PRA Group, Inc. Q1 FY2026 earnings call

Prepared Remarks: Focused on PRA 3.0 strategy. Adjusted EBITDA for last 12 months was $1.3 billion, up 14% y/y. Net leverage ended the quarter at 2.71 times, ticking down. Ample liquidity and strong capital structure. Refinanced European revolving credit facility. Repurchased $10 million of shares in the quarter. Q1 was solid. Questions and Answers: Martin talked about testing adjacent product segments, focus on disciplined capital allocation, progress on technology platform with plans to have one global cloud instance by end of year, legal channel growth in US due to combination of investment and optimization, and building capabilities like external debt collection agencies in US.

Goal is to have net leverage continue to decline over next few years to mid two times area. Plan to invest between 1 to 1.3 over next few years as part of 3.0 strategy. Funding profile strong with no maturities until 2028. Will evaluate share repurchases as part of capital allocation strategy consistent with covenant restrictions.

Q: Martin, is the area of buying in adjacent or new areas that you talked about potentially expanding into something more meaningful?

A: Part of strategy to test into adjacent segments to leverage operating and underwriting capabilities, investing in areas with future opportunity but testing to get data first.

Q: As you execute more on 3.0 strategy, could you accelerate purchasing activity if generating better returns?

A: Focused on disciplined capital allocation, plan based on current market conditions but would consider if macro environment changes.

Q: How far along is progress on 3.0 strategy technology?

A: Making good progress, expect to have one global cloud instance and common contact platform in US by end of year, with longer-term projects like AI also in progress.

Q: Is unifying global platform and IT investments encouraging expansion into other agencies?

A: European markets already in broader segments, US investments will provide lean operating platform, better service, automation, and make flexible for handling other segments, along with other capabilities like external debt collection agencies.

Q: How much of legal channel growth in US is from spending more versus optimization?

A: Combination, improving processes and scoring accounts to meet return thresholds before putting into legal channel, with greater certainty on cash collection.