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]

Financial Performance - Encore's portfolio purchases increased by 24% to $368 million in Q1 2025[6] - Collections increased by 18% to $605 million in Q1 2025 compared to Q1 2024[6] - EPS increased by 103.2% to $1.93 in Q1 2025 compared to $0.95 in Q1 2024[6, 32] - Cash generation for the trailing twelve months increased by 23% for Q1 2025 compared to Q1 2024[17] - The company's leverage improved to 2.6x from 2.8x year-over-year[6] Segment Performance - MCM (U.S.) portfolio purchases increased by 34% to a record $316 million in Q1 2025 compared to Q1 2024[6, 25] - MCM (U.S.) collections increased by 23% to a record $454 million in Q1 2025 compared to Q1 2024[6, 25] - Cabot (Europe) collections increased by 7% to $150 million in Q1 2025 compared to Q1 2024[6, 29] - Cabot (Europe) portfolio purchases were $51 million in Q1 2025, in line with historical trends[6, 29] Market Dynamics and Guidance - The company expects interest expense in 2025 to be $285 million[41] - The company expects the effective tax rate in 2025 to be in the mid-20's %[41] - The company reiterates its full-year guidance, expecting portfolio purchases to exceed $1.35 billion and collections to increase by 11% to $2.4 billion[41]

Financial Data and Key Metrics Changes - Portfolio purchases in Q1 were $368 million, up 24% compared to Q1 2024, while collections reached $654 million, an 18% increase [6][13][14] - Earnings per share for Q1 was $1.93, reflecting a 103% increase year-over-year [6][31] - Leverage improved to 2.6 times, down from 2.8 times a year ago [7][32] - Operating expenses increased by 8% to $263 million, indicating significant operating leverage [29] Business Line Data and Key Metrics Changes - Midland Credit Management (MCM) in the U.S. achieved record portfolio purchases of $316 million, a 34% increase year-over-year, and collections of $454 million, up 23% [9][18] - Cabot Credit Management in Europe reported portfolio purchases of $51 million and collections of $150 million, a 7% increase compared to the previous year [19][20] Market Data and Key Metrics Changes - U.S. revolving credit remains near record levels, with the credit card charge-off rate at its highest in over ten years, driving robust portfolio supply [15][16] - Delinquency rates in the U.S. are near multi-year highs, indicating favorable purchasing conditions [15][17] Company Strategy and Development Direction - The company focuses on markets with strong regulatory frameworks and stable long-term returns, primarily in the U.S. and the U.K. [12][11] - The three-pillar strategy emphasizes market focus, operational efficiency, and compliance to enhance performance and shareholder value [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the favorable U.S. market conditions for 2025, anticipating continued growth in portfolio purchases and collections [36][66] - The company expects global portfolio purchasing in 2025 to exceed $1.35 billion, with collections projected to grow by 11% to $2.4 billion [36] Other Important Information - The company resumed share repurchases in Q1, purchasing $10 million worth of shares [8][34] - Interest expense increased by 30% to $69 million due to higher debt balances and interest rates [30] Q&A Session Summary Question: Was the collections performance at Cabot a function of updated forecasts or underlying improvements? - Management indicated it was a combination of improved operations and updated forecasts [42] Question: What is the expected collections multiple for U.S. and Cabot? - Both MCM and Cabot had a collections multiple of 2.3 for Q1 [43] Question: Are purchasing conditions in the U.S. stable? - Management noted that purchasing conditions remain favorable, with expectations for continued strong supply [46] Question: Any volatility in collectability during Q1? - Management reported stable consumer behavior and no significant issues during tax season [47] Question: What drives the cash overs and negative revisions to forecasted recoveries? - Management explained that cash overs and NPV changes are based on different vintages and are not always directly correlated [54] Question: How should changes in recoveries impact core EPS? - Management provided an estimate that the changes in recoveries could translate to about 73 cents impact on EPS [59] Question: Will the pace of buybacks continue throughout 2025? - Future buybacks will depend on financial conditions and performance, but the current pace is expected to continue [62] Question: What is attracting the U.S. market for purchases? - The U.S. market is favorable due to high lending, elevated charge-offs, and ample supply of portfolios [66]

Financial Data and Key Metrics Changes - Portfolio purchases in Q1 2025 were $368 million, up 24% compared to Q1 2024, while collections reached $654 million, an increase of 18% [6][13][14] - Earnings per share for Q1 2025 were $1.93, reflecting a 103% increase from $0.95 in Q1 2024 [6][29] - Leverage improved to 2.6 times, down from 2.8 times a year ago, and flat compared to Q4 2024 [7][31] - Cash generation for the trailing twelve months was up 23% compared to the same period last year [14] Business Line Data and Key Metrics Changes - Midland Credit Management (MCM) in the U.S. had record portfolio purchases of $316 million, a 34% increase year-over-year, and collections of $454 million, up 23% [8][17] - Cabot Credit Management in Europe reported portfolio purchases of $51 million, consistent with historical trends, and collections of $150 million, up 7% [8][18] Market Data and Key Metrics Changes - U.S. revolving credit remains near record levels, with the credit card charge-off rate at its highest in over ten years, indicating favorable purchasing conditions [15][17] - U.S. consumer credit card delinquencies are near multi-year highs, supporting expectations for strong portfolio sales by banks and credit card issuers in 2025 [15][16] Company Strategy and Development Direction - The company focuses on markets with strong regulatory frameworks and stable long-term returns, primarily in the U.S. and the U.K. [12] - The three-pillar strategy emphasizes market focus, operational efficiency, and compliance to enhance performance and shareholder value [11][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the favorable U.S. market conditions, anticipating continued growth in portfolio purchasing and collections in 2025 [34][35] - The company expects global portfolio purchasing in 2025 to exceed $1.35 billion, with global collections projected to grow by 11% to $2.4 billion [35] Other Important Information - The company resumed share repurchases in Q1 2025, purchasing $10 million worth of shares [7][33] - Interest expense increased by 30% to $69 million due to higher debt balances and interest rates [28] Q&A Session Summary Question: Was the collections performance at Cabot a function of updated forecasts or underlying improvements? - Management indicated it was a combination of both improved operations and updated forecasts [40][41] Question: What is the expected collections multiple for U.S. and Cabot? - Both MCM and Cabot had a collections multiple of 2.3 times for Q1 [42] Question: Are purchasing conditions in the U.S. stable? - Management confirmed that purchasing conditions remain favorable, with stable delinquency and charge-off rates [44][45] Question: Any volatility in collectability during Q1? - Management reported stable consumer behavior and no significant issues during tax season [46][47] Question: What drives cash overs and negative revisions to forecasted recoveries? - Management explained that cash overs and NPV changes are based on different vintages and are not always directly correlated [53][55] Question: How should the $21.5 million of changes in recoveries be viewed from a core EPS perspective? - Management indicated that this could translate to about 73 cents impact on EPS, but emphasized the strong collections performance [58][60] Question: Will the pace of buybacks continue throughout 2025? - Future buybacks will depend on financial conditions and market opportunities, but the company has resumed repurchases as planned [61][63] Question: What is attracting the U.S. market for purchases going forward? - Management noted ample supply and strong returns, with expectations for record purchasing in 2025 [67][68] Question: Any unusual mix between new payment plans and one-time payments during Q1? - Management confirmed that there were no unusual changes in payment types, with consistent performance across all channels [72][74] Question: How long before a newly acquired bank might start selling into the market? - Management suggested it would take time for any new seller to align strategies and begin selling, indicating a gradual process [76][77]

PRA Group Q1 2025 Conference Call Presentation Nasdaq: PRAA Forward-Looking Statements 1 Nasdaq: PRAA Q1 2025 Highlights Started 2025 with Momentum and Delivered Strong Results | Metric ($ in M, except per share amounts) | Q1 2025 | Q1 2024 | Change | | --- | --- | --- | --- | | Portfolio Purchases | $292 | $246 | +19% | | ERC1 | $7,805 | $6,498 | +20% | | Cash Collections | $497 | $450 | +11% | | Cash Efficiency Ratio2 | 60.8% | 58.0% | +284 bps | | Changes in Expected Recoveries | $28 | $52 | (46%) | | Ne ...

Core Insights - PRA Group, Inc. reported a record estimated remaining collections (ERC) of $7.8 billion, reflecting a 20.1% year-over-year increase, driven by a 19% growth in portfolio purchases [1][8] - The company achieved total cash collections of $497.4 million in Q1 2025, marking a 10.7% increase compared to $449.5 million in Q1 2024 [5][8] - The transition to the newly appointed CEO Martin Sjolund is expected to enhance the company's strategic initiatives and operational efficiency [1][4] Financial Performance - Net income attributable to PRA Group, Inc. for Q1 2025 was $3.7 million, a 5.3% increase from $3.5 million in Q1 2024, with diluted earnings per share remaining at $0.09 [4][19] - Total portfolio revenue increased by 6.0% to $268.9 million in Q1 2025, compared to $253.7 million in Q1 2024 [6][8] - Operating expenses rose by 3.1% to $195.0 million in Q1 2025, primarily due to investments in the U.S. legal collections channel [17][19] Cash Collections and Portfolio Purchases - Total portfolio purchases reached $291.7 million in Q1 2025, an 18.7% increase from $245.8 million in Q1 2024 [9][8] - Cash collections from the Americas and Australia Core segment amounted to $288.2 million in Q1 2025, up from $256.9 million in Q1 2024 [5][9] - The company reported a cash efficiency ratio of 60.8%, reflecting an improvement of 284 basis points year-over-year [8] Strategic Outlook - The company maintains its long-term financial targets, with an expectation that the return on average tangible equity will be lower than the previously targeted 12% [4][8] - The management is optimistic about the overall trajectory of the business, emphasizing a commitment to driving growth, profitability, and shareholder value [4][8]

NORFOLK, Va., April 21, 2025 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, will report its first quarter 2025 results after market close on Monday, May 5, 2025, followed by a webcast and conference call at 5 p.m. E.T.To listen to PRA Group's webcast and view the corresponding slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone on May 5, call 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask fo ...

Core Viewpoint - PRA Group, Inc. (PRAA) is well-positioned for growth in debt collection, having expanded its services to include government work and audit services, despite a recent decline in stock value that is less severe than the industry average [1][2]. Company Overview - PRA Group has a market capitalization of $708.8 million and operates globally, acquiring and collecting non-performing loans and debt, with a growing presence in the Americas, Europe, and Australia [2]. - The company currently holds a Zacks Rank 2 (Buy), indicating solid prospects for future performance [2]. Financial Estimates - The Zacks Consensus Estimate for PRA Group's 2025 earnings is $2.26 per share, reflecting a 26.3% year-over-year increase, with three upward estimate revisions in the past two months [3]. - Revenue estimates for 2025 are projected at $1.17 billion, indicating a 5.2% year-over-year rise [3]. Growth Drivers - PRA Group achieved a record portfolio purchase of $1.4 billion in the fourth quarter of 2024, marking a 22% year-over-year increase, and anticipates further growth in 2025 [4]. - The company reported $1.9 billion in cash collections for 2024, representing a 13% year-over-year growth, with 89% of cash collections coming from portfolios purchased before 2024 [5]. Financial Performance - The cash efficiency ratio improved to 59% in 2024 from 58% in 2023, with total revenues of $293 million for Q4 2024 and $1.1 billion for the full year, reflecting increases of 32% and 39% respectively [6]. - In Q4 2024, net income attributable to PRAA was 47 cents per share, exceeding the Zacks Consensus Estimate by 4.4%, and the company has consistently beaten earnings estimates over the past four quarters, with an average surprise of 297.1% [6].

Core Points - PRA Group, Inc. has appointed Martin Sjolund as President and CEO effective June 17, 2025, succeeding Vikram Atal, who will retire and serve as a senior advisor until December 31, 2025 [1][2] - The Board of Directors emphasized that this leadership transition is part of an ongoing succession planning process aimed at ensuring long-term, profitable growth for the company [2] - Sjolund has a strong track record in the European market, having overseen nearly $3 billion in portfolio investments and significantly improved profitability during his tenure as President of PRA Group Europe [3] Company Overview - PRA Group, Inc. is a global leader in acquiring and collecting nonperforming loans, helping to return capital to banks and creditors, thereby expanding financial services for consumers in the Americas, Europe, and Australia [6] - The company has thousands of employees worldwide and collaborates with customers to assist them in resolving their debt [6] Leadership Background - Martin Sjolund has been with PRA Group since 2014, previously serving as Chief Operating Officer of Europe and Director of Group Strategy and Corporate Development [4][5] - Before joining PRA Group, Sjolund held leadership roles in global technology companies and worked as a management consultant with McKinsey & Company [5]