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- **Revenue Growth**: Q3 2025 cash collections up 14% YoY, driven by U.S. legal collections (27% YoY growth).
- **Cost Efficiency**: $20M annualized savings from U.S. headcount reduction (25%) and operational restructuring.
- **Goodwill Impairment**: $413M noncash charge triggered by stock price decline, with European business fundamentals unchanged.
- **Capital Allocation**: Prioritizing portfolio purchases ($1.2B annual target) over buybacks, with €300M bond issuance to diversify capital structure.
- **Southern Europe**: Stabilization in Southern Europe allows selective investments, with Europe overperforming cash targets by 10% in Q3.

**【CEO Summary Section】**
- Q3 2025 revenue growth driven by 14% year-over-year cash collections ($542M), with U.S. legal collections up 27% YoY.
- Implemented cost reduction program, reducing U.S. headcount by 25% and achieving $20M annualized savings.
- Restructured U.S. operations into a cross-functional team, right-sized agent headcount by 170, and expanded offshoring to 1/3 of capacity.
- Launched new talent hub in Charlotte, NC, to access specialized skills in AI and analytics.
- Global ERC at $8.4B, up 15% YoY, with Europe overperforming by 10% and U.S. COVID vintages adjusted down by 33%.

**CFO Financial Commentary】**
- Q3 2025 GAAP net loss of $408M due to $413M noncash goodwill impairment charge, with adjusted net income of $21M.
- Portfolio purchases of $255M (60% Americas, 40% Europe), targeting $1.2B annual purchases.
- Adjusted EBITDA for LTM up 15% to $1.3B, with cash efficiency ratio 61% (excluding one-time payment).
- Issued €300M bond to diversify capital structure, reducing leverage to 2.8x net debt/EBITDA.
- U.S. legal collections channel now 46% of core cash, up from 38% two years ago.

**Q&A Highlights】**
- $15M one-time payment to modify portfolio terms, reducing Q3 revenue by $15M but improving future cash collections.
- Southern Europe showing stabilization, with selective investments at return thresholds.
- Buyback authorization remains, but prioritized portfolio purchases and leverage reduction.
- European business continues strong performance, with 6 consecutive years of overperformance vs. underwriting targets.

PRA Group, Inc. (PRAA) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PRAA

PRAA fundamentals

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