Synchrony Financial
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −1.37%.
Did SYF Beat Earnings? Q4 2025 Results
Synchrony Financial delivered a mixed fourth quarter, nudging past earnings expectations while falling short on revenue as the consumer lending giant navigated a sharp year-over-year revenue decline. The company posted diluted EPS of $2.04, edging above the $2.02 consensus estimate by 0.91%, even as quarterly revenue of $3.79 billion missed the $3.83 billion consensus by 0.85% and contracted 22.9% from a year ago. The headline story, however, was a meaningful improvement in credit quality, with net charge-offs falling 108 basis points year-over-year to 5.37%, pulling the portfolio back within Synchrony's 5.5% to 6.0% target range and reflecting the tangible benefits of its ongoing product, pricing, and policy changes. Net interest margin expanded 82 basis points to 15.83%, lending support to profitability even as results included a $51 million after-tax restructuring charge tied to a voluntary early retirement program. Some observers have noted the stock appears undervalued relative to its long-term cash generation potential. Looking to 2026, management guided diluted EPS of $9.10 to $9.50, with mid-single-digit loan receivables growth and continued investment in partnerships including Walmart and Lowe's.
- Net interest margin expansion of 82 basis points to 15.83% driven by PPPCs and lower funding costs
- Net charge-off rate improved 108 basis points to 5.37%, returning to within target range of 5.5-6.0%
- Purchase volume increased 3% to $49.5 billion, with record fourth quarter purchase volume
- Dual Card/Co-Brand purchase volume grew 16% to $24.7 billion
- Lower benchmark rates drove 51 basis point reduction in interest-bearing liabilities cost to 4.07%
- Retailer share arrangements increased 19% to $1.1 billion reflecting improved program profitability
- Payment rate of 16.3% up approximately 45 basis points year-over-year
“Synchrony's fourth quarter performance capped off a year of strong execution and set the stage to drive our momentum forward in the years ahead. We advanced our key strategic priorities by expanding our reach and penetration, and optimizing the outcomes for the customers, partners and the hundreds of thousands of small and mid-sized businesses we serve across the country.”
Synchrony Financial CEO, on the earnings call
Forward Guidance & Outlook
For 2026, Synchrony expects diluted EPS of $9.10 to $9.50 and mid-single-digit ending loan receivables growth, with a net charge-off rate of approximately 5.5% to 6.0%. The outlook assumes a stable macroeconomic environment with 2.0% GDP growth, 4.8% year-end unemployment rate, 3.25% year-end fed funds rate, and approximately 65% deposit betas. The company expects growth in purchase volume and average active accounts, with payment rates remaining elevated. Net interest income is expected to grow, reflecting building impact of PPPCs and lower funding liabilities costs, partially offset by lower late fee incidence and new account acceleration. RSA as a percentage of average loan receivables is expected to stay within the target 4.0% to 4.5% range. Significant growth investments are planned including Walmart/OnePay, Lowe's commercial co-brand credit card acquisition, Versatile Credit acquisition, and increased strategic initiative spending. The outlook assumes no regulatory or legislative changes, no additional modifications to PPPCs, and no additional broad-based credit refinements.
SYF YoY Financials
SYF Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.