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ENCORE CAPITAL GROUP, INC.
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 6, 2026, Encore Capital Group, Inc. (“Encore”) issued a press release announcing its financial results for the quarter ended March 31, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in Item 2.02 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1, is being furnished to the Securities and Exchange Commission pursuant to Item 2.02, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by a specific reference in such filing.
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Exhibit 99.1
Encore Capital Group Announces First Quarter 2026 Financial Results
•Favorable purchasing conditions continue in U.S. market
•Global portfolio purchases of $363 million, including $316 million in U.S.
•Global collections up 19% to record $718 million
•Earnings per share of $3.86
SAN DIEGO, May 6, 2026 — Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company, today reported consolidated financial results for the first quarter ended March 31, 2026.
“Encore delivered another quarter of strong performance in Q1 as our industry leadership and operational improvement remain on full display,” said Ashish Masih, President and Chief Executive Officer. “Our business continues to thrive with solid first quarter portfolio purchases of $363 million and record collections of $718 million, which were up 19% compared to a year ago. This collections performance helped earnings increase sharply, with first quarter earnings per share of $3.86 up 100% compared to $1.93 per share a year ago.”
“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 first quarter were $316 million, one of our strongest portfolio purchasing quarters ever. MCM also delivered record collections of $556 million in the first quarter, up 23% compared to Q1 a year ago. This exceptional collections performance is the result of strong execution and continued significant portfolio purchasing as well as the deployment of new technologies, enhanced digital capabilities and continued operational innovation.”
“Our Cabot business in Europe delivered a solid first quarter. Portfolio purchases of $47 million were consistent with Cabot’s recent historical trend while collections of $161 million were up 7% compared to the first quarter last year.”
“As a result of our strong start to the year, we are raising our global collections guidance and now expect our full-year 2026 collections to be approximately $2.8 billion, reflecting year-over-year growth of 8%. Additionally, we are raising our earnings guidance and now expect our earnings per share in 2026 to increase 19% to $13.00. Our guidance for portfolio purchasing remains unchanged from our view in February as we continue to anticipate our global portfolio purchases this year to be within a range from $1.4 billion to $1.5 billion. As always, we remain committed to the critical role we play in the consumer credit ecosystem and to helping consumers restore their financial health,” said Masih.
In the first quarter, the company repurchased $20 million of its shares of common stock.
Encore Capital Group, Inc.
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Financial Highlights for the First Quarter of 2026:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands, except percentages and earnings per share) | 2026 | 2025 | Change | ||||||||||||||
| Portfolio purchases(1) | $ | 362,841 | $ | 367,851 | (1)% | ||||||||||||
| Average receivable portfolios(2) | $ | 4,404,473 | $ | 3,864,450 | 14% | ||||||||||||
| Estimated Remaining Collections (ERC) | $ | 9,825,266 | $ | 8,862,661 | 11% | ||||||||||||
| Collections | $ | 718,414 | $ | 604,807 | 19% | ||||||||||||
| Revenues | $ | 475,411 | $ | 392,775 | 21% | ||||||||||||
| Operating expenses | $ | 291,419 | $ | 263,432 | 11% | ||||||||||||
| Net income | $ | 86,243 | $ | 46,796 | 84% | ||||||||||||
| Earnings per share | $ | 3.86 | $ | 1.93 | 100% | ||||||||||||
______________________
(1)Includes U.S. purchases of $315.8 million and $316.4 million, and Europe purchases of $47.0 million and $51.5 million in Q1 2026 and Q1 2025, respectively.
(2)Represents the average of receivable portfolios for the quarter (sum of receivable portfolios at the beginning and end of the quarter divided by 2).
Conference Call and Webcast
Encore will host a conference call and slide presentation today, May 6, 2026, at 2:00 p.m. Pacific / 5:00 p.m. Eastern time, to present and discuss first quarter results.
Members of the public are invited to access the live webcast via the Internet by logging in on the Investor Relations page of Encore’s website at encorecapital.com. To access the live conference call by telephone, please pre-register using this link. Registrants will receive confirmation with dial-in details.
For those who cannot listen to the live broadcast, a replay of the webcast will be available on the Company’s website shortly after the call concludes.
Encore Capital Group, Inc.
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Non-GAAP Financial Measures
This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company has included information concerning adjusted EBITDA because management utilizes this information in the evaluation of its operations and believes that this measure is a useful indicator of the Company’s ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. Adjusted EBITDA has not been prepared in accordance with GAAP and should not be considered as an alternative to, or more meaningful than, net income and net income per share as indicators of the Company’s operating performance. Further, this non-GAAP financial measure, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. A reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure is below.
About Encore Capital Group, Inc.
Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, and utility providers.
Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at http://www.encorecapital.com.
Encore Capital Group, Inc.
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Forward Looking Statements
The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results (including purchases and collections), performance, supply and pricing, liquidity, business plans or prospects. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent report on Form 10-K, as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.
Contact:
Bruce Thomas
Encore Capital Group, Inc.
Vice President, Global Investor Relations
bruce.thomas@encorecapital.com
SOURCE: Encore Capital Group, Inc.
FINANCIAL TABLES FOLLOW
Encore Capital Group, Inc.
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Financial Condition
(In Thousands, Except Par Value Amounts)
(Unaudited)
| March 31, 2026 |
December 31, 2025 |
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| Assets | |||||||||||
| Cash and cash equivalents | $ | 227,204 | $ | 156,784 | |||||||
| Receivable portfolios, net | 4,437,415 | 4,371,532 | |||||||||
| Property and equipment, net | 79,292 | 82,080 | |||||||||
| Other assets | 177,163 | 193,113 | |||||||||
| Goodwill | 529,487 | 536,291 | |||||||||
| Total assets | $ | 5,450,561 | $ | 5,339,800 | |||||||
| Liabilities and Equity | |||||||||||
| Liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 252,277 | $ | 230,261 | |||||||
| Borrowings | 4,033,301 | 4,001,293 | |||||||||
| Other liabilities | 130,175 | 131,496 | |||||||||
| Total liabilities | 4,415,753 | 4,363,050 | |||||||||
| Commitments and Contingencies | |||||||||||
| Equity: | |||||||||||
| Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding | — | — | |||||||||
| Common stock, $0.01 par value, 75,000 shares authorized, 21,499 and 21,688 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | 215 | 217 | |||||||||
| Additional paid-in capital | — | — | |||||||||
| Accumulated earnings | 1,167,038 | 1,104,640 | |||||||||
| Accumulated other comprehensive loss | (132,445) | (128,107) | |||||||||
| Total stockholders’ equity | 1,034,808 | 976,750 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,450,561 | $ | 5,339,800 | |||||||
The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”) included in the condensed consolidated statements of financial condition above. Most assets in the table below include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities exclude amounts where creditors or beneficial interest holders have recourse to the general credit of the Company.
| March 31, 2026 |
December 31, 2025 |
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| Assets | |||||||||||
| Cash and cash equivalents | $ | 50,115 | $ | 40,256 | |||||||
| Receivable portfolios, net | 1,177,046 | 1,151,221 | |||||||||
| Other assets | 4,392 | 3,540 | |||||||||
| Liabilities | |||||||||||
| Accounts payable and accrued liabilities | 2,986 | 3,101 | |||||||||
| Borrowings | 783,444 | 791,182 | |||||||||
| Other liabilities | 1,352 | 2,774 | |||||||||
Encore Capital Group, Inc.
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
(Unaudited)
| Three Months Ended March 31, |
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| 2026 | 2025 | ||||||||||
| Revenues | |||||||||||
| Portfolio revenue | $ | 390,019 | $ | 345,218 | |||||||
| Changes in recoveries | 62,740 | 21,464 | |||||||||
| Total debt purchasing revenue | 452,759 | 366,682 | |||||||||
| Servicing revenue | 20,638 | 22,547 | |||||||||
| Other revenues | 2,014 | 3,546 | |||||||||
| Total revenues | 475,411 | 392,775 | |||||||||
| Operating expenses | |||||||||||
| Salaries and employee benefits | 114,541 | 105,932 | |||||||||
| Cost of legal collections | 89,221 | 68,013 | |||||||||
| General and administrative expenses | 39,629 | 41,018 | |||||||||
| Other operating expenses | 34,833 | 34,252 | |||||||||
| Collection agency commissions | 6,337 | 6,873 | |||||||||
| Depreciation and amortization | 6,858 | 7,344 | |||||||||
| Total operating expenses | 291,419 | 263,432 | |||||||||
| Income from operations | 183,992 | 129,343 | |||||||||
| Other expense | |||||||||||
| Interest expense | (73,050) | (70,530) | |||||||||
| Other income | 790 | 1,647 | |||||||||
| Total other expense | (72,260) | (68,883) | |||||||||
| Income before income taxes | 111,732 | 60,460 | |||||||||
| Provision for income taxes | (25,489) | (13,664) | |||||||||
| Net income | $ | 86,243 | $ | 46,796 | |||||||
| Earnings per share: | |||||||||||
| Basic | $ | 3.97 | $ | 1.96 | |||||||
| Diluted | $ | 3.86 | $ | 1.93 | |||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 21,728 | 23,879 | |||||||||
| Diluted | 22,320 | 24,269 | |||||||||
Encore Capital Group, Inc.
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ENCORE CAPITAL GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, In Thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities: | |||||||||||
| Net income | $ | 86,243 | $ | 46,796 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 6,858 | 7,344 | |||||||||
| Other non-cash interest expense, net | 2,537 | 3,544 | |||||||||
| Stock-based compensation expense | 4,575 | 3,424 | |||||||||
| Changes in recoveries | (62,740) | (21,464) | |||||||||
| Other, net | 4,681 | 1,737 | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Other assets | 4,892 | (3,499) | |||||||||
| Accounts payable, accrued liabilities and other liabilities | 35,280 | 7,401 | |||||||||
| Net cash provided by operating activities | 82,326 | 45,283 | |||||||||
| Investing activities: | |||||||||||
| Purchases of receivable portfolios, net of put-backs | (359,463) | (362,712) | |||||||||
| Collections applied to receivable portfolios | 328,395 | 259,589 | |||||||||
| Purchases of property and equipment | (4,856) | (6,990) | |||||||||
| Other, net | 8,517 | 9,835 | |||||||||
| Net cash used in investing activities | (27,407) | (100,278) | |||||||||
| Financing activities: | |||||||||||
| Payment of loan and debt refinancing costs | (1,109) | (255) | |||||||||
| Proceeds from credit facilities | 358,021 | 246,426 | |||||||||
| Repayment of credit facilities | (304,185) | (185,831) | |||||||||
| Repurchase and retirement of common stock | (20,092) | (10,004) | |||||||||
| Other, net | (14,026) | (9,999) | |||||||||
| Net cash provided by financing activities | 18,609 | 40,337 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 73,528 | (14,658) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (3,108) | 1,910 | |||||||||
| Cash and cash equivalents, beginning of period | 156,784 | 199,865 | |||||||||
| Cash and cash equivalents, end of period | $ | 227,204 | $ | 187,117 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid for interest | $ | 37,343 | $ | 41,303 | |||||||
| Cash paid for income taxes, net of refunds | 860 | 1,247 | |||||||||
| Supplemental schedule of non-cash investing activities: | |||||||||||
| Receivable portfolios transferred to real estate owned | $ | 1,020 | $ | 1,040 | |||||||
Encore Capital Group, Inc.
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ENCORE CAPITAL GROUP, INC.
Supplemental Financial Information
Reconciliation of Non-GAAP Metrics
Adjusted EBITDA
| Three Months Ended March 31, |
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| (in thousands, unaudited) | 2026 | 2025 | |||||||||
| GAAP net income, as reported | $ | 86,243 | $ | 46,796 | |||||||
| Adjustments: | |||||||||||
| Interest expense | 73,050 | 70,530 | |||||||||
| Interest income | (1,094) | (1,546) | |||||||||
| Provision for income taxes | 25,489 | 13,664 | |||||||||
| Depreciation and amortization | 6,858 | 7,344 | |||||||||
| Stock-based compensation expense | 4,575 | 3,424 | |||||||||
| Acquisition, integration and restructuring related expenses(1) | 1,465 | 248 | |||||||||
| Adjusted EBITDA | $ | 196,586 | $ | 140,460 | |||||||
| Collections applied to principal balance(2) | $ | 269,469 | $ | 244,300 | |||||||
________________________
(1)Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore, adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
(2)Amount represents (a) gross collections from receivable portfolios less (b) debt purchasing revenue, plus (c) proceeds applied to basis from sales of real estate owned (“REO”) assets and, when applicable, other receivable portfolios. A reconciliation of “collections applied to receivable portfolios, net” to “collections applied to principal balance” is available in the Form 10-Q for the period ending March 31, 2026.
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