PRA Group, Inc. (PRAA) reported a net loss of $305 million for 2025, largely driven by a $413 million goodwill impairment charge that was non‑cash and unrelated to operational performance. After adjusting for the impairment, the company earned $73 million in net income, reflecting a solid underlying earnings platform. Cash collections rose 13.6% year‑over‑year to $531.7 million in the fourth quarter and 12.8% to $2.1 billion for the full year, underscoring the resilience of its portfolio‑buying and collection model. The estimated remaining collections (ERC) reached a record $8.6 billion, and the cash‑efficiency ratio improved to 61% from 59% in 2024, indicating stronger operating leverage.
Earnings per share (EPS) of $1.46 beat the consensus estimate of $0.31 by 371%, a margin that reflects the company’s disciplined cost management and the strong cash‑collection momentum. The EPS beat was driven by the 14% growth in quarterly cash collections and the company’s ability to maintain margin expansion despite the one‑time goodwill impairment. Revenue of $333.4 million exceeded the consensus estimate of $296.2 million by 12.6%, driven by robust demand in core debt‑collection segments and a favorable mix shift toward higher‑margin U.S. and European portfolios.
Management guidance for 2026 signals confidence in continued growth. The company projects earnings per share between $0.43 and $0.80, and full‑year revenue of $1.228 billion, up from the prior guidance of $1.1 billion. PRA plans to invest $1 billion to $1.3 billion annually in non‑performing loan portfolios, while targeting a net leverage decline to the mid‑2x range. These forward‑looking metrics suggest a sustained focus on disciplined capital allocation and operational efficiency.
CEO Martin Sjolund emphasized the company’s progress, noting that “2025 was a year of significant progress for PRA as we focused on strengthening our U.S. platform, building on the strength and momentum of our European franchise, executing on our near‑term priorities, and developing our longer‑term strategy.” CFO Rakesh Sehgal added that “cash collections for the quarter were $532 million, reflecting a strong 14% growth year‑over‑year. For the full year, cash collections grew 13% to $2.1 billion, exceeding the high single‑digit growth target we had for 2025.”
Investors responded positively to the results, with analysts highlighting the substantial EPS and revenue beats as evidence of effective execution and a strong underlying business model. The market reaction underscores confidence in PRA’s ability to sustain growth and improve profitability in the coming years.
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