Encore Capital is a specialty finance company that buys portfolios of defaulted consumer debt at deep discounts from banks, credit unions, and other lenders, then collects on those debts over time. The spread between the purchase price and total collections, net of operating and funding costs, drives profitability. Encore operates two main businesses: MCM (Midland Credit Management) in the U.S., which receives the large majority of deployed capital and is the dominant earnings driver, and Cabot Credit Management in Europe, primarily in the UK with smaller operations in France and Spain. Encore buys charged-off credit card debt, personal loans, and other consumer receivables, then contacts those consumers via mail, call centers, digital channels, and legal action, offering payment plans and negotiated settlements. Revenue is recognized using an effective interest rate model based on expected lifetime collections. Key business metrics include Estimated Remaining Collections (ERC), which reflects total expected future collections across all owned portfolios, and the collections multiple, or the ratio of expected lifetime collections to purchase price. Encore funds purchases primarily with debt, targeting a 2–3x debt-to-equity ratio. The U.S. market is Encore's highest-returning market and is currently benefiting from elevated credit card charge-off rates. Cabot has faced headwinds from subdued lending supply and elevated competition in Europe, and is not expected to be a near-term growth driver. Encore also generates a smaller revenue stream from debt servicing, where Cabot provides collections services to European credit originators on a fee basis.