ENCORE CAPITAL GROUP INC Quarterly Report Released - Here’s What You Should Know

Encore Capital Group, Inc. Q3 2025 Investor Summary

Financial Performance

• Revenues: Q3 2025 total revenues were $460.4 million, up 25% from $367.1 million in Q3 2024. For the nine months ended September 30, 2025, total revenues were $1.30 billion, up 23% from $1.05 billion in the prior year period.
• Net Income: Q3 2025 net income was $74.7 million (up from $30.6 million Q3 2024). Nine months 2025 net income was $180.2 million, up 109% from $86.1 million.
• EPS: Diluted earnings per share for Q3 2025 were $3.17 (vs. $1.26 in Q3 2024). Nine-month diluted EPS was $7.57 (vs. $3.54 in 2024).
• Adjusted EBITDA: Q3 2025 adjusted EBITDA was $184.8 million (up from $117.8 million in Q3 2024).

Key Operating Metrics

• Receivable Purchases: Q3 2025 purchases totaled $346.1 million ($1.08 billion YTD), up from $282.5 million ($856.9 million YTD) in 2024.
  • US: $261.1 million (Q3), $894.8 million (YTD)
  • Europe: $84.9 million (Q3), $186.2 million (YTD)
• Collections: Q3 2025 collections from purchased receivables were $663.0 million (+20.5% YoY). Nine-month collections were $1.92 billion (+19.6% YoY).
• Receivable Portfolios (Net): $4.27 billion at September 30, 2025 (vs. $3.78 billion December 31, 2024).
• Estimated Remaining Collections (ERC): $8.10 billion (84 months ERC at September 30, 2025).

Margins and Expenses

• Operating Margin: Income from operations was 37.6% of revenues for Q3 2025 (up from 28.9% in 2024).
• Operating Expenses: Q3 expenses rose 10% YoY to $287.2 million, due mainly to increased legal collection costs (+18.8%) and salaries/benefits (+8.9%).
• Interest Expense: Q3 2025 interest expense was $74.2 million, up 11% due to higher average debt balances.

Balance Sheet and Liquidity

• Total Assets: $5.26 billion at September 30, 2025 (up from $4.79 billion at December 31, 2024).
• Cash and Equivalents: $172.5 million.
• Borrowings: $3.93 billion at quarter end.
• Stockholders’ Equity: $952.9 million (up from $767.3 million at year-end).
• Net Cash: Operating activities provided $136.4 million YTD. Net cash used in investing was $215.5 million (mostly for portfolio purchases). Financing activities provided $50.6 million, boosted by net borrowings.

Capital Activity

• $243.2 million of stock repurchased in Q3 2025 under the $300 million buyback program, at an average price of $41.18.
• October 2025: Issued $500 million of 6.625% Senior Secured Notes due April 2031.
• Settled $100 million of 2025 Convertible Notes in cash for $106.2 million on maturity.

Geographic & Segment Data

• US revenues: $335.1 million (Q3); $917.3 million (nine months)
• Europe revenues: $123.5 million (Q3); $373.1 million (nine months)
• Other geographies: minor contribution

Risks & Regulatory

• No material change in legal or regulatory risk factors from prior disclosures.
• Litigation/regulatory matters ongoing, but none deemed material this quarter.
• The company is in compliance with all debt covenants.
• Global/US economic conditions, delinquency trends, and interest rate changes remain key risks.
• Foreign currency effects and interest rate hedges impact results; $19.0 million liability on interest rate swaps as of quarter end.

Other Notes

• Share count: 22.3 million shares outstanding as of October 29, 2025.
• Tax: Effective tax rate 25.2% (Q3); 24.4% (nine months).
• Goodwill: $535.6 million with no impairments this quarter.
• No major changes in control, accounting policies, or internal controls.

Investor Takeaway:
Encore delivered strong year-over-year growth in revenue, collections, and profitability, driven by robust portfolio purchasing and improved recoveries in both US and Europe. The company remains well-capitalized and liquid, but continues to face macroeconomic, regulatory, and rate-related risks. The stock buyback and refinance actions may support further shareholder value.

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