Burford Capital Ltd

Unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025

Overview

The table below sets forth a summary of our unaudited condensed consolidated statements of operations for the periods indicated.

Total revenues increased 110% for the three months ended September 30, 2026, partially offset by a 32% increase in total other expenses. The increase in total revenues was primarily due to an increase in capital provision income arising mostly from higher fair value adjustments as described below, while the increase in total other expenses was primarily due to an increase in interest expense as described below. The net result was $23.4 million in net income attributable to Burford Capital Limited shareholders for the three months ended September 30, 2026 as compared to net loss of $19.2 million for the three months ended September 30, 2025.

Total revenues decreased for the nine months ended September 30, 2026, partially offset by a decrease in total operating expenses. The decrease in both total revenues and total operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.7 billion and (ii) with respect to total operating expenses, a decrease in long-term incentive compensation including accruals of $122.6 million and a decrease in case-related expenditures ineligible for inclusion in asset cost of $67.3 million. Furthermore, total operating expenses increased due to an increase in case-related expenditures ineligible for inclusion in asset cost, though partially offset by lower compensation and benefits costs. The net result was $1.6 billion in net loss attributable to Burford Capital Limited shareholders for the nine months ended September 30, 2026 as compared to net income of $100.1 million for the nine months ended September 30, 2025.

Revenues

The table below sets forth the components of our total revenues for the periods indicated.

Capital provision income/(loss)

Three months ended September 30, 2026 as compared to three months ended September 30, 2025

The table below sets forth the components of our capital provision income for the periods indicated.

For the three months ended September 30, 2026, net realized gains were $25.0 million, comprising $54.9 million of gross realized gains, offset by gross realized losses of $29.9 million. For the three months ended September 30, 2025, net realized gains were $70.8 million, comprising $95.8 million of gross realized gains, offset by gross realized losses of $25.0 million. The decrease in net realized gains was due to lower individual favorable conclusions in 2026 as compared to 2025 with no single asset significantly impacting the result. Overall, net realized gains resulted from $94.3 million in realizations for the three months ended September 30, 2026 as compared to $139.4 million in realizations for the three months ended September 30, 2025.

Fair value adjustments during the period, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), were affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains/(losses) upon conclusion of a matter and their transfer to realized gains/(losses), and actual performance of matters as they pass through milestones. All of those factors contributed to the unrealized gain of $123.0 million for the three months ended September 30, 2026 as compared to the unrealized gain of $2.9 million for the three months ended September 30, 2025, with several positive milestone developments during the three months ended September 30, 2026 being the largest contributing factor on the change period over period.

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from June 30, 2026, applying those same discount rates to the portfolio as of September 30, 2026, fair value would have been approximately $120.5 million higher than as reported. The weighted average discount rate across the portfolio increased to 7.6% as of September 30, 2026 from 6.7% as of June 30, 2026, and interest sensitivities of the portfolio to assumed basis point changes in discount rates as of each period end are disclosed in note 11 (Fair value of assets and liabilities) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was down at 48.0% as of September 30, 2026 from 48.6% as of June 30, 2026. The impact of the addition of newly acquired or originated capital provision assets during the period (which generally have higher risk premiums at the start of the capital provision asset's life) was offset by net favorable developments across the rest of the portfolio.

Nine months ended September 30, 2026 as compared to nine months ended September 30, 2025

The table below sets forth the components of our capital provision income for the periods indicated.

For the nine months ended September 30, 2026, net realized gains were $122.8 million, comprising $200.9 million of gross realized gains, offset by gross realized losses of $78.1 million. For the nine months ended September 30, 2025, net realized gains were $178.7 million, comprising $232.0 million of gross realized gains, offset by gross realized losses of $53.3 million. The decrease in net realized gains was due to a combination of an individual realized loss of $25.5 million and a decrease in revenue from the Advantage Fund since the fund concluded its investment period (in December 2024) and now only comprises a small part of the portfolio. Overall, net realized gains resulted from $344.6 million in realizations for the nine months ended September 30, 2026, as compared to $518.3 million in realizations for the nine months ended September 30, 2025.

Fair value adjustments during the period, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), were affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains/(losses) upon conclusion of a matter and their transfer to realized gains/(losses), and actual performance of matters as they pass through milestones. All of those factors contributed to the net reduction in fair value of $2.4 billion for the nine months ended September 30, 2026, of which the vast majority was attributable to the YPF-related assets, primarily due to the impact of the YPF Judgment Reversal.

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from December 31, 2025, applying those same rates to the portfolio at September 30, 2026, fair value would have been approximately $178.2 million higher than as reported. The weighted average discount rate across the portfolio increased to 7.6% as of September 30, 2026, from 6.1% as of December 31, 2025, and interest sensitivities of the portfolio to assumed basis point changes in rates at each period end are disclosed in note 11 (Fair value of assets and liabilities) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was up at 48.0% as of September 30, 2026, from 31.1% as of December 31, 2025. Contributing to the higher risk premium during the period was the addition of newly acquired or originated capital provision assets (as capital provision assets generally have higher risk premiums at their outset) and the negative milestone for the YPF-related assets.

Plus/(Less): Third-party interests in capital provision assets

Third-party interests in capital provision assets decreased 66% for the three months ended September 30, 2026, which is the net impact from an increase in the unrealized gain of an asset related to a third party interest, offset by the decrease in the unrealized gain related to the YPF-related assets.

Third-party interests in capital provision assets reduced capital provision loss by $766.2 million for the nine months ended September 30, 2026, as compared to a reduction of $83.8 million to capital provision income for the nine months ended September 30, 2025, of which $774.4 million was for the YPF-related assets for the nine months ended September 30, 2026.

Asset management income/(loss)

Asset management income decreased 89% and 84% for the three and nine months ended September 30, 2026, respectively, as our remaining private funds are in run off and are therefore earning less management fee income period-over-period. As BOF-C and the Advantage Fund are consolidated entities, asset management income from these private funds is eliminated on a consolidated basis and is not reflected here. See “—Asset Management and Other Services segment” for a discussion of our asset management income, reflecting the impact of the income from BOF-C and the Advantage Fund.

Marketable securities income/(loss) and interest

Marketable securities income and interest decreased 20% and 15% for the three and nine months ended September 30, 2026, respectively, primarily due to lower overnight rates in the three months ended September 30, 2026, compared to 2025, resulting in lower returns on our cash and cash equivalents. In addition, the decrease for the nine months ended September 30, 2026 was also impacted by the fact that in 2025 interest income benefited from the appreciation of the pound sterling against the US dollar in our non-USD holdings, which were liquidated in January 2026 to fund the redemption of the 2026 Bonds.

Operating expenses

The table below sets forth the components of our total operating expenses for the periods indicated.

Total operating expenses increased 9% for the three months ended September 30, 2026, primarily due to higher fair value driven compensation-related accruals, partially offset by a decrease in share-based and deferred compensation costs. The increase in fair value driven compensation-related accruals was primarily related to the higher capital provision income in 2026 as compared to 2025, since it is correlated to the fair value of the capital provision asset portfolio, while the decrease in share-based and deferred compensation costs is primarily attributable to the decrease in deferred compensation expense in 2026 due to (i) the expense acceleration in 2025 of awards to staff who had met the service conditions of the awards and (ii) the lower decrease in the price of Burford shares in 2026 compared to 2025.

Total operating expenses decreased to a credit of $53.5 million for the nine months ended September 30, 2026, primarily due to lower fair value driven compensation-related accruals and lower case-related expenditures ineligible for inclusion in asset cost.

Fair value driven compensation-related accruals decreased for the nine months ended September 30, 2026, primarily due to a $122.6 million credit to long-term incentive compensation including accruals as a result of the YPF Judgment Reversal. Further to the $122.6 million credit related to the YPF Judgment Reversal, there was an expense accrual of $17.0 million from the remainder of the portfolio, which represented aggregate employee carried interest of approximately 10% for the nine months ended September 30, 2026.

Case-related expenditures ineligible for inclusion in asset cost increased for the three months ended September 30, 2026 and decreased for the nine months ended September 30, 2026. The period-over-period changes reflect the level of such expenses and instances where we incur legal or other related expenses that are directly attributable to a capital provision asset but that do not form part of the deployed amount under a capital provision agreement, such as when we bear incremental legal expenses in cases.

Claimant in litigation expenses

Claimant in litigation expenses include situations where we are effectively the claimant in a litigation matter due to the acquisition of assets or the assignment of a claim. Such expenditures accounted for$3.6 million and $2.2 million of the total case-related expenditures ineligible for inclusion in asset cost for the three months ended September 30, 2026 and 2025, respectively, and a credit of $33.1 million and an expense of $9.5 million for the nine months ended September 30, 2026 and 2025, respectively.

The decrease for the nine months ended September 30, 2026 was primarily due to a $67.3 million credit associated with the YPF Judgment Reversal related to accrued contingent fee arrangements associated with the EP Funds, partially offset by an increase in other case costs. Such other case costs totaled $34.2 million for the nine months ended September 30, 2026, of which $23.0 million related to the correction of certain costs that had been previously included within capital provision assets but that did not meet the applicable criteria for inclusion in the fair value of those assets. The impact of this correction was not material to 2026 or any prior periods. While we report these costs as expenses for accounting purposes, we treat them for purposes of return and performance metrics as part of the asset’s cost basis in the same way that we treat traditional legal finance arrangements.

As of September 30, 2026, we have deployed a cumulative $39.0 million of such costs in respect of capital provision assets that remain ongoing.

Other case-related expenses

Other case-related expenditures ineligible for inclusion in asset cost include fees paid to third parties when we have sought our own legal advice or expert opinion with respect to matters related to a capital provision asset. These expenses are expected to fluctuate period-over-period and accounted for $0.4 million and $1.6 million of total case-related expenditures ineligible for inclusion in asset cost for the three months ended September 30, 2026 and 2025, respectively, and $2.8 million and $3.2 million for the nine months ended September 30, 2026 and 2025, respectively.

Other expenses

The table below sets forth the components of our total other expenses for the periods indicated.

Finance costs

Finance costs increased 25% and 38% for the three and nine months ended September 30, 2026, respectively, primarily due to interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate outstanding principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the aggregate outstanding principal amount of the 2026 Bonds in January 2026.

Foreign currency transactions (gains)/losses and other expenses

Foreign currency transactions (gains)/losses and other expenses were losses of $2.5 million for the three months ended September 30, 2026, due to the impact of foreign currency exchange rate movements.

Foreign currency transactions (gains)/losses and other expenses were losses of $17.8 million for the nine months ended September 30, 2026. The period-over-period change was primarily driven by the realization during the three months ended March 31, 2026, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

Provision for/(benefit from) income taxes

The table below sets forth our provision for/(benefit from) income taxes for the periods indicated.

Provision for income taxes increased 135% for the three months ended September 30, 2026, primarily reflecting changes in the mix of earnings across taxing jurisdictions and the related tax effects, including changes in the valuation allowance. Cash taxes paid were $0.1 million for the three months ended September 30, 2026. There were no cash taxes paid for the three months ended September 30, 2025.

Provision for income taxes decreased 31% for the nine months ended September 30, 2026, primarily reflecting changes in the mix of earnings across taxing jurisdictions and the related tax effects, including changes in the valuation allowance. Cash taxes paid were $7.4 million and $21.2 million for the nine months ended September 30, 2026 and 2025, respectively.

Net income/(loss) attributable to non-controlling interests

The table below sets forth our net income/(loss) attributable to non-controlling interests for the periods indicated.

We consolidate certain entities that have other shareholders and/or investors, including the Advantage Fund and BOF-C. The Advantage Fund does not have a traditional management and performance fee structure, but instead we retain any excess returns after the first 10% of annual simple returns are remitted to the Advantage Fund’s investors. With respect to BOF-C, under the co-investing arrangement with the sovereign wealth fund, we (in our capacity as the appointed investment adviser) receive reimbursement of expenses from BOF-C up to a certain level before we or the sovereign wealth fund, as applicable, receive a return of capital. After the repayment of capital, we then receive a portion of the return generated from the assets held by BOF-C. We include 100% of the Advantage Fund’s and BOF-C’s income and expenses in the applicable line items in our unaudited condensed consolidated statements of operations (for example, 100% of the income on the Advantage Fund’s and BOF-C’s capital provision assets is included in capital provision income in our unaudited condensed consolidated statements of operations), and the net amount of those income and expense line items that relate to third-party interests is included in net income/(loss) attributable to non-controlling interests. In turn, this net amount is deducted from net income/(loss) to arrive at net income/(loss) attributable to Burford Capital Limited shareholders in our unaudited condensed consolidated statements of operations. Net income/(loss) attributable to non-controlling interests does not include Colorado and the EP Funds. See note 2 (Summary of significant accounting policies—Consolidation) to our unaudited condensed consolidated financial statements contained in this Form 10-Q for additional information with respect to our consolidation policies.

Net income/(loss) attributable to non-controlling interests increased for the three months ended September 30, 2026, primarily reflecting non-controlling interests’ share of the increase in capital provision income period-over-period. See “Capital provision income/(loss)” above for additional information with respect to the period-over-period change in the different components of capital provision income.

Net income/(loss) attributable to non-controlling interests decreased 21% for the nine months ended September 30, 2026, primarily reflecting non-controlling interests’ share of the decrease in capital provision income period-over-period. See “Capital provision income/(loss)” above for additional information with respect to the period-over-period change in the different components of capital provision income.

Unaudited condensed consolidated statements of financial condition as of September 30, 2026 as compared to December 31, 2025

The table below sets forth specified line items from our unaudited condensed consolidated statements of financial condition as of the dates indicated.

Cash and cash equivalents and marketable securities

Cash and cash equivalents decreased 18% and marketable securities decreased 25%, in each case, as of September 30, 2026. The net decrease in cash and cash equivalents and marketable securities primarily reflects (i) the redemption of the 2026 Bonds and the 2028 Notes, (ii) the funding of capital provision assets and (iii) the impact from third-party net capital distributions, partially offset by the issuance of the 2029 Notes and the 2034 Notes, and the proceeds received from capital provision assets.

Other assets

Other assets increased 5% as of September 30, 2026, primarily due to the acquisitions of equity method and other investments.

Due from settlement of capital provision assets

Due from settlement of capital provision assets decreased 27% as of September 30, 2026, primarily due to the relative level of new realizations, offset by the collection of receivables, during the nine months ended September 30, 2026. Of the $164.8 million of due from settlement of capital provision assets receivables outstanding as of December 31, 2025, 65% was collected in cash during 2026.

Capital provision assets

Capital provision assets decreased 41% as of September 30, 2026, primarily due to the YPF Judgment Reversal and the impact of realizations, partially offset by continued deployments into capital provision assets.