Executive Summary

EPS missed but revenue beat: diluted EPS $1.18 vs $1.33 S&P Global consensus (-11%), while revenue of $129.6M beat $99.6M consensus (+30%); management cited higher leasing-related credit costs and lower projected traditional lending balances as headwinds (S&P Global estimates and actuals marked with asterisk; see Estimates Context).*
Fintech engine remained strong: GDV rose 16% YoY to $44.04B; total card/ACH/payment fees +10% YoY to $30.6M; consumer credit fintech fees rose to $4.5M from $1.6M; credit sponsorship balances ended at $785M (+15% QoQ, +180% YoY) .
Asset quality/mix: criticized REBL assets fell to $185.3M from $215.8M, with $102M under contract expected to close in Q4; however, REBL past-due balances increased sequentially in Q3 but are expected to improve as contracted resolutions close .
Guidance reset lowers near-term EPS but reinforces medium-term vector: 2025 EPS guidance cut to $5.10 (from $5.25); targeting at least $7.00 EPS run-rate by Q4’26 and preliminary 2027 EPS of $8.25; restructuring, AI efficiency, and buybacks are core levers .

What Went Well and What Went Wrong

What Went Well

Fintech momentum: “Fintech GDV continues to grow above trend at 16%,” with credit sponsorship balances at $785M (+15% QoQ, +180% YoY) and embedded finance development tracking for launch next year .
Payments fee growth: Total prepaid/debit/ACH/other payment fees rose 10% YoY to $30.6M; consumer credit fintech fees rose to $4.5M from $1.6M YoY, aided by product and partner expansion .
Portfolio derisking: Criticized REBL assets declined 14% QoQ to $185.3M, with $102M under contract expected to close in Q4; management “fairly confident” in achieving the reduction ring-fenced for Q4 .

What Went Wrong

EPS miss vs consensus: Diluted EPS of $1.18 missed S&P Global consensus of $1.33, as provisions rose—$5.8M for non-consumer fintech loans, with $4.8M tied to leasing (trucking/transportation) .*
Guidance cut for 2025: EPS guidance trimmed to $5.10 (from $5.25) due to “lower projected balances for traditional lending” and “increased credit provision for leasing” tied to trucking dispositions .
Mixed credit optics intra-quarter: REBL past-due balances increased sequentially into Q3, though management expects Q4 improvement as $102M in contracted resolutions close; consumer fintech charge-offs remain high but are indemnified/credit-enhanced by the partner, leaving net income neutral on that portfolio .

Financial Results

Results vs prior periods (bank “Adjusted Total Revenue” used to exclude consumer fintech credit enhancement for comparability)

Metric	Q3 2024	Q2 2025	Q3 2025
Adjusted Total Revenue ($M)	$125.8	$138.0	$134.8
Net Interest Income ($M)	$93.7	$97.5	$94.2
Non-Interest Income ($M)	$32.1	$83.7	$80.4
Diluted EPS ($)	$1.04	$1.27	$1.18
NIM (%)	4.78%	4.44%	4.45%
ROA (annualized, %)	2.5%	2.8%	2.5%
ROE (annualized, %)	26%	28%	27%
Efficiency Ratio (%)	42%	41%	42%

Notes: Adjusted Total Revenue = Net Interest Income + Non-Interest Income – consumer fintech loan credit enhancement income, per company methodology .

Q3 2025 vs S&P Global consensus

Metric	Actual	Consensus	Surprise
Diluted EPS ($)	$1.18	$1.33*	-11% (miss)*
Revenue ($M)	$129.6*	$99.6*	+30% (beat)*

Values marked with an asterisk were retrieved from S&P Global; the company reports “Adjusted Total Revenue” of $134.8M for Q3’25 (methodology differs from S&P Global revenue taxonomy) . “Values retrieved from S&P Global.”*

Payments and fee detail

Metric	Q3 2024	Q3 2025
ACH, card and other payment processing fees ($M)	$3.892	$5.077
Prepaid, debit card and related fees ($M)	$23.907	$25.513
Consumer credit fintech fees ($M)	$1.600	$4.493
Total fintech fees ($M)	$29.399	$35.083

Key KPIs and balance metrics

KPI	Prior Period	Current Period
GDV ($B)	$37.90 (Q3’24)	$44.04 (Q3’25)
Avg total deposits ($B), cost	$7.01, 2.44% (Q3’24)	$7.63, 2.15% (Q3’25)
Loans, net ($B)	$5.91 (Q3’24)	$6.67 (Q3’25)
Consumer fintech loans ($M)	$280.1 (Q3’24)	$785.0 (Q3’25)
REBL criticized assets ($M)	$215.8 (Q2’25)	$185.3 (Q3’25)
Share repurchases (shares; avg price)	—	2,034,053 @ $73.74 (Q3’25)
Book value per share ($)	$16.90 (Q3’24)	$17.48 (Q3’25)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (diluted)	FY 2025	$5.25	$5.10	Lowered
EPS run-rate (diluted)	Q4 2026 (annualized)	$7.00 run-rate (Project 7)	Reiterated minimum $7.00 run-rate	Maintained
EPS (diluted)	FY 2027	—	Preliminary $8.25	Introduced
Capital return	2H 2025–2026	Plan for $500M buybacks over ~18 months (incl. ~$300M in 2H’25; $50M/quarter in 2026)	Continuing high level of buybacks targeted; cadence subject to price/board approval	Reaffirmed intent

Earnings Call Themes & Trends

Topic	Q1 2025 (prior-2)	Q2 2025 (prior-1)	Q3 2025 (current)	Trend
Credit sponsorship growth	Balances $574M; pathway >$1B by YE’25	Consumer fintech loans $680.5M; fees rising	$785M; +15% QoQ; +180% YoY	Accelerating
Embedded finance	Concept, in development	Discussed platform investment; future growth	“Expected launch next year”; large fee opportunity	Advancing toward launch
Cash App (Block)	Teased portfolio expansions	5-year addendum for card issuing; expected revenue from Q1’26	“On track; substantial fee revenue by 2H’26”	Implementation underway
NIM/asset sensitivity	Less asset-sensitive; ~1–3% NII sensitivity to 400 bps moves	NIM 4.44% in Q2	NIM 4.45%; still flat asset sensitivity	Stable
REBL asset quality	Working down substandard; peak near	Managing maturity wall; Aubrey progress	Criticized ↓ to $185M; $102M under contract; near-term improvement expected	Improving
Leasing/trucking exposure	Minimal commentary	N/A	Higher provision tied to trucking dispositions	Headwind moderating (legacy)
AI/efficiency	Evaluating use cases	2026–27 focus	First AI tool funded ($0.3M) to save ~$1.5M run-rate; live 1Q’26	Execution started
BaaS regulation	N/A	N/A	Regulators reverting to guidance-based expectations; helpful to largest providers	Constructive backdrop

Management Commentary

Strategic priorities: “Our three main fintech initiatives…credit sponsorship expansion, embedded finance platform development and new program implementations…should have an increasingly positive effect…through 2026 and into 2027.”
Cost/efficiency: “We will be conducting a restructuring of our institutional banking business in the fourth quarter…reducing run-rate expenses by approximately $8 million while incurring ~$1.3 million restructuring charge.”
AI: “We have developed a new tool to reduce the writing of narratives in financial crimes risk management…$300,000 investment…avoid approximately $1.5 million run-rate expenses…operational in the first quarter of 2026.”
Guidance reset: “We are lowering guidance from $5.25 to $5.10 EPS for 2025, primarily due to lower projected balances for our traditional lending businesses and an increased credit provision for leasing…Not giving specific guidance for 2026 other than…minimum $7 EPS run-rate by Q4 2026. Preliminary guidance for 2027 of $8.25 EPS.”

Q&A Highlights

Cash App ramp: Program “on track,” with revenue expected starting Q1’26; substantial fee revenue by 2H’26 depends on partner timelines .
REBL resolutions: ~$102M criticized under contract; management “fairly confident” of reductions in Q4; a $27M substandard loan expected to close within days of the call .
Deposits: Seasonal/ program-driven volatility; management proactively manages deposit off-balance-sheet flows; expects growth in Q4 and tax-season ramp in Q1 .
Leasing headwinds: Provision increase driven by trucking/transportation asset dispositions across three borrowers; legacy exposure now small (~$12M left) .
Revenue mix/fees: Sequential volatility in ACH fees noted; management recommends focusing on YoY trends; GDV growth above trend even before Cash App/embedded finance contributions .

Estimates Context

Q3 2025: EPS $1.18 vs $1.33 consensus (miss); revenue $129.6M vs $99.6M (beat); limited coverage (2 EPS, 1 revenue estimate) increases dispersion [GetEstimates]. “Values retrieved from S&P Global.”*
FY 2025: Consensus EPS $5.07 vs company guidance $5.10; following the guidance cut from $5.25, estimates may consolidate slightly below prior levels but are broadly aligned with updated guide [GetEstimates].*

Key Takeaways for Investors

Fintech-led growth proved resilient (GDV +16% YoY) and remains the primary earnings engine ahead of Cash App card issuance and embedded finance in 2026–27 .
The EPS miss was driven by leasing credit costs and softer traditional lending balances; NIM held stable QoQ (4.45%) with limited rate sensitivity, implying core profitability is less rate-dependent vs peers .
REBL risk is trending better: criticized balances fell and sizable contracted sales point to Q4 improvements; watch for Q4 closings to confirm de-risking trajectory .
2025 EPS guide reset lowers near-term bar; the key stock catalysts are execution milestones on Cash App migration and embedded finance commercialization, plus sustained buybacks .
AI and restructuring should support operating leverage into 2026, potentially cushioning expense growth as volumes scale .
Consumer fintech charge-offs remain high but are indemnified/credit-enhanced, netting to neutral in earnings via matching provision and credit enhancement income; investors should monitor partner behavior and volumes .
Capital remains solid with strong insured deposit mix (92% insured) and ample liquidity lines; ongoing repurchases (2.03M shares in Q3) support per-share metrics .

Sources:

Q3 2025 8-K/Press Release and Investor Presentation: earnings, KPIs, and guidance .
Q3 2025 earnings call transcript: qualitative drivers, provisions, pipeline, regulatory context .
Prior quarters:
- Q2 2025 8-K/Press Release: revenue, EPS, fee detail, asset quality .
- Q2 2025 call transcript: partnership expansion with Block/Cash App, buyback, margin/credit commentary .
- Q1 2025 call transcript: credit sponsorship trajectory, NIM/asset sensitivity, GDV/fees framework .
Release date PR: confirms timing logistics for Q3 results .

Estimates disclaimer: Values marked with an asterisk are retrieved from S&P Global via GetEstimates (EPS and revenue consensus/actual, target price metrics).*

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