Financial Data and Key Metrics Changes - Portfolio purchases in Q3 2025 were $346 million, up 23% compared to Q3 2024 [4] - Collections increased 20% to a record $663 million [4] - Average receivable portfolios rose 16% to $4.2 billion [4] - Estimated remaining collections (ERC) increased 10% to a record $9.5 billion [4] - Earnings per share for Q3 2025 were $3.17, up more than 150% compared to Q3 2024 [4][18] - Leverage improved to 2.5 times at the end of Q3, compared to 2.7 times a year ago [4][18] Business Line Data and Key Metrics Changes - The MCM business in the U.S. drove strong performance, with portfolio purchases of $261 million in Q3, a 13% increase year-over-year [12] - MCM collections reached a record $502 million, up 25% compared to Q3 2024 [12] - Cabot's portfolio purchases were $85 million, higher than historical trends, with collections of $160 million, up 8% year-over-year [14] Market Data and Key Metrics Changes - U.S. revolving credit remains near record levels, with elevated charge-off rates driving robust portfolio supply [10] - Annualized net charge-off volume in the U.S. was estimated at $55 billion, significantly higher than previous years [11] - U.S. consumer credit delinquencies remain near multi-year highs, indicating favorable purchasing conditions [11] Company Strategy and Development Direction - The company employs a three-pillar strategy focusing on large markets, competitive advantages, and a strong balance sheet [8] - The focus remains on purchasing portfolios in the U.S. market, which accounted for 75% of capital deployed in Q3 [9] - The company plans to exceed $1.35 billion in global portfolio purchases for 2025, with MCM expected to surpass its 2024 purchases [22] Management's Comments on Operating Environment and Future Outlook - Management noted stable consumer behavior despite macroeconomic uncertainties, with no significant impact on payment plans [49] - The company expects continued strong performance in collections and cash generation, driven by operational improvements and technology deployment [64] - Future acquisitions are considered but will be approached with caution, focusing on opportunities that create sustained shareholder value [68] Other Important Information - The company repurchased $10 million of shares in Q3 and nearly $25 million in Q4, totaling approximately $60 million year-to-date [5] - An additional $300 million was authorized for share repurchases, reflecting confidence in future prospects [21] Q&A Session Summary Question: Insights on fourth quarter purchasing - Management confirmed robust purchasing conditions in the U.S. and reiterated guidance to exceed $1.35 billion in purchases [28][29] Question: Comparison with peers on purchasing - Management stated that their strong purchasing reflects favorable market conditions and opportunities not taken by peers [31] Question: Collections multiple for U.S. and U.K. core paper - The collections multiple for both U.S. and Cabot is 2.3, stable throughout the year [37] Question: Impact of new technologies on operations - Management highlighted significant improvements in collections due to the implementation of new technologies and digital capabilities [42] Question: Sustainability of collections overperformance - Management expressed confidence in the sustainability of collections performance, driven by MCM's operational excellence [64] Question: Future acquisition opportunities - Management indicated that while acquisition opportunities are monitored, the focus remains on portfolio purchases due to reliable returns [68]

Financial Performance - Total revenues for Q3 2025 reached $460.4 million, a 25.4% increase from $367.1 million in Q3 2024[12] - Net income for Q3 2025 was $74.7 million, compared to $30.6 million in Q3 2024, representing a 143.5% year-over-year growth[12] - Earnings per share (EPS) for Q3 2025 were $3.22 (basic) and $3.17 (diluted), up from $1.28 and $1.26 in Q3 2024, respectively[12] - Comprehensive income for Q3 2025 was $62.9 million, compared to $56.2 million in Q3 2024, indicating a 11.9% increase[15] - Operating income for the three months ended September 30, 2025, was $190.3 million, up 58.2% from $120.2 million in the same period of 2024[113][115] - Net income for the nine months ended September 30, 2025, was $180.177 million, compared to $86.063 million for the same period in 2024, representing an increase of 109.5%[21] - Total revenues for the nine months ended September 30, 2025, were $1.3 billion, a 23.2% increase from $1.1 billion in the same period of 2024[117][119] Assets and Liabilities - Total assets increased to $5.26 billion as of September 30, 2025, from $4.79 billion at the end of 2024, marking a 9.8% growth[9] - The company's total liabilities increased to $4.31 billion as of September 30, 2025, from $4.02 billion at the end of 2024, representing a 7.2% rise[9] - The company's receivable portfolios, net, rose to $4.27 billion, up 13.1% from $3.78 billion at the end of 2024[9] - The total borrowings as of September 30, 2025, were $3,933,858 thousand, up from $3,672,762 thousand as of December 31, 2024, indicating an increase of approximately 7.1%[69] - Total equity as of September 30, 2025, was $952.914 million, down from $1,048.105 million as of September 30, 2024, reflecting a decrease of 9.1%[17] Cash Flow and Operating Activities - Cash and cash equivalents at the end of the period were $172.488 million, a decrease from $247.353 million at the end of the same period in 2024, indicating a decline of 30.2%[21] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $136.388 million, slightly up from $132.624 million in 2024, showing an increase of 2.9%[21] - Cash collections for the three months ended September 30, 2025, amounted to $663,018 thousand, an increase from $550,268 thousand in the same period of 2024, representing a growth of about 20.5%[65] - Collections applied to receivable portfolios, net, for the three months ended September 30, 2025, were $292,892 thousand, compared to $222,149 thousand in 2024, marking an increase of approximately 31.7%[65] Stock and Shareholder Activities - The company repurchased and retired common stock totaling $35.329 million during the nine months ended September 30, 2025[21] - The company repurchased 243,174 shares for approximately $10 million during the three months ended September 30, 2025, as part of a $300 million share repurchase program approved in May 2021[36] - The total weighted-average dilutive shares outstanding for the three months ended September 30, 2025, was 23.52 million, compared to 24.41 million in 2024, indicating a decrease of 3.6%[37] Expenses and Taxation - Operating expenses for Q3 2025 totaled $287.2 million, an increase of 10.0% compared to $261.0 million in Q3 2024[12] - The provision for income taxes for Q3 2025 was $25.2 million, compared to $10.1 million in Q3 2024, reflecting a higher taxable income[12] - The Company's effective tax rate for the three months ended September 30, 2025, was 25.2%, compared to 24.8% for the same period in 2024[10] Debt and Financing - The company issued $500.0 million in 6.625% Senior Secured Notes due April 2031, with interest payable semi-annually starting April 15, 2026[75] - The outstanding borrowings under the Cabot Securitisation Senior Facility were £255.0 million (approximately $342.9 million), with a weighted average interest rate of 7.29% for the three months ended September 30, 2025[88] - The U.S. Facility had outstanding borrowings of $352.5 million as of September 30, 2025, with a weighted average interest rate of 7.81% for the three months ended September 30, 2025[91] - The total principal balance of the Company's Convertible Notes was $330.0 million as of September 30, 2025, with interest rates of 3.250% and 4.000% for the 2025 and 2029 Convertible Notes, respectively[76] Other Comprehensive Income and Loss - Other comprehensive income for the nine months ended September 30, 2025, was $30.840 million, compared to $19.538 million in 2024, indicating an increase of 57.7%[21] - The balance of accumulated other comprehensive loss as of September 30, 2025, was $(131.290) million, compared to $(104.382) million as of September 30, 2024, reflecting an increase in loss of 25.8%[17] - The company expects to reclassify approximately $10.5 million of net derivative loss from other comprehensive income into earnings within the next 12 months[55] Receivable Portfolios - The fair value of receivable portfolios as of September 30, 2025, was estimated at $4.55 billion, an increase from $4.05 billion as of December 31, 2024[44] - The total face value of receivable portfolios as of September 30, 2025, was $2,767,966 thousand, compared to $2,170,385 thousand as of September 30, 2024, indicating an increase of approximately 27.5%[65] - The balance of receivable portfolios, net at the end of the period was $4,270,016 thousand, up from $3,719,260 thousand in the same period of 2024, indicating an increase of about 14.8%[63]

Financial Performance Highlights - Portfolio purchases increased by 23% to $346 million[6] - Collections increased by 20% to $663 million[6, 15] - Estimated Remaining Collections (ERC) increased by 10% to $9.5 billion[6] - Earnings Per Share (EPS) increased by 152% to $3.17[6] - Average Receivable Portfolios increased by 16% to $4.2 billion[6] Market and Strategy - The company is allocating more capital to U S opportunities where returns are highest[13] - MCM (U S ) portfolio purchases in Q3 2025 were $261 million, up 13% compared to Q3 2024[26] - MCM (U S ) collections in Q3 2025 were $502 million, up 25% compared to Q3 2024[26] Liquidity and Debt - The company added $550 million of liquidity and has no significant maturities until 2028[36] - Available liquidity as of September 30, 2025, was $736 million, including $491 million available from the Revolving Credit Facility, $97 million from the U S Facility, and $148 million in cash[39] Updated Guidance - The company maintains its guidance for portfolio purchases to exceed $1 35 billion[44] - The company updated its guidance for collections to +18% to $2 55 billion[44]

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

Core Insights - Encore Capital Group reported strong financial performance in Q3 2025, with significant increases in portfolio purchases and collections, leading to a substantial rise in earnings per share [2][5][4]. Financial Performance - Portfolio purchases reached $346 million, a 23% increase compared to Q3 2024, with U.S. purchases at $261 million, up 13% year-over-year [2][4]. - Record collections amounted to $663 million, reflecting a 20% increase from the previous year, with U.S. collections at $502 million, up 25% [2][4]. - Earnings per share for Q3 2025 were $3.17, a remarkable 152% increase from $1.26 in Q3 2024 [2][4]. Business Segments - The U.S. MCM business showed strong results, with portfolio purchases of $261 million and record collections of $502 million [2]. - The Cabot business in Europe reported portfolio purchases of $85 million and collections of $160 million, an 8% increase compared to the same quarter last year [2]. Guidance and Future Outlook - The company raised its global collections guidance for the full year 2025 to approximately $2.55 billion, indicating an 18% year-over-year growth [2]. - Portfolio purchasing guidance remains unchanged, with expectations to exceed $1.35 billion in purchases made in 2024 [2]. Share Repurchase Program - The company repurchased $10 million of its common stock in Q3 and nearly $25 million in Q4 to date, totaling approximately $60 million year-to-date [3]. - The board authorized an additional $300 million to its existing share repurchase program [3].

Group 1: Encore Capital Group (ECPG) - Encore Capital Group is an international specialty finance company providing debt recovery solutions and related services for consumers across various financial assets [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a 3.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Encore Capital Group has a price-to-earnings ratio (P/E) of 5.05, significantly lower than the industry average of 13.40, and possesses a Value Score of A [2] Group 2: TechnipFMC (FTI) - TechnipFMC is a leading manufacturer and supplier of products, services, and fully integrated technology solutions for the energy industry [2] - The company also carries a Zacks Rank of 1 and has experienced a 0.8% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [2] - TechnipFMC has a price-to-earnings ratio (P/E) of 16.42, which is slightly lower than the industry average of 16.80, and has a Value Score of B [3]

Core Insights - The Zacks Consumer Loans industry is experiencing a positive outlook due to falling interest rates and easing lending standards, which are expected to sustain and boost loan demand, leading to modest growth in revenues [1][4]. Industry Overview - The Zacks Consumer Loans industry includes companies that provide various loan products such as mortgages, credit card loans, and personal loans, generating net interest income (NII) as a primary revenue source [3]. - The industry's performance is closely tied to the overall economic conditions and consumer sentiments, with many companies diversifying their revenue through services like commercial lending and insurance [3]. Major Influencing Themes - **Interest Rates & Loan Demand**: The Federal Reserve has lowered interest rates by 25 basis points and indicated further cuts, which is expected to keep loan demand steady and improve net interest margins (NIM) and NII [4]. - **Lending Standards**: Improved credit scores and looser lending criteria are expanding the borrower base, aiding consumer loan providers in meeting loan demand [5]. - **Asset Quality**: Falling interest rates are likely to enhance borrowers' repayment capacity, although a slight increase in non-performing loans is anticipated [6]. Industry Performance - The Zacks Consumer Loans industry ranks 87 among over 250 Zacks industries, placing it in the top 36% and indicating potential outperformance in the near term [7][8]. - Over the past two years, the industry has outperformed the Zacks S&P 500 composite and the Zacks Finance sector, with a collective increase of 127.6% compared to 56.9% and 51.2% for the S&P 500 and Finance sector, respectively [11]. Valuation Metrics - The industry has a trailing 12-month price-to-tangible book ratio (P/TBV) of 1.13X, above the five-year median of 1.02X, and is trading at a significant discount compared to the S&P 500's P/TBV of 13.68X [14][16]. Investment Opportunities - **Capital One Financial Corporation (COF)**: Focused on consumer and commercial lending, with a market cap of $135.5 billion. The company is expected to see modest improvements in NII and NIM due to anticipated interest rate cuts, with a projected earnings growth of 22.1% for 2025 [19][21][22]. - **Encore Capital Group, Inc. (ECPG)**: Specializes in debt recovery services, with a market cap of $981.9 million. The company is expected to benefit from rising delinquency rates and improved collections as interest rates decline, with earnings projected to jump 63.3% this year [24][26][27].

Core Viewpoint - Encore Capital Group (ECPG) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Company Performance and Outlook - The upgrade reflects an improvement in Encore Capital Group's underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. - The Zacks Consensus Estimate for Encore Capital Group has increased by 23.6% over the past three months, with expected earnings of $8.31 per share for the fiscal year ending December 2025, indicating no year-over-year change [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Stocks in the top 20% of Zacks-covered stocks, like Encore Capital Group with its Zacks Rank 2, are positioned for potential market-beating returns in the near term [10].

Core Insights - Encore Capital Group, Inc. will release its financial results for Q3 2025 on November 5, 2025, after market close [1] - A conference call will be held on the same day at 2:00 p.m. Pacific / 5:00 p.m. Eastern time, featuring key executives discussing the results [1] Company Overview - Encore Capital Group is an international specialty finance company that provides debt recovery solutions and related services for consumers [3] - The company purchases portfolios of consumer receivables from major banks, credit unions, and utility providers [3] - Encore operates with a Consumer Bill of Rights, offering industry-leading commitments to consumers [4] - The company is headquartered in San Diego and is publicly traded on NASDAQ under the ticker symbol ECPG [4]

Financial Data and Key Metrics Changes - Portfolio purchases in Q2 2025 were $367 million, up 32% compared to Q2 2024 [6][13] - Collections increased by 20% to a record $655 million, with Estimated Remaining Collections (ERC) rising 12% to $9.4 billion [6][14] - Earnings per share for Q2 were $2.49, an increase of 86% compared to the same quarter last year [6][26] - Leverage improved to 2.6 times, compared to 2.7 times a year ago [7][26] - Net income increased by 82% to $59 million [26] Business Line Data and Key Metrics Changes - Midland Credit Management (MCM) in the U.S. had record portfolio purchases of $317 million, a 34% increase year-over-year [8][18] - MCM collections reached $490 million, up 24% compared to Q2 last year [8][18] - Cabot Credit Management in Europe reported collections of $164 million, up 10% year-over-year, and portfolio purchases of $50 million [8][19] Market Data and Key Metrics Changes - U.S. revolving credit remains near record levels, with elevated charge-off rates driving robust portfolio supply [15][16] - U.S. consumer credit card delinquencies are at multi-year highs, indicating favorable purchasing conditions [16][17] - In Europe, the market is impacted by subdued consumer lending and low delinquencies, leading to lower supply [19][57] Company Strategy and Development Direction - The company focuses on markets with strong regulatory frameworks and stable long-term returns [12] - The three-pillar strategy emphasizes market focus, operational execution, and cash generation [11][15] - The company aims to maintain a strong balance sheet and flexible funding structure to capitalize on purchasing opportunities [30][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the favorable purchasing environment in the U.S. and expects MCM to surpass its 2024 purchasing record [41][42] - The company raised its guidance for global collections growth to approximately 15.5%, expecting total collections to reach $2.5 billion [34][30] - Management noted stable consumer payment behavior despite macroeconomic uncertainties [23][26] Other Important Information - The company increased its revolving credit facility by $190 million to $1.485 billion, extending its maturity to 2029 [27] - Interest expense is expected to be approximately $285 million for the year, with a corporate tax rate around 25% [25][34] Q&A Session Summary Question: Any one-timers in the second quarter affecting the $285 million guidance? - Management confirmed that the $285 million is the expected figure for the year without any anticipated one-timers [39] Question: What is the outlook for supply given the recent downtick in charge-off rates and delinquencies? - Management indicated that supply remains elevated and favorable, with confidence in purchasing ability [41][42] Question: Can you provide updated collections multiples for MCM and Cabot? - For 2025 vintage, MCM's multiple is 2.3 and Cabot's is 2.4 [43] Question: What factors contributed to the year-over-year growth in collections? - Management highlighted stable U.S. consumer behavior, increased purchasing, and operational performance improvements [47] Question: Can you break down the outperformance in collections between the U.S. and Cabot? - Approximately $45 million of the $55.6 million outperformance was attributed to MCM [50][51] Question: What is the competitive dynamics and pricing in the purchasing environment? - The U.S. market remains stable with good supply and pricing, while Europe faces lower supply and higher competition [56][57]