Finance Receivables, net

3 Months Ended

Mar. 31, 2026

Finance receivables, net consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):


	March 31, 2026		December 31, 2025
Amortized cost	$	—	$	—
Negative allowance for expected recoveries	4,637,094		4,688,024
Balance as of end of period	$	4,637,094	$	4,688,024

Changes in Finance receivables, net for the three months ended March 31, 2026 and 2025 were as follows (in thousands):


	Three Months Ended March 31,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Balance as of beginning of period	$	4,383,201	$	304,823	$	4,688,024	$	3,809,723	$	331,019	$	4,140,742
Initial negative allowance for expected recoveries on current period purchases (1)	202,950		17,900		220,850		273,893		17,809		291,702
Recoveries collected and applied to Finance receivables, net (2)	(255,906)		(31,685)		(287,591)		(231,483)		(33,635)		(265,118)
Changes in expected recoveries (3)	40,354		3,532		43,886		26,325		1,597		27,922
Foreign currency translation adjustment	(25,774)		(2,301)		(28,075)		108,406		4,680		113,086
Balance as of end of period	$	4,344,825	$	292,269	$	4,637,094	$	3,986,864	$	321,470	$	4,308,334

(1) Initial negative allowance for expected recoveries on current period purchases

The initial negative allowance for expected recoveries on purchases made during the three months ended March 31, 2026 and 2025 was as follows (in thousands):


	Three Months Ended March 31,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Allowance for credit losses at acquisition	$	(1,190,672)	$	(61,722)	$	(1,252,394)	$	(1,417,971)	$	(73,592)	$	(1,491,563)
Writeoffs, net	1,190,672		61,722		1,252,394		1,417,971		73,592		1,491,563
Expected recoveries	202,950		17,900		220,850		273,893		17,809		291,702
Initial negative allowance for expected recoveries on current period purchases	$	202,950	$	17,900	$	220,850	$	273,893	$	17,809	$	291,702

The purchase price for purchases made during the three months ended March 31, 2026 and 2025 was as follows (in thousands):


	Three Months Ended March 31,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Face value	$	1,587,851	$	90,086	$	1,677,937	$	1,966,064	$	101,474	$	2,067,538
Noncredit discount	(194,229)		(10,464)		(204,693)		(274,200)		(10,073)		(284,273)
Allowance for credit losses at acquisition	(1,190,672)		(61,722)		(1,252,394)		(1,417,971)		(73,592)		(1,491,563)
Purchase price	$	202,950	$	17,900	$	220,850	$	273,893	$	17,809	$	291,702

(2) Recoveries collected and applied to Finance receivables, net

Recoveries collected and applied to Finance receivables, net for the three months ended March 31, 2026 and 2025 were as follows (in thousands):


	Three Months Ended March 31,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected (a)	$	514,154	$	43,016	$	557,170	$	460,969	$	45,107	$	506,076
Amounts reclassified to portfolio income (b)	(258,248)		(11,331)		(269,579)		(229,486)		(11,472)		(240,958)
Recoveries collected and applied to Finance receivables, net	$	255,906	$	31,685	$	287,591	$	231,483	$	33,635	$	265,118

(a)Includes cash collections, buybacks and other cash-based adjustments.

(b)Reclassifications from Finance receivables, net to Portfolio income based on the effective interest rate of the underlying account pools.

(3) Changes in expected recoveries

Changes in expected recoveries for the three months ended March 31, 2026 and 2025 were as follows (in thousands):


	Three Months Ended March 31,
	2026						2025
	Core		Insolvency		Total		Core		Insolvency		Total
Recoveries collected in excess of forecast	$	19,192	$	3,506	$	22,698	$	14,290	$	2,210	$	16,500
Changes in expected future recoveries	21,162		26		21,188		12,035		(613)		11,422
Changes in expected recoveries	$	40,354	$	3,532	$	43,886	$	26,325	$	1,597	$	27,922

Changes in expected recoveries for the three months ended March 31, 2026 were $43.9 million, which included $22.7 million in recoveries collected in excess of forecast and a $21.2 million positive adjustment to changes in expected future recoveries. Recoveries collected in excess of forecast were due primarily to cash collections overperformance in Europe, and to a lesser extent, in South America and the U.S. Changes in expected future recoveries were based on the Company's forecasting models and evaluations of recent performance and were due largely to an increase in the collections forecasts of certain European pools. In the U.S., the impact of an increase in the collections forecast for the 2024 Core pool was partially offset by a decrease in the forecast for the 2023 Core pool and the impact of changes in the expected timing of collections for the 2025 Core pool.

Changes in expected recoveries for the three months ended March 31, 2025 were $27.9 million, which included $16.5 million in recoveries collected in excess of forecast and $11.4 million in changes in expected future recoveries. Recoveries collected in excess of forecast were largely due to cash collections overperformance in Europe and South America, partially offset by underperformance in the U.S. Changes in expected future recoveries were primarily due to the impact of an increase in the collections forecasts on certain U.S. Core and European pools.