PRA Group (PRAA) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Fri, May 8, 2026 astatine 12:34 PM CDT 26 min read

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DATE

Thursday, May 7, 2026 astatine 5 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Martin Sjolund

• Chief Financial Officer — Rakesh Sehgal

Full Conference Call Transcript

Martin Sjolund: Thank you, Najim, and convey you, everyone, for joining america this evening. We are excited to beryllium holding today's net telephone successful our caller Charlotte office, surrounded by immoderate of our caller colleagues who volition assistance america alteration our IT, AI and information analytics strategy. I wanted to commencement by providing a speedy overview of our fiscal results for the quarter. As you tin spot connected this slide, we person had a beardown commencement to 2026, gathering connected the occurrence we achieved past year. Let's commencement with cash. Cash collections grew 11% year-over-year, driven by the continued momentum of our operational initiatives, particularly successful the U.S. This was supplemented by our continued beardown show successful Europe.

Cash ratio improved to 62% from 61% past year, and that's with a $15 cardinal summation successful ineligible postulation costs. As seen recently, these ineligible investments person been generating important currency collections successful the quarters pursuing our investment. We expect our investments successful ineligible collections to proceed to make currency for years to come. Turning present to portfolio purchases. Over the past 2 years, we've invested $2.6 cardinal successful caller portfolios, and this included our highest and 3rd highest yearly concern levels successful institution history. In Q1 of 2026, we purchased $221 cardinal of portfolios globally arsenic we stay disciplined with our buying and instrumentality a semipermanent attack focused connected nett returns alternatively than maturation for growth's sake.

This concern magnitude is successful enactment with our expectations, some successful presumption of measurement and expected returns. We did besides instrumentality the accidental to put successful immoderate adjacent little cost-to-collect segments wherever we saw bully returns. This is portion of our strategy of cautiously investing into caller segments that conscionable our nett instrumentality thresholds. Net income accrued to $28 million, gathering connected the beardown momentum we person been generating implicit the past mates of quarters. Adjusted EBITDA for the past 12 months was up 14% to $1.3 billion, increasing faster than currency collections erstwhile again. This suggests that we proceed to summation operating leverage adjacent arsenic we accrued investments successful the ineligible channel.

Due to the continued beardown maturation successful adjusted EBITDA and our disciplined purchasing, our nett leverage continued to tick down, ending the 4th astatine 2.7x. As you tin see, we've started 2026 with coagulated momentum. I wanted to supply immoderate perspectives connected the wellness of our customers, particularly successful airy of the existent macroeconomic and geopolitical backdrop that has led to elevated vigor costs and state prices. To commencement with, our customers stay unchangeable successful the U.S. and Europe and planetary currency collections successful Q1 performed successful enactment with expectations. Based connected our investigation of telephone recordings, we haven't truly been proceeding customers mention state prices oregon ostentation arsenic reasons for not being capable to pay.