and many more. Thank you. All right. Thank you. Thank you. Thank you for watching. and many more. Thank you for watching. Thank you for watching. Good evening and welcome to the PRA Group's third quarter 2026 conference call. All participants will be in listen-only mode. Should you need assistance, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then the number one on your touchtone phone. And to withdraw your question, please press the star, then the number two. Please note that this event is being recorded. And now I would like to turn the call over to Mr. Najim Mostamand, Vice President, Investor Relations for PRA. Please go ahead.

Thank you, operator. Good evening, everyone, and thank you for joining us. With me today are Martin Sjolund, President and Chief Executive Officer, and Rakesh Sehgal, Executive Vice President and Chief Financial Officer. We will make forward-looking statements during the call, which are based on management's current beliefs Projections, Assumptions, and Expectations. We assume no obligation to revise or update these statements. We caution listeners that these forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that could cause our actual results to differ materially from our expectations. Please refer to our earnings press release issued today and our SEC filings for a detailed discussion of these factors. The earnings release, The slide presentation that we will use during today's call and our SEC filings can all be found in the investor relations section of our website at www.pragroup.com. Additionally, a replay of this call will be available shortly after its conclusion, and the replay dial-in information is included in the earnings press release. All comparisons mentioned today will be between Q3 2026 and Q3 2025, unless otherwise noted. During our call, we will discuss certain financial measures on an adjusted basis. Please refer to the appendix of the slide presentation used during this call for a reconciliation of the most directly comparable U.S. GAAP financial measures to non-GAAP financial measures. And with that, I'd now like to turn the call over to Martin.

Thank you, Najim, and thank you everyone for joining us this evening. First of all, I want to tell you about our NASDAQ bell-ringing ceremony in New York earlier this week as we celebrated PRA's 30th anniversary. I was joined by our co-founder and executive chairman, Steve Fredrickson, our senior leadership team, and select members of our high-performing staff from the UK, Poland, and the US who were nominated by their peers. This milestone was a reminder of the long track record we've built as a global business through multiple economic cycles, as well as the importance of maintaining a disciplined approach to capital allocation, operations, and managing the business for the long term. Those principles remain at the core of how we run the business today. I want to thank our staff and our partners for their hard work and support over many years. Turning now to our third quarter results. As you can see from this slide, we continue to execute against our PRA 3.0 strategy introduced earlier this year. This quarter provides further evidence that the actions we have taken are translating into tangible financial outcomes. Let me start with cash collections, which exceeded our internal expectations for the quarter. Cash collections were relatively stable at $536 million as our disciplined capital deployment resulted in a somewhat lower level of buying over the past one and a half years. At the same time, adjusted cash efficiency improved by more than 200 basis points to 63%, even as we continued investing in the legal collections channel which remains a strong platform for cash collections. This demonstrates disciplined cost management especially as it relates to the significant cost reduction initiatives we took over the past year to reduce our workforce, consolidate our call center footprint, and drive more efficiency across the business. Turning to portfolio purchases, we invested $229 million during the quarter. As we've discussed previously, we remain focused on net returns and we continue to deploy capital globally in a disciplined manner where we see the most attractive returns. We have seen a good level of supply in Europe and have shifted more capital deployment to Europe using our global capital allocation framework. We benefit from access to a global set of markets and can shift capital to where we can earn the strongest returns. Over the years, we have seen the buying mix between the US and Europe ebb and flow, demonstrating the benefit of our unique global footprint. Trailing 12-month adjusted EBITDA increased 9% to $1.4 billion, reflecting the significant cost savings we are beginning to realize from the workforce reductions we completed in October 2025 and June of 2026. As a result of the strong adjusted EBITDA growth and disciplined portfolio investments, net leverage in the third quarter ticked down to 2.6 times, marking our eighth consecutive quarter of deleveraging. Finally, net income attributable to PRA was $15 million during the quarter, even as we are making significant investments in the legal collections channel as well as in our technology platform, which sets the company up for long-term success. I'll now spend a few minutes discussing some of our key initiatives and actions underway across the business. As we've discussed throughout the year, PRA 3.0 is focused on three key vectors, capital and investing, operations technology and data, and People & Culture. We are seeing clear evidence that our actions are strengthening the business and translating into tangible results, starting with capital and investing. We continue to focus on strengthening our funding profile, maintaining ample liquidity, and staggering our maturities. Last month, we issued $400 million of senior notes due to 2033, further strengthening our funding flexibility. Rakesh will talk more about this shortly. We also were able to achieve our eighth quarter in a row of deleveraging, supported by the strong adjusted EBITDA generation I mentioned earlier. When combined with our level of buying this quarter, this benefited our cash flow profile for Q3. Our cash flow will naturally fluctuate based on the level of portfolio investments in a given quarter. When higher returning purchasing opportunities are more limited, we can generate more cash flow. When there are significantly more attractive portfolio opportunities, We have the flexibility to reinvest that cash at returns we believe will create long-term shareholder value. As it relates to our capital allocation strategy, our priorities remain unchanged. We continue to prioritize portfolio purchases that meet our return thresholds, investments that improve our operating performance, and opportunistic share repurchases depending on valuation and balancing portfolio purchases with leverage. Turning now to operations, technology, and data. Our team has made great progress in developing our US operating capability over the past few years, but we have more work to do. We have built up offshore capabilities, introduced external debt collection agencies, and focused on our US P&L. We have also embarked on a major technology transformation. As I've said many times, cost discipline remains a core operating principle. The actions we took over the past year to simplify the organization, reduce corporate and overhead costs, and improve efficiency are beginning to show up in our financial results. As Rakesh will go over in more detail, operating expenses during the third quarter declined, enabling our adjusted EBITDA to continue growing even as we invest in legal and in technology. The rollout of our cloud-based omnichannel contact platform in the U.S. during the quarter is off to a strong start and is already improving agent productivity and customer engagement. Our data migration to the cloud in the US also remains on track for completion by the end of the year. We are moving billions of documents and a lot of data into the cloud, which will streamline our processes and provide for faster insights and decision making. We also continue to make progress modernizing our legal, core, and data platforms. The legal IT investments in particular are worth mentioning. We're in the process of developing a significant upgrade to our legal collection capabilities One that will benefit from the rapid advancements in AI. These investments will improve our systems, enhance our processes, improve efficiency, and enable greater coverage in the states we operate in. We expect our IT modernization investments to be less than $10 million over the next few years as we work with partners who themselves are leveraging AI for software and system development. AI is also becoming an increasingly important component of how we operate. We have multiple pilots and projects underway across the US and Europe to drive productivity, improve processes, and increase cash collections. As an example, these initiatives are helping us enhance document processing and improve customer engagement. I would point out that we are being very cautious in terms of direct customer interactions with AI. Finally, under people and culture, we continue to build a more agile, accountable, and performance-oriented organization. We recently celebrated our 30th anniversary Thank you for joining us today.

A leaner and more efficient organization with a great culture.

Overall, I am pleased with the progress we're making. We have strengthened our funding position, reduced costs, grown adjusted EBITDA to near record levels, lowered leverage, advanced our technology capabilities, and continued building a stronger foundation for long-term growth. With that, I'll turn the call over to Rakesh to discuss our third quarter financial results in more detail.

Thanks, Martin. We purchased $229 million of portfolios during the quarter. Consistent with our PRA 3.0 strategy, we remain focused on deploying capital globally where we see the most attractive net returns. During the quarter, purchases in the U.S. totaled $92 million while purchases in Europe totaled $130 million. Supply remains healthy in the U.S. and we have seen the market get quite competitive. In Europe, portfolio volumes continue to trend higher toward pre-COVID levels and we expect that trend to continue in Q4. Our global diversification and disciplined capital deployment focusing on net returns provide the flexibility to direct capital towards the most attractive opportunities globally. Our increased buying shifts From the U.S. to Europe reflects that we are seeing better relative returns in select European markets. ERC at quarter end increased to $8.8 billion, up 5% year over year. Europe represented 55% of ERC, while the U.S. represented 40%, giving us a well-diversified portfolio across markets and economic cycles. Based on the average purchase price multiples for the first nine months of 2026, we would need to invest approximately $1 billion over the next 12 months to maintain current ERC levels. Total cash collections were $536 million during the quarter, which performed 1% above our expectations. In the U.S., cash collections were relatively in line with our expectations. whereas in Europe, cash collections exceeded expectations by 3%. This 3% cash overperformance in Europe is after we increased our collection targets at the end of the second quarter by recording a $349 million write-up on the European portfolio. U.S. legal cash collections grew 19% to $148 million and now represent 58% of US core cash collections. The continued growth in legal collections reflects significant investments we have made over the past several years to drive strong cash generation. We continue to see good returns on those investments and remain on track for another strong year of legal cash collections. As a reminder, The legal channel remains an important component of our collection strategy, but it is not the channel we lead with or prefer. Before accounts are considered for the legal process, we make extensive outreach efforts over an extended period of time through numerous other channels, providing customers multiple opportunities to voluntarily engage with us. The increase in legal cash collections we have seen this year have mostly been driven by older accounts which we have been trying to engage with over long periods of time. For the subset of customers who do not engage with us voluntarily but have an ability to pay, we will consider using the legal channel when our data suggests that the investment in upfront court costs is economical and we have the proper documentation. Our digital collections also continue to grow as that channel is further developed. Following the launch of our mobile app in the UK earlier this year, we have been seeing encouraging payment activity, including from customers who have not previously engaged with us. Total revenues were $286 million for the quarter. Portfolio income grew 5% in the quarter to $271 million. As we've discussed previously, portfolio income represents the largest component of our revenue stream. Continued growth in portfolio income, even with lower recent buying compared to the record levels we saw in 2024, supports a more predictable revenue profile. Changes in expected recoveries, totaling $14 million this quarter, were driven in part by the actions we have taken in the past several quarters to enhance our cash collection projections. This resulted in more of our portfolio revenue coming from portfolio income and less from changes in expected recoveries, increasing the predictability of our revenue streams. Total operating expenses were $200 million for the quarter. Total adjusted operating expenses which exclude the $413 million non-cash goodwill impairment charge recorded in Q3 of last year declined 6% year-over-year. The decline reflects in part the cost reduction initiatives we implemented over the past year as we continue to simplify the organization and improve efficiency across the business. Compensation and benefits expense declined 11% to $66 million, primarily reflecting the workforce reduction initiatives we undertook since the start of 2025. These workforce reductions included actions taken in October 2025 and in June of this year. Altogether, we have eliminated more than 215 corporate and overhead roles. A reduction of more than 25%. Looking ahead, we expect compensation and benefits expense to be approximately $70 million on a run rate basis per quarter. Legal collection costs were relatively flat year over year at $46 million. At the same time, global legal cash collections from investments made in private quarters increased 11%. Demonstrating the strong performance of the legal channel. Looking ahead, we expect to be nearing our peak in legal collection costs. As we work through the remaining backlog of accounts, we expect annual legal collection costs to begin declining and to be lower in 2027 than they are in 2026. This is based on our current buying outlook and is subject to change. Moving below the operating line, net interest expense was $64 million for the quarter, relatively flat year over year. Our effective tax rate was approximately 16% during the quarter, and for the full year of 2026, we expect our effective tax rate to be approximately 30%, depending on income mix from various countries and other factors. Net income attributable to PRA Group was $15 million. In addition to net income, we also focused on adjusted EBITDA, which provides a more cash-oriented view of the business. Adjusted EBITDA for the last 12 months was $1.4 billion, up 9% year-over-year. This increase reflects continued operating execution and Discipline Cost Management under our PRA 3.0 strategy. Our borrowings have remained relatively stable while our adjusted EBITDA has continued to grow, helping drive lower net leverage. Net leverage at quarter end ticked lower to 2.6 times, down from 2.67 times last quarter and from a peak of 2.87 times in the third quarter of 2024. This marks our eighth consecutive quarter of deleveraging and reflects the combination of growing adjusted EBITDA, stable borrowing, and disciplined capital deployment. As we've said before, to the extent we see good investment opportunities, we may capitalize on them, which in some quarters may result in an uptick in our leverage. However, our objective over the longer term continues to be to move toward the mid two times area as outlined in our PRA 3.0 strategy. Turning to funding and capital allocation. We continue to maintain a strong funding profile with ample liquidity and a well-diversified capital structure supported by both bank and bond debt. As of September 30th, we had $3.1 billion in total committed capital under our credit facilities. with total availability of $1 million, comprised of $770 million available based on current ERC, and $262 million of additional availability that we can draw from, subject to borrowing base and debt covenants, including advance rates. In early October, we issued $400 million of senior notes, June 2033, Reflecting our strong relationships with high yield investors. Given the current rate and market environment, we are pleased that the recent bond issuance further extends our debt maturity profile, which remains well staggered. This positions us well from a funding perspective as we continue executing our strategy and investing in attractive portfolio opportunities. Last week, one of the rating agencies affirmed our existing corporate and bond ratings and changed the outlook to stable after having us on negative outlook. We are appreciative of the action taken by the agency as we continue to strengthen our balance sheet. Our capital allocation priorities remain unchanged. First, we will continue to make disciplined portfolio investments that meet our return requirements. Second, we will continue to invest in initiatives that enhance the operating performance of the business, including legal collections, digital capabilities, and technology modernization. Our legal investments this year have been very significant. We have invested more than $190 million in legal collection costs in the last 12 months, and we expect that to pay off in the future. As we mentioned earlier, our technology transformation is also important, although the amounts are significantly smaller and spread out over multiple years. Finally, we continue to view opportunistic share repurchases as part of our overall capital allocation strategy to drive shareholder value. We did not repurchase shares during the third quarter. This decision was in line with our strategy to be opportunistic. depending on valuation and balancing portfolio purchases with leverage. Since the second quarter of 2025, we have repurchased approximately $40 million of our shares, and we currently have $150 million remaining under our new share repurchase program, which our board approved in August. As a reminder, the amount and timing of share repurchases depend on several factors including our capital allocation priorities, market supply outlook, financial performance, market conditions, valuation, leverage, liquidity, and the terms of our existing debt agreements. Overall, we believe a strong liquidity position, staggered debt maturities, improving financial profile, and disciplined capital allocation strategy provides significant flexibility as we continue executing against our PRA 3.0 strategy. I'll now turn it back to Martin. Thanks, Rakesh.

I'm pleased with the progress we have made since launching PRA 3.0. The team has executed with pace and urgency, and we are seeing clear evidence that our actions are strengthening the business and translating into tangible results. In capital and investing, we strengthened our funding profile, achieved eight consecutive quarters of deleveraging, and continued deploying capital in a disciplined manner focused on net return thresholds. In terms of overall portfolio investments, we're tracking toward the level we mentioned at the start of the year, which is between 1 to 1.3 billion and similar to last year. In operations, technology and data, we continued simplifying the business, reducing costs, modernizing our technology platforms and expanding our AI capabilities. Importantly, many of these initiatives are now beginning to deliver financial results. In people and culture, we continue building a more agile, performance-oriented organization while investing in talent, strengthening accountability, and further aligning incentives with shareholder value creation. We have also strengthened our team by setting up our talent hub here in Charlotte. We're making solid progress and are on a good trajectory. Our execution is driving higher portfolio income, lowering costs, and Growing Adjusted EBITDA. And we believe that our significant investments in legal and technology will strengthen the business in the years to come. Thank you everyone for your time, support and continued confidence in PRA. And with that, we'll open it up for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchstone phone. And you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. One moment, please, for your first question. And your first question comes from the line of Mark Hughes of TruWaste. Please go ahead.

Yeah, thank you very much. Good afternoon.

Hey, Mark. The collections upside in Europe, I think you said it was 3%, the US was Stable.

Did you provide the number for the overall elections performance?

Yeah. Hey, Mark, it's Rakesh. Yeah, we did. We said we exceeded our target by 1% globally.

Okay. Yeah. Thank you for that. And then you talked about more competition in the U.S. When I look at your multiples, it looks like the multiples there have been still inching up, I think, 2.2 times if I'm Thank you, Mark. That's a good observation. As we said at the start,

We have from, you know, ever since the start of this year, we've talked about being disciplined in terms of how we allocate capital. We've also talked about the importance of having this globally diversified footprint. So, you know, we've been mindful of leverage throughout the year. We set out this range that Rakesh mentioned, you know, between 1 to 1.3 billion. So we're pretty much tracking on a global level, we're tracking right to where we had planned, you know, as we went into this year. As you mentioned, we did see the US market being quite competitive. And that's one of the reasons why you see us shifting a little bit more towards Europe on the deployment side. I would remind you that we've had a really strong track record of performance in Europe over many years. We did the big write-up in Q2 of last quarter. We raised our targets for Europe as part of that. And despite that, we still overperformed. So the other thing is that we have a very efficient business over there. So, you know, the multiples that you see here, they do reflect the mix and they do reflect the cost to collect that we see. So we normalize for the net returns when we make our capital allocation decisions. And that's how we ended up with the profile that you see this quarter.

Yeah, I appreciate that. Any comments? I think you might have touched on this consumer health, whether gas prices, inflation pressure is having much of an impact on your collections, your ability to establish new collections plans or any breakage rates on the existing plans?

Yeah, I mean, you know, obviously, we're really focused on that. We've been focused on it all year. And, you know, we all know that the inflationary environment and the gas prices and so on is, you know, a concern for consumers, you know, clearly. That's, I think, a global thing. But on the cash side, I think what we've seen has been pretty resilient consumers. As Rakesh mentioned, we overperformed our targets on a global level. The US was pretty much in line and Europe was a little bit ahead. So we're seeing pretty stable performance from the consumers despite that. And I think it reflects a few things. One is we try to get people onto affordable repayment plans that they can afford. And so that's number one. and number two is you also have people in a legal channel, which is a pretty stable channel usually. So we do continue to monitor this all the time. And you have ups and downs in individual markets, but overall on an aggregated global basis, I would say the consumers so far have been pretty resilient given what's been happening in the macro environment. But of course we keep a close eye on it.

Yeah. How do you... Or how should we think about your leverage versus the kind of the collections you've pretty deliberately and consistently been reducing your leverage? You talked about going to the mid twos, which implies maybe just continuing on this trajectory. But obviously, you see it having an impact on your collections, the gross collections, which are down in the quarter. So your finance income is still up, but with a little bit slower purchasing, the focus on deleveraging seems to be you're incurring some headwinds associated with that. How should we think about that balance in coming quarters?

Yeah, I mean, I'll let Rakesh comment on the leverage part. As you say, we have been very focused on bringing that down. By taking the measures we've taken both on the discipline investment side and then on the cost control side, we have been able to continue to grow our adjusted EBITDA. That was up 9%. You're right that cash was pretty flat this quarter, but the cash EBITDA grew by 9%. That's despite the fact that we continue to make significant investments in legal in the US and also investments in our technology platform. I really see us in kind of an investment phase, especially in the U.S. market, as we implement this 3.0 strategy. But I think the fact that our adjusted EBITDA is growing by 9% is a very important facet there, as I think the platform becomes more efficient overall. Maybe, Rakesh, you can comment on the leverage part of that.

Yeah. So, Mark, all the metrics that you're seeing really are in line with our 3.0 strategy that we had laid out. We did say that our goal is to get to a 2.5 times area from a net leverage perspective over the next two to three years. And so we are very pleased that eight quarters in a row we've been able to deliver. Our borrowings have been very stable, whereas our adjusted EBITDA, as Martin said, continues to grow. Keep in mind, we did say at the outset of our strategy that We're not just going to grow for growth's sake, so we've been very disciplined on our investments. And you pointed out correctly that you saw some uptick in our purchase price multiples also in the U.S. But again, we are focusing on the net returns. I also mentioned to you that in the past, which is that we did expect the 2026 cash growth rates to moderate relative to 2025. and that's primarily because we had a big buying year in 2024. Since then, our buying in 25 and 26 has stabilized at slightly lower levels. So we would see, call it single digit growth rates in 26 for cash. We had strong Q1 and Q2. So obviously you'll see in the back half of 26 some lower growth rates to get to the lower levels for the full year versus last year. But as it relates to just leverage, look, this is despite all the investments that we're making in the legal channel and investing in our U.S. business, we're still very pleased that we're able to continue to be levered. However, to the extent we see additional purchase opportunities, you could see an uptick in leverage to some extent. Keep in mind that we are choosing to de-lever. We've got significant leverage. Very good. Thank you.

And your next question comes from the line of Robert Dodd of Raymond James. Please go ahead.

Hi, guys. If I can go back to kind of Mark's question about the competition. I mean, to that point, I mean, if I look at the purchase volumes from the schedule and the purchase multiple through the first six months of the year in the U.S. for 2026, obviously, it was 2.08. For the nine months, it's 2.10. So that implies the multiple has actually improved in the third quarter, but you're characterizing competition as tough. Obviously, that multiple only applies to the stuff you actually bought. So is the competition effect more on things you're seeing that you're unwilling to pay, right, because you're targeting the returns, And is that tied to, you know, is it you see the competition more on like, you know, forward flow renewals or things like that? Because, I mean, obviously what you're buying, the multiples are still better. But at the same time, you know, material competition increase says something's going on somewhere in the market. I'm just trying to figure out what it is.

Yeah, no, I think you hit the nail on the head there. You know, it's really for us about being selective. Thank you. Thank you. This is where we ended up. Actually, I think we have a good investment quarter in both the U.S. and Europe, actually, and globally overall as well. We're happy with where this came in. We just mentioned the competition because I think you do see a bit of a shift here where we're now investing a little bit more in Europe maybe than we had been in the years before that and a little bit less in the U.S. That's the benefit of being in these global markets. Even in the European market, it's not like every market. I always say it's competitive. And there are some markets in Europe that are very competitive right now. But on the other hand, we cover a broad range and we're able to, I see it like windows that open up. And sometimes when those windows open up, the fact that we have a strong team, decades of data and experience, it enables us to move in and as different competitive intensities, Ships Around. So back to your point, I think we're trying to put together a good vintage of discipline investments. And obviously, if your investments are down a little bit, which ours are over the last year and a half, that means that you got to deal with your cost, you got to deal with the platform, you got to take those difficult initiatives. And that's what we're doing. So I think that for us, at least, it's coming together I would also mention the overall supply environment is good in both the U.S. and Europe. So the supply is there, and that's the other good news. The opportunity is there. We're just trying to be really selective about which ones we go after, and that means we're happy to let other people take the ones that don't meet our thresholds.

Got it. Got it. Thank you. On the curve adjustments this quarter, I missed your point. Europe's still outperforming despite taking the curves up. U.S. is stable as it was last quarter, or in line with your curves, is a better way of putting it, as it was last quarter. I've got to say, I underestimated how much the curve adjustments last quarter would eliminate curve adjustments this quarter. So can you give us, I mean, I think the impression I got last quarter was like, yes, you put in These adjustments, they were significant, and they have, obviously, they've taken Europe down from 109 to 103 because the changes in tariffs. But it seems like your general pattern has been factoring the curve adjustments that you're extremely comfortable with, but not earlier ones. And so the lack of them this quarter, hopefully this all makes sense, the reduction in them this quarter seems like there's something more going on that that you put in all the ones you were very comfortable with and that somehow largely wiped out all curve adjustments this quarter and so it doesn't seem like there's as much other you know less comfortable outperformance that you hadn't factored into the curves I don't know if that makes sense but

Yeah, I think I hear where you're coming from. Just as a reminder for those who may not have been following it as closely, we took a $349 million write-up on the European portfolio in Q2 of this year. That was a result of what we refer to as a real deep dive. We spent time with our underwriting team really reviewing that portfolio. We'd had Many, many quarters, over 20 quarters in a row of overperformance on that European book. And we took this significant upward revision. And as you said, despite having taken that upward revision, we still overperformed a little bit. We're 3% above this quarter. So I think that just shows the solid momentum and strength of the European business. As we did say, I think on the last call, on one hand, this drives up our portfolio income. So our portfolio income this quarter was up 5%, and that's in an environment where the cash is pretty flat. So I think that's a positive. We see that as a more predictable component of our revenue. But by doing that, we did also say that we would expect a more moderate level of overperformance in the future. And I think that's one of the things that you're seeing here.

Got it. Got it. Thank you. And then if I can, one more. On the legal expense, I think you're pretty clear, right? It should be down in 27 versus 26. I mean, is this just to your point where you had big purchases in 2024 where you're now almost I mean, is it just that lag or is there a reallocation of expenses away from legal? I doubt it, but I'm just trying to get a handle. Is it just the timing of when the purchases and the flow through or is there something else going on?

Yeah, no. So on that one, there's really two drivers of the significant increases we've made in legal investments in the U.S. One is the, as you point out, you know, the very big buying year we had in 2024. So there's a bit of a time lag as those, you know, we wouldn't start with legal, but over time, if after repeated attempts to contact and engage with customers that we haven't been able to, and we have all the necessary documentation, and we have data that suggests that they should be able to pay through legal, you know, we'll consider that channel. So one thing is catching up on that, is following through on that 2024 volume. But the other part is that we also had quite a bit of backlog accounts. We underinvested in legal for a number of years for a variety of internal reasons. But we've made the decision that we needed to take a look at those accounts again. And that's one of the things that caused us to have such a sharp increase in legal investments really over the past year, two years, really. But that is also driving the cash up. I mean, the legal cash in the U.S. was up by 19% this quarter. So again, even with the backdrop of buying coming down a bit, the legal cash was up 19%. So we are seeing those investments returning as expected. And then as Rakesh also pointed out, All of that said, as we've worked through most of this backlog and we've worked through the peak buying year that we had, you will start to see the legal costs coming down. What we said so far was that we expect the legal costs next year to be lower than they were this year. This really has been an investment year for us, both in terms of the legal side and also the technology transformation that we're driving. We're doing this, obviously, even though it's a cost now, but we believe that it's going to generate good results in the future.

Got it. Thank you. Once again, if you wish to ask a question, please press star 1 to join the queue. Again, if you want to ask a question, please press star 1.

And there are no further questions at this time. I will now turn the call over to Martin and Sjolund. Please continue.

Okay. Well, you know, I just want to thank everyone for listening. You know, we're almost a year into our PRA 3.0 strategy that we laid out at the start of the year. I think we've demonstrated that we're taking action on reducing our costs. We've driven up portfolio income. We've grown adjusted EBITDA to a near all-time high. We're at eight quarters of consecutive delivering. We've strengthened our funding profile and we're making significant investments in legal and in our technology platform. So I think we're making good progress on the strategy and we look forward to keeping you updated in the future. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.