		24.6		12.7		2.5		1.0		0.3		137.3
2019	120.8		—		—		—		—		13.4		30.9		37.9		36.8		28.0		14.2		2.7		0.8		164.7
2020	62.1		—		—		—		—		—		6.5		16.1		20.4		19.5		17.0		8.7		0.9		89.1
2021	54.9		—		—		—		—		—		—		4.5		17.7		17.4		15.2		11.8		4.0		70.6
2022	33.4		—		—		—		—		—		—		—		3.2		9.2		11.1		10.5		4.4		38.4
2023	61.2		—		—		—		—		—		—		—		—		4.5		14.8		18.0		9.4		46.7
2024	68.2		—		—		—		—		—		—		—		—		—		12.1		23.1		12.0		47.2
2025	59.1		—		—		—		—		—		—		—		—		—		—		5.2		8.4		13.6
2026	32.3		—		—		—		—		—		—		—		—		—		—		—		0.5		0.5
Subtotal	2,405.1		2,290.4		240.5		210.6		200.8		177.2		153.3		145.2		127.7		98.6		91.2		83.1		41.6		3,860.2
Total U.S.	10,082.7		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		579.7		18,545.2
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		61.6		2,766.5
2016	333.1		—		40.4		78.9		72.6		58.0		48.3		46.7		36.9		29.7		27.4		27.1		13.5		479.5
2017	252.2		—		—		17.9		56.0		44.1		36.1		34.8		25.2		20.2		17.9		15.7		7.3		275.2
2018	341.8		—		—		—		24.3		88.7		71.3		69.1		50.7		41.6		37.1		34.3		16.2		433.3
2019	518.6		—		—		—		—		48.0		125.7		121.4		89.8		75.1		68.2		61.7		28.0		617.9
2020	324.1		—		—		—		—		—		32.3		91.7		69.0		56.1		50.1		45.1		20.0		364.3
2021	412.4		—		—		—		—		—		—		48.5		89.9		73.0		66.6		59.7		28.0		365.7
2022	359.4		—		—		—		—		—		—		—		33.9		83.8		74.7		67.8		31.9		292.1
2023	410.6		—		—		—		—		—		—		—		—		50.2		103.1		93.2		42.4		288.9
2024	451.9		—		—		—		—		—		—		—		—		—		46.3		135.6		59.7		241.6
2025	512.5		—		—		—		—		—		—		—		—		—		—		57.1		69.9		127.0
2026	247.3		—		—		—		—		—		—		—		—		—		—		—		13.9		13.9
Subtotal	5,389.7		538.4		390.6		407.1		443.4		480.2		519.7		614.6		559.7		572.1		623.5		724.2		392.4		6,265.9
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		0.2		44.5
2016	39.3		—		6.2		12.7		12.9		10.7		7.9		6.0		2.7		1.3		0.8		0.6		0.2		62.0
2017	39.2		—		—		1.2		7.9		9.2		9.8		9.4		6.5		3.8		1.5		1.0		0.3		50.6
2018	44.9		—		—		—		0.6		8.4		10.3		11.7		9.8		7.2		3.5		1.4		0.4		53.3
2019	77.2		—		—		—		—		5.0		21.1		23.9		21.0		17.5		12.9		6.1		1.4		108.9
2020	105.4		—		—		—		—		—		6.0		34.6		34.1		29.7		25.5		15.5		3.4		148.8
2021	53.2		—		—		—		—		—		—		5.5		14.4		14.7		15.4		14.6		5.7		70.3
2022	44.6		—		—		—		—		—		—		—		4.5		12.4		15.2		15.2		6.7		54.0
2023	46.7		—		—		—		—		—		—		—		—		4.2		12.7		15.7		8.3		40.9
2024	43.4		—		—		—		—		—		—		—		—		—		9.5		15.2		7.9		32.6
2025	20.8		—		—		—		—		—		—		—		—		—		—		1.9		3.0		4.9
2026	14.4		—		—		—		—		—		—		—		—		—		—		—		0.7		0.7
Subtotal	559.0		7.3		14.5		22.1		28.8		38.7		58.8		93.0		93.8		91.4		97.4		87.5		38.2		671.5
Total Europe	5,948.7		545.7		405.1		429.2		472.2		518.9		578.5		707.6		653.5		663.5		720.9		811.7		430.6		6,937.4
Other markets(4)	963.4		33.9		86.5		103.9		83.7		137.0		135.9		125.4		135.0		215.9		220.5		210.7		100.2		1,588.6
Total PRA Group	$	16,994.8	$	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	$	2,107.4	$	1,110.5	$	27,071.2

(1)Non-U.S. amounts are presented at the average exchange rates during the cash collections period.

(2)Includes the acquisition date finance receivables portfolios acquired through our business acquisitions.

(3)Non-U.S. amounts, including purchase price adjustments that occur throughout the life of a portfolio, are presented at the exchange rate at the end of the respective period of purchase.

(4)Reflects all vintages in South America, Canada and Australia.

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 June 30, 2026, cash and cash equivalents totaled $132.4 million, of which $119.1 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 14 to our Consolidated Financial Statements in the 2025 Form 10-K.

Borrowings

As of June 30, 2026, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):


							Composition of Total Availability
	Committed Amounts		Outstanding Borrowings		Total Availability		Based on Current ERC (1)		Additional Availability (2)
North American revolving credit facility	$	1,075,000	$	565,092	$	509,908	$	318,207	$	191,701
North American term loan	455,111		455,111		—		—		—
European revolving credit facility	873,733		618,227		255,506		255,506		—
UK revolving credit facility	725,000		491,946		233,054		159,383		73,671
Colombian revolving credit facility	245		245		—		—		—
Senior notes	1,640,630		1,640,630		—		—		—
Debt premium and issuance costs, net	—		(11,898)		—		—		—
Total	$	4,769,719	$	3,759,353	$	998,468	$	733,096	$	265,372

(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.

(2)Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC.

Interest-bearing deposits

As of June 30, 2026, interest-bearing deposits totaled $100.5 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($226.8 million as of June 30, 2026).

Uses of liquidity and material cash requirements

We believe that funds generated from our business activities, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets, will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases for at least the next 12 months. 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. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.

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. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum, 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.

As of June 30, 2026, we had forward flow agreements in place with an estimated purchase price of approximately $218.7 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 $117.3 million in Europe, $86.1 million in the U.S. and $15.4 million in our other markets. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly.

Borrowings

As of June 30, 2026, we had $3.8 billion in outstanding borrowings. Our estimated interest, unused fees and principal payments for the next 12 months are $247.7 million. With the exception of $2.5 million in quarterly principal payments on our North American term loan, as of June 30, 2026, principal payments on our borrowings have maturity dates ranging from February 2028 through September 2032. Our financing arrangements include covenants with which we must comply, and as of June 30, 2026, we were in compliance with these covenants.

We amended and extended our European revolving credit facility on April 30, 2026, resulting in the extension of the maturity date from November 23, 2027 to April 30, 2031; the reduction of the maximum ERC ratio (as defined in the agreement) from 45.0% to 40.0%; and, subject to certain conditions, the ability of the borrowers to make investments in, or loans to, joint ventures up to an aggregate amount of €100 million.

For additional information about our borrowings, refer to Note 5.

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. The share repurchase program has no stated expiration date; does not obligate us to repurchase any specified amount of shares; remains subject to the discretion of our Board of Directors; is subject to compliance with applicable laws; and may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes. Our Board of Directors approved a new share repurchase program on August 3, 2026. For additional information, refer to Note 15.

Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. During the second quarter of 2026, we repurchased 587,642 shares of our common stock at an average price of $17.02 for a total of $10.0 million. As of June 30, 2026, we had $27.7 million remaining for share repurchases under the program, subject to the restrictive covenants mentioned above.

Leases

Our leases have remaining terms ranging from one to approximately seven years. As of June 30, 2026, we had $30.7 million in lease liabilities, of which $6.6 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2025 Form 10-K.

Derivatives

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of June 30, 2026, we had $8.0 million of derivative liabilities, of which $3.5 million matures within the next 12 months and $4.4 million in 2028. For additional information, refer to Note 6.

Investments

As of June 30, 2026, we held $117.6 million in Swedish treasury securities and $26.5 million in Finnish corporate notes to meet liquidity requirements for our banking subsidiary, AK Nordic AB.

Cash flow analysis

The following table summarizes our cash flow activity for the periods indicated (in thousands):


	Year-to-Date
	2026		2025		$ Change
Net cash provided by/(used in):
Operating activities	$	(11,344)	$	(65,490)	$	54,146
Investing activities	(31,510)		(33,408)		1,898
Financing activities	55,094		105,900		(50,806)
Effect of foreign exchange rates	14,796		20,885		(6,089)
Net increase in cash, cash equivalents and restricted cash	$	27,036	$	27,887	$	(851)

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. It does not include cash collections applied to the negative allowance, which are classified as investing activities. Net cash used in operating activities decreased by $54.1 million compared to the prior year period due primarily to higher cash collections recognized as income and lower cash paid for taxes, partially offset by higher cash paid for operating expenses.

Investing activities

Net cash used in investing activities decreased by $1.9 million compared to the prior year period due primarily to a decrease in purchases of nonperforming loan portfolios, increases in recoveries collected and applied to Finance receivables, net, and proceeds from sales and maturities of investments, partially offset by an increase in purchases of investments and the impact of the proceeds received from the sale of our interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, in the prior year period.

Financing activities

Net cash provided by financing activities decreased by $50.8 million compared to the prior year period due primarily to lower net proceeds from credit lines and higher levels of stock repurchases, partially offset by the activity in our interest-bearing deposit customer accounts and lower levels of noncontrolling interest distributions.

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. We consider accounting estimates to be critical if they (1) involve a significant level of estimation uncertainty and (2) have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material.

Our critical accounting estimates include revenue recognition on finance receivables, goodwill and income taxes. For a detailed description of our critical accounting estimates, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in the 2025 Form 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS

For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 14.

FREQUENTLY USED TERMS

We may use the following terms throughout this Quarterly Report:

•"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. 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. 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.

•"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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our business is primarily subject to interest rate and foreign currency risk. Our exposure to these risks, as described in Part II, Item 7A in the 2025 Form 10-K, has not changed materially.

Interest rate exposure

Of our $3.8 billion in total borrowings as of June 30, 2026, approximately $1.6 billion was fixed rate debt. Considering these fixed rate borrowings and the interest rate hedges on our variable rate debt, with maturities ranging from seven months to approximately four years, as of June 30, 2026, 60% of our total debt was either fixed rate or converted to a fixed rate. 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 $7.8 million.

Foreign currency exposure

We operate internationally and enter into transactions denominated in various foreign currencies. During Q2 2026, our revenues from operations outside the U.S. were $221.7 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. We conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, the principal executive officer and principal financial officer have concluded that, as of June 30, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings as of June 30, 2026, refer to Note 12.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of the 2025 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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, refer to Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of this Quarterly Report. Our Board of Directors approved a new share repurchase program on August 3, 2026. For additional information, refer to Note 15.

Share repurchases during the three months ended June 30, 2026 were as follows:


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Remaining Purchase Price for Share Repurchases Under the Program (1)
Period
April 1, 2026 - April 30, 2026	—	$	—	—	$	37,742
May 1, 2026 - May 31, 2026	—	—		—	37,742
June 1, 2026 - June 30, 2026	587,642	17.02		587,642	27,742
Total	587,642	$	17.02	587,642	$	27,742

(1)In thousands.

Our credit facilities and the indentures governing our senior notes contain financial and other restrictive covenants, including restrictions on certain types of transactions and our ability to pay dividends to our stockholders and repurchase our common stock.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement during the second quarter of 2026.

Item 6. Exhibits


3.1			Fifth Amended and Restated Certificate of Incorporation of PRA Group, Inc. (Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
3.2			Amended and Restated By-Laws of PRA Group, Inc. (Incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
4.1			Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Registration Statement on Form S-1 filed October 15, 2002 (Registration No. 333-99225)).
4.2			Form of Warrant (Incorporated by reference to Exhibit 4.2 of Amendment No. 2 to the Registration Statement on Form S-1 filed October 30, 2002 (Registration No. 333-99225)).
4.3			Indenture, dated as of September 22, 2021 among PRA Group Inc., the domestic subsidiaries of PRA Group Inc., party thereto and Regions Banks, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 24, 2021 (File No. 000-50058)).
4.4			Indenture, dated as of February 6, 2023, among PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc., party thereto and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 6, 2023 (File No. 000-50058)).
4.5			Indenture, dated as of May 20, 2024, among PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc. party thereto and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed May 20, 2024 (File No. 000-50058)).


4.6			Indenture, dated as of September 30, 2025, among PRA Group Europe Holding II S.à r.l, PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc., party thereto and U.S. Bank Trustees Limited, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed October 1, 2025 (File No. 000-50058)).
4.7			Description of the Registrant's Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.3 of the Annual Report on Form 10-K filed February 26, 2021 (File No. 000-50058)).











10.1			Second Amended and Restated Credit Agreement, dated April 30, 2026, to the Multicurrency Revolving Credit Facility Agreement by and among PRA Group Europe Holding S.à.r.l., acting through its Swiss branch office PRA Group Europe Holding S.à.r.l., Luxembourg, Zug Branch, Horyzont Niestandaryzowany Fundusz Wierzytelności Fundusz Inwestycyjny Zamknięty, and DNB Bank ASA (filed herewith).
10.2*			PRA Group, Inc. Amended and Restated 2022 Omnibus Incentive Plan (Incorporated by reference to Appendix B of the Definitive Proxy Statement on Schedule 14A filed April 30, 2026 (File No. 000-50058)).
31.1			Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
31.2			Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
32.1			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkable Document
101.LAB			XBRL Taxonomy Extension Label Linkable Document
101.PRE			XBRL Taxonomy Extension Presentation Linkable Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Denotes management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.