Encore Capital Group Inc · NASDAQ:ECPG

Encore Capital — Q2 2026 Earnings Presentation

28 slides from Encore Capital's earnings presentation, Aug 5, 2026

  1. Slide 1: Second Quarter 2026 Investor Presentation

    Second Quarter 2026 Investor Presentation Encore Capital Group, Inc. August 5, 2026

  2. 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

  3. Slide 3: Q2 2026 Financial Highlights

    Q2 2026 Financial Highlights Portfolio Purchases Collections Average Receivable Portfolios1 $444M $737M $4.52B up 21% up 13% up 11% Leverage2 Net Income EPS 2.3x $64M $2.81 0.3x lower up 9% up 13% Includes ($1.00) refinancing cost impact 1) Represents the average of receivable portfolios for the qua

  4. Slide 4: Our Strategy and Market Presence

    Our Strategy and Market Presence Our Strategy Our Market Presence  Market leader in the United States  25+ years in operation  Market Focus  Competitive Advantage  One of the largest players in the UK (20+ years in operation)  Balance Sheet Strength  Building strength in select European marke

  5. Slide 5: Encore's competitive advantage is driven by our value engine

    Encore’s competitive advantage is driven by our value engine Buy well Purchasing portfolios at attractive returns Disciplined portfolio purchasing Collect efficiently underpinned by superior data and analytics capabilities Maximizing net collections to realize strong yields Virtuous cycle Operationa

  6. Slide 6: We continue to allocate the majority of our capital to U.S. opportunities

    We continue to allocate the majority of our capital to U.S. opportunities Portfolio Purchases (in $M) 444 367 72 16% 363 346 50 327 47 85 48 372 84% 317 316 261 279 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 United States Europe Encore Capital Group, Inc. 6

  7. Slide 7: Collections increased by 13% to a quarterly record $737 million

    Collections increased by 13% to a quarterly record $737 million Collections by Geography (in $M) +13% 718 737 655 663 670 161 164 164 160 167 556 572 490 502 503 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 United States Europe Other Note: Global, U.S. and Europe collections for Q2 2026 were 108%, 109% a

  8. Slide 8: Cash generation increased by 21%

    Cash generation increased by 21% Encore TTM Cash Generation1 (in $M) 2000 +21% 1600 1200 800 400 0 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 2 TTM adjusted EBITDA TTM collections applied to principal balance 1) Trailing Twelve Month (“TTM”) cash generation defined as TTM adjusted EBITDA + TTM collecti

  9. Slide 9: Robust U.S. portfolio supply driven by high charge off rate and 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 1400 $1.34T 6% May 1200 2026 5% 1000 4% 3.84% 800 $ Billions Q1 2026 3% 600 2% 400 200 1% 0 0% 2016 2017 2018 2019 2020 2021 2022

  10. Slide 10: U.S. consumer credit card delinquency rates remain at high levels

    U.S. consumer credit card delinquency rates remain at high levels even with typical Q2 seasonality 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 Q

  11. Slide 11: MCM continues to deliver very strong results

    MCM continues to deliver very strong results MCM (U.S.) MCM Collections (in $M)  Portfolio supply in the U.S. remains robust +17%  Record MCM portfolio purchases of ​$372​M in Q2 2026 572 556 included opportunistic spot market purchases 490 502 503  Record MCM collections of $572​M in Q2 2026 inc

  12. Slide 12: Cabot delivered a solid Q2

    Cabot delivered a solid Q2 Cabot (Europe) Cabot Collections (in $M)  Cabot portfolio purchases were ​$72​M in Q2 2026 164 167 161 164 160  U.K. market remains impacted by subdued consumer lending, low delinquencies and robust competition  Cabot collections in Q2 2026 of $164​M were flat compared

  13. Slide 13: Detailed Financial Discussion

    Detailed Financial Discussion Encore Capital Group, Inc. 13

  14. Slide 14: Financial Results

    Financial Results Summary earnings statement Variance Key financial measures Variance $ in millions, except EPS Q2 26 Q2 25 $ % $ in millions Q2 26 Q2 25 $ % Portfolio revenue 400.2 361.2 39.1 10.8% Collections 736.9 655.0 81.9 12.5% Changes in recoveries 71.1 55.6 15.5 27.9% Portfolio purchases 443

  15. Slide 15: We continue to proactively manage our balance sheet; no significant maturities until 2028

    We continue to proactively manage our balance sheet and have no significant maturities until 2028 Debt Maturity Profile at June 30, 2026 (in $M)1 1,200 1,000 889 814 838 800 750 230 338 600 450 500 371 400 32 750 659 200 500 500 332 371 - - - 2026 2027 2028 2029 2030 2031 2032 2033 Cabot Securitisat

  16. Slide 16: Our Objectives and Priorities

    Our Objectives and 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 throug

  17. Slide 17: Updating our full-year 2026 guidance

    Updating our full-year 2026 guidance 2025 Result Updated 2026 Guidance1 Portfolio purchases $1.4B $1.40B to $1.50B Collections $2.6B $2.80B to $2.85B GAAP earnings per share $10.91 $13.00 to $14.002  Interest expense3 of $295M  Effective tax rate to be in the mid-20’s % 1) In constant currency 2)

  18. Slide 18: Appendix

    Appendix Encore Capital Group, Inc. 18

  19. Slide 19: Receivable portfolios and annualized yields

    Receivable portfolios and annualized yields Receivable portfolios $ in millions Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Balance, beginning of period 3,952.5 4,184.8 4,270.0 4,371.5 4,437.4 Definitions: Portfolio purchases 367.1 346.1 327.1 362.8 443.8 Collections yield = Collections (655.0) (663.0) (670.0) (7

  20. Slide 20: 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

  21. Slide 21: Quarterly Cash Efficiency Margin

    Quarterly Cash Efficiency Margin Quarterly Cash Efficiency Margin and Cash Receipts (in $M) 100.0% 741 757 $800 90.0% 680 690 696 $700 80.0% $600 70.0% $500 60.0% 60.9% 60.2% 50.0% 57.3% 58.4% 57.1% $400 40.0% $300 30.0% $200 20.0% $100 10.0% 0.0% - Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Cash recei

  22. Slide 22: Q2 2026 Cash Collections and Revenue Reconciliation

    Q2 2026 Cash Collections and Revenue Reconciliation Q2 2026 Collections and Revenue Reconciliation (in $M) 800 +53 284 700 $737M Cash Collections from debt purchasing business A 600 in Q2 2026 500 $53M Recoveries Above Forecast, cash collections 400 737 B above expected cash collections for Q2 2026

  23. Slide 23: Components of Debt Purchasing Revenue in Q2 2026

    Components of Debt Purchasing Revenue in Q2 2026 Q2 2026 Debt Purchasing Revenue (in $M) D1. 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

  24. Slide 24: 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

  25. Slide 25: Calculation of Quarterly Cash Efficiency Margin

    Calculation of Quarterly Cash Efficiency Margin Quarterly cash efficiency margin 1 $ in millions, except percentages Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Collections 655.0 663.0 670.0 718.4 736.9 Servicing revenues 22.3 22.2 21.4 20.6 18.2 Other revenues 3.0 4.4 4.8 2.0 2.3 Cash receipts (A) 680.3 689.6 69

  26. Slide 26: Calculation of Cash Generation: Reconciliation of Adjusted EBITDA to Net Income

    Calculation of Cash Generation Reconciliation of Adjusted EBITDA to Net Income LTM Adjusted EBITDA $ in millions Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 LTM net income, as reported (89.1) (45.1) 256.8 296.3 301.6 Adjustments: Interest expense 279.9 287.2 293.9 296.4 296.4 Interest income (6.8) (5.9) (5.0) (4.

  27. Slide 27: Calculation of Net Debt and Leverage

    Calculation of Net Debt and Leverage Net debt and leverage $ in millions, except leverage Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 GAAP Borrowings 3,965.5 3,933.9 4,001.3 4,033.3 4,179.5 Debt issuance costs and debt discounts 33.1 30.5 32.1 30.4 33.9 Cash & cash equivalents (172.9) (172.5) (156.8) (227.2) (182

  28. Slide 28: Calculation of ROIC: Reconciliation of Adjusted Income from Operations

    Calculation of ROIC Reconciliation of Adjusted Income from Operations Adjusted income from operations and ROIC $ in millions, except percentages Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Numerator LTM income from operations 252.0 319.1 626.6 681.3 717.5 Adjustments: 1 Acquisition, integration and restructuring

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