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Receivable Portfolios, Net
 9 Months Ended
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, 2025December 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,
2025202420252024
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,
2025202420252024
Purchase price$346,069 $282,485 $1,081,019 $856,891 
Allowance for credit losses859,199 667,584 2,939,336 1,961,740 
Amortized cost1,205,268 950,069 4,020,355 2,818,631 
Noncredit discount1,562,698 1,220,316 5,164,621 3,688,070 
Face value2,767,966 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 allowance346,069 282,485 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,
2025202420252024
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,
2025202420252024
Recoveries above forecast
$61,459 $22,962 $140,674 $51,258 
Changes in expected future recoveries2,177 (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.