Encore Capital Group used its fourth-quarter 2025 earnings call to do two things the credit and collections industry does not often get to see in public: lay out the “why” behind a monster year of performance and put a stake in the ground for what comes next. The company reported full-year 2025 net income of $257 million and said it expects 2026 earnings to rise 10%, with global portfolio purchases of $1.4 to $1.5 billion and global collections up 5% to $2.7 billion. Management also pushed back on the growing narrative of consumer distress, saying it has seen “no impact” on payer conversion, payment plans, or plan resilience so far.
What stood out:
- Records on the core engine (U.S.): Midland Credit Management finished 2025 with record U.S. portfolio purchases of $1.17 billion (up 18%) and record U.S. collections of $1.95 billion (up 24%), including fourth quarter collections of $503 million, its highest quarter ever.
- A rare visibility move: Encore gave a single-point earnings-per-share guide ($12) because leadership believes the market was not fully reflecting its “earnings power.”
Why management thinks the cycle still favors buyers
Encore pointed to near-record revolving credit and elevated charge-off rates (above 4%) as the fuel for supply, estimating over $54 billion in annualized net charge-offs using the Fed’s most recent data discussed on the call. Management characterized both supply and pricing as “very stable” entering 2026.
The operational takeaway
Encore attributed much of the collections outperformance to new technologies, enhanced digital capabilities, and omnichannel execution that lifted early-life recoveries and expanded the payer book. CEO Ashish Masih framed it simply: they are spending on tech to collect more, not just to cut costs, and consumer payment behavior in their book remains steady even amid the “noise” in headlines.
