PRA Group at Small-Cap Virtual Conference: growth, deleveraging and AI

On September 23, 2026, PRA Group (PRAA) presented its strategy at the Small-Cap Virtual Conference, emphasizing steady capital deployment, reduced leverage, and increased technological integration. The company reported a record $8.9 billion in estimated remaining collections, driven by robust operational execution. Cash collections in the second quarter amounted to $559 million, while portfolio purchases totaled $297 million.

Net leverage reached 2.67x as of June 30, marking the seventh consecutive quarter of deleveraging. CEO Martin Sjolund and CFO Rakesh Sehgal highlighted the company's "PRA 3.0" plan, focusing on disciplined capital allocation, modernization of operations and technology, and strengthening of culture and talent. PRA Group is a global debt buyer operating in 18 markets, with roughly equal exposure to the U.S. and Europe.

The company's success is attributed to its extensive data on over 50 million customers and decades of experience in the business, enabling it to offer competitive pricing, efficient collections, and high customer treatment standards. In the second quarter, PRA Group's portfolio purchases were $297 million, and cash collections were $559 million.

Net income reached $58 million, with estimated remaining collections standing at $8.9 billion. The company's last 12 months adjusted EBITDA amounted to $1.4 billion, while net leverage declined to 2.67x by June 30, down from a peak of 2.9x in 2024. Adjusted EBITDA has grown by 35% since 2023, and cash collections have increased by 32% over the same period.

Cash efficiency has improved by more than 200 basis points, despite rising legal court costs. PRA Group's stock has risen by 25% over the past year, trading near $20.09, close to its 52-week high of $22.55. InvestingPro analysis suggests the company is undervalued, placing it among the platform's Most Undervalued stocks. Analysts expect net income to grow this year, with a forecasted earnings per share of $2.74 for 2026.

PRA Group employs a three-part plan, known as PRA 3.0, which includes disciplined capital allocation and investing, modernization of operations and technology, and enhancement of culture and talent. CEO Sjolund emphasized the company's reliance on scale, technology, and specialized capabilities, citing its extensive data on over 50 million customers in the U.S. and Europe as a key advantage in pricing, collections, and customer treatment.

The company reported a 215-person reduction in corporate and overhead roles, a 575-person elimination of call center positions, and a reduction of its U.S. call center footprint from seven sites to one. The company anticipates annualized net savings of $35 million by the end of 2025. PRA Group also launched a cloud-based customer contact platform in the U.S., after deploying it in Europe, and established an AI team to support contact centers and back-office operations.

Management aimed to improve customer interactions through mobile and digital channels while reducing manual work over time. Additionally, PRA Group opened a talent hub in Charlotte, North Carolina, to recruit financial services professionals with specialized skills for future technology and capability development. Management also noted a reduction in layers of management and adjustments to incentive programs aimed at aligning employees with shareholder goals.

The investment environment remained favorable in both the U.S. and Europe, with stable or slightly declining charge-off rates and a strong credit card balance exceeding $1 trillion in the U.S. However, the U.S. market's high regulatory complexity presented challenges.