Encore Capital Group reported a sharp increase in first-quarter profit as elevated credit card charge-offs, strong portfolio supply, and operational improvements helped fuel record collections and stronger recoveries. The company posted net income of $86.2 million in the first quarter of 2026, up 84% from $46.8 million a year earlier, while earnings per share doubled to $3.86 from $1.93. Executives also raised full-year guidance and repeatedly pointed to technology investments, digital engagement strategies, and operational efficiencies as major drivers behind the company’s recent performance.
Encore said global collections climbed 19% year over year to a record $718 million, while portfolio revenue increased 13% to $390 million. The company purchased $363 million in portfolios during the quarter, with 87% of those purchases concentrated in the United States. Midland Credit Management, Encore’s U.S. operation, accounted for $316 million of those purchases and delivered record collections of $556 million, up 23% from the prior year period.
Encore Chief Executive Ashish Masih described the U.S. market as “very favorable,” citing elevated revolving consumer credit balances, charge-off rates above 4%, and delinquency levels that remain near multi-year highs. Using Federal Reserve data, the company estimated annualized U.S. credit card charge-offs at more than $54 billion.
One of the more notable themes from the call was the company’s emphasis on operational execution and technology deployment. Executives repeatedly pointed to new digital capabilities, operational innovation, and technology enhancements that are helping the company reach more consumers and generate more payments earlier in the collection lifecycle. Management said more than 50% of new payments are now occurring digitally.
Encore also highlighted what it described as stable consumer payment behavior despite broader macroeconomic uncertainty and pressure from higher costs. Executives said payment plan performance and new payer generation remain consistent with prior quarters and aligned with commentary from major banks and card issuers this earnings season.
The company disclosed that collections exceeded internal forecasts by $46 million during the quarter, driven largely by strong performance from portfolios purchased in 2024 and 2025. Executives said recent vintages are outperforming expectations because operational improvements are having the greatest impact during the early stages of the collection lifecycle.
During the Q&A session, analysts also pressed management on artificial intelligence and automation. Masih said the company is actively piloting AI-related tools but stressed that collection calls remain highly complex and empathy-driven interactions that current voice AI technologies are not fully equipped to handle. He also acknowledged the regulatory considerations surrounding artificial voice usage in collections.
