$96.93
+0.39%
N/A+$0.38
금융 서비스
금융 - 신용 서비스
NASDAQ
활발히 거래 중
Encore Capital Group, Inc.는 다양한 금융 자산을 보유한 개인 소비자에게 부채 해결 및 관련 지원 서비스에 대한 글로벌 솔루션을 제공하는 전문 금융 ...
Encore Capital Group, Inc.는 다양한 금융 자산을 보유한 개인 소비자에게 부채 해결 및 관련 지원 서비스에 대한 글로벌 솔루션을 제공하는 전문 금융 ...
Operator: Good day, and thank you for standing by. Welcome to the Encore Capital Group's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bruce Thomas, Vice President of Global Investor Relations. Please go ahead. Bruce Thomas: Thank you, operator. Good afternoon, and welcome to Encore Capital Group's First Quarter 2026 Earnings Call. Joining me on the call today are Ashish Masih, our President and Chief Executive Officer; Tomas Hernanz, Executive Vice President and Chief Financial Officer; and Ryan Bell, President of Midland Credit Management. Ashish and Thomas will make prepared remarks today, and then we'll be happy to take your questions. Unless otherwise noted, comparisons on this conference call will be made between the first quarter of 2026 and the first quarter of 2025. In addition, today's discussion will include forward-looking statements that are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from our expectations. Please refer to our SEC filings for a detailed discussion of potential risks and uncertainties. We undertake no obligation to update any forward-looking statement. During this call, we will use rounding and abbreviations for the sake of brevity. We will also be discussing non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our investor presentation, which is available on the Investors section of our website. As a reminder, following the conclusion of this conference call, a replay, along with our prepared remarks, will also be available on the Investors section of our website. With that, let me turn the call over to Ashish Masih, our President and Chief Executive Officer. Ashish Masih: Thanks, Bruce, and good afternoon, everyone. Thank you for joining us. Encore delivered another strong performance in the first quarter as our industry leadership and operational execution are on full display. Our business continues to thrive with solid first-quarter portfolio purchases of $363 million. And record collections of $718 million, which were up 19% compared to a year ago. Average receivable portfolios increased 14% to $4.4 billion. Our record collection performance helped earnings increase sharply, with net income in the first quarter of $86 million and earnings per share of $3.86. Our leverage improved to 2.3x at the end of Q1 compared to 2.6x a year ago, even with continued significant portfolio purchases in the first quarter. Encore's strong operating and financial results are primarily driven by the exceptional performance of our MCM business in the U.S. across all dimensions of purchasing, collections, and efficiency. I will provide more details on MCM's results later in the presentation. Before I continue, I believe it's helpful to remind investors of the critical role we play in the consumer credit ecosystem by assisting in the resolution of unpaid debts. These unpaid debts are an expected outcome of the lending business model. Our mission is to create pathways to economic freedom for the consumers we serve by helping them resolve their past due debts. We achieved this by engaging consumers in honest, empathetic, and respectful conversations. We pursue our business objectives through our 3-pillar strategy of participating in the largest and most valuable markets, developing and sustaining a competitive advantage in these markets, and maintaining a strong balance sheet. We employ our strategy across our 2 main businesses: Midland Credit Management, or MCM, in the U.S., and Cabot Credit Management in select European markets. We believe value is created in the consumer debt buying industry through optimal execution of 3 critical drivers: buying, collecting, and funding. When these drivers are executed well within attractive markets, leveraging the resources we possess and our strong balance sheet, we believe they enable highly consistent returns and profitability. The cycle begins with a commitment to purchase portfolios of charged-off receivables at attractive returns, which is the buy well component of our value engine. Our disciplined portfolio purchasing is underpinned by superior data and analytics capabilities, which, when applied to a very large data set stemming from our scale and history, optimizes portfolio valuation through account-level underwriting. As a result, we win more portfolios at strong returns enabled by our superior collections, as reflected in our industry-leading portfolio yield and collections yield. The cycle continues with our commitment to collect efficiently, maximizing net collections to realize strong yields. Our operational excellence, advanced analytics, and consumer-centric approach produce industry-leading yields while still exhibiting a solid cash efficiency margin. As a result, our very effective personalized engagement with consumers leads to payments with predictable, consistent cash flow. This cash flow helps to complete the cycle as it contributes to our commitment to fund competitively based on low-cost funding and a strong balance sheet. Importantly, our balance sheet strength enables access to capital at competitive costs through the credit cycle. In summary, Encore's value engine is the critical enabler of our competitive advantage that allows us to execute our proven 3-pillar strategy to drive shareholder value. I would now like to highlight Encore's first quarter performance in terms of several key metrics, starting with portfolio purchasing. Encore's global portfolio purchases for the first quarter were $363 million as a result of the attractive market conditions and higher returns available in the United States, 87% of our portfolio purchasing dollars were spent in the U.S. during the first quarter. Global collections in Q1 were up 19% to a record $718 million. This exceptional collection's performance is a result of strong execution and continued significant portfolio purchasing as well as the deployment of new technologies, enhanced digital capabilities, and continued operational innovation, especially in the U.S. Our global collections performance in the first quarter compared to our ERC at the end of 2025, was 106%. We believe that our ability to generate significant cash provides us with an important competitive advantage, which is also a key component of our 3-pillar strategy. Similar to the collection's dynamic I mentioned earlier, strong execution, higher portfolio purchases at strong returns over the past few years, as well as operational improvements, have also led to meaningful growth in cash generation. Our cash generation in the first quarter was up 21% compared to Q1 last year, and we expect it to continue to grow. Let's now take a look at our 2 largest markets, beginning with the U.S. The U.S. Federal Reserve reports that revolving credit in the U.S. remains near record levels. At the same time, since bottoming out in late 2021, the credit card charge-off rate in the U.S. increased to its highest level in more than 10 years in 2024 and still remains at an elevated level. The combination of strong lending and elevated charge-off rates continues to drive robust portfolio supply in the U.S. Let me illustrate this impact by highlighting the annualized amount of net dollar charge-offs, which can be estimated by multiplying the revolving credit outstandings by the net charge-off rate. Using Q4 2025 data, the most recent quarter reported by the Federal Reserve, annualized net charge-off volume was more than $54 billion. Similarly, U.S. consumer credit card delinquencies, which are a leading indicator of future charge-offs, also remain near multiyear highs with revolving consumer credit at an elevated level and a charge-off rate of 4%, purchasing conditions in the U.S. market remain favorable. We are observing continued strong U.S. market supply and favorable pricing as well. First-quarter delinquency data support our expectation that the portfolio purchasing environment in the U.S. is expected to remain robust for the foreseeable future. MCM continues to capture significant portions of this U.S. market supply opportunity. MCM portfolio purchases in the first quarter were $316 million, one of our strongest portfolio purchasing quarters ever. In addition to its solid portfolio purchases in Q1, our MCM business continues to excel operationally. MCM collections increased to a record $556 million, which was an increase of 23% compared to Q1 last year. The collection's overperformance in the U.S. was driven by the deployment of new technologies, enhanced digital capabilities, and continued operational innovation, which enabled us to reach more consumers, leading to more payments as well as a large and growing payer book. These initiatives had a greater impact on the early stages of a portfolio's life cycle, leading to overperformance of our recent vintages. We expect that our collections forecast will gradually adjust to reflect the positive impact of these initiatives. Our outstanding results reflect a substantial portfolio purchasing over the last few years at strong returns, as well as improvements we made in our collections operation. Despite some of the negative news and macro uncertainty in the U.S., our consumers' payment behavior remains stable. This is in line with what many of the banks and credit card issuers are saying in the recent earnings calls. We, of course, continue to monitor for any signs of change. Turning to our business in Europe. Cabot delivered another quarter of solid performance in Q1. Cabot's portfolio purchases of $47 million in the first quarter were consistent with Cabot's recent historical trend. We continue to be selective with Cabot's deployments as the U.K. market remains impacted by subdued consumer lending and low delinquencies, as well as continued robust competition. Cabot collections in the first quarter were $161 million, up 7% compared to Q1 last year, supported by currency tailwinds. We continue to focus on Cabot's operational excellence and cost management, including leveraging relevant best practices from our MCM business. This is particularly relevant in the U.K., where banks are increasingly selling fresh portfolios and forward flows. Our operational focus and initiatives within the Cabot business continue to drive cash efficiency margin improvement. I'd now like to hand the call over to Tomas for a more detailed look at our financial results. Tomas Hernanz: Thank you, Ashish. Moving to the financial results slide. In the first quarter, we delivered strong growth in collections and portfolio revenue of 19% and 13%, respectively. The strong collections performance was supported by the high levels of U.S. portfolio purchases in recent quarters, our focus on execution, operational improvements, and stable consumer behavior. Collection yield was 65.2% in Q1, an improvement of 2.6 percentage points compared to last year. Portfolio revenue increased by 13% to $390 million, supported by 14% growth in average receivable portfolios and a portfolio yield of 35.4%. As a reminder, changes in recoveries are the sum of 2 numbers. First, recoveries above or below the forecast are the amount we collected above or below our ERC expectation for the quarter, and are also known as cash overs or cash unders. Second, changes in expected future recoveries are the net present value of changes in the ERC forecast beyond the current quarter. Changes in recoveries were $62.7 million for the quarter. Of that total, the majority, $46 million, were recoveries above forecast. Changes in expected future recoveries were $16.7 million. Put differently, we collected $46 million more than we forecasted in our ERC, which is incremental cash flow. The collection's overperformance in the U.S. was driven by the deployment of new technologies, enhanced digital capabilities, and continued operational innovation, which enabled us to reach more consumers, leading to more payments as well as a large and growing payer book. These initiatives are having a greater impact on the early stages of our portfolio life cycle, leading to overperformance of our recent vintages. We expect that our collection forecast will continue to gradually adjust to reflect the positive impact of these initiatives. Over the next few quarters, we expect any future cash flows to transition eventually into portfolio revenues. Changes in expected future recoveries in Q1 were $16.7 million, a reflection that this transition is taking place. Debt purchasing revenue increased by 23.5% to $453 million, and the resulting debt purchasing yield was 41.1%. Approximately 5.7% was the impact of changes in recoveries. Servicing and other revenues were $23 million, bringing total revenues to $475 million, reflecting growth of 21%. Operating expenses increased only 11% to $291 million compared to 19% growth in collections, reflecting significant operating leverage in the business. Cash efficiency margin for the quarter improved by 2.6 percentage points to 16.9% compared to 58.3% in Q1 last year. We continue to expect the cash efficiency margin for the full year to exceed 58% in 2026. Interest expense and other income increased by 5% to $72 million, reflecting higher debt balances. Our tax provision of $25 million implies a corporate tax rate of approximately 23%, which is in line with our previous guidance. Finally, net income increased by 84% to $86 million, resulting in earnings per share for the quarter of $3.86, up 100% compared to $1.93 in Q1 last year. We believe our balance sheet provides us with very competitive funding costs and access to capital when compared to our peers. Our funding structure also provides us with financial flexibility and diversified funding sources to compete effectively in this favorable supply environment. Leverage closed at 2.3x or 0.3x improvement versus last year and lower than a quarter ago. In March, we extended the maturity date of our securitization facility by 1 year to January 2031, and we have no material maturities until 2028 and ample liquidity to continue to grow our business well into the future. With that, I would like to turn it back over to Ashish. Ashish Masih: Thanks, Tomas. Now I would like to remind everyone of our key financial objectives and priorities. Maintaining a strong and flexible balance sheet, including a strong BB debt rating as well as operating within our target leverage range of 2 to 3x, remains a critical objective. With regard to our capital allocation priorities, buying portfolios, particularly in today's attractive U.S. market, offers the best opportunity to create long-term shareholder value by deploying capital at attractive returns. This is indeed what we are doing, as highlighted by our track record of purchasing receivable portfolios at strong returns. Next on our capital allocation priority list are share repurchases. We repurchased approximately $20 million of Encore shares in the first quarter. And finally, we remain committed to delivering a strong return on invested capital throughout the credit cycle. Our ROIC improved to 14.6% in the first quarter on a trailing 12-month basis, up from 8.3% in Q1 last year. In summary, Encore's first quarter results are an indication that we are off to a very strong start in 2026. I'm truly excited about how Encore is performing and about our future prospects. To begin, through our MCM business in the U.S., we are the largest debt buyer in the largest and most valuable consumer credit market in the world. The U.S. market continues to be very favorable, driven by growth in consumer lending and charge-off rates that are at the highest level in 10 years. Within this environment, we are leveraging our scale and extremely effective collections operation to purchase record amounts of portfolio in the U.S. at strong returns. In Europe, Cabot is delivering stable collection performance and remains focused on operational excellence and cost management. We continue to selectively purchase portfolios amid modestly growing market supply conditions. Finally, we have adequate liquidity to continue to grow the business, as a strong, flexible balance sheet provides us the capacity to capitalize on any opportunities that come up in the market. This competitive advantage only grows as we continue to reduce our leverage. As a result of this continuing strong performance and the business momentum we carried into the second quarter, we are providing the following guidance on key metrics. We continue to anticipate global portfolio purchases in 2026 to be within a range of from $1.4 billion to $1.5 billion. We are raising our collections guidance and now expect global collections in 2026 to increase by 8% to $2.8 billion. In addition, after a strong start to 2026 in the first quarter, in which productivity enhancements and strong execution across the business contributed to significant earnings power, we expect our EPS in 2026 to increase by 19% to $13 per share. We continue to expect the combination of interest expense and other income to be approximately $300 million for the year. And we also continue to expect our effective tax rate for the year to be in the mid-20s on a percentage basis. Now we'd be happy to answer any questions that you may have. Operator, please open up the line for questions. Operator: [Operator Instructions] Our first question comes from David Scharf with Citizens Capital Markets. David Scharf: I guess to start off with, Ashish, I've been asking the same boring question of you for the last few quarters, but I'll ask it again. And that is, as we digest your prepared remarks about the purchasing and collection environments, both here and abroad. Is there anything that you would call out as being notably new versus the calls from 3 and 6 months ago, recognizing that an answer of no is actually very positive, given the group the company is in? But whether it's externally in the purchasing or collection environments here or abroad, or internally in terms of initiatives or investments, is there anything that we should take away as being incremental? Or we're just in the early stages of a long runway of an attractive macro backdrop? Ashish Masih: David, it may be a boring question, but it is a very pertinent one. And the short answer is no. Things are very similar in our U.S. market in terms of total outstandings and charge-off rate, which leads to supply and competition level, and pricing is stable, and returns are strong. And particularly given our strong collections, we are able to deliver even stronger returns than our competition, if you would. And in Europe, pretty stable as well. Supply is not growing, and the competition level is a little bit higher than in the U.S. So, we are staying disciplined there and allocating our capital. In terms of the other macro question, perhaps you had in mind, the consumer behavior as well remains very stable in terms of new payer generation, for example, converting newly purchased accounts to payers. Or the payment plan behavior, it is very consistent with the prior quarters and what we are also hearing from banks and credit card issuers' earnings calls in this quarter, that the consumer remains very resilient despite some of the pressures they may be feeling, for example, on gas prices and whatnot. David Scharf: That's helpful and consistent with what every lender has been saying this reporting season. Maybe just my follow-up question. I haven't really talked a lot about AI, and it's a topic that's been coming up more frequently on these earnings calls. My question is, are there unique regulatory issues we ought to be paying attention to as it relates to maybe the pace of investments in AI by a collection company? Obviously, call center-centric businesses have been front and center, talking about the advantages of enhanced automation and potential returns. But obviously, the collection industry is much more heavily regulated than a lot of other customer service businesses, call center-centric businesses. Can you just maybe talk a little broadly about how you're viewing AI from the standpoint of where to invest, where to just maybe wait and see what regulators are thinking about, and how we ought to think about whether this is a business that could become potentially less labor-intensive somewhere down the road? Ashish Masih: Great question, David. So let me touch on a couple of things on this. So, as a bigger question, we've been leveraging technology for years and increasing its use in our digital and omnichannel, for example, over 50% of our new payments take place digitally. So, we've been using technology, and now AI is another level of that technology that's coming in. In some cases, vendors are incorporating AI or AI-like approaches into their tools, which we are using. In other cases, we are actively piloting some of the new technologies to see what business results we get, and so forth. So we are actively thinking about and doing things. Over time, given our scale and focus on technology, we are very confident we will leverage AI as it becomes more meaningful. Now that said, I think you also raised another question early on, a point. Our calls are very complex. It requires empathy and dealing with consumers. So, tools there, while there are a lot of voice-oriented tools, they are not quite ready to deal with that as well as we can with our account managers. There are some regulatory nuances being able to using this artificial voice, for example, in collection calls and all that one has to be mindful of. Obviously, there's a broader backdrop of AI and financial services, which we are very mindful of as we work with our bank partners as well, and what they are subject to. So we want to be fully aware of that. I would say the last thing is that you mentioned voice is important in the collection industry. It is important, but it is not the only thing; at least from a debt buyer perspective, voice is one element of it. There's a complicated legal process, for example, that you need large data sets and other things, where some AI can be used, some cannot be. So while voice can seem the most intriguing part of technology that can impact collections, it is not the only thing. There are a lot of elements that go into our success and to win in this industry. And we do have a higher regulatory bar in this industry. We are just very mindful of that fact as well. So we're treading in a careful way, but we will be fully leveraging the capabilities when they become mature and available for that. Operator: Our next question comes from Mark Hughes with Truist. Mark Hughes: Did I hear you say you think the overall supply is increasing? You definitely gave the big numbers for the outstanding balances and the elevated charge-off rates. But from your perspective, supply is continuing to go up? Ashish Masih: I would say it's pretty stable. So now there are 2 drivers. Spending is pretty strong from consumers. So lending, there might be seasonal things here and there. But in general, if you look at the trend, it's up, and the charge-off rate is at a 10-year high. It is still at a pretty normal level, a little over 4%. So I would say total supply is stable, although some fintech sellers have come to market over the last 2 to 3 years. So there are some new sellers in there that are pretty regular sellers. So maybe marginally higher, but a very stable, good market in terms of our ability to purchase at strong returns. Mark Hughes: I think it's probably in the queue. I have not had the opportunity to look at it, the collection's multiple for the U.S. 2026 paper. How does that look compared to last year? Ashish Masih: That's a good question, Mark. So collections multiple for the Q1 2026 vintage have started at 2.4. I would highlight, given you mentioned that, how we have been performing better in the early stages of our collections life cycle, which, as I've said before, has led to '24 and '25 vintages doing really well compared to forecast. '24 multiple started at 2.3 is 2.4 now. '24 multiple started a couple of years ago at 2.3, became 2.4, and is now at 2.5. Mark Hughes: Then, your outlook for purchasing, it seems like, under the circumstances, perhaps you could do better. Is that just a prudential judgment that the share buybacks are maybe a better use of capital, or equivalent use of capital? Ashish Masih: I want to make sure I understood your question. In terms of portfolio purchasing, we are staying with our guidance of $1.4 billion to $1.5 billion. Now, as you get better multiples, you're actually getting more ERC for that. So keep in mind, dollars deployed is one element of earnings power or collections power. And the #1 priority is portfolio purchases, as I've been very clear in our priorities. But given our leverage is in the lower half of our range, we have been repurchasing shares, and it's always subject to other conditions of balance sheet strength, ability to generate cash, and the market conditions, as I've said many times. So if we took all of that into consideration, we are repurchasing our shares, and we bought $20 million of that in Q1. Mark Hughes: Is that still like a good run rate of $20 million per quarter? Ashish Masih: That's what we did in Q1. We are in the midpoint of that lower half of the leverage range. So we have not guided on that number. Again, it's subject to multiple other conditions. Number one priority, again, is portfolio purchasing, but we feel good about how we're generating cash and the share repurchases we were able to do in Q1. So I would leave it at that. Mark Hughes: And the guidance for the cash efficiency margin, did I hear correctly? I think last quarter, you talked about to exceed 58%. Was that the same guidance as of this quarter? Ashish Masih: Yes, I'll jump in, but Tomas here is probably going to chime in on that. Yes, we are staying with that general guidance, although we did better in Q1. Now, Q1 can be because of seasonality and all at times higher, but we do expect to keep improving compared to the 58% historical one. Tomas, any other color? Tomas Hernanz: I think what we said was we're going to do better than 25%. So we did just shy of 58%. So we delivered in Q1, 60.9%, which was a very good print. The costs behaved very well in the quarter. So we feel pretty comfortable with margins and cost in '26. Operator: Our next question comes from Mike Grondahl with Northland Capital Markets. Unknown Analyst: This is Logan on for Mike. First, can you give some additional color on what drove the collection strength in the quarter, and also an update on how the 2024 and 2025 vintages are performing? Ashish Masih: So overall collections growth in the quarter is driven by strong purchasing that's been going on for multiple quarters at strong multiples as well as, as I've highlighted many times, the improvements we are making, particularly in our MCM line of business, are driving a lot of that growth because it's impacting the early stages of our portfolio life cycle. As we said a couple of quarters ago, that impacts the vintages of '24 and '25, and they're very large vintages in terms of deployments. So that's why you see very meaningful increases. All of that MCM performance is also complemented by very stable Cabot collection performance. So when you add the whole picture up, purchasing and good collections execution, as well as improvement in the early stage, are driving the growth in collections. Now to your other question on the vintages, those vintages are the ones that I just said. Early-stage improvements have been greater. So '24 vintage moved from 2.3 multiple to 2.5, '25 vintage moved from 2.3 multiple to 2.4. And we're starting out the 2026 vintage at 2.4. So feeling really good about the '24 and '25 vintages and how they've been performing and starting out strong in 2026. Unknown Analyst: One more. Is there anything to call out on the U.S. purchasing environment so far in 2Q, or just some additional insight there? Ashish Masih: No additional insight, Logan. I would say, as the other question asked, it's been very stable, but strong supply, stable supply, good returns. And returns are partially driven by not just good, stable pricing, but also our collection ability. So I just want to highlight that. So we are able to buy the portfolios we want and perform well with those as well. So no change in Q2 compared to Q1 numbers that we just put out there. Operator: [Operator Instructions] Our next question comes from Robert Dodd with Raymond James. Robert Dodd: Congrats on another really excellent quarter. Digging in a little bit, as you said, the '24s and the '25s have continued to outperform. Overall, cash collections are $46 million above curves and 106% collections versus ERC just from the end of the year. Can you give us any more color on, like, what's the driver, I mean, the '24 was outperforming last year, and that was factoring into the expectations for the '25s. I mean, is the outperformance now being the '25s taking over for the '24s? I mean, the '24 is maybe still continuing to outperform, but they're smaller now. Relatively speaking, any additional color on this, or is it still that $46 million, for example, is that predominantly coming from the '24s, and that's just a spectacular vintage? Any color on how that's shaping? Ashish Masih: So it's still coming from those vintages in terms of the overperformance. '24 is still doing very strong. It continues to perform well. So the '24 vintage had the changes in recoveries of about $15 million and $24 million for the '25 vintage. So as you can see, they both continue to perform well. They're still in the early stages. As we have said in the past, it takes some time for our actual performance of history to get into the forecast, and it will. And by the way, this quarter, in addition to this performance above forecast, we also had changes in expected future recoveries of about $16.7 million. So the mix was not 95-5, but 70-30, if you would. That is one proof of how that transition will happen over time. And over time, when that happens, it's going to increase the basis as well on those vintages, and they'll see higher portfolio revenue as those things add up. So still similar good performance from those 2 vintages. By the way, dollar amounts seem large because those were very large purchases. Robert Dodd: To flip back to David's question on the AI issue. I mean, to your point, maybe it's not quite ready versus a human account manager for some of the voice calls, for some other things. How has it been incorporated in any meaningful manner in pricing models in terms of maybe curve modifications or initial pricing? Obviously, there is a very good supply. You are buying a ton, and the multiples look pretty good. I mean, is that just the same old processes or new technologies being incorporated into that component of the business as well? Ashish Masih: It's been over time and AI-like. So I mean, machine learning models and AI modeling techniques, we've been incorporating over time. Machine learning algorithms have been around for a while, and now they're in the AI family. And as new tools are available that leverage more of that, we are testing some of those. Some are doing fine, some not so, but it's part of our test and learn continuous improvement culture that we have. So they keep incorporating new techniques into our modeling. Years ago, it was the cloud and how data got into it, and how you could get more efficient and get better modeling, and then machine learning, and now a bit more self-learning tools that we test and look at. But nothing that's going to suddenly change how we get the modeling and valuation done for our pricing. It's been a constant evolution, and we expect to continue to improve on that. Robert Dodd: One more, if I can. On all these things, I mean, the new technologies in the U.S., these are all paying off. Clearly, I think the efficiencies are up, et cetera, et cetera. I think qualitatively rather than quantitatively, I mean, at some point, I would presume you're going to hit the flatter part of the diminishing return curve on all the technological processes you can introduce rather than modify. I mean, how close is that in terms of you've done a lot of work, is it all predominantly done, and it's now fine-tuning? Or are there still significant steps that you can take? Ashish Masih: This is a constant improvement journey. So I'm not going to predict or bet on how and when technology starts providing diminishing returns broadly in financial services. But over time, we've leveraged things like automation from a cost point of view or cycle times and accuracy point of view, to now what we're seeing is, as I answered last quarter, technology is driving collections improvements much more, especially in the early stage. So we start these things with a multiyear road map, if you would, and phases of implementing these. But every year, the road map keeps getting enhanced and refined with new tools and techniques coming. So as I said last quarter, I think our headcount from '23, '24 to '25 was flat around 7,300, 7,400. And collections went up in those 3 years by 39%, I think. I'm going by memory. So there's a lot of improvement possible still from efficiency. But as I also said, it's the collection side that we are also starting to see big gains. So I think there's a lot of runway left on both sides of the P&L in this journey. Operator: Our next question comes from Mark Hughes with Truist. Mark Hughes: The collection multiple on the Cabot paper in Q1, what was that? Ashish Masih: In Q1, the collections multiple was 2.2. Mark Hughes: 2.2. And then any comments on tax season? Did the tax season bring a meaningful benefit? Ashish Masih: It's been a typical tax season, as I would say, always there's a benefit in Q1 and maybe the early part of Q2 from tax season, depending on timing. But it's been similar. There are some reports of a little bit higher refunds, but depending on which part of this population they go to, it's generally been as expected. Operator: I'm showing no further questions at this time. I'd now like to turn it back to Mr. Masih for closing remarks. Ashish Masih: Thanks for taking the time to join us today, and we look forward to providing our second-quarter 2026 results in August. Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.