Core Insights - Encore Capital Group, Inc. (ECPG) shares have increased by 24.3% since the release of first-quarter 2025 results, driven by rising collections and strong portfolio purchasing, although higher expenses have partially offset these gains [1] Financial Performance - ECPG reported adjusted earnings per share (EPS) of $1.93 for Q1 2025, exceeding the Zacks Consensus Estimate by 55.7% and improving from $0.95 in the prior year [1] - Revenues increased by 19.6% year over year to $392.8 million, surpassing the consensus mark by 5.5% [2] - Total debt purchasing revenues rose by 20.8% year over year to $366.7 million, while servicing revenues increased by 10.6% to $22.5 million, beating the consensus estimate of $20 million [3] Collections and Expenses - Collections grew by 18% year over year to $604.8 million, exceeding the consensus estimate of $583.3 million, supported by strong portfolio purchasing and a stable collections environment [4] - Total operating expenses rose by 8% year over year to $263.4 million, driven by increased salaries, legal collection costs, and general administrative expenses [4] Interest and Net Income - Interest expenses increased by 26.5% year over year to $70.5 million, while net income surged by 101% year over year to $46.8 million [5] - Global portfolio purchases reached $367.9 million, up from $295.7 million a year ago, with $316.4 million deployed in the United States [5] Financial Position - As of March 31, 2025, total assets were $5 billion, up from $4.8 billion at the end of 2024, while cash and cash equivalents decreased to $187.1 million [5][6] - Borrowings increased to $3.8 billion from $3.7 billion, and total liabilities rose to $4.2 billion from $4 billion at the end of 2024 [6] - Total equity increased to $819.1 million from $767.3 million at the end of 2024 [6] Share Repurchase and Guidance - ECPG repurchased $10 million worth of shares in Q1 2025 [7] - Management expects portfolio purchasing to exceed $1.35 billion in 2025 and collections to grow by approximately 11% to $2.4 billion [8] Zacks Rank - ECPG currently holds a Zacks Rank 2 (Buy) [9]
Encore Capital Q1 Earnings Top Estimates on Higher Portfolio Purchases