NASDAQ$ECPG

Encore Capital Group Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Driven by strong collections, particularly in the MCM business, the company's Q3 performance was solid.

Encore Capital Group reported a strong Q3 2021, driven by strong collections, particularly in their MCM business. They saw a 5% increase in collections and a 2% increase in revenues compared to Q3 2020. The company also repurchased $41M of ECPG shares in Q3 and is accelerating capital return via a $300M tender offer for ECPG shares.

  • Collections were $567M, a 5% increase year-over-year.
  • Revenues were $413M, a 2% increase year-over-year.
  • GAAP Net Income was $84M, a 53% increase year-over-year.
  • GAAP EPS was $2.66, a 55% increase year-over-year.

Headline financials

Total Revenue

$413M

Previous: $404M+2.2%
EPS (adj)

$2.66

Previous: $2.31+15.2%
Portfolio Purchases

$168M

No prior period
ERC

$7.88B

Previous: $8.5B-7.3%
Capital Expenditures

-$24.2M

Previous: -$22.7M-6.6%
Free Cash Flow

$59.4M

Previous: $32M+85.7%
Net Income

$83.6M

Previous: $54.7M+52.9%
Operating Income

$167M

Previous: $142M+17.0%
Gross Profit

$403M

Previous: $384M+5.1%
Cash & Equivalents

$158M

Previous: $170M-6.9%
Total Assets

$4.55B

Previous: $4.73B-3.8%
Stock-Based Comp

$3.85M

Previous: $3.88M-1.0%

Revenue & EPS history

Encore · Revenue · Quarterly

$413M

Q3 2021+2.2%vs Q3 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Encore · $327M total across 3 segments · Q3 2023

  • Debt Purchasing Revenue
    $303M
  • Servicing Revenue
    $19.9M
  • Other Revenues
    $4.11M

Forward guidance

The company is focused on purchasing NPL portfolios at attractive cash returns, focusing on the consumer and ensuring compliance, meeting or exceeding collection expectations, maintaining an efficient cost structure, and minimizing the cost of funding.

Tailwinds

  • Purchase NPL portfolios at attractive cash returns
  • Focus on the consumer and ensure the highest level of compliance
  • Meet or exceed collection expectations
  • Maintain efficient cost structure
  • Minimize cost of funding

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 Q3 2021

Historical avgQ3 2021

+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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