NASDAQ$ECPG

Encore Capital Group Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported consolidated financial results for the fourth quarter and full year ended December 31, 2022.

Encore Capital Group reported strong financial and operational performance for 2022, with earnings per share second only to the previous year's extraordinary result. Increased lending by banks and rising delinquencies have led to a transition in the U.S. credit cycle, increasing opportunities to deploy capital at strong returns. In Q4, accounting items negatively impacted results, but the company still delivered strong full-year results.

  • Collections decreased by 16% to $436.16 million.
  • Revenues decreased by 35% to $233.99 million.
  • Portfolio purchases increased by 23% to $225.34 million.
  • GAAP net loss was $(73.12) million, with a loss per share of $(3.11).

Headline financials

Total Revenue

$234M

Previous: $357M-34.5%
EPS (adj)

-$3.11

Previous: $2.53-222.9%
Capital Expenditures

$16.2M

Previous: $9.21M+75.4%
Free Cash Flow

$39.6M

Previous: $81.9M-51.6%
Net Income

-$73.1M

Previous: $76.1M-196.1%
Operating Income

-$2.31M

Previous: $124M-101.9%
Gross Profit

$81.6M

Previous: $196M-58.4%
Cash & Equivalents

$144M

Previous: $190M-24.1%
Total Assets

$4.51B

Previous: $4.61B-2.2%
Stock-Based Comp

$3.17M

Previous: $5.43M-41.6%

Revenue & EPS history

Encore · Revenue · Quarterly

$234M

Q4 2022-34.5%vs Q4 2021
Beat estimate in 5 of 13 quarters(38%)
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

Encore expects MCM's portfolio purchases in Q1 2023 to be at least $200 million, more than double Q1 2022 purchases, with a robust purchasing pipeline for 2023.

Tailwinds

  • MCM’s portfolio purchases in Q1 2023 to be at least $200 million dollars
  • Attractive returns on portfolio purchases
  • Purchasing pipeline for 2023 appears equally robust
  • Well positioned to capitalize on emerging opportunities
  • Rising portfolio supply

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 Q4 2022

Historical avgQ4 2022

+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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