The following is a summary of the PRA Group, Inc. (PRAA) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Total revenues for Q3 reached $281 million, an increase of 30% year-over-year.

• Portfolio income was $216 million for the quarter, up 14% from the previous year.

• Net income for the quarter was $27 million, with a diluted earnings per share of $0.69.

• Cash collections for the quarter were $477 million, marking a 14% increase from the previous year.

• Debt to adjusted EBITDA ratio was 3x as of September 30.

Business Progress:

• PRA Group purchased $350 million of portfolios during the quarter, reaching a record year-to-date purchase amount of $975 million.

• Significant operational optimizations and cost management strategies are being implemented.

• The company is focusing on expanding and enhancing its legal collections channel.

• Plans are set to increase the offshore collectors to about 50% of the overall collector base by the second half of 2025.

Opportunities:

• The consistent and elevated portfolio supply in the U.S. market and stable supply in Europe enhance buying opportunities.

• The growth in ERC to $7.3 billion sets a new company record and provides a robust baseline for future cash collections.

Risks:

• The increase in operating expenses, particularly legal collection costs which were up $8 million year-over-year, may affect short-term profitability but are expected to yield higher future collections.

• Economic pressures, especially in the U.S. market, and higher inflation might impact consumers' ability to make payments.

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