PRA Group discussed the strides it has made in expanding its legal collection efforts while also announcing plans to close three of its six U.S. offices while transitioning impacted employees to work-from-home roles or offshore positions during a quarterly conference call with analysts after releasing its third-quarter earnings yesterday.
By the Numbers:
- The company reported net income of $27.2 million in the third quarter of 2024, compared to a net loss of $12.3 million in the same quarter of last year.
- Earnings per share for the third quarter reached $0.69, up from a loss of $0.31 per share in the same period last year.
- Cash collections grew 14% year-over-year to $477.1 million.
- Portfolio purchases totaled $350 million during the quarter.
- Estimated Remaining Collections (ERC) hit a record $7.3 billion.
Legal Collections and U.S. Operations: PRA Group has doubled down on its U.S. legal collections, with a reported $8 million increase in legal collection costs year-over-year. These investments are part of a strategy to boost future cash collections and have already shown results. Legal cash collections in the U.S. grew 51%, from $65 million in the third quarter of 2023 to $98 million in the third quarter of this year.
- The company also announced a recalibration of its office footprint in the U.S. With six sites currently in operation, PRA Group plans to reduce its physical presence to three offices by mid-2025, leveraging both an expanded work-from-home program and increased use of offshore collections. Offshore collectors already make up 25% of the workforce and are expected to represent 50% by the latter half of 2025, said Vik Atal, the company’s chief executive.
