Executive Summary

Strong quarter with credit-led upside: EPS rose 47% YoY to $2.86 as net charge-offs fell 90 bps to 5.16%, ROA reached 3.6%, and NIM expanded 58 bps to 15.62% . Purchase volume returned to growth (+2% YoY to $46.0B), led by Digital (+5%) and Diversified & Value (+3%) .
Capital return accelerated: Board added $1.0B to buybacks; total authorization $2.1B through 2Q26. Q3 capital returned was $971M ($861M repurchases, $110M dividends) . Dividend maintained at $0.30 per share (declared Oct 23) .
Guidance mixed: Net revenue trimmed to $15.0–$15.1B (from $15.0–$15.3B) on higher payment rates/lower late fees; NIM expected to average ~15.7% in 2H’25; NCOs tightened to 5.6–5.7% (from 5.6–5.8%); efficiency ratio raised to 33.0–33.5% (from 32.0–33.0%) .
Strategic catalysts: Launch of Walmart/OnePay co‑brand (Sept), Amazon Pay Later ramp, PayPal physical card rollout, and Versatile Credit acquisition underpin 2026 growth; Lowe’s commercial co‑brand portfolio acquisition expected to close 1H26 .
S&P Global consensus vs results: EPS beat ($2.86 vs $2.21*). S&P’s revenue framework shows a miss ($2.68B* vs $3.80B*), but company-reported net revenue was $3.82B; differences reflect revenue definition for financials (see Estimates Context) . Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

Credit outperformance drove earnings: NCO rate fell to 5.16% (–90 bps YoY) and delinquencies improved (30+ DPD 4.39%, –39 bps YoY; 90+ DPD 2.12%, –21 bps YoY), enabling a $152M reserve release and lifting EPS to $2.86 . CFO: “Provision…decreased $451 million…driven by lower net charge‑offs…and a reserve release of $152 million” .
Margin expansion: NIM rose to 15.62% (+58 bps YoY) on lower funding costs (–58 bps liabilities cost) and higher loan yields from PPPCs, partly offset by lower liquidity portfolio yields and asset mix . CFO detailed NIM drivers and basis-point attribution on the call .
Capital return and authorization: $971M returned in Q3 ($861M buybacks, $110M dividends) and authorization increased by $1.0B to $2.1B through 2Q26; CET1 improved to 13.7% (vs 13.1%) . CEO framed buyback expansion as confidence in “strong capital generation capacity” .

What Went Wrong

Net revenue guidance trimmed; efficiency ratio higher: FY net revenue narrowed to $15.0–$15.1B (vs $15.0–$15.3B prior) and efficiency ratio raised to 33.0–33.5% (vs 32.0–33.0%) due to higher payment rates and lower late fee incidence offsetting PPPC benefits and NIM gains .
Payment rate elevated at 16.3% (≈+60 bps YoY), dampening receivables and interest & fee income growth despite spend inflecting positive; average active accounts fell 3% YoY .
Home & Auto and Lifestyle remain soft: Home & Auto purchase volume −1% and receivables −6%; Lifestyle purchase −3%, reflecting selective consumer behavior in larger-ticket/discretionary categories .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Net revenue ($B)	$3.814	$3.801	$3.718	$3.647	$3.823
Diluted EPS ($)	$1.94	$1.91	$1.89	$2.50	$2.86
Net interest margin (%)	15.04%	15.01%	14.74%	14.78%	15.62%
Efficiency ratio (%)	31.2%	33.3%	33.4%	34.1%	32.6%
Net charge-offs (% of avg LRs)	6.06%	6.45%	6.38%	5.70%	5.16%
Purchase volume ($B)	$44.985	$47.955	$40.720	$46.084	$46.005
Return on assets (%)	2.6%	2.6%	2.5%	3.2%	3.6%

Notes:

Net earnings rose to $1.077B (+36.5% YoY) on flat net revenue as higher NII (+2%) and lower provision (–28%) offset higher RSAs (+12%) and opex (+5%) .
Payment rate 16.3% (+~60 bps YoY) and lower late fee incidence muted interest and fees growth; PPPCs lifted yields; funding costs fell with lower benchmarks; NIM drivers detailed in 8‑K and call .

Segment/Platform Purchase Volume and Receivables (YoY)

Platform	Purchase Volume Q3’24 ($B)	Purchase Volume Q3’25 ($B)	Period‑End Receivables Q3’24 ($B)	Period‑End Receivables Q3’25 ($B)
Home & Auto	$11.215	$11.061	$32.321	$30.295
Digital	$13.352	$14.044	$27.771	$28.179
Diversified & Value	$14.992	$15.417	$19.466	$19.500
Health & Wellness	$3.867	$3.976	$15.439	$15.447
Lifestyle	$1.411	$1.371	$6.831	$6.644

Key KPIs and Credit

KPI	Q3 2024	Q3 2025
30+ DPD (% of LRs)	4.78%	4.39%
90+ DPD (% of LRs)	2.33%	2.12%
Allowance coverage ratio (%)	10.79%	10.35%
CET1 ratio (%)	13.1%	13.7%
Tangible book value per share ($)	$32.68	$37.93
Capital returned ($M)	—	$971

Guidance Changes

Metric	Period	Previous Guidance (2Q’25 update)	Current Guidance (Q3’25)	Change
Period‑end loan receivables growth	FY25	Flat	Flat	Maintained
Net revenue	FY25	$15.0–$15.3B	$15.0–$15.1B	Lowered (range tightened)
RSA as % of avg LRs	FY25	3.95–4.10%	3.95–4.05%	Lowered upper bound
Net charge‑offs	FY25	5.6–5.8%	5.6–5.7%	Improved (narrowed lower)
Efficiency ratio	FY25	32.0–33.0%	33.0–33.5%	Raised
Net interest margin	2H’25	~15.70%	~15.70%	Maintained

Management explained the net revenue trim reflects (1) elevated payment rates and (2) lower late fee incidence offsetting PPPCs, while efficiency ratio rises on lower net revenue; loss outlook tightened on better credit .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1’25 & Q2’25)	Current Period (Q3’25)	Trend
Credit actions & PPPCs	PPPCs lifting yields; evaluating rollbacks partner‑by‑partner; <~$50M revenue impact contemplated; payment rate elevated; loss guide moved inside LT range	NIM +58 bps; liabilities cost –58 bps; PPPCs drove +35 bps yield lift; revenue guide trimmed on higher payment rate/lower late fees; PPPC rollbacks limited and not broad‑based	Credit beat continues; cautious, incremental rollback
Consumer/macro	Consumer resilient; spend consistent; cautious on tariffs; elevated payment rate	Consumer still “in pretty good shape”; spend inflected +2%; non‑prime mix lower, better behavior; monitoring mixed macro signals	Stable to improving
New programs (Walmart/OnePay)	Announced Walmart/OnePay program; execution/placement emphasized for 2H’25 ramp	Launched in Sept; “one of the fastest de novo programs”; strong placement; top‑five potential	Positive early traction
Multi‑product strategy (BNPL/Pay Later)	Amazon Pay Later launched; PayPal physical card rollout; partners value multi‑product	Continued Pay Later adoption (Amazon, Lowe’s, JCPenney, Belk, Sleep Number); partners see value of multi‑product	Expanding
Capital return	New $2.5B authorization (Apr), elevated capital return pace	$971M returned in Q3; buybacks authorization increased by $1.0B (total $2.1B)	Accelerating
Technology/AI	Ongoing tech investments; efficiency initiatives	Tech investments continue; OnePay API stack highlighted	Sustained focus

Management Commentary

CEO (press release): “Return to purchase volume growth…stronger spend trends across all five…continued strength in our credit performance…consistent execution has primed our business for strong risk‑adjusted growth as conditions allow.”
CFO (call): “Net interest margin increased 58 bps…49 bps from lower interest‑bearing liabilities cost and 29 bps from higher loan yields due to PPPCs; provision decreased $451M on lower NCOs and $152M reserve release.”
Capital return: “Board approved an incremental $1.0 billion in our share repurchase authorization…total authorization to $2.1 billion at the end of the third quarter.”
Walmart program: “Leading‑edge…embedded digital experience via OnePay app…Walmart+ members get 5% cash back…can clearly be a top five program.”

Q&A Highlights

Guidance trim rationale: Revenue range lowered due to elevated payment rates and lower late fee incidence despite PPPC benefits; efficiency ratio increased on lower net revenue outlook .
PPPC modifications: No broad rollback; any changes are partner‑by‑partner; prior modifications summed to <~$50M revenue and are in the outlook .
Credit aperture: Opening selectively (about 30% of earlier tightening reversed), starting with existing customers and specific high‑return areas; 70% under evaluation; depends on macro signals .
Capital deployment: CET1 at 13.7%; $2.1B buyback authorization to be deployed “aggressive but prudent” with focus on reducing CET1 over time .
NIM trajectory: 4Q step‑up expected given higher receivables mix and funding cost benefits; PPPCs continue to roll through .

Estimates Context

EPS: S&P Global consensus for Q3’25 was $2.21*, actual $2.86, a clear beat. Values retrieved from S&P Global.*
Revenue: S&P Global “Revenue Consensus Mean” was $3.80B*, with S&P “actual” showing $2.68B*, implying a miss within S&P’s framework. Company‑reported net revenue was $3.82B, flat YoY, highlighting definitional differences for financials (S&P often uses a different revenue basis than company “net revenue”). Values retrieved from S&P Global.* Company net revenue from 8‑K was $3.823B .

Metric	S&P Consensus*	Actual*	Company‑reported
EPS ($)	2.21	2.86	2.86
Revenue ($B)	3.80	2.68	Net revenue $3.823

Values retrieved from S&P Global.*

Implications: Street models likely need to revise EPS higher on better credit/NIM trajectory; top‑line modeling should align to company “net revenue” definitions to avoid misinterpretation.

Key Takeaways for Investors

Credit normalization is ahead of plan: Delinquencies and NCOs improved faster than expected, enabling reserve release and EPS upside; FY NCO guide tightened to 5.6–5.7% .
NIM expansion is durable near‑term: 2H’25 NIM ~15.7% driven by lower funding costs and PPPC‑driven yield; watch mix and liquidity yield as partial offsets .
Revenue growth remains constrained by elevated payment rates and lower late fee incidence despite PPPCs; management trimmed FY net revenue range accordingly .
Capital return is a near‑term catalyst: $2.1B buyback capacity through 2Q26 and a $0.30 quarterly dividend; CET1 at 13.7% provides flexibility .
Strategic pipeline supports 2026 growth: Walmart/OnePay ramp, Amazon Pay Later, PayPal physical card, and Versatile Credit integration should offset pockets of discretionary softness (Home/Lifestyle) .
Watch definitional differences in revenue versus S&P: Use company “net revenue” for comparability; rely on EPS for beat/miss signaling .
Risk monitor: Macro (tariffs/labor), consumer payment rates staying elevated (dampens receivables), and efficiency ratio drift higher on lower net revenue; management remains cautious and incremental on PPPC rollbacks and credit aperture .

Additional Press Releases Relevant to Q3 2025

Dividend: Declared $0.30 common dividend payable Nov 17, 2025; preferred dividends detailed for Series A/B .
Versatile Credit acquisition: Closed Oct 1; enhances embedded finance capabilities and non‑lending fee income potential; not material near‑term .
Program updates: Multiple adds/renewals, including Lowe’s commercial co‑brand portfolio acquisition expected to close 1H26 .

Notable Items and Non‑GAAP

Notable items: $45M provision build tied to pending loan portfolio acquisition in Q3’25; prior‑year included $11M preparatory expenses for the late fee rule .
Non‑GAAP: Tangible book value per share rose 16% YoY to $37.93; company provides reconciliations for TCE/TBV and Tier 1 + reserves metrics .

Synchrony Financial (SYF)·Q3 2025 Earnings Summary