Encore Capital Group reported second quarter revenues of $491.9 million, up 11% from a year earlier, and net income of $64 million, or $2.81 per diluted share, as the parent company of Midland Credit Management posted record global collections and its largest U.S. portfolio purchasing quarter ever.
The story of the quarter is what is driving the collections number. Global collections reached $737 million, up 13% year over year, with MCM contributing a record $572 million, a 17% increase. Executives repeatedly attributed the overperformance to new technologies, enhanced digital capabilities, and operational innovation that are allowing the company to reach more consumers earlier in a portfolio’s life cycle. Chief Financial Officer Tomas Hernanz told analysts the company collected $53 million more in the quarter than its own forecasts anticipated, with recent vintages from 2024 and 2025 showing the strongest gains.
Chief Eexecuitve Ashish Masih said the efficiency gains are compounding. Because MCM is collecting more per account, it can bid more aggressively for portfolios while maintaining returns, a dynamic he described as a virtuous cycle. That purchasing power showed up in the second quarter, when MCM bought $372 million in portfolios, boosted by opportunistic spot market purchases on top of its usual forward flow commitments.
The supply picture remains favorable for buyers. Masih pointed to Federal Reserve data showing revolving credit near record levels and charge-off rates near 4%, above the 10-year average, producing annualized net charge-off volume of more than $50 billion. He said delinquency data suggests the robust purchasing environment will persist for the foreseeable future, and that consumer payment behavior remains stable despite macro uncertainty.
Encore’s Cabot business in Europe was quieter, with collections flat at $164 million and purchases of $72 million as U.K. lending stays subdued. Masih noted U.K. banks are increasingly selling fresher paper and forward flows, a shift he called aligned with the company’s capabilities.
The company raised its full-year collections guidance to a range of $2.8 billion to $2.85 billion, representing 8% to 10% growth, and now expects 2026 earnings per share of $13 to $14. Portfolio purchasing guidance held at $1.4 billion to $1.5 billion, though Masih said the company will likely finish near the top of that range. Cash efficiency margin improved to 60.2%, and leverage declined to 2.3 times.
