Encore Capital Group's Q2 2025 Earnings Call: Unpacking Contradictions in Collections, Market Stability, and Cash Efficiency

Collections multiple for MCM and Cabot, purchasing environment and competitive dynamics, collections multiples stability, U.S. supply and purchasing dynamics, and cash efficiency and collections efficiency are the key contradictions discussed in Encore Capital Group's latest 2025Q2 earnings call.



Portfolio Purchases and Collections Increase:
- Encore reported record portfolio purchases of $367 million in Q2 2025, up 32% compared to the second quarter of 2024.
- This was driven by favorable supply environments and strong returns, particularly in the U.S. market.

Strong Collections Performance:
- Global collections increased to a record $655 million, up 20% year-on-year.
- Growth was attributed to higher portfolio purchases at strong returns, stable consumer behavior, operational execution, and seasonality tailwinds.

Robust U.S. Market Performance:
- U.S. portfolio purchases reached a record $317 million in Q2, a 34% increase from the previous year.
- The favorable conditions in the U.S. market, with elevated charges-off rates and strong supply, led to strong purchasing and collections.

Cabot Credit Management in Europe:
- Cabot delivered solid performance with $164 million in collections, up 10% year-on-year.
- This growth was driven by disciplined purchasing and stable collections performance despite subdued lending conditions in the U.K.

Financial Metrics and Guidance:
- Earnings per share increased to $2.49, up 86% from the previous year.
- Guidance for 2025 global collections was raised to a 15.5% increase, reflecting strong performance and positive market conditions.