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praa-20251231

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2025

☐Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________ to ________

Commission File Number: 000-50058

PRA Group, Inc.

(Exact name of registrant as specified in its charter)

120 Corporate Boulevard, Norfolk, Virginia23502

(888) 772-7326

(Address of principal executive offices, zip code, telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value per share PRAA NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes ☐No☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2025 was $568,047,885 based on the $14.75 closing price as reported on the NASDAQ Global Select Market.

The number of shares of the registrant's Common Stock outstanding as of February 20, 2026 was 38,453,344.

Documents incorporated by reference

Portions of the Registrant's definitive Proxy Statement for its 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Part I

Item 1. Business 4

Item 1A. Risk Factors 9

Item 1B. Unresolved Staff Comments 17

Item 1C. Cybersecurity 17

Item 2. Properties 19

Item 3. Legal Proceedings 19

Item 4. Mine Safety Disclosures 19

Part II

Item 6. [Reserved] 21

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 41

Item 8. Financial Statements and Supplementary Data 42

Item 9A. Controls and Procedures 76

Item 9B. Other Information 78

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 78

Part III

Item 10. Directors, Executive Officers and Corporate Governance 78

Item 11. Executive Compensation 78

Item 14. Principal Accountant Fees and Services 78

Part IV

Item 15. Exhibits and Financial Statement Schedules 78

Signatures 81

All references in this Annual Report on Form 10-K ("Form 10-K") to "PRA Group," "our," "we," "us," the "Company" or similar terms are to PRA Group, Inc. and its subsidiaries.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are forward-looking statements, including statements regarding cash collection trends, operating cost trends, liquidity and capital needs and other statements of expectations, beliefs, future plans, strategies and anticipated events or trends. Our results could differ materially from those expressed or implied by such forward-looking statements, or our forward-looking statements could be wrong as a result of risks, uncertainties and assumptions, including the following:

•a deterioration in general business and economic conditions;

•our ability to purchase a sufficient volume of nonperforming loans at favorable pricing;

•our ability to collect sufficient amounts on our nonperforming loans to recover our costs and fund our operations;

•our reliance on internally developed models and the underlying data used in those models;

•a disruption or failure by any of our third-party service providers, or the vendors on whom they may depend, to meet their obligations and our service level expectations, or an ability to contract alternative providers;

•our ability to realize the expected benefits from our cash-generating and cost savings initiatives in our United States ("U.S.") business;

•changes in the regulatory environment for legal collections or our ability to effectively collect on legal recovery and post-judgment processes;

•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of our information technology ("IT") infrastructure, networks or communication systems;

•our ability to effectively manage change associated with ongoing enhancements to our key operational systems and processes;

•our ability to effectively utilize artificial intelligence ("AI") and machine learning technologies and to adequately safeguard our systems against AI-driven threats;

•our ability to execute our three-year strategic plan effectively, including the targets related to improving our financial results;

•further impairment of goodwill;

•our ability to manage risks associated with our international operations;

•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws that limit our ability to collect on our nonperforming loans;

•our ability to comply with existing and new regulations of the collection industry;

•investigations, reviews or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");

•our ability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");

•our ability to retain, expand, renegotiate or replace our credit facilities and our ability to comply with the covenants under our financing arrangements;

•our ability to manage our capital and liquidity needs effectively, including as a result of changes in credit or capital markets or adverse changes in our credit ratings, whether due to concerns about our industry in general, the financial condition of our competitors, or other factors;

•changes in interest or exchange rates;

•default by, or failure of, one or more of our counterparty financial institutions; and

•the "Risk Factors" in Item 1A of this Form 10-K and in our other filings with the Securities and Exchange Commission ("SEC").

You should assume that the information appearing in this Form 10-K is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. Future events, developments or results described in, or implied by, this Form 10-K could turn out to be materially different. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Form 10-K, and you should not expect us to do so.

PART I

Item 1. Business.

OVERVIEW

General

We are a specialty finance company headquartered in Norfolk, Virginia and incorporated in Delaware. Our primary business is the purchase, collection and management of nonperforming loan portfolios, and we are a global leader in the industry. Most of the loans we purchase are from credit originators who have chosen not to pursue, or have been unsuccessful in collecting, the full balance owed to them ("Core" accounts). To a lesser extent, we also purchase loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts). As part of an ancillary business, we purchase and provide fee-based services for class action claims recoveries in the U.S.

We are organized on a geographic basis, with our principal markets in the U.S. and Europe, where we have operations in 12 countries and the United Kingdom ("UK"). On a significantly smaller scale, we also operate in South America, Canada and Australia. Subject to globally-established parameters for capital allocation, portfolio return thresholds and leverage, each market functions under a similar debt management business model, which is predicated on purchasing nonperforming loans and generating returns through disciplined collection strategies over extended collection periods.

Portfolio purchasing

To identify purchasing opportunities, our investment teams continuously engage with known and potential sellers, including major banks, consumer finance companies, auto finance providers and other creditors. The types of Core and Insolvency loans we purchase include general purpose and private label credit cards, consumer loans, auto loans, overdrafts and small business loans. In valuing these loans, we consider several factors, including the type of asset, the age since charge-off, the geographic region, the sellers' selection criteria and collections activity up to the time of sale.

Nonperforming loan portfolios are typically sold through formal sales processes in which bids are requested from a group of pre-qualified potential buyers. In some cases, portfolios can also be sold on an exclusive basis directly to a seller's preferred buyer. In determining the price we bid for a portfolio, we leverage our extensive data set and modeling experience, which considers various factors, including projected cash collections, the estimated cost to collect and financing costs. All of our purchases are subject to approval by the applicable internal investment committee(s).

Credit originators sell nonperforming loans in either single portfolio transactions, referred to as spot sales, or through pre-arranged sales of multiple portfolios over time, referred to as forward flow sales. Under forward flows, portfolios are purchased on a periodic basis at a negotiated price over a specified term, typically ranging from six to 12 months. Forward flow agreements establish specific criteria for the loans to be purchased, and many allow for termination and/or price renegotiation should the underlying quality of the portfolio deteriorate over time.

Portfolio collections

Core

Our Core account collection efforts are driven by a combination of internally staffed call centers and external vendors. Except for accounts placed with a third-party debt collection agency, we utilize proprietary models to proportionally direct work efforts to those customers most able and willing to pay, and ultimately, to achieve the highest correlation to profitable collections from our call activities. As part of our focus on driving cost efficiency and optimizing the performance of our U.S. business, we have reduced our onshore call center headcount and moved approximately one-third of our U.S. call center capacity offshore.

An important component of our collection efforts involves legal recovery and the judicial collection of balances from customers who we believe have the ability to settle their obligations but are unwilling to pay. We do not initiate our collections activity in the legal channel, but consider using it when customers do not engage with us voluntarily. There are some markets, especially in the Nordic countries, where the collection process follows a prescribed and time-sensitive set of legal actions, but in the majority of instances, we are able to use models and analysis to identify accounts with a higher propensity to pay in legal recovery. The legal process can take an extended period of time and requires an upfront investment in court filing costs, but usually generates net cash collections that likely would not have been realized otherwise. We utilize a combination of internal resources (attorneys and supporting staff), external law firms and other third-party service providers to perform legal recovery and judicial collections.

Insolvency

Accounts that are in an insolvent or bankrupt status are managed by our Insolvency operations team. These accounts fall under insolvency plans such as Individual Voluntary Arrangements ("IVAs") and Trust Deeds in the UK, Consumer Proposals in Canada and various forms of bankruptcy plans in the U.S., Canada, Germany and the UK. We file claims or claim transfers securing our creditor rights under these plans, and we actively manage these accounts through the entire life cycle of the insolvency proceeding to ensure that we participate in any distributions to creditors. The accounts we manage are derived from two sources: (1) purchased portfolios of insolvent nonperforming loans and (2) Core accounts when customers file for protection under insolvency or bankruptcy laws after we have purchased the accounts.

These types of accounts are managed under the relevant country's insolvency or bankruptcy codes and may have an associated payment plan that generally ranges from three to seven years. Accounts that are purchased while insolvent can be purchased at any stage of the insolvency or bankruptcy plan life cycle. Accounts sold close to the filing of the insolvency or bankruptcy plan may take months to generate cash flows, while accounts sold years after the filing of the insolvency or bankruptcy plan typically generate cash flows immediately.

Digital

We utilize digital platforms to support our inbound collection efforts, and where permitted by local regulations, our outbound communications. Our digital channels allow us to serve our customers in a way that many of them prefer, providing convenient, user-friendly platforms for receiving information, making payments, accessing account information, viewing documents and contacting an account representative. We have expanded collections activity through our digital platforms, which provide an efficient, cost-effective and growing channel for us.

Seasonality

In all of the countries in which we operate, customer payment patterns can be impacted by multiple factors, including seasonal employment trends, income tax refunds and holiday spending habits.

STRATEGY AND BUSINESS SEGMENTS

Strategy

During 2025, we focused on strengthening our U.S. platform, building on the strength and momentum of our European business, executing on our near-term priorities and developing our longer-term strategy. The three components of our global business strategy are the following:

1.Capital and investing - invest with discipline and allocate capital to opportunities that align with our return objectives: leverage our geographic diversification; maintain a solid financial profile with a strong and diversified funding base; and allocate capital prudently, prioritizing investments in portfolios.

2.Operations, technology and data - advance our core systems and infrastructure, becoming more efficient, flexible and technology-driven: optimize the mix of in-house and external collections capabilities; leverage technology standardization and AI; enhance data and analytics, generating better customer insights; and maintain disciplined cost management.

3.People and culture - maintain a performance-oriented culture focused on accountability and execution: establish clear objectives and key-result metrics while encouraging an entrepreneurial mindset; continue to align incentives with shareholder interests; and maintain a strong culture of compliance.

Business segments

During the fourth quarter of 2025, we reorganized our business segment structure from a single operating segment into two operating and reportable segments, comprised of our U.S. and European businesses. Our operations in South America, Canada and Australia are not operating segments individually or collectively. Subject to local regulations and market conditions, all of our businesses are engaged in substantially similar portfolio purchasing and collections activities, as described above.

For additional information about our reportable business segments, refer to Part I, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Reportable Business Segments" of this Form 10-K and Note 16 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

COMPETITION

Competition is derived primarily from other debt purchasers that either manage their own nonperforming loans or outsource such services. In the U.S., regulatory complexity and burdens, combined with seller preferences for experienced portfolio purchasers, create barriers to successful entry for new competitors, resulting in a fairly stable competitive landscape. In Europe, diverse regulatory environments create varying levels of competition, with some markets being more competitive than others. We compete with other debt purchasers on a number of individual factors, including price, reputation, industry experience and long-term performance. We believe that our competitive strengths include our:

•diverse global presence, with portfolios in 18 countries;

•strong and longstanding relationships with credit originators globally;

•strong capital position;

•extensive data set informing our proprietary underwriting process and disciplined approach to bidding;

•comprehensive compliance program;

•reputation from previous portfolio purchase transactions;

•customer service; and

•ability to efficiently and effectively collect on various asset types.

GOVERNMENT REGULATION

We are subject to a variety of federal, state, local and international laws, some of which establish specific guidelines and procedures for the collection, use, retention, security and transfer of personal information that debt collectors must follow when collecting on customer accounts. The most significant government regulations that impact our business are discussed below. For further discussion about how these regulations may impact our business, refer to Item 1A. Risk Factors.

U.S.

We are subject to supervision by the CFPB, which has primary regulatory authority over consumer debt collection in the U.S. and is responsible for enforcing numerous financial statutes and regulations. After the change in U.S. presidential administration in 2025, there have been some indications that the regulatory and enforcement activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain.

Significant laws and regulations applicable to our U.S. business include the following:

•Fair Debt Collection Practices Act, which imposes certain obligations and restrictions on the practices of debt collectors, including specific restrictions regarding the time, place and manner of communications.

•Fair Credit Reporting Act, which obligates credit information furnishers to verify the accuracy of information provided to credit reporting agencies and investigate consumer disputes concerning the accuracy of such information.

•Gramm-Leach-Bliley Act ("GLBA"), which requires that certain financial institutions, including collection companies, develop policies to protect the privacy of consumers' private financial information and provide notices to consumers advising them of their privacy policies.

•Electronic Funds Transfer Act, which regulates electronic fund transfer transactions, including a consumer’s right to stop payments on a pre-approved fund transfer.

•Telephone Consumer Protection Act, which, along with similar state laws, places certain restrictions on the use of artificial or pre-recorded voice messages and automatic dialing systems that place telephone calls to consumers.

•Servicemembers Civil Relief Act, which gives U.S. military and uniformed services personnel relief from credit obligations they may have incurred prior to entering military service and may also apply in certain circumstances to obligations and liabilities incurred by a servicemember while serving on active duty.

•U.S. Bankruptcy Code, which prohibits certain contacts with consumers after the filing of bankruptcy petitions and dictates what types of claims will or will not be allowed in a bankruptcy proceeding, including how such claims may be discharged.

•Americans with Disabilities Act, which requires certain companies operating in the U.S. to take steps to ensure functionally equivalent services are available for their consumers with disabilities and to accommodate consumers with disabilities through, for example, implementation of telecommunications relay services.

•Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act"), which restructured the regulation and supervision of the financial services industry in the U.S. and created the CFPB.

At the state and local levels, we are subject to a variety of statutes and regulations. These state and local rules regulate, among other things, collection activity, AI, data privacy, data collection and use, legal recovery and post-judgment processes, and licensing and bonding.

Europe and other markets

Our international operations are subject to regulation by various regulators, including central banks and other regulatory bodies such as the UK Financial Conduct Authority, Swedish Financial Supervisory Authority, German Federal Financial Supervisory Authority, Bank of Italy, Polish Financial Supervision Authority and Australian Securities & Investments Commission.

Significant laws and regulations applicable to our international businesses include the following:

•U.S. Foreign Corrupt Practices Act ("FCPA"), UK Bribery Act and similar laws, which prohibit certain payments to, and transactions with, governmental officials and other individuals.

•International data protection and privacy laws, which include relevant country specific legislation in the UK and other European countries in which we operate that regulate the processing of information related to individuals, including the obtaining, holding, use or disclosure of such information; the Personal Information Protection and Electronic Documents Act, which aims to protect personal information that is collected, used or disclosed in certain circumstances for purposes of electronic commerce in Canada; the GDPR, which regulates the processing and free movement of personal data within the European Union ("EU") and the transfer of such data outside the EU; and in the UK, the Data Protection Act 2018, which implements requirements similar to those of the EU GDPR in the UK.

•EU Directive 2021/2167 (the "Directive"), which creates a regulatory framework for the sale, purchase and servicing of EU nonperforming loans and requires "credit servicing" to be subject to authorization and oversight processes. EU member states are required to establish regulatory frameworks for authorizations and registrations of all credit servicers and to set standards for consumer protection and fitness and propriety standards for business owners, among other requirements.

•Consumer Credit Act 1974 (and its related regulations); Unfair Terms in Consumer Contracts Regulations of 1999; and the Financial Conduct Authority's Handbook of rules and guidance, including the:

•Consumer Credit Sourcebook, which governs regulated consumer credit agreements and collection activities in the UK;

•Consumer Duty, which sets higher and clearer standards of consumer protection across financial services in the UK and requires firms to act to deliver good outcomes for customers; and

•Senior Managers and Certification Regime, which aims to reduce harm to consumers and strengthen market integrity in the UK by imposing additional obligations on certain individuals who have significant control or influence over the management of UK financial services businesses to ensure accountability for their conduct and competence.

•EU Regulation 2022/2554 (the Digital Operational Resilience Act ("DORA")), which establishes a unified framework for information and communication technologies ("ICT") risk management across several categories of financial entities and their critical third-party ICT providers. DORA requires organizations to implement robust ICT risk governance, conduct resilience testing (including advanced penetration tests), promptly report major ICT-related incidents, manage third-party dependencies through due diligence and contractual safeguards and participate in cyber-threat information sharing.

•EU Regulation 2024/1689 (the Artificial Intelligence Act ("AI Act")), which introduces a risk-based framework categorizing AI systems into four tiers: unacceptable risk (banned, e.g., social scoring, manipulative AI); high-risk (subject to strict obligations such as risk assessments, data quality, transparency, human oversight and pre-market conformity assessments); limited-risk (e.g., chatbots requiring transparency notices); and minimal-risk (unregulated). It also mandates specific rules for general-purpose AI models, including documentation, incident reporting, cybersecurity measures and dataset transparency. The AI ACT became effective on August 1, 2024, and the enforcement of most of its provisions will begin on August 2, 2026.

Our international operations are subject to the tax laws and regulations of the countries in which they are organized and operate. Foreign governments enact legislation that could impact our business activities or the amount of taxes that we pay. Of note, the Global Anti-Base Erosion Model Rules (Pillar Two) issued by the Organization for Economic Cooperation and

Development (“OECD”) recommended a minimum 15% tax on the income of large multinational enterprises in each jurisdiction in which they operate, and a number of countries have either enacted Pillar Two rules or are evaluating whether to enact such rules. In addition, certain of our subsidiaries are subject to capital adequacy, liquidity, and other requirements imposed by regulators.

HUMAN CAPITAL MANAGEMENT

Our Company’s values and culture are central to our ability to attract, hire and retain talented employees. Our human capital management objectives are grounded in our commitment to these values and ethics and are focused on supporting employee health, safety and wellness and furthering talent development, performance management and engagement.

Commitment to values and ethics

We strive to foster a culture of respect and responsibility through a common set of values and commitments among all our employees referred to as "C.A.R.E.S", which stands for Committed, Accountable, Respectful, Ethical and Successful. Our C.A.R.E.S values guide how we treat each other, how we relate to our customers and the responsibilities we have to other key stakeholders such as our stockholders, sellers and regulators. These values are also reflected in our Code of Conduct.

Total rewards and safety

We are committed to creating a workplace that promotes the health, safety and wellness of our employees. We offer a comprehensive total rewards program, which includes competitive pay and bonus structures, health and wellness benefits, retirement plans and an employee assistance program.

Talent development and engagement

We believe that talent development, performance management and the engagement of our employees are key to our future success. We offer tuition reimbursement assistance and have a robust suite of training and development offerings for employees across the globe, many available in multiple languages. Our performance management framework is designed to foster accountability, encourage interactive discussions about performance and expand the skills and capabilities of our employees. We conduct an annual employee survey to measure engagement and inform action plans to address employee concerns and celebrate accomplishments. We believe that our employees are one of our greatest assets and encourage them to be their best and to be themselves, which fosters an inclusive workplace that values diverse experiences, perspectives and abilities.

Our workforce

As of December 31, 2025, we employed 2,615 full-time equivalents globally, with approximately 60% of our workforce located in the U.S., 35% in Europe and 5% in our other markets. None of our employees in the U.S. are represented by a union or covered by a collective bargaining agreement. In Europe, we work closely with works councils, and in countries where it is the customary local practice, such as Finland and Spain, we have collective bargaining agreements.

Available Information

We make available on or through our website, www.pragroup.com, certain reports that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Filings"). We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at: www.sec.gov.

The information contained on, or that can be accessed through our website, is not, and shall not be deemed to be a part of this Form 10-K or incorporated into any of our other SEC Filings.

Reports filed with, or furnished to, the SEC are also available free of charge upon request by contacting our corporate office at:

PRA Group, Inc.

Attn: Investor Relations

120 Corporate Boulevard, Suite 100

Norfolk, Virginia 23502

Item 1A. Risk Factors.

You should carefully read the following discussion of material factors, events and uncertainties when evaluating our business and the forward-looking information contained in this Form 10-K. The events and consequences discussed in these risk factors could materially and adversely affect our business, results of operations, liquidity, cash flow and financial condition. While we believe we have identified and discussed below the material risk factors affecting our business, these risk factors do not identify all of the risks we face, and there could be additional risks and uncertainties that we do not presently know of or that we do not currently believe to be material that could have an adverse effect on our business, results of operations, liquidity, cash flow or financial condition in the future.

OPERATIONAL AND INDUSTRY RISKS

A deterioration in general business and economic conditions could adversely impact our business and financial results.

Our business has been sensitive to, and our financial performance is in part dependent on, the general business and economic conditions in the markets in which we operate. Our financial performance may be adversely affected by an economic recession, a significant rise in inflation, including sustained high inflation, interest rate uncertainty and the effects of governmental fiscal and monetary policies in the markets in which we operate. Any prolonged economic downturn or volatility in the financial or credit markets could place financial pressure on and negatively affect the ability of consumers to pay their debts, which could adversely affect collections and the value of our receivable portfolios. In addition, levels of consumer or commercial lending and financing could decline, thereby reducing the volume of nonperforming loans available for purchase, which could adversely affect our business and financial results in the markets in which we operate.

We may not be able to purchase a sufficient volume of nonperforming loans at favorable pricing, which could adversely impact our profitability.

Our ability to operate profitably is dependent on our ability to purchase and service a sufficient volume of nonperforming loans to generate revenue that exceeds our expenses. The cadence for the purchase of nonperforming loan portfolios by quarter, and by year, has been and may continue to be varied and periodic due in large part to the available supply of portfolios in the markets in which we operate and pricing that meets our return thresholds. The availability of nonperforming loan portfolios at prices that generate an appropriate return on our investment depends on a number of factors, including:

•consumer debt levels;

•the sale of nonperforming loan portfolios by credit originators;

•competitive factors affecting potential purchasers and credit originators of nonperforming loans;

•our ability to obtain and analyze portfolio data efficiently and to accurately predict loan collectability; and

•changes in credit and financial lending laws and regulations.

Changes in the financial or credit markets may cause an existing forward flow agreement to fail to meet our expected return thresholds, since we are committed to purchasing portfolios at a previously negotiated price over a specified term, and may ultimately pay higher prices for portfolios than we would have otherwise been willing to pay under similar market conditions.

Moreover, there can be no assurance that credit originators will continue to sell their nonperforming loan portfolios consistent with historical levels, or at all, or that we will be able to bid competitively for those portfolios. Because of the length of time involved in collecting on acquired nonperforming loans and the variability in the timing of our collections, we may not be able to identify trends and make changes to our purchasing strategies in a timely manner. If we are unable to adapt to evolving market demands, or keep pace with our current or future competitors, we may limit our ability to acquire nonperforming loan portfolios at acceptable pricing, or at all, which could adversely impact our business, results of operations and cash flow.

We may not be able to collect sufficient amounts to recover our costs and fund our operations.

Our principal business consists of purchasing and collecting on nonperforming loans from credit originators that consumers or others have failed to pay. The credit originators have typically made numerous attempts to recover on these accounts, often using a combination of in-house recovery efforts and third-party collection agencies. These nonperforming loans are difficult to collect, and we may not collect a sufficient amount to recover our investment and fund the costs of operating our business. Moreover, if we experience operational challenges in our collections processes, we may incur losses on portfolios that would have otherwise been profitable, which could adversely impact our business, financial performance, results of operations and cash flow.

Our reliance on internally developed models and the underlying data used in those models could adversely affect our financial condition and results of operations if the models or data prove to be inaccurate or ineffective.

We rely on internally developed models across various aspects of our business, including for projecting cash flows as part of the underwriting and ongoing management of our nonperforming loan portfolios and more broadly to support certain strategic and operational decision-making activities. These models involve significant judgment and are based on assumptions, methodologies and data inputs that may not accurately reflect future conditions or events.

Our models incorporate historical data regarding collections performance and consider, among other inputs, changes in external consumer factors, macroeconomic conditions, portfolio characteristics and information available when we acquire accounts, as well as data obtained from third parties and public sources. These models may not fully identify or appropriately assess all material factors, trends or risks, and our historical experience may not be indicative of current or future results. In addition, we may not achieve the collection levels forecasted by our models, and changes in economic conditions, consumer behavior, regulatory or legal environments, portfolio mix, collection strategies or business practices may reduce the predictive accuracy of our models over time, even if they have performed reliably in the past.

The effectiveness of our models also depends on the accuracy, completeness, timeliness and continued availability of the data used as inputs. Inaccuracies, errors, omissions, delays, changes in third-party data sources or methodologies, or limitations in internal or external data could cause our models to produce forecasts or estimates that differ materially from actual outcomes. Furthermore, limitations in model design, assumptions, calibration, validation or governance processes may impair model performance or result in the use of models that are not appropriately suited for their intended purpose.

If our models or the underlying data prove to be inaccurate, incomplete or ineffective, we could make inappropriate or ineffective decisions, including in how we allocate capital and deploy resources. Any such outcomes could adversely affect our financial condition, results of operations and cash flows, and could also subject us to increased regulatory scrutiny or reputational harm.

We outsource certain activities related to our business to third parties. Any disruption or failure of these third parties to provide their services, or an inability to contract alternative providers for such services, could adversely affect our business operations, financial condition and reputation.

We rely on both onshore and offshore third-party service providers who, in turn, may depend on additional vendors (fourth-party and other downstream entities), to conduct collection and other activities on our behalf. These third parties include law firms, collection agencies, data providers, tracing service providers, business process outsourcing companies and information technology firms. If our third-party service providers fail to perform their service obligations in a timely manner or at a satisfactory quality level, or fail to handle the case volumes assigned to them, the quality of our services and operations, as well as our reputation, could be adversely impacted. Furthermore, we may not be able to find alternative third parties in a timely manner on terms that are acceptable to us, or because of contractual restrictions that limit our flexibility in responding to disruptions from these third parties. If any of these third-party service providers, or the vendors on whom they may depend, fail to implement proper controls to meet our industry’s regulatory requirements, violate laws, do not fulfill their contractual obligations, or act inappropriately in conducting their services on our behalf, our operations and reputation could be negatively impacted and result in regulatory fines and penalties.

Our reliance on these third parties to collect, store, process and transmit confidential and sensitive customer and employee data increases our cybersecurity threat profile. A third-party cybersecurity incident could compromise the security, integrity or availability of data, or result in theft, unauthorized access or processing, or disruption of access to data, which could negatively impact our operations. We rely on these third parties to maintain the security of all software code, IT systems and data provided to them and used while providing their services to us. Cybersecurity incidents involving third parties on which we rely, as well as the vendors on whom they may depend, as further discussed below, could negatively affect our reputation,

competitive position and financial performance, and we could face regulatory scrutiny, investigations, lawsuits and potential liability.

We may not realize the expected benefits from our cash-generating and cost savings initiatives in our U.S. business, which could have an adverse impact on our business and financial results.

Our ability to successfully compete depends, in part, on our ability to optimize cash collections in relation to our marginal costs through effective execution. In our U.S. business, we continue to identify and implement initiatives that we believe will position our business for long-term sustainable growth and profitability by allowing us to achieve a lower marginal cost structure and to execute effectively, particularly as relates to our customer contact strategies and post-judgment legal collections. It is possible that the implementation of some of these initiatives could be altered or delayed or result in unintended consequences, such as business disruptions, distraction of management and employees, reduced productivity, unexpected employee attrition or an inability to attract or retain key personnel. If we are unable to successfully implement some or all of our operational initiatives, or we do not achieve the anticipated cash-generating or cost savings improvements as a result of these initiatives, our profitability and cash flows could be adversely impacted.

As part of these initiatives, to improve our operational and labor efficiencies in our U.S. business, we have offshored a portion of our collection and related support activities to third-party service providers located in Asia. As a result, we may experience a loss of continuity, loss of accumulated knowledge or inefficiency. We also cannot predict the availability of qualified workers, interruptions in collections or the impact of macroeconomic drivers in the countries we utilize for these activities. There is inherent risk beyond our control, including exposure to political uncertainty and foreign regulatory restrictions. One or more of these factors, or any other factors not yet identified related to our offshoring activities, could result in unexpected increases in operating expenses and make it more difficult for us to manage our costs and operations, which could cause our profitability to decline.

As we increase the use of our legal collections channel, deficiencies in the systems and processes we use to support this channel, adverse changes in the regulatory environment or an inability to obtain and collect on favorable court judgments could have an adverse impact on our business, financial condition and results of operations.

We generate a significant portion of our revenue by collecting on judgments that are granted by courts in lawsuits filed against our customers. A decrease in the willingness of courts to grant these judgments, a change in the requirements for filing these cases or obtaining these judgments, a decrease in our ability to collect on these judgments, including because of operational deficiencies or the closure of any court systems, could have an adverse effect on our business, financial condition and results of operations. As we increase our use of the legal channel, short-term margins may decrease as a result of an increase in upfront court costs and costs related to counter claims, and we may not be able to collect on certain aged accounts because of applicable statutes of limitations. Furthermore, courts in certain jurisdictions require that a copy of the account statements or applications be attached to the pleadings in order to obtain a judgment against consumers. If, despite the contractual obligations of sellers, we are unable to produce those account documents, courts could deny our claims and our business, financial condition and results of operations may be adversely affected.

A cybersecurity incident could damage our reputation and adversely impact our business and financial results.

Our business is highly dependent on our ability to process and monitor a large number of transactions across markets and in multiple currencies. We rely on IT systems to conduct our business, including IT systems developed and administered by third parties. Many of these IT systems contain sensitive and confidential information, including personal data, our trade secrets and proprietary business information, and information and materials owned by or pertaining to our customers, vendors and business partners. The secure maintenance of this information and the IT systems on which they reside is critical to our business strategy, operations and financial performance. As our reliance on IT systems increases, maintaining the security of these IT systems and safeguarding our data becomes more challenging.

Our IT systems and infrastructure may be vulnerable to computer viruses, cyber-attacks, security breaches caused by employee error or malfeasance and other disruptions. Although we take a number of steps to protect our IT systems, the attacks companies have experienced have increased in number, sophistication and complexity in recent years, including emerging threats from the malicious use of AI.

As a result of our reliance on IT systems, we may experience data security incidents or other cybersecurity incidents, which could compromise our IT systems and networks, creating disruptions and exploiting vulnerabilities in our IT applications and systems. Any such breach or other incident could cause the personal data or other confidential or proprietary information stored on our systems and networks, or our vendors’ systems and networks, to be improperly accessed, acquired or modified, or publicly disclosed, lost or stolen, which could subject us to liability to our customers, vendors, business partners and others. We

seek to detect and investigate such incidents and to prevent their occurrence where practicable through preventive and remedial measures, but such measures may not always be successful.

Should a cybersecurity incident occur, we may be required to expend significant resources to notify affected parties, modify our protective measures or investigate and remediate vulnerabilities or other exposures. Additionally, such cybersecurity events could cause reputational damage and subject us to fines, penalties, litigation costs and settlements, or other financial losses, that may not be fully covered by our cybersecurity insurance policy.

The underperformance or failure of our IT or telecommunication systems could result in a loss in productivity, loss of competitive advantage or business disruption.

We depend on continuous and uninterrupted IT and telecommunication systems to operate our business, and significant resources are required to maintain and upgrade our existing systems. We continue to streamline and integrate our global IT and telecommunication systems, infrastructure, network and other core applications, with a focus on optimizing our systems to meet our changing business demands and mitigate the risks of a changing cybersecurity threat landscape. Although we have invested in strategies to prevent failures, our IT and telecommunication systems are vulnerable to outages due to natural disasters, power loss, computer viruses, security breaches, hardware or software vulnerabilities, disruptions and similar events. We may not be able to successfully implement certain updates or upgrades to our systems without experiencing difficulties, which could cause us to lose our competitive advantage, divert management’s time, result in a loss of productivity or disrupt business operations, which could have a material adverse effect on our business, financial condition and results of operations.

We use our IT and telecommunications systems to contact consumers to collect on their debts. Over recent years, consumers, telecommunication carriers and email platforms have adopted and implemented filtering and blocking of spam communications. If our calls, texts, emails or other communications are blocked through a spam filter, or we are otherwise not able to contact our customers, our ability to collect on their debt through our call center and digital channels may be impacted, and we would need to pursue collections through an alternative channel or not at all, which could impact our results of operations and financial condition.

Ongoing enhancements to key operational systems and processes require effective change management, and if not executed properly, our business operations could be adversely affected.

We are executing multiple concurrent enhancements to operating systems that support our key business activities. These initiatives require coordinated change management, including system configuration, process updates, testing and user retraining, and they rely heavily on the same internal resources, external resources and subject-matter experts, which increases the risk of resource constraints, execution errors and delays. If we do not effectively manage these changes, we may experience system instability, data integrity issues or failures in key controls, any of which could adversely affect our business and operational efficiency.

We may utilize AI and machine learning in our business. Challenges with effectively managing such technologies, or adequately safeguarding our systems from cyber threat actors, could result in reputational and competitive harm, legal liability and adversely affect our business, financial condition and results of operations.

AI and machine learning technologies are rapidly evolving, and our ability to benefit from them depends on our capacity to assess their performance, accuracy and appropriateness for broader adoption. AI systems may behave unpredictably, generate inaccurate or biased outputs or underperform if the underlying data is insufficient or flawed. If we do not properly design, test, monitor and validate our pilot programs, or if employees rely on these tools without adequate human oversight, our evaluation of potential AI capabilities or future deployment decisions could be impaired.

The use of AI introduces legal, regulatory and ethical considerations. Regulators in the U.S. and abroad are developing new laws and standards governing automated decision-making, data use, transparency and accountability. Failure to anticipate or comply with emerging AI-related requirements as we expand our use of these technologies could expose us to regulatory scrutiny, government investigations, civil liability or contractual disputes. Additionally, concerns regarding our use of AI, including perceptions of bias, lack of transparency, inadequate controls or any broader ethical implications, could harm our reputation and affect customer and partner trust.

The use of AI technologies also contributes to increased cybersecurity risks. Threat actors increasingly use AI-enabled tools to conduct sophisticated attacks and exploit vulnerabilities. If our systems and data protection measures are not effectively designed to defend against emerging AI-driven threats, we could experience operational disruptions, data loss, theft of proprietary information, financial fraud or other harms. Any such incident could result in significant remediation costs, legal liability, business interruption or reputational damage.

Further impairment of goodwill may adversely impact our results of operations.

Goodwill is required to be tested for impairment annually, or more frequently if events or circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. As part of our September 30, 2025 interim impairment assessment, based on a sustained decrease in our stock price and market capitalization, we determined there to be an indicator of potential goodwill impairment in our Debt Buying and Collection (“DBC”) reporting unit. Based on the quantitative impairment test performed, we determined that the DBC reporting unit's goodwill was fully impaired and recorded an impairment charge of $412.6 million. The impairment was driven in large part by the impact on the reporting unit's fair value of a decrease in the terminal value assumption and an increase in the discount rate assumption since our most recent annual impairment test, as well as the comparison of the reporting unit's fair value to the Company's market capitalization. As of December 31, 2025, remaining goodwill of $26.9 million related to our class action claims recoveries ("CCB") reporting unit.

Our goodwill impairment testing involves the use of estimates and the exercise of judgment, including judgments regarding expected future business performance and market conditions. Changes in our assessment of such factors, including the deterioration of market conditions, could affect our assessment of the fair value of our CCB reporting unit and could result in a goodwill impairment charge in a future period.

INTERNATIONAL OPERATIONS RISKS

Our international operations expose us to risks and uncertainties, which could harm our business, results of operations and financial condition.

We are a global business with operations in 18 countries. In 2025, our international operations represented 43% of our total portfolio income. Managing a global business is complex, and our international operations are subject to additional risks that may not exist in the U.S., or that may be more significant compared to the U.S. This could expose us to adverse economic, industry and political conditions that may adversely affect our ability to manage our international operations, which could have a negative impact on our business, results of operations and financial condition.

The global nature of our operations expands the risks and uncertainties described elsewhere in this section, including the following:

•changes in geopolitical conditions and the political, economic, social and labor conditions in the markets in which we operate;

•foreign exchange controls on currency conversion and the transfer of funds that might prevent us from repatriating cash earned in countries outside the U.S. in a tax-efficient manner;

•currency exchange rate fluctuations, currency restructurings, inflation or deflation and our ability to manage these fluctuations through a foreign exchange risk management program;

•different employee/employer relationships, laws and regulations, union recognition and the existence of employment tribunals and works councils;

•laws and regulations imposed by international governments, including those governing the security, sharing and transfer of data;

•changes in tax laws in the jurisdictions in which we operate, or challenges to our interpretation and application of complex international tax laws;

•logistical, communication and other challenges caused by distance and cultural and language differences, each making it harder to do business in certain jurisdictions;

•volatility of global credit markets and the availability of consumer credit and financing in our international markets;

•uncertainty as to the enforceability of contract rights under local laws;

•the potential of forced nationalization of certain industries, or the impact on creditors' rights, consumer disposable income levels, flexibility and availability of consumer credit and the ability to enforce and collect aged or charged-off debts stemming from international governmental actions, whether through austerity or stimulus measures or initiatives intended to control or influence macroeconomic factors such as wages, unemployment, national output or consumption, inflation, investment, credit, finance, taxation or other economic drivers;

•the potential for widening military conflicts;

•the potential damage to our reputation due to non-compliance with international and local laws; and

•the complexity and necessity of using non-U.S. representatives, consultants and other third-party vendors, including offshore service providers.

Any one or more of these factors could adversely affect our business, results of operations, liquidity, cash flow and financial condition.

Compliance with complex and evolving international and U.S. laws and regulations governing our international operations could increase our cost of doing business in international jurisdictions.

We face increased exposure to risks inherent in conducting business internationally, including compliance with complex international and U.S. laws and regulations that apply to our international operations, which could increase our cost of doing business in international jurisdictions. These laws and regulations relate to consumer debt, taxation, and anti-corruption, including the EU Directive 2021/2167, FCPA and UK Bribery Act. Given the complexity of these laws, there is a risk that we may inadvertently breach certain provisions of these laws, such as through the negligence of an employee or our failure to comply with certain formal documentation requirements. Violations of these laws and regulations by us, any of our employees, or our third-party service providers, either inadvertently or intentionally, could result in fines and penalties, criminal sanctions, restrictions on our operations and the inability to offer our services in one or more countries. Violations of these laws could also adversely affect our business, reputation, ability to attract and retain employees and our results of operations.

We are monitoring the enactment and implementation of Pillar Two legislation to determine the potential impact on our financial results, as well as monitoring U.S. amendments to the U.S. global intangible low-tax income ("GILTI"), if any. While we currently do not expect that implementation of Pillar Two and any amendments to GILTI will significantly increase our U.S. and international income taxes, there is a risk that the final enactment and implementation throughout our global operations could cause a material increase in our income tax expense.

LEGAL AND REGULATORY RISKS

Our ability to collect and enforce our nonperforming loans may be limited under federal, state and international laws, regulations and policies.

Our operations are subject to licensing and regulation by governmental and regulatory bodies in many of the jurisdictions in which we operate. U.S. federal and state laws, and the laws and regulations of the countries in which we operate, may limit our ability to collect on and enforce our rights with respect to our nonperforming loans regardless of any act or omission on our part. Some laws and regulations applicable to credit issuers may preclude us from collecting on nonperforming loans we acquire if the credit issuer previously failed to comply with applicable laws in generating or servicing those accounts. Collection laws and regulations also directly apply to our business, and such laws and regulations are extensive and subject to change. A variety of state, federal and international laws and regulations govern the collection, use, retention, transmission, sharing and security of consumer data. Consumer protection and privacy protection laws, changes in the ways that existing rules or laws are interpreted or enforced and any procedures that may be implemented as a result of regulatory consent orders, may adversely affect our ability to collect on our nonperforming loans and adversely affect our business. Our failure to comply with laws or regulations could limit our ability to collect on our nonperforming loans, which could reduce our profitability and adversely affect our business.

Failure to comply with government regulation of the collections industry could result in penalties, fines, litigation, damage to our reputation or the suspension or termination of our ability to conduct our business.

The collections industry throughout the markets in which we operate is governed by various laws and regulations, many of which require us to be a licensed debt collector. Our industry is also at times investigated by regulators and offices of state attorneys general, and subpoenas and other requests or demands for information may be issued by governmental authorities who are investigating debt collection activities. These investigations may result in enforcement actions, fines and penalties or the assertion of private claims and lawsuits. If any such investigations result in findings that we or our vendors have failed to comply with applicable laws and regulations, we could be subject to penalties, litigation losses and expenses, damage to our reputation or the suspension or termination of, or required modification to, our ability to conduct collections, which would adversely affect our business, results of operations and financial condition.

In a number of jurisdictions, we must maintain licenses to purchase or own debt and/or to perform debt recovery services and must satisfy related bonding requirements. Our failure to comply with existing licensing requirements, changing interpretations of existing requirements or the adoption of new licensing requirements, could restrict our ability to collect in certain jurisdictions, subject us to increased regulation or higher costs or adversely affect our ability to purchase, own and/or collect on our nonperforming loans.

Some laws, among other things, may limit the interest rates and fees we can impose on our customers, limit the amount of time we have to file legal actions to enforce customer accounts and require specific account information for certain collection

activities. In addition, local requirements and court rulings in various jurisdictions may affect our ability to collect on our nonperforming loans.

Regulations and statutes applicable to our industry further provide that, in some cases, consumers cannot be held liable for, or their liability may be limited with respect to, charges to their debit or credit card accounts that resulted from unauthorized use. These laws, among others, may limit our ability to recover the amounts owed with respect to our nonperforming loans, whether or not we committed any wrongful act or omission in connection with the account.

If we fail to comply with any applicable laws and regulations, including those discussed above, such failure could result in penalties, litigation losses and expenses, damage to our reputation or otherwise impact our ability to conduct collections efforts, which could adversely affect our business, results of operations and financial condition.

Investigations, reviews or enforcement actions by governmental authorities, or our inability to effectively manage uncertainties related to the U.S. consumer financial regulatory environment, may result in changes to our business practices, negatively impact our nonperforming loan portfolio purchasing volume, make collection of nonperforming loans more difficult or expose us to the risk of fines, penalties, restitution payments or litigation.

Our debt collection activities and business practices are subject to review by various governmental authorities and regulators, including the CFPB, which may commence investigations, reviews or enforcement actions targeted at businesses in the financial services industry. These investigations or reviews may involve individual consumer complaints or our debt collection policies and practices generally. Such investigations or reviews could lead to assertions by governmental authorities that we are not in compliance with applicable laws or regulations. In such circumstances, authorities may request or seek to impose a range of penalties that could involve potential compensatory or punitive damage claims, fines, restitution payments, sanctions or injunctive relief, that if agreed to or granted, could require us to make payments or incur other expenditures.

The CFPB has the authority to obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief), recover costs and impose monetary penalties (ranging from $7,000 per day to over $1.4 million per day, depending on the nature and gravity of the violation). In addition, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations implemented thereunder, the Dodd-Frank Act empowers state attorneys general and other state regulators to bring civil actions to remedy violations under state law. Governmental authorities could also request or seek to require us to cease certain practices or institute new practices. Negative publicity relating to investigations or proceedings brought by governmental authorities could have an adverse impact on our reputation, harm our ability to conduct business with industry participants and result in financial institutions reducing or eliminating sales of nonperforming loan portfolios to us. Moreover, changing or modifying our internal policies or procedures, responding to governmental inquiries and investigations and defending lawsuits or other proceedings could require significant efforts on the part of management and result in increased costs to our business. In addition, such efforts could divert management's full attention from our business operations. All of these factors could have an adverse effect on our business, results of operations and financial condition.

The CFPB has issued civil investigative demands to many companies that it regulates, including PRA Group, and periodically examines practices regarding the collection of consumer debt. In April 2023, Portfolio Recovery Associates, LLC, our wholly owned subsidiary, entered into an order with the CFPB settling a previously disclosed investigation of certain debt collection practices (the "2023 Order"), and we are currently executing our compliance plan as required by the 2023 Order. There can be no assurance we will implement each requirement to the satisfaction of the CFPB or that additional litigation or new industry regulations currently under consideration by the CFPB would not have an adverse effect on our business, results of operations and financial condition.

Following the change in U.S. presidential administration in 2025, there were indications that the regulatory and enforcement priorities and activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain. Any expansion or shift in the CFPB's interpretation of consumer protection laws could increase our compliance costs, restrict certain business practices or expose us to heightened regulatory scrutiny and potential penalties.

The regulation of data privacy in the U.S. and globally, or an inability to effectively manage our data governance structures, could have an adverse effect on our business, results of operations and financial condition by increasing our compliance costs, exposing us to the risk of liability or decreasing our competitiveness.

A variety of jurisdictions in which we operate have laws and regulations concerning privacy, AI, cybersecurity and the protection of personal data, including the EU GDPR, UK GDPR, U.S. GLBA, EU AI Act, EU Digital Operational Resilience Act and California Consumer Privacy Act of 2018. These laws and regulations create certain privacy rights for individuals and

impose prescriptive operational requirements for covered businesses relating to the processing and protection of personal data and the use of AI and may also impose substantial penalties for non-compliance.

Laws and regulations relating to privacy, AI, cybersecurity and data protection are rapidly evolving, and any such proposed or new legal frameworks could significantly impact our operations, financial performance and business. The application and enforcement of these evolving legal requirements is uncertain and may require us to further change or update our information practices and could impose additional compliance costs and regulatory scrutiny. If we fail to effectively implement and maintain data governance structures across our business, or to effectively interpret and utilize such data, our operations could be exposed to additional adverse impacts and we could be at a competitive disadvantage.

In addition, we rely on data provided to us by credit reference agencies and servicing providers. If these agencies and service providers were to stop providing us with data for any reason, for example, due to a change in governmental regulation, there could be a material adverse effect on our business, results of operations and financial condition.

We may incur significant costs in complying with legal obligations and inquiries, investigations or any other government actions related to privacy, cybersecurity and data protection. Such legal requirements and government actions also may impede the development of our business, make existing services or businesses unprofitable, increase our operating costs, require substantial management resources, result in adverse publicity and subject us to remedies that harm our business or profitability, including penalties or orders that may change or terminate current business practices. Our insurance policies may be insufficient to insure us against such risks, and future escalations in premiums and deductibles under these policies may render them uneconomical.

FINANCIAL RISKS

We expect to continue to use leverage in executing our business strategy, which may have adverse consequences.

We have and may continue to incur a substantial amount of debt in the future. As of December 31, 2025, we had total consolidated indebtedness of $3.7 billion, of which $2.1 billion was secured indebtedness. Our unsecured indebtedness consisted of $398.0 million outstanding principal amount of our 8.375% senior notes due 2028, $350.0 million outstanding principal amount of our 5.00% senior notes due 2029, $550.0 million outstanding principal amount of our 8.875% senior notes due 2030 and €300.0 million ($352.4 million) outstanding principal amount of our 6.250% senior notes due 2032. Total availability under our credit facilities as of December 31, 2025 was $1.1 billion, comprised of $825.2 million based on current ERC and subject to debt covenants, and $274.3 million of additional availability subject to borrowing base and debt covenants, including advance rates. We consider a number of factors when evaluating our level of indebtedness and when making decisions about incurring any new indebtedness, including the purchase price of assets to be acquired with debt financing and the ability of those assets, and the Company as a whole, to generate cash flow to cover the expected debt service.

Incurring a substantial amount of indebtedness could have consequences for our business, including:

•making it more difficult for us to satisfy our obligations with respect to our debt and to our trade and other creditors;

•increasing our vulnerability to adverse changes in economic or industry conditions, including higher interest rate environments;

•limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is constrained;

•requiring us to use a substantial portion of our cash flows from operations to repay our indebtedness, which reduces our ability to use our cash flows to fund working capital, capital expenditures, acquisitions and general corporate requirements;

•increasing the amount of interest expense owed since the indebtedness under our credit facilities bears interest at floating rates, which, if interest rates increase, will result in higher interest expense;

•limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

•placing us at a competitive disadvantage compared to less leveraged competitors.

Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us through capital markets financings, under credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness, repurchase our senior notes upon a change of control or fund our other liquidity needs. Furthermore, we may need to refinance all or a portion of our indebtedness at or before its scheduled maturity, but we may not be able to do so on commercially reasonable terms or at all.

We may not generate sufficient cash flow or be able to complete alternative financing plans, including raising additional capital, to meet our debt service obligations.

Our ability to generate sufficient cash flow from operations to make scheduled payments on our debt obligations will depend on our current and future financial performance, which in part depends on general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient cash flow from operations to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets or seeking additional debt or equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. We cannot provide assurance that any refinancing would be possible, that any assets could be sold, or, if sold, of the timeliness and amount of proceeds that would be realized from those sales, that additional financing could be obtained on acceptable terms, if at all, or that additional financing would be permitted under the terms of our various debt instruments then outstanding. Furthermore, our ability to refinance depends upon the condition of the finance and credit markets. Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms, or on a timely basis, could materially affect our business, financial condition and results of operations and may delay or prevent the expansion of our business.

The agreements governing our indebtedness include provisions that may restrict our financial and business operations.

Our credit facilities and the indentures that govern our senior notes contain financial and other restrictive covenants, including restrictions on certain types of transactions and our ability to pay dividends to our stockholders. These restrictions may interfere with our ability to engage in other necessary or desirable business activities, which could adversely affect our business, financial condition and results of operations.

The failure to satisfy any of these covenants could have negative consequences, including the following:

•acceleration of outstanding indebtedness;

•exercise by our lenders of rights with respect to the collateral pledged under certain of our outstanding indebtedness;

•our inability to continue to purchase nonperforming loans; or

•our inability to secure alternative financing on favorable terms, if at all.

Adverse changes in our credit ratings could increase our future borrowing costs and reduce our access to capital.

Our ability to access capital markets is important to our ability to operate our business. Increased scrutiny of our industry and the impact of regulation, as well as changes in our financial performance and unfavorable conditions in the capital markets, could result in credit agencies reexamining and downgrading our credit ratings. A downgrade in our credit ratings may restrict or discontinue our ability to access capital markets at attractive rates and increase our borrowing costs, which could adversely affect our business, financial condition and results of operations.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

We rely heavily on IT systems to operate our business, including processing and monitoring a large number of transactions across different markets and multiple currencies. To date, we have not experienced a cybersecurity incident that we deemed to be material. For a discussion of whether and how risks from cybersecurity threats could materially and adversely affect us, including our business, results of operations or financial condition, refer to Item 1A. Risk Factors – "Operational and Industry Risks," which is incorporated by reference into this Item 1C.

Risk Management and Strategy

We have developed and implemented an information security program predicated on industry practices, frameworks and applicable regulations that are reinforced by policies, processes, procedures, standards, technologies and training designed to protect our IT systems, operations and sensitive business information with administrative, physical and technical safeguards. Through our information security program, we seek to assess, identify, monitor, mitigate and manage cybersecurity incidents and threats and to prevent the occurrence of a cybersecurity incident through protective and detective technologies that measure and monitor our critical IT systems, which include among others, intrusion detection and protection, email security, endpoint security, third-party security monitoring and proactive security testing. Our information security program is integrated as part of our enterprise risk management framework.

We regularly conduct internal risk assessments to identify reasonably foreseeable security risks or threats and to evaluate and categorize those risks or threats based on the likelihood and potential impact to the security, confidentiality and integrity of our IT systems and sensitive business information. Our risk assessments are developed from industry best practices and frameworks, including external third-party maturity assessments. As part of our information security program, we regularly assess the sufficiency of our safeguards to control potential risks. As part of our risk assessment process, we regularly measure, analyze and report security and risk metrics and share those findings with the Board and senior management. We have invested and continue to invest in risk management measures in order to protect our IT systems, operations and sensitive business information.

To strengthen our cybersecurity readiness, we have developed a cybersecurity incident management process that incorporates the use of third-party IT resources. Our cybersecurity incident response plan is intended to promptly identify, evaluate, respond to, remediate and recover from cybersecurity incidents through the preparation, detection, analysis, communication, eradication and containment of such incidents, including those associated with third-party service providers. The identification, assessment and response functions related to information security are managed by an internal incident response team, which is responsible for maintaining and operationalizing our incident response plan. Key components of our cybersecurity incident management process and response plan include root cause analysis when incidents occur, tabletop exercises and implementation of business continuity and disaster recovery plans.

To protect against the risk of cybersecurity threats, we evaluate new and existing third-party service providers through a risk assessment process designed to assess their capabilities for maintaining appropriate safeguards over the information provided to them.Where applicable, we require our third-party service providers, by contract, to implement and maintain such safeguards, and we periodically evaluate these providers and the continued adequacy of their safeguards based on the risk they present. In addition, we may engage third-party service providers to perform functions associated with our information security program and the assessment of security threats. The third-party risk assessments and reports are shared with internal teams and IT leadership to assist with ongoing risk mitigation actions.

We regularly evaluate and adjust our information security procedures by integrating emerging technologies, revised frameworks and industry best practices. We require employees to participate in periodic training covering information security-related topics, maintain informational content on our internal portals and conduct ongoing simulated phishing exercises.

Governance

Role of our Board of Directors

Our Board of Directors oversees the Company’s enterprise risk management framework, which includes information security. The Board has delegated responsibility for overseeing enterprise risk to its Risk Committee, which is governed by a formal charter. Consistent with the Risk Committee Charter, management reports regularly to the Risk Committee on key risks to the Company, including cybersecurity risks. Our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”) report regularly to the Risk Committee on the overall status of, and any recommended changes to, the information security program, compliance with applicable regulations and material matters related to the program. The Risk Committee Chair reports to the Board of Directors on matters discussed during Risk Committee meetings.

Role of management

Led by our CIO and CISO, our information security management team oversees the design, implementation and evolution of our security practices to protect critical business processes, information systems and IT assets across our business. The information security management team is primarily responsible and accountable for the awareness, oversight and control of enterprise information security and the implementation of cybersecurity policies, procedures and strategies. Our information security management and risk assessment teams regularly communicate to senior management about the effectiveness and efficiency of our information security program’s risk management processes. Senior management reviews such assessments, reports any potential threats and vulnerabilities and responds accordingly, including by providing regularly scheduled reports and escalating items, as necessary, to our Disclosure Committee and Risk Committee.

Our information security management team is led by a global CIO to whom the CISO reports. The CIO, who reports directly to the Chief Executive Officer ("CEO"), has more than 30 years of related experience and is responsible for IT, information security and business applications at a strategic level across our global platforms. Moreover, the CIO is also responsible for reporting any information security matters to our Disclosure Committee to support compliance with applicable disclosure obligations. Our CISO has held various positions in the information security field over the past 19 years, including senior level positions across multiple industries with a focus on establishing and executing systems and security strategies to protect corporate data and improve regulatory compliance. The experience of our information security management spans various job practice analysis areas and is underpinned by relevant education and certifications as well as decades of in-field experience in areas such as information security program development, information security governance, risk management and information security incident management.

Item 2. Properties.

Our corporate headquarters are located in Norfolk, Virginia. As of December 31, 2025, we had five operational sites in our U.S. business (three leased and two owned), eight leased properties in our European business and five leased properties in our other markets. In December 2025, we entered into a lease for a new talent hub in Charlotte, North Carolina, which will begin operating in March 2026.

Item 3. Legal Proceedings.

We and our subsidiaries are from time-to-time subject to a variety of legal and regulatory claims, inquiries and proceedings, most of which are incidental to the ordinary course of our business. We initiate lawsuits against customers and are occasionally countersued by them. Also, customers, either individually, as members of a class action, or through a governmental entity on behalf of customers, may initiate litigation against us in which they allege that we have violated a state or federal law in the process of collecting on an account. From time-to-time, other types of lawsuits are brought against us.

For additional information, refer to the "Litigation and Regulatory Matters" section of Note 15 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Common Stock

Our common stock is traded on the Nasdaq Global Select Market under the symbol "PRAA". Based on information provided by our transfer agent and registrar, as of February 20, 2026, there were 44 holders of record.

Stock Performance

The following graph and subsequent table compare, from December 31, 2020 to December 31, 2025, cumulative stockholder returns assuming an initial investment of $100 in our common stock (PRAA), the stocks comprising the Nasdaq Financial 100 (IXF) and the stocks comprising the Nasdaq Global Market Composite Index (NQGM) at the beginning of the period. Any dividends paid during the five-year period are assumed to be reinvested.

The comparisons of stock performance shown above are not intended to forecast or be indicative of possible future performance of our common stock. We do not make or endorse any predictions as to our future stock performance.

Dividend Policy

Our Board of Directors sets our dividend policy. We do not currently pay regular dividends on our common stock and did not pay dividends during the three years ended December 31, 2025; however, our Board of Directors may determine in the future to declare or pay dividends on our common stock. Our credit facilities and the indentures that govern our senior notes contain financial and other restrictive covenants, including restrictions on certain types of transactions and our ability to pay dividends to our stockholders. Any future determination as to the declaration and payment of dividends will be at the discretion of our Board of Directors and depend on conditions then existing, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors that our Board of Directors may consider relevant.

Recent Sales of Unregistered Securities

None.

Share Repurchase Programs

Share repurchases during the three months ended December 31, 2025 were as follows:

Period

(1)Amounts in thousands.

Our credit facilities and the indentures governing our senior notes contain financial and other restrictive covenants, including restrictions on our ability to repurchase our common stock.

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our audited financial statements and accompanying notes thereto included in Item 8 of this Form 10-K. See Frequently Used Terms at the end of this Item 7 for definitions used throughout this Form 10-K. Unless otherwise specified, references to 2025, 2024 and 2023 are for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

EXECUTIVE OVERVIEW

We are a global leader in acquiring and collecting nonperforming loans with 2,615 full-time employees worldwide. Most of the nonperforming loans we purchase are from credit originators who have chosen not to pursue, or have been unsuccessful in collecting, the full balance owed to them ("Core" accounts). To a lesser extent, we also purchase loans in situations where the customer is involved in a bankruptcy or similar proceeding ("Insolvency" accounts).

During the fourth quarter of 2025, we reorganized our business segment structure from a single operating segment into two operating and reportable segments, comprised of our U.S. and European businesses. On a significantly smaller scale, we also operate in South America, Canada and Australia. Subject to globally-established parameters for capital allocation, portfolio return thresholds and leverage, each market functions under a similar debt management business model, which is predicated on purchasing nonperforming loans and generating returns through disciplined collection strategies over extended collection periods.

For additional information about our business and reportable segments, refer to Part I, Item 1 "Business" of this Form 10-K and Note 16 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Results and business trends

•Net loss attributable to PRA Group, Inc. of $305.1 million. Excluding the impact of Gain on sale of equity method investment and Goodwill impairment, Adjusted net income attributable to PRA of $72.6 million ("Adjusted net income attributable to PRA" is a non-GAAP financial measure; refer to section "Non-GAAP Financial Measures" below).

•Portfolio income, the more stable and predictable yield component of our revenue, increased by 18.2% compared to 2024, outpacing the growth in cash collections and contributing more to our net results.

•ERC of $8.6 billion at year-end, an increase of 15.4% compared to 2024, with the U.S. accounting for 42.5% of total ERC and Europe 51.0%.

•Maintenance of a diversified capital structure consistent with our targeted leverage and liquidity objectives, completing the issuance of our first Euro-denominated senior notes (€300.0 million) and repurchasing $20.0 million shares of our common stock.

•Further progress on our U.S. business initiatives focused on improving cost efficiency and operational flexibility, with a reduction in our U.S. onshore agent headcount of approximately 40% and concurrent increase in U.S. Core cash collections of 19.8%.

Environment

The nonperforming loans segment in the U.S. has been characterized by regulatory complexity, with a relatively high level of customer disputes, a fairly stable competitive landscape, a small number of sellers and a tendency toward forward flow-driven sales. In Europe, the segment has been characterized by a more fragmented regulatory environment, with each jurisdiction having its own rules, a more competitive environment and larger number of sellers, and sales, until recently, more typically made on a spot basis.

Consumer behavior in the nonperforming loans segment can be seasonal and change in response to macroeconomic conditions, government programs or shifts in household finances. Our overall customer base has remained stable across the U.S. and Europe, and we believe our global diversification helps to mitigate risk from individual markets. Over the last two years, market conditions included a favorable supply environment, which contributed to higher purchase price multiples ("PPMs") and improved returns. Based on current trends and recent pipeline activity, subject to changes in market and economic conditions, we expect portfolio supply to remain relatively stable over the near to medium term.

SELECTED CONSOLIDATED FINANCIAL DATA

Income statement

Goodwill impairment 412,611 — —

Gain on sale of equity method investment 38,403 — —

Adjusted diluted earnings per share (2) 1.84 1.79 (2.13)

Performance data and ratios

Return on average tangible equity ("ROATE") (7) (35.6) 9.5 (11.3)

Adjusted return on average tangible equity ("Adjusted ROATE") (8) 8.5 9.5 (11.3)

Portfolio volumes

Balance sheet (year-end)

Credit facility availability (year-end)

(1)Total operating expenses excluding the impact of Goodwill impairment ("Adjusted operating expenses") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(2)Net income/(loss) attributable to PRA Group, Inc. and Diluted earnings per share excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations ("Adjusted net income/(loss) attributable to PRA" and "Adjusted diluted earnings per share", respectively), are non-GAAP financial measures. Refer to section "Non-GAAP Financial Measures" below.

(3)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(4)Calculated by dividing cash receipts less operating expenses by cash receipts.

(5)Calculated by dividing cash receipts less Adjusted operating expenses by cash receipts ("Adjusted cash efficiency ratio"), which is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

(6)Calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by average Total stockholders' equity - PRA Group, Inc.

(7)ROATE is calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity ("Average tangible equity"). ROATE and Average tangible equity are non-GAAP financial measures. Refer to section "Non-GAAP Financial Measures" below.

(8)Adjusted ROATE, which is a non-GAAP financial measure, is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity. Refer to section "Non-GAAP Financial Measures" below.

Consolidated and Business Segment Results of Operations (2025 and 2024)

Purchasing and collections activity

Portfolio purchases

Portfolio purchases by business segment and in total for 2025 and 2024 were as follows (in thousands, except percentages):

(1)Reflects portfolio purchases in South America, Canada and Australia.

Our total portfolio purchases in 2025 decreased by $199.3 million, or 14.2%, compared to the prior year. Total portfolio purchases of $1.2 billion were in-line with our 2025 target as we continued to invest selectively, focusing on long-term returns and balancing our investments with our leverage. Coupled with the improvements in our collection capabilities, this approach to allocating capital helped drive higher PPMs and increased Portfolio income.

•U.S.: Portfolio purchases decreased by $205.7 million reflecting more selectivity in our buying and focus on net returns. The PPM for our 2025 U.S. Core vintage was 2.16x, reflecting a steady increase in recent years.

•Europe: Portfolio purchases were distributed broadly across our markets and increased by $10.4 million. Core portfolio purchases increased by $34.1 million due to higher volumes in certain markets and the addition of new sellers, partially offset by a decrease of $23.7 million in Insolvency purchases. The PPM for our 2025 European Core vintage was 1.85x, reflecting a steady increase in recent years.

Cash collections

Cash collections by business segment and in total for 2025 and 2024 were as follows (in thousands, except percentages):

(1)Reflects cash collections in South America, Canada and Australia.

Our total cash collections in 2025 increased by $239.1 million, or 12.8%, compared to the prior year. Total cash collections of $2.1 billion exceeded our growth target for the year and was driven by performance in both the U.S. and Europe.

•U.S.: Cash collections increased by $157.8 million driven in large part by higher volumes resulting from the expansion in our legal collections channel.

•Europe: Cash collections increased by $91.0 million distributed broadly across multiple markets and due, in part, to foreign exchange rate variation.

Operating results

Segment operating income

Our CEO evaluates the profitability of our U.S. and European business segments based primarily on segment operating income, which we define as Income/(loss) from operations adjusted to exclude goodwill impairment and certain unallocated corporate expenses. Refer to Note 16 to our Consolidated Financial Statements included in Item 8 of this Form 10-K for further information and a reconciliation of segment operating income to consolidated Income/(loss) before income taxes.

Segment operating income for 2025 and 2024 was as follows (in thousands, except percentages):

•U.S.: Segment operating income decreased by $6.9 million due primarily to an increase in operating expenses, partially offset by an increase in portfolio revenue.

•Europe: Segment operating income increased by $52.1 million due primarily to an increase in portfolio revenue, partially offset by an increase in operating expenses.

Portfolio revenue

Total portfolio revenue by component and business segment for 2025 and 2024 were as follows (in thousands, except percentages):

By component:

By business segment:

(1)Reflects portfolio revenue in South America, Canada and Australia.

Our total portfolio revenue in 2025 increased by $91.7 million, or 8.3%, compared to the prior year, while Portfolio income, the more stable and predictable yield component of our revenue, increased by $156.1 million, or 18.2%.

•U.S.: Portfolio revenue increased by $17.6 million due primarily to a $115.8 million increase in portfolio income driven largely by higher purchasing levels in recent years and improved pricing. This increase was partially offset by a $98.2 million decrease in Changes in expected recoveries driven by a lower net increase in changes in expected future recoveries and lower net overperformance on our U.S. Core pools.

•Europe: Portfolio revenue increased by $67.0 million due primarily to a $42.9 million increase in portfolio income driven by higher recent purchasing levels in several of our European markets and due, in part, to foreign exchange rate variation. Changes in expected recoveries increased by $24.1 million due to a higher net increase in changes in expected future recoveries.

Operating expenses

Total operating expenses and Adjusted operating expenses for 2025 and 2024 were as follows (in thousands, except percentages):

(1)Mainly costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.

(2)Contingent fees incurred for cash collections generated by our third-party attorney network.

(3)Mainly third-party collection fees.

(4)Mainly correspondence, network and calling costs associated with our collection efforts.

(5)Adjusted operating expenses is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" below.

Our Total operating expenses increased by $457.3 million, or 59.0%, compared to the prior year. This was primarily due to a goodwill impairment charge of $412.6 million in 2025 related to our DBC reporting unit (refer to Note 4 to our Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information). Adjusted operating expenses, which exclude the impact of the goodwill impairment charge, increased by $44.7 million, or 5.8%.

•U.S.: Operating expenses increased by $37.7 million due primarily to the goodwill impairment charge and higher legal collection costs and fees associated with expanded activity in our legal collections channel. These increases were partially offset by lower compensation costs driven in part by the consolidation of our U.S. call centers and offshoring of a portion of our collection activities, as well as a reduction in communication costs due to the use of more cost-efficient strategies.

•Europe: Operating expenses increased by $375.5 million due primarily to the goodwill impairment charge. The increase was also due to higher compensation expense associated with organizational changes and higher non-collector wage costs, in addition to higher agency fees associated with increased outsourcing in certain markets.

Consolidated non-operating results

Gain on sale of equity method investment

In April 2025, we sold our 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, and recorded a gain of $38.4 million in our Consolidated Income Statement for 2025. The sale did not impact the ownership of our portfolio investments in South America or our existing operations and expected future portfolio investments.

Interest expense, net

Interest expense, net for 2025 and 2024 was as follows (in thousands, except percentages):

Our Interest expense, net increased by $22.5 million, or 9.8%, compared to the prior year due primarily to a higher average debt balance in 2025.

Income tax expense

Income tax expense and our effective tax rate for 2025 and 2024 were as follows (in thousands, except percentages):

Effective tax rate (19.2) % 19.2 %

Our Income tax expense increased by $25.7 million, or 122.2%, compared to the prior year, while our effective tax rates for the years ended December 31, 2025 and 2024 were (19.2)% and 19.2%, respectively. Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The effective tax rate for 2025 was further impacted by the goodwill impairment charge.

Noncontrolling interests

In South America, we purchase nonperforming loan portfolios through investment funds in which we hold a majority interest. The portion of our Net income/(loss) attributable to noncontrolling interests in those funds is reflected in Net income attributable to noncontrolling interests in our Consolidated Income Statements, which totaled $15.2 million and $18.0 million in 2025 and 2024, respectively.

Consolidated balance sheet

Finance receivables, net

Finance receivables, net were $4.7 billion as of December 31, 2025, an increase of $547.3 million, or 13.2%, driven largely by portfolio purchases of $1.2 billion and Changes in expected recoveries of $176.5 million, partially offset by recoveries collected and applied to Finance receivables, net of $1.1 billion. The remaining difference was attributable to foreign currency translation.

Goodwill

Goodwill was $26.9 million as of December 31, 2025, a decrease of $369.5 million, or 93.2%, due to a goodwill impairment charge. As part of our September 30, 2025 interim impairment assessment, based on a sustained decrease in our stock price and market capitalization, we determined there to be an indicator of potential goodwill impairment in our DBC reporting unit and performed a quantitative impairment test. As a result, we determined that the goodwill in our DBC reporting unit was fully impaired and recorded an impairment charge of $412.6 million. For additional information, refer to Note 4 to our Consolidated Financial Statements included in Item 8 of this Form 10-K. The December 31, 2025 goodwill balance related to our CCB reporting unit.

Borrowings

Borrowings were $3.7 billion as of December 31, 2025, an increase of $370.7 million, or 11.1%, due primarily to an increase in amounts outstanding under our senior notes and net borrowings under our European revolving credit facility of $21.6 million. On September 30, 2025, we completed the issuance of €300.0 million ($352.4 million as of December 31, 2025) aggregate principal amount of our 6.250% senior notes due 2032.

Interest-bearing deposits

Interest-bearing deposits were $106.1 million as of December 31, 2025, a decrease of $57.3 million, or 35.0%, due primarily to lower interest rates resulting in decreased deposit levels, partially offset by foreign exchange rate variation.

Consolidated Results of Operations (2024 and 2023)

Refer to Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K for a discussion of our 2024 results compared to our 2023 results.

NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management also uses certain non-GAAP financial measures, including the non-GAAP financial measures referred to below, internally to evaluate our performance and to set performance goals. This Form 10-K includes certain non-GAAP financial measures that exclude the impact of certain items and are not required by, or presented in accordance with, GAAP. Also included are reconciliations of the most directly comparable financial measures calculated in accordance with GAAP to the corresponding non-GAAP financial measure. The non-GAAP financial measures included below should not be considered as an alternative to the most directly comparable financial measure determined in accordance with GAAP and may not be comparable to the calculation of similarly titled financial measures reported by other companies.

Adjusted EBITDA

We present Adjusted EBITDA because we consider it an important supplemental measure of our operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of our operational and financial performance, as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the operations of our business and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA is calculated starting with Net income/(loss) attributable to PRA Group, Inc. and is adjusted for:

•income tax expense (or less income tax benefit);

•foreign exchange loss (or less foreign exchange gain);

•interest expense, net;

•other expense;

•depreciation and amortization;

•impairment of real estate;

•goodwill impairment;

•net income attributable to noncontrolling interests;

•gain on sale of equity method investment; and

•recoveries collected and applied to Finance receivables, net less Changes in expected recoveries.

The following table provides a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted EBITDA for the years indicated (in thousands):

Adjusted EBITDA Reconciliation

Adjustments:

Foreign exchange (gain)/loss (755) 9 (289)

Goodwill impairment 412,611 — —

Gain on sale of equity method investment (38,403) — —

(1)Reflects non-operating activities.

Adjusted cash efficiency ratio

We use an Adjusted cash efficiency ratio to monitor and evaluate operating expenses, excluding goodwill impairment, relative to our cash collections plus fees and revenue recognized from our class action claims recovery services. Management believes the Adjusted cash efficiency ratio is a useful financial measure for investors in evaluating our management of operating expenses. The Adjusted cash efficiency ratio is calculated by dividing cash receipts less Adjusted operating expenses by cash receipts. The following table provides a reconciliation of Total operating expenses to Adjusted operating expenses and presents our Adjusted cash efficiency ratios for the years indicated (in thousands, except for ratio data):

Adjusted Operating Expenses Reconciliation and Adjusted Cash Efficiency Ratio

Goodwill impairment (412,611) — —

Adjusted cash efficiency ratio 61.3 % 58.8 % 58.0 %

Adjusted net income/(loss) attributable to PRA, Adjusted diluted earnings per share, ROATE and Adjusted ROATE

We use Adjusted net income/(loss) attributable to PRA and Adjusted diluted earnings per share to monitor and evaluate our operating performance and allow for better comparability. Management believes Adjusted net income/(loss) attributable to PRA and Adjusted diluted earnings per share are useful financial measures for investors in evaluating our operating results. Adjusted net income/(loss) attributable to PRA is defined as Net income/(loss) attributable to PRA Group, Inc. excluding the impact of certain transactions that are unusual or infrequent in nature and not reflective of our ongoing operations. Calculation of Adjusted diluted earnings per share excludes those same transactions and, if dilutive based on Adjusted net income attributable to PRA, may also include the impact of additional potentially dilutive shares.

We use ROATE to monitor and evaluate operating performance relative to our equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity and is an important component of our long-term stockholder return. Average tangible equity is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing Net income/(loss) attributable to PRA Group, Inc. by Average tangible equity.

ROATE may include certain items that are not indicative of the ongoing operating results of our business. Accordingly, management also uses Adjusted ROATE to monitor and evaluate operating performance relative to our equity. Management believes Adjusted ROATE is a useful financial measure for investors because it is based on Adjusted net income/(loss) attributable to PRA. Adjusted ROATE is calculated by dividing Adjusted net income/(loss) attributable to PRA by Average tangible equity.

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. to Average tangible equity and a reconciliation of Net income/(loss) attributable to PRA Group, Inc. to Adjusted net income/(loss) attributable to PRA, and presents our ROATE and Adjusted ROATE for the years indicated (in thousands, except for ratio data):

Balance as of Year End Average Tangible Equity Reconciliation (1)

(1)Amounts represent the average balances for the respective years.

ROATE

Adjusted Net Income/(Loss) Attributable to PRA Reconciliation and Adjusted ROATE

Gain on sale of equity method investment (38,403) — —

Goodwill impairment 412,611 — —

Tax effect of adjusting items (1) 3,515 — —

(1)Based on the annual effective tax rate and pretax income excluding the effect of the adjusting items.

The following table provides a reconciliation of Diluted earnings per share to Adjusted diluted earnings per share for the years indicated:

Adjusted Diluted Earnings Per Share Reconciliation

Diluted earnings per share $ (7.79) $ 1.79 $ (2.13)

Effect of adjusting items and dilutive shares (1) 9.63 — —

Adjusted diluted earnings per share $ 1.84 $ 1.79 $ (2.13)

(1)Impact of the non-GAAP adjusting items and dilutive effect of all potential shares of common stock.

SUPPLEMENTAL PERFORMANCE DATA

The tables in this section provide supplemental performance data about our:

•ERC by business segment, portfolio type and expected year of collection;

•Cash collections by business segment, Core cash collections separated between call center/other and legal collections and total constant currency adjusted cash collections; and

•nonperforming loan portfolios and collections by business segment, portfolio type and year of purchase.

Purchasing

We purchase portfolios of nonperforming loans from a variety of creditors, or acquire portfolios through strategic acquisitions, and segregate them into our Core or Insolvency portfolios based on the status of the account upon acquisition. In addition, the accounts are segregated into geographical regions based upon where the account was acquired and, as applicable, foreign currency exchange rates are fixed for purposes of comparability in future periods. Ultimately, accounts are aggregated into annual pools based on portfolio type, geography and year of acquisition. Portfolios of accounts that were in an insolvency status at the time of acquisition are represented under Insolvency headings in the tables below. All other acquisitions of portfolios of accounts are included under Core headings. Once an account is initially segregated, it is not later transferred from an Insolvency pool to a Core pool, or vice versa.

Purchase price multiples ("PPMs")

The PPM represents our estimate of total cash collections over the original purchase price of the portfolio. PPMs can vary over time due to a variety of factors, including pricing competition, supply levels, age of the accounts acquired, type and mix of portfolios purchased, expected costs to collect and returns and changes in operational efficiency and effectiveness. When we pay more for a portfolio, the PPM and effective interest rate are generally lower. Certain types of accounts, such as Insolvency accounts, have lower collection costs, and we generally pay more for those types of accounts resulting in lower PPMs but similar net income margins compared to other portfolio purchases.

Estimated remaining collections ("ERC") and Total estimated collections ("TEC")

Depending on the level of performance and expected future impacts from our operations, we may update ERC and TEC levels based on the results of our cash forecasts with a correlating adjustment to the PPM. We follow an established process to evaluate ERC, and we typically do not adjust our ERC and TEC until we gain sufficient collection experience with a pool of accounts. Over time, our TEC has often increased as pools have aged resulting in the ratio of TEC to purchase price for any given year of buying to gradually increase.

For additional information about our nonperforming loan portfolios, refer to Note 1 and Note 2 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Estimated remaining collections

The following table displays our ERC by business segment, year and portfolio type as of December 31, 2025 (in thousands):

ERC By Business Segment, Year and Portfolio

(1)Includes ERC of $1.7 billion for the UK, $1.1 billion for Central Europe, $998.5 million for Northern Europe and $564.6 million for Southern Europe.

(2)Reflects ERC in South America, Canada and Australia.

Cash collections

The following table displays our cash collections by business segment and portfolio type, Core cash collections separated between call center/other and legal collections and total constant currency adjusted cash collections for the years indicated (in thousands, except percentages):

Cash Collections by Business Segment and Portfolio Type

U.S.

Europe

(1)Reflects total cash collections in South America, Canada and Australia.

(2)Total cash collections adjusted refers to prior year foreign currency cash collections remeasured at average U.S. dollar exchange rates for the current year.

Purchase Price Multiplesas of December 31, 2025In thousands, except percentages

U.S. Core

U.S. Insolvency

Europe Core

Europe Insolvency

(1)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.

(2)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.

(3)Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase.

(4)Non-U.S. amounts are presented at the December 31, 2025 exchange rate.

(5)Reflects all vintages in South America, Canada and Australia.

Portfolio Financial Information (1) (in thousands)

U.S. Core

U.S. Insolvency

Europe Core

Europe Insolvency

(1)Includes the nonperforming loan portfolios that were acquired through our business acquisitions.

(2)Non-U.S. amounts are presented using the average exchange rates during the current year.

(3)Non-U.S. amounts are presented at the December 31, 2025 exchange rate.

(4)Reflects all vintages in South America, Canada and Australia.

Cash Collections

U.S. Core

U.S. Insolvency

Europe Core

Europe Insolvency

(1)Non-U.S. amounts are presented using the average exchange rates during the respective year.

(2)Includes the acquisition date finance receivables portfolios acquired through our business acquisitions.

(3)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase.

(4)Reflects all vintages in South America, Canada and Australia.

LIQUIDITY AND CAPITAL RESOURCES

We actively manage our liquidity to meet our business needs and financial obligations.

Sources of liquidity

Cash and cash equivalents

As of December 31, 2025, cash and cash equivalents totaled $104.4 million, of which $93.0 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our foreign subsidiaries, refer to Note 14 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Borrowings

As of December 31, 2025, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):

Composition of Total Availability

Colombian revolving credit facility 2,611 2,611 — — —

Debt premium and issuance costs, net — (13,653) — — —

(1)Available borrowings after calculation of borrowing base, subject to the committed amounts and debt covenants, which may be used for general corporate purposes, including portfolio purchases.

(2)Subject to borrowing base and debt covenants, including advance rates ranging from 35-55% of applicable ERC.

Interest-bearing deposits

As of December 31, 2025, interest-bearing deposits totaled $106.1 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion ($239.2 million as of December 31, 2025).

Uses of liquidity and material cash requirements

We believe that funds generated from our business activities, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets, will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases for at least the next 12 months. Our long-term capital requirements will depend in large part on the level of nonperforming loan portfolios that we purchase.

Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock or senior notes in the open market or otherwise.

We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections. In 2025, we purchased $1.2 billion in nonperforming loan portfolios, which generated $196.6 million of cash collections, representing 9.3% of our total cash collections.

Forward flows

We enter into forward flow agreements for the purchase of nonperforming loans. These agreements typically have terms ranging from six to 12 months, or they can be open-ended, and establish purchase prices and specific criteria for the accounts to be purchased. Some of the agreements establish a volume reference for the contract term in the form of a target or maximum,

however, very few agreements establish a minimum contractual obligation, and many of the contracts contain early termination provisions allowing either party to cancel the agreements in accordance with a specified notice period.

As of December 31, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $378.0 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $167.4 million in the U.S., $194.8 million in Europe and $15.8 million in our other markets. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly.

Borrowings

As of December 31, 2025, we had$3.7 billion in outstanding borrowings. The estimated interest, unused fees and principal payments for the next 12 months are$251.7 million, of which $10.0 million relates to principal on our term loan. After 12 months, principal payments on our debt are due from between one and approximately seven years. Our financing arrangements include covenants with which we must comply, and as of December 31, 2025, we were in compliance with these covenants.

On September 30, 2025, we completed the private offering of our 2032 senior notes. For additional information about our borrowings, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Share repurchases

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Exchange Act or other methods subject to market and/or other conditions and applicable regulatory requirements. During the year ended December 31, 2025, we repurchased 1,299,760 shares of our common stock at an average price of $15.39 for a total cost of $20.0 million. As of December 31, 2025, we had $47.7 million remaining for share repurchases under the program.

Leases

Our leases have remaining terms from one to seven years. As of December 31, 2025, we had $32.2 million in lease liabilities, of which $7.7 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Derivatives

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of December 31, 2025, we had $12.4 million of derivative liabilities, of which $2.1 million matures within the next 12 months. Of the remaining $10.3 million, $7.6 million matures in 2028 and $2.8 million matures in 2029 and 2030. For additional information, refer to Note 8 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Investments

As of December 31, 2025, we held $64.9 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.

Cash flow analysis

The following table summarizes our cash flow activity for the years ended December 31, 2025 and 2024 (in thousands):

Net cash provided by/(used in):

Net increase/(decrease) in cash and cash equivalents $ 1,212 $ (6,261) $ 7,473

Operating activities

Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities. Net cash used in operating activities decreased by $9.1 million in 2025 due primarily to higher cash collections recognized as income, partially offset by higher cash paid for operating expenses, interest and taxes.

Investing activities

Net cash used in investing activities decreased by $322.5 million in 2025 due primarily to a decrease of $203.3 million in purchases of nonperforming loan portfolios, an increase of $71.3 million in recoveries collected and applied to Finance receivables, net and an increase of $49.2 million in proceeds from sales and maturities of investments.

Financing activities

Net cash provided by financing activities decreased by $374.9 million in 2025 due primarily to a decrease of $269.0 million in net proceeds from lines of credit, a $148.0 million decrease related to interest bearing deposits activity and a decrease of $37.6 million in net proceeds from long-term debt, partially offset by a $94.6 million increase in net proceeds from the issuance and repayment of senior notes. Additionally, we repurchased $20.0 million of our common stock in 2025 compared to no repurchases during the prior year.

For additional information about our credit facilities, term loan and senior notes, refer to Note 7 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Effect of foreign exchange rates

The net effect of foreign exchange rates on cash decreased by $50.8 million in 2025, primarily due to the impact of the devaluation of the U.S. dollar on foreign currency denominated borrowings and intercompany balances.

RECENT ACCOUNTING PRONOUNCEMENTS

For discussion of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

PRAA US Equity

PRAA · 10-K · period ended 2025-12-31

Item 1. Business.

Item 1A. Risk Factors.

Item 1B. Unresolved Staff Comments.

Item 1C. Cybersecurity.

Item 2. Properties.

Item 3. Legal Proceedings.

Item 4. Mine Safety Disclosures.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

PRAA US Equity☆

PRAA · 10-K · period ended 2025-12-31

Item 1. Business.

Item 1A. Risk Factors.

Item 1B. Unresolved Staff Comments.

Item 1C. Cybersecurity.

Item 2. Properties.

Item 3. Legal Proceedings.

Item 4. Mine Safety Disclosures.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

PRAA US Equity