Pra Group (PRAA) risk factors, FY2025 10-K

Pra Group's FY2025 10-K, filed Mar 02, 2026, lists 21 risk factors in 4 groups. Against the prior year's 23: 9 new, 11 dropped, 7 substantially reworded.

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Risk factors listed
214 groups
New this year
9vs 23 last year
Dropped
11since the prior 10-K
Substantially reworded
7of those kept
Section length
7k wordsItem 1A

What the changes say

  • Goodwill was fully impaired for the DBC reporting unit at $412.6 million due to a lower stock price.

What changed since the prior 10-K

New

  • NewOPERATIONAL AND INDUSTRY RISKS

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

    General economic downturns, inflation, and interest rate volatility could reduce consumer debt payments and nonperforming loan availability.

  • NewOPERATIONAL AND INDUSTRY RISKS

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

    Operational collection challenges may prevent recovery of costs and debt investments.

  • NewOPERATIONAL AND INDUSTRY RISKS

    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

    Inaccurate internally developed forecasting and underwriting models could harm financial results.

  • NewOPERATIONAL AND INDUSTRY RISKS

    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

    Cybersecurity incidents may cause uninsurable financial losses, fines, and reputational damage.

  • NewOPERATIONAL AND INDUSTRY RISKS

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

    Concurrent system enhancements and AI adoption risks could cause control failures and operational inefficiencies.

  • NewOPERATIONAL AND INDUSTRY RISKS

    Further impairment of goodwill may adversely impact our results of operations

    A $412.6 million impairment charge fully wrote off goodwill in the Debt Buying and Collection unit due to stock price drops.

  • NewLEGAL AND REGULATORY RISKS

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

    Debit and credit card consumer protection laws may limit recovery on nonperforming loans.

  • NewLEGAL AND REGULATORY RISKS

    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

    Evolving privacy, data protection, and AI regulations could increase compliance costs and operational uncertainty.

  • NewFINANCIAL RISKS

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

    Credit rating downgrades could increase borrowing costs and restrict capital access.

Dropped

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    Volatility and uncertainty in general business and economic conditions or financial markets could adversely impact our business, financial performance, results of operations and cash flow

    General economic conditions volatility.

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    Changes in the financial or credit markets may cause a forward flow agreement to fail to meet our return thresholds, since we have agreed to purchase portfolios at a negotiated price for a specified term, and may end up paying higher prices for portfolios than we would have otherwise agreed to pay for a spot purchase

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    We may not be able to collect sufficient amounts to fund our operations due to the purchase of nonperforming loans that ultimately prove to be unprofitable

    Forward flow agreement pricing risks.

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    We may not achieve the expected benefits of offshoring a portion of our collection activities, which could adversely affect our business, financial condition and results of operations

    Unprofitable nonperforming loan purchases.

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    We may not effectively utilize AI, or effectively work with other companies that use AI, which could adversely impact our results of operations and result in a loss of competitive advantage or business disruption

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    We have a significant amount of goodwill which, if impaired in the future, would adversely impact our results of operations

    Offshoring collection risks.

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    Our goodwill impairment testing involves the use of estimates and the exercise of judgment, including judgments regarding expected future business performance and market conditions

  • DroppedOPERATIONAL AND INDUSTRY RISKS

    Our loss contingency accruals may not be adequate to cover actual losses

  • DroppedLEGAL AND REGULATORY RISKS

    After the recent change in presidential administration, 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

  • DroppedLEGAL AND REGULATORY RISKS

    Changes in tax provisions or exposures to additional tax liabilities could have an adverse effect on our financial condition

    AI utilization risks.

  • DroppedFINANCIAL RISKS

    Adverse changes in our credit ratings could have a negative impact on our business, results of operations and financial condition

    Goodwill impairment exposure.

Reworded

  • 75% rewrittenOPERATIONAL AND INDUSTRY RISKS

    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

    Refined language regarding U.S. cash collection optimization in relation to marginal costs.

    Was: We may not be successful in implementing or realizing 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 results of operations

  • 72% rewrittenLEGAL AND REGULATORY RISKS

    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

    Minor phrasing cleanup regarding collections industry investigations and litigation.

  • 63% rewrittenOPERATIONAL AND INDUSTRY RISKS

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

    Minor grammatical edits on loan portfolio pricing factors.

  • 55% rewrittenOPERATIONAL AND INDUSTRY RISKS

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

    Added explicit mention of safeguarding data in IT system security risks.

  • 31% rewrittenOPERATIONAL AND INDUSTRY RISKS

    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

    Expanded third-party risks to explicitly include fourth-party and downstream vendor dependencies.

    Was: We outsource and offshore certain activities related to our business to third parties. Any disruption or failure of these third parties to provide these services could adversely affect our business operations, financial condition and reputation

  • 30% rewrittenINTERNATIONAL OPERATIONS RISKS

    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

    Streamlined international compliance descriptions for EU Directive 2021/2167, FCPA, and UK Bribery Act.

  • 22% rewrittenFINANCIAL RISKS

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

    Updated total consolidated indebtedness to $3.7 billion and added €300 million senior notes due 2032.

All 21 risk factors

Headings as the filing states them, in filing order.

OPERATIONAL AND INDUSTRY RISKS

  1. 01A deterioration in general business and economic conditions could adversely impact our business and financial resultsNew
  2. 02We may not be able to purchase a sufficient volume of nonperforming loans at favorable pricing, which could adversely impact our profitability63% rewritten
  3. 03We may not be able to collect sufficient amounts to recover our costs and fund our operationsNew
  4. 04Our 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 ineffectiveNew
  5. 05We 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 reputation31% rewritten
  6. 06We 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 results75% rewritten
  7. 07A cybersecurity incident could damage our reputation and adversely impact our business and financial results55% rewritten
  8. 08seek 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 successfulNew
  9. 09The underperformance or failure of our IT or telecommunication systems could result in a loss in productivity, loss of competitive advantage or business disruption
  10. 10Ongoing enhancements to key operational systems and processes require effective change management, and if not executed properly, our business operations could be adversely affectedNew
  11. 11Further impairment of goodwill may adversely impact our results of operationsNew

INTERNATIONAL OPERATIONS RISKS

  1. 12Our international operations expose us to risks and uncertainties, which could harm our business, results of operations and financial condition
  2. 13Compliance with complex and evolving international and U.S. laws and regulations governing our international operations could increase our cost of doing business in international jurisdictions30% rewritten

LEGAL AND REGULATORY RISKS

  1. 14Our ability to collect and enforce our nonperforming loans may be limited under federal, state and international laws, regulations and policies
  2. 15Failure 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 business72% rewritten
  3. 16activities. In addition, local requirements and court rulings in various jurisdictions may affect our ability to collect on our nonperforming loansNew
  4. 17impose 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-complianceNew

FINANCIAL RISKS

  1. 18We expect to continue to use leverage in executing our business strategy, which may have adverse consequences22% rewritten
  2. 19We may not generate sufficient cash flow or be able to complete alternative financing plans, including raising additional capital, to meet our debt service obligations
  3. 20The agreements governing our indebtedness include provisions that may restrict our financial and business operations
  4. 21Adverse changes in our credit ratings could increase our future borrowing costs and reduce our access to capitalNew

Other Pra Group 10-Ks

  • FY2024 10-K risk factors
    23 risks

    Nonperforming loan purchases and debt collection drive our business across 18 global jurisdictions. Heavy reliance on IT systems, data security, and third-party outsourcing. Significant leverage with $3.3 billion in total indebtedness.

    Filed Feb 27, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.