Encore Capital Group Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 5 November 2025: press release. Guidance figures: 1 raised, 1 new, 1 kept. The quarter’s numbers.

Key takeaways

Earnings per share rose 152%: Diluted earnings per share were $3.17 against $1.26 a year earlier, up 152%. Management linked the increase to collections. Source
MCM collections rose 25%: MCM collections were $502 million, up 25%, which management credited to execution and continued significant portfolio purchasing. Source
Operating expenses rose 10%: Total operating expenses were $287.2 million, up 10% from $261.0 million a year earlier. Source
Estimated remaining collections up 10%: Estimated remaining collections were $9.49 billion, up 10% from $8.65 billion a year earlier. Source
Collections guidance raised again: Full-year 2025 collections guidance is about $2.55 billion, which the company said reflects 18% growth. Source
Purchasing guidance held unchanged: Global portfolio purchasing guidance is unchanged, with 2025 purchases expected to exceed the $1.35 billion bought in 2024. Source
Share repurchases continued: Third-quarter repurchases were $10 million; about $25 million was repurchased in the fourth quarter to date, about $60 million year-to-date. Source
$300 million repurchase addition: The board authorized a $300 million addition to the existing share repurchase program. Source

“This collections performance helped earnings increase sharply, with third quarter earnings per share of $3.17 up 152% compared to $1.26 per share a year ago.”
Ashish Masih, President and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Global collections Source	Full-year 2025	approximately $2.55 billion	Raised from approximately $2.5 billion
Global portfolio purchases Source	Full-year 2025	exceed $1.35 billion	Kept
Share repurchases Source	Not dated	$300 million addition to existing program	New

What changed from last quarter

Guidance raised: Full-year 2025 collections guidance raised to about $2.55 billion from about $2.5 billion. Source
New: Board authorized a $300 million addition to the existing share repurchase program. Source

Results and earnings drivers

Earnings per share rose 152%: Diluted earnings per share were $3.17 against $1.26 a year earlier, up 152%. Management linked the increase to collections. Source
Recoveries line increased: The changes in recoveries line was $63.6 million against $12.7 million a year earlier. Source
Adjusted EBITDA rose: Adjusted EBITDA was $184.8 million against $117.8 million, per the company's non-GAAP reconciliation. Source
Net income up sharply: Quarterly net income was $74.7 million against $30.6 million; nine-month net income was $180.2 million against $86.1 million. Source
Total revenues up 25%: Total revenues were $460.4 million, up 25% from $367.1 million in the year-ago quarter. Source

U.S. MCM business

MCM purchases rose 13%: MCM portfolio purchases were $261 million, up 13%, which management tied to ample U.S. portfolio supply. Source
MCM collections rose 25%: MCM collections were $502 million, up 25%, which management credited to execution and continued significant portfolio purchasing. Source
Technology cited for collections: Management also cited new technologies, enhanced digital capabilities and continued operational innovation as contributors to MCM collections. Source

“As always, we remain committed to the critical role we play in the consumer credit ecosystem and to helping consumers restore their financial health”
Ashish Masih, President and Chief Executive Officer

Cabot Europe business

Cabot purchases above trend: Cabot portfolio purchases were higher than its historical trend, which management attributed to spot market purchases. Source
Cabot collections rose 8%: Cabot collections were $160 million, up 8% from the third quarter of 2024. Source
Cabot quarter described: Management reported that the Cabot business in Europe delivered the third quarter's results. Source

Costs, interest and taxes

Operating expenses rose 10%: Total operating expenses were $287.2 million, up 10% from $261.0 million a year earlier. Source
Legal collection costs higher: Cost of legal collections was $80.0 million against $67.3 million a year earlier. Source
Cash interest paid higher: Cash paid for interest in the nine months was $172.8 million against $139.0 million. Source
Income tax provision higher: Provision for income taxes was $25.2 million against $10.1 million in the quarter. Source
Operating income rose: Income from operations was $173.2 million against $106.1 million a year earlier. Source

“as MCM is poised to surpass their record level of purchases of a year ago”
Ashish Masih, President and Chief Executive Officer

Receivable base and collections

Estimated remaining collections up 10%: Estimated remaining collections were $9.49 billion, up 10% from $8.65 billion a year earlier. Source
Average receivables up 16%: Average receivable portfolios were $4.23 billion, up 16% from $3.65 billion. Source
Collections applied to principal: Collections applied to principal balance were $236.3 million in the quarter, against $223.3 million a year earlier. Source

Guidance and consumer commitment

Collections guidance raised again: Full-year 2025 collections guidance is about $2.55 billion, which the company said reflects 18% growth. Source
Prior collections guidance history: The prior release raised collections guidance to about $2.5 billion, 15.5% growth, from an earlier expectation of 11% growth to $2.4 billion.
Purchasing guidance held unchanged: Global portfolio purchasing guidance is unchanged, with 2025 purchases expected to exceed the $1.35 billion bought in 2024. Source
Consumer commitment restated: Management restated its commitment to the consumer credit ecosystem and to helping consumers restore their financial health. Source

Capital, cash and share repurchases

Share repurchases continued: Third-quarter repurchases were $10 million; about $25 million was repurchased in the fourth quarter to date, about $60 million year-to-date. Source
Operating cash flow for nine months: Net cash provided by operating activities for the nine months was $136.4 million against $132.6 million. Source
Borrowings increased: Borrowings were $3.93 billion at September 30, 2025, against $3.67 billion at December 31, 2024. Source
Receivable purchases rose: Nine-month purchases of receivable portfolios, net of put-backs, were $1.07 billion against $845 million a year earlier. Source
$300 million repurchase addition: The board authorized a $300 million addition to the existing share repurchase program. Source

Coming up, as management said on 5 November 2025

MCM expected to pass prior record: Management said MCM is poised to surpass its record level of purchases from a year ago, within the full-year purchasing expectation. Source

Figures management reported

Figure	Reported
Global portfolio purchases Source	$346 million
Global collections Source	$663 million
Estimated remaining collections (ERC) Source	$9.49 billion
Average receivable portfolios Source	$4.23 billion

Earlier plans management reported on

Not stated: Management restated continued commitment to its role in the consumer credit ecosystem. Source
Not stated: Management said purchasing guidance is unchanged, with 2025 purchases expected above the 2024 level. Source
Not stated: The prior release raised collections guidance to about $2.5 billion; the current release states no status against that earlier figure.

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Encore Capital Group Announces Third Quarter 2025 Financial Results

Global portfolio purchases up 23% to $346 million, including $261 million in U.S.
Global collections up 20% to record $663 million, including $502 million in U.S.
Earnings per share of $3.17
Approximately $60 million share repurchases year-to-date; $300 million repurchase program reauthorization

SAN DIEGO, November 5, 2025 -- Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company, today reported consolidated financial results for the third quarter ended September 30, 2025.

“Encore delivered another quarter of strong performance in Q3 as our industry leadership and operational improvement become increasingly evident in our results,” said Ashish Masih, President and Chief Executive Officer. “Portfolio purchases of $346 million were up 23% compared to the third quarter last year and record collections of $663 million were up 20%. This collections performance helped earnings increase sharply, with third quarter earnings per share of $3.17 up 152% compared to $1.26 per share a year ago.”

“Our MCM business in the U.S. continues to deliver very strong results. Capitalizing on the ongoing attractive market opportunity in the U.S. driven by ample portfolio supply, MCM portfolio purchases in the third quarter were $261 million, up 13% compared to the year ago quarter. MCM also delivered record collections of $502 million in the third quarter, up 25% compared to Q3 a year ago. This exceptional collections performance is the result of strong execution and continued significant portfolio purchasing as well as the deployment of new technologies, enhanced digital capabilities and continued operational innovation.”

“Our Cabot business in Europe delivered a solid third quarter. Portfolio purchases of $85 million were higher than Cabot’s historical trend due to spot market opportunities while collections of $160 million were up 8% compared to the third quarter last year.”

“As a result of our strong performance so far this year and our continued investment and operational execution, we are again raising our global collections guidance and now expect our full-year 2025 collections to be approximately $2.55 billion, reflecting year-over-year growth of 18%. Our guidance for portfolio purchasing remains unchanged as we still anticipate our global portfolio purchases this year will exceed the $1.35 billion of purchases we made in 2024 as MCM is poised to surpass their record level of purchases of a year ago. As always, we remain committed to the critical role we play in the consumer credit ecosystem and to helping consumers restore their financial health,” said Masih.

In the third quarter, the company repurchased $10 million of its shares of common stock. The company also repurchased nearly $25 million of its shares in the fourth quarter to date, bringing its total repurchases to approximately $60 million year-to-date. The company’s board recently authorized a $300 million addition to its existing share repurchase program.

Financial Highlights for the Third Quarter of 2025:

	Three Months Ended September 30,
(in thousands, except percentages and earnings per share)		2025		2024	Change
Portfolio purchases	$346,069		$282,485		23%
Average receivable portfolios	$4,227,398		$3,651,291		16%
Estimated Remaining Collections (ERC)	$9,489,772		$8,648,886		10%
Collections	$663,018		$550,268		20%
Revenues	$460,353		$367,071		25%
Operating expenses	$287,175		$260,981		10%
Net income	$74,660		$30,643		144%
Earnings per share	$3.17		$1.26		152%

(1)Includes U.S. purchases of $261.1 million and $230.2 million, and Europe purchases of $84.9 million and $52.3 million in Q3 2025 and Q3 2024, respectively.

(2)Represents the average of receivable portfolios for the quarter (sum of receivable portfolios at the beginning and end of the quarter divided by 2).

Conference Call and Webcast

Encore will host a conference call and slide presentation today, November 5, 2025, at 2:00 p.m. Pacific / 5:00 p.m. Eastern time, to present and discuss third quarter results.

Members of the public are invited to access the live webcast via the Internet by logging in on the Investor Relations page of Encore's website at encorecapital.com. To access the live conference call by telephone, please pre-register using this link. Registrants will receive confirmation with dial-in details.

For those who cannot listen to the live broadcast, a replay of the webcast will be available on the Company's website shortly after the call concludes.

Non-GAAP Financial Measures

This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company has included information concerning adjusted EBITDA because management utilizes this information in the evaluation of its operations and believes that this measure is a useful indicator of the Company’s ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. Adjusted EBITDA has not been prepared in accordance with GAAP and should not be considered as an alternative to, or more meaningful than, net income and net income per share as indicators of the Company’s operating performance. Further, this non-GAAP financial measure, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. A reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure is below.

About Encore Capital Group, Inc.

Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, and utility providers.

Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at http://www.encorecapital.com.

Forward Looking Statements

Forward-looking statements notice

The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results (including purchases and collections), performance, supply and pricing, liquidity, business plans or prospects. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent report on Form 10-K, as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.

FINANCIAL TABLES FOLLOW

Condensed Consolidated Statements of Financial Condition

(In Thousands, Except Par Value Amounts)

(Unaudited)

	September 30, 2025	December 31, 2024
Assets
Cash and cash equivalents	$172,488	$199,865
Receivable portfolios, net	4,270,016	3,776,369
Property and equipment, net	82,041	80,597
Other assets	197,772	225,090
Goodwill	535,626	507,808
Total assets	$5,257,943	$4,789,729
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities	$259,884	$233,545
Borrowings	3,933,858	3,672,762
Other liabilities	111,287	116,091
Total liabilities	4,305,029	4,022,398
Commitments and Contingencies
Equity:
Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding	-	-
Common stock, $0.01 par value, 75,000 shares authorized, 22,854 and 23,691 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	229	237
Additional paid-in capital	-	19,297
Accumulated earnings	1,083,975	909,927
Accumulated other comprehensive loss	(131,290)	(162,130)
Total stockholders’ equity	952,914	767,331
Total liabilities and stockholders’ equity	$5,257,943	$4,789,729

The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”) included in the condensed consolidated statements of financial condition above. Most assets in the table below include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities exclude amounts where creditors or beneficial interest holders have recourse to the general credit of the Company.

	September 30, 2025	December 31, 2024
Assets
Cash and cash equivalents	$35,300	$23,875
Receivable portfolios, net	1,009,105	895,704
Other assets	3,972	3,699
Liabilities
Accounts payable and accrued liabilities	3,034	2,946
Borrowings	692,416	599,830
Other liabilities	2,986	887

Condensed Consolidated Statements of Income

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
Revenues
Portfolio revenue	$370,126	$328,119	$1,076,518	$965,901
Changes in recoveries	63,636	12,675	140,699	6,020
Total debt purchasing revenue	433,762	340,794	1,217,217	971,921
Servicing revenue	22,175	22,772	67,022	64,258
Other revenues	4,416	3,505	11,011	14,563
Total revenues	460,353	367,071	1,295,250	1,050,742
Operating expenses
Salaries and employee benefits	117,118	107,502	340,788	318,294
Cost of legal collections	80,010	67,339	227,672	190,309
General and administrative expenses	39,220	38,808	121,565	111,828
Other operating expenses	37,056	31,804	108,298	93,016
Collection agency commissions	6,601	7,370	21,848	22,308
Depreciation and amortization	7,170	8,158	21,825	23,467
Total operating expenses	287,175	260,981	841,996	759,222
Income from operations	173,178	106,090	453,254	291,520
Other expense
Interest expense	(74,242)	(66,906)	(218,715)	(184,047)
Other income	929	1,578	3,802	6,291
Total other expense	(73,313)	(65,328)	(214,913)	(177,756)
Income before income taxes	99,865	40,762	238,341	113,764
Provision for income taxes	(25,205)	(10,119)	(58,164)	(27,701)
Net income	$74,660	$30,643	$180,177	$86,063
Earnings per share:
Basic	$3.22	$1.28	$7.66	$3.61
Diluted	$3.17	$1.26	$7.57	$3.54
Weighted average shares outstanding:
Basic	23,222	23,912	23,534	23,859
Diluted	23,520	24,407	23,789	24,324

Condensed Consolidated Statements of Cash Flows

(Unaudited, In Thousands)

	Nine Months Ended September 30,
	2025	2024
Operating activities:
Net income	$180,177	$86,063
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,825	23,467
Other non-cash interest expense, net	11,151	12,379
Stock-based compensation expense	13,048	11,731
Changes in recoveries	(140,699)	(6,020)
Other, net	7,231	9,195
Changes in operating assets and liabilities
Other assets	17,316	(35,277)
Accounts payable, accrued liabilities and other liabilities	26,339	31,086
Net cash provided by operating activities	136,388	132,624
Investing activities:
Purchases of receivable portfolios, net of put-backs	(1,066,223)	(844,868)
Collections applied to receivable portfolios	846,292	641,982
Purchases of property and equipment	(19,338)	(20,451)
Other, net	23,720	47,632
Net cash used in investing activities	(215,549)	(175,705)
Financing activities:
Payment of loan and debt refinancing costs	(3,892)	(18,164)
Proceeds from credit facilities	812,751	458,844
Repayment of credit facilities	(699,452)	(1,292,578)
Proceeds from senior secured notes	-	1,000,000
Repayment of senior secured notes	-	(29,310)
Repurchase and retirement of common stock	(35,329)	-
Other, net	(23,522)	11,695
Net cash provided by financing activities	50,556	130,487
Net (decrease) increase in cash and cash equivalents	(28,605)	87,406
Effect of exchange rate changes on cash and cash equivalents	1,228	1,583
Cash and cash equivalents, beginning of period	199,865	158,364
Cash and cash equivalents, end of period	$172,488	$247,353
Supplemental disclosures of cash flow information:
Cash paid for interest	$172,756	$138,951
Cash paid for income taxes, net of refunds	40,174	61,255
Supplemental schedule of non-cash investing activities:
Receivable portfolios transferred to real estate owned	$2,960	$4,617

Supplemental Financial Information

Reconciliation of Non-GAAP Metrics

Adjusted EBITDA

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, unaudited)		2025		2024		2025		2024
GAAP net income, as reported	$74,660		$30,643		$180,177		$86,063
Adjustments:
Interest expense	74,242		66,906		218,715		184,047
Interest income	(1,027)		(1,909)		(3,935)		(5,037)
Provision for income taxes	25,205		10,119		58,164		27,701
Depreciation and amortization	7,170		8,158		21,825		23,467
Stock-based compensation expense	4,341		3,737		13,048		11,731
Net loss (gain) on derivative instruments	-		7		-		(267)
Acquisition, integration and restructuring related expenses	165		162		1,455		4,364
Adjusted EBITDA	$184,756		$117,823		$489,449		$332,069
Collections applied to principal balance	$236,293		$223,292		$725,270		$666,766

(1)Amount represents gain or loss recognized on derivative instruments that are not designated as hedging instruments or gain or loss recognized on derivative instruments upon dedesignation of hedge relationships. We adjust for this amount because we believe the gain or loss on derivative contracts is not indicative of ongoing operations.

(2)Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore, adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.

(3)Amount represents (a) gross collections from receivable portfolios less (b) debt purchasing revenue, plus (c) proceeds applied to basis from sales of real estate owned (“REO”) assets and, when applicable, other receivable portfolios. A reconciliation of “collections applied to receivable portfolios, net” to “collections applied to principal balance” is available in the Form 10-Q for the period ending September 30, 2025.

Contacts
Bruce Thomas
Vice President, Global Investor Relations bruce.thomas@encorecapital.com
SOURCE: Encore Capital Group, Inc.