Jefferson Capital Reports Second Quarter 2025 Results

Rhea-AI Summary

Jefferson Capital (JCAP) reported strong Q2 2025 financial results, with revenue growing 47% to $152.7 million and collections surging 85% to $255.7 million. The company's Estimated Remaining Collections (ERC) reached a record $2.9 billion, up 31% year-over-year.

Key performance metrics include pre-tax income up 82% to $62.0 million and net income increasing 48% to $47.7 million. The company maintained a sector-leading Cash Efficiency Ratio of 75.9%. The Board declared a quarterly dividend of $0.24 per share. Jefferson Capital deployed $125.3 million in portfolio acquisitions and improved its leverage ratio to 1.76x, with $257.3 million of deployments locked through forward flows.

Positive

• Revenue grew 47% year-over-year to $152.7 million
• Collections increased 85% to $255.7 million
• Record ERC of $2.9 billion, up 31%
• Pre-tax income rose 82% to $62.0 million
• Sector-leading Cash Efficiency Ratio of 75.9%
• Improved leverage ratio to 1.76x from 2.47x
• Strong liquidity with undrawn $825 million credit facility
• Quarterly dividend of $0.24 per share declared

Negative

• Portfolio deployments decreased 10.8% to $125.3 million year-over-year
• Operating expenses increased 37.3% to $65.5 million

Insights

Financial Analyst

Jefferson Capital delivered exceptional Q2 results with robust growth across all key metrics, driven by strategic acquisitions and operational efficiency.

Jefferson Capital's Q2 2025 results demonstrate remarkable financial momentum across all key performance indicators. Revenue surged 47% to $152.7 million, while collections jumped 85.4% to $255.7 million. Most impressively, the company achieved an industry-leading Cash Efficiency Ratio of 75.9%, representing a 638 basis point improvement year-over-year.

The balance sheet has strengthened considerably, with leverage improving to 1.76x from 2.47x a year earlier. This deleveraging occurred while Estimated Remaining Collections (ERC) - a critical forward-looking metric - increased 31.5% to a record $2.9 billion. This ERC growth provides excellent visibility into future revenue streams.

The Conn's Portfolio Purchase completed in Q4 2024 has been transformative, contributing $65.1 million to US collections and adding $226.5 million to ERC. It generated $24.7 million in portfolio revenue and $19.5 million in net operating income for the quarter alone.

Geographic diversification remains a strength, with impressive growth across all regions. The company maintains significant liquidity with an undrawn $825 million revolving credit facility and has prudently pre-funded its 2026 maturity through a $500 million offering in May.

The board's declaration of a $0.24 quarterly dividend further demonstrates confidence in the company's financial position and commitment to returning capital to shareholders. With diluted EPS of $16.76 and pro forma adjusted diluted EPS of $0.81, Jefferson Capital is delivering exceptional shareholder value while maintaining financial flexibility to capitalize on favorable market conditions created by elevated consumer credit delinquencies.

47% Growth in Revenue to $152.7 Million
Collections Grow 85% to $255.7 Million with Estimated Remaining Collections (“ERC”) up 31% to a Record $2.9 Billion
Pre-tax Income up 82% to $62.0 Million with Net Income up 48% to $47.7 Million
Adjusted Pre-tax Income up 55% to $61.7 Million
Board of Directors Declares Quarterly Cash Dividend of $0.24 per Share

MINNEAPOLIS, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Jefferson Capital, Inc. (“Jefferson Capital”), a leading analytically driven purchaser and manager of charged-off and insolvency consumer accounts, today announced its second quarter 2025 financial results.

“We delivered robust inaugural quarterly results following the successful listing of our shares,” said David Burton, Chief Executive Officer. “Collections growth was strong and our ERC set a new record.”

“We are very proud of our best-in-class Cash Efficiency Ratio, which came in at 75.9% for the quarter. It is the result of years of relentless focus on optimizing the performance and the cost of our collections platform. Our leading operating efficiency is a powerful competitive advantage, and, coupled with the strong returns from our differentiated investment strategy, continues to deliver consistent attractive ROE.”

“The investment environment remains favorable with elevated levels of consumer credit delinquencies and charge-offs to drive portfolio supply and low unemployment to support liquidation rates. We have never been better positioned to take advantage of the opportunities ahead with low leverage and ample capital resources.”

Second Quarter 2025 Highlights versus Second Quarter 2024

• Collections grew 85% to $255.7 million
• ERC rises 31% reaching new record of $2.9 billion
• Strong 47% revenue growth to $152.7 million
• Sector-leading Cash Efficiency Ratio of 75.9%, up 638 bps
• Leverage* improves to 1.76x as compared to 2.47x
• Pre-tax Income increases 82% to $62.0 million, and Net Income increases 48% to $47.7 million
• Adjusted Pre-tax Income* increases 55% to $61.7 million
• Diluted EPS of $16.76 and Pro Forma Adjusted Diluted EPS* of $0.81

Collections
The following table summarizes total collections by geographic area:

		Three Months Ended
		June 30,						Increase			%
(in Millions)		2025			2024			(Decrease)			Change
United States		$	202.4		$	97.7		$	104.7		107.2	%
Canada			30.8			21.4			9.4		43.9	%
United Kingdom			10.7			9.8			0.9		9.2	%
Latin America			11.8			9.0			2.8		31.1	%
Total Collections		$	255.7		$	137.9		$	117.8		85.4	%

• Collections from purchased receivables increased 85.4% or $117.8 million to $255.7 million during the second quarter 2025 versus $137.9 million during the same quarter in 2024
• Collections in the United States included $65.1 million from the Conn’s Portfolio Purchase in the fourth quarter of 2024

Estimated Remaining Collections
The following table summarizes total ERC by geographic area:

		June 30,						Increase			%
(in Millions)		2025			2024			(Decrease)			Change
United States		$	2,101.7		$	1,616.4		$	485.3		30.0	%
Canada			348.5			221.6			126.9		57.3	%
United Kingdom			158.4			146.5			12.0		8.2	%
Latin America			244.3			185.8			58.5		31.5	%
Total		$	2,852.9		$	2,170.2		$	682.7		31.5	%

• ERC in the United States included $226.5 million from the Conn’s Portfolio Purchase
  

Deployments
The following table summarizes the total deployments by geographic area:

		Three Months Ended
		June 30,						Increase				%
(in Millions)		2025			2024			(Decrease)				Change
United States		$	80.6		$	91.8		$	(11.2	)		(12.2	)	%
Canada			26.6			24.1			2.5			10.4		%
United Kingdom			4.7			8.5			(3.8	)		(44.7	)	%
Latin America			13.4			16.1			(2.7	)		(16.8	)	%
Total Purchases		$	125.3		$	140.5		$	(15.2	)		(10.8	)	%

• The company invested $125.3 million to acquire receivable portfolios, which compares to $140.5 million in the second quarter 2024
• $257.3 million of deployments locked in through forward flows at quarter end of which $218.8 million are for the next twelve months

Revenues

• Total revenues increased $48.9 million, or 47.1%, to $152.7 million compared to $103.8 million for the second quarter 2024. The growth is primarily a result of strong deployment growth in prior periods
  

Operating Expenses

• Total operating expenses increased $17.8 million, or 37.3% to $65.5 million compared to $47.7 million for the second quarter 2024 primarily due to increases of $12.7 million in court costs, agency commissions and other servicing expenses due to increased collections
  

For the second quarter 2025, the Company recognized portfolio revenue of $24.7 million, servicing revenue of $3.1 million and net operating income of $19.5 million related to the Conn’s portfolio purchase.

Leverage, Liquidity and Capital Resources

• Leverage* improved to 1.76x at June 30, 2025 compared to 2.47x at June 30, 2024 as a result of strong growth in portfolio cashflow
• At June 30, 2025, the Company’s Revolving Credit Facility (“RCF”) with $825 million of commitments was undrawn and in addition, the Company had $51.7 million of unrestricted cash and cash equivalents
• 2026 maturity was pre-funded with a $500 million unsecured debt offering in May 2025, which paid down the RCF
  

Dividend
The Board of Directors declared a quarterly cash dividend of $0.24 per share on its outstanding common stock, payable on September 4, 2025, to shareholders of record as of the close of business on August 25, 2025.

*Leverage Ratio, Adjusted Pre-Tax Income and Adjusted EPS are non-GAAP financial measures. For a reconciliation of historical Leverage, Adjusted Pre-Tax Income and Adjusted Net Income, to the most directly comparable U.S. GAAP financial measures, please refer to the “Non-GAAP Financial Measures” section of this press-release.

Webcast
The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://investors.jcap.com/news-events/events.

Use of Non-GAAP Financial Measures
This press release contains references to non-GAAP financial measures, including Leverage, Adjusted Pre-Tax Income, Adjusted Net Income, and Adjusted Earnings Per Share, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). These non-GAAP measures are used by management as a supplemental measure, have certain limitations, and should not be construed as alternatives to financial measures determined in accordance with GAAP. Our management believes Leverage, Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted Earnings Per Share help us provide enhanced period-to-period comparability of operations and financial performance and are useful to investors as other companies in our industry report similar financial measures. The non-GAAP measures as defined by us may not be comparable to similar non-GAAP financial measures presented by other companies, which could limit such measures’ usefulness as comparative measures. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by other unusual or non-recurring items. Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release.

About Jefferson Capital, Inc.
Founded in 2002, Jefferson Capital is an analytically driven purchaser and manager of charged-off and insolvency consumer accounts with operations in the United States, Canada, the United Kingdom and Latin America. It purchases and services both secured and unsecured assets, and its growing client base includes Fortune 500 creditors, banks, fintech origination platforms, telecommunications providers, credit card issuers and auto finance companies. Jefferson Capital is headquartered in Minneapolis, Minnesota with additional offices and operations located in Sartell, Minnesota, Denver, Colorado and San Antonio, Texas (United States); Basingstoke, England; London, England and Paisley, Scotland (United Kingdom); London, Ontario and Toronto, Ontario (Canada); as well as Bogota (Colombia).

Contacts:
Investor Relations
IR@jcap.com

Media Relations
Doug.Donsky@icrinc.com

Disclosure Regarding Forward Looking Statements

This press release may contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and in the U.S. Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements concerning our anticipated financial performance, the favorability of the investment environment, our adjusted net debt leverage ratio and capital resources, and our ability to continue paying quarterly cash dividends. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: a deterioration in the economic or inflationary environment in the United States, Canada, the United Kingdom or Latin America, including the interest rate environment; our ability to replace our portfolios of nonperforming loans with additional portfolios sufficient to operate efficiently and profitably; our ability to collect sufficient amounts on our nonperforming loans to fund our operations; the possibility that third parties we rely on to conduct collection and other activities fail to perform their services; the possibility that we could recognize significant decreases in our estimate of future recoveries on nonperforming loans; changes in, or interpretations of, federal, state, local, or international laws, including bankruptcy and collection laws, or changes in the administrative practices of various bankruptcy courts, which could negatively impact our business or our ability to collect on nonperforming loans; goodwill impairment charges that could negatively impact our net income and stockholders’ equity; our ability to comply with existing and new regulations of the collection industry, the failure of which could result in penalties, fines, litigation, damage to our reputation, or the suspension or termination of or required modification to our ability to conduct our business; adverse outcomes in pending or future litigation or administrative proceedings; the possibility that class action suits and other litigation could divert management’s attention and increase our expenses; investigations, reviews, or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau, which could result in changes to our business practices, negatively impact our deployment volume, make collection of account balances more difficult, or expose us to the risk of fines, penalties, restitution payments, and litigation; the possibility that compliance with complex and evolving international and United States laws and regulations that apply to our international operations could increase our cost of doing business in international jurisdictions; our ability to comply with data privacy regulations such as the General Data Protection Regulation; our ability to retain, expand, renegotiate or replace our credit facility and our ability to comply with the covenants under our financing arrangements; our ability to refinance our indebtedness; our ability to service our outstanding indebtedness; changes in interest or exchange rates, which could reduce our net income, and the possibility that future hedging strategies may not be successful; and the possibility that we could incur business or technology disruptions or cybersecurity incidents. These and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q to be filed with the SEC, and our other filings with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Jefferson Capital, Inc. Combined and Condensed Consolidated Balance Sheets (Unaudited, in Thousands)
		June 30,				December 31,
		2025				2024
Assets
Cash and cash equivalents		$	51,651			$	35,506
Restricted cash			3,849				2,737
Accounts receivable			20,425				16,532
Prepaid expenses			6,253				2,791
Current tax receivable			1,697				1,562
Other assets			9,200				10,038
Investments in receivables, net			1,589,801				1,497,748
Credit card receivables (net of allowance for credit losses of $1,733 and $1,907)			16,238				17,176
Property, plant and equipment, net			2,304				2,274
Other intangible assets, net			8,157				10,237
Goodwill			58,043				57,683
Total Assets		$	1,767,618			$	1,654,284
Liabilities
Accounts payable and accrued expenses		$	76,425			$	69,975
Other liabilities			4,858				4,861
Deferred tax liabilities			94,057				2,193
Notes payable, net			1,181,470				1,194,726
Total Liabilities		$	1,356,810			$	1,271,755
Stockholder's Equity
Common Stock par value $0.0001 per share; 64,685,082 shares and 0 shares authorized as of June 30, 2025 and December 31, 2024 and 58,266,307 and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024		$	6			$	—
Additional paid-in capital			(69,497	)			—
Retained earnings			477,576				398,122
Accumulated other comprehensive income (loss)			2,723				(15,593	)
Total stockholder's equity		$	410,808			$	382,529
Total Liabilities and Stockholder's Equity		$	1,767,618			$	1,654,284

Jefferson Capital, Inc. Combined and Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited in Thousands, except for Earnings Per Share amounts)
		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2025				2024				2025				2024
Revenues
Total portfolio income		$	138,877			$	94,699			$	277,571			$	186,103
Changes in recoveries			1,556				(41	)			5,176				(125	)
Total portfolio revenue			140,433				94,658				282,747				185,978
Credit card revenue			1,798				2,083				3,696				4,305
Servicing revenue			10,477				7,063				21,208				13,476
Total Revenues			152,708				103,804				307,651				203,759
Provision for credit losses			560				983				1,101				1,770
Operating Expenses
Salaries and benefits			6,254				12,299				20,276				23,407
Servicing expenses			43,546				30,810				86,339				62,627
Depreciation and amortization			1,250				559				2,854				1,129
Professional fees			9,444				2,124				11,611				4,036
Other selling, general and administrative			5,013				1,882				9,562				3,715
Total Operating Expenses			65,507				47,674				130,642				94,914
Net Operating Income			86,641				55,147				175,908				107,075
Other Income (Expense)
Interest expense			(25,824	)			(18,199	)			(50,717	)			(35,436	)
Foreign exchange and other income (expense)			1,089				(2,881	)			3,620				(2,741	)
Total other expense			(24,735	)			(21,080	)			(47,097	)			(38,177	)
Income Before Income Taxes			61,906				34,067				128,811				68,898
Provision for income taxes			(14,255	)			(1,899	)			(16,935	)			(3,839	)
Net Income			47,651				32,168				111,876				65,059
Foreign currency translation gain / (loss)			14,432				(3,133	)			18,316				(5,896	)
Comprehensive Income		$	62,083			$	29,035			$	130,192			$	59,163
Earnings per share
Basic		$	18.61			$	—			$	86.88			$	—
Diluted			16.76				—				78.26				—
Weighted average common shares outstanding
Basic			2,561				—				1,288				—
Diluted			2,843				—				1,430				—

Jefferson Capital, Inc. Combined and Condensed Consolidated Statements of Cash Flows (Unaudited, in Thousands)
		For the Six Months Ended
		June 30,
		2025				2024
Cash flows from operating activities
Net income		$	111,876			$	65,059
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation and amortization			2,854				1,130
Amortization of debt issuance costs			2,494				2,051
Provision for credit losses			1,101				1,770
Deferred income tax			12,386				(2,135	)
Changes in assets and liabilities:
Prepaid expenses			(3,457	)			(670	)
Other assets			645				(836	)
Accounts receivable			(3,175	)			(1,217	)
Accounts payable and accrued expenses			5,841				17,994
Net cash provided by operating activities			130,565				83,146
Cash flows from investing activities
Purchases of receivables, net			(300,501	)			(241,883	)
Purchases of credit card receivables			(13,138	)			(15,856	)
Collections applied to investments in receivables, net			233,761				79,101
Collections applied to credit card receivables			13,479				14,956
Purchases of property and equipment, net			(539	)			(326	)
Net cash used in investing activities			(66,938	)			(164,008	)
Cash flow from financing activities
Proceeds from notes payable			681,790				567,066
Payments on notes payable			(694,872	)			(486,525	)
Payment of debt issuance costs			(7,605	)			(6,849	)
Dividends paid to stockholders			(32,422	)			-
Proceeds from issuance of common stock			10,000				-
Net cash (used in) / provided by financing activities			(43,109	)			73,692
Exchange rate effects on cash balances held in foreign currencies			(3,261	)			115
Net (decrease) increase in cash and cash equivalents and restricted cash			17,257				(7,055	)
Cash and cash equivalents and restricted cash, beginning of period			38,243				20,604
Cash and cash equivalents and restricted cash, end of period		$	55,500			$	13,549

Jefferson Capital, Inc. Supplemental Financial Information Reconciliation of Non-GAAP Metrics
Cash Efficiency Ratio
	Three Months Ended
	June 30,
($ in Millions)		2025				2024
Collections	$	255.7			$	137.9
Credit card revenue		1.8				2.1
Servicing revenue		10.5				7.1
Cash Receipts (A)	$	268.0			$	147.1
Operating Expenses	$	65.5			$	47.7
Stock compensation		8.3				(0.7	)
Canaccede exit incentive		(0.7	)			-
IPO, merger and acquisition, and other one-time expenses(1)		(8.4	)			(2.1	)
Adjusted Operating Expenses (B)	$	64.7			$	44.9
Cash Efficiency Ratio (A-B) / A		75.9	%			69.5	%

Adjusted Pre-tax Income
	Three Months Ended
	June 30,
($ in Millions)		2025			2024
Pre-tax Income	$	62.0			$	34.1
Foreign exchange and other income (expense)		(1.1	)			2.8
Stock Compensation		(8.3	)			0.7
Canaccede exit incentive		0.7				-
IPO, merger and acquisition, and other one-time expenses(1)		8.4				2.1
Adjusted Pre-tax Income	$	61.7			$	39.7

(1)	Includes professional fees and other one-time expenses related to (i) the Jefferson Capital, Inc. IPO; and (ii) M&A and other corporate transactions.

Jefferson Capital, Inc.
Supplemental Financial Information
Reconciliation of Non-GAAP Metrics (Continued)

Pro Forma Earnings Per Share

Adjusted Basic earnings per share is calculated by dividing net income available to common stockholders of Jefferson Capital, Inc. by the weighted average number of common shares outstanding as of June 27, 2025, the date of the IPO. Diluted EPS is computed using the same components as basic EPS, with the denominator adjusted for nonvested share awards from June 27, 2025, the date of the IPO.

The components of earnings per share for the three and six months ended June 30, 2025 are (in thousands, except per share amounts):

		For the Three Months Ended June 30,
		As Reported			Adjustments			(1)	Pro Forma Adjusted
Net income		$	47,651		$	—			$	47,651
Shares:
Weighted-average basic common shares outstanding			2,561			55,705				58,266
Weighted-average diluted common shares outstanding			2,843			55,705				58,548
Earnings per common share		$	18.61			(17.79	)		$	0.82
Diluted earnings per common share			16.76			(15.95	)			0.81
		For the Six Months Ended June 30,
		As Reported			Adjustments			1	Pro Forma Adjusted
Net income		$	111,876		$	—			$	111,876
Shares:
Weighted-average basic common shares outstanding			1,288			56,978				58,266
Weighted-average diluted common shares outstanding			1,430			56,979				58,408
Earnings per common share		$	86.88			(84.96	)		$	1.92
Diluted earnings per common share			78.26			(76.35	)			1.92

(1)	The adjustment to the shares represents the impact as if the IPO had occurred as of January 1, 2025, and the related impact to EPS.

Leverage
		Trailing Twelve Months Ended
		June 30,
($ in Millions)			2025				2024
Net cash provided by operating activities		$	295.1			$	143.9
Changes in prepaid expenses			11.1				1.7
Changes in accounts payable and accrued expenses			(118.7	)			(18.1	)
Provision for credit losses			(2.8	)			(3.5	)
Foreign exchange and other income (expense)			(0.8	)			0.9
Cash Interest paid			87.8				59.0
Provision for income taxes			22.0				7.9
Total portfolio revenue			(492.6	)			(331.8	)
Gross collections			836.0				477.8
Stock compensation			(5.4	)			2.8
Conn's one-time items(1)			4.6				-
Canaccede exit incentive			8.6				-
IPO, merger and acquisition, and other one-time expenses(2)			9.1				2.9
Adjusted Cash EBITDA (A)		$	654.0			$	343.5
		As of June 30,
			2025				2024
Borrowings, as reported		$	1,181.5			$	845.0
Unamortized issuance costs			18.5				15.2
Unrestricted cash			(51.7	)			(10.5	)
Net Debt (B)		$	1,148.3			$	849.7
Leverage (B / A)		1.76 x				2.47 x

(1)

Components include: (i) cure amounts associated with assumed contracts related to the Conn’s Portfolio Purchase, where we paid past-due amounts owed to the vendor upon assuming such contracts; and (ii) legal fees for highly specialized expertise related to the Conn’s bankruptcy process. In a typical portfolio purchase, we do not assume any contracts and do not incur either of these types of expenses.

(2)

Includes professional fees and other one-time expenses related to (i) the Jefferson Capital, Inc. IPO; and (ii) M&A and other corporate transactions.

FAQ

What were Jefferson Capital's (JCAP) Q2 2025 earnings results?

Jefferson Capital reported Q2 2025 revenue of $152.7 million (up 47%), net income of $47.7 million (up 48%), and collections of $255.7 million (up 85%) year-over-year.

What is Jefferson Capital's (JCAP) dividend for Q2 2025?

Jefferson Capital declared a quarterly cash dividend of $0.24 per share, payable on September 4, 2025, to shareholders of record as of August 25, 2025.

How much did Jefferson Capital (JCAP) invest in portfolio acquisitions in Q2 2025?

Jefferson Capital invested $125.3 million in receivable portfolios during Q2 2025, down from $140.5 million in Q2 2024.

What is Jefferson Capital's (JCAP) Estimated Remaining Collections (ERC)?

Jefferson Capital's ERC reached a record $2.9 billion, representing a 31.5% increase from the previous year.

What is Jefferson Capital's (JCAP) current leverage ratio?

Jefferson Capital's leverage ratio improved to 1.76x at June 30, 2025, compared to 2.47x at June 30, 2024.