Two Losses, Then $10.91

On February 26, 2025, Ashish Masih, president and chief executive of Encore Capital Group, had to publish a number with no soft edges: a full-year net loss of $139 million, or $(5.83) a share. It was the second consecutive year Encore had finished in the red. The year before had been worse - $206 million gone, $(8.72) a share. In the fourth quarter of 2024 alone the company lost $225 million, or $9.42 for every share outstanding.

Encore buys debt that banks have given up on. Portfolios of charged-off consumer receivables change hands for cents on the dollar, and Encore then spends the next decade collecting what it can. The arithmetic is patient. It is also brittle in one specific way: the whole enterprise rests on an estimate of how much of a written-off loan will eventually come back. Move that estimate and the revision does not arrive gradually. It arrives at once, in a single quarter, in public.

In 2024 Encore's estimate moved. It moved in Europe.

The Write-Down Came From Europe

Cabot is Encore's British and European arm, and by 2024 it was the part of the company that would not behave. Masih's account in the results release was unsentimental. For Cabot, he said, 2024 was "a year of progress, but also significant restructuring to resolve certain persistent issues and enable future success."

The restructuring had specifics. Encore walked out of the Spanish secured non-performing loan market in the third quarter and the Italian one in the fourth. It rebased Cabot's estimated remaining collections - the running forecast of every dollar the company still expects to recover - and booked a $101 million goodwill charge in the fourth quarter.

Masih's argument was that the damage was accounting rather than operations. The 2024 results, he said, were "not indicative of the operational performance of our business due to certain non-cash charges." That is the standard defence of a bad year. It is also, unusually, a checkable one, and the check was scheduled for twelve months later.

One detail complicates the tidy version. While Encore was writing Cabot down it was buying more European debt than ever: Cabot's 2024 purchases rose 36 percent, including $200 million in the fourth quarter - the same three months as the goodwill charge. He marked down the old book and paid up for a new one simultaneously.

The American Book Kept Compounding

The other half of the company never wobbled. Midland Credit Management, Encore's U.S. business, was working the most generous supply conditions in years: bank lending growing, delinquencies rising, charge-offs running above 4 percent. In 2024 MCM bought a record $1 billion of U.S. portfolios, up 23 percent. In 2025 it bought $1.17 billion, up another 18 percent, and collected a record $1.95 billion, up 24 percent.

That contrast is the company in miniature. One book set records while the other was being rebuilt underneath it.

Twelve Months, One Reversal

On February 25, 2026, Masih published the check on his own argument. Encore's 2025 net income was $256.8 million. Earnings per share: $10.91. Global collections reached $2.59 billion, up 20 percent, and the company repurchased roughly 9 percent of its shares outstanding for $89.5 million.

"This performance led to $257 million of net income for the year, or earnings per share of $10.91," he said - a sentence that reads differently coming from the executive who had signed off on $(5.83) exactly twelve months before.

The first quarter of 2026 did not soften it. Collections hit a record $718 million. "This collections performance helped earnings increase sharply, with first quarter earnings per share of $3.86 up 100% compared to $1.93 per share a year ago," Masih said.

The Coupon Fell 2.625 Points

Credit markets price a turnaround before anyone writes it up. On May 11, 2026, Encore went out for $550 million of senior secured notes due 2032 and came back the same day having priced $750 million at 6.625 percent. The proceeds retired $500 million of 9.250 percent notes due 2029 in full, along with 200 million euros of floating-rate notes due 2028.

The old coupon was 9.250 percent. The new one is 6.625. A company that had reported a $9.42 quarterly loss fifteen months earlier was borrowing 2.625 points cheaper, and for three years longer.

It was not free. "In May we refinanced $1 billion of debt, incurring $30.5 million of refinancing costs in the second quarter, which will save approximately $15 million in annual interest expense going forward," Masih said. That cost took a full dollar off second-quarter earnings per share. He paid it anyway and reported the figure with the deduction left visible.

He Came Through Operations

Masih is 60 and has run Encore since June 2017, reaching the chief executive's chair by a route through the operating floor rather than the deal desk. He joined Encore in 2009 into operations and corporate development, took over Midland Credit Management as its president in November 2016, and moved up seven months later. Before Encore he was at Capital One from 2001 to 2009, in its U.S. credit card business, and before that at McKinsey and KPMG Consulting. He holds a bachelor's degree in mechanical engineering from the Indian Institute of Technology in New Delhi, a master's in manufacturing systems engineering from Lehigh, and an MBA from Wharton.

In 2019 the U.S. Secretary of Commerce named him to the U.S.-India CEO Forum, and he was reappointed in 2022 for a term running through 2024. "I'm a native of India who has made the U.S. my home for more than 30 years, and I'm proud to lead a U.S.-based company with more than 2,000 of our colleagues working in India," he said then. Encore has run operations in India since 2005.

What The Guidance Now Assumes

The second quarter of 2026, reported on August 5, was the heaviest buying quarter in Encore's history: $372 million of U.S. portfolios, "our strongest purchasing quarter ever." Global collections set a record at $737 million, up 13 percent. Estimated remaining collections - the forward book, the number that broke 2024 - stood at $10.18 billion. Masih has raised full-year guidance twice in six months, from $12.00 a share in February to $13.00 in May to a range of $13.00 to $14.00 in August.

Cabot, meanwhile, sits still. "Portfolio purchases were $72 million while collections of $164 million were in line with the second quarter last year." European markets, as he put it in February, "remain competitive."

Two years after the write-down the European business is not growing, and the guidance does not ask it to. The American one is setting records every quarter, and the guidance assumes it keeps doing so. The estimate that cost Masih two years has been contained. It has not yet been proved right.