Encore Capital Group Reports Robust Q3 Growth

Encore Capital Group ((ECPG)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Encore Capital Group painted a picture of robust financial health, driven by impressive growth in collections, earnings per share, and portfolio purchases, particularly in the U.S. market. The company has leveraged new technologies and digital enhancements to fuel this growth, although challenges persist in the European markets due to subdued consumer lending and low delinquencies. Despite increased operating expenses, the overall sentiment was positive, with an expanded share repurchase program signaling confidence in future prospects.

Strong Collections Growth

Encore Capital Group reported a remarkable 20% increase in collections year-over-year, reaching a record $663 million. This growth was primarily driven by the implementation of new technologies and enhanced digital capabilities in the U.S. market, showcasing the company’s ability to adapt and thrive in a competitive landscape.

Record Earnings Per Share

The company achieved a significant milestone with earnings per share soaring to $3.17, marking an increase of over 150% compared to the third quarter of the previous year. This substantial growth underscores Encore’s strong financial performance and strategic execution.

Increased Portfolio Purchases

Encore’s global portfolio purchases for the third quarter amounted to $346 million, reflecting a 23% increase compared to Q3 2024. This strategic investment highlights the company’s commitment to expanding its portfolio and capitalizing on market opportunities.

Share Repurchase Program Expansion

In a move that signals confidence in its future prospects, Encore repurchased $10 million of shares in Q3 and authorized an additional $300 million under its share repurchase program. This expansion demonstrates the company’s commitment to returning value to shareholders.

Strong U.S. Market Performance

Encore’s MCM business in the U.S. reported a 25% increase in collections, reaching a record $502 million. This growth was driven by strong operational performance and favorable market conditions, reinforcing the U.S. market as a key driver of the company’s success.

Challenges in European Markets

While Cabot’s portfolio purchases were higher than usual due to spot market purchases, the U.K. market continues to face challenges from subdued consumer lending and low delinquencies. These factors have impacted the overall performance in the European markets.

Increased Operating Expenses

Operating expenses rose by 10% to $287 million. However, this increase was outpaced by the growth in collections, indicating efficient cost management and a focus on maintaining profitability.

Forward-Looking Guidance

Looking ahead, Encore Capital Group remains optimistic about its future prospects, as evidenced by a 23% increase in portfolio purchases and a 20% rise in collections during the third quarter of 2025. The company’s average receivable portfolios grew by 16% to $4.2 billion, with estimated remaining collections reaching a record $9.5 billion. These figures, coupled with a significant improvement in leverage to 2.5x, reflect a strong foundation for continued growth.

In summary, Encore Capital Group’s latest earnings call highlighted a period of strong financial performance, driven by strategic investments and technological advancements. Despite challenges in the European markets, the company’s robust growth in collections and earnings per share, along with an expanded share repurchase program, underscore its confidence in future success. Investors and market enthusiasts will be keenly watching how Encore navigates its opportunities and challenges in the coming quarters.