Jefferson Capital, Inc. / DE: Form 10-Q for the period ended Jun 30, 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the combined and consolidated financial statements and the related notes included in our audited combined and consolidated financial statements included in the Company’s 2025 Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and the Company’s 2025 Form 10-K.

Overview

We provide debt recovery solutions and other related services across a broad range of consumer receivables, including credit card, secured and unsecured automotive, telecom and utilities, and other receivables. We primarily purchase portfolios of previously charged-off consumer receivables at deep discounts to face value and manage them by working with individuals as they repay their obligations and work toward financial recovery. Previously charged-off receivables include receivables subject to bankruptcy proceedings. We also provide debt servicing and other portfolio management services to credit originators for nonperforming loans. In addition, through our credit card acquisition programs, we earn credit card revenue. All deployments are purchased from independent third parties.

We operate and manage our business through four reportable segments that are based on geography: United States, United Kingdom, Canada, and Latin America. We also have the following two primary lines of business:

• Distressed, our largest line of business, represents the purchase, collection, and servicing collection of nonperforming consumer loans; and
• Insolvency, which consists of the purchasing and/or servicing of financial assets of consumers who have entered bankruptcy through Chapter 7 or 13 of the U.S. Bankruptcy Code in the United States, consumer proposal, credit counseling, or bankruptcy in Canada and the United Kingdom.

We are headquartered in Minneapolis, Minnesota, and as of June 30, 2026, with 1,089 FTE (including our offshore co-sourced operation).

Our Business Model

Portfolio Purchasing

We purchase portfolios of nonperforming loans, and occasionally those that are performing but with significant credit deterioration, through either single portfolio transactions, referred to as spot sales, or through the pre-arranged purchase of multiple portfolios at regular intervals, referred to as forward flow sales. Under a forward flow contract, we agree to purchase statistically similar nonperforming loan portfolios from credit grantors on a periodic basis at a negotiated price over a specified time period, generally from six months to a year.

When we purchase portfolios with credit deterioration, we find that our expertise in evaluating and managing charged-off accounts allows us to confidently manage such portfolios with a higher level of credit risk than a buyer without that level of expertise would be comfortable. In such instances, a portfolio may include a mix of loans that are delinquent and restructured as well as a significant amount of charged-off or nonperforming loans, with a high level of risk that more of the current loans will become delinquent over time and eventually need to be charged-off. In these cases, we can offer the seller the convenience of purchasing all its loan assets together as opposed to bidding for only a single category of loan, which might result in a seller needing to transact with multiple counterparties. We regularly evaluate the opportunity to purchase portfolios that include a mix of performing accounts and nonperforming accounts, and that comprise all of a credit originator’s loan assets and believe we will find attractive opportunities to make more purchases like these going forward.

We purchase portfolios of nonperforming loans from credit grantors through auctions and negotiated sales. In an auction process, the seller will assemble a portfolio of nonperforming loans and will seek purchase prices from specifically invited potential purchasers. In a privately negotiated sale process, the seller will contact one or more purchasers directly, receive a bid, and negotiate the terms of sale. In either case, invited purchasers will typically have already successfully completed a qualification process and due diligence examination that includes the seller’s review of the purchaser’s experience, financial standing, operating procedures, business practices, and compliance oversight.

We purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across our operations. These methods and models allow us to value portfolios accurately (and limit the risk of overpaying), avoid buying portfolios that are incompatible with our methods or strategies, and align the accounts we purchase with our business and collection channels to maximize future collections. As a result, we have been able to realize attractive returns from the receivables we acquire. We maintain strong relationships with many of the largest financial service providers in the United States, Canada, United Kingdom, and Latin America.

Deployments and Collections

Creditors sell their volume in a mix of forward flow arrangements and competitive bid transactions. Sales levels are expected to fluctuate from quarter to quarter with portfolio pricing remaining competitive.

We believe that smaller competitors continue to face difficulties in the portfolio purchasing market because of the high cost to operate due to regulatory pressure, issuers’ selectiveness with buyers and lack of consistent access to capital. We believe these operational costs favor larger participants, such as us, because the larger market participants are better able to adapt to these pressures and commit to larger purchases and forward flow agreements.

Deployments

Our deployments are a mix of spot sales and forward flow agreements. The timing, contract duration and volumes for each contract can fluctuate leading to variation when compared to prior periods.

The average purchase price, as a percentage of face value, varies from period to period depending on, among other factors, the type and quality of the accounts purchased and the length of time from charge-off to the time we purchase the portfolios.

The average purchase price as a percentage of face value is higher for newly charged-off portfolios as compared to more seasoned portfolios because newly charged-off portfolios generally have higher liquidation rates. Similarly, portfolios consisting of paying accounts tend to have a higher purchase price relative to face value than non-paying accounts due to the higher expectations for collections, as well as lower anticipated collection costs. As a result, in years that we purchase a higher percentage of newly charged-off assets or paying portfolios, we expect that our purchase price as a percentage of face value would be higher than would be in years where a higher ratio of seasoned assets or non-paying portfolios were purchased.

Collections

We have two primary types of collection channels for the collection of our purchased receivables, legal and voluntary. The legal collection channel consists of collections that result from our internal legal channel or from our network of retained law firms. The voluntary collection channel utilizes call centers (domestic and offshore) and collection agencies. The call center collections include collections that result from our call centers, direct mail programs, and digital collections. The collection agencies collections consist of collections from third-party collection agencies that we utilize when we believe they can liquidate better or less expensively than we can.

Key Business Metrics and Non-GAAP Financial Measures

We regularly review net operating income and net income along with a number of key business metrics and non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections, and make business decisions. Although we believe the key business metrics and non-GAAP financial measures we review are useful, they have limitations as analytical tools and should not be considered in isolation, or as substitutes for analysis of our financial results prepared in accordance with GAAP.

Key Business Metrics

Estimated Remaining Collections

We define ERC as the undiscounted sum of all future projected collections on our owned finance receivables portfolios. We calculate ERC using data derived from our databases of owned and serviced debt portfolio in the markets in which we operate and from our proprietary behavioral and asset valuation models. References to our ERC are references to gross ERC (which includes estimated collections in respect of the current charge-off balances). We believe that our ERC estimation represents an important supplemental measure to compare our cash generating capacity with other companies in the debt collection industry, even though we can provide no assurance that we will achieve such collections within a specified time period, or at all.

The following table summarizes the total ERC by geographic area, or segment, during the three months ended:

(in Millions)

For the three months ended June 30, 2026, ERC in our United States reportable segment included $218.2 million from the Bluestem portfolio purchase with the comparative 2025 period having no ERC related to Bluestem.

Deployments

Deployments refers to portfolios purchases in the ordinary course. We believe deployments represent an important measure of our investment activity. Deployments are a key driver of the growth of our ERC and a measure to compare growth in our business with the growth of other companies in the debt collection industry.

The following tables summarize the total deployments or purchases by geographic area, or reportable segments, during the three months ended:

(in Millions)

During the three months ended June 30, 2026, we invested $152.2 million to acquire receivable portfolios, with face values aggregating $2,873.2 million, for an average purchase price of 5.3% of face value. The amount invested in receivable portfolios increased $26.9 million, or 21.5%, compared with the $125.3 million invested during the three months ended June 30, 2025, to acquire receivable portfolios with face values aggregating $1,759.6 million, for an average purchase price of 7.1% of face value.

(in Millions)

During the six months ended June 30, 2026, we invested $301.9 million to acquire receivable portfolios, with face values aggregating $5,581.3 million, for an average purchase price of 5.4% of face value. The amount invested in receivable portfolios increased $1.4 million, or 0.5%, compared with the $300.5 million invested during the six months ended June 30, 2025, to acquire receivable portfolios with face values aggregating $4,517.0 million, for an average purchase price of 6.7% of face value.

Collections

The following tables summarize the total collections by geographic area, or reportable segment, during the periods presented:

(in Millions)

Collections from purchased receivables increased by $45.2 million or 17.7% to $300.9 million during the three months ended June 30, 2026, from $255.7 million during the three months ended June 30, 2025. The increase in collections from purchased receivables compared to the three months ended June 30, 2025, was primarily a result of increased purchases during the period. Collections in our United States reportable segment included for the three months ended June 30, 2026 were $41.0 million for the Bluestem portfolio with no collections in the comparative 2025 period.

(in Millions)

Collections from purchased receivables increased by $94.2 million or 18.2% to $610.8 million during the six months ended June 30, 2026, from $516.6 million during the six months ended June 30, 2025. The increase in collections from purchased receivables compared to the six months ended June 30, 2025, was primarily a result of increased purchases during the period. Collections in our United States reportable segment included $95.5 million from the Bluestem portfolio with no collections in the comparative 2025 period.

Non-GAAP Financial Measures

To supplement our combined and condensed consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures throughout this Quarterly Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our combined and condensed consolidated financial statements prepared and presented in accordance with GAAP.

Adjusted Net Income

Adjusted net income is calculated as net income in accordance with GAAP, adjusted to exclude (i) foreign exchange and other income (expense); (ii) stock-based compensation; (iii) provision for income taxes and (iv) merger and acquisition and other infrequent, non-recurring, non-core or unusual charges. Adjusted net income is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. We present adjusted net income because we consider it an important supplemental measure of our operations and financial performance. Our management believes adjusted net income helps us provide enhanced period-to-period comparability of operations and financial performance and is useful to investors as other companies in our industry report similar financial measures. Adjusted net income should not be considered as an alternative to net income determined in accordance with GAAP.

Some of the limitations related to the use of adjusted net income as an analytical tool include:

• does not reflect our future requirements for capital expenditures or contractual commitments;
• does not reflect changes in, or cash requirements for, our working capital needs; and
• other companies in our industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted net income should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.

Set forth below is a reconciliation of adjusted net income to net income, the most directly comparable financial measure calculated and reported in accordance with GAAP.

(in Millions)

(in Millions)

Components of Results of Operations

Revenue

Our revenue is primarily derived from revenue from investments in receivables, which is revenue recognized from engaging in debt purchasing and recovery activities, and from credit card and servicing revenue streams.

Total Portfolio Revenue

Portfolio revenue consists of two components: (i) portfolio income, which is the accretion of the discount on the negative allowance due to the passage of time (generally the portfolio balance multiplied by the established pool effective interest rate (“EIR”)), and (ii) changes in recoveries, which includes recoveries above or below forecast (the difference between actual cash collected or recovered during the current period and expected cash recoveries for the current period) and changes in expected future recoveries (the present value change of expected future recoveries, where such change generally results from changes to the expected timing of collections and changes to the total amount of expected future collections).

For a majority of the portfolios we purchase, we apply our charge-off policy and fully write off the amortized costs of the individual receivables we acquire immediately after purchasing the portfolio. We then record 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 is presented as “investments in previously charged-off receivables, net” on our combined and condensed consolidated balance sheet. The discount rate is a purchase EIR established based on the purchase price of the portfolio and the expected future cash flows at the time of purchase. From time to time, we will also purchase performing portfolios for a discount, where we will apply the interest method and accrete the discount.

Credit Card Revenue

Credit card revenue consists of interest income, annual fees, late fees, as well as interchange fees, cash advance fees and other miscellaneous items from credit card transactions. Interest income is accrued monthly based on the outstanding receivables and their contractual interest rates.

Servicing Revenue

Servicing revenue consists of the revenue we generate from providing collection services to certain third parties. Generally, we receive a percentage of collections as the fee for services, and in some cases, we receive a fixed fee. Servicing revenue is recognized when the underlying receivables are collected or when a fixed fee service is performed.

Allowance for Credit Losses

Provision for credit losses is the allowance we provide for credit losses on loans and fees receivable. We compute the allowance for credit losses on loans and fees receivable at the pool level using a roll-rate methodology and consider a number of factors in the measurement of the allowance, including historical loss rates, current delinquency and roll-rate trends, the effects of changes in the economy, changes in underwriting criteria and estimated recoveries. The allowance is estimated based on amortized cost basis of the loan, including principal, accrued interest receivable, deferred fees and costs. We place receivables on non-accrual at 90 days past due and write off the accrued interest at 180 days past due or sooner if facts and circumstances indicate earlier non-collectability. Expected recoveries are included in the measurement of the allowance for credit losses.

Operating Expenses

Salaries and Benefits Expense

Salaries and benefits expense primarily consists of base salary, commission, bonus expense and healthcare costs. Additionally, it includes 401k match and stock-based compensation expense. We expense all salaries and benefits expense as incurred. While we expect our salaries and benefits expense will increase in absolute dollars as we continue to invest in our growth and operate as a public company (including as a result of increased stock-based compensation), we expect such expense to decline as a percentage of revenue over time as we scale our business and leverage our investments already made.

Servicing Expenses

Servicing expenses primarily consists of collections and customer service expenses associated with previously charged-off receivables, such as the cost of outsourced collections, debtor correspondence, legal fees associated with the collection of debt and other direct expenses associated with collections and customer service efforts. While we expect our servicing expenses will increase in absolute dollars as our business grows, we expect such expenses will vary from period-to-period as a percentage of revenue for the foreseeable future and decrease as a percentage of revenue over the long term as a result of continued investments to improve the efficiency of our operations and support organization.

Depreciation and Amortization

Depreciation and amortization consists of depreciation of property and equipment and amortization of intangible assets.

Professional Fees

Professional fees primarily consists of legal and consulting expenses, including annual audit fees and various other outside service fees provided by expert services firms. In addition, it includes legal fees associated with settlements and fees associated with merger and acquisition expenses.

We incurred additional expenses related to the IPO and expect to incur additional expense primarily due to the costs of operating as a public company, which are expected to include additional legal, accounting and consulting expenses, among others.

Other Selling, General and Administrative Expenses

Other selling, general and administrative expenses generally consists of rent, travel and entertainment expenses, and other general overhead expenses.

Other Income (Expense)

Interest Expense

Interest expense consists of interest expense on our outstanding debt and amortization of debt issuance costs.

Foreign Exchange and Other Income (Expense)

Foreign exchange and other income (expense) consists of foreign currency related realized gains or losses on portfolio purchase transactions.

Results of Operations

Three months ended June 30, 2026 compared to the three months ended June 30, 2025.

The following tables set forth combined and condensed consolidated income statement data expressed in a dollar amount and as a percentage of total revenues for the periods indicated:

(in Millions)

Revenues

A summary of how our revenues were generated during the periods indicated is as follows:

(in Millions)

Total revenues were $177.5 million for the three months ended June 30, 2026, an increase of $24.8 million, or 16.2%, compared to $152.8 million for the three months ended June 30, 2025. The increase is primarily a result of strong deployment growth in prior periods.

Operating Expenses

Total operating expenses were $95.4 million for the three months ended June 30, 2026, an increase of $29.9 million, or 45.6%, compared to $65.5 million for the three months ended June 30, 2025 driven primarily by an increase of $21.3 million in servicing expenses due to increased court costs of $9.3 million which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections, higher agency and legal commissions of $6.5 million and an increase of $16.6 million in stock-based compensation expense over the three months ended June 30, 2025 partially offset by lower professional fees of $6.3 million due to legal and professional fees incurred as part of the initial public offering in June 2025.

Salaries and Benefits

Salaries and benefits were $21.9 million for the three months ended June 30, 2026 an increase of $15.6 million, or 247.6%, compared to $6.3 million for the three months ended June 30, 2025. The increase in Salaries was driven by $8.3 million in stock-based compensation costs which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO as well as the reversal of compensation accrual of $8.3 million for outstanding Class B units prior to the IPO.

Servicing Expenses

Servicing expenses were $64.8 million for the three months ended June 30, 2026, an increase of $21.3 million, or 49.0%, compared to $43.5 million for the three months ended June 30, 2025. The increase in servicing expenses was primarily driven by increased collections and court costs which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections. Servicing expenses consisted of the following for the three months ended June 30, 2026 and 2025:

(in Millions)

Depreciation and Amortization

Depreciation and amortization was $0.8 million for the three months ended June 30, 2026, a $0.5 million, or 38.5%, decrease from the $1.3 million for the three months ended June 30, 2025. The decrease was primarily due to assets fully amortizing since June 30, 2025 and lower amortization of $0.3 million related to the Conn’s portfolio purchase.

Professional Fees

Professional fees were $3.1 million for the three months ended June 30, 2026 a decrease of $6.3 million, or 67.0%, compared to $9.4 million for the three months ended June 30, 2025. The decrease was primarily due to one-time legal and professional fees incurred as part of the initial public offering in June 2025.

Other Selling, General and Administrative Expenses

Other selling, general and administrative expenses which generally consists of rent, travel and entertainment expenses, and other general overhead expenses were $4.8 million for the three months ended June 30, 2026, a decrease of $0.2 million or 4.0%, compared to $5.0 million for the three months ended June 30, 2025. The decrease is primarily due to lower rent in the three months ended June 30, 206 related to the Conn’s portfolio purchase compared to the three months ended June 30, 2025.

Other Income (Expense)

Interest Expense

Total interest expense was $30.4 million for the three months ended June 30, 2026, an increase of $4.6 million, or 18.0%, compared to $25.8 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in the cost of debt due to the payoff of the credit facility with the net proceeds of the 2030 Senior Notes issued in May 2025 as well as by increased amortization of debt issuance costs of $1.7 million, an increase of $0.3 million or 21.4% higher compared to $1.4 million for the three months ended June 30, 2025, due to the issuance of the 2030 Senior Notes in May 2025.

Interest expense consisted of the following for the three months ended June 30, 2026 and 2025:

(in Millions)

Provision for Income Tax Expense

The provision for income taxes consists primarily of income taxes in certain federal, state, local and foreign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates from those in the United States. Accordingly, our effective tax rates may vary depending on the impact of the valuation allowance of our deferred tax assets and liabilities, and changes in tax laws. The provision for income tax was $12.0 million for the three months ended June 30, 2026, a decrease of $2.3 million or 16.1% compared to $14.3 million for the three months ended June 30, 2025 due to lower taxable income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Segment Results of Operations

The following tables set forth combined and condensed consolidated income statement amounts categorized by segment, for the periods indicated:

(in Millions)

United States

(in Millions)

Portfolio revenue grew $20.1 million or 18.9% in the three months ended June 30, 2026 compared to June 30, 2025, primarily due to the growth in deployments, including the Bluestem portfolio purchase.

Servicing revenue decreased $2.6 million or 68.4% for the three months ended June 30, 2026 compared to June 30, 2025, primarily due to the Conn’s portfolio purchase, which contributed $0.6 million of total servicing revenue in the three months ended June 30, 2026 compared with $3.1 million in the three months ended June 30, 2025.

Salaries and benefits increased $15.0 million or 2,142.9% in the three months ended June 30, 2026 compared to June 30, 2025 driven by $8.3 million for stock-based compensation which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO in June 2025 as well as the reversal of stock-based compensation accrual of $8.3 million for outstanding Class B units partially offset by reductions in personnel and benefit costs related to the Conn’s portfolio purchase due to 72 less FTE for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Servicing expenses grew $20.7 million or 63.7% in the three months ending June 30, 2026 compared to June 30, 2025 driven by increased collections and increased court costs of $9.3 million which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections, higher agency and legal commissions. Servicing expenses includes $3.9 million related to the Bluestem portfolio purchase with no expense in the comparative period in 2025.

Depreciation and amortization was $0.6 million for the three months ended June 30, 2026, a $0.3 million, or 33.3%, decrease from the $0.9 million for the three months ended June 30, 2025. The decrease was primarily due to lower intangible amortization expense of $0.3 million for the three months ended June 30, 2026 associated with the Conn’s purchase compared to the three months ended June 30, 2025.

Professional fees decreased $6.3 million or 72.4% in the three months ended June 30, 2026 compared to June 30, 2025 driven by one-time legal and professional fees incurred as part of the initial public offering in June 2025.

Other selling, general and administrative expenses which generally consists of rent expense, travel and entertainment, and other general overhead expenses decreased $0.4 million or 10.5% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to lower rent expense related to the Conn’s portfolio purchase and various other expense reductions.

Overall net operating income decreased $11.3 million or 17.6% in the three months ended June 30, 2026 compared to June 30, 2025 to $52.7 million from $63.9 million driven by higher stock-based compensation which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO in June 2025, lower net operating income of $11.4 million associated with the Conn’s portfolio purchase compared to the three months ended June 30, 2025, partially offset by $7.1 million in net operating income associated with the Bluestem portfolio purchase with no net operating income for Bluestem in the comparative period in 2025. Net operating income as a percentage of total revenues was 40.9% in the three months ended June 30, 2026 compared to 57.6% in June 30, 2025.

United Kingdom

(in Millions)

Portfolio revenue increased $0.3 million or 4.1% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to an increase in deployment volumes.

Servicing revenue increased $2.6 million or 41.3% in the three months ended June 30, 2026 compared to June 30, 2025 due to increased third party servicing.

Salaries and benefits increased $0.4 million or 9.8% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to higher employee salary and benefit costs.

Servicing expenses decreased $0.2 million or 4.0% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to cost control initiatives.

Overall net operating income increased $2.8 million or 82.4% in the three months ended June 30, 2026 compared to June 30, 2025 due to higher deployments and increased third party servicing. Net operating income as a percentage of total revenues was 37.3% in the three months ended June 30, 2026 compared to 24.8% in June 30, 2025.

Canada

(in Millions)

Portfolio revenue increased $1.5 million or 8.7% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to higher deployments.

Credit card revenue decreased $0.3 million or 23.0% in the three months ended June 30, 2026 compared to June 30, 2025 due to the portfolio continuing to attrit with no new originations since August 2024 due to regulatory changes.

Servicing revenue increased $0.1 million or 24.4% in the three months ended June 30, 2026 compared to June 30, 2025 due to the underlying organic growth.

Overall net operating income increased $1.5 million or 10.6% in the three months ended June 30, 2026 compared to June 30, 2025 due to higher revenue growth. Net operating income as a percentage of total revenues was 75.9% in the three months ended June 30, 2026 compared to 73.4% in June 30, 2025.

Latin America

(in Millions)

Portfolio revenue increased $2.8 million or 31.5% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to increase in deployments.

Salaries and benefits increased $0.3 million or 333.6% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to an FTE increase of 16 in March 2026.

Servicing expenses increased $0.8 million or 25.5% in the three months ended June 30, 2026 compared to June 30, 2025 primarily due to increased collections.

Overall net operating income increased by $1.5 million or 28.5% in the three months ended June 30, 2026 compared to June 30, 2025 due to portfolio revenue growth. Net operating income as a percentage of total revenues was 57.5% in the three months ended June 30, 2026 compared to 58.9% in June 30, 2025.

Six months ended June 30, 2026 compared to six months ended June 30, 2025

The following tables set forth combined and condensed consolidated income statement data expressed in a dollar amount and as a percentage of total revenues for the periods indicated:

(in Millions)

Revenues

A summary of how our revenues were generated during the six months ended June 30, 2026 and 2025 is as follows:

(in Millions)

Total revenues were $354.0 million for the six months ended June 30, 2026, an increase of $46.4 million, or 15.1%, compared to $307.6 million for the six months ended June 30, 2025. The increase is primarily a result of increased deployments during the period.

Operating Expenses

Total operating expenses were $191.0 million for the six months ended June 30, 2026, an increase of $60.4 million, or 46.3%, compared to $130.6 million for the six months ended June 30, 2025 driven by an increase in salaries expense of $24.0 million primarily for stock-based compensation of $16.9 million which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO in June 2025 as well as the reversal of stock-based compensation accrual of $8.3 million for outstanding Class B units partially offset by reductions in personnel and benefit costs related to the Conn’s portfolio purchase due to 72 less FTE for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 and servicing expense increase of $44.1 million related to increased collections. Professional fees decreased $6.3 million primarily due to legal and professional fees incurred as part of the initial public offering in June 2025.

Salaries and Benefits

Salaries and benefits were $44.3 million for the six months ended June 30, 2026 an increase of $24.0 million, or 118.3%, compared to $20.3 million for the six months ended June 30, 2025 primarily due to stock-based compensation of $16.9 million which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO in June 2025 as well as the reversal of stock-based compensation accrual of $8.3 million for outstanding Class B units and higher salary and benefit expenses partially offset by reductions in personnel and benefit costs related to the Conn’s portfolio purchase due to 72 less FTE for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Servicing Expenses

Servicing expenses were $130.4 million for the six months ended June 30, 2026, an increase of $44.1 million, or 51.0%, compared to $86.3 million for the six months ended June 30, 2025. The increase in servicing expenses was primarily driven by increased collections and court costs which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections. Servicing expenses consisted of the following for the six months ended June 30, 2026 and 2025:

(in Millions)

Depreciation and Amortization

Depreciation and amortization was $1.7 million for the six months ended June 30, 2026, a $1.2 million, or 41.3%, decrease from the $2.9 million for the six months ended June 30, 2025. The decrease was due to lower intangible assets amortization of $1.0 million associated with the Conn’s purchase.

Professional Fees

Professional fees were $5.3 million for the six months ended June 30, 2026, a decrease of $6.3 million, or 54.3%, compared to $11.6 million for the six months ended June 30, 2025. The decrease was primarily due to one-time legal and professional fees incurred as part of the initial public offering in June 2025.

Other Selling, General and Administrative Expenses

Other selling, general and administrative expenses generally consist of rent, travel and entertainment expenses, and other general overhead expenses. These expenses totaled $9.3 million for the six months ended June 30, 2026, a decrease of $0.2 million or 2.1%, compared to $9.5 million for the six months ended June 30, 2025. The decrease is due to lower rent expense related to the Conn’s portfolio purchase and various other expense reductions.

Other Income (Expense)

Interest Expense

Total interest expense was $60.9 million for the six months ended June 30, 2026, an increase of $10.2 million, or 20.1%, compared to $50.7 million for the six months ended June 30, 2025. The increase was primarily driven by higher interest expense related to the outstanding notes payable, as well as increased amortization of debt issuance costs of $3.3 million, an increase of $0.7 million or 29.8% higher compared to $2.5 million for the six months ended June 30, 2025, due to the issuance of the 2030 Senior Notes in May 2025.

Interest expense consisted of the following for the period ended June 30, 2026 and 2025:

(in Millions)

Provision for Income Tax Expense

The provision for income taxes consists primarily of income taxes in certain federal, state, local and foreign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates from those in the United States. Accordingly, our effective tax rates may vary depending on the impact of the valuation allowance of our deferred tax assets and liabilities, and changes in tax laws. The provision for income tax was $25.5 million for the six months ended June 30, 2026, an increase of $8.6 million or 50.9% compared to $16.9 million for the six months ended June 30, 2025 which increased in 2026 as the Company is no longer treated as a Partnership for US income tax purposes as it was before the IPO in June 2025.

Segment Results of Operations

The following tables set forth combined and condensed consolidated income statement amounts categorized by segment, for the periods indicated:

(in Millions)

United States

(in Millions)

Portfolio revenue increased $35.6 million or 16.3% in the six months ended June 30, 2026 compared to June 30, 2025, primarily due to growth in deployments, including the Bluestem portfolio purchase which contributed $26.3 million.

Servicing revenue decreased $5.3 million or 63.9% in the six months ended June 30, 2026, primarily due to the Conn’s Portfolio Purchase, which contributed $1.8 million of total servicing revenue in the three months ended June 30, 2026 compared with $6.8 million for the six months ended June 30, 2025.

Salaries and benefits were $32.3 million for the six months ended June 30, 2026 which is an increase of $22.7 million, or 236.5%, compared to $9.6 million for the six months ended June 30, 2025. The increase is due to the increase in personnel expense related to stock-based compensation of $16.9 million which primarily reflects the amortization of grant-date fair value of restricted stock awards granted in connection with the IPO in June 2025 as well as the reversal of stock-based compensation accrual of $8.3 million for outstanding Class B units, higher salary and benefits expense partially offset by reductions in personnel and benefit costs related to the Conn’s portfolio purchase due to 72 less FTE for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Servicing expenses were $107.7 million for the six months ended June 30, 2026, an increase of $41.8 million, or 63.4%, compared to $65.9 million for the six months ended June 30, 2025. The increase in servicing expenses was primarily driven by increased collections, court costs which are incurred upfront at the outset of consumer litigation in anticipation of generating future collections and $11.3 million from the Bluestem portfolio acquisition.

Professional fees were $4.1 million for the six months ended June 30, 2026, a decrease of $6.3 million, or 60.6%, compared to $10.4 million for the six months ended June 30, 2025. The decrease was primarily due to one-time legal and professional fees incurred as part of the initial public offering in June 2025.

Other selling, general and administrative expenses generally consist of rent expense, travel and entertainment expenses, and other general overhead expenses. These expenses totaled $6.6 million for the six months ended June 30, 2026, a decrease of $0.7 million or 9.6%, compared to $7.3 million for the six months ended June 30, 2025. The decrease is primarily due to lower rent expense related to the Conn’s portfolio purchase and various other expense reductions.

Overall net operating income decreased $26.3 million or 20.0% in the six months ended June 30, 2026 than the six months ended June 30, 2025 primarily due to lower net operating income of $32.4 million from the Conn’s portfolio purchase compared to the six months ended June 30, 2025, partially offset by $15.0 million in net operating income from the Bluestem portfolio with no net operating income from the Bluestem portfolio purchase in the six months ended June 30, 2025. Net operating income as a percentage of total revenues was 40.8% in the six months ended June 30, 2026 compared to 57.8% for the six months ended June 30, 2025.

United Kingdom

(in Millions)

Portfolio revenue increased $5.2 million or 43.7% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher deployments in the United Kingdom.

Servicing revenue increased $4.6 million or 38.0% in the six months ended June 30, 2026 compared to June 30, 2025 due to increased third party servicing.

Salaries and benefits increased $0.9 million or 11.5% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher salary and employee benefit costs.

Servicing expenses increased $0.5 million or 5.5% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher deployments.

Overall net operating income increased $8.3 million or 159.6% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher deployments. Net operating income as a percentage of total revenues was 39.9% in the six months ended June 30, 2026 compared to 21.7% for the six months ended June 30, 2025.

Canada

(in Millions)

Portfolio revenue increased $1.6 million or 4.7% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to strong collection performance.

Credit card revenue decreased $0.5 million or 20.8% in the six months ended June 30, 2026 compared to June 30, 2025 due to the portfolio continuing to attrit with no new originations since August 2024 due to regulatory changes.

Servicing revenue increased $0.3 million or 42.9% in the six months ended June 30, 2026 compared to June 30, 2025 due to continued organic growth.

Overall net operating income increased $1.6 million or 5.9% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to strong collection performance. Net operating income as a percentage of total revenues was 75.1% in the six months ended June 30, 2026 compared to 73.6% for the six months ended June 30, 2025.

Latin America

(in Millions)

Portfolio revenue increased $4.8 million or 25.3% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to increased deployments and strong collection performance.

Salaries and benefits increased $0.4 million or 200.0% in the six months ended June 30, 2026 compared to June 30, 2025 primarily due to an FTE increase of 16 in March 2026.

Servicing expense increased $1.8 million or 29.0% in the six months ended June 30, 2026 compared to June 30, 2025 due to increased collections and deployments.

Overall net operating income increased $2.2 million or 18.5% in the six months ended June 30, 2026 compared to June 30, 2025 due to strong collection performance and increased deployments. Net operating income as a percentage of total revenues was 59.2% in the six months ended June 30, 2026 compared to 62.6% for the six months ended June 30, 2025.

Supplemental Performance Data as of June 30, 2026

Investments in Receivables Portfolio Performance.

The accounts represented in the Insolvency category in the tables below are those portfolios of accounts that were in an insolvency status at the time of purchase. This contrasts with accounts in our Distressed portfolios that file for bankruptcy/insolvency protection after we purchase them, which continue to be tracked in their corresponding Distressed portfolio. Distressed customers sometimes file for bankruptcy/insolvency protection subsequent to our purchase of the related Distressed portfolio. When this occurs, we adjust our collection practices to comply with bankruptcy/insolvency rules and procedures; however, for accounting purposes, these accounts remain in the original Distressed portfolio. Insolvency accounts may be dismissed voluntarily or involuntarily subsequent to our purchase of the Insolvency portfolio. Dismissal occurs when the terms of the bankruptcy are not met by the petitioner. When this occurs, we are typically free to pursue collection outside of bankruptcy procedures; however, for accounting purposes, these accounts remain in the original Insolvency pool.

Purchase price multiples can vary over time due to a variety of factors, including pricing competition, supply levels, age of the receivables acquired, and changes in our operational efficiency. For example, increased pricing competition during the 2005 to 2008 period negatively impacted purchase price multiples of our Distressed portfolio compared to prior years. Conversely, during the 2009 to 2011 period, additional supply occurred as a result of the 2008 recession, which resulted in an economic downturn. This created unique and advantageous purchasing opportunities, particularly within the Insolvency market, relative to the prior four years. Purchase price multiples can also vary among types of receivables. For example, we generally incur lower collection costs on our Insolvency portfolio compared with our Distressed portfolio. This allows us, in general, to pay more for an Insolvency portfolio and experience lower purchase price multiples, while generating similar net returns when compared with a Distressed portfolio.

When competition increases and/or supply decreases, pricing often becomes negatively impacted relative to expected collections, and yields tend to trend lower. The opposite tends to occur when competition decreases and/or supply increases.

Within a given portfolio type, to the extent that lower purchase price multiples are the result of more competitive pricing and lower net yields, this will generally lead to lower profitability. As portfolio pricing becomes more favorable on a relative basis, our profitability will tend to increase. Profitability within given Distressed portfolio types may also be impacted by the age and quality of the receivables, which impact the cost-to-collect on those accounts. Fresher accounts, for example, typically carry lower associated collection expenses, while older accounts and lower balance accounts typically carry higher costs and, as a result, require higher purchase price multiples to achieve the same net profitability as fresher paper.

We acquire portfolios and record them at the price paid at the time of acquisition. Beginning in 2022, with the adoption of CECL, we aggregate the acquired pools during the year such that during the year the blended effective interest rate will change to reflect new buying and additional cash flow estimates until the end of the respective year. Once the year is completed, the effective interest rate is fixed at the amount we expect to collect discounted at the rate to equate purchase price to the recovery estimate. During the first year of purchase, we typically allow pools to season before making any material adjustments to the estimated remaining collections (“ERC”s). Subsequent to the initial year, as we establish collection experience and confidence with a pool of accounts, we evaluate whether to update the annually aggregated ERC. These processes could cause the ratio of ERC to purchase price for any given year of buying to gradually change over time.

The numbers presented in the following tables represent collections and do not reflect any costs to collect; therefore, they may not represent relative profitability. Due to all the factors described above, investors should be cautious when making comparisons of purchase price multiples among periods and between types of receivables.

The following tables show certain data related to our investment in receivables portfolios.

PURCHASE PRICE MULTIPLES AS OF JUNE 30, 2026 Excludes Resale as Noted at Bottom (in millions)

(in Millions)

(in Millions)

(1) Includes the portfolios that were acquired through our business acquisitions from the date of acquisition.

(2) For our non-U.S. amounts, purchase price is presented at the exchange rate on the date the pool was purchased.

(3) For our non-U.S. amounts, historical period exchange rates are presented at the respective exchange rate for each collection period.

(4) For our non-U.S. amounts, Total ERC is presented at the exchange rate as of June 30, 2026. .

(5) The original estimated purchase price multiple represents the purchase price multiple at the end of the year of acquisition.

(6) This vintage data excludes forward flow purchases that were resold between 2005 and 2008 shortly after purchase and does not reflect typical collection multiples as there is no cost-to-collect for accounts that were resold.

(7) Adjusted to include historical information from Canaccede Financial Group and its predecessor businesses.

The following table illustrates collections from purchased receivables, total portfolio revenue for the six months ended June 30, 2026 and investment in receivables, net as of June 30, 2026 and monthly EIR, by year of purchase:

RECEIVABLE PORTFOLIO FINANCIAL INFORMATION, BY YEAR OF PURCHASE(1) (in millions)

Note: Not adjusted to include historical information from Canaccede Financial Group and its predecessor businesses. Results of Canaccede Financial Group and its predecessor businesses for deployments from prior to the date of our acquisition are consolidated in the 2020 vintage year.

(1) Refers to revenue from zero basis accounts.

The following table illustrates historical collections, by year, on our portfolios.

COLLECTIONS, BY YEAR, BY YEAR OF PURCHASE Excludes Resale as Noted at Bottom

(in millions)

(in Millions)

(1) Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions from the date of acquisition.

(2) For our non-U.S. amounts, purchase price is presented at the exchange rate on the date the pool was purchased.

(3) U.S. Distressed excludes credit card collections from zero basis accounts associated with our Emblem Brand Credit Card.

(4) Excludes forward flow purchases that were resold between 2005 and 2008 shortly after purchase and do not reflect typical collection multiples as there is no cost-to-collect for accounts that were resold.

(5) Adjusted to include historical information from Canaccede Financial Group and its predecessor businesses and excludes collections associated with recovering charged-off accounts in our credit card origination business.

Deployments

The following table displays our quarterly deployments for the three months ended June 30, 2026 and 2025.

Deployments by Geography and Business Line

(in Millions)

Liquidity and Capital Resources

We actively manage our liquidity to help provide access to sufficient funding to meet our business needs and financial obligations. As of June 30, 2026, unrestricted cash and cash equivalents totaled $20.4 million. Of the unrestricted cash and cash equivalent balance as of June 30, 2026, $16.9 million consisted of cash on hand related to international operations with indefinitely reinvested earnings. On July 2, 2026, we filed a Registration Statement on Form S-3 that was declared effective by the SEC on July 17, 2026, and allows us to offer and sell, from time to time in one or more offerings, up to $100.0 million in the aggregate of securities. Management believes that the Company has sufficient liquidity available to meet our operating cash needs and obligations for the next twelve months and the foreseeable future.

As of June 30, 2026, we had approximately $1,405.8 million in borrowings outstanding, net of unamortized debt issuance costs with $924.1 million of availability under our Revolving Credit Facility (as defined herein) (subject to the borrowing base and applicable debt covenants). Considering borrowing base restrictions, as of June 30, 2026, the amount available to be drawn was $855.4 million. For more information, see Note 8 to our combined and condensed consolidated financial statements.

Net debt is calculated as total borrowings, adjusted to remove the contra-liability for unamortized debt issuance costs and subtract unrestricted cash. We present net debt because we consider it an important supplemental measure used for assessing our leverage and enhanced period-to-period comparability of leverage and is useful to investors as other companies in our industry report similar financial measures. Net debt should not be considered as an alternative to total borrowings determined in accordance with GAAP. Our calculation of net debt may not be comparable to the calculation of similarly titled measures reported by other companies.

(in Millions)

Our leverage is measured for purposes of our financial covenants in our Revolving Credit Facility based on a ratio of net debt to adjusted cash EBITDA but focused on just the Borrowers (as defined below) and as such, excludes adjusted cash EBITDA related to our Latin America operations as well as to a small portion of our Canadian assets. Additionally, the rating agencies who rate our Senior Notes look to the ratio of net debt to adjusted cash EBITDA as a primary metric in their ratings methodology. Additional information regarding adjusted cash EBITDA, a non-GAAP financial measure, is outlined further below.

We were in compliance with the covenants of our financing arrangements as of June 30, 2026. Financial covenants are important in determining the level of cash flow needed to maintain in relation to our ability to incur debt under our Revolving Credit Facility. If these financial covenants are not complied with, we would be in breach of our Revolving Credit Facility agreement if not cured through an additional pay down within the designated timeframe.

Adjusted Cash EBITDA

Adjusted cash EBITDA is a supplemental non-GAAP financial measure used to evaluate our liquidity. Management believes adjusted cash EBITDA helps provide enhanced period-to-period comparability of our cash flow by aligning our collection expenses with our collections. Adjusted cash EBITDA should not be considered as an alternative to net cash provided by operating activities determined in accordance with GAAP.

Some of the limitations related to the use of adjusted cash EBITDA as an analytical tool include:

• does not reflect our future requirements for capital expenditures or contractual commitments;
• does not reflect changes in, or cash requirements for, our working capital needs;
• does not reflect the interest expense, or the cash requirements necessary to make interest or principal payments, on our debts;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and adjusted cash EBITDA does not reflect any cash requirements for such replacements; and
• other companies in our industry may calculate adjusted cash EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted cash EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.

Set forth below is a reconciliation of adjusted cash EBITDA to net cash provided by operating activities.

(in millions)

Revolving Credit Facility

On November 13, 2024, we amended our Revolving Credit Facility (as supplemented or otherwise modified from time to time, the “Revolving Credit Facility”) under our credit agreement entered into on May 21, 2021 (the “Credit Agreement”). As amended, the Revolving Credit Facility provides for borrowings in an aggregate principal amount of $825.0 million (subject to compliance with a borrowing base and applicable debt covenants) and matures on April 26, 2028. In May 2025, we issued $500.0 million aggregate principal amount of 2030 Notes (as defined below) and used a majority of the proceeds therefrom, net of fees, to pay down the outstanding balance under the Revolving Credit Facility. In April 2026 we further amended and extended our Revolving Credit Facility to an aggregate commitment of $1.15 billion. As of June 30, 2026, there was $225.9 million aggregate principal amount of loans outstanding under the Revolving Credit Facility.

6.000% Senior Notes due 2026

On August 4, 2021, Jefferson Capital Holdings, LLC completed an offering of $300.0 million aggregate principal amount of 6.000% senior notes due 2026 (the “2026 Notes”) under an indenture (the “2026 Notes Indenture”), dated as of August 4, 2021, among Jefferson Capital, Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee. The 2026 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2026 Notes is payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2022. The 2026 Notes mature on August 15, 2026. As of June 30, 2026 there was $300.0 million aggregate principal amount of the 2026 Notes outstanding.

9.500% Senior Notes due 2029

On February 2, 2024, Jefferson Capital Holdings, LLC completed an offering of $400.0 million aggregate principal amount of 9.500% senior notes due 2029 (the “2029 Notes”) under an indenture (the “2029 Notes Indenture”), dated as of February 2, 2024, among Jefferson Capital Holdings, LLC the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2029 Notes is payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2024. As of June 30, 2026, there was approximately $400.0 million aggregate principal amount of the 2029 Notes outstanding. The 2029 Notes mature on February 15, 2029.

8.250% Senior Notes due 2030

On May 2, 2025, Jefferson Capital Holdings, LLC completed an offering of $500.0 million aggregate principal amount of 8.250% senior notes due 2030 (the “2030 Notes”) under an indenture (the “New Notes Indenture”), dated as of May 2, 2025, among Jefferson Capital Holdings, LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes are general senior unsecured obligations of Jefferson Capital Holdings, LLC and are guaranteed by certain of Jefferson Capital Holdings, LLC’s wholly-owned domestic restricted subsidiaries. Interest on the 2030 Notes is payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2025. As of June 30, 2026, there was approximately $500.0 million aggregate principal amount of the 2030 Notes outstanding. The 2030 Notes mature on May 15, 2030.

Registration Statement on Form S-3

On July 2, 2026, the Company filed a shelf registration statement on Form S-3 with the SEC. The shelf registration allows the Company to offer and sell up to $100 million in the aggregate of common stock, preferred stock, debt securities, warrants, purchase contracts and units from time to time in one or more offerings, and separately permits certain selling stockholders to offer and sell up to 32,721,807 shares of the Company's common stock. We will not receive any proceeds from the sale of common stock by the selling stockholders.

Cash Flows Analysis for the Six months Ended June 30, 2026 and 2025

The following table summarizes our cash flow activity for the six months ended June 30, 2026 and 2025:

(in Millions)

Operating Activities

The change in our cash flows from operating activities in the six months ended June 30, 2026 was primarily due to collections recognized as revenue offset by cash paid for operating expenses, interest, and income taxes. Key drivers of operating activities were adjusted for (i) non-cash items included in net income such as provisions for credit losses and depreciation and amortization and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.

Investing Activities

Cash used in investing activities is normally driven by purchases of investments in receivables. Cash provided by investing activities is mainly driven by collections applied to investments in receivables.

Net cash used in investing activities decreased $60.9 million in the six months ended June 30, 2026, primarily due to increased collections applied to investment in receivables of $63.1 million when compared to the six months ended June 30, 2025.

Financing Activities

Cash from financing activities is normally provided by draws on our Revolving Credit Facility and proceeds from debt offerings. Cash used in financing activities is primarily driven by principal payments on our Revolving Credit Facility.

Net cash used in financing activities increased $51.7 million, primarily due the repurchase by the Company of our common stock.

Contractual Obligations

Our contractual obligations as of June 30, 2026 were as follows:

(in millions)

(1) Includes estimated interest and unused line fees due on our Revolving Credit Facility and assumes that the outstanding balance on such facility remain constant from the June 30, 2026 balance to maturity.

(2) Includes scheduled interest and principal payments on the 2026 Notes, 2029 Notes and 2030 Notes.

(3) Reflects the expected remaining amount to be purchased under forward flow and other contracts for the purchase of receivable portfolios.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our combined and condensed consolidated financial statements, which have been prepared in accordance with GAAP. Our significant accounting policies are fundamental to understanding our results of operations and financial condition because they require that we use estimates, assumptions and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. Our significant accounting estimates are discussed in Note 1 to our combined and condensed consolidated financial statements.

We have identified the total portfolio revenue estimate as critical because it requires significant judgment and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions could have a material impact on our results of operations or financial condition.

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary, based on several items, including, but not limited to, changing macroeconomic and market conditions.

There have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.