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PRA Group Q1 2025 Conference Call Presentation Nasdaq: PRAA
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Forward-Looking Statements Statements in this presentation, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future operations and financial performance. Such statements involve uncertainties and risks, some of which are not currently known to us, and may be superseded by future events that could cause actual results to differ materially from those expressed or implied in this presentation. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation and are qualified in their entirety by these cautionary statements. Information regarding risks and other factors that could cause our actual results to differ materially from our expectations can be found in our most recent Annual Report on Form 10-K and in subsequent SEC filings and should be considered when evaluating the forward-looking statements in this presentation. Except as required by law, we assume no obligation to update or revise these statements to reflect changes in the events, conditions, or circumstances upon which any such forward-looking statements are based. 1 Nasdaq: PRAA
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Q1 2025 Highlights Started 2025 with Momentum and Delivered Strong Results 2 Nasdaq: PRAA 1. Estimated remaining collections (ERC) refers to the sum of all future projected cash collections on our nonperforming loan (NPL) portfolio. Figures are as of March 31, 2025 and March 31, 2024, respectively. 2. Cash efficiency ratio = (cash receipts – operating expenses)/cash receipts. 3. A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this presentation. Metric ($ in M, except per share amounts) Q1 2025 Q1 2024 Change Portfolio Purchases $292 $246 +19% ERC1 $7,805 $6,498 +20% Cash Collections $497 $450 +11% Cash Efficiency Ratio2 60.8% 58.0% +284 bps Changes in Expected Recoveries $28 $52 (46%) Net Income Attributable to PRA Group, Inc. $4 $3 +5% Diluted EPS $0.09 $0.09 – Adjusted EBITDA3 $1,184 $1,044 +13% Debt to Adjusted EBITDA3 2.93x 2.83x +0.10x • Strong purchasing led to record ERC • Double-digit cash collections growth for fourth quarter in a row • Improved cash efficiency ratio • Net Income Attributable to PRA Group, Inc. reflects moderated level of Changes in Expected Recoveries • Seventh consecutive quarter of sequential adjusted EBITDA growth
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• Higher investment levels in Europe in Q1, with attractive pricing globally • Achieved record ERC of $7.8 billion as of March 31, 2025 • Continued focus on reducing U.S. legal cycle times and optimizing post-judgment activities • U.S. legal cash collections up 33% year- over-year to $111 million in Q1 • Completed consolidation of U.S. call centers from six sites to three • Plans to grow offshore headcount at a more measured pace through 2025 Three Strategic Pillars to Enhanced Profitability 3 Optimizing Investments Increase ERC and portfolio returns Operational Execution Maximize cash collected per dollar invested ✓ Higher portfolio returns ✓ Higher cash collections ✓ Lower marginal costs Enhanced Profitability Nasdaq: PRAA Managing Expenses Optimize cost structure Latest Update 1 2 3
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Seamless Leadership Transition for Next Phase of Growth Leveraging Successful European Playbook to Build on Three-Pillar Strategy 4 Nasdaq: PRAA ✓ 13 years at PRA Group (7 as President of PRA Group Europe) ✓ Member of the senior leadership team, overseeing 15 of PRA Group’s 18 markets ✓ Member of the Global Investment Committee, reviewing all major investments ✓ Key partner to U.S. business across multiple areas, including investment oversight and IT modernization ✓ Previously COO of Europe, leading transformation of European business ✓ Implemented IT modernization, new contact management system, and enhanced data & analytics ✓ Built out European leadership team ✓ Optimized costs and enhanced profitability of European business ✓ European playbook aligns well with global three-pillar strategy ✓ Outgoing CEO, Vik Atal, to serve as a senior advisor through year-end Martin Sjolund Incoming President and CEO effective June 17, 2025
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PRA Europe A Track Record of Consistent Growth 5 Nasdaq: PRAA 1. In billions. Figures are as of December 31 for each year between 2014 and 2024 and as of March 31 for the first quarter of 2025 2. In millions. $1.5 $2.0 $2.1 $2.4 $2.5 $2.9 $3.2 $3.1 $3.0 $3.4 $3.6 $3.9 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q1 2025 CAGR: +6% PRA Europe ERC1 $167 $351 $405 $429 $472 $519 $579 $708 $654 $664 $721 $739 $0 $200 $400 $600 $800 $1,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 LTM Q1 2025 CAGR: +8% PRA Europe Cash Collections2 Optimizing Investments: • Track record of disciplined investments with deep seller relationships • Successfully purchased $3B+ in portfolios while growing ERC at a CAGR of 6% over the last seven years Operational Execution: • Implemented common cloud platform and enhanced data & analytics capabilities Managing Expenses: • Leveraged technology and scale to build a highly cost-efficient platform in Europe
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Q1 Investments Up 19% Year-Over-Year Achieved Record ERC of $7.8 Billion 6 Nasdaq: PRAA 2023 2024 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $230 $328 $311 $285 $246 $379 $350 $433 $292 +19% Americas and Australia Europe Quarterly Portfolio Purchases1 ERC2 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 $5.7 $5.9 $6.0 $6.4 $6.5 $6.8 $7.3 $7.5 $7.8 +20% 2023 2024 2025 1. In millions. 2. In billions
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Q1 Cash Collections Increased 11% Year-Over-Year 7 Nasdaq: PRAA Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $411 $419 $420 $410 $450 $474 $477 $468 $497+9% +11% Americas and Australia Europe 2023 2024 2025 $ in millions
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($37) $21 $22 $23 $52 $73 $61 $55 $28 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 The Two Components of Portfolio Revenue Both Represent an Important Part of Revenue & Profitability 8 Nasdaq: PRAA Avg: $33 2023 2024 2025 Changes in Expected Recoveries $ in millions Portfolio Income 2023 2024 2025 $188 $184 $190 $195 $202 $209 $216 $230 $241 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 +19%
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Q1 2025 Financial Results Revenue Growth and Disciplined Cost Management Drive Profitability 9 $ in millions Nasdaq: PRAA $155 $209 $216 $221 $256 $284 $281 $293 $270 +5% Revenues $189 $164 $173 $176 $189 $195 $191 $199 $195 +3% Operating Expenses ($59) ($4) ($12) ($9) $3 $22 $27 $18 $4 0.0 0.2 0.4 0.6 0.8 1.0 -60 -40 -20 0 20 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 +5% Net Income Attributable to PRA Group 2023 2024 2025
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Strong Cash Collections Drive Adjusted EBITDA Growth Leverage Remains Stable and Within 2-3x Target Range $ in millions 10 Nasdaq: PRAA *A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this presentation. 2023 2024 2025 Adjusted EBITDA* Debt to Adjusted EBITDA* $1,015 $993 $998 $1,007 $1,044 $1,065 $1,100 $1,138 $1,184 2.89x 2.76x 2.84x 2.89x 2.83x 2.92x 3.00x 2.92x 2.93x 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 +3% +13%
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Strong Capital Structure Well-Positioned to Continue Capitalizing on Elevated Portfolio Supply $ in millions 11 Nasdaq: PRAA • $919 million available under our credit facilities as of March 31, 2025 • $538 million available based on current ERC • $381 million of additional availability subject to borrowing base and debt covenants, including advance rates • Strong long-term relationships with creditors • Bank covenant structure provides the financial flexibility to drive future growth Debt Maturity Profile $615 $398 $550 2025 2026 2027 2028 2029 2030 2031+ $1,913 UK RCF NA RCF NA Term Loan Europe RCF Senior Unsecured Notes $0 $0 $0
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Key Takeaways Nasdaq: PRAA d Positive start to the year with encouraging results on key financial metrics Confident about the overall trajectory of the business Company is positioned for continued success with transition to new CEO 12
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Q&A 13 Nasdaq: PRAA
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Reconciliation of Non-GAAP Financial Measures to GAAP 14 Nasdaq: PRAA Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including Adjusted EBITDA, internally to evaluate the Company’s performance and to set performance goals. Adjusted EBITDA is calculated as net income (or loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); plus foreign exchange loss (or less foreign exchange gain); plus interest expense, net and other; plus depreciation and amortization; plus impairment of real estate; plus net income attributable to noncontrolling interests; and plus recoveries collected and applied to Finance receivables, net less Changes in expected recoveries. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. The Company presents Adjusted EBITDA because the Company considers it an important supplemental measure of operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period- to-period comparability of the Company’s operational and financial performance and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Set forth below is a reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA for the last twelve months (LTM) as of March 31, 2023 through the LTM as of March 31, 2025. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies. Additionally, the Company evaluates its business using certain ratios that use Adjusted EBITDA. Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following table also reflects the Company's Debt to Adjusted EBITDA for the LTM as of March 31, 2023 through the LTM as of March 31, 2025. $ in millions 2025 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 Net income/(loss) attributable to PRA Group, Inc. 19$ (22)$ (59)$ (83)$ (21)$ 4$ 43$ 71$ 71$ (+) Income tax expense/(benefit) 14 1 (8) (16) 5 12 10 21 23 (+) Foreign exchange loss (gain) (2) (1) (1) — (1) — 1 — — (+) Interest expense, net and other 138 150 168 183 198 209 221 230 239 (+) Depreciation and amortization 15 15 14 13 13 12 11 11 11 (+) Impairment of real estate — — 5 5 5 5 — — 1 (+) Net income attributable to noncontrolling interests 11 13 15 17 20 19 17 18 15 (+) Recoveries collected and applied to Finance receivables, net less Changes in expected recoveries 820 837 864 888 825 804 797 787 824 LTM Adjusted EBITDA 1,015$ 993$ 998$ 1,007$ 1,044$ 1,065$ 1,100$ 1,138$ 1,184$ Borrowings 2,938$ 2,740$ 2,832$ 2,914$ 2,953$ 3,114$ 3,296$ 3,327$ 3,466$ Debt to LTM Adjusted EBITDA 2.89x 2.76x 2.84x 2.89x 2.83x 2.92x 3.00x 2.92x 2.93x 2023 2024 LTM Ended
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I R . P R A G R O U P . C O M Najim Mostamand, CFA VP, Investor Relations (757) 431-7913 IR@pragroup.com