Jefferson Capital Reports Third Quarter 2025 Results

Core Insights - Jefferson Capital, Inc. reported strong financial results for Q3 2025, with collections growing 63% to $236.8 million and deployments increasing 22% to $151.0 million, marking the largest third quarter deployments in the company's history [1][6][10] - The company achieved a pre-tax income of $45.5 million, a 16% increase year-over-year, with net income reaching $38.4 million and earnings per share (EPS) of $0.59 [1][6][10] - The Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on December 4, 2025 [1][15] Financial Performance - Total collections increased by 63.2% or $91.7 million compared to Q3 2024, with significant contributions from the United States, which saw collections of $182.9 million [4][7] - Deployments rose to $151.0 million, up 22.3% from $123.4 million in the same quarter last year, with notable growth in the U.S. market [9][10] - Adjusted pre-tax income increased by 30% to $54.8 million, with adjusted net income of $47.7 million, resulting in an adjusted EPS of $0.74 [1][6][34][37] Market Position and Strategy - The company continues to execute its differentiated strategy effectively, capitalizing on favorable investment conditions characterized by high consumer credit delinquencies and low unemployment rates [2] - Jefferson Capital has enhanced its market position by upsizing its revolving credit facility to $1 billion, improving pricing and terms [2][16] - The company signed a strategic portfolio purchase agreement for a sizable credit card portfolio from Bluestem Brands, following a previous acquisition from Conn's [2][16] Operational Metrics - The estimated remaining collections (ERC) rose by 27% to $2.9 billion, indicating strong future revenue potential [6][8] - The cash efficiency ratio improved to 72.2%, reflecting effective management of operating expenses, which increased by 59.5% to $80.2 million due to higher servicing costs and salaries [6][13][33] - The leverage ratio improved to 1.59x from 2.52x, demonstrating enhanced financial stability [6][13][39]