Encore Capital Group Inc (NASDAQ:ECPG) reported second-quarter 2025 earnings that significantly exceeded analyst expectations, driving a strong after-hours market reaction. The specialty finance company posted earnings per share (EPS) of $2.49, surpassing the consensus estimate of $1.45 by 72%. Revenue for the quarter came in at $442.1 million, well above the projected $391.1 million, marking a 13% beat.
Key Financial Highlights
- Revenue Growth: The company’s revenue increased by 24% year-over-year, driven by record collections of $655 million, up 20% from the prior year.
- EPS Surge: Net income rose 82% to $58.7 million, translating to EPS of $2.49, an 86% increase from $1.34 in Q2 2024.
- Portfolio Purchases: Global portfolio acquisitions climbed 32% to $367 million, with U.S. purchases hitting a record $317 million.
- Estimated Remaining Collections (ERC): ERC, a key metric for future cash flows, grew 12% to a record $9.4 billion.
Market Reaction
Following the earnings release, Encore Capital’s stock surged nearly 8.9% in after-hours trading, reflecting investor optimism over the strong quarterly performance. The positive reaction suggests that the market was not fully pricing in such a significant earnings beat, particularly given the company’s recent underperformance—shares had declined 6% over the past two weeks and 8.7% over the past month.
Outlook vs. Analyst Estimates
Management raised its full-year collections guidance to approximately $2.5 billion, representing 15.5% year-over-year growth, up from prior expectations of 11% growth. This upward revision aligns with analysts’ full-year revenue estimate of $1.6 billion, reinforcing confidence in the company’s ability to sustain momentum.
For Q3 2025, analysts currently expect revenue of $401.2 million and EPS of $1.60. Given Encore’s Q2 outperformance, investors will be watching whether the company can maintain this trajectory in the coming quarters.
Summary of Press Release Highlights
- Record U.S. collections of $490 million, up 24% YoY.
- Strong purchasing activity, with U.S. portfolio acquisitions up 34%.
- Share repurchases of $15 million in Q2, totaling $25 million for the first half of 2025.
- European operations (Cabot) saw a 10% increase in collections.
For more detailed earnings estimates and historical performance, view the full earnings data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
