Jefferson Capital — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue increased 16.2% year-over-year to a record $177.5 million for the quarter ended June 30, 2026, compared to $152.7 million in the same period in 2025.
• Pre-tax income was $53.3 million, down from $61.9 million in Q2 2025; net income was $41.3 million, down from $47.7 million in Q2 2025.
• Earnings per share (EPS) were $0.67 for the quarter, compared to $18.61 in Q2 2025 (reflecting a share count change).
• Adjusted pre-tax income was $59.3 million; adjusted net income was $47.3 million; adjusted EPS was $0.77.
• Collections grew 17.7% to $300.9 million, up from $255.7 million in Q2 2025.
• Deployments (purchases of receivables) increased 21.5% to $152.2 million, up from $125.3 million in Q2 2025.
• Estimated Remaining Collections (ERC) rose 17.9% to $3.36 billion, up from $2.85 billion in Q2 2025.
• Operating expenses increased 45.6% to $95.4 million, compared to $65.5 million in Q2 2025, driven by higher servicing expenses ($21.3 million increase) including $9.3 million in court costs and $3.9 million related to the Bluestem portfolio.
• Cash Efficiency Ratio improved to 72.2% from 75.9% in Q2 2025.
• Leverage ratio improved to 1.71x at June 30, 2026, from 1.76x at June 30, 2025.
• Net cash provided by operating activities for the six months ended June 30, 2026, was $82.9 million, down from $130.6 million in the same period in 2025.
• Net cash used in financing activities for the six months ended June 30, 2026, was $94.8 million, compared to $43.1 million used in the same period in 2025.

Guidance and Future Outlook

• Management stated the investment environment remains favorable, particularly in auto finance where record high balances and credit quality headwinds are driving portfolio supply.
• The company highlighted its unique position to offer solutions across the spectrum of performing, charged-off, and insolvency auto finance portfolios for both secured and unsecured accounts.
• Forward-looking statements indicate a focus on executing a differentiated strategy to drive shareholder value in the near and long term.

Business Segments and Product Lines

• Collections growth was driven by operations in the United States ($235.4 million, +16.3%), Canada ($35.3 million, +14.6%), United Kingdom ($12.2 million, +14.0%), and Latin America ($18.0 million, +52.5%).
• Deployments increased across all regions: United States ($93.1 million, +15.5%), Canada ($34.2 million, +28.6%), United Kingdom ($6.9 million, +46.8%), and Latin America ($18.0 million, +34.3%).
• ERC growth was observed in the United States ($2,422.5 million, +15.3%), Canada ($420.5 million, +20.7%), United Kingdom ($197.2 million, +24.5%), and Latin America ($324.0 million, +32.6%).
• The Bluestem portfolio purchase, closed in Q4 2025, contributed $41.0 million to collections and $218.2 million to ERC in the quarter, along with $11.0 million in portfolio revenue and $7.1 million in net operating income.
• The company serves Fortune 500 creditors, banks, fintech platforms, telecommunications providers, credit card issuers, and auto finance companies.

Market and Competitive Landscape

• The company operates in the United States, Canada, the United Kingdom, and Latin America.
• It distinguishes itself as one of the few industry participants capable of offering solutions across the full spectrum of auto finance portfolios (performing, charged-off, and insolvency).
• The market environment is characterized by high portfolio supply driven by credit quality headwinds in the auto finance sector.

Risks and Challenges

• Risks include deterioration in the economic or inflationary environment, including interest rates, in the company's operating regions.
• Challenges involve the ability to replace nonperforming loan portfolios with sufficient new portfolios to operate efficiently and profitably.
• Potential risks include changes in federal, state, or international laws regarding bankruptcy and collection, which could negatively impact collection abilities.
• The company faces risks related to regulatory compliance, including potential investigations by the Consumer Financial Protection Bureau, which could result in fines, penalties, or business modifications.
• Risks also include cybersecurity incidents, data privacy regulation compliance (e.g., GDPR), and adverse outcomes in litigation or administrative proceedings.

Management Commentary and Tone

• David Burton, Chairman and CEO, described the quarter's performance as "excellent" with "consistent momentum across all key aspects of the business."
• Management expressed confidence in executing their differentiated strategy and remaining well-positioned to drive shareholder value.
• The tone regarding the investment environment was positive, citing favorable conditions in auto finance.

Analyst Questions and Answers

• No specific analyst questions and answers were included in the provided press release text.

Other Key Points

• The Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on September 3, 2026, to shareholders of record as of August 24, 2026.
• On April 22, 2026, the company completed an upsize of its Revolving Credit Facility (RCF), increasing aggregate commitments to $1.15 billion.
• As of June 30, 2026, the company had $226 million drawn under the RCF and $480.7 million in committed forward flows.
• On August 13, 2026, the company deposited $300 million with the bond trustee for the repayment of 2026 notes expected to be repaid on August 17, 2026.
• The company recognized $8.3 million in non-cash stock-based compensation expense during the quarter.
• Total assets were $2.08 billion as of June 30, 2026, with total liabilities of $1.61 billion and stockholders' equity of $476.2 million.
• The company repurchased $58.9 million of common stock during the six months ended June 30, 2026.