Jefferson Capital (NASDAQ: JCAP) grows revenue but Q1 2026 profit declines
Rhea-AI Filing Summary
Jefferson Capital, Inc. reported Q1 2026 total revenues of $176,439k, up from $154,943k a year earlier, driven mainly by higher portfolio revenue. Net operating income declined to $80,185k from $89,266k as servicing and salary expenses increased.
Net income fell to $37,634k from $64,227k, translating into basic and diluted EPS of $0.61. Total assets were $2,084,105k and notes payable, net, were $1,433,321k with a 7.76% weighted-average interest rate, reflecting a highly levered balance sheet typical for this business model.
Operating cash flow was $39,640k, funding $149,705k of portfolio purchases and supporting a share repurchase of $58,912k plus dividends of $14,805k at $0.24 per share. Subsequently, the revolving credit facility was upsized to $1.150B and another $0.24 dividend per share was declared.
Positive
- Revenue growth: Total revenues increased to $176.4M from $154.9M year over year, led by portfolio income of $157.6M versus $138.7M, indicating higher cash-generation from purchased receivables.
- Strong operating cash flow: Net cash from operating activities of $39.6M in Q1 2026 supported $149.7M of new receivable purchases while still funding dividends and buybacks.
Negative
- Earnings decline: Net income fell to $37.6M from $64.2M year over year despite higher revenue, as servicing expenses, salaries, and interest costs rose.
- High leverage and rising interest burden: Notes payable reached $1.43B with 7.76% weighted-average interest, and quarterly interest expense climbed to $30.6M from $24.8M.
Insights
Revenue grew, but earnings declined as leverage and expenses weighed on results.
Jefferson Capital increased Q1 2026 revenue to $176,439k from $154,943k, mainly via higher portfolio income. However, servicing costs and salaries pushed total operating expenses to $95,630k, reducing net operating income to $80,185k from $89,266k.
Net income dropped to $37,634k versus $64,227k as interest expense rose to $30,578k on $1,454,224k of gross notes payable at a 7.76% weighted-average rate. This highlights sensitivity to funding costs in a debt-intensive model.
Management still returned capital through a $58,912k share repurchase and $14,805k dividend while expanding the revolver to $1.150B. Future filings will show whether earnings recover sufficiently to support this combination of leverage, portfolio purchases, and shareholder distributions.
Key Figures
Key Terms
Current Expected Credit Loss model financial
purchased financial assets with credit deterioration financial
forward flow purchase agreements financial
Estimated Remaining Collections financial
Net Operating Losses (NOLs) financial
senior unsecured notes financial
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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
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Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered |
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 past 90 days.
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Large accelerated filer ☐ | 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
The number of shares of the registrant’s common stock outstanding as of May 14, 2026 was
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TABLE OF CONTENTS
Page | |
Part I — Financial Information | 5 |
Item 1 — Combined and Condensed Consolidated Financial Statements | 5 |
Combined and Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (Unaudited) | 5 |
Combined and Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2026 and 2025 (Unaudited) | 6 |
Combined and Condensed Consolidated Statements of Stockholder’s Equity for the three months ended March 31, 2026 and 2025 (Unaudited) | 7 |
Combined and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited) | 8 |
Notes to Combined and Condensed Consolidated Financial Statements (Unaudited) | 10 |
1. Organization, Description of Business and Summary of Significant Accounting Policies | 10 |
2. Earnings Per Share | 13 |
3. Acquisitions | 14 |
4. Fair Value Measurements | 14 |
5. Investment in receivables, net | 15 |
6. Credit Card Receivables | 17 |
7. Goodwill | 18 |
8. Notes Payable, Net | 19 |
9. Leases | 22 |
10. Stock Based Compensation | 23 |
11. Commitments and Contingencies | 25 |
12. Income Taxes | 26 |
13. Segment Reporting | 27 |
14. Subsequent Events | 28 |
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 |
Item 3 — Quantitative and Qualitative Disclosures about Market Risk | 52 |
Item 4 — Controls and Procedures | 53 |
Part II — Other Information | 54 |
Item 1 — Legal Proceedings | 54 |
Item 1A — Risk Factors | 54 |
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds | 54 |
Item 3 — Defaults Upon Senior Securities | 55 |
Item 4 — Mine Safety Disclosures | 55 |
Item 5 — Other Information | 55 |
Item 6 — Exhibits | 55 |
Signatures | 57 |
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BASIS OF PRESENTATION
Except as otherwise indicated or as the context otherwise requires, all references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to the “Company,” “we,” “our,” and “us” and similar terms refer to Jefferson Capital, Inc. a Delaware corporation, together with its subsidiaries. Unless otherwise indicated, all references to our financial information are to the combined and condensed consolidated financial information of the Company and references to “dollars” and “$” in this Quarterly Report are to, and amounts are presented in, U.S. dollars. Financial data as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and the twelve months ended December 31, 2025, relate to financial information of the Company on a combined and condensed consolidated basis. All amounts referred to in the combined and condensed consolidated financial statements have been rounded to the nearest thousand, unless otherwise stated. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.
Special Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements about Jefferson Capital, Inc. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, future economic conditions and the anticipated future revenue, expenses, financial condition, asset quality, capital and liquidity levels, plans, prospects and operations of Jefferson Capital, Inc. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “projects,” “forecasts,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.”
Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those set forth in forward-looking statements. Factors that may materially affect such forward-looking statements include:
| ● | Deterioration in general business and economic conditions or turbulence in domestic or global financial markets, which could adversely affect Jefferson Capital, Inc.’s revenues and the values of its assets and liabilities; |
| ● | Turmoil and volatility in the financial services industry; |
| ● | Actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions; |
| ● | Changes in interest rates; |
| ● | Increases in unemployment rates; |
| ● | Impacts of current, pending or future litigation and governmental proceedings; |
| ● | Increased competition from both banks and non-banks; |
| ● | Effects of climate change and related physical and transition risks; |
| ● | Changes in customer behavior and preferences and the ability to implement technological changes to respond to customer needs and meet competitive demands; |
| ● | Failures or disruptions in or breaches of Jefferson Capital, Inc’s operational, technology or security systems or infrastructure, or those of third parties, including as a result of cybersecurity incidents; |
| ● | Failures to safeguard personal information; |
| ● | Impacts of pandemics, natural disasters, terrorist activities, civil unrest, international hostilities and geopolitical events; |
| ● | Impacts of supply chain disruptions, rising inflation, slower growth or a recession; |
| ● | Failure to execute on strategic or operational plans; |
| ● | Effects of mergers and acquisitions and related integration; |
| ● | Effects of critical accounting policies and judgments; |
| ● | Effects of changes in or interpretations of tax laws and regulations; and |
| ● | Management’s ability to effectively manage market risk, operational risk, compliance risk, strategic risk, liquidity risk and reputation risk. |
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Factors other than these risks, including those described under the sections in this Quarterly Report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report, also could adversely affect Jefferson Capital, Inc.’s results, and the reader should not consider these risks to be a complete set of all potential risks or uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date hereof, and Jefferson Capital, Inc. undertakes no obligation to update them in light of new information or future events, except as required by applicable law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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Part 1. Financial Information
Jefferson Capital, Inc.
Combined and Condensed Consolidated Balance Sheets
(Unaudited, in Thousands)
As of March 31, | As of December 31, | ||||||
| 2026 | | 2025 | | |||
Assets | |||||||
Cash and cash equivalents | $ | | $ | | |||
Restricted cash | | | |||||
Accounts receivable | | | |||||
Other assets | | | |||||
Investments in receivables, net | | | |||||
Credit card receivables (net of allowance for | | | |||||
credit losses of $ | |||||||
Property, plant and equipment, net | | | |||||
Other intangible assets, net | | | |||||
Goodwill | | | |||||
Total Assets | $ | | $ | | |||
Liabilities | |||||||
Accounts payable and accrued expenses | $ | | $ | | |||
Other liabilities | | | |||||
Current tax liabilities | | | |||||
Deferred tax liabilities | | | |||||
Notes payable, net | | | |||||
Total Liabilities | $ | | $ | | |||
Stockholders' Equity | |||||||
Common Stock par value $ | $ | | $ | | |||
Additional paid-in capital | ( | ( | |||||
Retained earnings | | | |||||
Accumulated other comprehensive income (loss) | ( | | |||||
Total stockholders' equity | $ | | $ | | |||
Total Liabilities and Stockholders' Equity | $ | | $ | | |||
See accompanying notes to the combined and condensed consolidated financial statements.
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Jefferson Capital, Inc.
Combined and Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited in Thousands, except Per Share amounts)
For the Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
Revenues | |||||||
Total portfolio income | $ | | $ | | |||
Changes in recoveries | | | |||||
Total portfolio revenue | | | |||||
Credit card revenue | | | |||||
Servicing revenue | | | |||||
Total Revenues | | | |||||
Provision for credit losses | | | |||||
Operating Expenses | |||||||
Salaries and benefits | | | |||||
Servicing expenses | | | |||||
Depreciation and amortization | | | |||||
Professional fees | | | |||||
Other selling, general and administrative | | | |||||
Total Operating Expenses | | | |||||
Net Operating Income | | | |||||
Other Income (Expense) | |||||||
Interest expense | ( | ( | |||||
Foreign exchange and other income (expense) | | | |||||
Total other expense | ( | ( | |||||
Income Before Income Taxes | | | |||||
Provision for income taxes | ( | ( | |||||
Net Income | | | |||||
Foreign currency translation gain / (loss) | ( | | |||||
Comprehensive Income | $ | | $ | | |||
Earnings per share | |||||||
Basic | $ | | $ | — | |||
Diluted | | — | |||||
Weighted average common shares outstanding | |||||||
Basic | | — | |||||
Diluted | | — | |||||
See accompanying notes to the combined and condensed consolidated financial statements.
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Jefferson Capital, Inc.
Combined and Condensed Consolidated Statements of Stockholder’s Equity
(Unaudited, in Thousands, except per share amounts)
Accumulated | ||||||||||||||||||
| Common Stock | Other Comprehensive | Additional | Retained | Total | |||||||||||||
Share | | Par | Income (Loss) | Paid-in Capital | Earnings | Equity | ||||||||||||
Balance, December 31, 2025 | | $ | | $ | | $ | ( | $ | | | ||||||||
Net income | | | ||||||||||||||||
Dividends to stockholders ($ | ( | ( | ||||||||||||||||
Shares issued | | — | — | — | ||||||||||||||
Shares repurchased | ( | — | ( | ( | ||||||||||||||
Stock based compensation | | | ||||||||||||||||
Foreign currency translation | ( | ( | ||||||||||||||||
Balance, March 31, 2026 | | $ | | $ | ( | $ | ( | $ | | $ | | |||||||
Balance, December 31, 2024 | $ | ( | $ | — | $ | | $ | | ||||||||||
Net income | | | ||||||||||||||||
Distribution to members | ( | ( | ||||||||||||||||
Foreign currency translation | | | ||||||||||||||||
Balance, March 31, 2025 | — | $ | — | $ | ( | $ | — | $ | | $ | |
See accompanying notes to the combined and condensed consolidated financial statements.
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Jefferson Capital, Inc.
Combined and Condensed Consolidated Statements of Cash Flows
(Unaudited, in Thousands)
For the Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
Cash flows from operating activities | |||||||
Net income | $ | | $ | | |||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | |||||||
Depreciation and amortization | | | |||||
Amortization of debt issuance costs | | | |||||
Provision for credit losses | | | |||||
Stock-based compensation | | | |||||
Deferred income tax | | ( | |||||
Changes in assets and liabilities: | |||||||
Other assets | | ( | |||||
Accounts receivable | ( | ( | |||||
Accounts payable and accrued expenses | ( | ( | |||||
Net cash provided by operating activities | | | |||||
Cash flows from investing activities | |||||||
Purchases of receivables, net | ( | ( | |||||
Purchases of credit card receivables | ( | ( | |||||
Collections applied to investments in receivables, net | | | |||||
Collections applied to credit card receivables | | | |||||
Purchases of property and equipment, net | | ( | |||||
Net cash used in investing activities | ( | ( | |||||
Cash flow from financing activities | |||||||
Proceeds from notes payable | | | |||||
Payments on notes payable | ( | ( | |||||
Payment of debt issuance costs | | ( | |||||
Repurchase of common stock | ( | | |||||
Dividends paid to stockholders | | ( | |||||
Net used in financing activities | ( | ( | |||||
Exchange rate effects on cash balances held in foreign currencies | ( | ( | |||||
Net decrease in cash and cash equivalents and restricted cash | ( | ( | |||||
Cash and cash equivalents and restricted cash, beginning of period | | | |||||
Cash and cash equivalents and restricted cash, end of period | $ | | $ | | |||
See accompanying notes to the combined and condensed consolidated financial statements.
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Jefferson Capital, Inc.
Combined and Condensed Consolidated Statements of Cash Flows
(Unaudited, in Thousands)
For the Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
Supplemental cash flow disclosures | |||||||
Interest paid | $ | | $ | | |||
Income taxes paid | $ | | $ | | |||
New leases assumed | $ | | $ | | |||
Deferred tax liability recognized in connection with reorganization | $ | | $ | | |||
The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents reported within the accompanying combined and condensed consolidated balance sheets that sum to the total of the same such amounts shown in the combined and condensed consolidated statements of cash flows: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Restricted cash | | | |||||
Total cash and cash equivalents and restricted cash as shown in the combined and condensed consolidated statements of cash flows | $ | | $ | | |||
See accompanying notes to the combined and condensed consolidated financial statements.
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Jefferson Capital, Inc.
Notes to Combined and Condensed Consolidated Financial Statements (unaudited)
1.Organization, Description of Business and Summary of Significant Accounting Policies
The accompanying combined and condensed consolidated financial statements include the combined and condensed consolidated results of operations of Jefferson Capital, Inc., and its subsidiaries (the “Company”). Jefferson Capital, Inc. is a Delaware corporation headquartered in Minneapolis, Minnesota.
The Company and its subsidiaries in the U.S., Canada, the U.K and Latin America provide debt recovery solutions and other related services across a broad range of consumer receivables, including credit card, secured and unsecured automotive, utilities, telecom, and other receivables. The Company primarily purchases portfolios of 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. Previously charged-off receivables include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans. Through credit card acquisition programs, the Company earns credit card revenue. All deployments are purchased from independent third parties.
The Company purchases portfolios of receivables from a diverse client base, including Fortune 500 creditors, banks, fintech origination platforms, telecommunications providers, credit card issuers, and auto finance companies. The Company’s top
Initial Public Offering June 2025
In June 2025, the Company completed its initial public offering (the “IPO”), in which the selling shareholders sold
Following a series of transactions that we refer to collectively as the “Reorganization,” Jefferson Capital, Inc. became a holding company with no material assets other than
| ● | the investors in the IPO collectively own |
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| ● | the JCF Stockholders collectively owned |
| ● | the Management Stockholders collectively own |
| ● | The number of shares of common stock received by the JCF Stockholders, the Former Canaccede Stockholders and the Management Stockholders in exchange for the |
In addition, based on the initial public offering price of $
Basis of Presentation
The accompanying unaudited combined and condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries, and they reflect all adjustments which are necessary for a fair statement of results of operations, financial position, and cash flows as if entities had been combined and consolidated for all periods presented and are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited combined and condensed consolidated interim financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These unaudited combined and condensed consolidated interim financial statements should be read in conjunction with our annual financial statements for the year ended December 31, 2025 and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Combined and Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”).
All intercompany transactions and balances have been eliminated in consolidation.
Translation of Foreign Currencies
The combined and condensed consolidated financial 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. Revenues and expenses are translated monthly utilizing average exchange rates and assets and liabilities are translated as of the balance sheet date utilizing the period end exchange rate.
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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.
Use of Estimates
The combined and condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and these principles require making estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the combined and condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during each reporting period. These estimates are based on information available as of the date of the combined and condensed consolidated financial statements. The actual results could differ materially from these estimates. Significant estimates include the determination of recovery income associated with the investment in charged off receivables. The recognition of revenue from previously charged-off receivables is primarily calculated using ASC 326 – Financial Instruments – Credit Losses, which is commonly referred to as the Current Expected Credit Loss model or “CECL,” which is based on expected future collections and involved significant judgement, including forecasts of macroeconomic conditions and collection trends, which are inherently uncertain and may change over time. Additionally, estimates of future credit losses on credit card receivables may have a significant effect on the provision for loan losses.
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies from the audited combined and condensed consolidated financial statements for the fiscal year ended December 31, 2025, included in the Company’s 2025 Form 10-K.
Recently adopted Accounting Standards
In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans. The update amends the accounting for purchased loans by eliminating the recognition of a day-one provision for expected credit losses for certain purchased loans and expanding the application of the gross-up approach previously applicable to purchased credit-deteriorated (“PCD”) assets. Under the amended guidance, expected credit losses for qualifying purchased loans are reflected in the amortized cost basis of the loans at acquisition rather than recognized as a credit loss expense at acquisition. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The standard is to be applied prospectively to purchased loans acquired on or after the date of adoption. The Company has elected to early adopt this change as of January 1, 2026. The adoption did not have an impact on the Company’s combined and condensed consolidated quarterly financial statements for the period ended March 31, 2026, as the Company did not purchase any receivables subject to the guidance during the period.
Recent Accounting Standards or Updates Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification (“ASC”). These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating these provisions and the impact they may have on its combined and condensed consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities. The objective of ASU 2024-03 is to address requests from investors for more detailed information about the types of expenses. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The effective date for annual reporting periods is after December 15, 2026, and interim periods within those annual periods beginning after December 15, 2027. The Company is currently evaluating these provisions of this ASU and the impact they may have on its combined and condensed consolidated financial statements and related disclosures.
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2.Earnings Per Share
The Company’s unvested restricted stock awards have the right to receive nonforfeitable dividends on the same basis as common shares; therefore, unvested restricted stock is considered a participating security in the computation of earnings per share (“EPS”). Accordingly, the Company applies the two-class method in the computation of basic EPS which allocates earnings from holders of common stock to holders of unvested restricted stock awards. Diluted EPS attributable to the Company’s common stock is computed using both the two-class method and the treasury stock method, and the more dilutive of the two computations is presented.
Historical earnings per unit are not meaningful or comparable because, prior to the IPO and Reorganization, Jefferson Capital Holdings, LLC, the predecessor to Jefferson Capital, Inc., was a single member limited liability company. Accordingly, earnings per unit are not presented for the three months ended March 31, 2025. In addition, because the nature of the Reorganization described in Note 1 does not constitute a stock dividend, stock split or reverse stock split, basic EPS and diluted EPS does not give retroactive effect to the Reorganization in a manner similar to a stock split or stock dividend in the historical financial statements of the Company. Therefore, EPS for periods preceding the Reorganization and IPO is not presented.
The computation of earnings per share for the three months ended March 31, 2026 and 2025 are (in thousands, except per share and footnote amounts):
For the Three Months Ended March 31, | ||||||
| 2026 | | 2025 | |||
Basic EPS | ||||||
Numerator | ||||||
Net income | $ | | $ | | ||
Less: Earnings allocated to participating securities | | — | ||||
Net income available to common stockholders | | | ||||
Denominator | ||||||
Weighted average shares outstanding | | — | ||||
Basic EPS | $ | | $ | — | ||
Diluted EPS | ||||||
Numerator | ||||||
Net income available to common stockholders | $ | | $ | | ||
Reallocation of earnings from participating securities | — | — | ||||
Net income available to common stockholders for diluted EPS | $ | | $ | | ||
Denominator | ||||||
Weighted average shares outstanding | | — | ||||
Weighted average effect of dilutive securities: | ||||||
Options(1) | | — | ||||
Nonvested restricted stock | — | — | ||||
Number of shares used for diluted EPS computation | | — | ||||
Diluted EPS | $ | | $ | — | ||
| (1) | Options outstanding of |
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3.Acquisitions
Effective December 4, 2025, the Company’s U.S. subsidiary Jefferson Capital Systems, LLC completed a portfolio acquisition of credit card assets from affiliates of Bluestem Brands (“Bluestem”). As part of the transaction, the Company paid a net purchase price of $
The Bluestem Portfolio Purchase was accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations—Related Issues. Under the asset acquisition method of accounting, the cost of the acquired asset group was allocated to the individual assets acquired and liabilities assumed based on their relative fair values as of the acquisition date. The acquired receivables were determined to be purchased financial assets with credit deterioration (“PCD”) in accordance with ASC 326, Financial Instruments—Credit Losses. At the acquisition date, the Company recorded an allowance for expected credit losses with a corresponding increase to the amortized cost basis of the acquired receivables (the “gross-up” approach). Accordingly, the initial allowance for credit losses was not recognized through earnings on the acquisition date.
In the three months ended March 31, 2026, the Company recognized portfolio revenue of $
4.Fair Value Measurements
The Company measures the fair values of its assets and liabilities, where applicable, based on 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.” Under applicable accounting standards, fair value measurements are categorized into one of three levels based on the inputs to the valuation technique with the highest priority given to unadjusted quoted prices in active markets and the lowest priority given to unobservable inputs. The Company categorizes its fair value measurements of financial instruments based on this three-level hierarchy. The following is a brief description of each level:
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. |
Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the overall fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments for which the determination of fair value requires significant management judgment or estimation. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability. |
The Company does not have any financial instruments that are subject to fair value measurements on a recurring basis.
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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 carrying amounts in the following table are recorded in the combined and condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 (in thousands):
March 31, 2026 | December 31, 2025 | |||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||
| Amount | | Fair Value | | Amount | | Fair Value | |||||
Financial Assets | ||||||||||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Accounts receivable | | | | | ||||||||
Investments in receivables, net | | | | | ||||||||
Credit card receivable, net | | | | | ||||||||
Financial Liabilities | ||||||||||||
Revolving credit facility | | | | | ||||||||
Senior unsecured bond due 2026 | | | | | ||||||||
Senior unsecured bond due 2029 | | | | | ||||||||
Senior unsecured bond due 2030 | | | | | ||||||||
Investment in receivables, net
The fair value of investments in receivables, net is measured using Level 3 inputs 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 a discount rate. The determination of such inputs requires significant judgment. The Company evaluates the use of key inputs on an ongoing basis and refines the data as it continues to obtain market data. See Note 5 to the combined and condensed consolidated financial statements for additional information.
Credit card receivables, net
The fair value approximates the carrying value, due to their short-term nature.
Revolving Credit Facility
The fair value of the Revolving Credit Facility, as supplemented or modified from time to time, (the “Revolving Credit Facility”) is measured using Level 3 inputs. The fair value approximates the principal value due to the short-term adjustable-rate nature of the notes payable.
Senior unsecured bonds due 2026, 2029 and 2030
The fair value estimates for the Senior Unsecured Bonds are based on quoted prices for identical assets or liabilities in markets that are not active. Accordingly, the Company uses Level 2 inputs for its fair value estimates.
5.Investment in receivables, net
The following table presents the roll forward of the balance of the investment in receivables, net for the following periods (in thousands):
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Balance, beginning of year | $ | | $ | | ||
Purchases | | | ||||
Cash collections | ( | ( | ||||
Total portfolio income | | | ||||
Changes in expected current period recoveries | | | ||||
Changes in expected future period recoveries | ( | ( | ||||
Foreign currency adjustments | ( | | ||||
Balance, end of period | $ | | $ | | ||
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The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented (in thousands):
For the Three Months Ended | |||||||
March 31, | |||||||
| 2026 | | 2025 | | |||
Purchase price | $ | | $ | | |||
Allowance for credit losses | | | |||||
Amortized cost | | | |||||
Noncredit discount | | | |||||
Face value | | | |||||
Write-off of amortized cost | ( | ( | |||||
Write-off of noncredit discount | ( | ( | |||||
Negative allowance | | | |||||
Negative allowance for expected recoveries | $ | | $ | | |||
For the three months ended March 31, 2026, the Company purchased receivable portfolios with face values of $
Recoveries above or below forecast represent over and under-performance in the reporting period, respectively. Actual collections during the three months ended March 31, 2026, and 2025, overperformed the projected collections by approximately $
When reassessing the forecasts of expected lifetime recoveries during the three months ended March 31, 2026, management considered historical and current collection performance and believes that for certain static pools sustained collections overperformance resulted in decreased total future expected recoveries. As a result, the Company has updated its forecast, resulting in a net decrease of total estimated remaining collections, which in turn, when discounted to present value, resulted in a change in expected future period recoveries of approximately $
At the time of the Bluestem portfolio purchase, which consisted primarily of performing receivables, the Company established an allowance for credit losses of $
The Company places performing receivables on nonaccrual status when the receivables are greater than 90 days. To facilitate the monitoring of credit quality for performing receivables, and for the purpose of determining an appropriate allowance for losses for these receivables, the Company utilizes payment history and current payment status.
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As of March 31, | As of December 31, | |||||
Delinquency vintage | | 2026 | | 2025 | ||
United States | ||||||
Current | $ | | $ | | ||
30-59 | | | ||||
60-89 | | | ||||
>90 | | | ||||
Total | $ | | $ | | ||
The following table presents non-accrual performing loans by segment (in thousands).
As of March 31, | As of December 31, | |||||||||||
2026 | 2025 | |||||||||||
Nonaccrual | Nonaccrual | |||||||||||
with No | with No | |||||||||||
| Nonaccrual | | Allowance | | Nonaccrual | | Allowance | |||||
United States | | — | | — | ||||||||
Total | $ | | $ | — | $ | | $ | — | ||||
6.Credit Card Receivables
The following table summarizes the credit card receivables, gross of allowance for credit losses, by segment (in thousands):
As of March 31, | As of December 31, | ||||||
| 2026 | | 2025 | | |||
United States | | | |||||
Canada | | | |||||
Total | $ | | $ | | |||
The Company places credit card receivables on nonaccrual status when the credit card receivables are greater than 90 days past due or within 60 days of being notified that the customer is in bankruptcy status, whichever is earlier. The below tables present the information on the Company’s past due and non-accrual credit card receivables as of March 31, 2026, and December 31, 2025.
Age analysis of past-due credit card receivables at March 31, 2026 (in thousands)
Amortized Cost | |||||||||||||||||||||
Total | > 90 DPD and | ||||||||||||||||||||
($ in 000s) | | 30-59 | | 60-89 | | >90 | | Past Due | | Current | | Total | | Accruing | |||||||
United States | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | |||||||
Canada | | | | | | | — | ||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | |||||||
Age analysis of past-due credit card receivables at December 31, 2025 (in thousands)
Amortized Cost | |||||||||||||||||||||
Total | > 90 DPD and | ||||||||||||||||||||
($ in 000s) | | 30-59 | | 60-89 | | >90 | | Past Due | | Current | | Total | | Accruing | |||||||
United States | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | |||||||
Canada | | | | | | | — | ||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | |||||||
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Allowance for Credit Losses
The following table summarizes the change in the allowance for credit losses for the Company’s credit card receivables portfolio (in thousands).
| United States | Canada | Total | ||||||
Balance as of December 31, 2025 | $ | | $ | | $ | | |||
Charge-offs | ( | ( | ( | ||||||
Recoveries | | | | ||||||
Provision | | | | ||||||
Balance as of March 31, 2026 | $ | | $ | | $ | | |||
Balance as of December 31, 2024 | $ | | $ | | $ | | |||
Charge-offs | ( | ( | ( | ||||||
Recoveries | | | | ||||||
Provision | | | | ||||||
Balance as of March 31, 2025 | $ | | $ | | $ | |
Non-Accrual Loans
The following table presents non-accrual loans by segment (in thousands).
| As of March 31, 2026 | | As of December 31, 2025 | |||||||||
Nonaccrual | Nonaccrual | |||||||||||
with No | with No | |||||||||||
| Nonaccrual | | Allowance | | Nonaccrual | | Allowance | |||||
United States | $ | | $ | — | $ | | $ | — | ||||
Canada |
| |
| — |
| |
| — | ||||
Total | $ | | $ | — | $ | | $ | — | ||||
7.Goodwill
The Company tests goodwill for impairment at least annually as of October 1, or more frequently, if certain events or circumstances warrant. During the three months ended March 31, 2026, and fiscal year 2025,
The following table summarizes the changes in goodwill (in thousands) in the Company’s reportable segments:
United | United | Latin | |||||||||||||
| States | | Kingdom | Canada | America | Total | |||||||||
Goodwill | |||||||||||||||
December 31, 2024 | $ | | $ | | $ | | $ | — | $ | | |||||
Acquisitions | — | — | — | — | — | ||||||||||
Impact of FX translation | — | — | | — | | ||||||||||
March 31, 2025 | $ | | $ | | $ | | $ | — | $ | | |||||
December 31, 2025 | $ | | $ | | $ | | $ | — | $ | | |||||
Acquisitions | — | — | — | — | — | ||||||||||
Impact of FX translation | — | — | ( | — | ( | ||||||||||
March 31, 2026 | $ | | $ | | $ | | $ | — | $ | | |||||
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8.Notes Payable, Net
| As of March 31, | As of December 31, |
| | ||||||||
2026 | 2025 |
| ||||||||||
Amount | Interest | Amount | Interest |
| ||||||||
(in thousands) | | Outstanding | | Rate | | Outstanding | | Rate |
| | ||
Senior unsecured bond due 2026 | $ | |
| | % | $ | |
| | % | ||
Senior unsecured bond due 2029 |
| |
| | % |
| |
| | % | ||
Senior unsecured bond due 2030 | | | % | | | % | ||||||
Revolving credit facility |
| |
| | % |
| |
| | % | ||
Total | $ | |
| | % | $ | |
| | % | ||
Unamortized debt issuance costs |
| ( |
|
| ( |
| | |||||
Notes Payable, net | $ | | $ | |
| | ||||||
On August 4, 2021, the Company completed an offering of $
| Percentage |
| |
Dates | of Principal | ||
2026 |
| | % |
The 2026 Notes Indenture contains covenants that limit the Company’s ability and the ability of the Company’s restricted subsidiaries to, among other things: (i) incur or guarantee additional debt; (ii) incur certain liens; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries that are not guarantors under the 2026 Notes Indenture; (v) enter into certain transactions with affiliates (vi) sell certain assets, including capital stock of the Company’s subsidiaries; (vii) designate the Company’s subsidiaries as unrestricted subsidiaries; and (viii) pay dividends, redeem or repurchase capital stock or make other restricted payments.
The 2026 Notes incurred issuance costs of $
On February 28, 2022, the Company amended its credit agreement entered into on May 21, 2021 (as amended, the “Credit Agreement”) to include a new $
On April 26, 2023, the Company amended and extended its Credit Agreement to an aggregate commitment of $
On September 29, 2023, the Company amended its Credit Agreement to an aggregate commitment of $
The Credit Agreement contains five financial covenants:
| ● | The Maximum Senior Leverage Ratio to not exceed |
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| ● | The Maximum Leverage Ratio to not exceed |
| ● | The Minimum Fixed Charge Coverage Ratio of not less than |
| ● | Minimum Tangible Net Worth not to be less than a starting value plus |
| ● | Minimum Actual Collections where the Company must collect at least |
On November 13, 2024, the Company amended its Credit Agreement to an aggregate commitment of $
On October 27, 2025 the Company further amended and extended its Credit Agreement to an aggregate commitment of $
| ● | An increase of the aggregate commitments as defined in the Credit Agreement capital by $ |
| ● | A reduction of the interest rate margins applicable to loans outstanding under the Revolving Credit Facility (defined below) by fifty ( |
| ● | A reduction of the non-use fee rate for unutilized commitments under the Revolving Credit Facility by |
| ● | Elimination of any credit spread adjustments from the calculation of the interest rate applicable to loans outstanding under the Revolving Credit Facility |
| ● | Extension of the maturity of the Revolving Credit Facility to October 27, 2030, subject to such maturity being |
reduced to 91 days in advance of the earliest final scheduled maturity date of either the
February 15, 2029 or the
| ● | Removal of the existing financial covenant requiring a minimum tangible net worth of certain subsidiaries |
| ● | Customary changes (including changes to financial reporting requirements and ‘change of control’ thresholds) to |
reflect the status of Jefferson Capital as a public company.
On February 2, 2024, the Company completed an offering of $
| Percentage |
| |
Dates | of Principal | ||
2026 | | % | |
2027 |
| | % |
2028 and thereafter |
| | % |
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The 2029 Notes Indenture contains covenants that limit the Company’s ability and the ability of the Company’s restricted subsidiaries to, among other things: (i) incur or guarantee additional debt; (ii) incur certain liens; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries that are not guarantors under the 2029 Notes Indenture; (v) enter into certain transactions with affiliates; (vi) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of the Company’s assets; (vii) sell certain assets, including capital stock of the Company’s subsidiaries; (viii) designate the Company’s subsidiaries as unrestricted subsidiaries; and (ix) pay dividends, redeem or repurchase capital stock or make other restricted payments.
The 2029 Notes incurred issuance costs of $
On May 2, 2025, Jefferson Capital Holdings, LLC completed an offering of $
At any time and from time to time prior to May 15, 2027, the 2030 Notes may be redeemed at Jefferson Capital Holdings, LLC’s option, in whole or in part, at a redemption price equal to
Percentage | |||
Dates | of Principal | ||
2027 | | % | |
2028 |
| | % |
2029 and thereafter |
| | % |
The 2030 Notes Indenture contains covenants that limit Jefferson Capital Holdings, LLC’s ability and the ability of Jefferson Capital Holdings, LLC’s restricted subsidiaries to, among other things: (i) incur or guarantee additional debt; (ii) incur certain liens; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from Jefferson Capital Holdings, LLC’s restricted subsidiaries that are not guarantors under the 2030 Notes Indenture; (v) enter into certain transactions with affiliates; (vi) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of Jefferson Capital Holdings, LLC’s assets; (vii) sell certain assets, including capital stock of Jefferson Capital Holdings, LLC’s subsidiaries; (viii) designate Jefferson Capital Holdings, LLC’s subsidiaries as unrestricted subsidiaries; and (ix) pay dividends, redeem or repurchase capital stock or make other restricted payments.
The 2030 Notes incurred issuance costs of $
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Components of interest expense for the three months ended March 31, 2026, and 2025 (in thousands):
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Interest expense | $ | | $ | | ||
Amortization of debt issuance costs | | | ||||
Total Interest Expense | $ | | $ | | ||
As of March 31, 2026, the outstanding balances of notes payable were $
The Company incurred costs related to the issuance and origination of its notes payable which are deferred and recorded net of the debt balance and amortized to interest expense over the life of the debt on an effective interest method. The unamortized debt issuance costs related to the notes payable were $
As of March 31, 2026, the Company was in compliance with all the financial covenants of its notes payable.
9.Leases
The Company enters into leases as a lessee for data centers, office space, and technology equipment. Lease expense associated with these arrangements are included in other selling, general and administrative expenses in the Company’s combined and condensed consolidated statements of operations.
The components of lease expense for the three months ended March 31, 2026 and 2025, are presented as follows (in thousands):
For the Three Months Ended March 31, | ||||||
| 2026 | | 2025 | |||
Operating lease costs | $ | | $ | | ||
Total lease costs | $ | | $ | | ||
The following table provides supplemental combined and condensed consolidated balance sheet information related to leases as of March 31, 2026, and December 31, 2025 (in thousands, except lease term and discount rate):
As of March 31, | As of December 31, | ||||||||
| Classification | | 2026 | | 2025 | | |||
Assets | |||||||||
Other assets | $ | | $ | | |||||
Total lease right-of-use assets | $ | | $ | | |||||
Liabilities | |||||||||
Other liabilities | $ | | $ | | |||||
Total lease liabilities | $ | | $ | | |||||
Weighted-average remaining lease term (in years) | |||||||||
Weighted-average discount rate | | % | | % | |||||
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Minimum future payments on non-cancellable operating leases as of March 31, 2026, are summarized as follows (in thousands):
| Operating Leases | ||
2026 | $ | | |
2027 | | ||
2028 | | ||
2029 | | ||
2030 | | ||
Thereafter | | ||
Total undiscounted lease payments | | ||
Less: imputed interest | ( | ||
Lease obligations under operating leases | $ | | |
10.Stock Based Compensation
Prior to the initial public offering in June 2025, the Company maintained the JCAP TopCo, LLC 2018 Underlying Units Plan (the “Plan”) and the Management Invest LLC 2018 Management Incentive Plan (the “Management Invest Plan”), effective August 31, 2018, to promote the long-term growth and profitability of the Company by providing certain of the Company’s employees and other service providers who were involved in the Company’s growth with an opportunity to acquire equity interests that enable them to share in the appreciation of value of the Company, thereby encouraging such persons to contribute to and participate in the success of the Company.
Under the Plan, awards of Class B Units representing limited liability company interests in JCAP TopCo, LLC, a holding company and direct parent of the Company, were issued to Management Invest LLC, which in turn issued corresponding awards of Class B Units in Management Invest LLC to certain of the Company’s employees and other service providers under the Management Invest Plan. As of June 26, 2025, there were
As part of the initial public offering, all of the Class B Units issued pursuant to the Management Invest Plan were crystalized and converted into shares of common stock on the basis of the Exchange Ratio used to convert the Class A Units and Class C Units. The conversion took into account the number of Class B Units held, the applicable distribution threshold and the value of the distributions that the holder would have been entitled to receive through their indirect ownership interest in JCAP TopCo, LLC had JCAP TopCo, LLC been liquidated on the date of such conversion in accordance with the terms of the distribution waterfall set forth in the JCAP TopCo LLC Agreement. If in-the-money, the Class B Units were converted into a number of shares based on the respective distribution thresholds and terms of such awards, and if out-of-the-money, were canceled. For Class B Units that were in-the-money but unvested and subject solely to time vesting requirements, such Class B Units were converted into shares of restricted stock and subject to the same time vesting requirements that the corresponding Class B Units were subject to prior to the Reorganization. For Class B Units that were in-the-money but unvested and subject to performance vesting requirements, those were converted into shares of restricted stock and subject to a
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Invest, LLC (which correspond to Class B Units of JCAP TopCo, LLC) that were in- the-money. These shares were issued as restricted stock either with the same time-based vesting requirements that the corresponding Class B Units were subject to prior to the Reorganization or, if such corresponding Class B Units had performance vesting requirements, with a three year time-vesting requirement. If the vesting conditions of the restricted stock are not satisfied, such restricted stock will be forfeited and canceled. The Company accounts for forfeitures when they occur. The modification of the award Class B Units did not result in a material impact to compensation costs. Holders of converted restricted stock awards will be eligible to receive non-forfeitable dividends in the event the Company determines to pay dividends in respect of its common stock. For Class B Units that were in-the-money and fully vested, those were converted into shares of common stock. With respect to Class B Units that were out-of-the-money and were canceled in the Reorganization, the Company issued new stock options under the 2025 Plan to the employee and director holders of such canceled Class B Units to put them in an approximately equivalent economic position in terms of number of options and exercise prices as they would be in if their Class B Units were not canceled and instead exchanged for new options. Such options were granted effective as of immediately following the determination of the initial public offering price per share of our common stock and were in an amount equal to the number of the out-of-the-money Class B Units that were canceled, multiplied by the Exchange Ratio, and have an exercise price per share equal to the distribution threshold of the out-of-the-money Class B Units, multiplied by the Exchange Ratio (or if greater, the initial public offering price per share of our common stock). The options are subject to the same time-vesting requirements that the corresponding Class B Units were subject to prior to the Reorganization.
The Company measures the fair value of stock option awards on the grant date using a Black-Scholes option-valuation model. The model incorporates various assumptions, including the exercise price, expected term, risk-free interest rate, expected stock price volatility, and expected dividend yield.
Awards are assumed to be exercised at the midpoint of the earliest and latest exercisable dates and adjusted for moneyness. The earliest expected term for awards with multiple vesting tranches is determined as the weighted average of each vesting tranche, with weights determined by the percentage vesting in a tranche. As the options were granted out-of-the-money, the midlife term is extended ratably, assuming a term based on the midlife for an option at-the-money (
The risk-free rate is assumed to be the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date (or most recently available). The interest rate is converted from a semi-annually compounded rate to a continuously compounded rate for purposes of Black-Scholes calculations. For terms where a risk-free rate is not available, the nearest terms greater than and less than the expected term are interpolated to estimate the risk-free rate.
Expected volatility is estimated using the historical volatility of a peer group of comparable publicly traded companies, given the limited trading history of the Company’s common stock. The expected dividend yield reflects a dividend rate of
A summary of the status of the Company’s equity-based awards and activity as of March 31, 2026 with the comparative 2025 period having
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Outstanding | Weighted-Average | |||
Restricted | Grant Date | |||
Shares | | Fair Value | ||
Balance December 31, 2025 | | $ | | |
Granted | — | |||
Vested | ( | |||
Forfeited, expired or canceled | ( | |||
Balance March 31, 2026 | | $ | | |
Weighted-Average | |||||||||
Weighted-Average | Remaining | Aggregate | |||||||
Stock Options | Grant | Contractual Term | Intrinsic Value | ||||||
Outstanding | | Exercise Price | (Years) | | (in thousands) | ||||
Balance December 31, 2025 | | $ | | $ | | ||||
Granted | | | |||||||
Vested | |||||||||
Exercised | |||||||||
Forfeited, expired or canceled | |||||||||
Balance March 31, 2026 | | $ | | $ | | ||||
For the three months ended March 31, 2026 and 2025, stock-based compensation expense recognized was $
As of March 31, 2026, the total unrecognized stock-based compensation expense related to unvested restricted shares was $
11.Commitments and Contingencies
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 to
As of March 31, 2026 and 2025 the Company had entered into forward flow purchase agreements for the purchase of receivables with an estimated minimum aggregate purchase price of approximately $
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Employee Savings and Retirement Plan
The Company sponsors defined contribution plans in the U.S., Canada, and the U.K. The U.S. plan is organized as a 401(k) plan under which all employees are eligible to make voluntary contributions to the plan up to
Commitments to extend credit
The Company, in the normal course of business through its credit card programs, agrees to purchase the credit card receivables from the issuing bank, thereby incurring off-balance-sheet risk. This risk includes the cardholder’s rights to borrow up to the maximum credit limit on their credit card accounts, which is $
Contingent payments
As part of the Company’s acquisition of Canaccede Financial Group, Ltd. “(Canaccede”) in March 2020, an exit incentive was awarded to the former shareholders of Canaccede for up to $
Litigation
The Company and its subsidiaries are subject to various legal proceedings and claims that arise in the ordinary course of business. For periods ended March 31, 2026 and December 31, 2025 there are
12.Income Taxes
The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
As of March 31, | |||||||
| 2026 | | 2025 | ||||
Income before income taxes | $ | | $ | | |||
Income tax expense | | | |||||
Effective tax rate | | % | | % | |||
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The change in the effective tax rate for the three months ended March 31, 2026 and 2025 was impacted by the period in which the Company was treated as a Partnership for US income tax purposes before the Initial Public Offering in June 2025.
13.Segment Reporting
The Company’s operating
For the Company’s operating segments, the CODM uses segment net operating income to allocate resources (including employees, property, and financial or capital resources). Additionally, the Company prepares an annual budget at the segment level. The CODM considers budget-to-actual variances on a monthly basis for the profit or loss measure when making decisions about allocating capital and personnel to the segments. The CODM also uses segment operating income to assess the performance for each segment by comparing the results of each segment with one another and for determining the compensation of certain employees.
The following table provides segment measure of profit and loss, presenting Net operating income, by each operating segment (in thousands) and is the measure that the CODM utilizes to determine resource and investment allocations:
| For the Three Months Ended March 31, | | For the Three Months Ended March 31, | |||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||||||
| United | | United | | | Latin | | | United | | United | | | Latin | | |||||||||||||||
States | Kingdom | Canada | America | Total | States | Kingdom | Canada | America | Total | |||||||||||||||||||||
Total portfolio revenue | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||
Credit card revenue |
| |
| — |
| |
| — |
| |
| |
| — |
| |
| — |
| | ||||||||||
Servicing revenue |
| |
| |
| |
| — |
| |
| |
| |
| |
| — |
| | ||||||||||
Total Revenue | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||
Provision for credit losses | $ | | $ | — | $ | | $ | — |
| $ | | $ | — | $ | | $ | — |
| ||||||||||||
Salaries and benefits | $ | | $ | | $ | | $ | |
| $ | | $ | | $ | | $ | |
| ||||||||||||
Servicing expenses |
| |
| |
| |
| |
|
| |
| |
| |
| |
| ||||||||||||
Depreciation and amortization |
| |
| |
| |
| |
|
| |
| |
| |
| |
| ||||||||||||
Professional fees |
| |
| |
| |
| |
|
| |
| |
| |
| |
| ||||||||||||
Other selling, general and administrative |
| |
| |
| |
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| |
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Net operating income | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||
Other Income / (Expense): |
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Interest expense |
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Total other expense |
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Income Before Income Taxes | $ | | $ | | ||||||||||||||||||||||||||
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14.Subsequent Events
Other than the below, there have been no events since March 31, 2026 that require recognition or disclosure in the combined and condensed consolidated financial statements.
Revolving Credit Facility Amendment
On April 22, 2026, the Company entered into an amendment to its Credit Agreement dated May 21, 2021 (“The Amendment”). The Amendment increased the aggregate revolving credit commitments under the Credit Agreement by $
Dividend Declaration
On May 13, 2026, the Company declared a dividend of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the combined and consolidated financial statements and the related notes included in our audited combined and consolidated financial statements included in the Company’s 2025 Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and the Company’s 2025 Form 10-K.
Overview
We provide debt recovery solutions and other related services across a broad range of consumer receivables, including credit card, secured and unsecured automotive, telecom and utilities, and other receivables. We primarily purchase portfolios of previously charged-off 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. Previously charged-off receivables include receivables subject to bankruptcy proceedings. We also provide debt servicing and other portfolio management services to credit originators for nonperforming loans. In addition, through our credit card acquisition programs, we earn credit card revenue. All deployments are purchased from independent third parties.
We operate and manage our business through four reportable segments that are based on geography: United States, United Kingdom, Canada, and Latin America. We also have the following two primary lines of business:
| ● | Distressed, our largest line of business, represents the purchase, collection, and servicing collection of nonperforming consumer loans; and |
| ● | Insolvency, which consists of the purchasing and/or servicing of financial assets of consumers who have entered bankruptcy through Chapter 7 or 13 of the U.S. Bankruptcy Code in the United States, consumer proposal, credit counseling, or bankruptcy in Canada and the United Kingdom. |
We are headquartered in Minneapolis, Minnesota, and as of March 31, 2026, with 1,178 FTE (including our offshore co-sourced operation).
Our Business Model
Portfolio Purchasing
We purchase portfolios of nonperforming loans, and occasionally those that are performing but with significant credit deterioration, through either single portfolio transactions, referred to as spot sales, or through the pre-arranged purchase of multiple portfolios at regular intervals, referred to as forward flow sales. Under a forward flow contract, we agree to purchase statistically similar nonperforming loan portfolios from credit grantors on a periodic basis at a negotiated price over a specified time period, generally from six months to a year.
When we purchase portfolios with credit deterioration, we find that our expertise in evaluating and managing charged-off accounts allows us to confidently manage such portfolios with a higher level of credit risk than a buyer without that level of expertise would be comfortable. In such instances, a portfolio may include a mix of loans that are delinquent and restructured as well as a significant amount of charged-off or nonperforming loans, with a high level of risk that more of the current loans will become delinquent over time and eventually need to be charged-off. In these cases, we can offer the seller the convenience of purchasing all its loan assets together as opposed to bidding for only a single category of loan, which might result in a seller needing to transact with multiple counterparties. We regularly evaluate the opportunity to purchase portfolios that include a mix of performing accounts and nonperforming accounts, and that comprise all of a
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credit originator’s loan assets and believe we will find attractive opportunities to make more purchases like these going forward.
We purchase portfolios of nonperforming loans from credit grantors through auctions and negotiated sales. In an auction process, the seller will assemble a portfolio of nonperforming loans and will seek purchase prices from specifically invited potential purchasers. In a privately negotiated sale process, the seller will contact one or more purchasers directly, receive a bid, and negotiate the terms of sale. In either case, invited purchasers will typically have already successfully completed a qualification process and due diligence examination that includes the seller’s review of the purchaser’s experience, financial standing, operating procedures, business practices, and compliance oversight.
We purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across our operations. These methods and models allow us to value portfolios accurately (and limit the risk of overpaying), avoid buying portfolios that are incompatible with our methods or strategies, and align the accounts we purchase with our business and collection channels to maximize future collections. As a result, we have been able to realize attractive returns from the receivables we acquire. We maintain strong relationships with many of the largest financial service providers in the United States, Canada, United Kingdom, and Latin America.
Deployments and Collections
Creditors sell their volume in a mix of forward flow arrangements and competitive bid transactions. Sales levels are expected to fluctuate from quarter to quarter with portfolio pricing remaining competitive. 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, issuers’ selectiveness with buyers and lack of consistent access to capital. We believe these operational costs favor larger participants, such as us, because the larger market participants are better able to adapt to these pressures and commit to larger purchases and forward flow agreements.
Deployments
Our deployments are a mix of spot sales and forward flow agreements. The timing, contract duration and volumes for each contract can fluctuate leading to variation when compared to prior periods. The average purchase price, as a percentage of face value, varies from period to period depending on, among other factors, the type and quality of the accounts purchased and the length of time from charge-off to the time we purchase the portfolios.
The average purchase price as a percentage of face value is higher for newly charged-off portfolios as compared to more seasoned portfolios because newly charged-off portfolios generally have higher liquidation rates. Similarly, portfolios consisting of paying accounts tend to have a higher purchase price relative to face value than non-paying accounts due to the higher expectations for collections, as well as lower anticipated collection costs. As a result, in years that we purchase a higher percentage of newly charged-off assets or paying portfolios, we expect that our purchase price as a percentage of face value would be higher than would be in years where a higher ratio of seasoned paper or non-paying portfolios were purchased.
Collections
We have two primary types of collection channels for the collection of our purchased receivables, legal and voluntary. The legal collection channel consists of collections that result from our internal legal channel or from our network of retained law firms. The voluntary collection channel utilizes call centers (domestic and offshore) and collection agencies. The call center collections include collections that result from our call centers, direct mail programs, and digital collections. The collection agencies collections consist of collections from third-party collection agencies that we utilize when we believe they can liquidate better or less expensively than we can.
Key Business Metrics and Non-GAAP Financial Measures
We regularly review net operating income and net income along with a number of key business metrics and non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections, and make business decisions. Although we believe the key business metrics and non-GAAP financial measures we review are useful, they have limitations as analytical tools and should not be considered in isolation, or as substitutes for analysis of our financial results prepared in accordance with GAAP.
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Key Business Metrics
Estimated Remaining Collections
We define ERC as the undiscounted sum of all future projected collections on our owned finance receivables portfolios. We calculate ERC using data derived from our databases of owned and serviced debt portfolio in the markets in which we operate and from our proprietary behavioral and asset valuation models. References to our ERC are references to gross ERC which includes estimated collections in respect of the current charge-off balances. We believe that our ERC estimation represents an important supplemental measure to compare our cash generating capacity with other companies in the debt collection industry, even though we can provide no assurance that we will achieve such collections within a specified time period, or at all.
The following table summarizes the total ERC by geographic area, or segment, during the three months ended:
March 31, | Increase | % | ||||||||||
(in Millions) | 2026 | | 2025 | | (Decrease) | | Change | | ||||
United States | $ | 2,460.1 | $ | 2,155.2 | $ | 304.9 | 14.1 | % | ||||
Canada | 408.3 | 317.8 | 90.5 | 28.5 | % | |||||||
United Kingdom | 198.0 | 146.4 | 51.6 | 35.3 | % | |||||||
Latin America | 289.4 | 218.5 | 70.9 | 32.4 | % | |||||||
Total | $ | 3,355.8 | $ | 2,837.9 | $ | 517.9 | 18.2 | % | ||||
For the three months ended March 31, 2026, ERC in our United States reportable segment included $237.7 million for the Bluestem portfolio purchase with the comparative 2025 period having no ERC related to Bluestem.
Deployments
Deployments refers to portfolios purchases in the ordinary course. We believe deployments represent an important measure of our investment activity. Deployments are a key driver of the growth of our ERC and a measure to compare growth in our business with the growth of other companies in the debt collection industry.
The following tables summarize the total deployments or purchases by geographic area, or reportable segments, during the three months ended:
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
United States | $ | 88.0 | $ | 119.5 | $ | (31.5) | (26.4) | % | ||||
Canada | 33.7 | 52.0 | (18.3) | (35.2) | % | |||||||
United Kingdom | 9.5 | 1.9 | 7.6 | 399.2 | % | |||||||
Latin America | 18.5 | 1.8 | 16.7 | 929.6 | % | |||||||
Total Purchases | $ | 149.7 | $ | 175.2 | $ | (25.5) | (14.6) | % | ||||
During the three months ended March 31, 2026, we invested $149.7 million to acquire receivable portfolios, with face values aggregating $2,708.2 million, for an average purchase price of 5.5% of face value. The amount invested in receivable portfolios decreased $25.5 million, or 14.6%, compared with the $175.2 million invested during the three months ended March 31, 2025, to acquire receivable portfolios with face values aggregating $2,757.4 million, for an average purchase price of 6.4% of face value.
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Collections
The following tables summarize the total collections by geographic area, or reportable segment, during the periods presented:
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | ||||
United States | $ | 250.6 | $ | 214.3 | $ | 36.3 | 16.9 | % | ||||
Canada | 32.2 | 25.8 | 6.4 | 24.8 | % | |||||||
United Kingdom | 10.8 | 10.2 | 0.6 | 5.9 | % | |||||||
Latin America | 16.3 | 10.6 | 5.7 | 53.8 | % | |||||||
Total Collections | $ | 309.9 | $ | 260.9 | $ | 49.0 | 18.8 | % | ||||
Collections from purchased receivables increased by $49.0 million or 18.8% to $309.9 million during the three months ended March 31, 2026, from $260.9 million during the three months ended March 31, 2025. The increase in collections from purchased receivables compared to the period ended March 31, 2025, was primarily a result of increased purchases during the period. Collections in our United States reportable segment included for the period ended March 31, 2026 and 2025 were $54.5 million for the Bluestem portfolio with no collections in the comparative 2025 period.
Non-GAAP Financial Measures
To supplement our combined and condensed consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures throughout this Quarterly Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making.
Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our combined and condensed consolidated financial statements prepared and presented in accordance with GAAP.
Adjusted Net Income
Adjusted net income is calculated as net income in accordance with GAAP, adjusted to exclude (i) foreign exchange and other income (expense); (ii) stock-based compensation; and (iii) merger and acquisition and other infrequent, non-recurring, non-core or unusual charges. Adjusted net income is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. We present adjusted net income because we consider it an important supplemental measure of our operations and financial performance. Our management believes adjusted net income helps us provide enhanced period-to-period comparability of operations and financial performance and is useful to investors as other companies in our industry report similar financial measures. Adjusted net income should not be considered as an alternative to net income determined in accordance with GAAP.
Some of the limitations related to the use of adjusted net income as an analytical tool include:
| ● | does not reflect our future requirements for capital expenditures or contractual commitments; |
| ● | does not reflect changes in, or cash requirements for, our working capital needs; and |
| ● | other companies in our industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, adjusted net income should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
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Set forth below is a reconciliation of adjusted net income to net income, the most directly comparable financial measure calculated and reported in accordance with GAAP.
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Net Income | $ | 37.6 | $ | 64.2 | $ | (26.6) | (41.4) | % | ||||
Foreign exchange and other income (expense) | (1.4) | (2.5) | 1.0 | (41.1) | % | |||||||
Stock compensation | 8.5 | 0.4 | 8.1 | 2,025.0 | % | |||||||
Merger and acquisition and initial public offering related expenses | 0.2 | 0.8 | (0.6) | (76.5) | % | |||||||
Adjusted Net Income | $ | 44.9 | $ | 63.0 | $ | (18.1) | (28.7) | % | ||||
Components of Results of Operations
Revenue
Our revenue is primarily derived from revenue from investments in receivables, which is revenue recognized from engaging in debt purchasing and recovery activities, and from credit card and servicing revenue streams.
Total Portfolio Revenue
Portfolio revenue consists of two components: (i) portfolio income, which is the accretion of the discount on the negative allowance due to the passage of time (generally the portfolio balance multiplied by the established pool effective interest rate (“EIR”)), and (ii) changes in recoveries, which includes recoveries above or below forecast (the difference between actual cash collected or recovered during the current period and expected cash recoveries for the current period) and changes in expected future recoveries (the present value change of expected future recoveries, where such change generally results from changes to the expected timing of collections and changes to the total amount of expected future collections).
For a majority of the portfolios we purchase, we apply our charge-off policy and fully write off the amortized costs 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 “investments in previously charged-off receivables, net” on our combined and condensed consolidated balance sheet. The discount rate is a purchase EIR established based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. From time to time, we will also purchase performing portfolios for a discount, where we will apply the interest method and accrete the discount.
Credit Card Revenue
Credit card revenue consists of interest income, annual fees, late fees, as well as interchange fees, cash advance fees and other miscellaneous items from credit card transactions. Interest income is accrued monthly based on the outstanding receivables and their contractual interest rates.
Servicing Revenue
Servicing revenue consists of the revenue we generate from providing collection services to certain third parties. Generally, we receive a percentage of collections as the fee for services, and in some cases, we receive a fixed fee. Servicing revenue is recognized when the underlying receivables are collected or when a fixed fee service is performed.
Allowance for Credit Losses
Provision for credit losses is the allowance we provide for credit losses on loans and fees receivable. We compute the allowance for credit losses on loans and fees receivable at the pool level using a roll-rate methodology and consider a number of factors in the measurement of the allowance, including historical loss rates, current delinquency and roll-rate trends, the effects of changes in the economy, changes in underwriting criteria and estimated recoveries. The allowance is estimated based on amortized cost basis of the loan, including principal, accrued interest receivable, deferred fees and costs. We place receivables on non-accrual at 90 days past due and write off the accrued interest at 180 days past due or sooner if facts and circumstances indicate earlier non-collectability. Expected recoveries are included in the measurement of the allowance for credit losses.
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Operating Expenses
Salaries and Benefits Expense
Salaries and benefits expense primarily consists of base salary, commission, bonus expense and healthcare costs. Additionally, it includes 401k match and stock-based compensation expense. We expense all salaries and benefits expense as incurred. While we expect our salaries and benefits expense will increase in absolute dollars as we continue to invest in our growth and operate as a public company (including as a result of increased stock-based compensation), we expect such expense to decline as a percentage of revenue over time as we scale our business and leverage our investments already made.
Servicing Expenses
Servicing expenses primarily consists of collections and customer service expenses associated with previously charged-off receivables, such as the cost of outsourced collections, debtor correspondence, legal fees associated with the collection of debt and other direct expenses associated with collections and customer service efforts. While we expect our servicing expenses will increase in absolute dollars as our business grows, we expect such expenses will vary from period-to-period as a percentage of revenue for the foreseeable future and decrease as a percentage of revenue over the long term as a result of continued investments to improve the efficiency of our operations and support organization.
Depreciation and Amortization
Depreciation and amortization consists of depreciation of property and equipment and amortization of intangible assets.
Professional Fees
Professional fees primarily consists of legal and consulting expenses, including annual audit fees and various other outside service fees provided by expert services firms. In addition, it includes legal fees associated with settlements and fees associated with merger and acquisition expenses.
We incurred additional expenses related to the IPO and expect to incur additional expense primarily due to the costs of operating as a public company, which are expected to include additional legal, accounting and consulting expenses, among others.
Other Selling, General and Administrative Expenses
Other selling, general and administrative expenses generally consists of rent, travel and entertainment expenses, and other general overhead expenses.
Other Income (Expense)
Interest Expense
Interest expense consists of interest expense on our outstanding debt and amortization of debt issuance costs.
Foreign Exchange and Other Income (Expense)
Foreign exchange and other income (expense) consists of foreign currency related realized gains or losses on portfolio purchase transactions.
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Results of Operations
Three months ended March 31, 2026 compared to the three months ended March 31, 2025.
The following tables set forth combined and condensed consolidated income statement data expressed in a dollar amount and as a percentage of total revenues for the periods indicated:
Three Months Ended March 31, | |||||||||||
(in Millions) | | 2026 | | 2025 | | ||||||
Revenues: | | | | | |||||||
Portfolio income | $ | 157.6 | 89.3 | % | $ | 138.7 | 89.5 | % | |||
Changes in recoveries | 7.1 | 4.0 | % | 3.6 | 2.3 | % | |||||
Total portfolio revenue | $ | 164.7 | 93.3 | % | $ | 142.3 | 91.8 | % | |||
Credit card revenue | 1.7 | 1.0 | % | 1.9 | 1.2 | % | |||||
Servicing revenue | 10.0 | 5.7 | % | 10.7 | 6.9 | % | |||||
Total revenues | $ | 176.4 | 100.0 | % | $ | 154.9 | | 100.0 | % | ||
Provision for credit losses | $ | 0.6 | 0.4 | % | $ | 0.5 | 0.3 | % | |||
Operating expenses: | |||||||||||
Salaries and benefits | $ | 22.4 | 12.7 | % | $ | 14.0 | 9.0 | % | |||
Servicing expenses | 65.6 | 37.2 | % | 42.8 | 27.6 | % | |||||
Depreciation and amortization | 0.9 | 0.5 | % | 1.6 | 1.0 | % | |||||
Professional fees | 2.3 | 1.3 | % | 2.2 | 1.4 | % | |||||
Other selling, general and administrative | 4.5 | 2.6 | % | 4.5 | 2.9 | % | |||||
Total operating expenses | $ | 95.6 | 54.2 | % | $ | 65.1 | 42.0 | % | |||
Net operating income | $ | 80.2 | 45.4 | % | $ | 89.3 | 57.6 | % | |||
Other income (expense): | |||||||||||
Interest expense | $ | (30.6) | (17.3) | % | $ | (24.8) | (16.0) | % | |||
Foreign exchange and other income (expense) | 1.4 | 0.8 | % | 2.5 | 1.6 | % | |||||
Total other income / (expense) | (29.1) | (16.5) | % | (22.4) | (14.4) | % | |||||
Income before income taxes | $ | 51.1 | 28.9 | % | $ | 66.9 | 43.2 | % | |||
Provision for income taxes | (13.4) | (7.6) | % | (2.7) | (1.7) | % | |||||
Net income | $ | 37.6 | 21.3 | % | $ | 64.2 | 41.5 | % | |||
Foreign currency translation | (5.7) | (3.2) | % | 3.9 | 2.5 | % | |||||
Comprehensive income | $ | 31.9 | 18.1 | % | $ | 68.1 | 44.0 | % | |||
Revenues
A summary of how our revenues were generated during the periods indicated is as follows:
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Cash collections | $ | 309.9 | $ | 260.9 | $ | 49.0 | 18.8 | % | ||||
Principal amortization | (145.2) | (118.6) | (26.7) | 22.5 | % | |||||||
Total portfolio revenue | 164.7 | 142.3 | 22.3 | 15.7 | % | |||||||
Credit card revenue | 1.7 | 1.9 | (0.2) | (8.6) | % | |||||||
Servicing revenue | 10.0 | 10.7 | (0.7) | (6.4) | % | |||||||
Total revenues | $ | 176.4 | $ | 154.9 | $ | 21.5 | 13.9 | % | ||||
Total revenues were $176.4 million for the three months ended March 31, 2026, an increase of $21.5 million, or 13.9%, compared to $154.9 million for the three months ended March 31, 2025. The increase is primarily a result of strong deployment growth in prior periods.
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Operating Expenses
Total operating expenses were $95.6 million for the three months ended March 31, 2026, an increase of $30.5 million, or 46.8%, compared to $65.1 million for the three months ended March 31, 2025 driven primarily by an increase of $22.8 million in servicing expenses due to increased court costs of $8.0 million which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections, $7.4 million related to the Bluestem portfolio purchase and collection growth as well as $8.5 million in stock-based compensation expense.
Salaries and Benefits
Salaries and benefits were $22.4 million for the three months ended March 31, 2026 an increase of $8.4 million, or 59.6%, compared to $14.0 million for the three months ended March 31, 2025. The increase in Salaries was driven by $8.5 million in stock-based compensation costs which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO.
Servicing Expenses
Servicing expenses were $65.6 million for the three months ended March 31, 2026, an increase of $22.8 million, or 53.3%, compared to $42.8 million for the three months ended March 31, 2025. The increase in servicing expenses was primarily driven by increased collections and court costs which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections. Servicing expenses consisted of the following for the three months ended March 31, 2026 and 2025:
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Agency and repo commission expense | $ | 11.3 | $ | 12.3 | $ | (1.0) | (8.1) | % | ||||
Legal commission expense | 8.8 | 6.5 | 2.3 | 35.4 | % | |||||||
Court costs | 17.3 | 9.3 | 8.0 | 86.0 | % | |||||||
Communications | 9.5 | 8.8 | 0.7 | 8.0 | % | |||||||
Offshore | 3.8 | 3.4 | 0.4 | 11.8 | % | |||||||
Other servicing expenses | 14.9 | 2.5 | 12.4 | 497.3 | % | |||||||
Total servicing expenses | $ | 65.6 | $ | 42.8 | $ | 22.8 | 53.3 | % | ||||
Depreciation and Amortization
Depreciation and amortization was $0.9 million for the three months ended March 31, 2026, a $0.7 million, or 45.8%, decrease from the $1.6 million for the three months ended March 31, 2025. The decrease was primarily due to lower intangible amortization expense of $0.6 million associated with the Conn’s purchase compared to the three months ended March 31, 2025.
Professional Fees
Professional fees were $2.3 million for the three months ended March 31, 2026 an increase of $0.1 million, or 5.4%, compared to $2.2 million for the three months ended March 31, 2025. The increase was primarily due to one-time legal and professional fees incurred as part of the follow-on equity offering in January 2026.
Other Selling, General and Administrative Expenses
Other selling, general and administrative expenses which generally consists of rent, travel and entertainment expenses, and other general overhead expenses which totaled $4.5 million for the three months ended March 31, 2026, which was flat to the $4.5 million for the three months ended March 31, 2025.
Other Income (Expense)
Interest Expense
Total interest expense was $30.6 million for the three months ended March 31, 2026, an increase of $5.8 million, or 23.2%, compared to $24.8 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in the cost of debt due to the payoff of the credit facility with the net proceeds of the 2030 Senior Notes issued in May 2025 as well as by increased amortization of debt issuance costs of $1.6 million, $0.5 million or 46.7% higher
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compared to $1.1 million for the three months ended March 31, 2025, due to the issuance of the 2030 Senior Notes in May 2025.
Interest expense consisted of the following for the three months ended March 31, 2026 and 2025:
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Interest expense | $ | 28.9 | $ | 23.7 | $ | 5.2 | 22.1 | % | ||||
Amortization of debt issuance costs | 1.6 | 1.1 | 0.5 | 46.7 | % | |||||||
Total interest expense | $ | 30.6 | $ | 24.8 | $ | 5.8 | 23.2 | % | ||||
Provision for Income Tax Expense
The provision for income taxes consists primarily of income taxes in certain federal, state, local and foreign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates from those in the United States. Accordingly, our effective tax rates may vary depending on the impact of the valuation allowance of our deferred tax assets and liabilities, and changes in tax laws. The provision for income tax was $13.4 million for the three months ended March 31, 2026, an increase of $10.7 million or 401.0% compared to $2.7 million for the three months ended March 31, 2025 which increased as the Company is no longer treated as a Partnership for US income tax purposes as it was before the Initial Public Offering in June 2025.
Segment Results of Operations
The following tables set forth combined and condensed consolidated income statement amounts categorized by segment, for the periods indicated:
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
2026 | 2025 | ||||||||||||||||||||||||||||||
(in Millions) | | United | | United | | Canada | | Latin | | Total | | United | | United | | Canada | | Latin | | Total | |||||||||||
Portfolio revenue | $ | 127.2 | $ | 9.4 | $ | 16.1 | $ | 12.0 | $ | 164.7 | $ | 111.7 | $ | 4.5 | $ | 16.1 | $ | 10.0 | $ | 142.3 | |||||||||||
Credit card revenue | 0.7 | — | 1.0 | — | 1.7 | 0.7 | — | 1.2 | — | 1.9 | |||||||||||||||||||||
Servicing revenue | 1.8 | 7.8 | 0.5 | — | 10.1 | 4.5 | 5.9 | 0.3 | — | 10.7 | |||||||||||||||||||||
Total Revenue | $ | 129.7 | $ | 17.2 | $ | 17.6 | $ | 12.0 | $ | 176.5 | $ | 116.9 | $ | 10.4 | $ | 17.6 | $ | 10.0 | $ | 154.9 | |||||||||||
Provision for credit losses | $ | 0.5 | $ | — | $ | 0.2 | $ | — | $ | 0.6 | $ | 0.3 | $ | — | $ | 0.2 | $ | — | $ | 0.5 | |||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||
Salaries and benefits | 16.3 | 4.4 | 1.3 | 0.3 | 22.4 | 8.8 | 3.7 | 1.3 | 0.1 | 13.9 | |||||||||||||||||||||
Servicing expenses | 54.6 | 4.7 | 2.3 | 4.0 | 65.6 | 33.5 | 4.0 | 2.3 | 3.0 | 42.8 | |||||||||||||||||||||
Depreciation and amortization | 0.6 | 0.1 | 0.2 | 0.0 | 0.9 | 1.3 | 0.1 | 0.3 | 0.0 | 1.6 | |||||||||||||||||||||
Professional fees | 1.7 | 0.2 | 0.1 | 0.3 | 2.3 | 1.6 | 0.2 | 0.1 | 0.2 | 2.1 | |||||||||||||||||||||
Other selling, general and administrative | 3.3 | 0.7 | 0.3 | 0.2 | 4.5 | 3.6 | 0.6 | 0.3 | 0.1 | 4.6 | |||||||||||||||||||||
Total Operating Expenses | $ | 76.5 | $ | 10.1 | $ | 4.2 | $ | 4.8 | $ | 95.7 | $ | 48.8 | $ | 8.6 | $ | 4.3 | $ | 3.4 | $ | 65.0 | |||||||||||
Net Operating Income | $ | 52.7 | $ | 7.1 | $ | 13.2 | $ | 7.2 | $ | 80.2 | $ | 67.8 | $ | 1.8 | $ | 13.1 | $ | 6.6 | $ | 89.3 | |||||||||||
Net operating income margin | 40.6 | % | 41.3 | % | 75.0 | % | 60.0 | % | 45.4 | % | 58.0 | % | 17.3 | % | 74.4 | % | 66.0 | % | 57.7 | % | |||||||||||
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United States
Three Months Ended | ||||||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Portfolio revenue | $ | 127.2 | $ | 111.7 | $ | 15.5 | 13.8 | % | ||||
Credit card revenue | 0.7 | 0.7 | 0.1 | 8.9 | % | |||||||
Servicing revenue | 1.8 | 4.5 | (2.8) | (60.7) | % | |||||||
Total Revenue | $ | 129.7 | $ | 116.9 | $ | 12.8 | 10.9 | % | ||||
Provision for credit losses | $ | 0.5 | $ | 0.3 | $ | 0.1 | 37.7 | % | ||||
Operating Expenses | ||||||||||||
Salaries and benefits | 16.3 | 8.9 | 7.4 | 83.1 | % | |||||||
Servicing expenses | 54.6 | 33.5 | 21.1 | 63.1 | % | |||||||
Depreciation and amortization | 0.6 | 1.3 | (0.7) | (52.9) | % | |||||||
Professional fees | 1.7 | 1.6 | 0.1 | 5.0 | % | |||||||
Other selling, general and administrative | 3.3 | 3.6 | (0.3) | (8.2) | % | |||||||
Total Operating Expenses | $ | 76.5 | $ | 48.8 | $ | 27.7 | 56.6 | % | ||||
Net Operating Income | $ | 52.8 | $ | 67.8 | $ | (15.0) | (22.1) | % | ||||
Net operating income margin | 40.7 | % | 58.0 | % | ||||||||
Portfolio revenue grew $15.5 million or 13.8% in the three months ended March 31, 2026 compared to March 31, 2025, primarily due to the growth in deployments, including the Bluestem portfolio purchase.
Servicing revenue decreased $2.8 million or 60.7% for the three months ended March 31, 2026 compared to March 31, 2025, primarily due to the Conn’s portfolio purchase, which contributed $1.2 million of total servicing revenue in the three months ended March 31, 2026 compared with $3.7 million in the three months ended March 31, 2025.
Salaries and benefits increased $7.4 million or 83.1% in the three months ended March 31, 2026 compared to March 31, 2025 driven by $8.5 million for stock-based compensation partially offset by reductions in personnel and benefit costs related to the Conn’s portfolio purchase due to 89 less FTE.
Servicing expenses grew $21.1 million or 63.1% in the three months ended March 31, 2026 compared to March 31, 2025 driven by increased collections, and court costs of $8.0 million which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections. Servicing expenses includes $1.5 million for the three months ended March 31, 2026 related to the Conn’s portfolio purchase compared to $3.7 million in the three months ended March 31, 2025, and $7.4 million related to the Bluestem portfolio purchase with no expense in the comparative period in 2025.
Depreciation and amortization was $0.6 million for the three months ended March 31, 2026, a $0.7 million, or 52.9%, decrease from the $1.3 million for the three months ended March 31, 2025. The decrease was primarily due to lower intangible amortization expense of $0.6 million associated with the Conn’s purchase compared to the three months ended March 31, 2025.
Professional fees were $1.7 million or 5.0% higher in the three months ended March 31, 2026 compared to March 31, 2025 driven by one-time legal and professional fees incurred as part of the follow-on equity offering in January 2026.
Other selling, general and administrative expenses which generally consists of rent expense, travel and entertainment, and other general overhead expenses decreased $0.3 million or 8.2% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to lower rent expense related to the Conn’s portfolio purchase.
Overall net operating income decreased $15.0 million or 22.1% in the three months ended March 31, 2026 compared to March 31, 2025 to $52.8 million from $67.8 million driven by lower net operating income of $15.6 million associated with the Conn’s portfolio purchase compared to the three months ended March 31, 2025, partially offset by $7.9 million
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in net operating income associated with the Bluestem portfolio purchase with no net operating income in the three months ended March 31, 2025. Net operating income as a percentage of total revenues was 40.7% in the three months ended March 31, 2026 compared to 58.0% in March 31, 2025.
United Kingdom
| Three Months Ended | | | |||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | 2026 | | 2025 | (Decrease) | Change | | ||||||
Portfolio revenue | $ | 9.4 | $ | 4.5 | $ | 4.9 | 108.6 | % | ||||
Servicing revenue | 7.8 | 5.9 | 1.9 | 32.5 | % | |||||||
Total Revenue | $ | 17.1 | $ | 10.4 | $ | 6.8 | 65.5 | % | ||||
Operating Expenses | ||||||||||||
Salaries and benefits | 4.4 | 3.7 | 0.7 | 18.8 | % | |||||||
Servicing expenses | 4.7 | 4.0 | 0.7 | 18.2 | % | |||||||
Depreciation and amortization | 0.1 | 0.1 | (0.0) | 0.0 | % | |||||||
Professional fees | 0.2 | 0.2 | (0.0) | (8.9) | % | |||||||
Other selling, general and administrative | 0.7 | 0.6 | 0.1 | 22.0 | % | |||||||
Total Operating Expenses | $ | 10.1 | $ | 8.6 | $ | 1.5 | 17.8 | % | ||||
Net Operating Income | $ | 7.0 | $ | 1.8 | $ | 5.3 | 292.6 | % | ||||
Net operating income margin | 41.1 | % | 17.3 | % | ||||||||
Portfolio revenue increased $4.9 million or 108.6% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to an increase in deployment volumes.
Servicing revenue increased $1.9 million or 32.5% in the three months ended March 31, 2026 compared to March 31, 2025 due to increased third party servicing.
Salaries and benefits increased $0.7 million or 18.8% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to higher employee salary and benefit costs.
Servicing expenses increased $0.7 million or 18.2% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to increase in collections as well as court costs which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections.
Overall net operating income increased $5.3 million or 292.6% in the three months ended March 31, 2026 compared to March 31, 2025 due to higher deployments. Net operating income as a percentage of total revenues was 41.1% in the three months ended March 31, 2026 compared to 17.3% in March 31, 2025.
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Canada
| Three Months Ended | | | |||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Portfolio revenue | $ | 16.1 | $ | 16.1 | $ | 0.0 | 0.2 | % | ||||
Credit card revenue | 1.0 | 1.2 | (0.2) | (18.0) | % | |||||||
Servicing revenue | 0.5 | 0.3 | 0.2 | 48.3 | % | |||||||
Total Revenue | $ | 17.6 | $ | 17.7 | $ | (0.0) | (0.2) | % | ||||
Provision for credit losses | $ | 0.2 | $ | 0.2 | $ | (0.0) | (20.5) | % | ||||
Operating Expenses | ||||||||||||
Salaries and benefits | 1.3 | 1.3 | 0.0 | 2.2 | % | |||||||
Servicing expenses | 2.3 | 2.3 | 0.0 | 0.5 | % | |||||||
Depreciation and amortization | 0.2 | 0.3 | (0.1) | (26.5) | % | |||||||
Professional fees | 0.1 | 0.1 | (0.0) | 0.0 | % | |||||||
Other selling, general and administrative | 0.3 | 0.3 | 0.0 | 4.0 | % | |||||||
Total Operating Expenses | $ | 4.3 | $ | 4.3 | $ | (0.0) | (0.8) | % | ||||
Net Operating Income | $ | 13.2 | $ | 13.1 | $ | 0.0 | 0.3 | % | ||||
Net operating income margin | 74.7 | % | 74.4 | % | ||||||||
Credit card revenue decreased $0.2 million or 18.0% in the three months ended March 31, 2026 compared to March 31, 2025 due to the portfolio continuing to attrit with no new originations since August 2024 due to regulatory changes.
Servicing revenue increased $0.2 million or 48.3% in the three months ended March 31, 2026 compared to March 31, 2025 due to organic growth.
Overall net operating income was flat in the three months ended March 31, 2026 compared to March 31, 2025. Net operating income as a percentage of total revenues was 74.7% in the three months ended March 31, 2026 compared to 74.4% in March 31, 2025.
Latin America
| Three Months Ended | | | |||||||||
March 31, | Increase | % | ||||||||||
(in Millions) | | 2026 | | 2025 | | (Decrease) | | Change | | |||
Portfolio revenue | $ | 12.0 | $ | 10.0 | $ | 2.0 | 20.0 | % | ||||
Total Revenue | $ | 12.0 | $ | 10.0 | $ | 2.0 | 20.0 | % | ||||
Operating Expenses | ||||||||||||
Salaries and benefits | 0.3 | 0.1 | 0.2 | 1.9 | % | |||||||
Servicing expenses | 4.0 | 3.0 | 0.9 | 30.7 | % | |||||||
Depreciation and amortization | 0.0 | 0.0 | 0.0 | 0.0 | % | |||||||
Professional fees | 0.3 | 0.2 | 0.1 | 0.3 | % | |||||||
Other selling, general and administrative | 0.2 | 0.1 | 0.1 | 180.0 | % | |||||||
Total Operating Expenses | $ | 4.8 | $ | 3.4 | $ | 1.4 | 39.2 | % | ||||
Net Operating Income | $ | 7.2 | $ | 6.5 | $ | 0.6 | 9.8 | % | ||||
Net operating income margin | 60.0 | % | 65.5 | % | ||||||||
Portfolio revenue increased $2.0 million or 20.0% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to increase in deployments.
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Servicing expenses increased $0.9 million or 30.7% in the three months ended March 31, 2026 compared to March 31, 2025 primarily due to increased collections.
Overall net operating income increased by $0.6 million or 9.8% in the three months ended March 31, 2026 compared to March 31, 2025 due to portfolio revenue growth. Net operating income as a percentage of total revenues was 60.0% in the three months ended March 31, 2026 compared to 65.5% in March 31, 2025.
Supplemental Performance Data as of March 31, 2026
Investments in Receivables Portfolio Performance
The accounts represented in the Insolvency category in the tables below are those portfolios of accounts that were in an insolvency status at the time of purchase. This contrasts with accounts in our Distressed portfolios that file for bankruptcy/insolvency protection after we purchase them, which continue to be tracked in their corresponding Distressed portfolio. Distressed customers sometimes file for bankruptcy/insolvency protection subsequent to our purchase of the related Distressed portfolio. When this occurs, we adjust our collection practices to comply with bankruptcy/insolvency rules and procedures; however, for accounting purposes, these accounts remain in the original Distressed portfolio. Insolvency accounts may be dismissed voluntarily or involuntarily subsequent to our purchase of the Insolvency portfolio. Dismissal occurs when the terms of the bankruptcy are not met by the petitioner. When this occurs, we are typically free to pursue collection outside of bankruptcy procedures; however, for accounting purposes, these accounts remain in the original Insolvency pool.
Purchase price multiples can vary over time due to a variety of factors, including pricing competition, supply levels, age of the receivables acquired, and changes in our operational efficiency. For example, increased pricing competition during the 2005 to 2008 period negatively impacted purchase price multiples of our Distressed portfolio compared to prior years. Conversely, during the 2009 to 2011 period, additional supply occurred as a result of the 2008 recession, which resulted in an economic downturn. This created unique and advantageous purchasing opportunities, particularly within the Insolvency market, relative to the prior four years. Purchase price multiples can also vary among types of receivables. For example, we generally incur lower collection costs on our Insolvency portfolio compared with our Distressed portfolio. This allows us, in general, to pay more for an Insolvency portfolio and experience lower purchase price multiples, while generating similar net returns when compared with a Distressed portfolio.
When competition increases and/or supply decreases, pricing often becomes negatively impacted relative to expected collections, and yields tend to trend lower. The opposite tends to occur when competition decreases and/or supply increases.
Within a given portfolio type, to the extent that lower purchase price multiples are the result of more competitive pricing and lower net yields, this will generally lead to lower profitability. As portfolio pricing becomes more favorable on a relative basis, our profitability will tend to increase. Profitability within given Distressed portfolio types may also be impacted by the age and quality of the receivables, which impact the cost-to-collect on those accounts. Fresher accounts, for example, typically carry lower associated collection expenses, while older accounts and lower balance accounts typically carry higher costs and, as a result, require higher purchase price multiples to achieve the same net profitability as fresher paper.
We acquire portfolios and record them at the price paid at the time of acquisition. Beginning in 2022, with the adoption of CECL, we aggregate the acquired pools during the year such that during the year the blended effective interest rate will change to reflect new buying and additional cash flow estimates until the end of the respective year. Once the year is completed, the effective interest rate is fixed at the amount we expect to collect discounted at the rate to equate purchase price to the recovery estimate. During the first year of purchase, we typically allow pools to season before making any material adjustments to the estimated remaining collections (“ERC”s). Subsequent to the initial year, as we establish collection experience and confidence with a pool of accounts, we evaluate whether to update the annually aggregated ERC. These processes could cause the ratio of ERC to purchase price for any given year of buying to gradually change over time.
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The numbers presented in the following tables represent collections and do not reflect any costs to collect; therefore, they may not represent relative profitability. Due to all the factors described above, investors should be cautious when making comparisons of purchase price multiples among periods and between types of receivables.
The following tables show certain data related to our investment in receivables portfolios.
PURCHASE PRICE MULTIPLES AS OF MARCH 31, 2026 Excludes Resale as Noted at Bottom (in millions)
Current | Original | |||||||||||||||||
Purchase | Life-to-Date | Total | Grand | Collection | Collection | |||||||||||||
| Price (1)(2) | Collections (3) | ERC (4) | Total | Multiple | Multiple (5) | ||||||||||||
US Distressed | ||||||||||||||||||
2003-2017 (6) | $ | 395.2 | $ | 1,184.9 | $ | 41.0 | $ | 1,225.9 | 3.10 | x | 2.29 | x | ||||||
2018 | 76.2 | 211.2 | 24.4 | 235.6 | 3.09 | x | 2.70 | x | ||||||||||
2019 | 94.8 | 270.7 | 16.4 | 287.1 | 3.03 | x | 2.29 | x | ||||||||||
2020 | 74.1 | 181.9 | 32.4 | 214.3 | 2.89 | x | 2.20 | x | ||||||||||
Vintage | 2021 | 73.1 | 119.2 | 32.5 | 151.7 | 2.08 | x | 1.97 | x | |||||||||
2022 | 142.1 | 170.8 | 107.5 | 278.3 | 1.96 | x | 2.00 | x | ||||||||||
2023 | 337.6 | 380.1 | 382.2 | 762.3 | 2.26 | x | 2.11 | x | ||||||||||
2024 | 481.5 | 518.4 | 522.9 | 1,041.3 | 2.16 | x | 1.98 | x | ||||||||||
2025 | 520.6 | 196.6 | 877.8 | 1,074.4 | 2.06 | x | 2.05 | x | ||||||||||
2026 | 63.3 | 2.4 | 147.7 | 150.0 | 2.37 | x | 2.37 | x | ||||||||||
Total | $ | 2,258.6 | $ | 3,236.0 | $ | 2,184.9 | $ | 5,420.9 | ||||||||||
US Insolvency | ||||||||||||||||||
2003-2017 (6) | $ | 285.4 | $ | 428.6 | $ | 0.7 | $ | 429.3 | 1.50 | x | 1.66 | x | ||||||
2018 | 86.7 | 107.0 | 1.0 | 108.0 | 1.25 | x | 1.30 | x | ||||||||||
2019 | 62.2 | 84.7 | 2.9 | 87.5 | 1.41 | x | 1.31 | x | ||||||||||
2020 | 30.1 | 43.1 | 5.0 | 48.1 | 1.60 | x | 1.40 | x | ||||||||||
Vintage | 2021 | 23.7 | 31.4 | 5.6 | 37.1 | 1.57 | x | 1.25 | x | |||||||||
2022 | 40.7 | 44.1 | 7.8 | 52.0 | 1.28 | x | 1.30 | x | ||||||||||
2023 | 66.7 | 59.5 | 32.6 | 92.1 | 1.38 | x | 1.34 | x | ||||||||||
2024 | 71.1 | 37.2 | 58.8 | 96.0 | 1.35 | x | 1.39 | x | ||||||||||
2025 | 104.3 | 18.0 | 126.3 | 144.3 | 1.38 | x | 1.38 | x | ||||||||||
2026 | 24.7 | 0.2 | 34.5 | 34.6 | 1.40 | x | 1.40 | x | ||||||||||
Total | $ | 795.6 | $ | 853.8 | $ | 275.2 | $ | 1,129.0 | ||||||||||
UK Distressed & Insolvency | ||||||||||||||||||
2009-2017 | $ | 23.7 | $ | 65.5 | $ | 2.8 | $ | 68.3 | 2.88 | x | 1.94 | x | ||||||
2018 | 3.1 | 12.2 | 3.6 | 15.9 | 5.13 | x | 2.20 | x | ||||||||||
2019 | 7.1 | 18.5 | 4.0 | 22.5 | 3.17 | x | 1.91 | x | ||||||||||
2020 | 13.1 | 28.0 | 7.3 | 35.3 | 2.69 | x | 1.74 | x | ||||||||||
Vintage | 2021 | 19.4 | 28.0 | 10.0 | 38.0 | 1.96 | x | 1.67 | x | |||||||||
2022 | 18.9 | 29.8 | 17.3 | 47.0 | 2.49 | x | 2.22 | x | ||||||||||
2023 | 26.7 | 34.2 | 33.5 | 67.7 | 2.53 | x | 2.08 | x | ||||||||||
2024 | 29.4 | 20.4 | 36.0 | 56.4 | 1.92 | x | 1.70 | x | ||||||||||
2025 | 32.0 | 5.1 | 63.0 | 68.1 | 2.13 | x | 2.14 | x | ||||||||||
2026 | 9.5 | 0.1 | 20.4 | 20.5 | 2.16 | x | 2.16 | x | ||||||||||
Total | $ | 182.9 | $ | 241.7 | $ | 198.0 | $ | 439.7 | ||||||||||
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Current | Original | |||||||||||||||||
Purchase | Life-to-Date | Total | Grand | Collection | Collection | |||||||||||||
(in Millions) | | Price (1)(2) | | Collections (3) | | ERC (4) | | Total | | Multiple | | Multiple (5) | ||||||
Canada Insolvency(7) | ||||||||||||||||||
2008-2017 | $ | 121.1 | $ | 236.0 | $ | 0.3 | $ | 236.3 | 1.95 | x | 1.64 | x | ||||||
2018 | 40.9 | 85.6 | 0.6 | 86.1 | 2.10 | x | 1.80 | x | ||||||||||
2019 | 34.7 | 68.8 | 1.1 | 69.8 | 2.01 | x | 1.72 | x | ||||||||||
2020 | 29.3 | 53.2 | 1.3 | 54.5 | 1.86 | x | 1.60 | x | ||||||||||
Vintage | 2021 | 23.7 | 38.2 | 3.2 | 41.3 | 1.74 | x | 1.62 | x | |||||||||
2022 | 18.5 | 22.7 | 5.7 | 28.4 | 1.54 | x | 1.47 | x | ||||||||||
2023 | 38.8 | 35.0 | 22.4 | 57.4 | 1.48 | x | 1.35 | x | ||||||||||
2024 | 61.9 | 32.0 | 62.2 | 94.2 | 1.52 | x | 1.38 | x | ||||||||||
2025 | 115.0 | 25.4 | 142.4 | 167.8 | 1.46 | x | 1.47 | x | ||||||||||
2026 | 27.5 | 0.6 | 41.2 | 41.8 | 1.52 | x | 1.52 | x | ||||||||||
Total | $ | 511.5 | $ | 597.5 | $ | 280.2 | $ | 877.7 | ||||||||||
Canada Distressed(1) | ||||||||||||||||||
2008-2017 | $ | 80.7 | $ | 178.1 | $ | 6.5 | $ | 184.6 | 2.29 | x | 1.91 | x | ||||||
2018 | 14.6 | 61.0 | 7.2 | 68.2 | 4.66 | x | 2.52 | x | ||||||||||
2019 | 12.8 | 41.3 | 3.0 | 44.3 | 3.46 | x | 2.19 | x | ||||||||||
2020 | 19.7 | 41.1 | 6.4 | 47.5 | 2.42 | x | 2.06 | x | ||||||||||
Vintage | 2021 | 9.2 | 14.4 | 3.9 | 18.3 | 2.00 | x | 1.79 | x | |||||||||
2022 | 24.3 | 24.8 | 11.6 | 36.4 | 1.50 | x | 1.69 | x | ||||||||||
2023 | 18.4 | 16.8 | 16.0 | 32.8 | 1.78 | x | 1.61 | x | ||||||||||
2024 | 33.5 | 31.9 | 30.1 | 62.1 | 1.86 | x | 1.83 | x | ||||||||||
2025 | 26.6 | 12.4 | 34.5 | 46.9 | 1.77 | x | 1.80 | x | ||||||||||
2026 | 6.2 | 0.8 | 8.8 | 9.6 | 1.55 | x | 1.55 | x | ||||||||||
Total | $ | 245.9 | $ | 422.7 | $ | 128.1 | $ | 550.7 | ||||||||||
Latin America Distressed | ||||||||||||||||||
2021 | $ | 7.9 | $ | 11.9 | $ | 8.0 | $ | 19.9 | 2.51 | x | 1.58 | x | ||||||
2022 | 25.0 | 39.5 | 33.9 | 73.4 | 2.94 | x | 2.67 | x | ||||||||||
Vintage | 2023 | 42.3 | 50.2 | 57.8 | 108.0 | 2.55 | x | 2.39 | x | |||||||||
2024 | 45.8 | 36.5 | 87.0 | 123.5 | 2.69 | x | 2.35 | x | ||||||||||
2025 | 33.6 | 15.1 | 67.4 | 82.5 | 2.45 | x | 2.43 | x | ||||||||||
2026 | 18.5 | 0.2 | 35.4 | 35.6 | 1.92 | x | 1.92 | x | ||||||||||
Total | $ | 173.2 | $ | 153.4 | $ | 289.4 | $ | 442.8 | ||||||||||
Current | Original | |||||||||||||||||
Purchase | Life-to-Date | Total | Grand | Collection | Collection | |||||||||||||
(in Millions) | | Price (1)(2) | | Collections (3) | | ERC (4) | | Total | | Multiple | | Multiple (5) | ||||||
Total | ||||||||||||||||||
2003-2017 (6) | $ | 906.0 | $ | 2,093.2 | $ | 51.2 | $ | 2,144.4 | 2.37 | x | 1.96 | x | ||||||
2018 | 221.6 | 476.9 | 36.9 | 513.7 | 2.32 | x | 1.97 | x | ||||||||||
2019 | 211.6 | 483.9 | 27.5 | 511.3 | 2.42 | x | 1.89 | x | ||||||||||
2020 | 166.3 | 347.3 | 52.4 | 399.7 | 2.40 | x | 1.90 | x | ||||||||||
Vintage | 2021 | 156.9 | 243.1 | 63.2 | 306.4 | 1.95 | x | 1.74 | x | |||||||||
2022 | 269.5 | 331.7 | 183.8 | 515.4 | 1.91 | x | 1.91 | x | ||||||||||
2023 | 530.5 | 575.8 | 544.4 | 1,120.2 | 2.11 | x | 1.96 | x | ||||||||||
2024 | 723.3 | 676.4 | 797.0 | 1,473.4 | 2.04 | x | 1.88 | x | ||||||||||
2025 | 832.1 | 272.7 | 1,311.4 | 1,584.1 | 1.90 | x | 1.90 | x | ||||||||||
2026 | 149.7 | 4.2 | 287.9 | 292.2 | 1.95 | x | 1.95 | x | ||||||||||
Total | $ | 4,167.6 | $ | 5,505.1 | $ | 3,355.7 | $ | 8,860.8 | ||||||||||
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| (1) | Includes the portfolios that were acquired through our business acquisitions from the date of acquisition. |
| (2) | For our non-U.S. amounts, purchase price is presented at the exchange rate on the date the pool was purchased. |
| (3) | For our non-U.S. amounts, historical period exchange rates are presented at the respective exchange rate for each collection period. |
| (4) | For our non-U.S. amounts, Total ERC is presented at the exchange rate as of March 31, 2026. . |
| (5) | The original estimated purchase price multiple represents the purchase price multiple at the end of the year of acquisition. |
| (6) | This vintage data excludes forward flow purchases that were resold between 2005 and 2008 shortly after purchase and does not reflect typical collection multiples as there is no cost-to-collect for accounts that were resold. |
| (7) | Adjusted to include historical information from Canaccede Financial Group and its predecessor businesses. |
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The following table illustrates collections from purchased receivables, total portfolio revenue for the three months ended March 31, 2026 and investment in receivables, net as of March 31, 2026 and monthly EIR, by year of purchase:
RECEIVABLE PORTFOLIO FINANCIAL INFORMATION, BY YEAR OF PURCHASE(1) (in millions)
Three Months Ended March 31, 2026 | As of | |||||||||||||||||
Total | March 31, 2026 | |||||||||||||||||
Portfolio | Changes in | Portfolio | Investments in | Monthly | ||||||||||||||
| Collections | | Income | | Recoveries | | Revenue | | Receivables, Net | | EIR | |||||||
US Distressed | ||||||||||||||||||
ZBA(1) | $ | 0.3 | $ | 0.3 | $ | — | $ | 0.3 | $ | — | 0.0 | % | ||||||
2004 - 2020 | 9.3 | 8.8 | (5.8) | 3.0 | 39.7 | 6.8 | % | |||||||||||
2021 | 2.1 | 1.9 | (3.9) | (2.0) | 17.9 | 3.2 | % | |||||||||||
2022 | 8.6 | 5.0 | (3.6) | 1.4 | 68.9 | 2.3 | % | |||||||||||
2023 | 35.2 | 18.4 | (5.5) | 12.9 | 232.4 | 2.5 | % | |||||||||||
2024 | 67.2 | 30.9 | 8.8 | 39.7 | 286.7 | 3.4 | % | |||||||||||
2025 | 106.8 | 43.7 | 16.9 | 60.6 | 472.6 | 2.8 | % | |||||||||||
2026 | 2.3 | 3.6 | 1.9 | 5.5 | 66.5 | 2.8 | % | |||||||||||
Subtotal | $ | 231.8 | $ | 112.6 | $ | 8.8 | $ | 121.4 | $ | 1,184.7 | ||||||||
US Insolvency | ||||||||||||||||||
2004 - 2020 | $ | 0.5 | $ | 0.4 | $ | (1.6) | $ | (1.2) | $ | 7.4 | 1.5 | % | ||||||
2021 | 0.4 | 0.2 | 0.1 | 0.3 | 4.2 | 1.6 | % | |||||||||||
2022 | 1.7 | 0.3 | (0.3) | — | 7.0 | 1.3 | % | |||||||||||
2023 | 4.0 | 1.1 | (0.5) | 0.6 | 28.0 | 1.2 | % | |||||||||||
2024 | 5.3 | 1.8 | (0.1) | 1.7 | 47.3 | 1.2 | % | |||||||||||
2025 | 6.7 | 3.3 | 0.5 | 3.8 | 97.6 | 1.1 | % | |||||||||||
2026 | 0.2 | 0.5 | 0.1 | 0.6 | 25.1 | 1.0 | % | |||||||||||
Subtotal | $ | 18.8 | $ | 7.6 | $ | (1.8) | $ | 5.8 | $ | 216.6 | ||||||||
UK Distressed & Insolvency | ||||||||||||||||||
2004 - 2020 | $ | 1.2 | $ | 1.0 | $ | (0.1) | $ | 0.9 | $ | 6.1 | 5.1 | % | ||||||
2021 | 1.0 | 0.6 | — | 0.6 | 6.3 | 3.0 | % | |||||||||||
2022 | 1.4 | 1.1 | (0.3) | 0.8 | 9.9 | 3.6 | % | |||||||||||
2023 | 2.5 | 2.1 | (0.2) | 1.9 | 19.9 | 3.4 | % | |||||||||||
2024 | 2.5 | 1.7 | — | 1.7 | 23.4 | 2.3 | % | |||||||||||
2025 | 2.3 | 2.8 | 0.2 | 3.0 | 32.9 | 2.8 | % | |||||||||||
2026 | 0.1 | 0.5 | — | 0.5 | 9.8 | 3.0 | % | |||||||||||
Subtotal | $ | 11.0 | $ | 9.8 | $ | (0.4) | $ | 9.4 | $ | 108.3 | ||||||||
Canada Distressed | ||||||||||||||||||
ZBA(2) | $ | 0.2 | $ | 0.2 | $ | — | $ | 0.2 | $ | — | 0.0 | % | ||||||
2020 | 1.0 | 1.3 | (0.1) | 1.2 | 3.3 | 12.7 | % | |||||||||||
2021 | 0.3 | 0.2 | 0.1 | 0.3 | 1.7 | 4.3 | % | |||||||||||
2022 | 0.6 | 0.6 | (0.1) | 0.5 | 6.5 | 2.8 | % | |||||||||||
2023 | 0.8 | 0.8 | (0.4) | 0.4 | 9.7 | 2.6 | % | |||||||||||
2024 | 2.2 | 1.5 | (1.2) | 0.3 | 18.0 | 2.6 | % | |||||||||||
2025 | 3.9 | 1.5 | (0.3) | 1.2 | 19.8 | 2.3 | % | |||||||||||
2026 | 0.8 | 0.3 | 0.1 | 0.4 | 5.7 | 2.1 | % | |||||||||||
Subtotal | $ | 9.8 | $ | 6.4 | $ | (1.9) | $ | 4.5 | $ | 64.7 | ||||||||
Canada Insolvency | ||||||||||||||||||
ZBA | $ | — | $ | — | $ | — | $ | — | $ | — | 0.0 | % | ||||||
2020 | 0.6 | 0.3 | (0.3) | — | 2.1 | 3.4 | % | |||||||||||
2021 | 1.4 | 0.2 | 0.3 | 0.5 | 2.7 | 1.9 | % | |||||||||||
2022 | 1.5 | 0.3 | 0.2 | 0.5 | 4.8 | 1.5 | % | |||||||||||
2023 | 3.9 | 0.8 | 0.4 | 1.2 | 19.0 | 1.2 | % | |||||||||||
2024 | 7.0 | 1.9 | 1.9 | 3.8 | 50.9 | 1.2 | % | |||||||||||
2025 | 7.5 | 3.8 | 0.7 | 4.5 | 108.3 | 1.2 | % | |||||||||||
2026 | 0.6 | 0.8 | 0.3 | 1.1 | 27.6 | 1.3 | % | |||||||||||
Subtotal | $ | 22.5 | $ | 8.1 | $ | 3.5 | $ | 11.6 | $ | 215.4 | ||||||||
Latin America Distressed | ||||||||||||||||||
2021 | $ | 0.3 | $ | 0.3 | $ | (0.1) | $ | 0.2 | $ | 3.8 | 3.0 | % | ||||||
2022 | 1.9 | 1.9 | 0.1 | 2.0 | 10.9 | 5.8 | % | |||||||||||
2023 | 2.8 | 3.3 | (1.6) | 1.7 | 31.3 | 3.3 | % | |||||||||||
2024 | 5.4 | 4.0 | 0.1 | 4.1 | 42.8 | 2.9 | % | |||||||||||
2025 | 5.6 | 3.1 | 0.4 | 3.5 | 31.7 | 3.1 | % | |||||||||||
2026 | 0.2 | 0.5 | — | 0.5 | 18.9 | 2.6 | % | |||||||||||
Subtotal | $ | 16.2 | $ | 13.1 | $ | (1.1) | $ | 12.0 | $ | 139.4 | ||||||||
Grand Total | $ | 310.1 | $ | 157.6 | $ | 7.1 | $ | 164.7 | $ | 1,929.1 | ||||||||
Note: | Not adjusted to include historical information from Canaccede Financial Group and its predecessor businesses. Results of Canaccede Financial Group and its predecessor businesses for deployments from prior to the date of our acquisition are consolidated in the 2020 vintage year. |
| (1) | Refers to revenue from zero basis accounts. |
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The following table illustrates historical collections, by year, on our portfolios.
COLLECTIONS, BY YEAR, BY YEAR OF PURCHASE Excludes Resale as Noted at Bottom (in millions)
Collections | |||||||||||||||||||||||||||||||||||||
Purchase | 2003 - | ||||||||||||||||||||||||||||||||||||
(in Millions) | | Price (1)(2) | | 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Total | |||||||||||||
US Distressed | |||||||||||||||||||||||||||||||||||||
2003-2017(3)(4) | $ | 395.2 | $ | 776.3 | $ | 97.2 | $ | 79.0 | $ | 69.5 | $ | 57.5 | $ | 37.7 | $ | 26.6 | $ | 21.3 | $ | 16.4 | $ | 3.3 | $ | 1,184.9 | |||||||||||||
2018 | 76.2 | — | 21.6 | 45.9 | 45.4 | 41.0 | 24.7 | 14.2 | 10.3 | 6.6 | 1.4 | 211.2 | |||||||||||||||||||||||||
2019 | 94.8 | — | — | 26.8 | 74.8 | 62.3 | 44.5 | 28.6 | 18.3 | 12.9 | 2.5 | 270.7 | |||||||||||||||||||||||||
2020 | 74.1 | — | — | — | 26.5 | 60.9 | 37.2 | 26.0 | 18.2 | 11.0 | 2.1 | 181.9 | |||||||||||||||||||||||||
Vintage | 2021 | 73.1 | — | — | — | — | 23.1 | 37.8 | 24.8 | 18.3 | 12.9 | 2.2 | 119.2 | ||||||||||||||||||||||||
2022 | 142.1 | — | — | — | — | — | 16.5 | 55.1 | 49.6 | 41.0 | 8.6 | 170.8 | |||||||||||||||||||||||||
2023 | 337.6 | — | — | — | — | — | — | 48.4 | 147.7 | 148.7 | 35.2 | 380.1 | |||||||||||||||||||||||||
2024 | 481.5 | — | — | — | — | — | — | — | 73.3 | 377.8 | 67.3 | 518.4 | |||||||||||||||||||||||||
2025 | 520.6 | — | — | — | — | — | — | — | — | 89.7 | 106.9 | 196.6 | |||||||||||||||||||||||||
2026 | 63.3 | — | — | — | — | — | — | — | — | — | 2.4 | 2.4 | |||||||||||||||||||||||||
Total | $ | 2,258.6 | $ | 776.3 | $ | 118.9 | $ | 151.7 | $ | 216.2 | $ | 244.8 | $ | 198.4 | $ | 223.9 | $ | 357.1 | $ | 717.0 | $ | 231.8 | $ | 3,236.0 | |||||||||||||
US Insolvency | |||||||||||||||||||||||||||||||||||||
2003-2017(4) | $ | 285.4 | $ | 333.1 | $ | 39.4 | $ | 26.0 | $ | 14.8 | $ | 9.0 | $ | 3.6 | $ | 1.3 | $ | 0.7 | $ | 0.5 | $ | 0.1 | $ | 428.6 | |||||||||||||
2018 | 86.7 | — | 16.0 | 34.9 | 23.8 | 17.1 | 9.7 | 3.6 | 1.1 | 0.5 | 0.1 | 107.0 | |||||||||||||||||||||||||
2019 | 62.2 | — | — | 7.0 | 23.2 | 19.8 | 16.2 | 11.0 | 6.1 | 1.2 | 0.2 | 84.7 | |||||||||||||||||||||||||
2020 | 30.1 | — | — | — | 3.5 | 10.5 | 10.8 | 9.0 | 6.7 | 2.5 | 0.2 | 43.1 | |||||||||||||||||||||||||
Vintage | 2021 | 23.7 | — | — | — | — | 8.9 | 10.1 | 6.3 | 3.5 | 2.2 | 0.4 | 31.4 | ||||||||||||||||||||||||
2022 | 40.7 | — | — | — | — | — | 5.4 | 16.4 | 11.8 | 8.8 | 1.7 | 44.1 | |||||||||||||||||||||||||
2023 | 66.7 | — | — | — | — | — | — | 12.7 | 23.2 | 19.6 | 4.0 | 59.5 | |||||||||||||||||||||||||
2024 | 71.1 | — | — | — | — | — | — | — | 9.6 | 22.3 | 5.3 | 37.2 | |||||||||||||||||||||||||
2025 | 104.3 | — | — | — | — | — | — | — | — | 11.3 | 6.7 | 18.0 | |||||||||||||||||||||||||
2026 | 24.7 | — | — | — | — | — | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||||||||
Total | $ | 795.6 | $ | 333.1 | $ | 55.4 | $ | 67.9 | $ | 65.3 | $ | 65.4 | $ | 55.8 | $ | 60.3 | $ | 62.8 | $ | 68.9 | $ | 18.7 | $ | 853.8 | |||||||||||||
UK Distressed & Insolvency | |||||||||||||||||||||||||||||||||||||
2009-2017 | $ | 23.7 | $ | 46.7 | $ | 4.0 | $ | 3.3 | $ | 2.7 | $ | 2.9 | $ | 1.9 | $ | 1.6 | $ | 1.3 | $ | 1.0 | $ | 0.2 | $ | 65.5 | |||||||||||||
2018 | 3.1 | — | 0.3 | 1.9 | 2.0 | 2.4 | 1.7 | 1.5 | 1.2 | 1.0 | 0.2 | 12.2 | |||||||||||||||||||||||||
2019 | 7.1 | — | — | 0.8 | 4.7 | 5.1 | 3.0 | 2.1 | 1.4 | 1.1 | 0.3 | 18.5 | |||||||||||||||||||||||||
2020 | 13.1 | — | — | — | 4.2 | 10.0 | 5.1 | 3.3 | 2.4 | 2.4 | 0.5 | 28.0 | |||||||||||||||||||||||||
Vintage | 2021 | 19.4 | — | — | — | — | 4.6 | 7.0 | 6.6 | 4.4 | 4.6 | 1.0 | 28.0 | ||||||||||||||||||||||||
2022 | 18.9 | — | — | — | — | — | 2.6 | 10.9 | 8.2 | 6.7 | 1.4 | 29.8 | |||||||||||||||||||||||||
2023 | 26.7 | — | — | — | — | — | — | 6.2 | 13.4 | 12.1 | 2.5 | 34.2 | |||||||||||||||||||||||||
2024 | 29.4 | — | — | — | — | — | — | — | 7.1 | 10.8 | 2.5 | 20.4 | |||||||||||||||||||||||||
2025 | 32.0 | — | — | — | — | — | — | — | — | 2.8 | 2.3 | 5.1 | |||||||||||||||||||||||||
2026 | 9.5 | — | — | — | — | — | — | — | — | — | 0.1 | 0.1 | |||||||||||||||||||||||||
Total | $ | 182.9 | $ | 46.7 | $ | 4.2 | $ | 5.9 | $ | 13.7 | $ | 24.9 | $ | 21.3 | $ | 32.3 | $ | 39.4 | $ | 42.5 | $ | 10.8 | $ | 241.7 | |||||||||||||
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Collections | |||||||||||||||||||||||||||||||||||||
Purchase | 2004 - | ||||||||||||||||||||||||||||||||||||
| Price (1)(2) | | 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Total | ||||||||||||||
CAD Insolvency(5) | |||||||||||||||||||||||||||||||||||||
2008-2017 | $ | 121.1 | $ | 126.7 | $ | 38.2 | $ | 31.6 | $ | 22.2 | $ | 11.7 | $ | 3.6 | $ | 0.9 | $ | 0.6 | $ | 0.5 | $ | 0.1 | $ | 236.0 | |||||||||||||
2018 | 40.9 | — | 6.4 | 16.9 | 21.2 | 19.3 | 13.5 | 6.4 | 1.2 | 0.6 | 0.1 | 85.6 | |||||||||||||||||||||||||
2019 | 34.7 | — | — | 3.4 | 12.6 | 18.7 | 15.2 | 11.2 | 6.2 | 1.3 | 0.2 | 68.8 | |||||||||||||||||||||||||
2020 | 29.3 | — | — | — | 3.4 | 11.7 | 13.8 | 11.2 | 8.0 | 4.9 | 0.3 | 53.2 | |||||||||||||||||||||||||
Vintage | 2021 | 23.7 | — | — | — | — | 3.1 | 8.5 | 10.1 | 8.3 | 6.7 | 1.4 | 38.2 | ||||||||||||||||||||||||
2022 | 18.5 | — | — | — | — | — | 1.5 | 5.9 | 6.9 | 6.9 | 1.5 | 22.7 | |||||||||||||||||||||||||
2023 | 38.8 | — | — | — | — | — | — | 3.0 | 11.0 | 17.1 | 3.9 | 35.0 | |||||||||||||||||||||||||
2024 | 61.9 | — | — | — | — | — | — | — | 4.8 | 20.3 | 7.0 | 32.0 | |||||||||||||||||||||||||
2025 | 115.0 | — | — | — | — | — | — | — | — | 18.0 | 7.5 | 25.4 | |||||||||||||||||||||||||
2026 | 27.5 | — | — | — | — | — | — | — | — | — | 0.6 | 0.6 | |||||||||||||||||||||||||
Total | $ | 511.5 | $ | 126.7 | $ | 44.6 | $ | 51.9 | $ | 59.5 | $ | 64.6 | $ | 56.0 | $ | 48.5 | $ | 46.8 | $ | 76.4 | $ | 22.4 | $ | 597.5 | |||||||||||||
CAD Distressed(5)(6) | |||||||||||||||||||||||||||||||||||||
2008-2017 | $ | 80.7 | $ | 94.4 | $ | 22.9 | $ | 17.3 | $ | 13.3 | $ | 11.4 | $ | 8.3 | $ | 5.1 | $ | 2.9 | $ | 2.2 | $ | 0.5 | $ | 178.1 | |||||||||||||
2018 | 14.6 | — | 6.5 | 16.2 | 11.0 | 9.4 | 7.1 | 4.8 | 3.1 | 2.5 | 0.4 | 61.0 | |||||||||||||||||||||||||
2019 | 12.8 | — | — | 13.4 | 10.7 | 8.1 | 4.6 | 2.4 | 1.2 | 0.9 | 0.1 | 41.3 | |||||||||||||||||||||||||
2020 | 19.7 | — | — | — | 10.7 | 12.7 | 7.7 | 4.7 | 3.1 | 1.9 | 0.3 | 41.1 | |||||||||||||||||||||||||
Vintage | 2021 | 9.2 | — | — | — | — | 4.4 | 4.3 | 2.3 | 1.9 | 1.3 | 0.3 | 14.4 | ||||||||||||||||||||||||
2022 | 24.3 | — | — | — | — | — | 7.3 | 8.1 | 4.6 | 4.2 | 0.6 | 24.8 | |||||||||||||||||||||||||
2023 | 18.4 | — | — | — | — | — | — | 5.7 | 6.3 | 4.0 | 0.8 | 16.8 | |||||||||||||||||||||||||
2024 | 33.5 | — | — | — | — | — | — | — | 15.6 | 14.2 | 2.2 | 31.9 | |||||||||||||||||||||||||
2025 | 26.6 | — | — | — | — | — | — | — | — | 8.5 | 3.9 | 12.4 | |||||||||||||||||||||||||
2026 | 6.2 | — | — | — | — | — | — | — | — | — | 0.8 | 0.8 | |||||||||||||||||||||||||
Total | $ | 245.9 | $ | 94.4 | $ | 29.4 | $ | 46.8 | $ | 45.6 | $ | 45.9 | $ | 39.2 | $ | 33.2 | $ | 38.6 | $ | 39.6 | $ | 9.8 | $ | 422.7 | |||||||||||||
LatAm Distressed | |||||||||||||||||||||||||||||||||||||
2021 | $ | 7.9 | $ | — | $ | — | $ | — | $ | — | $ | 0.8 | $ | 5.2 | $ | 2.3 | $ | 1.7 | $ | 1.5 | $ | 0.3 | $ | 11.9 | |||||||||||||
2022 | 25.0 | — | — | — | — | — | 6.0 | 14.4 | 9.2 | 8.0 | 1.9 | 39.5 | |||||||||||||||||||||||||
2023 | 42.3 | — | — | — | — | — | — | 15.4 | 17.7 | 14.3 | 2.8 | 50.2 | |||||||||||||||||||||||||
Vintage | 2024 | 45.8 | — | — | — | — | — | — | — | 10.3 | 20.8 | 5.4 | 36.5 | ||||||||||||||||||||||||
2025 | 33.6 | — | — | — | — | — | — | — | — | 9.5 | 5.6 | 15.1 | |||||||||||||||||||||||||
2026 | 18.5 | — | — | — | — | — | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||||||||
Total | $ | 173.2 | $ | — | $ | — | $ | — | $ | — | $ | 0.8 | $ | 11.2 | $ | 32.0 | $ | 39.0 | $ | 54.1 | $ | 16.3 | $ | 153.4 | |||||||||||||
Total | |||||||||||||||||||||||||||||||||||||
2003-2017(4) | $ | 906.0 | $ | 1,377.2 | $ | 201.8 | $ | 157.1 | $ | 122.6 | $ | 92.5 | $ | 55.1 | $ | 35.5 | $ | 26.7 | $ | 20.6 | $ | 4.2 | $ | 2,093.2 | |||||||||||||
2018 | 221.6 | — | 50.8 | 115.8 | 103.5 | 89.1 | 56.7 | 30.6 | 16.9 | 11.3 | 2.1 | 476.9 | |||||||||||||||||||||||||
2019 | 211.6 | — | — | 51.3 | 126.0 | 114.0 | 83.4 | 55.3 | 33.3 | 17.4 | 3.2 | 483.9 | |||||||||||||||||||||||||
2020 | 166.3 | — | — | — | 48.3 | 105.8 | 74.6 | 54.2 | 38.4 | 22.7 | 3.3 | 347.3 | |||||||||||||||||||||||||
Vintage | 2021 | 156.9 | — | — | — | — | 45.0 | 72.9 | 52.5 | 38.1 | 29.2 | 5.5 | 243.1 | ||||||||||||||||||||||||
2022 | 269.5 | — | — | — | — | — | 39.3 | 110.8 | 90.3 | 75.5 | 15.7 | 331.7 | |||||||||||||||||||||||||
2023 | 530.5 | — | — | — | — | — | — | 91.3 | 219.3 | 215.9 | 49.2 | 575.8 | |||||||||||||||||||||||||
2024 | 723.3 | — | — | — | — | — | — | — | 120.6 | 466.2 | 89.6 | 676.4 | |||||||||||||||||||||||||
2025 | 832.1 | — | — | — | — | — | — | — | — | 139.8 | 132.9 | 272.7 | |||||||||||||||||||||||||
2026 | 149.7 | — | — | — | — | — | — | — | — | — | 4.2 | 4.2 | |||||||||||||||||||||||||
Total | $ | 4,167.6 | $ | 1,377.2 | $ | 252.6 | $ | 324.2 | $ | 400.4 | $ | 446.4 | $ | 382.0 | $ | 430.2 | $ | 583.7 | $ | 998.5 | $ | 309.9 | $ | 5,505.1 | |||||||||||||
| (1) | Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions from the date of acquisition. |
| (2) | For our non-U.S. amounts, purchase price is presented at the exchange rate on the date the pool was purchased. |
| (3) | U.S. Distressed excludes credit card collections from zero basis accounts associated with our Emblem Brand Credit Card. |
| (4) | Excludes forward flow purchases that were resold between 2005 and 2008 shortly after purchase and do not reflect typical collection multiples as there is no cost-to-collect for accounts that were resold. |
| (5) | Adjusted to include historical information from Canaccede Financial Group and its predecessor businesses and excludes collections associated with recovering charged-off accounts in our credit card origination business. |
| (6) | Canada Distressed excludes collections from zero basis accounts associated with Fidem Finance, Inc., which totaled $0.2 million in the three months ended March 31, 2026 and $0.1 million in the three months ended March 31, 2025. |
47
Table of Contents
Deployments
The following table displays our quarterly deployments for the three months ended March 31, 2026 and 2025.
Deployments by Geography and Business Line
Three months ended | ||||||||
March 31, | ||||||||
(in Millions) | | 2026 | | | 2025 | | ||
US Distressed | $ | 63.3 | $ | 92.9 | ||||
US Insolvency | 24.7 | 26.7 | ||||||
UK Distressed & Insolvency | 9.5 | 1.9 | ||||||
Canada Insolvency | 27.5 | 46.3 | ||||||
Canada Distressed | 6.2 | 5.6 | ||||||
Latin America Distressed | 18.5 | 1.8 | ||||||
Total Purchases | $ | 149.7 | $ | 175.2 | ||||
Liquidity and Capital Resources
We actively manage our liquidity to help provide access to sufficient funding to meet our business needs and financial obligations. As of March 31, 2026, unrestricted cash and cash equivalents totaled $26.2 million. Of the unrestricted cash and cash equivalent balance as of March 31, 2026, $17.8 million consisted of cash on hand related to international operations with indefinitely reinvested earnings. Management believes that the Company has sufficient liquidity available to meet our operating cash needs and obligations for the next twelve months and the foreseeable future.
As of March 31, 2026, we had approximately $1,433.3 million in borrowings outstanding, net of unamortized debt issuance costs with $745.8 million of availability under our Revolving Credit Facility (as defined herein) (subject to the borrowing base and applicable debt covenants). Considering borrowing base restrictions, as of March 31, 2026, the amount available to be drawn was $739.7 million. For more information, see Note 8 to our combined and condensed consolidated financial statements.
Net debt is calculated as total borrowings, adjusted to remove the contra-liability for unamortized debt issuance costs and subtract unrestricted cash. We present net debt because we consider it an important supplemental measure used for assessing our leverage and enhanced period-to-period comparability of leverage and is useful to investors as other companies in our industry report similar financial measures. Net debt should not be considered as an alternative to total borrowings determined in accordance with GAAP. Our calculation of net debt may not be comparable to the calculation of similarly titled measures reported by other companies.
Three Months Ended | |||||||
March 31, | |||||||
(in Millions) | 2026 | | 2025 | ||||
Total borrowings | $ | 1,433.3 | $ | 1,212.0 | |||
Unamortized debt issuance costs | 20.9 | 12.3 | |||||
Unrestricted cash and cash equivalents | (26.2) | (27.0) | |||||
Net debt | 1,428.0 | 1,197.3 | |||||
Adjusted cash EBITDA | 798.0 | 551.7 | |||||
Leverage ratio (net debt / adjusted cash EBITDA) | 1.79 | x | 2.17 | x | |||
Our leverage is measured for purposes of our financial covenants in our Revolving Credit Facility based on a ratio of net debt to adjusted cash EBITDA but focused on just the Borrowers (as defined below) and as such, excludes adjusted cash EBITDA related to our Latin America operations as well as to a small portion of our Canadian assets. Additionally, the rating agencies who rate our Senior Notes look to the ratio of net debt to adjusted cash EBITDA as a primary metric in their ratings methodology. Additional information regarding adjusted cash EBITDA, a non-GAAP financial measure, is outlined further below.
We were in compliance with the covenants of our financing arrangements as of March 31, 2026. Financial covenants are important in determining the level of cash flow needed to maintain in relation to our ability to incur debt under our
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Revolving Credit Facility. If these financial covenants are not complied with, we would be in breach of our Revolving Credit Facility agreement if not cured through an additional pay down within the designated timeframe.
Adjusted Cash EBITDA
Adjusted cash EBITDA is a supplemental non-GAAP financial measure used to evaluate our liquidity. Management believes adjusted cash EBITDA helps provide enhanced period-to-period comparability of our cash flow by aligning our collection expenses with our collections. Adjusted cash EBITDA should not be considered as an alternative to net cash provided by operating activities determined in accordance with GAAP.
Some of the limitations related to the use of adjusted cash EBITDA as an analytical tool include:
| ● | does not reflect our future requirements for capital expenditures or contractual commitments; |
| ● | does not reflect changes in, or cash requirements for, our working capital needs; |
| ● | does not reflect the interest expense, or the cash requirements necessary to make interest or principal payments, on our debts; |
| ● | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and adjusted cash EBITDA does not reflect any cash requirements for such replacements; and |
| ● | other companies in our industry may calculate adjusted cash EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, adjusted cash EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
Set forth below is a reconciliation of adjusted cash EBITDA to net cash provided by operating activities.
Three Months Ended March 31, | |||||||
(in millions) | 2026 | | 2025 | ||||
Net cash provided by operating activities | $ | 39.6 | $ | 51.7 | |||
Changes in prepaid expenses | 0.8 | 7.7 | |||||
Changes in accounts payable and accrued expenses | 8.9 | 8.0 | |||||
Provision for credit losses | (0.6) | (0.5) | |||||
Foreign exchange and other income (expense) | (1.4) | (2.5) | |||||
Cash interest paid | 28.9 | 23.7 | |||||
Provision for income taxes | 13.4 | 2.8 | |||||
Total portfolio revenue | (164.7) | (142.3) | |||||
Gross collections | 309.9 | 260.9 | |||||
Stock-based compensation | — | 0.4 | |||||
Merger and acquisition and initial public offering related expenses | 0.2 | 0.8 | |||||
Adjusted Cash EBITDA | $ | 235.0 | $ | 210.7 | |||
Revolving Credit Facility
On November 13, 2024, we amended our Revolving Credit Facility (as supplemented or otherwise modified from time to time, the “Revolving Credit Facility”) under our credit agreement entered into on May 21, 2021 (the “Credit Agreement”). As amended, the Revolving Credit Facility provides for borrowings in an aggregate principal amount of $825.0 million (subject to compliance with a borrowing base and applicable debt covenants) and matures on April 26, 2028. In May 2025, we issued $500.0 million aggregate principal amount of 2030 Notes (as defined below) and used a majority of the proceeds therefrom, net of fees, to pay down the outstanding balance under the Revolving Credit Facility. In October 2025 we further amended and extended our Revolving Credit Facility to an aggregate commitment of $1.0 billion. As of March 31, 2026, there was $254.2 million aggregate principal amount of loans outstanding under the Revolving Credit Facility.
6.000% Senior Notes due 2026
On August 4, 2021, Jefferson Capital Holdings, LLC completed an offering of $300.0 million aggregate principal amount of 6.000% senior notes due 2026 (the “2026 Notes”) under an indenture (the “2026 Notes Indenture”), dated as of
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August 4, 2021, among Jefferson Capital, Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee. The 2026 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2026 Notes is payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2022. The 2026 Notes mature on August 15, 2026. As of March 31, 2026 there was $300.0 million aggregate principal amount of the 2026 Notes outstanding.
9.500% Senior Notes due 2029
On February 2, 2024, Jefferson Capital Holdings, LLC completed an offering of $400.0 million aggregate principal amount of 9.500% senior notes due 2029 (the “2029 Notes”) under an indenture (the “2029 Notes Indenture”), dated as of February 2, 2024, among Jefferson Capital Holdings, LLC the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2029 Notes is payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2024. As of March 31, 2026, there was approximately $400.0 million aggregate principal amount of the 2029 Notes outstanding. The 2029 Notes mature on February 15, 2029.
8.250% Senior Notes due 2030
On May 2, 2025, Jefferson Capital Holdings, LLC completed an offering of $500.0 million aggregate principal amount of 8.250% senior notes due 2030 (the “2030 Notes”) under an indenture (the “New Notes Indenture”), dated as of May 2, 2025, among Jefferson Capital Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2030 Notes is payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2025. As of March 31, 2026, there was approximately $500.0 million aggregate principal amount of the 2030 Notes outstanding. The 2030 Notes mature on May 15, 2030.
Cash Flows Analysis for the Three months Ended March 31, 2026 and 2025
The following table summarizes our cash flow activity for the three months ended March 31, 2026 and 2025:
Three Months Ended | |||||||||||||
(in Millions) | March 31, | Increase | % | ||||||||||
Total cash flow provided by / (used in) | 2026 | | 2025 | | (Decrease) | | Change | ||||||
Operating activities | $ | 39.6 | $ | 51.7 | $ | (12.1) | (23.4) | % | |||||
Investing activities | (4.0) | (56.2) | 52.3 | (92.9) | % | ||||||||
Financing activities | (36.0) | (0.5) | (35.5) | 7,670.0 | % | ||||||||
Exchange rate effects on cash balances held in foreign currencies | (1.6) | (2.8) | 1.2 | (42.9) | % | ||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | $ | (1.9) | $ | (7.8) | $ | 5.9 | (75.4) | % | |||||
Operating Activities
The change in our cash flows from operating activities in the three months ended March 31, 2026 was primarily due to collections recognized as revenue offset by cash paid for operating expenses, interest, and income taxes. Key drivers of operating activities were adjusted for (i) non-cash items included in net income such as provisions for credit losses and depreciation and amortization and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments. Net cash provided by operating activities decreased $12.0 million, or 23.3%, when compared to the three months ended March 31, 2025.
Investing Activities
Cash used in investing activities is normally driven by purchases of investments in receivables. Cash provided by investing activities is mainly driven by collections applied to investments in receivables.
Net cash used in investing activities decreased $52.2 million in the three months ended March 31, 2026, primarily due to increased collections applied to investment in receivables of $26.7 million and decreased purchases of investments in receivables of $25.5 million when compared to the three months ended March 31, 2025.
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Financing Activities
Cash from financing activities is normally provided by draws on our Revolving Credit Facility and proceeds from debt offerings. Cash used in financing activities is primarily driven by principal payments on our Revolving Credit Facility.
Net cash used in financing activities increased $35.5 million, primarily due to payments on our borrowings under our Revolving Credit Facility compared to the three months ended March 31, 2025.
Contractual Obligations
Our contractual obligations as of March 31, 2026 were as follows:
Less Than | 1 - 3 | 4 - 5 | More Than | ||||||||||||
(in millions) | | Total | | 1 Year | | Years | | Years | | 5 Years | |||||
Operating leases | $ | 4.7 | $ | 0.9 | $ | 2.5 | $ | 0.5 | $ | 0.8 | |||||
Revolving credit facility(1) | 260.4 | 260.4 | — | — | — | ||||||||||
Notes payable(2) | 1,486.2 | 366.2 | 158.5 | 961.5 | — | ||||||||||
Purchase commitments(3) | 353.2 | 215.9 | 137.3 | — | — | ||||||||||
Other liabilities | 9.6 | 0.3 | 9.3 | — | — | ||||||||||
Total | $ | 2,114.1 | $ | 843.7 | $ | 307.6 | $ | 962.0 | $ | 0.8 | |||||
| (1) | Includes estimated interest and unused line fees due on our Revolving Credit Facility and assumes that the outstanding balance on such facility remain constant from the March 31, 2026 balance to maturity. |
| (2) | Includes scheduled interest and principal payments on the 2026 Notes, 2029 Notes and 2030 Notes. |
| (3) | Reflects the expected remaining amount to be purchased under forward flow and other contracts for the purchase of receivable portfolios. |
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our combined and condensed consolidated financial statements, which have been prepared in accordance with GAAP. Our significant accounting policies are fundamental to understanding our results of operations and financial condition because they require that we use estimates, assumptions and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. Our significant accounting estimates are discussed in Note 1 to our combined and condensed consolidated financial statements.
We have identified the total portfolio revenue estimate as critical because it requires significant judgment and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions could have a material impact on our results of operations or financial condition.
We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary, based on several items, including, but not limited to, changing macroeconomic and market conditions.
There have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We are subject to interest rate risk from borrowings on our Revolving Credit Facility, as well as our interest-bearing deposits. As such, our combined and condensed consolidated financial results are subject to fluctuations due to changes in market interest rates. We assess this interest rate risk by estimating the increase or decrease in interest expense that would occur due to a change in short-term interest rates. The borrowings on our variable rate credit facilities were $254.2 million as of March 31, 2026.
Foreign Currency Exchange Risk
We transact business globally in multiple currencies. Our international revenue, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. We are exposed to foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, including the British pound and Canadian dollar. Accordingly, changes in exchange rates may negatively affect our future revenue and other operating results as expressed in U.S. dollars.
We have experienced and will continue to experience fluctuations in our net income (loss) as a result of transaction gains or losses related to remeasurement of our asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. We do not currently hedge against the risks associated with currency fluctuations but may do so, or use other derivative instruments, in the future. It is difficult to predict the impact hedging activities would have on our results of operations.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy, which includes labor costs. Nonetheless, if our costs, in particular personnel-related costs, continue to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Concentration Risk
A substantial percentage of our purchases are concentrated with a few large sellers. For the three months ended March 31, 2026 and 2025, our five largest clients together accounted for 41.3% and 53.4% of our deployments, respectively, with the top client representing 9.2% and 17.0% of purchases for the same periods, respectively.
We are subject to risks and uncertainties associated with our client concentration. An inability to maintain our purchasing activity with any of our largest clients as a result of potential competitive pressures, changes in a client’s debt recovery strategy or other factors could have an adverse impact on our financial performance. Our client concentration has, however, decreased in recent years as our client base has become more diversified. A key driver of this trend, which we expect to continue in future periods, has been our ability to add new clients across multiple asset classes, including clients who are first time sellers that previously managed collections themselves.
In addition, we enter into forward flow purchase agreements with our customers on a regular basis, which provides pricing and contractual certainty and mitigates the risk of unforeseen client loss. As of March 31, 2026, we had $353.2 million of total committed forward flows.
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Item 4. Controls and Procedures
Limitation on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.
Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2026, there was no change made in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
In the ordinary course of business, we may at times be subject to claims and legal actions. We do not believe the results of any current or threatened proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity.
Item 1A. Risk Factors
The Company’s business, results of operations, and financial conditions are subject to various risks described in the Company’s 2025 Form 10-K. There have been no material changes to the risk factors identified in the Company’s 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Repurchases
The following table summarizes purchase of our own equity securities during the three months ended March 31, 2026 (dollars in thousands, except per share amounts):
Dollar Value of Shares Purchased | Approximate Dollar Value of | ||||||||||||||||||
Total Number of | Average Price | as Part of Publicly Announced | Shares That May Yet to be Purchased | ||||||||||||||||
Shares purchased | Paid per Share | Plans or Programs | Under the Plans or Programs | ||||||||||||||||
January 1 - 31 | 3,000,000 | (1) | $ | 19.63 | $ | — | $ | — | |||||||||||
February 1- 28 | |||||||||||||||||||
March 1 - 31 | |||||||||||||||||||
Total | 3,000,000 | $ | 19.63 | $ | — | $ | — | ||||||||||||
| (1) | In January 2026, the Company completed a follow-on equity offering of 10,000,000 shares of its common stock, and 1,500,000 shares pursuant to the underwriters option to purchase additional shares. The Company did not raise proceeds through this offering. In conjunction with the offering, the Company repurchased 3,000,000 of its common stock, at an aggregate of $58.9 million. |
Recent Sales of Unregistered Securities
None.
Use of Proceeds
All shares of common stock issued and sold in the IPO were registered under the Securities Act pursuant to our registration statement on Form S-1, as amended (File No. 333-287488), which was declared effective by the SEC on June 25, 2025.
There have been no material changes in the expected use of net proceeds from our IPO as described under the heading “Use of Proceeds” in our Prospectus.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
| (a) | Disclosure in lieu of reporting on a Current Report on Form 8-K. |
None.
| (b) | Material changes to the procedures by which security holders may recommend nominees to the board of directors. |
None.
| (c) | Insider trading arrangements and policies |
During the three months ended March 31, 2026,
Item 6. Exhibits
Incorporated by Reference | ||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith |
3.1 | Amended and Restated Certificate of Incorporation of Jefferson Capital, Inc. | S-1/A | 333-287488 | 3.2 | 6/24/2025 | |
3.2 | Amended and Restated Bylaws of Jefferson Capital, Inc. | S-1/A | 333-287488 | 3.2 | 6/24/2025 | |
4.1 | Specimen Stock Certificate evidencing the shares of common stock | S-1/A | 333-287488 | 4.1 | 6/13/2025 | |
4.2 | Indenture, dated as of August 4, 2021, by and among Jefferson Capital Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee. | S-1 | 333-287488 | 4.2 | 5/21/2025 | |
4.3 | Form of 6.000% Senior Notes due 2026 (included in Exhibit 4.2) | S-1 | 333-287488 | 4.3 | 5/21/2025 | |
4.4 | Indenture, dated as of February 2, 2024, by and among Jefferson Capital Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. | S-1 | 333-287488 | 4.4 | 5/21/2025 | |
4.5 | Form of 9.500% Senior Notes due 2029 (included in Exhibit 4.4). | S-1 | 333-287488 | 4.5 | 5/21/2025 | |
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4.6 | Indenture, dated as of May 2, 2025, by and among Jefferson Capital Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. | S-1 | 333-287488 | 4.6 | 5/21/2025 | |
4.7 | Form of 8.250% Senior Notes due 2030 (included in Exhibit 4.6). | S-1 | 333-287488 | 4.7 | 5/21/2025 | |
4.8 | Stockholders Agreement | 10-Q | 001-42718 | 4.8 | 8/14/2025 | |
10.1† | Amendment No. 8 to Credit Agreement, dated as of April 22, 2026, by and among CL Holdings, LLC, Jefferson Capital Systems, LLC, JC International Acquisition, LLC, CFG Canada Funding, LLC, the guarantors party thereto, the existing lenders party thereto, the incremental lenders party thereto and Citizens Bank, N.A., as administrative agent. | 8-K | 001-42718 | 10.1 | 4/23/2026 | * |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ** | ||||
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ** | ||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | * | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | ||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 99.1) | * |
*Filed herewith
**Furnished herewith
† Certain portions of this exhibit have been redacted pursuant to Item 601(b)(2)(ii) and Item 601(b)(10)(iv) of Regulation S-K, as applicable. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request.
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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, duly authorized.
Date: May 14, 2026
Jefferson Capital, Inc. | ||
By: | /s/ David Burton | |
Name: | David Burton | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) | ||
By: | /s/ Christo Realov | |
Name: | Christo Realov | |
Title: | Chief Financial Officer | |
(Principal Financial Officer) | ||
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