Encore Capital Group - 10-Q quarterly report FY

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________________________________________________

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026 or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________.

COMMISSION FILE NUMBER: 000-26489

ENCORE CAPITAL GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware			48-1090909
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

350 Camino De La Reina, Suite 100

San Diego, California 92108

(Address of principal executive offices, including zip code)

(877) 345-3002

(Registrant’s telephone number, including area code)

(Not Applicable)

(Former name, former address and former fiscal year, if changed since last report)

_______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 Par Value Per Share

ECPG

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at April 29, 2026
Common Stock, $0.01 par value						21,440,412 shares

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ENCORE CAPITAL GROUP, INC.

INDEX TO FORM 10-Q


			Page
PART I – FINANCIAL INFORMATION			3
Item 1— Condensed Consolidated Financial Statements (Unaudited)			3
Condensed Consolidated Statements of Financial Condition			3
Condensed Consolidated Statements of Income			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Equity			6
Condensed Consolidated Statements of Cash Flows			7
Notes to Condensed Consolidated Financial Statements			8
Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies			8
Note 2: Earnings Per Share			9
Note 3: Fair Value Measurements			10
Note 4: Derivatives and Hedging Instruments			12
Note 5: Receivable Portfolios, Net			13
Note 6: Other Assets			15
Note 7: Borrowings			15
Note 8: Variable Interest Entities			19
Note 9: Accumulated Other Comprehensive Loss			20
Note 10: Income Taxes			19
Note 11: Commitments and Contingencies			20
Note 12: Segment and Geographic Information			21
Note 13: Goodwill			22
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3 – Quantitative and Qualitative Disclosures About Market Risk			41
Item 4 – Controls and Procedures			41

PART II – OTHER INFORMATION			42
Item 1 – Legal Proceedings			42
Item 1A – Risk Factors			42
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 5 – Other Information			42
Item 6 – Exhibits			43
SIGNATURES			44

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PART I – FINANCIAL INFORMATION

Item 1—Condensed Consolidated Financial Statements (Unaudited)

ENCORE CAPITAL GROUP, INC.

Condensed Consolidated Statements of Financial Condition

(In Thousands, Except Par Value Amounts)

(Unaudited)


	March 31, 2026		December 31, 2025
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 (Note 11)
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. See “Note 8: Variable Interest Entities” for additional information on the Company’s VIEs.


	March 31, 2026		December 31, 2025
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

See accompanying notes to condensed consolidated financial statements

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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,
	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

See accompanying notes to condensed consolidated financial statements

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ENCORE CAPITAL GROUP, INC.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, In Thousands)


	Three Months Ended March 31,
	2026		2025
Net income	$	86,243	$	46,796
Other comprehensive (loss) income, net of tax:
Change in unrealized gain (loss) on derivative instruments:
Unrealized gain (loss) on derivative instruments	10,311		(1,065)
Income tax effect	(2,287)		189
Unrealized gain (loss) on derivative instruments, net of tax	8,024		(876)
Change in foreign currency translation:


Unrealized (loss) gain on foreign currency translation	(12,233)		15,337
Income tax effect	(129)		127
Unrealized (loss) gain on foreign currency translation, net of tax	(12,362)		15,464
Other comprehensive (loss) income, net of tax:	(4,338)		14,588
Comprehensive income	$	81,905	$	61,384

See accompanying notes to condensed consolidated financial statements

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ENCORE CAPITAL GROUP, INC.

Condensed Consolidated Statements of Equity

(Unaudited, In Thousands)


	Three Months Ended March 31, 2026
	Common Stock			Additional Paid-In Capital		Accumulated Earnings		Accumulated Other Comprehensive Loss		Total Equity
	Shares	Par
Balance as of December 31, 2025	21,688	$	217	$	—	$	1,104,640	$	(128,107)	$	976,750

Net income	—	—		—		86,243		—		86,243
Other comprehensive loss, net of tax	—	—		—		—		(4,338)		(4,338)
Issuance of share-based awards, net of shares withheld for employee taxes	157	1		(8,331)		—		—		(8,330)
Repurchase and retirement of common stock	(346)	(3)		3,756		(23,845)		—		(20,092)
Stock-based compensation	—	—		4,575		—		—		4,575

Balance as of March 31, 2026	21,499	$	215	$	—	$	1,167,038	$	(132,445)	$	1,034,808


	Three Months Ended March 31, 2025
	Common Stock			Additional Paid-In Capital		Accumulated Earnings		Accumulated Other Comprehensive (Loss) Income		Total Equity
	Shares	Par
Balance as of December 31, 2024	23,691	$	237	$	19,297	$	909,927	$	(162,130)	$	767,331
Net income	—	—		—		46,796		—		46,796
Other comprehensive income, net of tax	—	—		—		—		14,588		14,588
Issuance of share-based awards, net of shares withheld for employee taxes	108	1		(3,075)		—		—		(3,074)
Repurchase and retirement of common stock	(289)	(3)		(10,001)		—		—		(10,004)
Stock-based compensation	—	—		3,424		—		—		3,424



Balance as of March 31, 2025	23,510	$	235	$	9,645	$	956,723	$	(147,542)	$	819,061

See accompanying notes to condensed consolidated financial statements

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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

See accompanying notes to condensed consolidated financial statements

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ENCORE CAPITAL GROUP, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies

Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.

Through Midland Credit Management, Inc. and its domestic affiliates (collectively, “MCM”), the Company is a market leader in portfolio purchasing and recovery in the United States. Through Cabot Credit Management Limited and its subsidiaries and European affiliates (collectively, “Cabot”), the Company is one of the largest credit management services providers in Europe and the United Kingdom. These are the Company’s primary operations.

The Company also has investments and operations in Latin America and Asia-Pacific, which the Company refers to as “LAAP.”

Financial Statement Preparation and Presentation

The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).

In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed consolidated financial statements and the accompanying notes. Actual results could materially differ from those estimates.

Basis of Consolidation

The condensed consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities (“VIEs”) for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 8: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation.

Translation of Foreign Currencies

The condensed consolidated statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations.

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Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses: Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim periods with fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new standard is effective for annual periods beginning after December 15, 2025. The Company adopted ASU 2024-04 on a prospective basis as of January 1, 2026. The adoption did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased loans. Under ASU 2025-08, loans acquired without credit deterioration and deemed “seasoned” will be considered purchased seasoned loans and accounted for using the gross-up approach at acquisition. The amendments in this update also clarify the recognition and measurement guidance for purchased seasoned loans, including the determination of the initial allowance for credit losses and the subsequent accounting for changes in expected credit losses. The new standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the potential impact, but does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. ASU 2025-09 introduces targeted amendments intended to further align hedge accounting with an entity’s risk management activities and to simplify the application of certain aspects of the hedge accounting guidance in ASC 815. The new standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the potential impact, but does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

Note 2: Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period.

The number of shares used to calculate the diluted earnings per share is computed by using the basic weighted-average number of common shares outstanding plus any potentially dilutive common shares outstanding during the period, except when their effect is anti-dilutive. Dilutive potential common shares include outstanding stock based awards, and the dilutive effect of the convertible senior notes, if applicable.

As announced in May 2021, the Company’s Board of Directors authorized a $300.0 million share repurchase program. In November 2025, the Company’s Board of Directors authorized an increase of an additional $300.0 million under the share repurchase program. During the three months ended March 31, 2026 and 2025, the Company repurchased 345,548 and 289,425 shares of common stock for $20.0 million and $10.0 million, respectively, under the share repurchase program. The Company’s practice is to retire the shares repurchased.

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A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts):


	Three Months Ended March 31,
	2026		2025
Net income	$	86,243	$	46,796
Shares:
Total weighted-average basic shares outstanding	21,728		23,879
Dilutive effect of stock-based awards	592		170
Dilutive effect of convertible senior notes	—		220

Total weighted-average dilutive shares outstanding	22,320		24,269

Basic earnings per share	$	3.97	$	1.96
Diluted earnings per share	$	3.86	$	1.93

Note 3: Fair Value Measurements

Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions.

Financial Instruments Required To Be Carried At Fair Value

Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements as of March 31, 2026
	Level 1		Level 2		Level 3		Total
Assets

Interest rate cap contracts	$	—	$	1,318	$	—	$	1,318
Interest rate swap agreements	—		224		—		224

Liabilities

Interest rate swap agreements	—		(7,724)		—		(7,724)


	Fair Value Measurements as of December 31, 2025
	Level 1		Level 2		Level 3		Total
Assets
Interest rate cap contracts	$	—	$	286	$	—	$	286

Liabilities
Interest rate swap agreements	—		(16,338)		—		(16,338)

Derivative Contracts:

The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using models that project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies.

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Non-Recurring Fair Value Measurement:

Certain assets are measured at fair value on a nonrecurring basis. Goodwill and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair values are determined using various valuation techniques under Level 3 fair value hierarchy. REO assets are classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined at the time of initial recognition and in each reporting period using Level 3 measurements based on appraised values using market comparables. The fair value estimate of the assets held for sale was $14.5 million and $18.1 million as of March 31, 2026 and December 31, 2025, respectively.

Financial Instruments Not Required To Be Carried At Fair Value

The table below summarizes fair value estimates for the Company's financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company.

The carrying amounts in the following table are included in the condensed consolidated statements of financial condition as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31, 2026				December 31, 2025
	Fair Value Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets
Cash and cash equivalents	Level 1	$	227,204	$	227,204	$	156,784	$	156,784
Receivable portfolios, net	Level 3	4,437,415		4,979,583		4,371,532		4,895,167
Other assets(1)	Level 2	108,480		108,480		118,130		118,130
Financial Liabilities
Accounts payable and accrued liabilities	Level 2	252,277		252,277		230,261		230,261
Global senior secured revolving credit facility	Level 2	681,267		681,267		631,998		631,998

Senior secured notes(2)	Level 2	2,309,031		2,353,735		2,322,890		2,385,645



Convertible senior notes due March 2029	Level 2	230,000		290,529		230,000		253,260
Cabot securitisation senior facility	Level 2	337,253		337,253		343,539		343,539
U.S. facility	Level 2	450,000		450,000		450,000		450,000
Other borrowings	Level 2	54,410		54,410		52,926		52,926
Other liabilities(1)	Level 2	122,451		122,451		115,158		115,158

_______________________

(1)Only includes financial instruments not required to be carried at fair value. Derivative instruments, which are required to be carried at fair value are excluded.

(2)Carrying amount represents historical cost, adjusted for any related debt discount.

Receivable Portfolios:

The fair value of receivable portfolios is measured by discounting the estimated future cash flows generated by the Company’s proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business.

Borrowings:

The Company’s convertible notes and senior secured notes are carried at historical cost, adjusted for the applicable debt discount. The fair value estimate for the convertible notes and the senior secured notes incorporates quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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The carrying values of the Company’s senior secured revolving credit facility, securitisation senior facility, U.S. facility, and other borrowings approximate their respective fair values due to the use of current market rates that are repriced frequently.

Others:

The carrying values of the Company’s cash and cash equivalents, certain other assets, accounts payable and accrued liabilities, and other liabilities approximate their respective fair values due to their short-term nature.

Note 4: Derivatives and Hedging Instruments

The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment.

The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands):

March 31, 2026

December 31, 2025

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Interest rate cap contracts

Other assets

1,318

Other assets

286

Interest rate swap agreements

Other assets

224

—

Interest rate swap agreements

Other liabilities

(7,724)

Other liabilities

(16,338)

Derivatives Designated as Hedging Instruments

The Company may periodically enter into interest rate swap agreements and interest rate cap contracts to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. Under the cap contracts, the Company receives floating interest rate payments and makes interest payments based on capped interest rates. The Company designates its interest rate swap and interest rate cap instruments as cash flow hedges at inception.

The following tables summarize the terms of the derivative instruments designated as hedging instruments as recorded in the Company’s condensed consolidated statements of financial condition:

March 31, 2026

Effective date

Maturity Date

Hedge Designation

Notional Amount

Receive Floating Rate Index

Interest rate cap contracts

2024 Cap

September 2024

September 2026

Cash flow hedge

$337.3 million

SONIA

2025 Cap

September 2026

January 2028

Cash flow hedge

$337.3 million

SONIA

2025 Cap - U.S. Facility

December 2025

October 2028

Cash flow hedge

$130.0 million

1-month SOFR CME Term

Interest rate swap agreements

2023 Euro IR Swap

October 2023

January 2028

Cash flow hedge

$115.6 million

3-month EURIBOR

2024 Euro IR Swaps

June 2024

January 2028

Cash flow hedge

$479.6 million

3-month EURIBOR

2023 SOFR IR Swaps - U.S. Facility

November 2023

October 2026

Cash flow hedge

$150.0 million

1-month SOFR CME Term

2025 SOFR IR Swaps - U.S. Facility

January 2025

October 2027

Cash flow hedge

$125.0 million

1-month SOFR CME Term

2025 SOFR IR Swaps - Global Senior Facility

April 2025

April 2027

Cash flow hedge

$150.0 million

1-month SOFR CME Term

In April 2026, the Company entered into a new interest rate cap contract (the “2026 Cap”) with a notional amount of £255.0 million (approximately $337.3 million based on an exchange rate of $1.00 to £0.76, the exchange rate as of March 31, 2026). The 2026 Cap is intended to hedge the Company’s exposure to fluctuations in interest payments on debt bearing variable interest based on the Sterling Overnight Index Average (“SONIA”). The 2026 Cap has an effective date of January 2028 and a maturity date of January 2029, and will be accounted for as a cash flow hedge.

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December 31, 2025

Effective date

Maturity Date

Hedge Designation

Notional Amount

Receive Floating Rate Index

Interest rate cap contracts

2024 Cap

September 2024

September 2026

Cash flow hedge

$343.5 million

SONIA

2025 Cap

September 2026

January 2028

Cash flow hedge

$343.5 million

SONIA

2025 Cap -

U.S. Facility

December 2025

October 2028

Cash flow hedge

$130.0 million

1-month SOFR CME Term

Interest rate swap agreements

2023 Euro IR Swap

October 2023

January 2028

Cash flow hedge

$117.5 million

3-month EURIBOR

2024 Euro IR Swaps

June 2024

January 2028

Cash flow hedge

$487.5 million

3-month EURIBOR

2023 SOFR IR Swaps - U.S. Facility

November 2023

October 2026

Cash flow hedge

$150.0 million

1-month SOFR CME Term

2025 SOFR IR Swaps - U.S.Facility

January 2025

October 2027

Cash flow hedge

$125.0 million

1-month SOFR CME Term

2025 SOFR IR Swaps - Global Senior Facility

April 2025

April 2027

Cash flow hedge

$150.0 million

1-month SOFR CME Term

The Company expects to reclassify approximately $1.3 million of net derivative loss from OCI into earnings relating to its cash flow designated derivatives within the next 12 months. This amount will vary due to fluctuations in benchmark interest rates.

The following table summarizes the effects of derivatives designated as hedging instruments in the Company’s condensed consolidated financial statements (in thousands):


Derivatives Designated as Hedging Instruments	Gain (Loss) Recognized in OCI				Location of Loss Reclassified from OCI into Income	Loss Reclassified from OCI
	Three Months Ended March 31,					Three Months Ended March 31,
	2026		2025			2026		2025


Interest rate swap agreements	$	6,802	$	(1,200)	Interest expense	$	(2,036)	$	(467)
Interest rate cap contracts	1,033		(696)		Interest expense	(440)		(364)

Note 5: Receivable Portfolios, Net

The Company’s purchased portfolios of loans are grossed-up to their face value with an offsetting allowance and noncredit discount allocated to the individual receivables as the unit of account is at the individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company applies its charge-off policy and fully writes-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company then records a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which ultimately equals the amount paid for a portfolio purchase and presented as “Receivable portfolios, net” in the Company’s condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. The amount of the negative allowance (i.e., receivable portfolios) will not exceed the total amortized cost basis of the loans written-off.

Receivable portfolio purchases are aggregated into pools based on similar risk characteristics. Examples of risk characteristics include financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic location. Once a pool is established, the portfolios will remain in the designated pool unless the underlying risk characteristics change. The purchase EIR of a pool will not change over the life of the pool even if expected future cash flows change.

Revenue is recognized for each static pool over the economic life of the pool. Debt purchasing revenue includes two components:

(1) Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the receivable portfolio balance multiplied by the EIR) and also includes all revenue from zero basis portfolio (“ZBA”) collections, and

(2) Changes in recoveries, which includes

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(a) Recoveries above or below forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and

(b) Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases).

The Company measures expected future recoveries based on historical experience, current conditions, reasonable and supportable forecasts, and other quantitative and qualitative factors. Factors that may change the expected future recoveries may include both internal as well as external factors. Internal factors include operational performance, such as capacity and the productivity of the Company’s collection staff. External factors that may have an impact on the Company’s collections include new laws or regulations, new interpretations of existing laws or regulations, and macroeconomic conditions.

Receivable portfolios, net consists of the following as of the dates presented (in thousands):



	March 31, 2026		December 31, 2025
Amortized cost	$	—	$	—
Negative allowance for expected recoveries	4,437,415		4,371,532
Balance, end of period	$	4,437,415	$	4,371,532

The following table summarizes the changes in the balance of receivable portfolios, net during the periods presented (in thousands):


	Three Months Ended March 31,
	2026		2025
Balance, beginning of period	$	4,371,532	$	3,776,369
Negative allowance for expected recoveries - portfolio purchases(1)	362,841		367,851
Collections applied to receivable portfolios, net(2)	(328,395)		(259,589)
Changes in recoveries(3)	62,740		21,464
Put-backs and recalls	(3,378)		(5,139)

Disposals and transfers to real estate owned	(1,020)		(1,040)
Foreign currency translation adjustments	(26,905)		52,615
Balance, end of period	$	4,437,415	$	3,952,531

_______________________

(1)The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented:


	Three Months Ended March 31,
	2026		2025
Purchase price	$	362,841	$	367,851
Allowance for credit losses	951,644		954,659
Amortized cost	1,314,485		1,322,510
Noncredit discount	1,755,822		1,659,266
Face value	3,070,307		2,981,776
Write-off of amortized cost	(1,314,485)		(1,322,510)
Write-off of noncredit discount	(1,755,822)		(1,659,266)
Negative allowance	362,841		367,851
Negative allowance for expected recoveries - portfolio purchases	$	362,841	$	367,851

(2)Collections applied to receivable portfolios, net, is calculated as follows during the periods presented:

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	Three Months Ended March 31,
	2026		2025
Cash Collections	$	718,414	$	604,807
Less - amounts classified to portfolio revenue	(390,019)		(345,218)
Collections applied to receivable portfolios, net	$	328,395	$	259,589

(3)Changes in recoveries is calculated as follows during the periods presented, where recoveries include cash collections, put-backs and recalls, and other cash-based adjustments:


	Three Months Ended March 31,
	2026		2025
Recoveries above forecast	$	46,044	$	26,952
Changes in expected future recoveries	16,696		(5,488)
Changes in recoveries	$	62,740	$	21,464

Recoveries above or below forecast represent over and under-performance in the reporting period, respectively. Collections during the three months ended March 31, 2026 over-performed the forecasted collections by $46.0 million, primarily driven by collections over-performance in the U.S. resulting from enhanced collections strategies. Collections during the three months ended March 31, 2025 over-performed the forecasted collections by $27.0 million.

Changes in expected future recoveries are reassessed each quarter; the Company considers, among other factors, historical and current collection performance, changes in consumer behavior, and the macroeconomic environment when updating the forecasts of expected lifetime recoveries. The significant recoveries above forecast during the three months ended March 31, 2026 were carefully evaluated. Management concluded that the recoveries above forecast were primarily current period collections over-performance and did not represent any material shift in timing of the collections. Additionally, the sustained over-performance in recent quarters led to increases in forecasted future recoveries for recently acquired vintages. As a result, the Company recorded a net positive change of $16.7 million in expected future recoveries during the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company recorded a net negative change of $5.5 million in expected future recoveries.

Note 6: Other Assets

Other assets consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Operating lease right-of-use assets	$	52,645	$	56,629
Prepaid expenses	41,137		36,162
Other financial receivables	18,465		21,110
Real estate owned	14,496		18,068
Service fee receivables	12,002		13,131

Income tax deposits	6,578		12,959

Deferred tax assets	4,155		5,766

Other	27,685		29,288
Total	$	177,163	$	193,113

Note 7: Borrowings

The Company is in compliance in all material respects with all covenants under its financing arrangements as of March 31, 2026. The components of the Company’s consolidated borrowings were as follows (in thousands):

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	March 31, 2026		December 31, 2025
Global senior secured revolving credit facility	$	681,267	$	631,998



Senior secured notes	2,310,272		2,324,335
Convertible senior notes	230,000		230,000

Cabot securitisation senior facility	337,253		343,539
U.S. facility	450,000		450,000
Other	54,410		52,926
Finance lease liabilities	515		596
	4,063,717		4,033,394
Less: debt discount and issuance costs, net of amortization	(30,416)		(32,101)
Total	$	4,033,301	$	4,001,293

Encore is the parent of the restricted group for the Global Senior Facility and the Senior Secured Notes, both of which are guaranteed by the same group of material Encore subsidiaries and secured by the same collateral, which represents substantially all of the assets of those subsidiaries.

Global Senior Secured Revolving Credit Facility

In September 2020, the Company entered into a multi-currency senior secured revolving credit facility agreement (as amended and restated, the “Global Senior Facility”). As of March 31, 2026, the Global Senior Facility provided for a total committed facility of $1,485.0 million that matures in September 2029, except for a $69.5 million tranche that terminates in September 2028, and included the following key provisions:

•Interest at Term SOFR (or EURIBOR for any loan drawn in Euro or a rate based on SONIA for any loan drawn in British Pound), with a Term SOFR (or EURIBOR or SONIA) floor of 0.00%, plus a margin of 2.25%, plus in the case of Term SOFR borrowings, a credit adjustment spread of 0.10%;

•An unused commitment fee of 0.40% per annum, payable quarterly in arrears;

•A restrictive covenant that limits the LTV Ratio (defined in the Global Senior Facility) to 0.75 in the event that the Global Senior Facility is more than 20% utilized;

•A restrictive covenant that limits the SSRCF LTV Ratio (defined in the Global Senior Facility) to 0.275;

•A restrictive covenant that requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Global Senior Facility) of at least 2.0;

•Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and

•Standard events of default which, upon occurrence, may permit the lenders to terminate the Global Senior Facility and declare all amounts outstanding to be immediately due and payable.

The Global Senior Facility is secured by substantially all of the assets of the Company and the guarantors. Pursuant to the terms of an intercreditor agreement entered into with respect to the relative positions of (1) the Global Senior Facility and any super priority hedging liabilities (collectively, “Super Senior Liabilities”) and (2) the Senior Secured Notes, Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.

As of March 31, 2026, the outstanding borrowings under the Global Senior Facility were $681.3 million. The weighted average interest rate of the Global Senior Facility was 5.53% and 6.56% for the three months ended March 31, 2026 and 2025, respectively. Available capacity under the Global Senior Facility, after taking into account applicable debt covenants, was approximately $791.3 million as of March 31, 2026.

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Senior Secured Notes

The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):


	March 31, 2026		December 31, 2025		Issue Currency	Maturity Date	Interest Payment Dates	Interest Rate




Encore 2028 Notes	$	330,640	$	336,803	GBP	Jun 1, 2028	Jun 1, Dec 1	4.250	%
Encore 2028 Floating Rate Notes	479,632		487,532		EUR	Jan 15, 2028	Jan 15, Apr 15, Jul 15, Oct 15	EURIBOR +4.250%(1)
Encore 2029 Notes	500,000		500,000		USD	Apr 1, 2029	Apr 1, Oct 1	9.250	%
Encore 2030 Notes	500,000		500,000		USD	May 15, 2030	May 15, Nov 15	8.500	%
Encore 2031 Notes	500,000		500,000		USD	Apr 15, 2031	Apr 15, Oct 15	6.625	%
	$	2,310,272	$	2,324,335

_______________________

(1)Interest rate is based on three-month EURIBOR (subject to a 0% floor) plus 4.250% per annum, resets quarterly.

The Senior Secured Notes are secured by the same collateral as the Global Senior Facility. The guarantees provided in respect of the Senior Secured Notes are pari passu with the guarantee given in respect of the Global Senior Facility. Subject to the intercreditor agreement described above under the section “Global Senior Secured Revolving Credit Facility,” Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.

The Encore 2028 Floating Rate Notes had a weighted average interest rate of 6.27% and 7.10% for the three months ended March 31, 2026 and 2025, respectively.

On April 30, 2026, the Company issued a conditional notice of redemption for €200.0 million of the €415.0 million outstanding Encore 2028 Floating Rate Notes at par, with a redemption date of May 28, 2026.

Convertible Notes

The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible senior notes (the “Convertible Notes”) ($ in thousands):


	March 31, 2026		December 31, 2025		Maturity Date	Interest Payment Dates	Interest Rate



2029 Convertible Notes	$	230,000	$	230,000	Mar 15, 2029	Mar 15, Sep 15	4.000	%

In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion prices of the Convertible Notes, the Company may enter into hedge programs that increase the effective conversion price for the Convertible Notes. In connection with the issuance of the 2029 Convertible Notes, the Company entered into privately negotiated capped call transactions that effectively raised the conversion price of the 2029 Convertible Notes from $65.89 to $82.69. These hedging instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification. The Company recorded the cost of the hedge instruments as a reduction in additional paid-in capital, and does not recognize subsequent changes in fair value of these financial instruments in its condensed consolidated financial statements.

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Certain key terms related to the convertible features as of March 31, 2026 are listed below ($ in thousands, except conversion price):


	2029 Convertible Notes
Initial conversion price	$	65.89
Closing stock price at date of issuance	$	51.68
Closing stock price date	Feb 28, 2023
Initial conversion rate (shares per $1,000 principal amount)	15.1763


Effective conversion price(1)	$	82.69
Excess of if-converted value compared to principal(2)	$	14,757
Free conversion date	Dec 15, 2028

_______________________

(1)As discussed above, the Company maintains a hedge program that increases the effective conversion price for the 2029 Convertible Notes to $82.69.

(2)Represents the premium the Company would have to pay assuming the Convertible Notes were converted on March 31, 2026 using a hypothetical share price based on the closing stock price on March 31, 2026.

Prior to the close of business on the business day immediately preceding the free conversion date (listed above), holders may convert their Convertible Notes only under certain circumstances set forth in the indenture. On or after the free conversion date until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time.

In the event of conversion, the Convertible Notes are convertible into cash up to the aggregate principal amount of the notes and the excess conversion premium, if any, may be settled in cash or shares of the Company’s common stock at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes.

The Company’s convertible notes are carried as a single liability, which reflects the principal amount of the convertible notes. Interest expense related to the Convertible Notes was $2.3 million and $3.1 million during the three months ended March 31, 2026 and 2025, respectively.

Cabot Securitisation Senior Facility

Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, has a senior facility for a committed amount of £255.0 million (as amended, the “Cabot Securitisation Senior Facility”). Prior to March 18, 2026, funds drawn under the Cabot Securitisation Senior Facility bore interest at a rate per annum equal to SONIA plus a margin of 3.20% plus, for periods after January 18, 2028, a step up margin ranging from zero to 1.00%. The Company amended its Cabot Securitisation Senior Facility, effective March 18, 2026, to extend the maturity date from January 2030 to January 2031, and to reduce the margin from 3.20% to 3.00%. For periods after January 18, 2029, a step up margin ranging from zero to 1.00% will apply. The amendment was accounted for as a debt modification.

As of March 31, 2026, the outstanding borrowings under the Cabot Securitisation Senior Facility were £255.0 million (approximately $337.3 million based on an exchange rate of $1.00 to £0.76, the exchange rate as of March 31, 2026). The obligations of Cabot Securitisation under the Cabot Securitisation Senior Facility are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was £277.7 million (approximately $367.3 million based on an exchange rate of $1.00 to £0.76, the exchange rate as of March 31, 2026) as of March 31, 2026. The weighted average interest rate of the Cabot Securitisation Senior Facility was 6.91% and 7.78% for the three months ended March 31, 2026 and 2025, respectively.

Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.

U.S. Facility

An indirect subsidiary of Encore (“U.S. Financing Subsidiary”) has a facility for a committed amount of $450.0 million (as amended, the “U.S. Facility”) that matures in October 2028. Funds drawn under the U.S. Facility bear interest at a rate per annum equal to Term SOFR plus a margin of 3.50%.

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As of March 31, 2026, the outstanding borrowings under the U.S. Facility were $450.0 million. The obligations under the U.S. Facility are secured by first ranking security interests over all of U.S. Financing Subsidiary’s assets and rights. As of March 31, 2026, this included receivables acquired from MCM, the book value of which was $805.7 million. The weighted average interest rate of the U.S. Facility was 7.18% and 7.82% for the three months ended March 31, 2026 and 2025, respectively.

The U.S. Facility is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.

Note 8: Variable Interest Entities

A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive residual returns from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary.

As of March 31, 2026, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs including the ability to exercise discretion in the servicing of the financial assets and has the right to receive residual returns that could potentially be significant to the VIEs. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary.

Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE.

Note 10: Income Taxes

The Company’s effective tax rate was 22.8% and 22.6% for the three months ended March 31, 2026 and 2025, respectively. The differences between the effective tax rate and the federal statutory rate during the periods presented were primarily due to state income taxes offset by other foreign adjustments.

Each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected amounts for the year. Since the Company operates in foreign countries with varying tax rates, the Company’s quarterly effective tax rate is dependent on the level of income or loss from international operations in the reporting period.

The Company’s subsidiary in Costa Rica is operating under a 100% tax holiday through April 6, 2034. The impact of the tax holiday in Costa Rica for the three months ended March 31, 2026 and 2025, was immaterial.

The Company is subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating uncertain tax positions and determining the provision for income taxes.

In December 2021, the Organization for Economic Cooperation and Development (“OECD”) enacted model rules for a new global minimum tax framework (“Pillar Two”). Under the Pillar Two rules, a company is required to determine a combined effective tax rate for each jurisdiction. If the jurisdictional effective tax rate determined under the Pillar Two rules is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%. In December 2022, European Union Member States adopted a directive implementing the Pillar Two rules requiring Member States to enact the directive into their national laws and these began to go into effect from January 1, 2024. The Company has estimated the applicable top-up tax and recorded this in tax expense for the three months ended March 31, 2026. The estimated impact of top-up tax for the three months ended March 31, 2026 was immaterial.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions affecting businesses. The legislation features permanent extension, with modifications, of key 2017 Tax Cuts and Jobs Act provisions that were set to change at the end of 2025. The effects of the OBBBA were included in the Company’s condensed consolidated financial statements for the three months ended March 31, 2026 and the impact was immaterial.

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Note 9: Accumulated Other Comprehensive Loss

A summary of the Company’s changes in accumulated other comprehensive loss by component is presented below (in thousands):


	Three Months Ended March 31, 2026
	Derivatives		Currency Translation Adjustments		Accumulated Other Comprehensive Loss
Balance at beginning of period	$	(15,034)	$	(113,073)	$	(128,107)
Other comprehensive income (loss) before reclassification	7,835		(12,233)		(4,398)
Reclassification	2,476		—		2,476
Tax effect	(2,287)		(129)		(2,416)
Balance at end of period	$	(7,010)	$	(125,435)	$	(132,445)


	Three Months Ended March 31, 2025
	Derivatives		Currency Translation Adjustments		Accumulated Other Comprehensive Loss
Balance at beginning of period	$	(16,368)	$	(145,762)	$	(162,130)
Other comprehensive (loss) income before reclassification	(1,896)		15,337		13,441
Reclassification	831		—		831
Tax effect	189		127		316
Balance at end of period	$	(17,244)	$	(130,298)	$	(147,542)

Note 11: Commitments and Contingencies

Litigation and Regulatory

The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions asserting various claims, including those based on the Fair Debt Collection Practices Act (“FDCPA”), the Fair Credit Reporting Act (“FCRA”), the Telephone Consumer Protection Act (“TCPA”), comparable state statutes, state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome.

As of March 31, 2026, there were no material developments in any of the legal proceedings disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 or any new material legal proceedings during the three months ended March 31, 2026.

In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. The Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. The Company’s legal costs are recorded to expense as incurred. As of March 31, 2026, the Company has no material reserves for legal matters.

Purchase Commitments

In the normal course of business, the Company enters into forward flow purchase agreements. A forward flow purchase agreement is a commitment to purchase receivables over a duration that is typically three to twelve months, but can be longer, generally with a specifically defined volume range, frequency, and pricing. Typically, these forward flow contracts have provisions that allow for early termination or price re-negotiation should the underlying quality of the portfolio deteriorate over time or if any particular month’s delivery is materially different than the original portfolio used to price the forward flow

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contract. Certain of these forward flow purchase agreements may also have termination clauses, whereby the agreements can be canceled by either party upon providing a certain specified amount of notice.

As of March 31, 2026, the Company had entered into forward flow purchase agreements for the purchase of nonperforming loans with an estimated minimum aggregate purchase price of $678.9 million. The Company expects actual purchases under these forward flow purchase agreements to be significantly greater than the estimated minimum aggregate purchase price.

Note 12: Segment and Geographic Information

The Company has one reportable segment, debt purchasing and recovery segment. Segment assets are presented in the Company’s condensed consolidated statements of financial condition as total assets. The following tables present the results of operations of the Company’s reportable segment for the periods presented (in thousands):


	Three Months Ended March 31, 2026
	Debt purchasing and recovery segment		Corporate and other unallocated		Consolidated
Total revenues	$	475,411	$	—	$	475,411

Total operating expenses(1)	(276,025)		(15,394)		(291,419)
Operating income	199,386				183,992
Other segment items(2)			790		790
Interest expense(3)			(73,050)		(73,050)
Provision for income taxes			(25,489)		(25,489)
Net income					$	86,243

_______________________

(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended March 31, 2026, such non-allocated operating expenses primarily consisted of salaries and employee benefits of $10.3 million for corporate employees and general and administrative expenses of $4.9 million.

(2)The other segment items category includes other income.

(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.


	Three Months Ended March 31, 2025
	Debt purchasing and recovery segment		Corporate and other unallocated		Consolidated
Total revenues	$	392,775	$	—	$	392,775

Total operating expenses(1)	(249,509)		(13,923)		(263,432)
Operating income	143,266				129,343
Other segment items(2)			1,647		1,647
Interest expense(3)			(70,530)		(70,530)
Provision for income taxes			(13,664)		(13,664)
Net income					$	46,796

_______________________

(1)Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended March 31, 2025, such non-allocated operating expenses primarily consisted of salaries and employee benefits of $8.1 million for corporate employees and general and administrative expenses of $5.4 million.

(2)The other segment items category includes other income.

(3)The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments.

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The following table presents information about geographic areas in which the Company operates (in thousands):


	Three Months Ended March 31,
	2026		2025
Total revenues:
United States	$	351,658	$	269,586
Europe
United Kingdom	88,525		84,468
Other European countries(1)	33,437		36,993
Total Europe	121,962		121,461

Other geographies(1)	1,791		1,728
Total	$	475,411	$	392,775

________________________

(1)None of these countries comprise greater than 10% of the Company's consolidated revenues.

Note 13: Goodwill

The Company’s goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions.

There have been no events or circumstances during the three months ended March 31, 2026 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future.

The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands):


	Total Company
Balance as of December 31, 2025	$	536,291
Effect of foreign currency translation	(6,804)
Balance as of March 31, 2026	$	529,487

As of March 31, 2026 and December 31, 2025, the Company’s accumulated goodwill impairment loss was $338.8 million, attributable to its Cabot reporting unit.

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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains “forward-looking statements” relating to Encore Capital Group, Inc. (“Encore”) and its subsidiaries (which we may collectively refer to as the “Company,” “we,” “our” or “us”) within the meaning of the securities laws. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “will,” “may,” and similar expressions often characterize forward-looking statements. These statements may include, but are not limited to, projections of collections, revenues, income or loss, estimates of capital expenditures, plans for future operations, products or services, and financing needs or plans, as well as assumptions relating to these matters. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we caution that these expectations or predictions may not prove to be correct or we may not achieve the financial results, savings, or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control or cannot be predicted or quantified, that could cause actual results to differ materially from those suggested by the forward-looking statements. Many factors including, but not limited to, those set forth in our Annual Report on Form 10-K under “Part I, Item 1A—Risk Factors” could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, achievements or industry results expressed or implied by these forward-looking statements. Our business, financial condition, or results of operations could also be materially and adversely affected by other factors besides those listed. Forward-looking statements speak only as of the date the statements were made. We do not undertake any obligation to update or revise any forward-looking statements to reflect new information or future events, or for any other reason, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. In addition, it is generally our policy not to make any specific projections as to future earnings, and we do not endorse projections regarding future performance that may be made by third parties.

Our Business

We are an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. We primarily purchase portfolios of defaulted consumer receivables at deep discounts to face value and manage them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. We also provide debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.

Encore Capital Group, Inc. (“Encore”) has three business units: MCM, which consists of Midland Credit Management, Inc. and its subsidiaries and domestic affiliates; Cabot, which consists of Cabot Credit Management Limited and its subsidiaries and European affiliates, and LAAP, which is comprised of our investments and operations in Latin America and Asia-Pacific.

MCM (United States)

Through MCM, we are a market leader in portfolio purchasing and recovery in the United States.

Cabot (Europe)

Through Cabot, we are one of the largest credit management services providers in Europe and the United Kingdom. Cabot, in addition to its primary business of portfolio purchasing and recovery, also provides a range of debt servicing offerings such as early stage collections, business process outsourcing (“BPO”), and contingent collections, including through Wescot Credit Services Limited (“Wescot”).

LAAP (Latin America and Asia-Pacific)

We have purchased non-performing loans in Mexico. Additionally, we have a subsidiary Encore Asset Reconstruction Company (“EARC”) in India.

To date, operating results from LAAP have not been significant to our total consolidated operating results. Our long-term growth strategy is focused on continuing to invest in our core portfolio purchasing and recovery business in the United States and United Kingdom and strengthening and developing our business in France and Spain.

Government Regulation

MCM (United States)

As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in the United States are subject to federal, state and municipal statutes, rules, regulations and

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ordinances that establish specific guidelines and procedures that debt purchasers and collectors must follow when collecting consumer accounts, including among others, specific guidelines and procedures for communicating with consumers and prohibitions on unfair, deceptive or abusive debt collection practices.

Cabot (Europe)

As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in Europe are affected by foreign statutes, rules and regulations regarding debt collection and debt purchase activities. These statutes, rules, regulations, ordinances, guidelines and procedures are modified from time to time by the relevant authorities charged with their administration, which could affect the way we conduct our business.

Portfolio Purchasing and Recovery

MCM (United States)

In the United States, the defaulted consumer receivable portfolios we purchase are primarily charged-off credit card debt portfolios. A small percentage of our capital deployment in the United States is comprised of unsecured personal loans.

We purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across our U.S. operations. These methods and models generally allow us to value portfolios accurately (limiting the risk of overpaying), avoid buying portfolios that are incompatible with our methods or strategies and align the accounts we purchase with our business channels to maximize future collections. As a result, we have generally been able to realize significant returns from the receivables we acquire. We maintain strong relationships with many of the largest financial service providers in the United States.

Cabot (Europe)

In Europe, our purchased defaulted debt portfolios primarily consist of credit card and consumer loan accounts. We purchase receivable portfolios using proprietary pricing models that utilize account-level statistical and behavioral data. These models generally allow us to accurately value portfolios and to develop collection strategies that maximize future returns. As a result, we have generally been able to realize significant returns from the assets we have acquired. We maintain strong relationships with many of the largest financial services providers in the United Kingdom and Europe.

Purchases and Collections

Portfolio Pricing, Supply and Demand

MCM (United States)

With lending and charge-off rates remaining near recent peak levels, U.S. portfolio supply continues to be robust. Issuers have continued to sell predominantly fresh portfolios. Fresh portfolios are portfolios that are generally sold within six months of the consumer’s account being charged-off by the financial institution. Pricing in the first quarter remained at favorable levels as a result of elevated market supply. Issuers continue to sell their volume in mostly forward flow arrangements that are often committed early in the calendar year. We believe steady lending and delinquency rates at elevated levels will result in stable and strong market supply.

We believe that smaller competitors continue to face difficulties in the portfolio purchasing market because of the high cost to operate due to regulatory pressure and increasing cost of capital. We believe this favors larger participants, like MCM, because the larger market participants are better able to adapt to these pressures and commit to larger forward flow agreements and fluctuating volumes.

Cabot (Europe)

The UK market for charged-off portfolios generally provides a relatively consistent pipeline of opportunities, despite a historically low level of charge-offs, as creditors have embedded debt sales as an integral part of their business models.

France and Spain continue to be two of the largest non-performing loan markets in Europe with significant portfolio sales. Financial institutions continue to look to dispose of non-performing loans in these markets.

While sales activity across all of our European markets remains stable, underlying default rates are generally low by historic levels, and consumer lending volumes have stagnated. Sales levels are expected to fluctuate from quarter to quarter. In general, portfolio pricing remains competitive across our European footprint, constraining the amount of capital we elect to deploy in Europe.

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Purchases by Geographic Location

The following table summarizes purchases of receivable portfolios by geographic location during the periods presented (in thousands):


	Three Months Ended March 31,
	2026		2025
MCM (United States)	$	315,794	$	316,366
Cabot (Europe)	47,047		51,485

Total purchases of receivable portfolios	$	362,841	$	367,851

In the United States, capital deployment remained consistent during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. The majority of our deployments in the U.S. come from forward flow agreements, and the timing, contract duration, and volumes for each contract can fluctuate leading to variation when comparing to prior periods. Portfolio purchases in the U.S. were robust as supply increased and pricing remained at favorable levels.

In Europe, capital deployment decreased during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. Pricing continues to remain competitive in our European footprint, constraining the amount of capital we choose to deploy in Europe. Capital deployment can fluctuate based on the timing of the forward flow contracts and spot purchases.

Collections from Purchased Receivables by Channel and Geographic Location

We utilize three channels for the collection of our receivable portfolios: call center and digital collections; legal collections; and collection agencies. The call center and digital collections channel consists of collections that result from our call centers, direct mail program and online collections. The legal collections channel consists of collections that result from our internal legal channel or from our network of retained law firms. The collection agencies channel consists of collections from third-party collections agencies to whom we pay a fee or commission. We utilize this channel to supplement capacity in our internal call centers, to service accounts in regions where we do not have collections operations or for accounts purchased where we maintain the collection agency servicing relationship.

The following table summarizes the total collections by collection channel and geographic area during the periods presented (in thousands):


	Three Months Ended March 31,
	2026		2025
MCM (United States):
Call center and digital collections	$	361,457	$	298,222
Legal collections	192,393		151,675
Collection agencies	2,621		4,128
Subtotal	556,471		454,025
Cabot (Europe):
Call center and digital collections	65,292		62,270
Legal collections	57,524		53,773
Collection agencies	38,258		33,933
Subtotal	161,074		149,976




Other geographies:	869		806
Total collections from purchased receivables	$	718,414	$	604,807

Collections from purchased receivables increased by $113.6 million, or 18.8%, to $718.4 million during the three months ended March 31, 2026, as compared to $604.8 million during the three months ended March 31, 2025. The increase in collections in the United States was primarily a result of consistent increases in capital deployments in the United States in recent periods. Collections in Europe were favorably impacted by foreign currency translation by approximately $12.2 million, during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

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Results of Operations

Results of operations, in dollars and as a percentage of total revenues, were as follows for the periods presented (in thousands, except percentages):


	Three Months Ended March 31,
	2026				2025
Revenues
Portfolio revenue	$	390,019	82.0	%	$	345,218	87.9	%
Changes in recoveries	62,740		13.2	%	21,464		5.5	%
Total debt purchasing revenue	452,759		95.2	%	366,682		93.4	%
Servicing revenue	20,638		4.4	%	22,547		5.7	%
Other revenues	2,014		0.4	%	3,546		0.9	%
Total revenues	475,411		100.0	%	392,775		100.0	%


Operating expenses
Salaries and employee benefits	114,541		24.1	%	105,932		27.0	%
Cost of legal collections	89,221		18.8	%	68,013		17.3	%
General and administrative expenses	39,629		8.3	%	41,018		10.4	%
Other operating expenses	34,833		7.4	%	34,252		8.8	%
Collection agency commissions	6,337		1.3	%	6,873		1.7	%
Depreciation and amortization	6,858		1.4	%	7,344		1.9	%
Total operating expenses	291,419		61.3	%	263,432		67.1	%
Income from operations	183,992		38.7	%	129,343		32.9	%
Other expense
Interest expense	(73,050)		(15.4)	%	(70,530)		(18.0)	%
Other income	790		0.2	%	1,647		0.5	%
Total other expense	(72,260)		(15.2)	%	(68,883)		(17.5)	%

Provision for income taxes	(25,489)		(5.4)	%	(13,664)		(3.5)	%
Net income	$	86,243	18.1	%	$	46,796	11.9	%

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Comparison of Results of Operations

Revenues

Our revenues primarily include debt purchasing revenue, which is revenue recognized from engaging in debt purchasing and recovery activities. We apply our charge-off policy and fully write-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables we acquire immediately after purchasing the portfolio. We then record a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which is presented as “Receivable portfolios, net” in our condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) established based on the purchase price of the portfolio and the expected future cash flows at the time of purchase.

Debt purchasing revenue includes two components:

(1) Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the receivable portfolio balance multiplied by the EIR), and

(2) Changes in recoveries, which includes

(a) Recoveries above (below) forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and

Certain pools already fully recovered their cost basis and became zero basis portfolios (“ZBA”) prior to our adoption of the accounting standard for Financial Instruments - Credit Losses (“CECL”) in January 2020. All subsequent collections to the ZBA pools are recognized as ZBA revenue, which is included in portfolio revenue in our condensed consolidated statements of income. We expect our ZBA revenue to continue to decline as we collect on these legacy pools. We do not expect to have new ZBA pools in the future.

Servicing revenue consists primarily of fee-based income earned on accounts collected on behalf of others, primarily credit originators. We earn fee-based income by providing debt servicing (such as early stage collections, BPO, contingent collections, trace services and litigation activities) to credit originators for non-performing loans in Europe.

Other revenues primarily include revenues recognized from the sale of real estate assets that are acquired as a result of our investments in non-performing secured residential mortgage portfolios and real estate assets in Europe and LAAP.

The following tables summarize revenues for the periods presented (in thousands, except percentages):


	Three Months Ended March 31,
	2026		2025		$ Change		% Change
Revenue recognized from portfolio basis	$	385,593	$	339,756	$	45,837	13.5	%
ZBA revenue	4,426		5,462		(1,036)		(19.0)	%
Portfolio revenue	390,019		345,218		44,801		13.0	%

Recoveries above forecast	46,044		26,952		19,092
Changes in expected future recoveries	16,696		(5,488)		22,184
Changes in recoveries	62,740		21,464		41,276		192.3	%
Debt purchasing revenue	452,759		366,682		86,077		23.5	%

Servicing revenue	20,638		22,547		(1,909)		(8.5)	%
Other revenues	2,014		3,546		(1,532)		(43.2)	%
Total revenues	$	475,411	$	392,775	$	82,636	21.0	%

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Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international revenues, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international revenues. Our revenue was favorably impacted by foreign currency translation by approximately $9.2 million during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

The increase in revenue recognized from portfolio basis during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to a higher portfolio basis (i.e. a higher receivable portfolios balance) in the U.S. driven by a consistent higher volume of purchases in recent periods.

Recoveries above or below forecast represent over and under-performance in the reporting period, respectively, and are expected to vary from period to period. Collections during the three months ended March 31, 2026 over-performed the forecasted collections by $46.0 million, primarily as a result of collections over-performance in the U.S. The collections over-performance in the U.S. was driven by the deployment of new technologies, enhanced digital capabilities and continued operational innovation, which enabled us to reach more consumers, leading to more payments as well as a larger payer book. These initiatives had a greater impact on the early stages of a portfolio’s lifecycle, leading to over-performance for our recent vintages. Collections during the three months ended March 31, 2025 over-performed the forecasted collections by $27.0 million.

We reassess the forecasts of expected lifetime recoveries each quarter by considering, among other factors, historical and current collection performance, changes in consumer behaviors, and the macroeconomic environment. The significant recoveries above forecast during the three months ended March 31, 2026 were carefully evaluated. We concluded that the recoveries above forecast during the three months ended March 31, 2026 were primarily current period collections over-performance and did not represent any material shift in timing of the collections. Additionally, the sustained over-performance in recent quarters led to increases in forecasted future recoveries for recently acquired vintages. As a result, we recorded a net positive change of $16.7 million in expected future recoveries during the three months ended March 31, 2026. During the three months ended March 31, 2025, we recorded a net negative change of $5.5 million in expected future recoveries.

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The following tables summarize collections from receivable portfolios, portfolio revenue, changes in recoveries, end of period receivable portfolios balance and other related supplemental data, by year of purchase (in thousands, except percentages):


	Three Months Ended March 31, 2026						As of March 31, 2026
	Collections		Portfolio Revenue		Changes in Recoveries		Receivable Portfolios		Monthly EIR
United States:
ZBA	$	4,425	$	4,425	$	—	$	—	—	%
<2022	77,574		46,288		(2,242)		305,922		4.7	%
2022	33,804		15,529		(36)		155,539		3.1	%
2023	87,476		38,426		15,474		373,329		3.3	%
2024	163,194		73,510		15,210		688,135		3.3	%
2025	180,168		107,292		24,369		1,077,429		3.2	%
2026	9,830		10,781		2,632		319,246		3.4	%
Subtotal	556,471		296,251		55,407		2,919,600		3.4	%
Europe:
ZBA	1		1		—		—		—	%
<2022	75,611		49,761		(691)		691,916		2.3	%
2022	11,474		5,993		(469)		123,745		1.5	%
2023	17,247		7,595		3,988		167,117		1.5	%
2024	31,165		16,290		1,249		273,420		1.9	%
2025	23,794		13,225		1,724		203,815		2.1	%
2026	1,782		903		1,065		46,247		2.1	%
Subtotal	161,074		93,768		6,866		1,506,260		2.0	%
Other geographies(1):
All vintages	869		—		467		11,555		—	%
Subtotal	869		—		467		11,555		—	%
Total	$	718,414	$	390,019	$	62,740	$	4,437,415	2.9	%

_______________________

(1)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.

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	Three Months Ended March 31, 2025						As of March 31, 2025
	Collections		Portfolio Revenue		Changes in Recoveries		Receivable Portfolios		Monthly EIR
United States:
ZBA	$	5,461	$	5,461	$	—	$	—	—	%
<2021	90,900		53,386		(648)		343,830		4.8	%
2021	25,222		13,647		(367)		107,762		3.9	%
2022	52,950		23,399		1,478		234,231		3.1	%
2023	116,222		57,733		(3,447)		548,323		3.3	%
2024	153,494		94,002		11,370		904,359		3.3	%
2025	9,776		10,072		3,500		320,049		3.1	%
Subtotal	454,025		257,700		11,886		2,458,554		3.5	%
Europe:
ZBA	1		1		—		—		—	%
<2021	71,905		46,341		4,478		663,794		2.3	%
2021	10,468		6,512		58		117,260		1.9	%
2022	13,936		6,575		890		141,172		1.5	%
2023	20,790		8,165		2,124		183,208		1.5	%
2024	30,395		18,388		1,080		320,444		1.9	%
2025	2,481		1,536		470		52,352		2.3	%
Subtotal	149,976		87,518		9,100		1,478,230		2.0	%
Other geographies(1):
All vintages	806		—		478		15,747		—	%
Subtotal	806		—		478		15,747		—	%
Total	$	604,807	$	345,218	$	21,464	$	3,952,531	2.9	%

_______________________

(1)All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes.

Servicing revenue decreased during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily driven by decreases in BPO revenue and collection service fees. Other revenues decreased during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily driven by a decrease in gains recognized on the sale of real estate assets.

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Operating Expenses

The following table summarizes operating expenses during the periods presented (in thousands, except percentages):


	Three Months Ended March 31,
	2026		2025		$ Change		% Change
Salaries and employee benefits	$	114,541	$	105,932	$	8,609	8.1	%
Cost of legal collections	89,221		68,013		21,208		31.2	%
General and administrative expenses	39,629		41,018		(1,389)		(3.4)	%
Other operating expenses	34,833		34,252		581		1.7	%
Collection agency commissions	6,337		6,873		(536)		(7.8)	%
Depreciation and amortization	6,858		7,344		(486)		(6.6)	%
Total operating expenses	$	291,419	$	263,432	$	27,987	10.6	%

Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international operating expenses, and the weakening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international operating expenses. Our operating expenses were unfavorably impacted by foreign currency translation by approximately $6.6 million, during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Operating expenses are explained in more detail as follows:

Salaries and Employee Benefits

The increase in salaries and employee benefits during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the following reasons:

•An increase in salaries and bonuses of $6.2 million, primarily attributable to higher performance-based bonuses awarded to employees as a result of our strong overall performance for the year ended December 31, 2025; and

•An increase in stock-based compensation expense of $1.2 million attributable to increased stock price in the recent periods and higher vesting of performance-based awards.

Cost of Legal Collections

Cost of legal collections primarily includes contingent fees paid to our external network of attorneys and the cost of litigation. We pursue legal collections using a network of attorneys that specialize in collection matters and through our internal legal channel. Under the agreements with our contracted attorneys, we advance certain out-of-pocket court costs. Cost of legal collections does not include internal legal channel employee costs, which are included in salaries and employee benefits in our condensed consolidated statements of income.

The following table summarizes our cost of legal collections during the periods presented (in thousands, except percentages):


	Three Months Ended March 31,
	2026		2025		$ Change		% Change
Court costs	$	60,967	$	44,814	$	16,153	36.0	%
Legal collection fees	28,254		23,199		5,055		21.8	%
Total cost of legal collections	$	89,221	$	68,013	$	21,208	31.2	%

The increase of cost of legal collections during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to increased legal placements in this channel in the United States.

General and Administrative Expenses

The decrease in general and administrative expense during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily attributable to a decrease in consulting and audit fees of $1.9 million. The decrease was partially offset by an increase in information technology expenses of $1.1 million.

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Other Operating Expenses

Other operating expenses remained relatively consistent during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Collection Agency Commissions

Collection agency commissions are commissions paid to third-party collection agencies. Collections through the collections agencies channel are predominately in Europe and vary from period to period depending on, among other things, the number of accounts placed with an agency versus accounts collected internally. Commission rates vary depending on, among other things, the amount of time that has passed since the charge-off of the accounts placed with an agency, the asset class, and the geographic location of the receivables. Generally, freshly charged-off accounts have a lower commission rate than accounts that have been charged off for a longer period of time, and commission rates for purchased bankruptcy portfolios are lower than the commission rates for charged-off credit card accounts. Collection agency commissions slightly decreased during the three months ended March 31, 2026, as compared to the same period in the prior year, due to fewer accounts placed with external agencies in the United States.

Depreciation and Amortization

Depreciation and amortization expenses decreased by $0.5 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily due to smaller depreciable and amortizable asset balances during the three months ended March 31, 2026, as compared to the corresponding period in the prior year.

Interest Expense

The following table summarizes our interest expense for the periods presented (in thousands, except percentages):


	Three Months Ended March 31,
	2026		2025		$ Change		% Change
Stated interest on debt obligations	$	70,513	$	66,986	$	3,527	5.3	%
Amortization of debt issuance costs	2,355		3,329		(974)		(29.3)	%
Amortization of debt discount	182		215		(33)		(15.3)	%
Total interest expense	$	73,050	$	70,530	$	2,520	3.6	%

The increase in interest expense during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the following reasons:

•The effect resulting from increased average debt balance of approximately $4.0 million; and

•The effect resulting from an unfavorable impact of foreign currency translation of approximately $1.7 million driven by the weakening of the U.S. dollar against the British Pound.

•The increase was partially offset by the effect resulting from a decrease in interest rates of approximately $3.2 million..

Other Income, net of Other Expense

Other income or expense consists primarily of foreign currency exchange gains or losses, interest income, and gains or losses recognized on certain transactions outside of our normal course of business. Other income, net, was $0.8 million and $1.6 million during the three months ended March 31, 2026 and 2025, respectively. Interest income included in other income, net of other expense, was $1.1 million and $1.5 million during the three months ended March 31, 2026 and 2025, respectively.

Provision for Income Taxes

Provision for income taxes and effective tax rate are as follows for the periods presented ($ in thousands):


	Three Months Ended March 31,
	2026		2025
Provision for income taxes	$	25,489	$	13,664
Effective tax rate	22.8%		22.6 %

For the three months ended March 31, 2026 and 2025, the differences between our effective tax rate and the federal statutory rate were primarily due to state income taxes offset by other foreign adjustments.

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Non-GAAP Disclosure

In addition to the financial information prepared in conformity with Generally Accepted Accounting Principles (“GAAP”), we provide historical non-GAAP financial information. Management believes that the presentation of such non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.

Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments, and amortization methods, which provide a more complete understanding of our financial performance, competitive position, and prospects for the future. Readers should consider the information in addition to, but not instead of, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of these measures for comparative purposes.

Adjusted EBITDA. Management utilizes adjusted EBITDA (defined as net income before interest income and expense, taxes, depreciation and amortization, stock-based compensation expenses, acquisition, integration and restructuring related expenses, and other charges or gains that are not indicative of ongoing operations), in the evaluation of our operating performance. Adjusted EBITDA for the periods presented is as follows (in thousands):


	Three Months Ended March 31,
	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)Collections applied to principal balance is calculated in the table below:


	Three Months Ended March 31,
	2026		2025
Collections applied to receivable portfolios, net	$	328,395	$	259,589
Changes in recoveries	(62,740)		(21,464)
Other proceeds applied to basis	3,814		6,175
Collections applied to principal balance	$	269,469	$	244,300

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Supplemental Performance Data

The tables included in this supplemental performance data section include detail for purchases, collections and ERC by year of purchase.

Our collection expectations are based on account characteristics and economic variables. Additional adjustments are made to account for qualitative factors that may affect the payment behavior of our consumers and servicing related adjustments to ensure our collection expectations are aligned with our operations. We continue to refine our process of forecasting collections both domestically and internationally with a focus on operational enhancements. Our collection expectations vary between types of portfolio and geographic location. As a result, past performance of pools in certain geographic locations or of certain types of portfolio are not necessarily a suitable indicator of future results in other locations or for other types of portfolio.

The supplemental performance data presented in this section is impacted by foreign currency translation, which represents the effect of translating financial results where the functional currency of our foreign subsidiary is different than our U.S. dollar reporting currency. Generally, international purchases reflect the exchange rates at the time of purchase and international cumulative collections are aggregated each month based on respective month-end exchange rates. For example, the strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable reporting impact on our international purchases, collections, and ERC, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international purchases, collections, and ERC.

We utilize proprietary forecasting models to continuously evaluate the economic life of each pool.

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Cumulative Collections Money Multiple - Cumulative Collections from Receivable Portfolios to Purchase Price Multiple

The following table summarizes our receivable purchases, related collections, and cumulative collections money multiples (in thousands, except multiples):


Year of Purchase	Purchase Price(1)		Cumulative Collections through March 31, 2026
			<2022		2022		2023		2024		2025		2026		Total(2)		CCMM(3)
United States:
<2022	$	7,585,852	$	16,334,075	$	1,256,655	$	861,884	$	606,852	$	432,143	$	81,999	$	19,573,608	2.6
2022	548,765		—		98,277		268,516		254,329		179,247		33,804		834,173		1.5
2023	805,587		—		—		184,182		471,838		419,265		87,476		1,162,761		1.4
2024	990,595		—		—		—		238,635		625,051		163,194		1,026,880		1.0
2025	1,168,557		—		—		—		—		293,593		180,168		473,761		0.4
2026	315,662		—		—		—		—		—		9,830		9,830		—
Subtotal	11,415,018		16,334,075		1,354,932		1,314,582		1,571,654		1,949,299		556,471		23,081,013		2.0
Europe:
<2022	3,421,004		4,512,881		516,314		432,671		383,208		336,631		75,611		6,257,316		1.8
2022	231,869		—		36,957		70,385		64,555		52,865		11,474		236,236		1.0
2023	259,255		—		—		40,975		89,799		78,352		17,247		226,373		0.9
2024	353,182		—		—		—		50,469		128,970		31,165		210,604		0.6
2025	234,058		—		—		—		—		44,123		23,794		67,917		0.3
2026	47,047		—		—		—		—		—		1,783		1,783		—
Subtotal	4,546,415		4,512,881		553,271		544,031		588,031		640,941		161,074		7,000,229		1.5
Other geographies(4):










All vintages	340,283		538,948		3,334		3,954		2,793		2,546		869		552,444		1.6
Subtotal	340,283		538,948		3,334		3,954		2,793		2,546		869		552,444		1.6
Total	$	16,301,716	$	21,385,904	$	1,911,537	$	1,862,567	$	2,162,478	$	2,592,786	$	718,414	$	30,633,686	1.9

________________________

(1)Adjusted for Put-Backs and Recalls. Put-Backs (“Put-Backs”) and recalls (“Recalls”) represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement.

(2)Cumulative collections from inception through March 31, 2026, excluding collections on behalf of others.

(3)Cumulative Collections Money Multiple (“CCMM”) through March 31, 2026 refers to cumulative collections as a multiple of purchase price.

(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.

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Purchase Price Multiple - Total Estimated Collections from Receivable Portfolios to Purchase Price Multiple

The following table summarizes our purchases, resulting historical collections, estimated remaining collections from receivable portfolios, and purchase price multiple (in thousands, except multiples):


	Purchase Price(1)		Historical Collections(2)		Estimated Remaining Collections		Total Estimated Collections		Purchase Price Multiple(3)
United States:
<2022	$	7,585,852	$	19,573,608	$	773,935	$	20,347,543	2.7
2022	548,765		834,173		314,437		1,148,610		2.1
2023	805,587		1,162,761		774,834		1,937,595		2.4
2024	990,595		1,026,880		1,408,010		2,434,890		2.5
2025	1,168,557		473,761		2,287,290		2,761,051		2.4
2026	315,662		9,830		737,504		747,334		2.4
Subtotal	11,415,018		23,081,013		6,296,010		29,377,023		2.6
Europe:
<2022	3,421,004		6,257,316		1,824,997		8,082,313		2.4
2022	231,869		236,236		227,062		463,298		2.0
2023	259,255		226,373		298,192		524,565		2.0
2024	353,182		210,604		591,577		802,181		2.3
2025	234,058		67,917		453,466		521,383		2.2
2026	47,047		1,783		100,011		101,794		2.2
Subtotal	4,546,415		7,000,229		3,495,305		10,495,534		2.3
Other geographies(4):










All vintages	340,283		552,444		15,188		567,632		1.7
Subtotal	340,283		552,444		15,188		567,632		1.7
Total	$	16,301,716	$	30,633,686	$	9,806,503	$	40,440,189	2.5

________________________

(1)Purchase price refers to the cash paid to a seller to acquire a portfolio less Put-backs, Recalls, and other adjustments. Put-Backs and Recalls represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement.

(2)Cumulative collections from inception through March 31, 2026, excluding collections on behalf of others.

(3)Purchase Price Multiple represents total estimated collections divided by the purchase price.

(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.

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Estimated Remaining Collections by Year of Purchase

The following table summarizes our estimated remaining collections from receivable portfolios and estimated future cash flows from real estate-owned assets (in thousands):


	Estimated Remaining Collections by Year of Purchase(1)
	2026(3)		2027		2028		2029		2030		2031		2032		2033		2034		>2034		Total(2)
United States:
<2022	$	200,422	$	184,823	$	125,010	$	85,051	$	58,019	$	39,781	$	27,417	$	18,716	$	12,721	$	21,975	$	773,935
2022	75,537		74,349		49,788		34,372		24,460		17,364		12,089		8,374		5,894		12,210		314,437
2023	186,065		182,174		126,702		84,762		58,724		41,723		29,662		20,589		14,323		30,110		774,834
2024	369,136		323,639		214,981		151,775		106,721		75,768		53,083		37,068		25,697		50,142		1,408,010
2025	474,817		585,490		371,868		253,617		181,467		128,405		91,325		63,968		44,694		91,639		2,287,290
2026	129,302		180,457		136,036		87,385		60,934		43,221		30,674		21,772		15,232		32,491		737,504
Subtotal	1,435,279		1,530,932		1,024,385		696,962		490,325		346,262		244,250		170,487		118,561		238,567		6,296,010
Europe:
<2022	208,102		246,871		213,789		182,450		155,598		134,031		117,071		103,112		91,022		372,951		1,824,997
2022	33,276		38,336		30,505		24,841		20,312		16,735		13,696		10,987		9,075		29,299		227,062
2023	44,652		49,643		41,465		33,310		26,542		21,374		17,553		14,389		11,700		37,564		298,192
2024	76,061		87,434		73,802		61,372		50,910		42,297		35,841		31,129		27,071		105,660		591,577
2025	60,518		72,436		59,043		48,245		39,282		32,082		26,525		22,654		19,209		73,472		453,466
2026	12,528		17,040		14,567		11,567		9,264		7,372		5,917		4,805		3,892		13,059		100,011
Subtotal	435,137		511,760		433,171		361,785		301,908		253,891		216,603		187,076		161,969		632,005		3,495,305
Other geographies(4):











All vintages	—		—		—		—		—		—		—		—		—		—		—
Subtotal	4,791		4,117		2,662		1,734		890		471		244		144		75		60		15,188
Portfolio ERC	1,875,207		2,046,809		1,460,218		1,060,481		793,123		600,624		461,097		357,707		280,605		870,632		9,806,503
REO ERC(5)	14,503		4,260		—		—		—		—		—		—		—		—		18,763
Total ERC	$	1,889,710	$	2,051,069	$	1,460,218	$	1,060,481	$	793,123	$	600,624	$	461,097	$	357,707	$	280,605	$	870,632	$	9,825,266

________________________

(1)As of March 31, 2026, ERC for Zero Basis Portfolios includes $22.9 million for purchased consumer and bankruptcy receivables in the United States. ERC for Zero Basis Portfolios in Europe and other geographies was immaterial. ERC also includes $15.2 million from non-accrual portfolios, primarily in other geographies.

(2)Represents the expected remaining cash collections over a 180-month period. As of March 31, 2026, ERC for 84-months was $8,414.6 million.

(3)Amount for 2026 consists of nine months data from April 1, 2026 to December 31, 2026.

(4)Annual pool groups for other geographies have been aggregated for disclosure purposes.

(5)Real estate-owned assets (“REO”) ERC includes $18.8 million of estimated future cash flows for Europe.

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Estimated Future Collections Applied to Receivable Portfolios

As of March 31, 2026, we had $4.4 billion in receivable portfolios. The estimated future collections applied to the receivable portfolios net balance is as follows (in thousands):


Years Ending December 31,	United States		Europe		Other Geographies		Total Amortization

2026(1)	$	621,183	$	174,650	$	3,953	$	799,786
2027	734,526		210,976		3,203		948,705
2028	482,365		179,622		1,946		663,933
2029	319,267		148,100		1,192		468,559
2030	224,370		120,752		510		345,632
2031	159,558		99,178		341		259,077
2032	113,876		83,890		186		197,952
2033	80,275		73,286		113		153,674
2034	56,067		64,961		60		121,088
2035	39,742		60,947		32		100,721
2036	29,255		57,113		15		86,383
2037	21,760		54,476		4		76,240
2038	17,217		55,648		—		72,865
2039	12,816		56,411		—		69,227
2040	6,656		52,260		—		58,916
2041	667		13,990		—		14,657

Total	$	2,919,600	$	1,506,260	$	11,555	$	4,437,415

________________________

(1)Amount for 2026 consists of nine months data from April 1, 2026 to December 31, 2026.

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Liquidity and Capital Resources

Liquidity

The following table summarizes our cash flow activities for the periods presented (in thousands):


	Three Months Ended March 31,
	2026		2025
	(Unaudited)
Net cash provided by operating activities	$	82,326	$	45,283
Net cash used in investing activities	(27,407)		(100,278)
Net cash provided by financing activities	18,609		40,337

Operating Cash Flows

Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.

Net cash provided by operating activities was $82.3 million and $45.3 million during the three months ended March 31, 2026 and 2025, respectively. Operating cash flows are derived by adjusting net income for non-cash operating items such as depreciation and amortization, changes in recoveries, stock-based compensation charges, deferred income tax, and changes in operating assets and liabilities which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations. Adjusting for the changes in recoveries resulted in a decrease in operating cash flows by $62.7 million during the three months ended March 31, 2026 and a decrease in operating cash flows by $21.5 million during the three months ended March 31, 2025. Refer to “Note 5: Receivable Portfolios, Net” in the notes to our condensed consolidated financial statements for discussion relating to changes in recoveries.

Investing Cash Flows

Net cash used in investing activities was $27.4 million and $100.3 million during the three months ended March 31, 2026 and 2025, respectively. Cash provided by or used in investing activities is primarily affected by receivable portfolio purchases offset by collection proceeds applied to the principal of our receivable portfolios. Receivable portfolio purchases, net of put-backs, were $359.5 million and $362.7 million during the three months ended March 31, 2026 and 2025, respectively. Collection proceeds applied to the principal of our receivable portfolios were $328.4 million and $259.6 million during the three months ended March 31, 2026 and 2025, respectively. Refer to Purchases and Collections within “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion relating to purchases and collections.

Financing Cash Flows

Net cash provided by financing activities was $18.6 million and $40.3 million during the three months ended March 31, 2026 and 2025, respectively. Financing cash flows are generally affected by borrowings under our credit facilities and proceeds from various debt offerings, offset by repayments of amounts outstanding under our credit facilities and repayments of various notes. Borrowings under our credit facilities were $358.0 million and $246.4 million during the three months ended March 31, 2026 and 2025, respectively. Repayments of amounts outstanding under our credit facilities were $304.2 million and $185.8 million during the three months ended March 31, 2026 and 2025, respectively.

Capital Resources

Our primary sources of capital are cash collections from our receivable portfolios, bank borrowings, debt offerings, and equity offerings. Depending on the capital markets, we consider additional financings to fund our operations and any potential acquisitions. From time to time, we may repurchase outstanding debt or equity and/or restructure or refinance debt obligations. Our primary cash requirements include funding the purchase of receivable portfolios, operating expenses, the payment of interest and principal on borrowings, the payment of income taxes, funding any entity acquisitions and share repurchases.

We are in material compliance with all covenants under our financing arrangements. See “Note 7: Borrowings” in the notes to our condensed consolidated financial statements for a further discussion of our debt. Available capacity under our Global Senior Facility, was $791.3 million as of March 31, 2026.

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In May 2021, our Board of Directors authorized a $300.0 million share repurchase program. In November 2025, our Board of Directors authorized an increase of an additional $300.0 million under the share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from our Global Senior Facility and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by our management and Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. The program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at our discretion. During the three months ended March 31, 2026 and 2025 , we repurchased 345,548 and 289,425 shares of our common stock for $20.0 million and $10.0 million, respectively, under the share repurchase program. As of March 31, 2026, we had remaining authority to purchase $282.4 million of our common stock. Our practice is to retire the shares repurchased.

Our cash and cash equivalents as of March 31, 2026, consisted of $68.5 million held by U.S.-based entities and $158.7 million held by foreign entities. Most of our cash and cash equivalents held by foreign entities is indefinitely reinvested and may be subject to material tax effects if repatriated. However, we believe that our sources of cash and liquidity are sufficient to meet our business needs in the United States and do not expect that we will need to repatriate the funds.

Included in cash and cash equivalents is cash that was collected on behalf of, and remains payable to, third-party clients. The balance of cash held for clients was $17.1 million as of March 31, 2026.

Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, timing of cash collections from our consumers, and other risks detailed in our Risk Factors. However, we believe that we have sufficient liquidity to fund our operations for at least the next twelve months, given our expectation of continued positive cash flows from operations, our cash and cash equivalents, our access to capital markets, and availability under our credit facilities. Our future cash needs will depend on our acquisitions of portfolios and businesses.

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. Refer to “Critical Accounting Estimates” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025, for a complete discussion of our critical accounting estimates. Other than the ongoing reassessment of expected future recoveries of our receivable portfolios during each reporting period under our CECL accounting policy as discussed in “Note 5: Receivable Portfolios, Net” to our condensed consolidated financial statements, there have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2025.

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Item 3 – Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rates. As of March 31, 2026, there had not been a material change in any of the foreign currency risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Interest Rates. As of March 31, 2026, there had not been a material change in the interest rate risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Item 4 – Controls and Procedures

Attached as exhibits to this Form 10-Q are the certifications required by Rule 13a-14 of the Securities Exchange Act of 1934, as amended. This section includes information concerning the controls and controls evaluation referred to in the certifications.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”) and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and accordingly, management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on their most recent evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

Information with respect to this item may be found in “Note 11: Commitments and Contingencies,” to the condensed consolidated financial statements.

Item 1A – Risk Factors

There is no material change in the information reported under “Part I-Item 1A-Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Repurchases of Equity Securities

In May 2021, our Board of Directors authorized a $300.0 million share repurchase program. In November 2025, our Board of Directors authorized an increase of an additional $300.0 million under the share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from our Global Senior Facility, and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by management and our Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. During the three months ended March 31, 2026, the Company repurchased 345,548 shares of our common stock for $20.0 million. The following table presents information with respect to purchases of common stock of the Company during the three months ended March 31, 2026, by the Company or an “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act:


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs
January 1, 2026 to January 31, 2026	236,730	$	55.56	236,730	$	289,225,971
February 1, 2026 to February 28, 2026	77,226	$	60.13	77,226	$	284,582,457
March 1, 2026 to March 31, 2026	31,592	$	69.76	31,592	$	282,378,557
Total	345,548	$	57.88	345,548	$	282,378,557

________________________

(1)This column discloses the number of shares purchased pursuant to the program during the indicated time periods.

Item 5 - Other Information

On March 10, 2026, Andrew Asch, SVP, General Counsel and Government Affairs, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 9,085 shares of Encore Capital Group, Inc. common stock between June 9, 2026 and March 10, 2027, subject to certain conditions.

On March 11, 2026, John Yung, President International and Cabot Credit Management, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 4,000 shares of Encore Capital Group, Inc. common stock between June 10, 2026 and March 11, 2027, subject to certain conditions.

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Item 6 – Exhibits


Number						Description
3.1.1						Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1/A filed on June 14, 1999, File No. 333-77483)

3.1.2						Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 4, 2002, File No. 000-26489)

3.1.3						Second Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1.3 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2019)

3.2						Amended and Restated Bylaws, as amended through March 18 , 202 6 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 20 , 202 6 )

10.1						Non-Employee Director Compensation Program Guidelines, effective June 12 , 202 6 (filed herewith)

31.1						Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2						Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1						Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101.INS						Inline XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document. (filed herewith)

101.SCH						Inline XBRL Taxonomy Extension Schema Document (filed herewith)

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101


In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt of the company are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			ENCORE CAPITAL GROUP, INC.

			By:						/s/ Tomas Hernanz
									Tomas Hernanz
									Executive Vice President,
									Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Date: May 6, 2026

Encore Capital Group - 10-Q quarterly report FY

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