Companies: 10,793     total market cap: $134.237 T
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Encore Capital Group
ECPG
#5125
Rank
$1.58 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$71.14
Share price
0.38%
Change (1 day)
127.14%
Change (1 year)
๐Ÿ’ณ Financial services
Categories
  1. Encore Capital Group
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q2

Encore Capital Group - 10-Q quarterly report FY2025 Q2


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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________________________________________________
FORM 10-Q
(Mark One)
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025 or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________.
COMMISSION FILE NUMBER: 000-26489
ENCORE CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware48-1090909
(State or other jurisdiction of incorporation or organization)
(IRS Employer
Identification No.)
350 Camino De La Reina, Suite 100
San Diego, California 92108
(Address of principal executive offices, including zip code)
(877) 345-3002
(Registrant’s telephone number, including area code)
(Not Applicable)
(Former name, former address and former fiscal year, if changed since last report)
_______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par Value Per ShareECPG
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at July 30, 2025
Common Stock, $0.01 par value23,011,773 shares

Table of Contents
ENCORE CAPITAL GROUP, INC.
INDEX TO FORM 10-Q
 
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Table of Contents
PART I – FINANCIAL INFORMATION
Item 1—Condensed Consolidated Financial Statements (Unaudited)
ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Financial Condition
(In Thousands, Except Par Value Amounts)
(Unaudited)
June 30,
2025		December 31,
2024
Assets
Cash and cash equivalents$172,896 $199,865 
Receivable portfolios, net
4,184,780 3,776,369 
Property and equipment, net84,055 80,597 
Other assets206,743 225,090 
Goodwill542,912 507,808 
Total assets
$5,191,386 $4,789,729 
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities$214,663 $233,545 
Borrowings3,965,465 3,672,762 
Other liabilities115,287 116,091 
Total liabilities
4,295,415 4,022,398 
Commitments and contingencies (Note 11)
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, 23,095 and 23,691 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively
231 237 
Additional paid-in capital— 19,297 
Accumulated earnings1,015,221 909,927 
Accumulated other comprehensive loss(119,481)(162,130)
Total stockholders’ equity895,971 767,331 
Total liabilities and stockholders’ equity$5,191,386 $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. See “Note 8: Variable Interest Entities” for additional information on the Company’s VIEs.
June 30,
2025		December 31,
2024
Assets
Cash and cash equivalents$36,046 $23,875 
Receivable portfolios, net
942,735 895,704 
Other assets3,682 3,699 
Liabilities
Accounts payable and accrued liabilities2,827 2,946 
Borrowings647,953 599,830 
Other liabilities3,144 887 
See accompanying notes to condensed consolidated financial statements
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
Revenues
Portfolio revenue
$361,174 $321,930 $706,392 $637,782 
Changes in recoveries55,599 5,754 77,063 (6,655)
Total debt purchasing revenue416,773 327,684 783,455 631,127 
Servicing revenue22,300 21,107 44,847 41,486 
Other revenues3,049 6,494 6,595 11,058 
Total revenues442,122 355,285 834,897 683,671 
Operating expenses
Salaries and employee benefits117,738 106,608 223,670 210,792 
Cost of legal collections79,649 64,249 147,662 122,970 
General and administrative expenses41,327 36,779 82,345 73,020 
Other operating expenses36,990 30,845 71,242 61,212 
Collection agency commissions8,374 7,504 15,247 14,938 
Depreciation and amortization7,311 7,461 14,655 15,309 
Total operating expenses291,389 253,446 554,821 498,241 
Income from operations150,733 101,839 280,076 185,430 
Other expense
Interest expense(73,943)(61,376)(144,473)(117,141)
Other income
1,226 2,047 2,873 4,713 
Total other expense(72,717)(59,329)(141,600)(112,428)
Income before income taxes78,016 42,510 138,476 73,002 
Provision for income taxes(19,295)(10,329)(32,959)(17,582)
Net income $58,721 $32,181 $105,517 $55,420 
Earnings per share:
Basic$2.50 $1.35 $4.45 $2.33 
Diluted$2.49 $1.34 $4.41 $2.28 
Weighted average shares outstanding:
Basic23,507 23,883 23,692 23,834 
Diluted23,578 24,097 23,926 24,282 

See accompanying notes to condensed consolidated financial statements
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited, In Thousands)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
Net income$58,721 $32,181 $105,517 $55,420 
Other comprehensive income (loss), net of tax:
Change in unrealized (loss) gain on derivative instruments:
Unrealized (loss) gain on derivative instruments
(3,775)(731)(4,840)4,744 
Income tax effect922 (1,088)1,111 (3,773)
Unrealized (loss) gain on derivative instruments, net of tax
(2,853)(1,819)(3,729)971 
Change in foreign currency translation:
Unrealized gain (loss) on foreign currency translation
30,855 (1,146)46,192 (7,292)
Income tax effect59 443 186 283 
Unrealized gain (loss) on foreign currency translation, net of tax
30,914 (703)46,378 (7,009)
Other comprehensive income (loss), net of tax:
28,061 (2,522)42,649 (6,038)
Comprehensive income$86,782 $29,659 $148,166 $49,382 
See accompanying notes to condensed consolidated financial statements
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Equity
(Unaudited, In Thousands)

Three Months Ended June 30, 2025
Common StockAdditional Paid-In CapitalAccumulated Earnings
Accumulated Other Comprehensive (Loss) Income
Total Equity
SharesPar
Balance as of March 31, 202523,510 $235 $9,645 $956,723 $(147,542)$819,061 
Net income— — — 58,721 — 58,721 
Other comprehensive income, net of tax
— — — — 28,061 28,061 
Issuance of share-based awards, net of shares withheld for employee taxes
3 — 56 — — 56 
Repurchase and retirement of common stock
(418)(4)(14,984)(223)— (15,211)
Stock-based compensation— — 5,283 — — 5,283 
Balance as of June 30, 202523,095 $231 $— $1,015,221 $(119,481)$895,971 

Three Months Ended June 30, 2024
Common StockAdditional Paid-In CapitalAccumulated EarningsAccumulated Other Comprehensive LossTotal Equity
SharesPar
Balance as of March 31, 202423,687 $237 $8,648 $1,072,410 $(127,436)$953,859 
Net income— — — 32,181 — 32,181 
Other comprehensive loss, net of tax— — — — (2,522)(2,522)
Issuance of share-based awards, net of shares withheld for employee taxes
4 — (28)— — (28)
Stock-based compensation
— — 4,637 — — 4,637 
Balance as of June 30, 202423,691 $237 $13,257 $1,104,591 $(129,958)$988,127 

Six Months Ended June 30, 2025
Common StockAdditional Paid-In CapitalAccumulated Earnings
Accumulated Other Comprehensive (Loss) Income
Total Equity
SharesPar
Balance as of December 31, 2024
23,691 $237 $19,297 $909,927 $(162,130)$767,331 
Net income— — — 105,517 — 105,517 
Other comprehensive income, net of tax
— — — — 42,649 42,649 
Issuance of share-based awards, net of shares withheld for employee taxes
111 1 (3,019)— — (3,018)
Repurchase and retirement of common stock
(707)(7)(24,985)(223)— (25,215)
Stock-based compensation— — 8,707 — — 8,707 
Balance as of June 30, 202523,095 $231 $— $1,015,221 $(119,481)$895,971 




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Six Months Ended June 30, 2024
Common StockAdditional Paid-In Capital
Accumulated Earnings
Accumulated Other Comprehensive LossTotal Equity
SharesPar
Balance as of December 31, 2023
23,545 $235 $11,052 $1,049,171 $(123,920)$936,538 
Net income— — — 55,420 — 55,420 
Other comprehensive loss, net of tax
— — — — (6,038)(6,038)
Issuance of share-based awards, net of shares withheld for employee taxes
146 2 (5,789)— — (5,787)
Stock-based compensation
— — 7,994 — — 7,994 
Balance as of June 30, 202423,691 $237 $13,257 $1,104,591 $(129,958)$988,127 


See accompanying notes to condensed consolidated financial statements

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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, In Thousands)
 Six Months Ended June 30,
 20252024
Operating activities:
Net income
$105,517 $55,420 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization14,655 15,309 
Other non-cash interest expense, net7,211 7,941 
Stock-based compensation expense8,707 7,994 
Changes in recoveries(77,063)6,655 
Other, net7,045 2,547 
Changes in operating assets and liabilities
Other assets14,897 (25,896)
Accounts payable, accrued liabilities and other liabilities(26,162)16,727 
Net cash provided by operating activities54,807 86,697 
Investing activities:
Purchases of receivable portfolios, net of put-backs
(725,391)(566,960)
Collections applied to receivable portfolios
553,400 419,833 
Purchases of property and equipment(13,320)(14,251)
Other, net15,659 29,492 
Net cash used in investing activities(169,652)(131,886)
Financing activities:
Payment of loan and debt refinancing costs(2,491)(17,201)
Proceeds from credit facilities549,605 393,455 
Repayment of credit facilities(418,463)(1,234,189)
Proceeds from senior secured notes— 1,000,000 
Repayment of senior secured notes— (19,540)
Repurchase and retirement of common stock(25,215)— 
Other, net(16,206)16,967 
Net cash provided by financing activities87,230 139,492 
Net (decrease) increase in cash and cash equivalents(27,615)94,303 
Effect of exchange rate changes on cash and cash equivalents646 (2,046)
Cash and cash equivalents, beginning of period199,865 158,364 
Cash and cash equivalents, end of period$172,896 $250,621 
Supplemental disclosures of cash flow information:
Cash paid for interest$133,830 $80,945 
Cash paid for income taxes, net of refunds
29,278 42,365 
Supplemental schedule of non-cash investing activities:
Receivable portfolios transferred to real estate owned
$2,011 $3,098 
    

See accompanying notes to condensed consolidated financial statements
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ENCORE CAPITAL GROUP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies
Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.
Through Midland Credit Management, Inc. and its domestic affiliates (collectively, “MCM”), the Company is a market leader in portfolio purchasing and recovery in the United States. Through Cabot Credit Management Limited (“CCM”) and its subsidiaries and European affiliates (collectively, “Cabot”), the Company is one of the largest credit management services providers in Europe and the United Kingdom. These are the Company’s primary operations.
The Company also has investments and operations in Latin America and Asia-Pacific, which the Company refers to as “LAAP.”
Financial Statement Preparation and Presentation
The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).
In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.
The preparation of condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed financial statements and the accompanying notes. Actual results could materially differ from those estimates.
Basis of Consolidation
The condensed consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities (“VIEs”) for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 8: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation.
Translation of Foreign Currencies
The condensed financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations.
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Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. This ASU, once adopted, will likely result in additional required disclosures in the Company’s consolidated financial statements for the year ending December 31, 2025.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses: Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim periods with fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new standard is effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the potential impact, but it does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.
Note 2: Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period.
The number of shares used to calculate the diluted earnings per share is computed by using the basic weighted-average number of common shares outstanding plus any potentially dilutive common shares outstanding during the period, except when their effect is anti-dilutive. Dilutive potential common shares include outstanding stock based awards, and the dilutive effect of the convertible senior notes, if applicable.
As announced in May 2021, the Company’s Board of Directors has approved a $300.0 million share repurchase program. During the three and six months ended June 30, 2025, the Company repurchased 418,499 and 707,924 shares of common stock for approximately $15.0 million and $25.0 million, respectively, under the share repurchase program. The Company did not make any repurchases under the share repurchase program during the three and six months ended June 30, 2024. The Company’s practice is to retire the shares repurchased.
A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts):
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
Net income $58,721 $32,181 $105,517 $55,420 
Shares:
Total weighted-average basic shares outstanding23,507 23,883 23,692 23,834 
Dilutive effect of stock-based awards71 19 121 109 
Dilutive effect of convertible senior notes
— 195 113 339 
Total weighted-average dilutive shares outstanding23,578 24,097 23,926 24,282 
Basic earnings per share$2.50 $1.35 $4.45 $2.33 
Diluted earnings per share$2.49 $1.34 $4.41 $2.28 

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Note 3: Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level:
•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions.
Financial Instruments Required To Be Carried At Fair Value
Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
 Fair Value Measurements as of June 30, 2025
 Level 1Level 2Level 3Total
Assets
Interest rate cap contracts$— $503 $— $503 
Liabilities
Interest rate swap agreements
— (22,659)— (22,659)
 Fair Value Measurements as of December 31, 2024
 Level 1Level 2Level 3Total
Assets
Interest rate cap contracts$— $252 $— $252 
Liabilities
Interest rate swap agreements— (18,360)— (18,360)
Derivative Contracts:
The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using models that project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies.
Non-Recurring Fair Value Measurement:
Certain assets are measured at fair value on a nonrecurring basis. Goodwill and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair values are determined using various valuation techniques under Level 3 fair value hierarchy. REO assets are classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined at the time of initial recognition and in each reporting period using Level 3 measurements based on appraised values using market comparables. The fair value estimate of the assets held for sale was approximately $30.1 million and $38.1 million as of June 30, 2025 and December 31, 2024, respectively.
Financial Instruments Not Required To Be Carried At Fair Value
The table below summarizes fair value estimates for the Company's financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company.
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The carrying amounts in the following table are included in the condensed consolidated statements of financial condition as of June 30, 2025 and December 31, 2024 (in thousands):
 June 30, 2025December 31, 2024
 
Fair Value Level
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Financial Assets
Cash and cash equivalents
Level 1
$172,896 $172,896 $199,865 $199,865 
Receivable portfolios, net
Level 3
4,184,780 4,469,118 3,776,369 4,052,645 
Other assets(2)
Level 2
115,064 115,064 128,674 128,674 
Financial Liabilities
Accounts payable and accrued liabilities
Level 2
214,663 214,663 233,545 233,545 
Global senior secured revolving credit facility
Level 2
999,678 999,678 865,365 865,365 
Senior secured notes(1)
Level 2
1,947,479 2,012,022 1,843,386 1,893,367 
Convertible senior notes due October 2025
Level 2
100,000 104,515 100,000 129,100 
Convertible senior notes due March 2029
Level 2
230,000 217,677 230,000 232,611 
Cabot securitisation senior facility
Level 2
350,141 350,141 319,137 319,137 
U.S. facility
Level 2
300,000 300,000 283,500 283,500 
Other borrowings
Level 2
67,710 67,710 64,904 64,904 
Other liabilities(2)
Level 2
92,628 92,628 97,731 97,731 
_______________________
(1)Carrying amount represents historical cost, adjusted for any related debt discount.
(2)Only includes financial instruments not required to be carried at fair value. Derivative instruments, which are required to be carried at fair value are excluded.
Receivable Portfolios:
The fair value of receivable portfolios is measured by discounting the estimated future cash flows generated by the Company’s proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business.
Borrowings:
The Company’s convertible notes and senior secured notes are carried at historical cost, adjusted for the applicable debt discount. The fair value estimate for the convertible notes incorporates quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. The fair value of the senior secured notes is estimated using borrowing rates with similar terms, maturities, and credit ratings.
The carrying value of the Company’s senior secured revolving credit facility, securitisation senior facility, U.S. facility, and other borrowings approximates fair value due to the use of current market rates that are repriced frequently.
Others:
The Company’s cash and cash equivalents, certain other assets, accounts payable and accrued liabilities, and other liabilities approximate their fair values due to their short-term nature.
Note 4: Derivatives and Hedging Instruments
The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment.
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The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands):
 June 30, 2025December 31, 2024
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Interest rate cap contractsOther assets$503 Other assets$252 
Interest rate swap agreementsOther liabilities(22,659)Other liabilities(18,360)
Derivatives Designated as Hedging Instruments
The Company may periodically enter into interest rate swap agreements and interest rate cap contracts to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. Under the cap contracts, the Company receives floating interest rate payments and makes interest payments based on capped interest rates. The Company designates its interest rate swap and interest rate cap instruments as cash flow hedges at inception.
From time to time, the Company uses cross-currency swap agreements to manage foreign currency exchange risk by converting fixed-rate Euro-denominated borrowings and fixed-rate GBP-denominated borrowings including periodic interest payments and the payment of principal at maturity to fixed-rate USD debt. The Company designates its cross-currency swap agreements as fair value hedges at inception.
The following tables summarize the terms of the derivative instruments designated as hedging instruments as recorded in the Company’s condensed consolidated statements of financial condition:

June 30, 2025
Effective dateMaturity DateHedge DesignationNotional AmountReceive Floating Rate Index
Interest rate cap contracts
2024 CapSeptember 2024September 2026Cash flow hedge$350.1 millionSONIA
2025 Cap
September 2026January 2028Cash flow hedge$350.1 million
SONIA
Interest rate swap agreements
2023 Euro IR SwapOctober 2023January 2028Cash flow hedge$117.8 million3-month EURIBOR
2024 Euro IR SwapsJune 2024January 2028Cash flow hedge$488.9 million3-month EURIBOR
2023 SOFR IR Swaps
November 2023October 2026
Cash flow hedge
$150.0 million
1-month SOFR CME Term
2025 SOFR IR Swaps - U.S.Facility
January 2025October 2027Cash flow hedge$125.0 million1-month SOFR CME Term
2025 SOFR IR Swaps - Global Senior Facility
April 2025April 2027Cash flow hedge$150.0 million1-month SOFR CME Term

December 31, 2024
Effective dateMaturity DateHedge DesignationNotional AmountReceive Floating Rate Index
Interest rate cap contracts
2024 CapSeptember 2024September 2026Cash flow hedge$319.1 millionSONIA
Interest rate swap agreements
2023 Euro IR SwapOctober 2023January 2028Cash flow hedge$103.5 million3-month EURIBOR
2024 Euro IR Swaps
June 2024January 2028Cash flow hedge$429.6 million3-month EURIBOR
2023 SOFR IR SwapsNovember 2023October 2026Cash flow hedge$150.0 million1-month SOFR CME Term

The Company expects to reclassify approximately $10.5 million of net derivative loss from OCI into earnings relating to its cash flow designated derivatives within the next 12 months. This amount will vary due to fluctuations in benchmark interest rates.

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The following tables summarize the effects of derivatives designated as hedging instruments in the Company’s condensed consolidated financial statements (in thousands):
Derivatives Designated as Hedging Instruments
(Loss) Gain Recognized in OCI
Location of Gain (Loss) Reclassified from OCI into Income (Loss)
(Loss) Gain Reclassified from OCI into Income
Three Months Ended June 30,Three Months Ended June 30,
2025202420252024
Interest rate swap agreements$(4,609)$6,199 Interest expense$(1,043)$655 
Interest rate cap contracts(623)(5,777)Interest expense(414)(664)
Cross-currency swap agreements— (4,289)Interest expense— (1,757)
Other expense— (1,370)
Derivatives Designated as Hedging Instruments
(Loss) Gain Recognized in OCI
Location of Gain (Loss) Reclassified from OCI into Income (Loss)
(Loss) Gain Reclassified from OCI into Income
Six Months Ended June 30,Six Months Ended June 30,
2025202420252024
Interest rate swap agreements$(5,809)$17,273 Interest expense$(1,510)$1,195 
Interest rate cap contracts(1,319)(11,828)Interest expense(778)(1,376)
Cross-currency swap agreements— (17,299)Interest expense— (3,537)
Other expense— (12,880)
Derivatives Not Designated as Hedging Instruments
From time to time, the Company enters into currency exchange forward contracts to reduce the effects of currency exchange rate fluctuations. These derivative contracts generally mature within one to six months and are not designated as hedge instruments for accounting purposes. The gains or losses on these unhedged derivative contracts are recognized in other income or expense based on the changes in fair value. The Company did not have any derivatives that were not designated as hedging instruments as of June 30, 2025 and December 31, 2024, respectively.
The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s condensed consolidated statements of income during the periods presented (in thousands):
Derivatives Not Designated as Hedging Instruments
Location of Gain Recognized in Income on Derivative
Amount of Gain Recognized in Income
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Interest rate cap contract
Other income
$— $79 $— $274 
Foreign currency exchange contract
Other income— 873 — 873 
Note 5: Receivable Portfolios, Net
The Company’s purchased portfolios of loans are grossed-up to their face value with an offsetting allowance and noncredit discount allocated to the individual receivables as the unit of account is at the individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company applies its charge-off policy and fully writes-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company then records a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which ultimately equals the amount paid for a portfolio purchase and presented as “Receivable portfolios, net” in the Company’s condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. The amount of the negative allowance (i.e., receivable portfolios) will not exceed the total amortized cost basis of the loans written-off.
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Receivable portfolio purchases are aggregated into pools based on similar risk characteristics. Examples of risk characteristics include financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic location. Once a pool is established, the portfolios will remain in the designated pool unless the underlying risk characteristics change. The purchase EIR of a pool will not change over the life of the pool even if expected future cash flows change.
Revenue is recognized for each static pool over the economic life of the pool. Debt purchasing revenue includes two components:
(1)     Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the portfolio balance multiplied by the EIR) and also includes all revenue from zero basis portfolio (“ZBA”) collections, and
(2)     Changes in recoveries, which includes
(a)     Recoveries above or below forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and
(b)     Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases).
The Company measures expected future recoveries based on historical experience, current conditions, reasonable and supportable forecasts, and other quantitative and qualitative factors. Factors that may change the expected future recoveries may include both internal as well as external factors. Internal factors include operational performance, such as capacity and the productivity of the Company’s collection staff. External factors that may have an impact on the Company’s collections include new laws or regulations, new interpretations of existing laws or regulations, and macroeconomic conditions.
Receivable portfolios, net consists of the following as of the dates presented (in thousands):
June 30, 2025December 31, 2024
Amortized cost$— $— 
Negative allowance for expected recoveries
4,184,780 3,776,369 
Balance, end of period$4,184,780 $3,776,369 
The following table summarizes the changes in the balance of receivable portfolios, net during the periods presented (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Balance, beginning of period$3,952,531 $3,531,387 $3,776,369 $3,468,432 
Negative allowance for expected recoveries - portfolio purchases (1)
367,099 278,692 734,950 574,406 
Collections applied to receivable portfolios, net (2)
(293,811)(224,798)(553,400)(419,833)
Changes in recoveries (3)
55,599 5,754 77,063 (6,655)
Put-backs and recalls
(4,420)(3,099)(9,559)(7,446)
Disposals and transfers to real estate owned(971)(1,053)(2,011)(3,098)
Foreign currency translation adjustments108,753 (3,561)161,368 (22,484)
Balance, end of period$4,184,780 $3,583,322 $4,184,780 $3,583,322 
_______________________
(1)The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented:
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Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Purchase price$367,099 $278,692 $734,950 $574,406 
Allowance for credit losses1,125,478 649,642 2,080,137 1,294,156 
Amortized cost1,492,577 928,334 2,815,087 1,868,562 
Noncredit discount1,942,657 1,211,961 3,601,923 2,467,754 
Face value3,435,234 2,140,295 6,417,010 4,336,316 
Write-off of amortized cost(1,492,577)(928,334)(2,815,087)(1,868,562)
Write-off of noncredit discount(1,942,657)(1,211,961)(3,601,923)(2,467,754)
Negative allowance367,099 278,692 734,950 574,406 
Negative allowance for expected recoveries - portfolio purchases
$367,099 $278,692 $734,950 $574,406 
(2)Collections applied to receivable portfolios, net, is calculated as follows during the periods presented:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Cash Collections$654,985 $546,728 $1,259,792 $1,057,615 
Less - amounts classified to portfolio revenue
(361,174)(321,930)(706,392)(637,782)
Collections applied to receivable portfolios, net
$293,811 $224,798 $553,400 $419,833 
(3)Changes in recoveries is calculated as follows during the periods presented, where recoveries include cash collections, put-backs and recalls, and other cash-based adjustments:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Recoveries above forecast
$52,263 $27,443 $79,215 $28,296 
Changes in expected future recoveries3,336 (21,689)(2,152)(34,951)
Changes in recoveries$55,599 $5,754 $77,063 $(6,655)
Recoveries above or below forecast represent over and under-performance in the reporting period, respectively. Collections during the three and six months ended June 30, 2025, over-performed the forecasted collections by approximately $52.3 million and $79.2 million, respectively. Collections during the three and six months ended June 30, 2024, over-performed the forecasted collections by approximately $27.4 million and $28.3 million, respectively.
When reassessing the forecasts of expected lifetime recoveries during the three months ended June 30, 2025, management considered, among other factors, historical and current collection performance, changes in consumer behavior, and the macroeconomic environment. The updated forecast resulted in changes in the timing and amount of total estimated remaining collections which in turn, when discounted to present value, resulted in a net positive change in expected future recoveries of approximately $3.3 million during the three months ended June 30, 2025. This net positive change, combined with the net negative change recorded in the first quarter, resulted in a net negative change in expected future recoveries of approximately $2.2 million during the six months ended June 30, 2025. During the three and six months ended June 30, 2024, the Company recorded approximately $21.7 million and $35.0 million in net negative change in expected future recoveries, respectively.
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Note 6: Other Assets
Other assets consist of the following (in thousands):
June 30,
2025		December 31,
2024
Operating lease right-of-use assets$61,054 $58,089 
Prepaid expenses34,874 35,564 
Real estate owned30,122 38,075 
Other financial receivables18,455 18,952 
Service fee receivables13,408 10,914 
Income tax deposits8,396 10,438 
Deferred tax assets6,349 8,418 
Other34,085 44,640 
Total$206,743 $225,090 
Note 7: Borrowings
The Company is in compliance in all material respects with all covenants under its financing arrangements as of June 30, 2025. The components of the Company’s consolidated borrowings were as follows (in thousands):
June 30,
2025		December 31,
2024
Global senior secured revolving credit facility$999,678 $865,365 
Senior secured notes1,950,022 1,846,047 
Convertible senior notes
330,000 330,000 
Cabot securitisation senior facility350,141 319,137 
U.S. facility
300,000 283,500 
Other67,710 64,904 
Finance lease liabilities996 1,065 
3,998,547 3,710,018 
Less: debt discount and issuance costs, net of amortization(33,082)(37,256)
Total$3,965,465 $3,672,762 
Encore is the parent of the restricted group for the Global Senior Facility and the Senior Secured Notes, both of which are guaranteed by the same group of material Encore subsidiaries and secured by the same collateral, which represents substantially all of the assets of those subsidiaries.
Global Senior Secured Revolving Credit Facility
In September 2020, the Company entered into a multi-currency senior secured revolving credit facility agreement (as amended and restated, the “Global Senior Facility”). On May 22, 2025, the Company issued an additional commitment increase notice and entered into an amendment letter that amended and supplemented the Global Senior Facility to, among other things, (1) reflect a $190.0 million upsize of the facility from $1,295.0 million to $1,485.0 million, and (2) extend the termination date of the facility from September 2028 to September 2029 except for a $69.5 million tranche that terminates in September 2028. The amendment was accounted for as a debt modification. As of June 30, 2025, the Global Senior Facility included the following key provisions:
•Interest at Term SOFR (or EURIBOR for any loan drawn in Euro or a rate based on SONIA for any loan drawn in British Pound), with a Term SOFR (or EURIBOR or SONIA) floor of 0.00%, plus a margin of 2.25%, plus in the case of Term SOFR borrowings, a credit adjustment spread of 0.10%;
•An unused commitment fee of 0.40% per annum, payable quarterly in arrears;
•A restrictive covenant that limits the LTV Ratio (defined in the Global Senior Facility) to 0.75 in the event that the Global Senior Facility is more than 20% utilized;
•A restrictive covenant that limits the SSRCF LTV Ratio (defined in the Global Senior Facility) to 0.275;
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•A restrictive covenant that requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Global Senior Facility) of at least 2.0;
•Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and
•Standard events of default which, upon occurrence, may permit the lenders to terminate the Global Senior Facility and declare all amounts outstanding to be immediately due and payable.
The Global Senior Facility is secured by substantially all of the assets of the Company and the guarantors. Pursuant to the terms of an intercreditor agreement entered into with respect to the relative positions of (1) the Global Senior Facility and any super priority hedging liabilities (collectively, “Super Senior Liabilities”) and (2) the Senior Secured Notes, Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.
As of June 30, 2025, the outstanding borrowings under the Global Senior Facility were $999.7 million. The weighted average interest rate of the Global Senior Facility was 6.49% and 7.85% for the three months ended June 30, 2025 and 2024, respectively, and 6.52% and 7.88% for the six months ended June 30, 2025 and 2024, respectively. Available capacity under the Global Senior Facility, after taking into account applicable debt covenants, was approximately $397.2 million as of June 30, 2025.
Senior Secured Notes
The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):
June 30,
2025		December 31,
2024		Issue
Currency		Maturity DateInterest Payment DatesInterest Rate
Encore 2028 Notes
$343,276 $312,880 GBPJun 1, 2028Jun 1, Dec 14.250 %
Encore 2028 Floating Rate Notes
606,746 533,167 EURJan 15, 2028Jan 15, Apr 15, Jul 15, Oct 15
EURIBOR +4.250%(1)
Encore 2029 Notes
500,000 500,000 
USD
Apr 1, 2029
Apr 1, Oct 1
9.250 %
Encore 2030 Notes
500,000 500,000 USDMay 15, 2030
May 15, Nov 15
8.500 %
$1,950,022 $1,846,047 
_______________________
(1)Interest rate is based on three-month EURIBOR (subject to a 0% floor) plus 4.250% per annum, resets quarterly.
The Senior Secured Notes are secured by the same collateral as the Global Senior Facility. The guarantees provided in respect of the Senior Secured Notes are pari passu with the guarantee given in respect of the Global Senior Facility. Subject to the intercreditor agreement described above under the section “Global Senior Secured Revolving Credit Facility,” Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.
The 2028 Floating Rate Notes had a weighted average interest rate of 6.61% and 8.16% for the three months ended June 30, 2025 and 2024, respectively, and 6.85% and 8.18% for the six months ended June 30, 2025 and 2024, respectively.
Convertible Notes
The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible senior notes (the “Convertible Notes”) ($ in thousands):
June 30,
2025		December 31,
2024		Maturity DateInterest Payment DatesInterest Rate
2025 Convertible Notes$100,000 $100,000 Oct 1, 2025Apr 1, Oct 13.250 %
2029 Convertible Notes230,000 230,000 Mar 15, 2029Mar 15, Sep 154.000 %
$330,000 $330,000 
In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion prices of the Convertible Notes, the Company may enter into hedge programs that increase the effective conversion price for the Convertible Notes. In connection with the issuance of the 2029 Convertible Notes, the Company entered into privately
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negotiated capped call transactions that effectively raised the conversion price of the 2029 Convertible Notes from $65.89 to $82.69. These hedging instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification. The Company recorded the cost of the hedge instruments as a reduction in additional paid-in capital, and does not recognize subsequent changes in fair value of these financial instruments in its condensed consolidated financial statements. The Company did not hedge the 2025 Convertible Notes.
Certain key terms related to the convertible features as of June 30, 2025 are listed below ($ in thousands, except conversion price):
2025 Convertible Notes2029 Convertible Notes
Initial conversion price
$40.00 $65.89 
Closing stock price at date of issuance$32.00 $51.68 
Closing stock price dateSep 4, 2019Feb 28, 2023
Initial conversion rate (shares per $1,000 principal amount)
25.0000 15.1763 
Adjusted conversion rate (shares per $1,000 principal amount)(1)
25.1310 15.1763 
Adjusted conversion price(1)
$39.79 $65.89 
Adjusted effective conversion price(2)
$39.79 $82.69 
Excess of if-converted value compared to principal(3)
$— $— 
Conversion date
Jul 1, 2025Dec 15, 2028
_______________________
(1)Pursuant to the indenture for the Company’s 2025 Convertible Notes, the conversion rate for the 2025 Convertible Notes was adjusted upon the completion of the Company’s tender offer in December 2021.
(2)As discussed above, the Company maintains a hedge program that increases the effective conversion price for the 2029 Convertible Notes to $82.69.
(3)Represents the premium the Company would have to pay assuming the Convertible Notes were converted on June 30, 2025 using a hypothetical share price based on the closing stock price on June 30, 2025.
Prior to the close of business on the business day immediately preceding their respective free conversion dates (listed above), holders may convert their Convertible Notes only under certain circumstances set forth in the applicable indentures. On or after their respective free conversion dates until the close of business on the second scheduled trading day immediately preceding their respective maturity dates, holders may convert their notes at any time.
In the event of conversion, the Convertible Notes are convertible into cash up to the aggregate principal amount of the notes and the excess conversion premium, if any, may be settled in cash or shares of the Company’s common stock at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes.
The Company’s convertible notes are carried as a single liability, which reflects the principal amount of the convertible notes. Interest expense related to the Convertible Notes was $3.1 million for both the three months ended June 30, 2025 and the three months ended June 30, 2024, and $6.2 million for both the six months ended June 30, 2025 and the six months ended June 30, 2024.
In June 2025, in accordance with the indenture for the 2025 Convertible Notes, the Company irrevocably elected “combination settlement” with a specified dollar amount equal to $1,750 per $1,000 principal amount of the 2025 Convertible Notes for all conversions of the 2025 Convertible Notes that occur on or after July 1, 2025, the free conversion date. None of the 2025 Convertible Notes have been converted.
Cabot Securitisation Senior Facility
Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, has a senior facility for a committed amount of £255.0 million (the “Cabot Securitisation Senior Facility”). Funds drawn under the Cabot Securitisation Senior Facility bear interest at a rate per annum equal to SONIA plus a margin of 3.20% plus, for periods after January 18, 2028, a step up margin ranging from zero to 1.00%. The Cabot Securitisation Senior Facility matures in January 2030.
As of June 30, 2025, the outstanding borrowings under the Cabot Securitisation Senior Facility were £255.0 million (approximately $350.1 million based on an exchange rate of $1.00 to £0.73, the exchange rate as of June 30, 2025). The obligations of Cabot Securitisation under the Cabot Securitisation Senior Facility are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was approximately £295.8 million (approximately $406.2 million based on an exchange rate of $1.00 to £0.73, the exchange rate as of June 30, 2025) as of June 30, 2025. The weighted average interest rate of the
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Cabot Securitisation Senior Facility was 7.54% and 8.41% for the three months ended June 30, 2025 and 2024, respectively, and 7.66% and 8.41% for the six months ended June 30, 2025 and 2024, respectively.
Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.
U.S. Facility
As of June 30, 2025, an indirect subsidiary of Encore (“U.S. Financing Subsidiary”) had a facility for a committed amount of $300.0 million (as amended, the “U.S. Facility”) that was set to mature in October 2027. Funds drawn under the U.S. Facility bear interest at a rate per annum equal to Term SOFR plus a margin of 3.50%. On July 3, 2025, the U.S. Facility was amended to extend the maturity date from October 2027 to October 2028 and to increase the committed amount from $300.0 million to $450.0 million.
As of June 30, 2025, the outstanding borrowings under the U.S. Facility were $300.0 million. The obligations under the U.S. Facility are secured by first ranking security interests over all of U.S. Financing Subsidiary’s assets and rights. As of June 30, 2025, this included receivables acquired from MCM, the book value of which was approximately $531.6 million. The weighted average interest rate of the U.S. Facility was 7.82% and 8.82% for the three months ended June 30, 2025 and 2024, respectively, and 7.82% and 8.83% for the six months ended June 30, 2025 and 2024, respectively.
The U.S. Facility is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.
Note 8: Variable Interest Entities
A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive residual returns from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary.
As of June 30, 2025, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs including the ability to exercise discretion in the servicing of the financial assets and has the right to receive residual returns that could potentially be significant to the VIEs. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary.
Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE.
Note 9: Accumulated Other Comprehensive Loss
A summary of the Company’s changes in accumulated other comprehensive loss by component is presented below (in thousands):
Three Months Ended June 30, 2025
 DerivativesCurrency Translation Adjustments
Accumulated Other Comprehensive Loss
Balance at beginning of period$(17,244)$(130,298)$(147,542)
Other comprehensive (loss) income before reclassification
(5,232)30,855 25,623 
Reclassification1,457 — 1,457 
Tax effect922 59 981 
Balance at end of period$(20,097)$(99,384)$(119,481)
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Three Months Ended June 30, 2024
 DerivativesCurrency Translation Adjustments
Accumulated Other Comprehensive Loss
Balance at beginning of period$(303)$(127,133)$(127,436)
Other comprehensive loss before reclassification(3,867)(1,146)(5,013)
Reclassification3,136 — 3,136 
Tax effect(1,088)443 (645)
Balance at end of period$(2,122)$(127,836)$(129,958)
Six Months Ended June 30, 2025
 DerivativesCurrency Translation Adjustments
Accumulated Other Comprehensive Loss
Balance at beginning of period$(16,368)$(145,762)$(162,130)
Other comprehensive (loss) income before reclassification(7,128)46,192 39,064 
Reclassification2,288 — 2,288 
Tax effect1,111 186 1,297 
Balance at end of period$(20,097)$(99,384)$(119,481)
Six Months Ended June 30, 2024
 DerivativesCurrency Translation Adjustments
Accumulated Other Comprehensive Loss
Balance at beginning of period$(3,093)$(120,827)$(123,920)
Other comprehensive loss before reclassification(11,854)(7,292)(19,146)
Reclassification16,598 — 16,598 
Tax effect(3,773)283 (3,490)
Balance at end of period$(2,122)$(127,836)$(129,958)
Note 10: Income Taxes
The Company’s effective tax rate for the three and six months ended June 30, 2025 was 24.7% and 23.8%, respectively. For the three and six months ended June 30, 2024, the Company’s effective tax rate was 24.3% and 24.1%, respectively. For the three and six months ended June 30, 2025, the differences between the effective tax rate and the federal statutory rate were primarily due to state income taxes offset by other foreign adjustments. For the three and six months ended June 30, 2024, the differences between our effective tax rate and the federal statutory rate were primarily due to state income taxes.
Each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected amounts for the year. Since the Company operates in foreign countries with varying tax rates, the Company’s quarterly effective tax rate is dependent on the level of income or loss from international operations in the reporting period.
The Company’s subsidiary in Costa Rica is operating under a 100% tax holiday through August 13, 2026. The exemption under this tax holiday will decrease to 50% through August 13, 2030, and then 0% thereafter. The impact of the tax holiday in Costa Rica for the three and six months ended June 30, 2025 and 2024, was immaterial.
The Company is subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating uncertain tax positions and determining the provision for income taxes.
In December 2021, the Organization for Economic Cooperation and Development (“OECD”) enacted model rules for a new global minimum tax framework (“Pillar Two”). Under the Pillar Two rules, a company is required to determine a combined effective tax rate for each jurisdiction. If the jurisdictional effective tax rate determined under the Pillar Two rules is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%. In December 2022, European Union Member States adopted a directive implementing the Pillar Two rules requiring Member States to enact the directive into their national laws and these began to go into effect from January 1, 2024. The Company has estimated the applicable top-up tax and recorded this in tax expense for the three and six months ended June 30, 2025. The estimated impact of top-up tax for the period was immaterial.
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On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions affecting businesses. The legislation features permanent extension, with modifications, of key 2017 Tax Cuts and Jobs Act provisions that were set to change at the end of 2025. The effects of the OBBBA will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment. The Company is currently evaluating the impact for future periods but expects it to be immaterial.
Note 11: Commitments and Contingencies
Litigation and Regulatory
The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions asserting various claims, including those based on the Fair Debt Collection Practices Act (“FDCPA”), the Fair Credit Reporting Act (“FCRA”), the Telephone Consumer Protection Act (“TCPA”), comparable state statutes, state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome.
As of June 30, 2025, there were no material developments in any of the legal proceedings disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 or any new material legal proceedings during the three and six months ended June 30, 2025.
In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. The Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. The Company’s legal costs are recorded to expense as incurred. As of June 30, 2025, the Company has no material reserves for legal matters.
Purchase Commitments
In the normal course of business, the Company enters into forward flow purchase agreements. A forward flow purchase agreement is a commitment to purchase receivables over a duration that is typically three to twelve months, but can be longer, generally with a specifically defined volume range, frequency, and pricing. Typically, these forward flow contracts have provisions that allow for early termination or price re-negotiation should the underlying quality of the portfolio deteriorate over time or if any particular month’s delivery is materially different than the original portfolio used to price the forward flow contract. Certain of these forward flow purchase agreements may also have termination clauses, whereby the agreements can be canceled by either party upon providing a certain specified amount of notice.
As of June 30, 2025, the Company had entered into forward flow purchase agreements for the purchase of nonperforming loans with an estimated minimum aggregate purchase price of approximately $411.1 million. The Company expects actual purchases under these forward flow purchase agreements to be significantly greater than the estimated minimum aggregate purchase price.
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Note 12: Segment and Geographic Information
The Company conducts business through several operating segments. The accounting policies applied to the segments are the same as those described in the summary of significant accounting policies. The Company determined its operating segments meet the aggregation criteria, and therefore, it has one reportable segment, debt purchasing and recovery segment, based on similarities among the operating units including economic characteristics, the nature of the services, the nature of the production process, customer types for their services, the methods used to provide their services and the nature of the regulatory environment. The Company’s Chief Operating Decision Maker, which is the Company’s chief executive officer, relies on internal management reporting processes that provide segment revenues, segment total operating expenses, segment operating income, and segment asset information in order to make financial decisions. The measure of segment performance is segment operating income. The Company’s Chief Operating Decision Maker assesses the segment’s performance and makes decisions about the allocation of capital resources to each segment accordingly. Corporate and other unallocated represents corporate overhead and other items not allocated to any of the Company’s operating segments. Segment assets are presented in the Company’s Consolidated Statements of Financial Position as total assets.
The following tables present the results of operations of the Company’s reportable segment for the periods presented (in thousands):
 Three Months Ended June 30, 2025
 
Debt purchasing and recovery segment
Corporate and other unallocatedConsolidated
Total revenues
$442,122 $— $442,122 
Total operating expenses(1)
(274,307)(17,082)(291,389)
Operating income
167,815 150,733 
Other segment items(2)
1,226 1,226 
Interest expense(3)
(73,943)(73,943)
Provision for income taxes
(19,295)(19,295)
Net income
$58,721 
(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended June 30, 2025, such non-allocated operating expenses primarily consisted of salaries and employee benefits of approximately $12.2 million for corporate employees and general and administrative expenses of approximately $4.4 million.
(2)The other segment items category includes other income.
(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.

 Three Months Ended June 30, 2024
 
Debt purchasing and recovery segment
Corporate and other unallocatedConsolidated
Total revenues
$355,285 $— $355,285 
Total operating expenses(1)
(238,540)(14,906)(253,446)
Operating income
116,745 101,839 
Other segment items(2)
2,047 2,047 
Interest expense(3)
(61,376)(61,376)
Provision for income taxes
(10,329)(10,329)
Net income
$32,181 
(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended June 30, 2024, such non-allocated operating expenses primarily consisted of salaries and employee benefits of approximately $10.4 million for corporate employees and general and administrative expenses of approximately $4.3 million.
(2)The other segment items category includes other income.
(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.

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 Six Months Ended June 30, 2025
 
Debt purchasing and recovery segment
Corporate and other unallocatedConsolidated
Total revenues
$834,897 $— $834,897 
Total operating expenses(1)
(523,816)(31,005)(554,821)
Operating income
311,081 280,076 
Other segment items(2)
2,873 2,873 
Interest expense(3)
(144,473)(144,473)
Provision for income taxes
(32,959)(32,959)
Net income
$105,517 
_______________________ 
(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the six months ended June 30, 2025 , such non-allocated operating expenses primarily consisted of salaries and employee benefits of approximately $20.3 million for corporate employees and general and administrative expenses of approximately $9.8 million.
(2)The other segment items category includes other income.
(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.
 Six Months Ended June 30, 2024
 
Debt purchasing and recovery segment
Corporate and other unallocatedConsolidated
Total revenues
$683,671 $— $683,671 
Total operating expenses(1)
(469,326)(28,915)(498,241)
Operating income
214,345 185,430 
Other segment items(2)
4,713 4,713 
Interest expense(3)
(117,141)(117,141)
Provision for income taxes
(17,582)(17,582)
Net income
$55,420 
_______________________ 
(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the six months ended June 30, 2024, such non-allocated operating expenses primarily consisted of salaries and employee benefits of approximately $18.9 million for corporate employees and general and administrative expenses of approximately $9.6 million.
(2)The other segment items category includes other income.
(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.

The following table presents information about geographic areas in which the Company operates (in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
Total revenues:
United States$312,590 $239,750 $582,176 $458,886 
Europe
United Kingdom91,009 76,725 175,477 149,152 
Other European countries(1)
37,129 38,188 74,122 74,292 
Total Europe128,138 114,913 249,599 223,444 
Other geographies(1)
1,394 622 3,122 1,341 
Total$442,122 $355,285 $834,897 $683,671 
________________________
(1)None of these countries comprise greater than 10% of the Company's consolidated revenues.

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Note 13: Goodwill
The Company’s goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions.
There have been no events or circumstances during the three and six months ended June 30, 2025 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future.
The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands):
Total Company
Balance as of December 31, 2024
$507,808 
Effect of foreign currency translation11,602 
Balance as of March 31, 2025
519,410 
Effect of foreign currency translation23,502 
Balance as of June 30, 2025$542,912 
As of June 30, 2025 and December 31, 2024, the Company’s accumulated goodwill impairment loss was $338.8 million, attributable to its Cabot reporting unit.

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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains “forward-looking statements” relating to Encore Capital Group, Inc. (“Encore”) and its subsidiaries (which we may collectively refer to as the “Company,” “we,” “our” or “us”) within the meaning of the securities laws. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “will,” “may,” and similar expressions often characterize forward-looking statements. These statements may include, but are not limited to, projections of collections, revenues, income or loss, estimates of capital expenditures, plans for future operations, products or services, and financing needs or plans, as well as assumptions relating to these matters. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we caution that these expectations or predictions may not prove to be correct or we may not achieve the financial results, savings, or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control or cannot be predicted or quantified, that could cause actual results to differ materially from those suggested by the forward-looking statements. Many factors including, but not limited to, those set forth in our Annual Report on Form 10-K under “Part I, Item 1A—Risk Factors” could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, achievements or industry results expressed or implied by these forward-looking statements. Our business, financial condition, or results of operations could also be materially and adversely affected by other factors besides those listed. Forward-looking statements speak only as of the date the statements were made. We do not undertake any obligation to update or revise any forward-looking statements to reflect new information or future events, or for any other reason, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. In addition, it is generally our policy not to make any specific projections as to future earnings, and we do not endorse projections regarding future performance that may be made by third parties.
Our Business
We are an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. We primarily purchase portfolios of defaulted consumer receivables at deep discounts to face value and manage them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. We also provide debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.
Encore Capital Group, Inc. (“Encore”) has three business units: MCM, which consists of Midland Credit Management, Inc. and its domestic affiliates; Cabot, which consists of Cabot Credit Management Limited (“CCM”) and its subsidiaries and European affiliates, and LAAP, which is comprised of our investments and operations in Latin America and Asia-Pacific.
MCM (United States)
Through MCM, we are a market leader in portfolio purchasing and recovery in the United States.
Cabot (Europe)
Through Cabot, we are one of the largest credit management services providers in Europe and the United Kingdom. Cabot, in addition to its primary business of portfolio purchasing and recovery, also provides a range of debt servicing offerings such as early stage collections, business process outsourcing (“BPO”), and contingent collections, including through Wescot Credit Services Limited (“Wescot”).
LAAP (Latin America and Asia-Pacific)
We have purchased non-performing loans in Mexico. Additionally, we have a subsidiary Encore Asset Reconstruction Company (“EARC”) in India.
To date, operating results from LAAP have not been significant to our total consolidated operating results. Our long-term growth strategy is focused on continuing to invest in our core portfolio purchasing and recovery business in the United States and United Kingdom and strengthening and developing our business in France and Spain.
Government Regulation
MCM (United States)
As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in the United States are subject to federal, state and municipal statutes, rules, regulations and
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ordinances that establish specific guidelines and procedures that debt purchasers and collectors must follow when collecting consumer accounts, including among others, specific guidelines and procedures for communicating with consumers and prohibitions on unfair, deceptive or abusive debt collection practices.
Cabot (Europe)
As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in Europe are affected by foreign statutes, rules and regulations regarding debt collection and debt purchase activities. These statutes, rules, regulations, ordinances, guidelines and procedures are modified from time to time by the relevant authorities charged with their administration, which could affect the way we conduct our business.
Portfolio Purchasing and Recovery
MCM (United States)
In the United States, the defaulted consumer receivable portfolios we purchase are primarily charged-off credit card debt portfolios. A small percentage of our capital deployment in the United States is comprised of receivable portfolios subject to Chapter 13 and Chapter 7 bankruptcy proceedings.
We purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across our U.S. operations. These methods and models generally allow us to value portfolios accurately (limiting the risk of overpaying), avoid buying portfolios that are incompatible with our methods or strategies and align the accounts we purchase with our business channels to maximize future collections. As a result, we have generally been able to realize significant returns from the receivables we acquire. We maintain strong relationships with many of the largest financial service providers in the United States.
Cabot (Europe)
In Europe, our purchased defaulted debt portfolios primarily consist of credit card and consumer loan accounts. We purchase receivable portfolios using a proprietary pricing model that utilizes account-level statistical and behavioral data. This model generally allows us to value portfolios accurately and quantify portfolio performance in order to maximize future collections. As a result, we have generally been able to realize significant returns from the assets we have acquired. We maintain strong relationships with many of the largest financial services providers in the United Kingdom and Europe.
Purchases and Collections
Portfolio Pricing, Supply and Demand
MCM (United States)
With lending reaching record levels and the highest U.S. charge-off rate in ten years, supply remains elevated at a record level. Issuers have continued to sell predominantly fresh portfolios. Fresh portfolios are portfolios that are generally sold within six months of the consumer’s account being charged-off by the financial institution. Pricing in the second quarter remained at favorable levels as a result of elevated market supply. Issuers continue to sell their volume in mostly forward flow arrangements that are often committed early in the calendar year. We believe steadying lending and delinquency rates will result in stable market supply.
We believe that smaller competitors continue to face difficulties in the portfolio purchasing market because of the high cost to operate due to regulatory pressure and increasing cost of capital. We believe this favors larger participants, like MCM, because the larger market participants are better able to adapt to these pressures and commit to larger forward flow agreements and fluctuating volumes.
Cabot (Europe)
The UK market for charged-off portfolios generally provides a relatively consistent pipeline of opportunities, despite a historically low level of charge-off rates, as creditors have embedded debt sales as an integral part of their business models. The percentage of volume that is sold in multi-year forward flow arrangements is increasing.
France and Spain continue to be two of the largest markets in Europe with significant portfolio sales. Financial institutions continue to look to dispose of non-performing loans in these markets.
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While sales activity across all of our European markets remains stable, underlying default rates are generally low by historic levels, and consumer lending volumes have stagnated. Sales levels are expected to fluctuate from quarter to quarter. In general, portfolio pricing remains competitive across our European footprint, constraining the amount of capital we elect to deploy in Europe.
Purchases by Geographic Location
The following table summarizes purchases of receivable portfolios by geographic location during the periods presented (in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
MCM (United States)$317,264 $236,826 $633,630 $473,335 
Cabot (Europe)49,835 41,866 101,320 101,071 
Total purchases of receivable portfolios$367,099 $278,692 $734,950 $574,406 
In the United States, capital deployments increased during the three and six months ended June 30, 2025, as compared to the corresponding periods in the prior year. The majority of our deployments in the U.S. come from forward flow agreements, and the timing, contract duration, and volumes for each contract can fluctuate leading to variation when comparing to prior periods. Portfolio purchases in the U.S. were robust as supply increased and pricing remained at favorable levels.
In Europe, capital deployment increased during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily driven by favorable foreign currency translation effect resulting from the weakening of the U.S. dollar against the British Pound during the comparable periods. Capital deployment remained relatively consistent during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. Pricing continues to remain competitive in Europe.
Collections from Purchased Receivables by Channel and Geographic Location
We utilize three channels for the collection of our purchased receivables: call center and digital collections; legal collections; and collection agencies. The call center and digital collections channel consists of collections that result from our call centers, direct mail program and online collections. The legal collections channel consists of collections that result from our internal legal channel or from our network of retained law firms. The collection agencies channel consists of collections from third-party collections agencies to whom we pay a fee or commission. We utilize this channel to supplement capacity in our internal call centers, to service accounts in regions where we do not have collections operations or for accounts purchased where we maintain the collection agency servicing relationship.
The following table summarizes the total collections by collection channel and geographic area during the periods presented (in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
MCM (United States):
Call center and digital collections$320,152 $247,074 $618,374 $482,165 
Legal collections166,811 144,249 318,486 273,152 
Collection agencies3,389 5,306 7,517 10,790 
Subtotal490,352 396,629 944,377 766,107 
Cabot (Europe):
Call center and digital collections66,495 60,298 128,765 116,945 
Legal collections59,033 52,496 112,806 101,190 
Collection agencies38,439 36,430 72,372 71,786 
Subtotal163,967 149,224 313,943 289,921 
Other geographies:666 875 1,472 1,587 
Total collections from purchased receivables$654,985 $546,728 $1,259,792 $1,057,615 
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Gross collections from purchased receivables increased by $108.3 million, or 19.8%, to $655.0 million during the three months ended June 30, 2025, as compared to $546.7 million during the three months ended June 30, 2024. Gross collections from purchased receivables increased by $202.2 million, or 19.1%, to $1,259.8 million during the six months ended June 30, 2025, as compared to $1,057.6 million during the six months ended June 30, 2024. The increases in collections in the United States were primarily a result of consistent increases in capital deployments in the United States in recent periods. The increases in collections from purchased receivables in Europe were primarily driven by a combination of increases in capital deployments and acquisitions of portfolios with higher returns in recent periods. Additionally, collections in Europe were favorably impacted by foreign currency translation by approximately $8.8 million and $6.7 million during the three and six months ended June 30, 2025, respectively, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 5.5% and 2.4% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively.
Results of Operations
Results of operations, in dollars and as a percentage of total revenues, were as follows for the periods presented (in thousands, except percentages):
 Three Months Ended June 30,
 20252024
Revenues
Portfolio revenue$361,174 81.7 %$321,930 90.6 %
Changes in recoveries55,599 12.6 %5,754 1.7 %
Total debt purchasing revenue416,773 94.3 %327,684 92.3 %
Servicing revenue22,300 5.0 %21,107 5.9 %
Other revenues3,049 0.7 %6,494 1.8 %
Total revenues442,122 100.0 %355,285 100.0 %
Operating expenses
Salaries and employee benefits117,738 26.6 %106,608 30.0 %
Cost of legal collections79,649 18.0 %64,249 18.1 %
General and administrative expenses41,327 9.3 %36,779 10.4 %
Other operating expenses36,990 8.4 %30,845 8.6 %
Collection agency commissions8,374 1.9 %7,504 2.1 %
Depreciation and amortization7,311 1.7 %7,461 2.1 %
Total operating expenses291,389 65.9 %253,446 71.3 %
Income from operations150,733 34.1 %101,839 28.7 %
Other expense
Interest expense(73,943)(16.7)%(61,376)(17.3)%
Other income
1,226 0.3 %2,047 0.6 %
Total other expense(72,717)(16.4)%(59,329)(16.7)%
Income before income taxes78,016 17.7 %42,510 12.0 %
Provision for income taxes(19,295)(4.4)%(10,329)(2.9)%
Net income $58,721 13.3 %$32,181 9.1 %
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 Six Months Ended June 30,
 20252024
Revenues
Portfolio revenue$706,392 84.6 %$637,782 93.3 %
Changes in recoveries77,063 9.2 %(6,655)(1.0)%
Total debt purchasing revenue783,455 93.8 %631,127 92.3 %
Servicing revenue44,847 5.4 %41,486 6.1 %
Other revenues6,595 0.8 %11,058 1.6 %
Total revenues834,897 100.0 %683,671 100.0 %
Operating expenses
Salaries and employee benefits223,670 26.8 %210,792 30.8 %
Cost of legal collections147,662 17.7 %122,970 18.0 %
General and administrative expenses82,345 10.0 %73,020 10.7 %
Other operating expenses71,242 8.5 %61,212 9.0 %
Collection agency commissions15,247 1.8 %14,938 2.2 %
Depreciation and amortization14,655 1.8 %15,309 2.2 %
Total operating expenses554,821 66.6 %498,241 72.9 %
Income from operations280,076 33.4 %185,430 27.1 %
Other expense
Interest expense(144,473)(17.3)%(117,141)(17.1)%
Other income
2,873 0.3 %4,713 0.7 %
Total other expense(141,600)(17.0)%(112,428)(16.4)%
Income before income taxes138,476 16.4 %73,002 10.7 %
Provision for income taxes(32,959)(3.9)%(17,582)(2.6)%
Net income $105,517 12.5 %$55,420 8.1 %















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Comparison of Results of Operations
Revenues
Our revenues primarily include debt purchasing revenue, which is revenue recognized from engaging in debt purchasing and recovery activities. We apply our charge-off policy and fully write-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables we acquire immediately after purchasing the portfolio. We then record a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which is presented as “Receivable portfolios, net” in our condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) established based on the purchase price of the portfolio and the expected future cash flows at the time of purchase.
Debt purchasing revenue includes two components:
(1)     Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the portfolio balance multiplied by the EIR), and
(2)     Changes in recoveries, which includes
(a)     Recoveries above (below) forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and
(b)     Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases).
Certain pools already fully recovered their cost basis and became zero basis portfolios (“ZBA”) prior to our adoption of the accounting standard for Financial Instruments - Credit Losses (“CECL”) in January 2020. We did not establish a negative allowance for these pools as we elected the Transition Resource Group for Credit Losses’ practical expedient to retain the integrity of these legacy pools. Similar to how we treated ZBA collections prior to the adoption of CECL, all subsequent collections to the ZBA pools are recognized as ZBA revenue, which is included in portfolio revenue in our condensed consolidated statements of income. We expect our ZBA revenue to continue to decline as we collect on these legacy pools. We do not expect to have new ZBA pools in the future.
Servicing revenue consists primarily of fee-based income earned on accounts collected on behalf of others, primarily credit originators. We earn fee-based income by providing debt servicing (such as early stage collections, BPO, contingent collections, trace services and litigation activities) to credit originators for non-performing loans in Europe.
Other revenues primarily include revenues recognized from the sale of real estate assets that are acquired as a result of our investments in non-performing secured residential mortgage portfolios and real estate assets in Europe and LAAP.











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The following tables summarize revenues for the periods presented (in thousands, except percentages):
Three Months Ended June 30,
20252024$ Change
% Change
Revenue recognized from portfolio basis$354,747 $315,668 $39,079 12.4 %
ZBA revenue6,427 6,262 165 2.6 %
Portfolio revenue
361,174 321,930 39,244 12.2 %
Recoveries above forecast
52,263 27,443 24,820 
Changes in expected future recoveries3,336 (21,689)25,025 
Changes in recoveries55,599 5,754 49,845 866.3 %
Debt purchasing revenue416,773 327,684 89,089 27.2 %
Servicing revenue22,300 21,107 1,193 5.7 %
Other revenues3,049 6,494 (3,445)(53.0)%
Total revenues$442,122 $355,285 $86,837 24.4 %
Six Months Ended June 30,
20252024$ Change
% Change
Revenue recognized from portfolio basis$694,503 $625,416 $69,087 11.0 %
ZBA revenue11,889 12,366 (477)(3.9)%
Portfolio revenue
706,392 637,782 68,610 10.8 %
Recoveries above forecast
79,215 28,296 50,919 
Changes in expected future recoveries(2,152)(34,951)32,799 
Changes in recoveries77,063 (6,655)83,718 (1258.0)%
Debt purchasing revenue783,455 631,127 152,328 24.1 %
Servicing revenue44,847 41,486 3,361 8.1 %
Other revenues6,595 11,058 (4,463)(40.4)%
Total revenues$834,897 $683,671 $151,226 22.1 %
Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international revenues, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international revenues. Our revenues were favorably impacted by foreign currency translation by approximately $6.9 million and $5.0 million during the three and six months ended June 30, 2025, respectively, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 5.5% and 2.4% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively.
The increases in revenue recognized from portfolio basis during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, were primarily due to a higher portfolio basis (i.e. a higher receivable portfolios balance) in the U.S. driven by a consistent higher volume of purchases in recent periods.
Recoveries above or below forecast represent over and under-performance in the reporting period, respectively, and are expected to vary from period to period. Collections during the three and six months ended June 30, 2025, over-performed the forecasted collections by approximately $52.3 million and $79.2 million, respectively, primarily driven by collections over-performance in the U.S. resulting from enhanced collections strategies. Collections during the three and six months ended June 30, 2024, over-performed the forecasted collections by approximately $27.4 million and $28.3 million, respectively.
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When reassessing the forecasts of expected lifetime recoveries during the three months ended June 30, 2025, management considered, among other factors, historical and current collection performance, changes in consumer behavior, and the macroeconomic environment. The updated forecast resulted in changes in timing and amount of total estimated remaining collections which in turn, when discounted to present value, resulted in a net positive change in expected future recoveries of approximately $3.3 million during the three months ended June 30, 2025. This net positive change, combined with the net negative change recorded in the first quarter, resulted in a net negative change in expected future recoveries of $2.2 million during the six months ended June 30, 2025. During the three and six months ended June 30, 2024, we recorded approximately $21.7 million and $35.0 million in net negative change in expected future recoveries, respectively.
The following tables summarize collections from purchased receivables, portfolio revenue, end of period receivable portfolios balance and other related supplemental data, by year of purchase (in thousands, except percentages):
 Three Months Ended June 30, 2025As of June 30, 2025
 Collections
Portfolio Revenue
Changes in Recoveries
Receivable Portfolios
Monthly EIR
United States:
ZBA$6,426 $6,426 $— $— — %
<201617,466 11,718 3,497 28,463 13.0 %
20165,504 2,670 848 20,304 4.2 %
20177,790 4,411 926 25,018 5.6 %
201811,308 6,086 497 47,437 4.0 %
201921,160 10,739 1,156 87,985 3.8 %
202023,437 12,225 561 103,255 3.7 %
202122,961 12,247 (42)96,971 3.9 %
202248,616 20,824 4,575 210,943 3.1 %
2023110,961 51,408 3,406 491,813 3.3 %
2024
161,522 88,596 25,953 856,320 3.3 %
2025
53,201 40,434 3,429 627,098 3.2 %
Subtotal490,352 267,784 44,806 2,595,607 3.4 %
Europe:
ZBA1 1 — — — %
<2016
34,005 23,212 2,666 263,489 3.0 %
2016
6,625 4,810 (259)59,373 2.7 %
20179,552 5,325 671 96,164 1.9 %
20188,940 5,177 412 111,527 1.6 %
201910,467 5,761 169 101,940 1.9 %
20206,620 3,578 225 53,021 2.2 %
202111,365 6,731 705 121,998 1.9 %
202213,761 6,678 652 144,793 1.5 %
202320,602 8,197 5,048 188,506 1.5 %
2024
33,525 18,778 (689)327,476 1.9 %
2025
8,504 5,142 803 104,967 2.2 %
Subtotal163,967 93,390 10,403 1,573,254 2.0 %
Other geographies:(1)
All vintages666 — 390 15,919 — %
Subtotal666 — 390 15,919 — %
Total$654,985 $361,174 $55,599 $4,184,780 2.9 %
_______________________
(1)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.
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 Three Months Ended June 30, 2024As of June 30, 2024
 Collections
Portfolio Revenue
Changes in Recoveries
Receivable Portfolios
Monthly EIR
United States:
ZBA$6,261 $6,261 $— $— — %
<2016
21,196 16,045 1,964 37,880 13.4 %
20167,595 3,775 667 28,150 4.2 %
201710,629 6,284 546 35,164 5.5 %
201816,935 8,872 1,141 69,006 4.0 %
201929,680 16,107 (596)131,559 3.8 %
202033,931 18,148 (630)152,393 3.7 %
202135,565 17,929 4,172 144,167 3.9 %
202267,121 32,055 (4,470)320,275 3.1 %
2023
124,551 71,689 5,867 699,893 3.3 %
2024
43,165 33,214 711 462,940 3.6 %
Subtotal396,629 230,379 9,372 2,081,427 3.7 %
Europe:
ZBA1 1 — — — %
<2016
35,606 28,069 (3,630)310,402 2.9 %
2016(1)
7,785 5,679 319 71,414 2.8 %
201710,727 6,363 (275)109,673 1.9 %
201811,086 6,806 (2,815)140,202 1.6 %
201912,066 6,986 (2)121,170 1.9 %
20208,078 5,200 203 76,681 2.2 %
202113,381 8,862 (604)153,377 1.9 %
202216,673 8,657 (586)178,896 1.6 %
2023
23,327 10,121 2,151 222,685 1.5 %
2024
10,494 4,807 952 94,950 2.2 %
Subtotal149,224 91,551 (4,287)1,479,450 2.0 %
Other geographies:(2)
All vintages875 — 669 22,445 — %
Subtotal875 — 669 22,445 — %
Total$546,728 $321,930 $5,754 $3,583,322 3.0 %

_______________________
(1)Portfolio balance includes non-accrual pool groups. The EIR presented is only for pool groups that accrete portfolio revenue.
(2)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.












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 Six Months Ended June 30, 2025As of June 30, 2025
 Collections
Portfolio Revenue
Changes in Recoveries
Receivable Portfolios
Monthly EIR
United States:
ZBA$11,887 $11,887 $— $— — %
<2016
34,803 24,863 3,990 28,463 13.0 %
201611,112 5,687 672 20,304 4.2 %
201716,003 9,333 1,144 25,018 5.6 %
201823,436 12,835 329 47,437 4.0 %
201943,396 22,725 439 87,985 3.8 %
202048,815 25,792 263 103,255 3.7 %
202148,183 25,894 (409)96,971 3.9 %
2022101,566 44,223 6,053 210,943 3.1 %
2023
227,183 109,141 (41)491,813 3.3 %
2024
315,016 182,598 37,323 856,320 3.3 %
202562,977 50,506 6,929 627,098 3.2 %
Subtotal944,377 525,484 56,692 2,595,607 3.4 %
Europe:
ZBA2 2 — — — %
<2016
66,483 45,546 7,100 263,489 3.0 %
201613,102 9,440 (95)59,373 2.7 %
201718,270 10,488 1,219 96,164 1.9 %
201817,504 10,204 248 111,527 1.6 %
201919,844 11,387 (131)101,940 1.9 %
202012,911 7,139 21 53,021 2.2 %
202121,833 13,243 763 121,998 1.9 %
202227,697 13,253 1,542 144,793 1.5 %
2023
41,392 16,362 7,172 188,506 1.5 %
2024
63,920 37,166 391 327,476 1.9 %
202510,985 6,678 1,273 104,967 2.2 %
Subtotal313,943 180,908 19,503 1,573,254 2.0 %
Other geographies:(1)
All vintages1,472 — 868 15,919 — %
Subtotal1,472 — 868 15,919 — %
Total$1,259,792 $706,392 $77,063 $4,184,780 2.9 %
_______________________
(1)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.










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 Six Months Ended June 30, 2024As of June 30, 2024
 Collections
Portfolio Revenue
Changes in Recoveries
Receivable Portfolios
Monthly EIR
United States:
ZBA$12,364 $12,364 $— $— — %
<2016
41,957 33,578 1,866 37,880 13.4 %
201614,667 7,816 1,499 28,150 4.2 %
201721,143 13,199 320 35,164 5.5 %
201834,722 18,684 1,277 69,006 4.0 %
201960,921 33,948 (2,262)131,559 3.8 %
202070,656 38,325 (2,409)152,393 3.7 %
202173,744 37,964 4,307 144,167 3.9 %
2022138,437 67,738 (7,198)320,275 3.1 %
2023
245,264 148,228 6,903 699,893 3.3 %
2024
52,232 42,133 606 462,940 3.6 %
Subtotal766,107 453,977 4,909 2,081,427 3.7 %
Europe:
ZBA2 2 — — — %
<2016
69,827 57,164 (7,904)310,402 2.9 %
2016(1)
15,837 11,594 (40)71,414 2.8 %
201720,810 13,043 (1,506)109,673 1.9 %
201822,491 14,017 (6,498)140,202 1.6 %
201924,247 14,324 (631)121,170 1.9 %
202016,330 10,642 (100)76,681 2.2 %
202127,279 18,039 (645)153,377 1.9 %
202233,586 17,769 (703)178,896 1.6 %
2023
45,751 20,846 3,419 222,685 1.5 %
2024
13,761 6,365 1,693 94,950 2.2 %
Subtotal289,921 183,805 (12,915)1,479,450 2.0 %
Other geographies:(2)
All vintages1,587 — 1,351 22,445 — %
Subtotal1,587 — 1,351 22,445 — %
Total$1,057,615 $637,782 $(6,655)$3,583,322 3.0 %
______________________
(1)Portfolio balance includes non-accrual pool groups. The EIR presented is only for pool groups that accrete portfolio revenue.
(2)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.
The increase in servicing revenues during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily attributable to favorable foreign currency translation, which was primarily the result of the weakening of the U.S. dollar against the British Pound. The increase in servicing revenues during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily attributable to increased demand from BPO clients.
Other revenues decreased during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily driven by a decrease in gains recognized on the sale of real estate assets.

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Operating Expenses
The following tables summarize operating expenses during the periods presented (in thousands, except percentages):
Three Months Ended June 30,
20252024$ Change% Change
Salaries and employee benefits$117,738 $106,608 $11,130 10.4 %
Cost of legal collections79,649 64,249 15,400 24.0 %
General and administrative expenses41,327 36,779 4,548 12.4 %
Other operating expenses36,990 30,845 6,145 19.9 %
Collection agency commissions8,374 7,504 870 11.6 %
Depreciation and amortization7,311 7,461 (150)(2.0)%
Total operating expenses$291,389 $253,446 $37,943 15.0 %
Six Months Ended June 30,
20252024$ Change% Change
Salaries and employee benefits$223,670 $210,792 $12,878 6.1 %
Cost of legal collections147,662 122,970 24,692 20.1 %
General and administrative expenses82,345 73,020 9,325 12.8 %
Other operating expenses71,242 61,212 10,030 16.4 %
Collection agency commissions15,247 14,938 309 2.1 %
Depreciation and amortization14,655 15,309 (654)(4.3)%
Total operating expenses$554,821 $498,241 $56,580 11.4 %
Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international operating expenses, and the weakening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international operating expenses. Our operating expenses were unfavorably impacted by foreign currency translation by approximately $5.0 million and $3.6 million, during the three and six months ended June 30, 2025, respectively, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 5.5% and 2.4% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively.
Operating expenses are explained in more detail as follows:
Salaries and Employee Benefits
The increase in salaries and employee benefits during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to the following reasons:
•An increase in salaries and bonus of approximately $8.8 million primarily due to an increase in overall headcount; and
•An increase in employee benefits and payroll taxes of approximately $1.7 million.
The increase in salaries and employee benefits during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the following reasons:
•An increase in salaries and bonus of approximately $10.2 million primarily due to an increase in overall headcount; and
•An increase in employee benefits and payroll taxes of approximately $1.9 million.

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Cost of Legal Collections
Cost of legal collections primarily includes contingent fees paid to our external network of attorneys and the cost of litigation. We pursue legal collections using a network of attorneys that specialize in collection matters and through our internal legal channel. Under the agreements with our contracted attorneys, we advance certain out-of-pocket court costs. Cost of legal collections does not include internal legal channel employee costs, which are included in salaries and employee benefits in our condensed consolidated statements of income.
The following tables summarize our cost of legal collections during the periods presented (in thousands, except percentages):
Three Months Ended June 30,
20252024$ Change% Change
Court costs$54,050 $41,881 $12,169 29.1 %
Legal collection fees25,599 22,368 3,231 14.4 %
Total cost of legal collections$79,649 $64,249 $15,400 24.0 %
Six Months Ended June 30,
20252024$ Change% Change
Court costs$98,864 $79,968 $18,896 23.6 %
Legal collection fees48,798 43,002 5,796 13.5 %
Total cost of legal collections$147,662 $122,970 $24,692 20.1 %
The increases of cost of legal collections during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, were primarily due to increased legal placements in this channel in the United States.
General and Administrative Expenses
The increase in general and administrative expense during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to the following reasons:
•An increase in information technology expenses of approximately $1.9 million; and
•An increase in consulting fees of approximately $1.9 million.
The increase in general and administrative expense during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the following reasons:
•An increase in information technology expenses of approximately $3.8 million; and
•An increase in consulting fees of approximately $3.5 million.
Other Operating Expenses
The increase in other operating expenses during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to the following reasons:
•An increase in postage and printing expenses of approximately $3.5 million; and
•An increase in collections bank charges and trace agencies fees of approximately $1.8 million.
The increase in other operating expenses during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the following reasons:
•An increase in postage and printing expenses of approximately $5.4 million; and
•An increase in collections bank charges and trace agencies fees of approximately $3.9 million.
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Collection Agency Commissions
Collection agency commissions are commissions paid to third-party collection agencies. Collections through the collections agencies channel are predominately in Europe and vary from period to period depending on, among other things, the number of accounts placed with an agency versus accounts collected internally. Commission rates vary depending on, among other things, the amount of time that has passed since the charge-off of the accounts placed with an agency, the asset class, and the geographic location of the receivables. Generally, freshly charged-off accounts have a lower commission rate than accounts that have been charged off for a longer period of time, and commission rates for purchased bankruptcy portfolios are lower than the commission rates for charged-off credit card accounts. Collection agency commissions remained relatively consistent during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024.
Depreciation and Amortization
Depreciation and amortization expenses remained relatively consistent during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024.
Interest Expense
The following tables summarize our interest expense for the periods presented (in thousands, except percentages):
 Three Months Ended June 30,
 20252024$ Change% Change
Stated interest on debt obligations$70,276 $57,163 $13,113 22.9 %
Amortization of debt issuance costs3,428 3,780 (352)(9.3)%
Amortization of debt discount
239 433 (194)(44.8)%
Total interest expense$73,943 $61,376 $12,567 20.5 %
 Six Months Ended June 30,
 20252024$ Change% Change
Stated interest on debt obligations$137,262 $109,201 $28,061 25.7 %
Amortization of debt issuance costs6,757 7,080 (323)(4.6)%
Amortization of debt discount
454 860 (406)(47.2)%
Total interest expense$144,473 $117,141 $27,332 23.3 %
The increase in interest expense during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to the following reasons:
•The effect resulting from increased average debt balance of approximately $10.4 million;
•The effect resulting from rising interest rates of approximately $1.0 million; and
•The effect resulting from an unfavorable impact of foreign currency translation of approximately $1.2 million driven by the weakening of the U.S. dollar against the British Pound.
The increase in interest expense during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the following reasons:
•The effect resulting from increased average debt balance of approximately $17.1 million;
•The effect resulting from rising interest rates of approximately $9.4 million; and
•The effect resulting from an unfavorable impact of foreign currency translation of approximately $0.8 million driven by the weakening of the U.S. dollar against the British Pound.
Other Income, net of Other Expense
Other income or expense consists primarily of foreign currency exchange gains or losses, interest income, and gains or losses recognized on certain transactions outside of our normal course of business. Other income, net, was $1.2 million and $2.9 million during the three and six months ended June 30, 2025, respectively. Other income, net, was $2.0 million and $4.7 million during the three and six months ended June 30, 2024, respectively. Interest income included in other income, net of other expense, was approximately $1.4 million and $2.9 million during the three and six months ended June 30, 2025, respectively, and $1.8 million and $3.1 million for the three and six months ended June 30, 2024, respectively.
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Provision for Income Taxes
Provision for income taxes and effective tax rate are as follows for the periods presented ($ in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Provision for income taxes$19,295 $10,329 $32,959 $17,582 
Effective tax rate
24.7%
24.3%
23.8%
24.1%
For the three and six months ended June 30, 2025, the differences between our effective tax rate and the federal statutory rate were primarily due to state income taxes offset by other foreign adjustments. For the three and six months ended June 30, 2024, the differences between our effective tax rate and the federal statutory rate were primarily due to state income taxes.
Non-GAAP Disclosure
In addition to the financial information prepared in conformity with Generally Accepted Accounting Principles (“GAAP”), we provide historical non-GAAP financial information. Management believes that the presentation of such non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments, and amortization methods, which provide a more complete understanding of our financial performance, competitive position, and prospects for the future. Readers should consider the information in addition to, but not instead of, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of these measures for comparative purposes.
Adjusted EBITDA. Management utilizes adjusted EBITDA (defined as net income before interest income and expense, taxes, depreciation and amortization, stock-based compensation expenses, acquisition, integration and restructuring related expenses, and other charges or gains that are not indicative of ongoing operations), in the evaluation of our operating performance. Adjusted EBITDA for the periods presented is as follows (in thousands):
 Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
GAAP net income, as reported$58,721 $32,181 $105,517 $55,420 
Adjustments:
Interest expense73,943 61,376 144,473 117,141 
Interest income(1,362)(1,760)(2,908)(3,128)
Provision for income taxes19,295 10,329 32,959 17,582 
Depreciation and amortization7,311 7,461 14,655 15,309 
Stock-based compensation expense5,283 4,637 8,707 7,994 
Net gain on derivative instruments(1)
— (78)— (273)
Acquisition, integration and restructuring related expenses(2)
1,042 1,883 1,290 4,202 
Adjusted EBITDA$164,233 $116,029 $304,693 $214,247 
Collections applied to principal balance(3)
$244,677 $228,923 $488,977 $443,474 
_______________________
(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)Collections applied to principal balance is calculated in the table below:
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Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Collections applied to receivable portfolios, net
$293,811 $224,798 $553,400 $419,833 
Changes in recoveries(55,599)(5,754)(77,063)6,655 
Other proceeds applied to basis
6,465 9,879 12,640 16,986 
Collections applied to principal balance$244,677 $228,923 $488,977 $443,474 

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Supplemental Performance Data
The tables included in this supplemental performance data section include detail for purchases, collections and ERC by year of purchase.
Our collection expectations are based on account characteristics and economic variables. Additional adjustments are made to account for qualitative factors that may affect the payment behavior of our consumers and servicing related adjustments to ensure our collection expectations are aligned with our operations. We continue to refine our process of forecasting collections both domestically and internationally with a focus on operational enhancements. Our collection expectations vary between types of portfolio and geographic location. As a result, past performance of pools in certain geographic locations or of certain types of portfolio are not necessarily a suitable indicator of future results in other locations or for other types of portfolio.
The supplemental performance data presented in this section is impacted by foreign currency translation, which represents the effect of translating financial results where the functional currency of our foreign subsidiary is different than our U.S. dollar reporting currency. Generally, international purchases reflect the exchange rates at the time of purchase and international cumulative collections are aggregated each month based on respective month-end exchange rates. For example, the strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable reporting impact on our international purchases, collections, and ERC, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international purchases, collections, and ERC.
We utilize proprietary forecasting models to continuously evaluate the economic life of each pool.
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Cumulative Collections Money Multiple - Cumulative Collections from Purchased Receivables to Purchase Price Multiple
The following table summarizes our receivable purchases, related gross collections, and cumulative collections money multiples (in thousands, except multiples):
Year of
Purchase
Purchase
Price(1)
Cumulative Collections through June 30, 2025
<20162016201720182019202020212022202320242025
Total(2)
CCMM(3)
United States:
<2016$4,261,075 $8,440,701 $970,845 $706,004 $498,378 $375,393 $281,095 $229,701 $166,469 $131,698 $102,710 $46,690 $11,949,684 2.8 
2016552,969 — 110,875 283,035 234,690 159,279 116,452 87,717 51,650 35,130 27,972 11,112 1,117,912 2.0 
2017527,441 — — 111,902 315,853 255,048 193,328 144,243 85,348 57,985 40,123 16,003 1,219,833 2.3 
2018629,170 — — — 175,042 351,696 308,302 228,919 144,566 89,548 64,231 23,436 1,385,740 2.2 
2019675,051 — — — — 174,693 416,315 400,250 256,444 164,106 112,391 43,396 1,567,595 2.3 
2020537,648 — — — — — 213,450 430,514 311,573 194,522 127,555 48,815 1,326,429 2.5 
2021403,614 — — — — — — 120,354 240,605 188,895 131,870 48,183 729,907 1.8 
2022549,097 — — — — — — — 98,277 268,516 254,329 101,566 722,688 1.3 
2023806,410 — — — — — — — — 184,182 471,838 227,183 883,203 1.1 
2024992,300 — — — — — — — — — 238,635 315,016 553,651 0.6 
2025632,645 — — — — — — — — — — 62,977 62,977 0.1 
Subtotal10,567,420 8,440,701 1,081,720 1,100,941 1,223,963 1,316,109 1,528,942 1,641,698 1,354,932 1,314,582 1,571,654 944,377 21,519,619 2.0 
Europe:
<20161,662,149 995,241 449,359 388,622 349,761 290,842 232,719 235,893 176,754 148,533 138,569 66,485 3,472,778 2.1 
2016249,584 — 44,641 97,587 83,107 63,198 51,609 51,017 40,214 35,278 30,143 13,102 509,896 2.0 
2017461,571 — — 68,111 152,926 118,794 87,549 86,107 61,762 48,763 41,211 18,270 683,493 1.5 
2018427,030 — — — 49,383 118,266 78,846 80,629 61,691 49,675 42,379 17,504 498,373 1.2 
2019272,905 — — — — 44,118 80,502 88,448 63,607 54,544 47,174 19,844 398,237 1.5 
2020104,940 — — — — — 22,721 59,803 45,757 37,363 31,454 12,911 210,009 2.0 
2021242,825 — — — — — — 43,082 66,529 58,515 52,278 21,833 242,237 1.0 
2022231,869 — — — — — — — 36,957 70,385 64,555 27,697 199,594 0.9 
2023259,255 — — — — — — — — 40,975 89,799 41,392 172,166 0.7 
2024353,182 — — — — — — — — — 50,469 63,920 114,389 0.3 
2025101,320 — — — — — — — — — — 10,985 10,985 0.1 
Subtotal4,366,630 995,241 494,000 554,320 635,177 635,218 553,946 644,979 553,271 544,031 588,031 313,943 6,512,157 1.5 
Other geographies(4):
All vintages340,283 82,958 109,884 112,383 108,480 75,601 28,960 20,682 3,334 3,954 2,793 1,472 550,501 1.6 
Subtotal340,283 82,958 109,884 112,383 108,480 75,601 28,960 20,682 3,334 3,954 2,793 1,472 550,501 1.6 
Total$15,274,333 $9,518,900 $1,685,604 $1,767,644 $1,967,620 $2,026,928 $2,111,848 $2,307,359 $1,911,537 $1,862,567 $2,162,478 $1,259,792 $28,582,277 1.9 
________________________
(1)Adjusted for Put-Backs and Recalls. Put-Backs (“Put-Backs”) and recalls (“Recalls”) represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement.
(2)Cumulative collections from inception through June 30, 2025, excluding collections on behalf of others.
(3)Cumulative Collections Money Multiple (“CCMM”) through June 30, 2025 refers to cumulative collections as a multiple of purchase price.
(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.
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Purchase Price Multiple - Total Estimated Collections from Purchased Receivables to Purchase Price Multiple
The following table summarizes our purchases, resulting historical gross collections, estimated remaining gross collections from purchased receivables, and purchase price multiple (in thousands, except multiples):
Purchase Price(1)
Historical
Collections(2)
Estimated
Remaining
Collections		Total Estimated
Gross Collections
Purchase Price Multiple(3)
United States:
<2016
$4,261,075 $11,949,684 $168,954 $12,118,638 2.8 
2016552,969 1,117,912 44,533 1,162,445 2.1 
2017527,441 1,219,833 67,966 1,287,799 2.4 
2018629,170 1,385,740 108,840 1,494,580 2.4 
2019675,051 1,567,595 194,103 1,761,698 2.6 
2020537,648 1,326,429 226,128 1,552,557 2.9 
2021403,614 729,907 221,440 951,347 2.4 
2022549,097 722,688 421,429 1,144,117 2.1 
2023806,410 883,203 1,006,647 1,889,850 2.3 
2024992,300 553,651 1,811,709 2,365,360 2.4 
2025632,645 62,977 1,384,581 1,447,558 2.3 
Subtotal10,567,420 21,519,619 5,656,330 27,175,949 2.6 
Europe:
<2016
1,662,149 3,472,778 879,935 4,352,713 2.6 
2016249,584 509,896 169,043 678,939 2.7 
2017461,571 683,493 210,078 893,571 1.9 
2018427,030 498,373 229,746 728,119 1.7 
2019272,905 398,237 220,369 618,606 2.3 
2020104,940 210,009 120,294 330,303 3.1 
2021242,825 242,237 262,539 504,776 2.1 
2022231,869 199,594 266,673 466,267 2.0 
2023259,255 172,166 337,275 509,441 2.0 
2024353,182 114,389 702,487 816,876 2.3 
2025101,320 10,985 236,016 247,001 2.4 
Subtotal4,366,630 6,512,157 3,634,455 10,146,612 2.3 
Other geographies(4):
All vintages340,283 550,501 24,786 575,287 1.7 
Subtotal340,283 550,501 24,786 575,287 1.7 
Total$15,274,333 $28,582,277 $9,315,571 $37,897,848 2.5 
________________________
(1)Purchase price refers to the cash paid to a seller to acquire a portfolio less Put-backs, Recalls, and other adjustments. Put-Backs and Recalls represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement.
(2)Cumulative collections from inception through June 30, 2025, excluding collections on behalf of others.
(3)Purchase Price Multiple represents total estimated gross collections divided by the purchase price.
(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.

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Estimated Remaining Gross Collections by Year of Purchase
The following table summarizes our estimated remaining gross collections from purchased receivable portfolios and estimated future cash flows from real estate-owned assets (in thousands):
 
Estimated Remaining Gross Collections by Year of Purchase(1)
 
2025(3)
20262027202820292030203120322033
>2033
Total(2)
United States:
<2016
$33,874 $48,757 $30,870 $21,002 $13,964 $9,059 $5,621 $3,350 $1,676 $781 $168,954 
20169,193 12,088 7,097 4,990 3,515 2,481 1,754 1,244 885 1,286 44,533 
201712,531 17,966 11,461 7,886 5,560 3,930 2,786 1,980 1,413 2,453 67,966 
201818,877 28,403 19,501 12,869 8,860 6,255 4,429 3,146 2,242 4,258 108,840 
201934,395 50,839 34,584 23,530 15,622 10,805 7,611 5,375 3,804 7,538 194,103 
202039,050 58,730 40,788 27,821 18,927 12,644 8,799 6,206 4,388 8,775 226,128 
202137,167 57,862 39,528 26,912 18,603 12,845 8,783 6,114 4,306 9,320 221,440 
202272,946 109,169 75,135 49,788 34,372 24,460 17,364 12,089 8,374 17,732 421,429 
2023177,988 259,315 172,612 121,829 84,676 59,692 41,700 29,199 20,028 39,608 1,006,647 
2024262,628 511,437 322,406 214,981 151,775 106,720 75,768 53,087 37,067 75,840 1,811,709 
2025157,653 341,934 286,287 180,802 124,464 89,583 63,186 44,671 31,113 64,888 1,384,581 
Subtotal856,302 1,496,500 1,040,269 692,410 480,338 338,474 237,801 166,461 115,296 232,479 5,656,330 
Europe:
<2016
61,938 111,742 98,983 86,438 76,322 66,671 58,586 52,834 47,430 218,991 879,935 
2016
13,432 24,247 21,744 18,796 15,870 13,309 11,422 9,594 8,162 32,467 169,043 
201718,108 31,205 27,823 23,065 19,659 16,419 13,730 11,606 9,934 38,529 210,078 
201817,964 32,279 28,828 23,779 20,846 18,079 15,804 13,910 12,056 46,201 229,746 
201920,340 34,288 28,986 24,747 20,157 16,746 13,963 11,899 10,096 39,147 220,369 
202012,811 20,559 16,393 13,037 10,539 8,629 7,143 6,012 5,086 20,085 120,294 
202122,375 40,094 35,001 29,504 25,088 21,259 17,939 15,146 12,717 43,416 262,539 
202226,711 46,534 38,188 30,749 25,027 20,342 16,798 13,879 11,182 37,263 266,673 
202333,635 58,370 48,512 40,626 32,740 26,126 21,214 17,318 14,174 44,560 337,275 
202461,908 113,318 93,414 77,535 63,649 52,021 43,017 36,346 31,505 129,774 702,487 
202519,208 40,815 36,213 28,744 22,912 18,019 14,227 11,422 9,663 34,793 236,016 
Subtotal308,430 553,451 474,085 397,020 332,809 277,620 233,843 199,966 172,005 685,226 3,634,455 
Other geographies(4):
All vintages3,375 5,140 3,836 2,900 2,289 1,845 1,450 1,144 892 1,915 24,786 
Subtotal3,375 5,140 3,836 2,900 2,289 1,845 1,450 1,144 892 1,915 24,786 
Portfolio ERC1,168,107 2,055,091 1,518,190 1,092,330 815,436 617,939 473,094 367,571 288,193 919,620 9,315,571 
REO ERC(5)
17,230 21,884 6,362 1,353 — — — — — — 46,829 
Total ERC$1,185,337 $2,076,975 $1,524,552 $1,093,683 $815,436 $617,939 $473,094 $367,571 $288,193 $919,620 $9,362,400 
________________________
(1)As of June 30, 2025, ERC for Zero Basis Portfolios include approximately $31.5 million for purchased consumer and bankruptcy receivables in the United States. ERC for Zero Basis Portfolios in Europe and other geographies was immaterial. ERC also includes approximately $24.8 million from non-accrual portfolios, primarily in other geographies.
(2)Represents the expected remaining gross cash collections over a 180-month period. As of June 30, 2025, ERC for 84-month was:
84-Month ERC
   United States$5,232,803 
   Europe2,681,275 
   Other geographies21,424 
Portfolio ERC7,935,502 
REO ERC46,829 
Total ERC$7,982,331 
(3)Amount for 2025 consists of six months data from July 1, 2025 to December 31, 2025.
(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.
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(5)Real estate-owned assets (“REO”) ERC includes approximately $46.3 million and $0.5 million of estimated future cash flows for Europe and Other Geographies, respectively.
Estimated Future Collections Applied to Receivable Portfolios
As of June 30, 2025, we had $4.2 billion in receivable portfolios. The estimated future collections applied to the receivable portfolios net balance is as follows (in thousands):
Years Ending December 31,
United States
Europe
Other Geographies
Total Amortization
2025(1)
$343,390 $123,571 $2,743 $469,704 
2026696,367 226,024 4,179 926,570 
2027497,511 197,583 3,129 698,223 
2028318,687 164,335 2,374 485,396 
2029218,833 136,612 1,865 357,310 
2030155,048 111,656 1,492 268,196 
2031109,983 92,441 137 202,561 
203277,890 79,208 — 157,098 
203354,436 69,142 — 123,578 
203438,221 61,599 — 99,820 
203527,654 58,164 — 85,818 
203620,835 55,584 — 76,419 
203715,874 54,205 — 70,079 
203812,132 56,721 — 68,853 
20397,238 59,001 — 66,239 
20401,508 27,408 — 28,916 
Total$2,595,607 $1,573,254 $15,919 $4,184,780 
________________________
(1)Amount for 2025 consists of six months data from July 1, 2025 to December 31, 2025.
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Liquidity and Capital Resources
Liquidity
The following table summarizes our cash flow activities for the periods presented (in thousands):
 Six Months Ended June 30,
 20252024
(Unaudited)
Net cash provided by operating activities$54,807 $86,697 
Net cash used in investing activities(169,652)(131,886)
Net cash provided by financing activities87,230 139,492 
Operating Cash Flows
Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.
Net cash provided by operating activities was $54.8 million and $86.7 million during the six months ended June 30, 2025 and 2024, respectively. Operating cash flows are derived by adjusting net income for non-cash operating items such as depreciation and amortization, changes in recoveries, stock-based compensation charges, deferred income tax, and changes in operating assets and liabilities which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations. Adjusting for the changes in recoveries resulted in a decrease in operating cash flows by $77.1 million during the six months ended June 30, 2025 and an increase in operating cash flows by $6.7 million during the six months ended June 30, 2024. Refer to “Note 5: Receivable Portfolios, Net” in the notes to our condensed consolidated financial statements for discussion relating to changes in recoveries.
Investing Cash Flows
Net cash used in investing activities was $169.7 million and $131.9 million during the six months ended June 30, 2025 and 2024, respectively. Cash provided by or used in investing activities is primarily affected by receivable portfolio purchases offset by collection proceeds applied to the principal of our receivable portfolios. Receivable portfolio purchases, net of put-backs, were $725.4 million and $567.0 million during the six months ended June 30, 2025 and 2024, respectively. Collection proceeds applied to receivable portfolios were $553.4 million and $419.8 million during the six months ended June 30, 2025 and 2024, respectively. Refer to Purchases and Collections within “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion relating to purchases and collections.
Financing Cash Flows
Net cash provided by financing activities was $87.2 million and $139.5 million during the six months ended June 30, 2025 and 2024, respectively. Financing cash flows are generally affected by borrowings under our credit facilities and proceeds from various debt offerings, offset by repayments of amounts outstanding under our credit facilities and repayments of various notes. Borrowings under our credit facilities were $549.6 million and $393.5 million during the six months ended June 30, 2025 and 2024, respectively. Repayments of amounts outstanding under our credit facilities were $418.5 million and $1,234.2 million during the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2024, we issued two $500.0 million senior secured notes that mature in 2029 and 2030, respectively. We used a portion of the proceeds from the senior secured notes issuance to repay drawings under our Global Senior Facility.
Capital Resources
Our primary sources of capital are cash collections from our receivable portfolios, bank borrowings, debt offerings, and equity offerings. Depending on the capital markets, we consider additional financings to fund our operations and any potential acquisitions. From time to time, we may repurchase outstanding debt or equity and/or restructure or refinance debt obligations. Our primary cash requirements include funding the purchase of receivable portfolios, operating expenses, the payment of interest and principal on borrowings, the payment of income taxes, funding any entity acquisitions and share repurchases.
We are in material compliance with all covenants under our financing arrangements. See “Note 7: Borrowings” in the notes to our condensed consolidated financial statements for a further discussion of our debt. Available capacity under our Global Senior Facility, was $397.2 million as of June 30, 2025.
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Our Board of Directors has approved a $300.0 million share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from our Global Senior Facility and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by our management and Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. The program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at our discretion. During the three and six months ended June 30, 2025, we repurchased 418,499 and 707,924 shares of our common stock for approximately $15.0 million and $25.0 million, respectively, under the shares repurchase program. We did not make any repurchases under the share repurchase program during the three and six months ended June 30, 2024. Our practice is to retire the shares repurchased. As of June 30, 2025, authorization for $66.9 million of share repurchases remained under the share repurchase program.
Our cash and cash equivalents as of June 30, 2025, consisted of $63.8 million held by U.S.-based entities and $109.1 million held by foreign entities. Most of our cash and cash equivalents held by foreign entities is indefinitely reinvested and may be subject to material tax effects if repatriated. However, we believe that our sources of cash and liquidity are sufficient to meet our business needs in the United States and do not expect that we will need to repatriate the funds.
Included in cash and cash equivalents is cash that was collected on behalf of, and remains payable to, third-party clients. The balance of cash held for clients was $23.4 million as of June 30, 2025.
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, timing of cash collections from our consumers, and other risks detailed in our Risk Factors. However, we believe that we have sufficient liquidity to fund our operations for at least the next twelve months, given our expectation of continued positive cash flows from operations, our cash and cash equivalents, our access to capital markets, and availability under our credit facilities. Our future cash needs will depend on our acquisitions of portfolios and businesses.
Critical Accounting Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. Refer to “Critical Accounting Estimates” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, for a complete discussion of our critical accounting estimates. Other than the ongoing reassessment of expected future recoveries of our receivable portfolios during each reporting period under our CECL accounting policy as discussed in “Note 5: Receivable Portfolios, Net” to our condensed consolidated financial statements, there have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2024.
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Item 3 – Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Rates. As of June 30, 2025, there had not been a material change in any of the foreign currency risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Interest Rates. As of June 30, 2025, there had not been a material change in the interest rate risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 4 – Controls and Procedures
Attached as exhibits to this Form 10-Q are the certifications required by Rule 13a-14 of the Securities Exchange Act of 1934, as amended. This section includes information concerning the controls and controls evaluation referred to in the certifications.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”) and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and accordingly, management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on their most recent evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION

Item 1 – Legal Proceedings
Information with respect to this item may be found in “Note 11: Commitments and Contingencies,” to the condensed consolidated financial statements.

Item 1A – Risk Factors
There is no material change in the information reported under “Part I-Item 1A-Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Repurchases of Equity Securities
As announced in on May 5, 2021, the Company’s Board of Directors has approved a $300.0 million share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from its Global Senior Facility, and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by management and its Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. During the three months ended June 30, 2025, the Company repurchased 418,499 shares of our common stock for approximately $15.0 million. The following table presents information with respect to purchases of common stock of the Company during the three months ended June 30, 2025, by the Company or an “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act:
PeriodTotal Number of Shares Purchased Average
Price Paid
Per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(1)
Approximate Dollar
Value of Shares That May
Yet Be Purchased
Under the Publicly
Announced Plans
or Programs
April 1, 2025 to April 30, 2025160,311 $31.70 160,311 $76,841,002 
May 1, 2025 to May 31, 2025 132,713 $38.29 132,713 $71,759,347 
June 1, 2025 to June 30, 2025125,475 $38.57 125,475 $66,919,622 
Total418,499 $35.85 418,499 $66,919,622 
________________________
(1)This column discloses the number of shares purchased pursuant to the program during the indicated time periods.

Item 5 - Other Information
On May 16, 2025, John Yung, President International and Cabot Credit Management, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 6,000 shares of Encore Capital Group, Inc. common stock between August 15, 2025, and June 9, 2026, subject to certain conditions.


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Item 6 – Exhibits
NumberDescription
3.1.1
3.1.2
3.1.3
3.2
10.1
31.1
31.2
32.1
101.INSInline XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document. (filed herewith)
101.SCHInline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LABInline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101
In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt of the company are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
ENCORE CAPITAL GROUP, INC.
By: 
/s/ Tomas Hernanz
 
Tomas Hernanz
 Executive Vice President,
 Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)


Date: August 6, 2025

52

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