NASDAQ$ECPG

Encore Capital Group Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Reported normalized consumer behavior and strategic cost management.

Encore Capital Group reported first quarter results reflecting normalized consumer behavior and strategic cost management. Global collections reached $462 million, and portfolio purchases increased by 63% to $276 million, driven by a record $213 million in U.S. portfolio purchases.

  • Global collections totaled $462 million.
  • Portfolio purchases increased 63% to $276 million.
  • U.S. portfolio purchases reached a record $213 million.
  • GAAP EPS was $0.75, impacted by a $0.19 per share charge related to European headcount reductions.

Headline financials

Total Revenue

$313M

Previous: $500M-37.4%
EPS (adj)

$0.94

Previous: $6.40-85.3%
Portfolio Purchases

$276M

No prior period
ERC

$7.79B

No prior period
Capital Expenditures

-$4.89M

Previous: -$7.08M+31.0%
Free Cash Flow

$13.7M

Previous: $169M-91.9%
Net Income

$18.6M

Previous: $176M-89.4%
Operating Income

$70.1M

Previous: $265M-73.5%
Gross Profit

$313M

Previous: $500M-37.4%
Cash & Equivalents

$159M

Previous: $160M-0.9%
Total Assets

$4.69B

Previous: $4.61B+1.6%
Stock-Based Comp

$4.05M

Previous: $3.92M+3.3%

Revenue & EPS history

Encore · Revenue · Quarterly

$313M

Q1 2023-37.4%vs Q1 2022
Beat estimate in 5 of 13 quarters(38%)
ActualEstimate

Revenue by segment

Encore · $322M total across 3 segments · Q1 2023

  • Debt Purchasing Revenue
    $296M
  • Servicing Revenue
    $22.6M
  • Other Revenues
    $3.87M

Forward guidance

Encore expects portfolio purchases in the U.S. in the second quarter to be at a similar level to those in Q1.

Tailwinds

  • Portfolio purchases in the U.S. in the second quarter are expected to be at a similar level to those in Q1.
  • Encore is well-positioned with the operational capability and balance sheet.
  • Encore is committed to the critical role in the consumer credit ecosystem.
  • Encore is helping consumers regain their financial freedom.
  • Encore is capitalizing on the growing portfolio purchasing opportunities in the market.

Headwinds

  • Collections have returned to pre-pandemic levels for MCM business in the U.S.
  • Collections have stabilized for Cabot business in Europe.
  • Took actions in the first quarter to manage our cost base, including headcount reductions in support functions.
  • Took a $6 million pre-tax charge.
  • GAAP EPS of $0.75 impacted by $0.19 per share charge related to headcount reductions in Europe

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+2.0%

Avg return

Earnings day

+3.8%

Avg return

5 days after

+3.1%

Avg return

30 days after

60%

39 / 65 earnings

Positive

+38.9%

Q3 2016

Best reaction

-21.9%

Q4 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.2%-2.6%-3.6%
Q4 2025+8.2%+21.4%+16.4%
Q3 2025+10.5%+16.3%+23.7%
Q1 2025+23.9%+22.5%+16.7%
Q4 2024-21.9%-30.8%-31.3%
Q3 2024+4.9%+5.3%+3.6%
Q2 2024+9.1%+3.5%+3.0%
Q1 2024+11.9%+10.1%-0.3%
Q4 2023-9.6%-11.0%-12.6%
Q3 2023+9.7%+16.9%+20.3%
Q2 2023-5.7%-2.6%-10.3%
Q1 2023-4.9%-3.8%-5.6%
Q4 2022-6.5%-6.7%-21.2%
Q3 2022-9.7%-5.6%-1.2%
Q2 2022-18.4%-19.9%-22.5%
Q1 2022+6.4%+6.7%+3.7%
Q4 2021-7.0%-7.3%-10.4%
Q3 2021+10.4%+12.4%+10.1%
Q2 2021-2.0%-0.5%+0.9%
Q1 2021+4.8%+0.4%+15.1%
Q4 2020-0.4%+1.9%+25.1%
Q3 2020-2.0%-1.8%+13.7%
Q2 2020+27.8%+22.1%+29.0%
Q1 2020-1.6%-0.2%+13.2%
Q4 2019+10.8%+23.6%-11.7%
Q3 2019+7.7%+7.5%+10.0%
Q2 2019+7.8%+5.3%-2.1%
Q1 2019+17.3%+27.2%+28.6%
Q4 2018+2.2%-2.4%-18.7%
Q3 2018-10.8%-5.5%-8.1%
Q2 2018+11.7%+9.6%+6.7%
Q1 2018+1.1%+0.6%-14.4%
Q4 2017+7.4%+1.8%+9.6%
Q3 2017+6.9%+4.8%-0.5%
Q2 2017+5.8%+7.2%+2.2%
Q1 2017-6.2%+0.0%+7.4%
Q4 2016+1.9%-3.5%-11.9%
Q3 2016+38.9%+39.5%+59.2%
Q2 2016-16.3%-14.3%-10.2%
Q1 2016+2.8%
Q4 2015+5.4%
Q3 2015+0.9%
Q2 2015-5.7%
Q1 2015-3.4%
Q4 2014-7.9%
Q3 2014+0.6%
Q2 2014+1.5%
Q1 2014+2.8%
Q4 2013+1.6%
Q3 2013+1.0%
Q2 2013+11.2%
Q1 2013+4.0%
Q4 2012+5.7%
Q3 2012-7.0%
Q2 2012+8.0%
Q1 2011+8.3%
Q1 2012+8.3%
Q4 2011-2.3%
Q4 2009-2.3%
Q3 2010+2.5%
Q3 2011+2.5%
Q2 2010-9.5%
Q4 2010-9.5%
Q2 2011-9.5%
Q1 2010-2.2%

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