ENCORE CAPITAL GROUP INC 10-Q

ecpg-20260331 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ___________________________________________________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________. COMMISSION FILE NUMBER: 000-26489 ENCORE CAPITAL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 48-1090909 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 350 Camino De La Reina , Suite 100 San Diego , California 92108 (Address of principal executive offices, including zip code) ( 877 ) 345-3002 (Registrant’s telephone number, including area code) (Not Applicable) (Former name, former address and former fiscal year, if changed since last report) _______________________________________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 Par Value Per Share ECPG The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Class Outstanding at April 29, 2026 Common Stock, $0.01 par value 21,440,412 shares Table of Contents ENCORE CAPITAL GROUP, INC. INDEX TO FORM 10-Q Page PART I – FINANCIAL INFORMATION 3 Item 1— Condensed Consolidated Financial Statements (Unaudited) 3 Condensed Consolidated Statements of Financial Condition 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Comprehensive Income 5 Condensed Consolidated Statements of Equity 6 Condensed Consolidated Statements of Cash Flows 7 Notes to Condensed Consolidated Financial Statements 8 Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies 8 Note 2: Earnings Per Share 9 Note 3: Fair Value Measurements 10 Note 4: Derivatives and Hedging Instruments 12 Note 5: Receivable Portfolios, Net 13 Note 6: Other Assets 15 Note 7: Borrowings 15 Note 8: Variable Interest Entities 19 Note 9: Accumulated Other Comprehensive Loss 20 Note 10: Income Taxes 19 Note 11: Commitments and Contingencies 20 Note 12: Segment and Geographic Information 21 Note 13: Goodwill 22 Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3 – Quantitative and Qualitative Disclosures About Market Risk 41 Item 4 – Controls and Procedures 41 PART II – OTHER INFORMATION 42 Item 1 – Legal Proceedings 42 Item 1A – Risk Factors 42 Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 5 – Other Information 42 Item 6 – Exhibits 43 SIGNATURES 44 Table of Contents PART I – FINANCIAL INFORMATION Item 1—Condensed Consolidated Financial Statements (Unaudited) ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Financial Condition (In Thousands, Except Par Value Amounts) (Unaudited) March 31, 2026 December 31, 2025 Assets Cash and cash equivalents $ 227,204 $ 156,784 Receivable portfolios, net 4,437,415 4,371,532 Property and equipment, net 79,292 82,080 Other assets 177,163 193,113 Goodwill 529,487 536,291 Total assets $ 5,450,561 $ 5,339,800 Liabilities and Equity Liabilities: Accounts payable and accrued liabilities $ 252,277 $ 230,261 Borrowings 4,033,301 4,001,293 Other liabilities 130,175 131,496 Total liabilities 4,415,753 4,363,050 Commitments and contingencies (Note 11) Equity: Convertible preferred stock, $ 0.01 par value, 5,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value, 75,000 shares authorized, 21,499 and 21,688 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 215 217 Additional paid-in capital — — Accumulated earnings 1,167,038 1,104,640 Accumulated other comprehensive loss ( 132,445 ) ( 128,107 ) Total stockholders’ equity 1,034,808 976,750 Total liabilities and stockholders’ equity $ 5,450,561 $ 5,339,800 The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”) included in the condensed consolidated statements of financial condition above. Most assets in the table below include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities exclude amounts where creditors or beneficial interest holders have recourse to the general credit of the Company . See “Note 8: Variable Interest Entities” for additional information on the Company’s VIEs. March 31, 2026 December 31, 2025 Assets Cash and cash equivalents $ 50,115 $ 40,256 Receivable portfolios, net 1,177,046 1,151,221 Other assets 4,392 3,540 Liabilities Accounts payable and accrued liabilities 2,986 3,101 Borrowings 783,444 791,182 Other liabilities 1,352 2,774 See accompanying notes to condensed consolidated financial statements 3 Table of Contents ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Income (In Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended March 31, 2026 2025 Revenues Portfolio revenue $ 390,019 $ 345,218 Changes in recoveries 62,740 21,464 Total debt purchasing revenue 452,759 366,682 Servicing revenue 20,638 22,547 Other revenues 2,014 3,546 Total revenues 475,411 392,775 Operating expenses Salaries and employee benefits 114,541 105,932 Cost of legal collections 89,221 68,013 General and administrative expenses 39,629 41,018 Other operating expenses 34,833 34,252 Collection agency commissions 6,337 6,873 Depreciation and amortization 6,858 7,344 Total operating expenses 291,419 263,432 Income from operations 183,992 129,343 Other expense Interest expense ( 73,050 ) ( 70,530 ) Other income 790 1,647 Total other expense ( 72,260 ) ( 68,883 ) Income before income taxes 111,732 60,460 Provision for income taxes ( 25,489 ) ( 13,664 ) Net income $ 86,243 $ 46,796 Earnings per share: Basic $ 3.97 $ 1.96 Diluted $ 3.86 $ 1.93 Weighted average shares outstanding: Basic 21,728 23,879 Diluted 22,320 24,269 See accompanying notes to condensed consolidated financial statements 4 Table of Contents ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Comprehensive Income (Unaudited, In Thousands) Three Months Ended March 31, 2026 2025 Net income $ 86,243 $ 46,796 Other comprehensive (loss) income, net of tax: Change in unrealized gain (loss) on derivative instruments: Unrealized gain (loss) on derivative instruments 10,311 ( 1,065 ) Income tax effect ( 2,287 ) 189 Unrealized gain (loss) on derivative instruments, net of tax 8,024 ( 876 ) Change in foreign currency translation: Unrealized (loss) gain on foreign currency translation ( 12,233 ) 15,337 Income tax effect ( 129 ) 127 Unrealized (loss) gain on foreign currency translation, net of tax ( 12,362 ) 15,464 Other comprehensive (loss) income, net of tax: ( 4,338 ) 14,588 Comprehensive income $ 81,905 $ 61,384 See accompanying notes to condensed consolidated financial statements 5 Table of Contents ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Equity (Unaudited, In Thousands) Three Months Ended March 31, 2026 Common Stock Additional Paid-In Capital Accumulated Earnings Accumulated Other Comprehensive Loss Total Equity Shares Par Balance as of December 31, 2025 21,688 $ 217 $ — $ 1,104,640 $ ( 128,107 ) $ 976,750 Net income — — — 86,243 — 86,243 Other comprehensive loss, net of tax — — — — ( 4,338 ) ( 4,338 ) Issuance of share-based awards, net of shares withheld for employee taxes 157 1 ( 8,331 ) — — ( 8,330 ) Repurchase and retirement of common stock ( 346 ) ( 3 ) 3,756 ( 23,845 ) — ( 20,092 ) Stock-based compensation — — 4,575 — — 4,575 Balance as of March 31, 2026 21,499 $ 215 $ — $ 1,167,038 $ ( 132,445 ) $ 1,034,808 Three Months Ended March 31, 2025 Common Stock Additional Paid-In Capital Accumulated Earnings Accumulated Other Comprehensive (Loss) Income Total Equity Shares Par Balance as of December 31, 2024 23,691 $ 237 $ 19,297 $ 909,927 $ ( 162,130 ) $ 767,331 Net income — — — 46,796 — 46,796 Other comprehensive income, net of tax — — — — 14,588 14,588 Issuance of share-based awards, net of shares withheld for employee taxes 108 1 ( 3,075 ) — — ( 3,074 ) Repurchase and retirement of common stock ( 289 ) ( 3 ) ( 10,001 ) — — ( 10,004 ) Stock-based compensation — — 3,424 — — 3,424 Balance as of March 31, 2025 23,510 $ 235 $ 9,645 $ 956,723 $ ( 147,542 ) $ 819,061 See accompanying notes to condensed consolidated financial statements 6 Table of Contents ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited, In Thousands) Three Months Ended March 31, 2026 2025 Operating activities: Net income $ 86,243 $ 46,796 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,858 7,344 Other non-cash interest expense, net 2,537 3,544 Stock-based compensation expense 4,575 3,424 Changes in recoveries ( 62,740 ) ( 21,464 ) Other, net 4,681 1,737 Changes in operating assets and liabilities Other assets 4,892 ( 3,499 ) Accounts payable, accrued liabilities and other liabilities 35,280 7,401 Net cash provided by operating activities 82,326 45,283 Investing activities: Purchases of receivable portfolios, net of put-backs ( 359,463 ) ( 362,712 ) Collections applied to receivable portfolios 328,395 259,589 Purchases of property and equipment ( 4,856 ) ( 6,990 ) Other, net 8,517 9,835 Net cash used in investing activities ( 27,407 ) ( 100,278 ) Financing activities: Payment of loan and debt refinancing costs ( 1,109 ) ( 255 ) Proceeds from credit facilities 358,021 246,426 Repayment of credit facilities ( 304,185 ) ( 185,831 ) Repurchase and retirement of common stock ( 20,092 ) ( 10,004 ) Other, net ( 14,026 ) ( 9,999 ) Net cash provided by financing activities 18,609 40,337 Net increase (decrease) in cash and cash equivalents 73,528 ( 14,658 ) Effect of exchange rate changes on cash and cash equivalents ( 3,108 ) 1,910 Cash and cash equivalents, beginning of period 156,784 199,865 Cash and cash equivalents, end of period $ 227,204 $ 187,117 Supplemental disclosures of cash flow information: Cash paid for interest $ 37,343 $ 41,303 Cash paid for income taxes, net of refunds 860 1,247 Supplemental schedule of non-cash investing activities: Receivable portfolios transferred to real estate owned $ 1,020 $ 1,040 See accompanying notes to condensed consolidated financial statements 7 Table of Contents ENCORE CAPITAL GROUP, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans in Europe. Through Midland Credit Management, Inc. and its domestic affiliates (collectively, “MCM”), the Company is a market leader in portfolio purchasing and recovery in the United States. Through Cabot Credit Management Limited and its subsidiaries and European affiliates (collectively, “Cabot”), the Company is one of the largest credit management services providers in Europe and the United Kingdom. These are the Company’s primary operations. The Company also has investments and operations in Latin America and Asia-Pacific, which the Company refers to as “LAAP.” Financial Statement Preparation and Presentation The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed consolidated financial statements and the accompanying notes. Actual results could materially differ from those estimates. Basis of Consolidation The condensed consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities (“VIEs”) for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 8: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation. Translation of Foreign Currencies The condensed consolidated statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations. 8 Table of Contents Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses: Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim periods with fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new standard is effective for annual periods beginning after December 15, 2025. The Company adopted ASU 2024-04 on a prospective basis as of January 1, 2026. The adoption did not have a material impact on the Company's condensed consolidated financial statements and related disclosures. In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased loans. Under ASU 2025-08, loans acquired without credit deterioration and deemed “seasoned” will be considered purchased seasoned loans and accounted for using the gross-up approach at acquisition. The amendments in this update also clarify the recognition and measurement guidance for purchased seasoned loans, including the determination of the initial allowance for credit losses and the subsequent accounting for changes in expected credit losses. The new standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the potential impact, but does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. ASU 2025-09 introduces targeted amendments intended to further align hedge accounting with an entity’s risk management activities and to simplify the application of certain aspects of the hedge accounting guidance in ASC 815. The new standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the potential impact, but does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. Note 2: Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. The number of shares used to calculate the diluted earnings per share is computed by using the basic weighted-average number of common shares outstanding plus any potentially dilutive common shares outstanding during the period, except when their effect is anti-dilutive. Dilutive potential common shares include outstanding stock based awards, and the dilutive effect of the convertible senior notes, if applicable. As announced in May 2021, the Company’s Board of Directors authorized a $ 300.0 million share repurchase program. In November 2025, the Company’s Board of Directors authorized an increase of an additional $ 300.0 million under the share repurchase program. During the three months ended March 31, 2026 and 2025, the Company repurchased 345,548 and 289,425 shares of common stock for $ 20.0 million and $ 10.0 million, respectively, under the share repurchase program. The Company’s practice is to retire the shares repurchased. 9 Table of Contents A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts) : Three Months Ended March 31, 2026 2025 Net income $ 86,243 $ 46,796 Shares: Total weighted-average basic shares outstanding 21,728 23,879 Dilutive effect of stock-based awards 592 170 Dilutive effect of convertible senior notes — 220 Total weighted-average dilutive shares outstanding 22,320 24,269 Basic earnings per share $ 3.97 $ 1.96 Diluted earnings per share $ 3.86 $ 1.93 Note 3: Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date ( i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions. Financial Instruments Required To Be Carried At Fair Value Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands) : Fair Value Measurements as of March 31, 2026 Level 1 Level 2 Level 3 Total Assets Interest rate cap contracts $ — $ 1,318 $ — $ 1,318 Interest rate swap agreements — 224 — 224 Liabilities Interest rate swap agreements — ( 7,724 ) — ( 7,724 ) Fair Value Measurements as of December 31, 2025 Level 1 Level 2 Level 3 Total Assets Interest rate cap contracts $ — $ 286 $ — $ 286 Liabilities Interest rate swap agreements — ( 16,338 ) — ( 16,338 ) Derivative Contracts: The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using models that project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies. 10 Table of Contents Non-Recurring Fair Value Measurement: Certain assets are measured at fair value on a nonrecurring basis. Goodwill and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair values are determined using various valuation techniques under Level 3 fair value hierarchy. REO assets are classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined at the time of initial recognition and in each reporting period using Level 3 measurements based on appraised values using market comparables. The fair value estimate of the assets held for sale was $ 14.5 million and $ 18.1 million as of March 31, 2026 and December 31, 2025, respectively. Financial Instruments Not Required To Be Carried At Fair Value The table below summarizes fair value estimates for the Company's financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company. The carrying amounts in the following table are included in the condensed consolidated statements of financial condition as of March 31, 2026 and December 31, 2025 (in thousands) : March 31, 2026 December 31, 2025 Fair Value Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial Assets Cash and cash equivalents Level 1 $ 227,204 $ 227,204 $ 156,784 $ 156,784 Receivable portfolios, net Level 3 4,437,415 4,979,583 4,371,532 4,895,167 Other assets (1) Level 2 108,480 108,480 118,130 118,130 Financial Liabilities Accounts payable and accrued liabilities Level 2 252,277 252,277 230,261 230,261 Global senior secured revolving credit facility Level 2 681,267 681,267 631,998 631,998 Senior secured notes (2) Level 2 2,309,031 2,353,735 2,322,890 2,385,645 Convertible senior notes due March 2029 Level 2 230,000 290,529 230,000 253,260 Cabot securitisation senior facility Level 2 337,253 337,253 343,539 343,539 U.S. facility Level 2 450,000 450,000 450,000 450,000 Other borrowings Level 2 54,410 54,410 52,926 52,926 Other liabilities (1) Level 2 122,451 122,451 115,158 115,158 _______________________ (1) Only includes financial instruments not required to be carried at fair value. Derivative instruments, which are required to be carried at fair value are excluded. (2) Carrying amount represents historical cost, adjusted for any related debt discount. Receivable Portfolios: The fair value of receivable portfolios is measured by discounting the estimated future cash flows generated by the Company’s proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business. Borrowings: The Company’s convertible notes and senior secured notes are carried at historical cost, adjusted for the applicable debt discount. The fair value estimate for the convertible notes and the senior secured notes incorporates quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. 11 Table of Contents The carrying values of the Company’s senior secured revolving credit facility, securitisation senior facility, U.S. facility, and other borrowings approximate their respective fair values due to the use of current market rates that are repriced frequently. Others: The carrying values of the Company’s cash and cash equivalents, certain other assets, accounts payable and accrued liabilities, and other liabilities approximate their respective fair values due to their short-term nature. Note 4: Derivatives and Hedging Instruments The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment. The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands) : March 31, 2026 December 31, 2025 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate cap contracts Other assets $ 1,318 Other assets $ 286 Interest rate swap agreements Other assets 224 — — Interest rate swap agreements Other liabilities ( 7,724 ) Other liabilities ( 16,338 ) Derivatives Designated as Hedging Instruments The Company may periodically enter into interest rate swap agreements and interest rate cap contracts to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. Under the cap contracts, the Company receives floating interest rate payments and makes interest payments based on capped interest rates. The Company designates its interest rate swap and interest rate cap instruments as cash flow hedges at inception. The following tables summarize the terms of the derivative instruments designated as hedging instruments as recorded in the Company’s condensed consolidated statements of financial condition: March 31, 2026 Effective date Maturity Date Hedge Designation Notional Amount Receive Floating Rate Index Interest rate cap contracts 2024 Cap September 2024 September 2026 Cash flow hedge $ 337.3 million SONIA 2025 Cap September 2026 January 2028 Cash flow hedge $ 337.3 million SONIA 2025 Cap - U.S. Facility December 2025 October 2028 Cash flow hedge $ 130.0 million 1-month SOFR CME Term Interest rate swap agreements 2023 Euro IR Swap October 2023 January 2028 Cash flow hedge $ 115.6 million 3-month EURIBOR 2024 Euro IR Swaps June 2024 January 2028 Cash flow hedge $ 479.6 million 3-month EURIBOR 2023 SOFR IR Swaps - U.S. Facility November 2023 October 2026 Cash flow hedge $ 150.0 million 1-month SOFR CME Term 2025 SOFR IR Swaps - U.S. Facility January 2025 October 2027 Cash flow hedge $ 125.0 million 1-month SOFR CME Term 2025 SOFR IR Swaps - Global Senior Facility April 2025 April 2027 Cash flow hedge $ 150.0 million 1-month SOFR CME Term In April 2026, the Company entered into a new interest rate cap contract (the “2026 Cap”) with a notional amount of £ 255.0 million (approximately $ 337.3 million based on an exchange rate of $1.00 to £ 0.76 , the exchange rate as of March 31, 2026). The 2026 Cap is intended to hedge the Company’s exposure to fluctuations in interest payments on debt bearing variable interest based on the Sterling Overnight Index Average (“SONIA”). The 2026 Cap has an effective date of January 2028 and a maturity date of January 2029, and will be accounted for as a cash flow hedge. 12 Table of Contents December 31, 2025 Effective date Maturity Date Hedge Designation Notional Amount Receive Floating Rate Index Interest rate cap contracts 2024 Cap September 2024 September 2026 Cash flow hedge $ 343.5 million SONIA 2025 Cap September 2026 January 2028 Cash flow hedge $ 343.5 million SONIA 2025 Cap - U.S. Facility December 2025 October 2028 Cash flow hedge $ 130.0 million 1-month SOFR CME Term Interest rate swap agreements 2023 Euro IR Swap October 2023 January 2028 Cash flow hedge $ 117.5 million 3-month EURIBOR 2024 Euro IR Swaps June 2024 January 2028 Cash flow hedge $ 487.5 million 3-month EURIBOR 2023 SOFR IR Swaps - U.S. Facility November 2023 October 2026 Cash flow hedge $ 150.0 million 1-month SOFR CME Term 2025 SOFR IR Swaps - U.S.Facility January 2025 October 2027 Cash flow hedge $ 125.0 million 1-month SOFR CME Term 2025 SOFR IR Swaps - Global Senior Facility April 2025 April 2027 Cash flow hedge $ 150.0 million 1-month SOFR CME Term The Company expects to reclassify approximately $ 1.3 million of net derivative loss fro m OCI into earnings relating to its cash flow designated derivatives within the next 12 months. This amount will vary due to fluctuations in benchmark interest rates. The following table summarizes the effects of derivatives designated as hedging instruments in the Company’s condensed consolidated financial statements (in thousands) : Derivatives Designated as Hedging Instruments Gain (Loss) Recognized in OCI Location of Loss Reclassified from OCI into Income Loss Reclassified from OCI Three Months Ended March 31, Three Months Ended March 31, 2026 2025 2026 2025 Interest rate swap agreements $ 6,802 $ ( 1,200 ) Interest expense $ ( 2,036 ) $ ( 467 ) Interest rate cap contracts 1,033 ( 696 ) Interest expense ( 440 ) ( 364 ) Note 5: Receivable Portfolios, Net The Company’s purchased portfolios of loans are grossed-up to their face value with an offsetting allowance and noncredit discount allocated to the individual receivables as the unit of account is at the individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company applies its charge-off policy and fully writes-off the amortized costs ( i.e. , face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company then records a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which ultimately equals the amount paid for a portfolio purchase and presented as “Receivable portfolios, net” in the Company’s condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. The amount of the negative allowance (i.e., receivable portfolios) will not exceed the total amortized cost basis of the loans written-off. Receivable portfolio purchases are aggregated into pools based on similar risk characteristics. Examples of risk characteristics include financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic location. Once a pool is established, the portfolios will remain in the designated pool unless the underlying risk characteristics change. The purchase EIR of a pool will not change over the life of the pool even if expected future cash flows change. Revenue is recognized for each static pool over the economic life of the pool. Debt purchasing revenue includes two components: (1) Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the receivable portfolio balance multiplied by the EIR) and also includes all revenue from zero basis portfolio (“ZBA”) collections, and (2) Changes in recoveries, which includes 13 Table of Contents (a) Recoveries above or below forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and (b) Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases). The Company measures expected future recoveries based on historical experience, current conditions, reasonable and supportable forecasts, and other quantitative and qualitative factors. Factors that may change the expected future recoveries may include both internal as well as external factors. Internal factors include operational performance, such as capacity and the productivity of the Company’s collection staff. External factors that may have an impact on the Company’s collections include new laws or regulations, new interpretations of existing laws or regulations, and macroeconomic conditions. Receivable portfolios, net consists of the following as of the dates presented ( in thousands ): March 31, 2026 December 31, 2025 Amortized cost $ — $ — Negative allowance for expected recoveries 4,437,415 4,371,532 Balance, end of period $ 4,437,415 $ 4,371,532 The following table summarizes the changes in the balance of receivable portfolios, net during the periods presented ( in thousands ): Three Months Ended March 31, 2026 2025 Balance, beginning of period $ 4,371,532 $ 3,776,369 Negative allowance for expected recoveries - portfolio purchases (1) 362,841 367,851 Collections applied to receivable portfolios, net (2) ( 328,395 ) ( 259,589 ) Changes in recoveries (3) 62,740 21,464 Put-backs and recalls ( 3,378 ) ( 5,139 ) Disposals and transfers to real estate owned ( 1,020 ) ( 1,040 ) Foreign currency translation adjustments ( 26,905 ) 52,615 Balance, end of period $ 4,437,415 $ 3,952,531 _______________________ (1) The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented: Three Months Ended March 31, 2026 2025 Purchase price $ 362,841 $ 367,851 Allowance for credit losses 951,644 954,659 Amortized cost 1,314,485 1,322,510 Noncredit discount 1,755,822 1,659,266 Face value 3,070,307 2,981,776 Write-off of amortized cost ( 1,314,485 ) ( 1,322,510 ) Write-off of noncredit discount ( 1,755,822 ) ( 1,659,266 ) Negative allowance 362,841 367,851 Negative allowance for expected recoveries - portfolio purchases $ 362,841 $ 367,851 (2) Collections applied to receivable portfolios, net, is calculated as follows during the periods presented: 14 Table of Contents Three Months Ended March 31, 2026 2025 Cash Collections $ 718,414 $ 604,807 Less - amounts classified to portfolio revenue ( 390,019 ) ( 345,218 ) Collections applied to receivable portfolios, net $ 328,395 $ 259,589 (3) Changes in recoveries is calculated as follows during the periods presented, where recoveries include cash collections, put-backs and recalls, and other cash-based adjustments: Three Months Ended March 31, 2026 2025 Recoveries above forecast $ 46,044 $ 26,952 Changes in expected future recoveries 16,696 ( 5,488 ) Changes in recoveries $ 62,740 $ 21,464 Recoveries above or below forecast represent over and under-performance in the reporting period, respectively. Collections during the three months ended March 31, 2026 over-performed the forecasted collections by $ 46.0 million, primarily driven by collections over-performance in the U.S. resulting from enhanced collections strategies. Collections during the three months ended March 31, 2025 over-performed the forecasted collections by $ 27.0 million. Changes in expected future recoveries are reassessed each quarter; the Company considers, among other factors, historical and current collection performance, changes in consumer behavior, and the macroeconomic environment when updating the forecasts of expected lifetime recoveries. The significant recoveries above forecast during the three months ended March 31, 2026 were carefully evaluated. Management concluded that the recoveries above forecast were primarily current period collections over-performance and did not represent any material shift in timing of the collections. Additionally, the sustained over-performance in recent quarters led to increases in forecasted future recoveries for recently acquired vintages. As a result, the Company recorded a net positive change of $ 16.7 million in expected future recoveries during the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company recorded a net negative change of $ 5.5 million in expected future recoveries . Note 6: Other Assets Other assets consist of the following (in thousands) : March 31, 2026 December 31, 2025 Operating lease right-of-use assets $ 52,645 $ 56,629 Prepaid expenses 41,137 36,162 Other financial receivables 18,465 21,110 Real estate owned 14,496 18,068 Service fee receivables 12,002 13,131 Income tax deposits 6,578 12,959 Deferred tax assets 4,155 5,766 Other 27,685 29,288 Total $ 177,163 $ 193,113 Note 7: Borrowings The Company is in compliance in all material respects with all covenants under its financing arrangements as of March 31, 2026. The components of the Company’s consolidated borrowings were as follows (in thousands) : 15 Table of Contents March 31, 2026 December 31, 2025 Global senior secured revolving credit facility $ 681,267 $ 631,998 Senior secured notes 2,310,272 2,324,335 Convertible senior notes 230,000 230,000 Cabot securitisation senior facility 337,253 343,539 U.S. facility 450,000 450,000 Other 54,410 52,926 Finance lease liabilities 515 596 4,063,717 4,033,394 Less: debt discount and issuance costs, net of amortization ( 30,416 ) ( 32,101 ) Total $ 4,033,301 $ 4,001,293 Encore is the parent of the restricted group for the Global Senior Facility and the Senior Secured Notes, both of which are guaranteed by the same group of material Encore subsidiaries and secured by the same collateral, which represents substantially all of the assets of those subsidiaries. Global Senior Secured Revolving Credit Facility In September 2020, the Company entered into a multi-currency senior secured revolving credit facility agreement (as amended and restated, the “Global Senior Facility”). As of March 31, 2026, the Global Senior Facility provided for a total committed facility of $ 1,485.0 million that matures in September 2029, except for a $ 69.5 million tranche that terminates in September 2028, and included the following key provisions: • Interest at Term SOFR (or EURIBOR for any loan drawn in Euro or a rate based on SONIA for any loan drawn in British Pound), with a Term SOFR (or EURIBOR or SONIA) floor of 0.00 %, plus a margin of 2.25 %, plus in the case of Term SOFR borrowings, a credit adjustment spread of 0.10 %; • An unused commitment fee of 0.40 % per annum, payable quarterly in arrears; • A restrictive covenant that limits the LTV Ratio (defined in the Global Senior Facility) to 0.75 in the event that the Global Senior Facility is more than 20 % utilized; • A restrictive covenant that limits the SSRCF LTV Ratio (defined in the Global Senior Facility) to 0.275 ; • A restrictive covenant that requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Global Senior Facility) of at least 2.0 ; • Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and • Standard events of default which, upon occurrence, may permit the lenders to terminate the Global Senior Facility and declare all amounts outstanding to be immediately due and payable. The Global Senior Facility is secured by substantially all of the assets of the Company and the guarantors. Pursuant to the terms of an intercreditor agreement entered into with respect to the relative positions of (1) the Global Senior Facility and any super priority hedging liabilities (collectively, “Super Senior Liabilities”) and (2) the Senior Secured Notes, Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets. As of March 31, 2026, the outstanding borrowings under the Global Senior Facility were $ 681.3 million. The weighted average interest rate of the Global Senior Facility was 5.53 % and 6.56 % for the three months ended March 31, 2026 and 2025, respectively. Available capacity under the Global Senior Facility, after taking into account applicable debt covenants, was approximately $ 791.3 million as of March 31, 2026. 16 Table of Contents Senior Secured Notes The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands) : March 31, 2026 December 31, 2025 Issue Currency Maturity Date Interest Payment Dates Interest Rate Encore 2028 Notes $ 330,640 $ 336,803 GBP Jun 1, 2028 Jun 1, Dec 1 4.250 % Encore 2028 Floating Rate Notes 479,632 487,532 EUR Jan 15, 2028 Jan 15, Apr 15, Jul 15, Oct 15 EURIBOR + 4.250 % (1) Encore 2029 Notes 500,000 500,000 USD Apr 1, 2029 Apr 1, Oct 1 9.250 % Encore 2030 Notes 500,000 500,000 USD May 15, 2030 May 15, Nov 15 8.500 % Encore 2031 Notes 500,000 500,000 USD Apr 15, 2031 Apr 15, Oct 15 6.625 % $ 2,310,272 $ 2,324,335 _______________________ (1) Interest rate is based on three-month EURIBOR (subject to a 0 % floor) plus 4.250 % per annum, resets quarterly. The Senior Secured Notes are secured by the same collateral as the Global Senior Facility. The guarantees provided in respect of the Senior Secured Notes are pari passu with the guarantee given in respect of the Global Senior Facility. Subject to the intercreditor agreement described above under the section “Global Senior Secured Revolving Credit Facility,” Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets. The Encore 2028 Floating Rate Notes had a weighted average interest rate of 6.27 % and 7.10 % for the three months ended March 31, 2026 and 2025, respectively. On April 30, 2026, the Company issued a conditional notice of redemption for € 200.0 million of the € 415.0 million outstanding Encore 2028 Floating Rate Notes at par, with a redemption date of May 28, 2026. Convertible Notes The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible senior notes (the “Convertible Notes”) ($ in thousands) : March 31, 2026 December 31, 2025 Maturity Date Interest Payment Dates Interest Rate 2029 Convertible Notes $ 230,000 $ 230,000 Mar 15, 2029 Mar 15, Sep 15 4.000 % In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion prices of the Convertible Notes, the Company may enter into hedge programs that increase the effective conversion price for the Convertible Notes. In connection with the issuance of the 2029 Convertible Notes, the Company entered into privately negotiated capped call transactions that effectively raised the conversion price of the 2029 Convertible Notes from $ 65.89 to $ 82.69 . These hedging instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification. The Company recorded the cost of the hedge instruments as a reduction in additional paid-in capital, and does not recognize subsequent changes in fair value of these financial instruments in its condensed consolidated financial statements. 17 Table of Contents Certain key terms related to the convertible features as of March 31, 2026 are listed below ($ in thousands, except conversion price) : 2029 Convertible Notes Initial conversion price $ 65.89 Closing stock price at date of issuance $ 51.68 Closing stock price date Feb 28, 2023 Initial conversion rate (shares per $1,000 principal amount) 15.1763 Effective conversion price (1) $ 82.69 Excess of if-converted value compared to principal (2) $ 14,757 Free conversion date Dec 15, 2028 _______________________ (1) As discussed above, the Company maintains a hedge program that increases the effective conversion price for the 2029 Convertible Notes to $ 82.69 . (2) Represents the premium the Company would have to pay assuming the Convertible Notes were converted on March 31, 2026 using a hypothetical share price based on the closing stock price on March 31, 2026. Prior to the close of business on the business day immediately preceding the free conversion date (listed above), holders may convert their Convertible Notes only under certain circumstances set forth in the indenture. On or after the free conversion date until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time. In the event of conversion, the Convertible Notes are convertible into cash up to the aggregate principal amount of the notes and the excess conversion premium, if any, may be settled in cash or shares of the Company’s common stock at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes. The Company’s convertible notes are carried as a single liability, which reflects the principal amount of the convertible notes. Interest expense related to the Convertible Notes was $ 2.3 million and $ 3.1 million during the three months ended March 31, 2026 and 2025, respectively. Cabot Securitisation Senior Facility Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, has a senior facility for a committed amount of £ 255.0 million (as amended, the “Cabot Securitisation Senior Facility”). Prior to March 18, 2026, funds drawn under the Cabot Securitisation Senior Facility bore interest at a rate per annum equal to SONIA plus a margin of 3.20 % plus, for periods after January 18, 2028, a step up margin ranging from zero to 1.00 %. The Company amended its Cabot Securitisation Senior Facility, effective March 18, 2026, to extend the maturity date from January 2030 to January 2031, and to reduce the margin from 3.20 % to 3.00 %. For periods after January 18, 2029, a step up margin ranging from zero to 1.00 % will apply. The amendment was accounted for as a debt modification. As of March 31, 2026, the outstanding borrowings under the Cabot Securitisation Senior Facility were £ 255.0 million (approximately $ 337.3 million based on an exchange rate of $1.00 to £ 0.76 , the exchange rate as of March 31, 2026). The obligations of Cabot Securitisation under the Cabot Securitisation Senior Facility are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was £ 277.7 million (approximately $ 367.3 million based on an exchange rate of $1.00 to £ 0.76 , the exchange rate as of March 31, 2026) as of March 31, 2026. The weighted average interest rate of the Cabot Securitisation Senior Facility was 6.91 % and 7.78 % for the three months ended March 31, 2026 and 2025, respectively. Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details. U.S. Facility An indirect subsidiary of Encore (“U.S. Financing Subsidiary”) has a facility for a committed amount of $ 450.0 million (as amended, the “U.S. Facility”) that matures in October 2028. Funds drawn under the U.S. Facility bear interest at a rate per annum equal to Term SOFR plus a margin of 3.50 %. 18 Table of Contents As of March 31, 2026, the outstanding borrowings under the U.S. Facility were $ 450.0 million. The obligations under the U.S. Facility are secured by first ranking security interests over all of U.S. Financing Subsidiary’s assets and rights. As of March 31, 2026, this included receivables acquired from MCM, the book value of which was $ 805.7 million. The weighted average interest rate of the U.S. Facility was 7.18 % and 7.82 % for the three months ended March 31, 2026 and 2025, respectively. The U.S. Facility is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details. Note 8: Variable Interest Entities A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive residual returns from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary. As of March 31, 2026, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs including the ability to exercise discretion in the servicing of the financial assets and has the right to receive residual returns that could potentially be significant to the VIEs. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE. Note 10: Income Taxes The Company’s effective tax rate was 22.8 % and 22.6 % for the three months ended March 31, 2026 and 2025, respectively. The differences between the effective tax rate and the federal statutory rate during the periods presented were primarily due to state income taxes offset by other foreign adjustments. Each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected amounts for the year. Since the Company operates in foreign countries with varying tax rates, the Company’s quarterly effective tax rate is dependent on the level of income or loss from international operations in the reporting period. The Company’s subsidiary in Costa Rica is operating under a 100 % tax holiday through April 6, 2034. The impact of the tax holiday in Costa Rica for the three months ended March 31, 2026 and 2025, was immaterial. The Company is subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating uncertain tax positions and determining the provision for income taxes. In December 2021, the Organization for Economic Cooperation and Development (“OECD”) enacted model rules for a new global minimum tax framework (“Pillar Two”). Under the Pillar Two rules, a company is required to determine a combined effective tax rate for each jurisdiction. If the jurisdictional effective tax rate determined under the Pillar Two rules is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%. In December 2022, European Union Member States adopted a directive implementing the Pillar Two rules requiring Member States to enact the directive into their national laws and these began to go into effect from January 1, 2024. The Company has estimated the applicable top-up tax and recorded this in tax expense for the three months ended March 31, 2026. The estimated impact of top-up tax for the three months ended March 31, 2026 was immaterial. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions affecting businesses. The legislation features permanent extension, with modifications, of key 2017 Tax Cuts and Jobs Act provisions that were set to change at the end of 2025. The effects of the OBBBA were included in the Company’s condensed consolidated financial statements for the three months ended March 31, 2026 and the impact was immaterial. 19 Table of Contents Note 9: Accumulated Other Comprehensive Loss A summary of the Company’s changes in accumulated other comprehensive loss by component is presented below (in thousands): Three Months Ended March 31, 2026 Derivatives Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at beginning of period $ ( 15,034 ) $ ( 113,073 ) $ ( 128,107 ) Other comprehensive income (loss) before reclassification 7,835 ( 12,233 ) ( 4,398 ) Reclassification 2,476 — 2,476 Tax effect ( 2,287 ) ( 129 ) ( 2,416 ) Balance at end of period $ ( 7,010 ) $ ( 125,435 ) $ ( 132,445 ) Three Months Ended March 31, 2025 Derivatives Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at beginning of period $ ( 16,368 ) $ ( 145,762 ) $ ( 162,130 ) Other comprehensive (loss) income before reclassification ( 1,896 ) 15,337 13,441 Reclassification 831 — 831 Tax effect 189 127 316 Balance at end of period $ ( 17,244 ) $ ( 130,298 ) $ ( 147,542 ) Note 11: Commitments and Contingencies Litigation and Regulatory The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions asserting various claims, including those based on the Fair Debt Collection Practices Act (“FDCPA”), the Fair Credit Reporting Act (“FCRA”), the Telephone Consumer Protection Act (“TCPA”), comparable state statutes, state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome. As of March 31, 2026, there were no material developments in any of the legal proceedings disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 or any new material legal proceedings during the three months ended March 31, 2026. In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. The Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. The Company’s legal costs are recorded to expense as incurred. As of March 31, 2026, the Company has no material reserves for legal matters. Purchase Commitments In the normal course of business, the Company enters into forward flow purchase agreements. A forward flow purchase agreement is a commitment to purchase receivables over a duration that is typically three to twelve months, but can be longer, generally with a specifically defined volume range, frequency, and pricing. Typically, these forward flow contracts have provisions that allow for early termination or price re-negotiation should the underlying quality of the portfolio deteriorate over time or if any particular month’s delivery is materially different than the original portfolio used to price the forward flow 20 Table of Contents contract. Certain of these forward flow purchase agreements may also have termination clauses, whereby the agreements can be canceled by either party upon providing a certain specified amount of notice. As of March 31, 2026, the Company had entered into forward flow purchase agreements for the purchase of nonperforming loans with an estimated minimum aggregate purchase price of $ 678.9 million. The Company expects actual purchases under these forward flow purchase agreements to be significantly greater than the estimated minimum aggregate purchase price. Note 12: Segment and Geographic Information The Company has one reportable segment, debt purchasing and recovery segment. Segment assets are presented in the Company’s condensed consolidated statements of financial condition as total assets. The following tables present the results of operations of the Company’s reportable segment for the periods presented (in thousands) : Three Months Ended March 31, 2026 Debt purchasing and recovery segment Corporate and other unallocated Consolidated Total revenues $ 475,411 $ — $ 475,411 Total operating expenses (1) ( 276,025 ) ( 15,394 ) ( 291,419 ) Operating income 199,386 183,992 Other segment items (2) 790 790 Interest expense (3) ( 73,050 ) ( 73,050 ) Provision for income taxes ( 25,489 ) ( 25,489 ) Net income $ 86,243 _______________________ (1) Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended March 31, 2026, such non-allocated operating expenses primarily consisted of salaries and employee benefits of $ 10.3 million for corporate employees and general and administrative expenses of $ 4.9 million. (2) The other segment items category includes other income. (3) The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments. Three Months Ended March 31, 2025 Debt purchasing and recovery segment Corporate and other unallocated Consolidated Total revenues $ 392,775 $ — $ 392,775 Total operating expenses (1) ( 249,509 ) ( 13,923 ) ( 263,432 ) Operating income 143,266 129,343 Other segment items (2) 1,647 1,647 Interest expense (3) ( 70,530 ) ( 70,530 ) Provision for income taxes ( 13,664 ) ( 13,664 ) Net income $ 46,796 _______________________ (1) Certain corporate activities that are not allocated to the debt purchasing and recovery segment are recorded under corporate and other unallocated. During the three months ended March 31, 2025, such non-allocated operating expenses primarily consisted of salaries and employee benefits of $ 8.1 million for corporate employees and general and administrative expenses of $ 5.4 million. (2) The other segment items category includes other income. (3) The Company manages its available capital resources at the corporate level. Interest expense is not allocated to operating segments. 21 Table of Contents The following table presents information about geographic areas in which the Company operates (in thousands) : Three Months Ended March 31, 2026 2025 Total revenues: United States $ 351,658 $ 269,586 Europe United Kingdom 88,525 84,468 Other European countries (1) 33,437 36,993 Total Europe 121,962 121,461 Other geographies (1) 1,791 1,728 Total $ 475,411 $ 392,775 ________________________ (1) None of these countries comprise greater than 10% of the Company's consolidated revenues. Note 13: Goodwill The Company’s goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions. There have been no events or circumstances during the three months ended March 31, 2026 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future. The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands) : Total Company Balance as of December 31, 2025 $ 536,291 Effect of foreign currency translation ( 6,804 ) Balance as of March 31, 2026 $ 529,487 As of March 31, 2026 and December 31, 2025, the Company’s accumulated goodwill impairment loss was $ 338.8 million, attributable to its Cabot reporting unit. 22 Table of Contents Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations This Quarterly Report on Form 10-Q contains “forward-looking statements” relating to Encore Capital Group, Inc. (“Encore”) and its subsidiaries (which we may collectively refer to as the “Company,” “we,” “our” or “us”) within the meaning of the securities laws. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “will,” “may,” and similar expressions often characterize forward-looking statements. These statements may include, but are not limited to, projections of collections, revenues, income or loss, estimates of capital expenditures, plans for future operations, products or services, and financing needs or plans, as well as assumptions relating to these matters. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we caution that these expectations or predictions may not prove to be correct or we may not achieve the financial results, savings, or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control or cannot be predicted or quantified, that could cause actual results to differ materially from those suggested by the forward-looking statements. Many factors including, but not limited to, those set forth in our Annual Report on Form 10-K under “Part I, Item 1A—Risk Factors” could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, achievements or industry results expressed or implied by these forward-looking statements. Our business, financial condition, or results of operations could also be materially and adversely affected by other factors besides those listed. Forward-looking statements speak only as of the date the statements were made. We do not undertake any obligation to update or revise any forward-looking statements to reflect new information or future events, or for any other reason, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. In addition, it is generally our policy not to make any specific projections as to future earnings, and we do not endorse projections regarding future performance that may be made by third parties. Our Business We are an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. We primarily purchase portfolios of defaulted consumer receivables at deep discounts to face value and manage them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. We also provide debt servicing and other portfolio management services to credit originators for non-performing loans in Europe. Encore Capital Group, Inc. (“Encore”) has three business units: MCM, which consists of Midland Credit Management, Inc. and its subsidiaries and domestic affiliates; Cabot, which consists of Cabot Credit Management Limited and its subsidiaries and European affiliates, and LAAP, which is comprised of our investments and operations in Latin America and Asia-Pacific. MCM (United States) Through MCM, we are a market leader in portfolio purchasing and recovery in the United States. Cabot (Europe) Through Cabot, we are one of the largest credit management services providers in Europe and the United Kingdom. Cabot, in addition to its primary business of portfolio purchasing and recovery, also provides a range of debt servicing offerings such as early stage collections, business process outsourcing (“BPO”), and contingent collections, including through Wescot Credit Services Limited (“Wescot”). LAAP (Latin America and Asia-Pacific) We have purchased non-performing loans in Mexico. Additionally, we have a subsidiary Encore Asset Reconstruction Company (“EARC”) in India. To date, operating results from LAAP have not been significant to our total consolidated operating results. Our long-term growth strategy is focused on continuing to invest in our core portfolio purchasing and recovery business in the United States and United Kingdom and strengthening and developing our business in France and Spain. Government Regulation MCM (United States) As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in the United States are subject to federal, state and municipal statutes, rules, regulations and 23 Table of Contents ordinances that establish specific guidelines and procedures that debt purchasers and collectors must follow when collecting consumer accounts, including among others, specific guidelines and procedures for communicating with consumers and prohibitions on unfair, deceptive or abusive debt collection practices. Cabot (Europe) As discussed in more detail under “Part I - Item 1 - Business - Government Regulation” contained in our Annual Report on Form 10-K, our operations in Europe are affected by foreign statutes, rules and regulations regarding debt collection and debt purchase activities. These statutes, rules, regulations, ordinances, guidelines and procedures are modified from time to time by the relevant authorities charged with their administration, which could affect the way we conduct our business. Portfolio Purchasing and Recovery MCM (United States) In the United States, the defaulted consumer receivable portfolios we purchase are primarily charged-off credit card debt portfolios. A small percentage of our capital deployment in the United States is comprised of unsecured personal loans. We purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across our U.S. operations. These methods and models generally allow us to value portfolios accurately (limiting the risk of overpaying), avoid buying portfolios that are incompatible with our methods or strategies and align the accounts we purchase with our business channels to maximize future collections. As a result, we have generally been able to realize significant returns from the receivables we acquire. We maintain strong relationships with many of the largest financial service providers in the United States. Cabot (Europe) In Europe, our purchased defaulted debt portfolios primarily consist of credit card and consumer loan accounts. We purchase receivable portfolios using proprietary pricing models that utilize account-level statistical and behavioral data. These models generally allow us to accurately value portfolios and to develop collection strategies that maximize future returns. As a result, we have generally been able to realize significant returns from the assets we have acquired. We maintain strong relationships with many of the largest financial services providers in the United Kingdom and Europe. Purchases and Collections Portfolio Pricing, Supply and Demand MCM (United States) With lending and charge-off rates remaining near recent peak levels, U.S. portfolio supply continues to be robust. Issuers have continued to sell predominantly fresh portfolios. Fresh portfolios are portfolios that are generally sold within six months of the consumer’s account being charged-off by the financial institution. Pricing in the first quarter remained at favorable levels as a result of elevated market supply. Issuers continue to sell their volume in mostly forward flow arrangements that are often committed early in the calendar year. We believe steady lending and delinquency rates at elevated levels will result in stable and strong market supply. We believe that smaller competitors continue to face difficulties in the portfolio purchasing market because of the high cost to operate due to regulatory pressure and increasing cost of capital. We believe this favors larger participants, like MCM, because the larger market participants are better able to adapt to these pressures and commit to larger forward flow agreements and fluctuating volumes. Cabot (Europe) The UK market for charged-off portfolios generally provides a relatively consistent pipeline of opportunities, despite a historically low level of charge-offs, as creditors have embedded debt sales as an integral part of their business models. France and Spain continue to be two of the largest non-performing loan markets in Europe with significant portfolio sales. Financial institutions continue to look to dispose of non-performing loans in these markets. While sales activity across all of our European markets remains stable, underlying default rates are generally low by historic levels, and consumer lending volumes have stagnated. Sales levels are expected to fluctuate from quarter to quarter. In general, portfolio pricing remains competitive across our European footprint, constraining the amount of capital we elect to deploy in Europe. 24 Table of Contents Purchases by Geographic Location The following table summarizes purchases of receivable portfolios by geographic location during the periods presented (in thousands) : Three Months Ended March 31, 2026 2025 MCM (United States) $ 315,794 $ 316,366 Cabot (Europe) 47,047 51,485 Total purchases of receivable portfolios $ 362,841 $ 367,851 In the United States, capital deployment remained consistent during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. The majority of our deployments in the U.S. come from forward flow agreements, and the timing, contract duration, and volumes for each contract can fluctuate leading to variation when comparing to prior periods. Portfolio purchases in the U.S. were robust as supply increased and pricing remained at favorable levels. In Europe, capital deployment decreased during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. Pricing continues to remain competitive in our European footprint, constraining the amount of capital we choose to deploy in Europe. Capital deployment can fluctuate based on the timing of the forward flow contracts and spot purchases. Collections from Purchased Receivables by Channel and Geographic Location We utilize three channels for the collection of our receivable portfolios: call center and digital collections; legal collections; and collection agencies. The call center and digital collections channel consists of collections that result from our call centers, direct mail program and online collections. The legal collections channel consists of collections that result from our internal legal channel or from our network of retained law firms. The collection agencies channel consists of collections from third-party collections agencies to whom we pay a fee or commission. We utilize this channel to supplement capacity in our internal call centers, to service accounts in regions where we do not have collections operations or for accounts purchased where we maintain the collection agency servicing relationship. The following table summarizes the total collections by collection channel and geographic area during the periods presented (in thousands) : Three Months Ended March 31, 2026 2025 MCM (United States): Call center and digital collections $ 361,457 $ 298,222 Legal collections 192,393 151,675 Collection agencies 2,621 4,128 Subtotal 556,471 454,025 Cabot (Europe): Call center and digital collections 65,292 62,270 Legal collections 57,524 53,773 Collection agencies 38,258 33,933 Subtotal 161,074 149,976 Other geographies: 869 806 Total collections from purchased receivables $ 718,414 $ 604,807 Collections from purchased receivables increased by $113.6 million, or 18.8%, to $718.4 million during the three months ended March 31, 2026, as compared to $604.8 million during the three months ended March 31, 2025. The increase in collections in the United States was primarily a result of consistent increases in capital deployments in the United States in recent periods. Collections in Europe were favorably impacted by foreign currency translation by approximately $12.2 million, during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. 25 Table of Contents Results of Operations Results of operations, in dollars and as a percentage of total revenues, were as follows for the periods presented (in thousands, except percentages) : Three Months Ended March 31, 2026 2025 Revenues Portfolio revenue $ 390,019 82.0 % $ 345,218 87.9 % Changes in recoveries 62,740 13.2 % 21,464 5.5 % Total debt purchasing revenue 452,759 95.2 % 366,682 93.4 % Servicing revenue 20,638 4.4 % 22,547 5.7 % Other revenues 2,014 0.4 % 3,546 0.9 % Total revenues 475,411 100.0 % 392,775 100.0 % Operating expenses Salaries and employee benefits 114,541 24.1 % 105,932 27.0 % Cost of legal collections 89,221 18.8 % 68,013 17.3 % General and administrative expenses 39,629 8.3 % 41,018 10.4 % Other operating expenses 34,833 7.4 % 34,252 8.8 % Collection agency commissions 6,337 1.3 % 6,873 1.7 % Depreciation and amortization 6,858 1.4 % 7,344 1.9 % Total operating expenses 291,419 61.3 % 263,432 67.1 % Income from operations 183,992 38.7 % 129,343 32.9 % Other expense Interest expense (73,050) (15.4) % (70,530) (18.0) % Other income 790 0.2 % 1,647 0.5 % Total other expense (72,260) (15.2) % (68,883) (17.5) % Provision for income taxes (25,489) (5.4) % (13,664) (3.5) % Net income $ 86,243 18.1 % $ 46,796 11.9 % 26 Table of Contents Comparison of Results of Operations Revenues Our revenues primarily include debt purchasing revenue, which is revenue recognized from engaging in debt purchasing and recovery activities. We apply our charge-off policy and fully write-off the amortized costs ( i.e. , face value net of noncredit discount) of the individual receivables we acquire immediately after purchasing the portfolio. We then record a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which is presented as “Receivable portfolios, net” in our condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) established based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. Debt purchasing revenue includes two components: (1) Portfolio revenue , which is the accretion of the discount on the negative allowance due to the passage of time (generally the receivable portfolio balance multiplied by the EIR), and (2) Changes in recoveries , which includes (a) Recoveries above (below) forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and (b) Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases). Certain pools already fully recovered their cost basis and became zero basis portfolios (“ZBA”) prior to our adoption of the accounting standard for Financial Instruments - Credit Losses (“CECL”) in January 2020. All subsequent collections to the ZBA pools are recognized as ZBA revenue, which is included in portfolio revenue in our condensed consolidated statements of income. We expect our ZBA revenue to continue to decline as we collect on these legacy pools. We do not expect to have new ZBA pools in the future. Servicing revenue consists primarily of fee-based income earned on accounts collected on behalf of others, primarily credit originators. We earn fee-based income by providing debt servicing (such as early stage collections, BPO, contingent collections, trace services and litigation activities) to credit originators for non-performing loans in Europe. Other revenues primarily include revenues recognized from the sale of real estate assets that are acquired as a result of our investments in non-performing secured residential mortgage portfolios and real estate assets in Europe and LAAP. The following tables summarize revenues for the periods presented ( in thousands, except percentages ): Three Months Ended March 31, 2026 2025 $ Change % Change Revenue recognized from portfolio basis $ 385,593 $ 339,756 $ 45,837 13.5 % ZBA revenue 4,426 5,462 (1,036) (19.0) % Portfolio revenue 390,019 345,218 44,801 13.0 % Recoveries above forecast 46,044 26,952 19,092 Changes in expected future recoveries 16,696 (5,488) 22,184 Changes in recoveries 62,740 21,464 41,276 192.3 % Debt purchasing revenue 452,759 366,682 86,077 23.5 % Servicing revenue 20,638 22,547 (1,909) (8.5) % Other revenues 2,014 3,546 (1,532) (43.2) % Total revenues $ 475,411 $ 392,775 $ 82,636 21.0 % 27 Table of Contents Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international revenues, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international revenues. Our revenue was favorably impacted by foreign currency translation by approximately $9.2 million during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase in revenue recognized from portfolio basis during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to a higher portfolio basis (i.e. a higher receivable portfolios balance) in the U.S. driven by a consistent higher volume of purchases in recent periods. Recoveries above or below forecast represent over and under-performance in the reporting period, respectively, and are expected to vary from period to period. Collections during the three months ended March 31, 2026 over-performed the forecasted collections by $46.0 million, primarily as a result of collections over-performance in the U.S. The collections over-performance in the U.S. was driven by the deployment of new technologies, enhanced digital capabilities and continued operational innovation, which enabled us to reach more consumers, leading to more payments as well as a larger payer book. These initiatives had a greater impact on the early stages of a portfolio’s lifecycle, leading to over-performance for our recent vintages. Collections during the three months ended March 31, 2025 over-performed the forecasted collections by $27.0 million. We reassess the forecasts of expected lifetime recoveries each quarter by considering, among other factors, historical and current collection performance, changes in consumer behaviors, and the macroeconomic environment. The significant recoveries above forecast during the three months ended March 31, 2026 were carefully evaluated. We concluded that the recoveries above forecast during the three months ended March 31, 2026 were primarily current period collections over-performance and did not represent any material shift in timing of the collections. Additionally, the sustained over-performance in recent quarters led to increases in forecasted future recoveries for recently acquired vintages. As a result, we recorded a net positive change of $16.7 million in expected future recoveries during the three months ended March 31, 2026. During the three months ended March 31, 2025, we recorded a net negative change of $5.5 million in expected future recoveries. 28 Table of Contents The following tables summarize collections from receivable portfolios, portfolio revenue, changes in recoveries, end of period receivable portfolios balance and other related supplemental data, by year of purchase ( in thousands, except percentages ): Three Months Ended March 31, 2026 As of March 31, 2026 Collections Portfolio Revenue Changes in Recoveries Receivable Portfolios Monthly EIR United States: ZBA $ 4,425 $ 4,425 $ — $ — — % <2022 77,574 46,288 (2,242) 305,922 4.7 % 2022 33,804 15,529 (36) 155,539 3.1 % 2023 87,476 38,426 15,474 373,329 3.3 % 2024 163,194 73,510 15,210 688,135 3.3 % 2025 180,168 107,292 24,369 1,077,429 3.2 % 2026 9,830 10,781 2,632 319,246 3.4 % Subtotal 556,471 296,251 55,407 2,919,600 3.4 % Europe: ZBA 1 1 — — — % <2022 75,611 49,761 (691) 691,916 2.3 % 2022 11,474 5,993 (469) 123,745 1.5 % 2023 17,247 7,595 3,988 167,117 1.5 % 2024 31,165 16,290 1,249 273,420 1.9 % 2025 23,794 13,225 1,724 203,815 2.1 % 2026 1,782 903 1,065 46,247 2.1 % Subtotal 161,074 93,768 6,866 1,506,260 2.0 % Other geographies (1) : All vintages 869 — 467 11,555 — % Subtotal 869 — 467 11,555 — % Total $ 718,414 $ 390,019 $ 62,740 $ 4,437,415 2.9 % _______________________ (1) All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes. 29 Table of Contents Three Months Ended March 31, 2025 As of March 31, 2025 Collections Portfolio Revenue Changes in Recoveries Receivable Portfolios Monthly EIR United States: ZBA $ 5,461 $ 5,461 $ — $ — — % <2021 90,900 53,386 (648) 343,830 4.8 % 2021 25,222 13,647 (367) 107,762 3.9 % 2022 52,950 23,399 1,478 234,231 3.1 % 2023 116,222 57,733 (3,447) 548,323 3.3 % 2024 153,494 94,002 11,370 904,359 3.3 % 2025 9,776 10,072 3,500 320,049 3.1 % Subtotal 454,025 257,700 11,886 2,458,554 3.5 % Europe: ZBA 1 1 — — — % <2021 71,905 46,341 4,478 663,794 2.3 % 2021 10,468 6,512 58 117,260 1.9 % 2022 13,936 6,575 890 141,172 1.5 % 2023 20,790 8,165 2,124 183,208 1.5 % 2024 30,395 18,388 1,080 320,444 1.9 % 2025 2,481 1,536 470 52,352 2.3 % Subtotal 149,976 87,518 9,100 1,478,230 2.0 % Other geographies (1) : All vintages 806 — 478 15,747 — % Subtotal 806 — 478 15,747 — % Total $ 604,807 $ 345,218 $ 21,464 $ 3,952,531 2.9 % _______________________ (1) All portfolios are on non-accrual basis. Annual pool groups for other geographies have been aggregated for disclosure purposes. Servicing revenue decreased during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily driven by decreases in BPO revenue and collection service fees. Other revenues decreased during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily driven by a decrease in gains recognized on the sale of real estate assets. 30 Table of Contents Operating Expenses The following table summarizes operating expenses during the periods presented ( in thousands, except percentages ): Three Months Ended March 31, 2026 2025 $ Change % Change Salaries and employee benefits $ 114,541 $ 105,932 $ 8,609 8.1 % Cost of legal collections 89,221 68,013 21,208 31.2 % General and administrative expenses 39,629 41,018 (1,389) (3.4) % Other operating expenses 34,833 34,252 581 1.7 % Collection agency commissions 6,337 6,873 (536) (7.8) % Depreciation and amortization 6,858 7,344 (486) (6.6) % Total operating expenses $ 291,419 $ 263,432 $ 27,987 10.6 % Our operating results are impacted by foreign currency translation, which represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency. The strengthening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international operating expenses, and the weakening of the U.S. dollar relative to other foreign currencies has an unfavorable impact on our international operating expenses. Our operating expenses were unfavorably impacted by foreign currency translation by approximately $6.6 million, during the three months ended March 31, 2026, primarily as a result of the weakening of the U.S. dollar against the British Pound by approximately 6.6% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Operating expenses are explained in more detail as follows: Salaries and Employee Benefits The increase in salaries and employee benefits during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the following reasons: • An increase in salaries and bonuses of $6.2 million, primarily attributable to higher performance-based bonuses awarded to employees as a result of our strong overall performance for the year ended December 31, 2025; and • An increase in stock-based compensation expense of $1.2 million attributable to increased stock price in the recent periods and higher vesting of performance-based awards. Cost of Legal Collections Cost of legal collections primarily includes contingent fees paid to our external network of attorneys and the cost of litigation. We pursue legal collections using a network of attorneys that specialize in collection matters and through our internal legal channel. Under the agreements with our contracted attorneys, we advance certain out-of-pocket court costs. Cost of legal collections does not include internal legal channel employee costs, which are included in salaries and employee benefits in our condensed consolidated statements of income. The following table summarizes our cost of legal collections during the periods presented ( in thousands, except percentages ): Three Months Ended March 31, 2026 2025 $ Change % Change Court costs $ 60,967 $ 44,814 $ 16,153 36.0 % Legal collection fees 28,254 23,199 5,055 21.8 % Total cost of legal collections $ 89,221 $ 68,013 $ 21,208 31.2 % The increase of cost of legal collections during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to increased legal placements in this channel in the United States. General and Administrative Expenses The decrease in general and administrative expense during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily attributable to a decrease in consulting and audit fees of $1.9 million. The decrease was partially offset by an increase in information technology expenses of $1.1 million. 31 Table of Contents Other Operating Expenses Other operating expenses remained relatively consistent during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Collection Agency Commissions Collection agency commissions are commissions paid to third-party collection agencies. Collections through the collections agencies channel are predominately in Europe and vary from period to period depending on, among other things, the number of accounts placed with an agency versus accounts collected internally. Commission rates vary depending on, among other things, the amount of time that has passed since the charge-off of the accounts placed with an agency, the asset class, and the geographic location of the receivables. Generally, freshly charged-off accounts have a lower commission rate than accounts that have been charged off for a longer period of time, and commission rates for purchased bankruptcy portfolios are lower than the commission rates for charged-off credit card accounts. Collection agency commissions slightly decreased during the three months ended March 31, 2026, as compared to the same period in the prior year, due to fewer accounts placed with external agencies in the United States. Depreciation and Amortization Depr eciation and amortization expenses decreased by $0.5 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily due to smaller depreciable and amortizable asset balances during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. Interest Expense The following table summarizes our interest expense for the periods presented ( in thousands, except percentages) : Three Months Ended March 31, 2026 2025 $ Change % Change Stated interest on debt obligations $ 70,513 $ 66,986 $ 3,527 5.3 % Amortization of debt issuance costs 2,355 3,329 (974) (29.3) % Amortization of debt discount 182 215 (33) (15.3) % Total interest expense $ 73,050 $ 70,530 $ 2,520 3.6 % The increase in interest expense during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the following reasons: • The effect resulting from increased average debt balance of approximately $4.0 million; and • The effect resulting from an unfavorable impact of foreign currency translation of approximately $1.7 million driven by the weakening of the U.S. dollar against the British Pound. • The increase was partially offset by the effect resulting from a decrease in interest rates of approximately $3.2 million.. Other Income, net of Other Expense Other income or expense consists primarily of foreign currency exchange gains or losses, interest income, and gains or losses recognized on certain transactions outside of our normal course of business. Other income , net, was $0.8 million and $1.6 million during the three months ended March 31, 2026 and 2025 , respectively. Interest income included in other income, net of other expense, was $1.1 million and $1.5 million during the three months ended March 31, 2026 and 2025 , respectively. Provision for Income Taxes Provision for income taxes and effective tax rate are as follows for the periods presented ( $ in thousands ): Three Months Ended March 31, 2026 2025 Provision for income taxes $ 25,489 $ 13,664 Effective tax rate 22.8% 22.6 % For the three months ended March 31, 2026 and 2025, the differences between our effective tax rate and the federal statutory rate were primarily due to state income taxes offset by other foreign adjustments. 32 Table of Contents Non-GAAP Disclosure In addition to the financial information prepared in conformity with Generally Accepted Accounting Principles (“GAAP”), we provide historical non-GAAP financial information. Management believes that the presentation of such non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments, and amortization methods, which provide a more complete understanding of our financial performance, competitive position, and prospects for the future. Readers should consider the information in addition to, but not instead of, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of these measures for comparative purposes. Adjusted EBITDA. Management utilizes adjusted EBITDA (defined as net income before interest income and expense, taxes, depreciation and amortization, stock-based compensation expenses, acquisition, integration and restructuring related expenses, and other charges or gains that are not indicative of ongoing operations), in the evaluation of our operating performance. Adjusted EBITDA for the periods presented is as follows (in thousands) : Three Months Ended March 31, 2026 2025 GAAP net income, as reported $ 86,243 $ 46,796 Adjustments: Interest expense 73,050 70,530 Interest income (1,094) (1,546) Provision for income taxes 25,489 13,664 Depreciation and amortization 6,858 7,344 Stock-based compensation expense 4,575 3,424 Acquisition, integration and restructuring related expenses (1) 1,465 248 Adjusted EBITDA $ 196,586 $ 140,460 Collections applied to principal balance (2) $ 269,469 $ 244,300 _______________________ (1) Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore, adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results. (2) Collections applied to principal balance is calculated in the table below: Three Months Ended March 31, 2026 2025 Collections applied to receivable portfolios, net $ 328,395 $ 259,589 Changes in recoveries (62,740) (21,464) Other proceeds applied to basis 3,814 6,175 Collections applied to principal balance $ 269,469 $ 244,300 33 Table of Contents Supplemental Performance Data The tables included in this supplemental performance data section include detail for purchases, collections and ERC by year of purchase. Our collection expectations are based on account characteristics and economic variables. Additional adjustments are made to account for qualitative factors that may affect the payment behavior of our consumers and servicing related adjustments to ensure our collection expectations are aligned with our operations. We continue to refine our process of forecasting collections both domestically and internationally with a focus on operational enhancements. Our collection expectations vary between types of portfolio and geographic location. As a result, past performance of pools in certain geographic locations or of certain types of portfolio are not necessarily a suitable indicator of future results in other locations or for other types of portfolio. The supplemental performance data presented in this section is impacted by foreign currency translation, which represents the effect of translating financial results where the functional currency of our foreign subsidiary is different than our U.S. dollar reporting currency. Generally, international purchases reflect the exchange rates at the time of purchase and international cumulative collections are aggregated each month based on respective month-end exchange rates. For example, the strengthening of the U.S. dollar relative to other foreign currencies has an unfavorable reporting impact on our international purchases, collections, and ERC, and the weakening of the U.S. dollar relative to other foreign currencies has a favorable impact on our international purchases, collections, and ERC. We utilize proprietary forecasting models to continuously evaluate the economic life of each pool. 34 Table of Contents Cumulative Collections Money Multiple - Cumulative Collections from Receivable Portfolios to Purchase Price Multiple The following table summarizes our receivable purchases, related collections, and cumulative collections money multiples (in thousands, except multiples) : Year of Purchase Purchase Price (1) Cumulative Collections through March 31, 2026 <2022 2022 2023 2024 2025 2026 Total (2) CCMM (3) United States : <2022 $ 7,585,852 $ 16,334,075 $ 1,256,655 $ 861,884 $ 606,852 $ 432,143 $ 81,999 $ 19,573,608 2.6 2022 548,765 — 98,277 268,516 254,329 179,247 33,804 834,173 1.5 2023 805,587 — — 184,182 471,838 419,265 87,476 1,162,761 1.4 2024 990,595 — — — 238,635 625,051 163,194 1,026,880 1.0 2025 1,168,557 — — — — 293,593 180,168 473,761 0.4 2026 315,662 — — — — — 9,830 9,830 — Subtotal 11,415,018 16,334,075 1,354,932 1,314,582 1,571,654 1,949,299 556,471 23,081,013 2.0 Europe : <2022 3,421,004 4,512,881 516,314 432,671 383,208 336,631 75,611 6,257,316 1.8 2022 231,869 — 36,957 70,385 64,555 52,865 11,474 236,236 1.0 2023 259,255 — — 40,975 89,799 78,352 17,247 226,373 0.9 2024 353,182 — — — 50,469 128,970 31,165 210,604 0.6 2025 234,058 — — — — 44,123 23,794 67,917 0.3 2026 47,047 — — — — — 1,783 1,783 — Subtotal 4,546,415 4,512,881 553,271 544,031 588,031 640,941 161,074 7,000,229 1.5 Other geographies (4) : All vintages 340,283 538,948 3,334 3,954 2,793 2,546 869 552,444 1.6 Subtotal 340,283 538,948 3,334 3,954 2,793 2,546 869 552,444 1.6 Total $ 16,301,716 $ 21,385,904 $ 1,911,537 $ 1,862,567 $ 2,162,478 $ 2,592,786 $ 718,414 $ 30,633,686 1.9 ________________________ (1) Adjusted for Put-Backs and Recalls. Put-Backs (“Put-Backs”) and recalls (“Recalls”) represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement. (2) Cumulative collections from inception through March 31, 2026, excluding collections on behalf of others. (3) Cumulative Collections Money Multiple (“CCMM”) through March 31, 2026 refers to cumulative collections as a multiple of purchase price. (4) Annual pool groups for other geographies have been aggregated for disclosure purposes. 35 Table of Contents Purchase Price Multiple - Total Estimated Collections from Receivable Portfolios to Purchase Price Multiple The following table summarizes our purchases, resulting historical collections, estimated remaining collections from receivable portfolios, and purchase price multiple (in thousands, except multiples) : Purchase Price (1) Historical Collections (2) Estimated Remaining Collections Total Estimated Collections Purchase Price Multiple (3) United States : <2022 $ 7,585,852 $ 19,573,608 $ 773,935 $ 20,347,543 2.7 2022 548,765 834,173 314,437 1,148,610 2.1 2023 805,587 1,162,761 774,834 1,937,595 2.4 2024 990,595 1,026,880 1,408,010 2,434,890 2.5 2025 1,168,557 473,761 2,287,290 2,761,051 2.4 2026 315,662 9,830 737,504 747,334 2.4 Subtotal 11,415,018 23,081,013 6,296,010 29,377,023 2.6 Europe : <2022 3,421,004 6,257,316 1,824,997 8,082,313 2.4 2022 231,869 236,236 227,062 463,298 2.0 2023 259,255 226,373 298,192 524,565 2.0 2024 353,182 210,604 591,577 802,181 2.3 2025 234,058 67,917 453,466 521,383 2.2 2026 47,047 1,783 100,011 101,794 2.2 Subtotal 4,546,415 7,000,229 3,495,305 10,495,534 2.3 Other geographies (4) : All vintages 340,283 552,444 15,188 567,632 1.7 Subtotal 340,283 552,444 15,188 567,632 1.7 Total $ 16,301,716 $ 30,633,686 $ 9,806,503 $ 40,440,189 2.5 ________________________ (1) Purchase price refers to the cash paid to a seller to acquire a portfolio less Put-backs, Recalls, and other adjustments. Put-Backs and Recalls represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreement. (2) Cumulative collections from inception through March 31, 2026, excluding collections on behalf of others. (3) Purchase Price Multiple represents total estimated collections divided by the purchase price. (4) Annual pool groups for other geographies have been aggregated for disclosure purposes. 36 Table of Contents Estimated Remaining Collections by Year of Purchase The following table summarizes our estimated remaining collections from receivable portfolios and estimated future cash flows from real estate-owned assets (in thousands) : Estimated Remaining Collections by Year of Purchase (1) 2026 (3) 2027 2028 2029 2030 2031 2032 2033 2034 >2034 Total (2) United States: <2022 $ 200,422 $ 184,823 $ 125,010 $ 85,051 $ 58,019 $ 39,781 $ 27,417 $ 18,716 $ 12,721 $ 21,975 $ 773,935 2022 75,537 74,349 49,788 34,372 24,460 17,364 12,089 8,374 5,894 12,210 314,437 2023 186,065 182,174 126,702 84,762 58,724 41,723 29,662 20,589 14,323 30,110 774,834 2024 369,136 323,639 214,981 151,775 106,721 75,768 53,083 37,068 25,697 50,142 1,408,010 2025 474,817 585,490 371,868 253,617 181,467 128,405 91,325 63,968 44,694 91,639 2,287,290 2026 129,302 180,457 136,036 87,385 60,934 43,221 30,674 21,772 15,232 32,491 737,504 Subtotal 1,435,279 1,530,932 1,024,385 696,962 490,325 346,262 244,250 170,487 118,561 238,567 6,296,010 Europe: <2022 208,102 246,871 213,789 182,450 155,598 134,031 117,071 103,112 91,022 372,951 1,824,997 2022 33,276 38,336 30,505 24,841 20,312 16,735 13,696 10,987 9,075 29,299 227,062 2023 44,652 49,643 41,465 33,310 26,542 21,374 17,553 14,389 11,700 37,564 298,192 2024 76,061 87,434 73,802 61,372 50,910 42,297 35,841 31,129 27,071 105,660 591,577 2025 60,518 72,436 59,043 48,245 39,282 32,082 26,525 22,654 19,209 73,472 453,466 2026 12,528 17,040 14,567 11,567 9,264 7,372 5,917 4,805 3,892 13,059 100,011 Subtotal 435,137 511,760 433,171 361,785 301,908 253,891 216,603 187,076 161,969 632,005 3,495,305 Other geographies (4) : All vintages — — — — — — — — — — — Subtotal 4,791 4,117 2,662 1,734 890 471 244 144 75 60 15,188 Portfolio ERC 1,875,207 2,046,809 1,460,218 1,060,481 793,123 600,624 461,097 357,707 280,605 870,632 9,806,503 REO ERC (5) 14,503 4,260 — — — — — — — — 18,763 Total ERC $ 1,889,710 $ 2,051,069 $ 1,460,218 $ 1,060,481 $ 793,123 $ 600,624 $ 461,097 $ 357,707 $ 280,605 $ 870,632 $ 9,825,266 ________________________ (1) As of March 31, 2026, ERC for Zero Basis Portfolios includes $22.9 million for purchased consumer and bankruptcy receivables in the United States. ERC for Zero Basis Portfolios in Europe and other geographies was immaterial. ERC also includes $15.2 million from non-accrual portfolios, primarily in other geographies. (2) Represents the expected remaining cash collections over a 180-month period. As of March 31, 2026, ERC for 84-months was $8,414.6 million. (3) Amount for 2026 consists of nine months data from April 1, 2026 to December 31, 2026. (4) Annual pool groups for other geographies have been aggregated for disclosure purposes. (5) Real estate-owned assets (“REO”) ERC includes $18.8 million of estimated future cash flows for Europe. 37 Table of Contents Estimated Future Collections Applied to Receivable Portfolios As of March 31, 2026, we had $4.4 billion in receivable portfolios. The estimated future collections applied to the receivable portfolios net balance is as follows (in thousands) : Years Ending December 31, United States Europe Other Geographies Total Amortization 2026 (1) $ 621,183 $ 174,650 $ 3,953 $ 799,786 2027 734,526 210,976 3,203 948,705 2028 482,365 179,622 1,946 663,933 2029 319,267 148,100 1,192 468,559 2030 224,370 120,752 510 345,632 2031 159,558 99,178 341 259,077 2032 113,876 83,890 186 197,952 2033 80,275 73,286 113 153,674 2034 56,067 64,961 60 121,088 2035 39,742 60,947 32 100,721 2036 29,255 57,113 15 86,383 2037 21,760 54,476 4 76,240 2038 17,217 55,648 — 72,865 2039 12,816 56,411 — 69,227 2040 6,656 52,260 — 58,916 2041 667 13,990 — 14,657 Total $ 2,919,600 $ 1,506,260 $ 11,555 $ 4,437,415 ________________________ (1) Amount for 2026 consists of nine months data from April 1, 2026 to December 31, 2026. 38 Table of Contents Liquidity and Capital Resources Liquidity The following table summarizes our cash flow activities for the periods presented (in thousands) : Three Months Ended March 31, 2026 2025 (Unaudited) Net cash provided by operating activities $ 82,326 $ 45,283 Net cash used in investing activities (27,407) (100,278) Net cash provided by financing activities 18,609 40,337 Operating Cash Flows Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. Net cash provided by operating activities was $82.3 million and $45.3 million during the three months ended March 31, 2026 and 2025, respectively. Operating cash flows are derived by adjusting net income for non-cash operating items such as depreciation and amortization, changes in recoveries, stock-based compensation charges, deferred income tax, and changes in operating assets and liabilities which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations. Adjusting for the changes in recoveries resulted in a decrease in operating cash flows by $62.7 million during the three months ended March 31, 2026 and a decrease in operating cash flows by $21.5 million during the three months ended March 31, 2025. Refer to “Note 5: Receivable Portfolios, Net” in the notes to our condensed consolidated financial statements for discussion relating to changes in recoveries. Investing Cash Flows Net cash used in investing activities was $27.4 million and $100.3 million during the three months ended March 31, 2026 and 2025, respectively. Cash provided by or used in investing activities is primarily affected by receivable portfolio purchases offset by collection proceeds applied to the principal of our receivable portfolios. Receivable portfolio purchases, net of put-backs, were $359.5 million and $362.7 million during the three months ended March 31, 2026 and 2025, respectively. Collection proceeds applied to the principal of our receivable portfolios were $328.4 million and $259.6 million during the three months ended March 31, 2026 and 2025, respectively. Refer to Purchases and Collections within “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion relating to purchases and collections. Financing Cash Flows Net cash provided by financing activities was $18.6 million and $40.3 million during the three months ended March 31, 2026 and 2025, respectively. Financing cash flows are generally affected by borrowings under our credit facilities and proceeds from various debt offerings, offset by repayments of amounts outstanding under our credit facilities and repayments of various notes. Borrowings under our credit facilities were $358.0 million and $246.4 million during the three months ended March 31, 2026 and 2025, respectively. Repayments of amounts outstanding under our credit facilities were $304.2 million and $185.8 million during the three months ended March 31, 2026 and 2025, respectively. Capital Resources Our primary sources of capital are cash collections from our receivable portfolios, bank borrowings, debt offerings, and equity offerings. Depending on the capital markets, we consider additional financings to fund our operations and any potential acquisitions. From time to time, we may repurchase outstanding debt or equity and/or restructure or refinance debt obligations. Our primary cash requirements include funding the purchase of receivable portfolios, operating expenses, the payment of interest and principal on borrowings, the payment of income taxes, funding any entity acquisitions and share repurchases. We are in material compliance with all covenants under our financing arrangements. See “Note 7: Borrowings” in the notes to our condensed consolidated financial statements for a further discussion of our debt. Available capacity under our Global Senior Facility, was $791.3 million as of March 31, 2026. 39 Table of Contents In May 2021, our Board of Directors authorized a $300.0 million share repurchase program. In November 2025, our Board of Directors authorized an increase of an additional $300.0 million under the share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from our Global Senior Facility and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by our management and Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. The program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at our discretion. During the three months ended March 31, 2026 and 2025 , we repurchased 345,548 and 289,425 shares of our common stock for $20.0 million and $10.0 million, respectively, under the share repurchase program. As of March 31, 2026, we had remaining authority to purchase $282.4 million of our common stock. Our practice is to retire the shares repurchased. Our cash and cash equivalents as of March 31, 2026, consisted of $68.5 million held by U.S.-based entities and $158.7 million held by foreign entities. Most of our cash and cash equivalents held by foreign entities is indefinitely reinvested and may be subject to material tax effects if repatriated. However, we believe that our sources of cash and liquidity are sufficient to meet our business needs in the United States and do not expect that we will need to repatriate the funds. Included in cash and cash equivalents is cash that was collected on behalf of, and remains payable to, third-party clients. The balance of cash held for clients was $17.1 million as of March 31, 2026. Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, timing of cash collections from our consumers, and other risks detailed in our Risk Factors. However, we believe that we have sufficient liquidity to fund our operations for at least the next twelve months, given our expectation of continued positive cash flows from operations, our cash and cash equivalents, our access to capital markets, and availability under our credit facilities. Our future cash needs will depend on our acquisitions of portfolios and businesses. Critical Accounting Estimates Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. Refer to “Critical Accounting Estimates” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025, for a complete discussion of our critical accounting estimates. Other than the ongoing reassessment of expected future recoveries of our receivable portfolios during each reporting period under our CECL accounting policy as discussed in “Note 5: Receivable Portfolios, Net” to our condensed consolidated financial statements, there have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2025. 40 Table of Contents Item 3 – Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exchange Rates. As of March 31, 2026, there had not been a material change in any of the foreign currency risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Interest Rates. As of March 31, 2026, there had not been a material change in the interest rate risk information disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Item 4 – Controls and Procedures Attached as exhibits to this Form 10-Q are the certifications required by Rule 13a-14 of the Securities Exchange Act of 1934, as amended. This section includes information concerning the controls and controls evaluation referred to in the certifications. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”) and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and accordingly, management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on their most recent evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are effective at the reasonable assurance level. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 41 Table of Contents PART II – OTHER INFORMATION Item 1 – Legal Proceedings Information with respect to this item may be found in “Note 11: Commitments and Contingencies,” to the condensed consolidated financial statements. Item 1A – Risk Factors There is no material change in the information reported under “Part I-Item 1A-Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds Issuer Repurchases of Equity Securities In May 2021, our Board of Directors authorized a $300.0 million share repurchase program. In November 2025, our Board of Directors authorized an increase of an additional $300.0 million under the share repurchase program. Repurchases under this program are expected to be made from cash on hand and/or a drawing from our Global Senior Facility, and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by management and our Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. During the three months ended March 31, 2026, the Company repurchased 345,548 shares of our common stock for $20.0 million. The following table presents information with respect to purchases of common stock of the Company during the three months ended March 31, 2026, by the Company or an “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs January 1, 2026 to January 31, 2026 236,730 $ 55.56 236,730 $ 289,225,971 February 1, 2026 to February 28, 2026 77,226 $ 60.13 77,226 $ 284,582,457 March 1, 2026 to March 31, 2026 31,592 $ 69.76 31,592 $ 282,378,557 Total 345,548 $ 57.88 345,548 $ 282,378,557 ________________________ (1) This column discloses the number of shares purchased pursuant to the program during the indicated time periods. Item 5 - Other Information On March 10, 2026 , Andrew Asch , SVP, General Counsel and Government Affairs , adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 9,085 shares of Encore Capital Group, Inc. common stock between June 9, 2026 and March 10, 2027 , subject to certain conditions. On March 11, 2026 , John Yung , President International and Cabot Credit Management , adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 4,000 shares of Encore Capital Group, Inc. common stock between June 10, 2026 and March 11, 2027 , subject to certain conditions. 42 Table of Contents Item 6 – Exhibits Number Description 3.1.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1/A filed on June 14, 1999, File No. 333-77483) 3.1.2 Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 4, 2002, File No. 000-26489) 3.1.3 Second Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1.3 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2019) 3.2 Amended and Restated Bylaws, as amended through March 18 , 202 6 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 20 , 202 6 ) 10.1 Non-Employee Director Compensation Program Guidelines, effective June 12 , 202 6 (filed herewith) 31.1 Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 31.2 Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 32.1 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) 101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document. (filed herewith) 101.SCH Inline XBRL Taxonomy Extension Schema Document (filed herewith) 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith) 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt of the company are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request. 43 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ENCORE CAPITAL GROUP, INC. By: /s/ Tomas Hernanz Tomas Hernanz Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) Date: May 6, 2026 44