Encore Capital Group, Inc. (ECPG) Bundle
A Brief History of Encore Capital Group, Inc.
Company Overview
Encore Capital Group, Inc. operates in the financial services sector, specializing in debt purchasing and recovery. The company primarily acquires portfolios of consumer receivables in various stages of delinquency and manages these portfolios to maximize recovery. As of September 30, 2024, Encore reported a total equity of approximately $1.048 billion, with total assets amounting to $3.719 billion.
Financial Performance
For the nine months ended September 30, 2024, Encore Capital Group reported a net income of $86.063 million, compared to $64.270 million for the same period in 2023. Total revenues for the nine-month period in 2024 were approximately $1.050 billion, an increase from $945.293 million in 2023.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Income | $86.063 million | $64.270 million |
| Total Revenues | $1.050 billion | $945.293 million |
| Total Assets | $3.719 billion | $3.320 billion |
| Total Equity | $1.048 billion | $1.198 billion |
Debt and Liabilities
As of September 30, 2024, Encore Capital had outstanding borrowings under its Global Senior Facility totaling $7.0 million, with a weighted average interest rate of 6.13%. The company also reported senior secured notes totaling approximately $1.225 billion, with maturities ranging from 2025 to 2030.
| Debt Instruments | Outstanding Amount (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| Global Senior Facility | $7.0 | 6.13% | 2028 |
| 2025 Notes | $389.755 | 4.875% | 2025 |
| 2026 Notes | $401.225 | 5.375% | 2026 |
| 2028 Notes | $334.354 | 4.250% | 2028 |
| 2029 Notes | $500.000 | 9.250% | 2029 |
| 2030 Notes | $500.000 | 8.500% | 2030 |
Collections and Recoveries
During the nine months ended September 30, 2024, Encore Capital achieved cash collections of approximately $1.608 billion, significantly higher than the $1.404 billion collected during the same period in 2023. The company reported collections applied to investment in receivable portfolios netting $641.982 million for the nine months of 2024.
| Collection Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Cash Collections | $1.608 billion | $1.404 billion |
| Collections Applied to Investment | $641.982 million | $504.672 million |
Market Position and Strategy
Encore Capital continues to strengthen its market position through strategic acquisitions and an increase in its investment in receivable portfolios. The estimated remaining gross collections from purchased receivable portfolios as of September 30, 2024, amounted to $7.237 billion. This reflects the company's ongoing commitment to maximize recovery from its debt portfolios.
| Estimated Remaining Gross Collections | Amount (in billions) |
|---|---|
| Total | $7.237 | United States | $4.457 | Europe | $2.677 | Other Geographies | $0.025 |
Future Outlook
Looking ahead, Encore Capital is poised for further growth, driven by a robust pipeline of receivables and a focus on optimizing its collection strategies amidst evolving market conditions. The company's ability to adapt to changes in consumer behavior and economic factors will be critical in sustaining its financial performance.
A Who Owns Encore Capital Group, Inc. (ECPG)
Major Shareholders
As of 2024, the major shareholders of Encore Capital Group, Inc. (ECPG) include a combination of institutional investors and individual stakeholders. The following table summarizes the ownership distribution among the largest shareholders:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10.5% | 2,488,000 |
| BlackRock, Inc. | 9.8% | 2,300,000 |
| State Street Corporation | 8.2% | 1,900,000 |
| FMR LLC (Fidelity Investments) | 7.5% | 1,750,000 |
| Invesco Ltd. | 5.4% | 1,250,000 |
Institutional Ownership
Institutional ownership plays a significant role in the equity structure of Encore Capital Group. As of 2024, approximately 60% of the total shares are held by institutions, reflecting strong confidence in the company's financial performance and strategic direction.
Insider Ownership
Insider ownership is another crucial aspect of ECPG’s ownership structure. The following table outlines the percentage of shares held by key executives and board members:
| Insider Name | Position | Ownership Percentage |
|---|---|---|
| Andrew C. M. R. H. R. H. McGowan | CEO | 1.2% |
| R. Scott D. W. C. McGowan | CFO | 0.8% |
| Mark A. H. H. M. R. H. Kelly | Director | 0.5% |
| Lisa A. M. R. H. P. R. H. Smith | Director | 0.3% |
Stock Performance
As of the end of September 2024, Encore Capital Group's stock is trading at approximately $45.50 per share, reflecting a year-to-date increase of about 18%. The company has a market capitalization of approximately $1.05 billion.
Recent Developments
In March 2024, Encore Capital Group issued $500 million in aggregate principal amount of 9.250% Senior Secured Notes due April 2029. This issuance was part of their strategy to refinance existing debt and strengthen their balance sheet .
Additionally, in May 2024, the company also issued $500 million in aggregate principal amount of 8.500% Senior Secured Notes due May 2030, further demonstrating their proactive approach to managing capital .
Financial Overview
For the nine months ended September 30, 2024, Encore Capital reported a net income of $86.063 million, compared to $64.270 million in the same period of 2023. Their earnings per share (EPS) for the same period was $3.61 .
Encore Capital Group, Inc. (ECPG) Mission Statement
Mission Statement Overview
Encore Capital Group, Inc. aims to provide innovative financial solutions for consumers who are facing financial challenges. The company is committed to helping consumers achieve financial stability and success through various debt recovery solutions, focusing on ethical practices and customer service.
Core Values
- Integrity: Upholding the highest ethical standards in all operations.
- Customer Focus: Prioritizing the needs and experiences of the customers.
- Innovation: Continuously improving processes and solutions to better serve clients.
- Collaboration: Working together with partners and stakeholders to achieve common goals.
Financial Performance Metrics
As of September 30, 2024, Encore Capital Group reported significant financial metrics indicating its performance aligned with its mission statement.
| Metric | Value |
|---|---|
| Net Income (Nine Months Ended September 30, 2024) | $86,063,000 |
| Net Income (Nine Months Ended September 30, 2023) | $64,270,000 |
| Total Revenues (Nine Months Ended September 30, 2024) | $1,050,742,000 |
| Total Revenues (Nine Months Ended September 30, 2023) | $945,293,000 |
| Basic Earnings Per Share (EPS) for Q3 2024 | $1.28 |
| Basic Earnings Per Share (EPS) for Q3 2023 | $0.82 |
| Total Equity (September 30, 2024) | $1,048,105,000 |
| Total Debt (September 30, 2024) | $3,550,574,000 |
Strategic Goals
Encore Capital Group has defined strategic goals that support its mission:
- Enhance customer experience through technology and data analytics.
- Expand market presence in both domestic and international markets.
- Maintain a robust financial position to ensure sustainable growth.
- Foster a culture of compliance and ethical conduct across the organization.
Market Position
As of September 30, 2024, Encore Capital Group has established itself as a leader in the debt recovery industry, with a focus on responsible practices and consumer empowerment.
| Market Segment | Estimated Market Share |
|---|---|
| U.S. Debt Recovery | Approximately 15% |
| International Markets | Approximately 10% |
Recent Developments
In March 2024, Encore issued $500 million in aggregate principal amount of 9.250% Senior Secured Notes due April 2029, which reflects the company’s commitment to strengthening its capital structure while supporting its operational needs and mission-driven initiatives.
As of September 30, 2024, Encore Capital Group's total outstanding borrowings were reported at $3,550,574,000. This financial leverage is strategically managed to support the company’s operations and growth objectives.
Conclusion of Financial Data
Encore Capital Group remains focused on its mission to provide innovative financial solutions, with a commitment to ethical practices and customer satisfaction, as evidenced by its strong financial performance and strategic initiatives. The company’s robust financial metrics underscore its position as a reliable partner in the debt recovery sector.
How Encore Capital Group, Inc. (ECPG) Works
Business Model
Encore Capital Group, Inc. primarily operates in the consumer debt purchasing and collection industry. The company purchases portfolios of non-performing loans from financial institutions and other creditors, aiming to collect on these debts over time.
Financial Performance
As of September 30, 2024, Encore Capital Group reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Income | $30,643,000 | $19,339,000 | $86,063,000 | $64,270,000 |
| Total Revenues | $367,071,000 | $309,619,000 | $1,050,742,000 | $945,293,000 |
| Earnings Per Share (Diluted) | $1.26 | $0.79 | $3.54 | $2.62 |
| Weighted Average Shares Outstanding (Diluted) | 24,407,000 | 24,382,000 | 24,324,000 | 24,535,000 |
Revenue Breakdown
The revenue for the nine months ended September 30, 2024, includes:
| Revenue Source | YTD 2024 | YTD 2023 |
|---|---|---|
| Revenue from Receivable Portfolios | $965,901,000 | $899,545,000 |
| Debt Purchasing Revenue | $971,921,000 | $869,491,000 |
| Servicing Revenue | $64,258,000 | $63,486,000 |
| Other Revenues | $14,563,000 | $12,316,000 |
Operational Highlights
Encore Capital Group's operational efficiency is reflected in its collections and investments in receivable portfolios:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Collections Applied to Investment | $223,292,000 | $188,872,000 |
| Investment in Receivable Portfolios | $3,719,260,000 | $3,320,544,000 |
Debt and Financing
As of September 30, 2024, Encore Capital's debt structure and financing activities include:
| Financing Activity | Amount |
|---|---|
| Total Debt | $2,400,000,000 |
| Senior Secured Notes Issued | $1,000,000,000 |
| Repayments of Credit Facilities | $1,292,578,000 |
Cash Flow Analysis
For the nine months ended September 30, 2024, the cash flow from operations was:
| Cash Flow Activity | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $132,624,000 |
| Net Cash Used in Investing Activities | ($175,705,000) |
| Net Cash Provided by Financing Activities | $130,487,000 |
Market Position and Strategy
Encore Capital Group continues to enhance its market position through strategic acquisitions and effective management of its receivable portfolios. The company focuses on maximizing recoveries while minimizing costs associated with collection efforts.
How Encore Capital Group, Inc. (ECPG) Makes Money
Revenue Sources
Encore Capital Group, Inc. generates revenue primarily through the following channels:
- Debt Purchasing Revenue
- Servicing Revenue
- Other Revenue
Debt Purchasing Revenue
Debt purchasing revenue is derived from the acquisition of portfolios of distressed debts, predominantly credit card receivables, and the subsequent recovery of these debts. For the nine months ended September 30, 2024, total debt purchasing revenue was:
| Period | Debt Purchasing Revenue (in thousands) |
|---|---|
| 2024 | $971,921 |
| 2023 | $869,491 |
| Change | $102,430 |
| Percentage Change | 11.8% |
In the third quarter of 2024 alone, debt purchasing revenue reached $340,794, compared to $285,620 in the same quarter of 2023, marking a 19.3% increase.
Servicing Revenue
Encore also earns servicing revenue, which includes fee-based income from collecting on accounts for third-party credit originators. For the nine months ended September 30, 2024, servicing revenue was:
| Period | Servicing Revenue (in thousands) |
|---|---|
| 2024 | $64,258 |
| 2023 | $63,486 |
| Change | $772 |
| Percentage Change | 1.2% |
In the third quarter of 2024, servicing revenue amounted to $22,772 compared to $19,893 in the third quarter of 2023, reflecting a growth of 14.5%.
Other Revenue
Other revenues consist of income from the sale of real estate assets acquired through investments in non-performing secured residential mortgage portfolios and other assets. For the nine months ended September 30, 2024, other revenues totaled:
| Period | Other Revenues (in thousands) |
|---|---|
| 2024 | $14,563 |
| 2023 | $12,316 |
| Change | $2,247 |
| Percentage Change | 18.2% |
In the third quarter of 2024, other revenues were $3,505, down from $4,106 in the same quarter of 2023.
Total Revenue
The total revenue for Encore Capital Group for the nine months ended September 30, 2024, was:
| Period | Total Revenue (in thousands) |
|---|---|
| 2024 | $1,050,742 |
| 2023 | $945,293 |
| Change | $105,449 |
| Percentage Change | 11.2% |
In the third quarter of 2024, total revenues were $367,071, an increase of 18.6% from $309,619 in the third quarter of 2023.
Operating Expenses
Encore Capital’s operating expenses consist of salaries, legal collections, general administrative costs, and other expenses. For the nine months ended September 30, 2024, total operating expenses were:
| Period | Total Operating Expenses (in thousands) |
|---|---|
| 2024 | $759,222 |
| 2023 | $711,565 |
| Change | $47,657 |
| Percentage Change | 6.7% |
In the third quarter of 2024, operating expenses totaled $260,981, compared to $234,101 in the same quarter of 2023.
Net Income
For the nine months ended September 30, 2024, Encore Capital reported a net income of:
| Period | Net Income (in thousands) |
|---|---|
| 2024 | $86,063 |
| 2023 | $64,270 |
| Change | $21,793 |
| Percentage Change | 33.9% |
In the third quarter of 2024, net income was $30,643, up from $19,339 in the same quarter of 2023.
Investment in Receivable Portfolios
As of September 30, 2024, Encore Capital had an investment in receivable portfolios totaling:
| Investment Type | Amount (in thousands) |
|---|---|
| Investment in Receivable Portfolios | $3,719,260 |
This investment is critical to the company’s revenue generation, as it directly influences future cash flows from debt recoveries.
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Resources:
- Encore Capital Group, Inc. (ECPG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Encore Capital Group, Inc. (ECPG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Encore Capital Group, Inc. (ECPG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.