Encore Capital Group Inc · NASDAQ:ECPG
Encore Capital — Q3 2025 Earnings Presentation
27 slides from Encore Capital's earnings presentation, Nov 5, 2025
Slide 1: Third Quarter 2025 Investor Presentation
Third Quarter 2025 Investor Presentation Encore Capital Group, Inc. November 5, 2025
Slide 2: Legal Disclaimers
Legal Disclaimers The statements in this presentation that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forwa
Slide 3: Q3 2025 Financial Highlights
Q3 2025 Financial Highlights Portfolio Purchases Collections Average Receivable Portfolios1 $346M $663M $4.2B up 23% up 20% up 16% ERC2 Leverage3 EPS $9.5B 2.5x $3.17 up 10% 0.2x lower up 152% 1) Represents the average of receivable portfolios for the quarter (the sum of receivable portfolios at the
Slide 4: Our Strategy and Market Presence
Our Strategy and Market Presence Our Business o Purchase NPL portfolios at attractive cash returns Our Market Presence o Focus on the consumer and ensure the highest level of compliance • Market leader in the United States o Meet or exceed collection expectations • 25+ years in operation o Maintain
Slide 5: We continue to allocate more capital to U.S. opportunities, where returns are highest
We continue to allocate more capital to U.S. opportunities, where returns are highest Portfolio Purchases (in $M) 495 200 368 367 346 51 50 282 25% 85 Europe 52 316 317 75% 295 United 261 230 States Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 United States Europe Encore Capital Group, Inc. 5
Slide 6: Collections increased by 20% to a quarterly record $663 million
Collections increased by 20% to a quarterly record $663 million Collections by Geography (in $M) +20% 655 663 605 550 555 164 160 150 148 150 490 502 454 402 404 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 United States Europe Other Note: Global, U.S. and Europe collections through Q3 2025 were 108%, 10
Slide 7: Cash generation increased by 23%
Cash generation increased by 23% Encore TTM Cash Generation1 (in $M) +23% 1600 1200 800 400 0 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 2 TTM adjusted EBITDA TTM collections applied to principal balance 1) Trailing Twelve Month (“TTM”) cash generation defined as TTM adjusted EBITDA + TTM collections a
Slide 8: Robust U.S. portfolio supply driven by high charge off rate combined with continued strong lending
Robust U.S. portfolio supply driven by high charge off rate combined with continued strong lending Outstanding U.S. Revolving Credit and U.S. Credit Card Charge Off Rate $1.31T 1400 Aug 2025 6% 1200 5% 1000 4% 4.17% 800 $ Billions Q2 2025 3% 600 2% 400 200 1% 0 0% 2015 2016 2017 2018 2019 2020 2021
Slide 9: U.S. consumer credit card delinquency rates remain at high levels
U.S. consumer credit card delinquency rates remain at high levels U.S. Bankcard Balance Delinquency Rates 4.5% 4.0% 3.5% % of Balances Past Due 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 10: MCM continues to deliver very strong results
MCM continues to deliver very strong results MCM (U.S.) MCM Collections (in $M) +25% Portfolio supply in the U.S. remains robust 502 490 MCM portfolio purchases of $261M in Q3 2025 were up 454 13% compared to Q3 2024 402 404 Record MCM collections of $502M in Q3 2025 increased by 25% compared
Slide 11: Cabot delivered a solid Q3
Cabot delivered a solid Q3 Cabot (Europe) Cabot Collections (in $M) +8% 164 160 Cabot portfolio purchases of $85M in Q3 2025 148 150 150 were higher than prior quarters due to spot opportunities U.K. market remains impacted by subdued consumer lending, low delinquencies and robust competition
Slide 12: Detailed Financial Discussion
Detailed Financial Discussion Encore Capital Group, Inc. 12
Slide 13: Financial Results
Financial Results Summary earnings statement Variance Key financial measures Variance $ in millions, except EPS Q3 25 Q3 24 $ % $ in millions Q3 25 Q3 24 $ % Portfolio revenue 370.1 328.1 42.0 12.8% Collections 663.0 550.3 112.8 20.5% Changes in recoveries 63.6 12.7 51.0 NM Portfolio purchases 346.1
Slide 14: As a result of our actions in Q3 and in October, we added $550M of liquidity
As a result of our actions in Q3 and in October, we added $550M of liquidity and have no significant maturities until 2028 Debt Maturity Profile at September 30, 2025 (in $M)1 2E+09 1.8E+09 1,614 1.6E+09 1,337 230 1.4E+09 1.2E+09 353 43 1E+09 884 843 800000000 336 600000000 343 400000000 100 604 500
Slide 15: Our capital allocation priorities
Our capital allocation priorities Balance Sheet Objectives Capital Allocation Priorities Preserve financial flexibility Portfolio purchases at attractive returns Target leverage1 between 2.0x and 3.0x Share Repurchases Maintain a strong BB debt Strategic M&A rating Deliver strong ROIC th
Slide 16: Updating our full-year guidance
Updating our full-year guidance Previous 2025 Guidance1 Updated 2025 Guidance1 Portfolio Purchases Exceed $1.35B Exceed $1.35B Collections +15.5% to $2.5B +18% to $2.55B Guidance Interest expense in 2025 of $295M Effective tax rate in 2025 to be in the mid-20’s % Encore Capital Group, Inc. 1) In
Slide 17: Appendix
Appendix Encore Capital Group, Inc. 17
Slide 18: Receivable portfolios and annualized yields
Receivable portfolios and annualized yields Receivable portfolios $ in millions Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Balance, beginning of period 3,583.3 3,719.3 3,776.4 3,952.5 4,184.8 Definitions: Portfolio purchases 282.5 495.1 367.9 367.1 346.1 Collections yield = Collections (550.3) (554.6) (604.8) (6
Slide 19: Supporting financial modeling formulas
Supporting financial modeling formulas Average receivable portfolios x Portfolio yield = Portfolio revenue Average receivable portfolios x Collections yield = Collections Servicing & other Collections + = Cash receipts revenue Cash receipts x ( 1 - Cashmargin efficiency ) = Operating expenses Encore
Slide 20: Quarterly Cash Efficiency Margin
Quarterly Cash Efficiency Margin Quarterly Cash Efficiency Margin and Cash Receipts (in $M) 90.0% 750 680 690 80.0% 631 650 577 579 70.0% 550 58.3% 57.3% 58.4% 60.0% 54.8% 52.6% 450 50.0% 350 40.0% 250 30.0% 150 20.0% 50 10.0% 0.0% Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 -50 Cash Receipts Quarterly
Slide 21: Q3 2025 Cash Collections and Revenue Reconciliation
Q3 2025 Cash Collections and Revenue Reconciliation Q3 2025 Collections and Revenue Reconciliation (in $M) 700 +61 $602M Expected Cash Collections, equal to the sum of A Q2 2025 ERC plus expected collections from portfolios 600 purchased in Q3 2025 500 -293 $61M Recoveries Above Forecast, cash colle
Slide 22: Components of Debt Purchasing Revenue in Q3 2025
Components of Debt Purchasing Revenue in Q3 2025 Q3 2025 Debt Purchasing Revenue (in $M) E1. Portfolio Revenue is revenue from expected collections and is a formulaic calculation based on the investment in receivable balance and an effective interest rate (EIR) that is established at the time of the
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The Company has included information concerning Adjusted EBITDA
Slide 24: Calculation of Quarterly Cash Efficiency Margin
Calculation of Quarterly Cash Efficiency Margin 1 Quarterly cash efficiency margin $ in millions, except percentages Q3-FY24 Q4-FY24 Q1-FY25 Q2-FY25 Q3-FY25 Collections 550.3 554.6 604.8 655.0 663.0 Servicing revenues 22.8 20.5 22.5 22.3 22.2 Other revenues 3.5 4.2 3.5 3.0 4.4 Cash receipts (A) 576.
Slide 25: Calculation of Cash Generation
Calculation of Cash Generation Reconciliation of Adjusted EBITDA to Net Income LTM Adjusted EBITDA $ in millions Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 LTM net income, as reported (184.7) (139.2) (115.7) (89.1) (45.1) Adjustments: Interest expense 238.5 252.5 267.3 279.9 287.2 Interest income (6.4) (7.0) (7.
Slide 26: Calculation of Net Debt and Leverage
Calculation of Net Debt and Leverage Net debt and leverage $ in millions, except leverage Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 GAAP Borrowings 3,550.6 3,672.8 3,790.7 3,965.5 3,933.9 Debt issuance costs and debt discounts 46.8 37.3 34.2 33.1 30.5 Cash & cash equivalents (247.4) (199.9) (187.1) (172.9) (172
Slide 27: Calculation of ROIC
Calculation of ROIC Reconciliation of Adjusted Income from Operations Adjusted income from operations and ROIC $ in millions, except percentages Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Numerator LTM income from operations 74.3 157.3 203.1 252.0 319.1 Adjustments: 1 Acquisition, integration and restructuring r