Financial Data and Key Metrics Changes - The company reported a 19% growth in portfolio purchases and a 13% growth in trailing twelve months adjusted EBITDA, marking the seventh consecutive quarter of adjusted EBITDA growth [6][7][29] - Net income attributable to the company was $4 million, or $0.09 in diluted earnings per share, which was lower than in recent quarters due to moderated changes in expected recoveries [29][31] - Total revenues for the quarter were $270 million, up 5% year over year, while operating expenses increased by 3% to $195 million [27][29] Business Line Data and Key Metrics Changes - In the U.S. legal collections channel, cash collections increased by 33% year over year to $111 million [8] - Portfolio income was $241 million for the quarter, reflecting a 19% increase due to higher portfolio investments and improved returns [24][29] - The company purchased $292 million of portfolios during the quarter, with $161 million in the U.S. and $113 million in Europe [21][22] Market Data and Key Metrics Changes - The company grew its Estimated Remaining Collections (ERC) to a record $7.8 billion, up 20% year over year and 5% sequentially [22][29] - Cash collections for the quarter were $497 million, an 11% increase from the prior year, with U.S. core cash collections up 20% [23][25] - Approximately half of total collections in Q1 came from outside the U.S., with nearly half of U.S. collections coming from the legal collections channel [23][25] Company Strategy and Development Direction - The company is focused on optimizing investments, operational execution, and managing expenses as part of its three strategic pillars [7][10] - The leadership transition to Martin Sjolund is expected to leverage successful strategies from the European business to enhance global operations [11][15] - The company aims to maintain a disciplined investment approach, avoiding aggressive M&A and focusing on attractive opportunities [17][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while net income was lower, the company maintained profitability and cash efficiency improved by nearly 300 basis points [6][7] - The company remains cautious about the macroeconomic environment but sees continued engagement from customers, reflected in the establishment of payment plans [26][36] - The company expects portfolio supply to remain elevated in the U.S. and stable in Europe, indicating a positive outlook for future cash collections [23][30] Other Important Information - The company completed the sale of its equity interest in Brazil, generating an estimated after-tax gain of approximately $28 million [31][69] - The debt to adjusted EBITDA ratio was 2.93 times as of March 31, within the long-term target range [29][30] - The company has $3.1 billion in total committed capital under credit facilities, with $919 million available for investment [30] Q&A Session Summary Question: What is the state of the consumer and tax refund season? - Management indicated that tax refunds were normal compared to prior years, and consumer engagement remains positive, with no signs of a decline in consumer activity [35][36] Question: Does the reduction in earnings guidance reflect first-quarter performance? - Management clarified that the first quarter's performance was lower than expected, prompting a cautious outlook for the remainder of the year due to macroeconomic uncertainties [42][43] Question: Will legal collection costs continue to be elevated? - Management expects legal collection costs to increase but at a much lower rate than in the previous year, indicating a moderation in spending [66][67] Question: How should noncontrolling interest be modeled? - Noncontrolling interest is primarily from investments in Brazil, with gains recognized from exiting a stake in a servicing company [68][69]

Financial Data and Key Metrics Changes - The company reported a 19% growth in portfolio purchases, with net income at $4 million, or $0.09 in diluted earnings per share, which was lower than in recent quarters due to moderated changes in expected recoveries [6][30] - Adjusted EBITDA grew by 13% year over year, marking the seventh consecutive quarter of growth [7][30] - Cash efficiency ratio improved to 61%, up from 58% in the prior year period [29] Business Line Data and Key Metrics Changes - U.S. legal cash collections increased by 33% year over year to $111 million, driven by reduced cycle times and optimized post-judgment activities [8] - Portfolio income for the quarter was $241 million, up 19% year over year, reflecting increased portfolio investments and improved returns [25] - Total portfolio revenue was $269 million for the quarter, with changes in expected recoveries amounting to $28 million [25] Market Data and Key Metrics Changes - The company purchased $292 million of portfolios during the quarter, with $178 million in the Americas and $113 million in Europe [21] - The expected cash collections from the current ERC balance is approximately $1.8 billion over the next twelve months [22] - Cash collections for the quarter were $497 million, up 11% from the prior year, with U.S. core cash collections up 20% [23][26] Company Strategy and Development Direction - The company is focused on optimizing investments, operational execution, and managing expenses as part of its three strategic pillars [7][10] - The leadership transition aims to leverage successful strategies from the European business to enhance global operations [11][15] - The company plans to continue investing judiciously in portfolios while maintaining a disciplined approach to capital deployment [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted a positive level of consumer engagement, with no significant signs of weakening consumer behavior despite a mismatch in cash collection expectations [38][40] - The macroeconomic environment remains uncertain, prompting a cautious approach to future cash generation expectations [44][47] - The company expects portfolio supply to remain elevated in the U.S. and stable in Europe, supporting ongoing investment opportunities [23][58] Other Important Information - The company completed the sale of its equity interest in Brazil, generating an estimated after-tax gain of approximately $28 million [32][70] - The effective tax rate for the quarter was 32%, with expectations for the full year to be in the mid-20s [29] Q&A Session Summary Question: What is the state of the consumer and tax refund season? - Management indicated that tax refunds were normal and consumer engagement remains positive, with no signs of a decline in consumer activity [37][38] Question: What are the implications of the reduction in earnings guidance? - The reduction reflects the first quarter's performance and a cautious outlook due to macroeconomic uncertainties [44][46] Question: Will legal collection costs continue to be elevated? - Legal collection costs are expected to increase but at a much lower level than in the previous year [67][68] Question: How should noncontrolling interest be modeled? - Noncontrolling interest relates to investments in Brazil, with gains recognized from exiting a stake in a servicing company [69][70]