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Receivable Portfolios, Net | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
Receivable Portfolios, Net | Receivable Portfolios, Net The Company’s purchased portfolios of loans are grossed-up to their face value with an offsetting allowance and noncredit discount allocated to the individual receivables as the unit of account is at the individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company applies its charge-off policy and fully writes-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company then records a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which ultimately equals the amount paid for a portfolio purchase and presented as “Receivable portfolios, net” in the Company’s condensed consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. The amount of the negative allowance (i.e., receivable portfolios) will not exceed the total amortized cost basis of the loans written-off. Receivable portfolio purchases are aggregated into pools based on similar risk characteristics. Examples of risk characteristics include financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic location. Once a pool is established, the portfolios will remain in the designated pool unless the underlying risk characteristics change. The purchase EIR of a pool will not change over the life of the pool even if expected future cash flows change. Revenue is recognized for each static pool over the economic life of the pool. Debt purchasing revenue includes two components: (1) Portfolio revenue, which is the accretion of the discount on the negative allowance due to the passage of time (generally the portfolio balance multiplied by the EIR) and also includes all revenue from zero basis portfolio (“ZBA”) collections, and (2) Changes in recoveries, which includes (a) Recoveries above or below forecast, which is the difference between (i) actual cash collected/recovered during the current period and (ii) expected cash recoveries for the current period, which generally represents over or under performance for the period; and (b) Changes in expected future recoveries, which is the present value change of expected future recoveries, where such change generally results from (i) collections “pulled forward from” or “pushed out to” future periods (i.e. amounts either collected early or expected to be collected later) and (ii) magnitude and timing changes to estimates of expected future collections (which can be increases or decreases). The Company measures expected future recoveries based on historical experience, current conditions, reasonable and supportable forecasts, and other quantitative and qualitative factors. Factors that may change the expected future recoveries may include both internal as well as external factors. Internal factors include operational performance, such as capacity and the productivity of the Company’s collection staff. External factors that may have an impact on the Company’s collections include new laws or regulations, new interpretations of existing laws or regulations, and macroeconomic conditions. Receivable portfolios, net consists of the following as of the dates presented (in thousands):
| September 30, 2025 |  | December 31, 2024 |  |  |  |  |  |
Amortized cost | $ | — |  |  | $ | — |  |  |  |  |  |  |
Negative allowance for expected recoveries | 4,270,016 |  |  | 3,776,369 |  |  |  |  |  |  |
Balance, end of period | $ | 4,270,016 |  |  | $ | 3,776,369 |  |  |  |  |  |  |
The following table summarizes the changes in the balance of receivable portfolios, net during the periods presented (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Balance, beginning of period | $ | 4,184,780 |  |  | $ | 3,583,322 |  |  | $ | 3,776,369 |  |  | $ | 3,468,432 |
Negative allowance for expected recoveries - portfolio purchases (1) | 346,069 |  |  | 282,485 |  |  | 1,081,019 |  |  | 856,891 |
Collections applied to receivable portfolios, net (2) | (292,892) |  |  | (222,149) |  |  | (846,292) |  |  | (641,982) |
Changes in recoveries (3) | 63,636 |  |  | 12,675 |  |  | 140,699 |  |  | 6,020 |
Put-backs and recalls | (5,237) |  |  | (4,577) |  |  | (14,796) |  |  | (12,023) |
Disposals and transfers to real estate owned | (949) |  |  | (7,055) |  |  | (2,960) |  |  | (10,153) |
Foreign currency translation adjustments | (25,391) |  |  | 74,559 |  |  | 135,977 |  |  | 52,075 |
Balance, end of period | $ | 4,270,016 |  |  | $ | 3,719,260 |  |  | $ | 4,270,016 |  |  | $ | 3,719,260 |
_______________________ (1)The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Purchase price | $ | 346,069 |  |  | $ | 282,485 |  |  | $ | 1,081,019 |  |  | $ | 856,891 |
Allowance for credit losses | 859,199 |  |  | 667,584 |  |  | 2,939,336 |  |  | 1,961,740 |
Amortized cost | 1,205,268 |  |  | 950,069 |  |  | 4,020,355 |  |  | 2,818,631 |
Noncredit discount | 1,562,698 |  |  | 1,220,316 |  |  | 5,164,621 |  |  | 3,688,070 |
Face value | 2,767,966 |  |  | 2,170,385 |  |  | 9,184,976 |  |  | 6,506,701 |
Write-off of amortized cost | (1,205,268) |  |  | (950,069) |  |  | (4,020,355) |  |  | (2,818,631) |
Write-off of noncredit discount | (1,562,698) |  |  | (1,220,316) |  |  | (5,164,621) |  |  | (3,688,070) |
Negative allowance | 346,069 |  |  | 282,485 |  |  | 1,081,019 |  |  | 856,891 |
Negative allowance for expected recoveries - portfolio purchases | $ | 346,069 |  |  | $ | 282,485 |  |  | $ | 1,081,019 |  |  | $ | 856,891 |
(2)Collections applied to receivable portfolios, net, is calculated as follows during the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cash Collections | $ | 663,018 |  |  | $ | 550,268 |  |  | $ | 1,922,810 |  |  | $ | 1,607,883 |
Less - amounts classified to portfolio revenue | (370,126) |  |  | (328,119) |  |  | (1,076,518) |  |  | (965,901) |
Collections applied to receivable portfolios, net | $ | 292,892 |  |  | $ | 222,149 |  |  | $ | 846,292 |  |  | $ | 641,982 |
(3)Changes in recoveries is calculated as follows during the periods presented, where recoveries include cash collections, put-backs and recalls, and other cash-based adjustments:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Recoveries above forecast | $ | 61,459 |  |  | $ | 22,962 |  |  | $ | 140,674 |  |  | $ | 51,258 |
Changes in expected future recoveries | 2,177 |  |  | (10,287) |  |  | 25 |  |  | (45,238) |
Changes in recoveries | $ | 63,636 |  |  | $ | 12,675 |  |  | $ | 140,699 |  |  | $ | 6,020 |
Recoveries above or below forecast represent over and under-performance in the reporting period, respectively. Collections during the three and nine months ended September 30, 2025, over-performed the forecasted collections by approximately $61.5 million and $140.7 million, respectively, primarily driven by collections over-performance in the U.S. resulting from enhanced collections strategies. Collections during the three and nine months ended September 30, 2024, over-performed the forecasted collections by approximately $23.0 million and $51.3 million, respectively. When reassessing the forecasts of expected lifetime recoveries during the three months ended September 30, 2025, management considered, among other factors, historical and current collection performance, changes in consumer behavior, and the macroeconomic environment. The significant recoveries above forecast in recent periods were carefully evaluated. Management concluded that the recoveries above forecast were primarily current period collections over-performance and did not represent any material shift in timing of the collections. Therefore, the updated forecast did not result in a material change in expected future recoveries. The Company recorded a net positive change in expected future recoveries of approximately $2.2 million during the three months ended September 30, 2025. This $2.2 million net positive change recorded during the three months ended September 30, 2025 was offset by approximately $2.2 million net negative change recorded in the first half of fiscal year 2025 and as a result, the net change in expected future recoveries recorded during the nine months ended September 30, 2025 was negligible. During the three and nine months ended September 30, 2024, the Company recorded approximately $10.3 million and $45.2 million in net negative change in expected future recoveries, respectively.

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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