Synchrony Financial Reports Q3 2026 Earnings, Sees 2026 EPS at $9.50

Synchrony Financial (NYSE: SYF ) reported third-quarter financial results on Tuesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary Synchrony Financial reported strong Q3 2026 results with an 8% increase in purchase volume, reaching nearly $50 billion, the highest third quarter level in the company's history. The company launched new strategic initiatives such as CareCredit Pay Later, expanded partnerships with Venmo and Stripe, and integrated AI technologies with OpenAI to enhance customer experiences. Net earnings were $892 million, or $2.68 per diluted share, with a return on average assets of 2.9% and a return on tangible common equity of 25.2%.

Synchrony Financial returned $1.2 billion to shareholders in Q3 through share repurchases and dividends, maintaining a strong capital position with a CET1 ratio of 12.9%. The company expects 2026 diluted earnings per share to reach $9.50, emphasizing sustained loan receivable growth, increased net interest income, and maintaining strong credit performance. Management highlighted the importance of leveraging data analytics for responsible underwriting and the role of digital commerce in shaping future growth opportunities. Full Transcript OPERATOR Please stand by.

Your program is about to begin. Good morning and welcome to the Synchrony Financial third quarter 2026 earnings conference call. Please refer to the company's investor relations website for access to their earnings materials. Please be advised that today's conference call is being recorded.

Currently, all callers have been placed in listen-only mode. The call will be opened up for your questions following the conclusion of management's prepared remarks. If at any time you should need operator assistance, please press 0. If you wish to ask a question following the prepared remarks, please press star one.

I will now turn the call over to Kathryn Miller, Senior Vice President of Investor Relations. Thank you. You may begin. Kathryn Miller (Senior Vice President of Investor Relations) Thank you and good morning everyone.

Welcome to our quarterly earnings conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release, detailed financial schedules and presentation are available on our website, SynchronyFinancial.com. This information can be accessed by going to the Investor Relations section of the website.

Before we get started, I wanted to remind you that our comments today will include forward-looking statements. These statements are subject to risks and uncertainty and actual results could differ materially. We list the factors that might cause actual results to differ materially in our SEC filings which are available on our website. During the call we will refer to non-GAAP financial measures in discussing the company's performance.

You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call. Finally, Synchrony Financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website. On the call this morning are Brian Doubles, Synchrony's President and Chief Executive Officer, and Brian Wenzel, Executive Vice President and Chief Financial Officer.

I will now turn the call over to Brian Doubles. Brian Doubles (President & CEO) Thanks, Kathryn. Good morning everyone. Synchrony delivered strong third quarter results highlighted by broad-based purchase volume growth across each of our five sales platforms.

Spend within our Diversified Value platform increased 13% compared to last year, primarily reflecting the impact of partner expansion and higher gas prices. In Home and Auto, purchase volume increased 9% compared to last year, primarily reflecting the performance of new programs, select furniture retailers and the impact of higher gas prices. Purchase volume was 6% higher in our Lifestyle platform, primarily reflecting strength in categories like other apparel and luxury as well as the impact from our new programs.

Meanwhile, Digital platform sales grew 5% driven by strong customer engagement across partners with broad diversified offerings and refreshed value propositions, and in Health and Wellness, purchase volume increased 3%, primarily reflecting growth in pet. Total purchase volume reached nearly 50 billion again this quarter, the highest third quarter level in our history and an increase of 8% compared to last year.

Approximately 53% of that spend occurred through Synchrony's co-branded cards in the third quarter, which increased 23% versus last year and was driven by the combination of new programs and product upgrades delivering enhanced value propositions and increased utility, and higher broad-based spend across our card programs, both discretionary and non-discretionary. Out-of-partner spend on our consumer co-brand cards grew by double digits. Strength in discretionary spend came from categories like electronics and entertainment, while in non-discretionary, gas station and discount store spend grew fastest.

And as Slide 3 shows, spend across Synchrony's portfolio is growing fastest among Gen Z and Millennials, particularly in our Diversified Value, Digital and Home and Auto platforms, where the strong value propositions and broad utility of our offerings resonate deeply. The significant growth across the younger age demographics has been enabled by our proprietary underwriting and data analytics platform, Prism. Synchrony leverages over 9,000 data variables and cash flow underwriting to responsibly deliver purchase power to credit-ready customers even when they are earlier in their financial journeys and often overlooked by other traditional lenders.

And because we can meet our customer wherever and however they want to be met with the right product for that purchase, Synchrony is building relationships and delivering experiences that can unlock greater financial flexibility over time. To that end, we recently introduced CareCredit Pay Later, an enhanced and rebranded installment loan product that will appear alongside CareCredit's existing credit card as another way for eligible customers to plan and pay for health and wellness-related products and services. It is now available at nearly 20,000 health and wellness locations, including dental, cosmetic, vision and audiology care providers.

By providing tailored choices up front after one seamless application, this multi-product experience empowers customers with financing flexibility and payment structure optionality that aligns with their preferences. In addition, Synchrony and Venmo collaborated on a refreshed value proposition for the Venmo Credit Card with an industry-first feature that rewards social spending, offering cardholders more cash back for splitting purchases with friends on Venmo. The Venmo Credit Card, issued by Synchrony, delivers unlimited daily cash back deposited directly into the account and offers a simple way to manage money and rewards together, all within the Venmo app.

As we all know, the spending experience is constantly evolving. Digital wallets and agentic commerce are changing the way consumers discover, decide and buy, so Synchrony remains focused on the heart of what matters, connecting our customers, partners, merchants and providers through seamless experiences and unmistakable value. Our new integration with Stripe, the programmable financial services company, will make it easier for both Synchrony's and Stripe's providers and health and wellness retailers to offer CareCredit financing as part of their online checkout experience.

More than 12 million CareCredit cardholders, as well as new approved applicants, will have opportunities to access trusted CareCredit financing for health and wellness purchases through participating Stripe providers. Synchrony is also integrated with VetSpire, a leading cloud-based veterinary practice management software provider, to embed CareCredit financing options directly within VetSpire's AI-enabled cloud-based platform and give veterinary practices a more modern way to offer real-time payment solutions at the point of care. VetSpire is used by more than 1,000 veterinary hospitals and clinics nationwide, and about 85% are already CareCredit-enrolled providers.

By operationalizing checkout workflows and making financial options easier to access, our collaboration aims to improve the experience for pet owners, reduce administrative friction for clinic teams, and support timely care for pets. Meanwhile, Synchrony's enterprise collaboration with OpenAI is designed to strengthen our positioning at the center of AI's next chapter in shopping and payments. We have launched our Synchrony ChatGPT plugin, which allows consumers to discover savings and offers within the Synchrony Marketplace directly within ChatGPT and browse promotional financing, deal and everyday value from participating partners in a fast conversational experience.

And from a corporate perspective, we are deploying the latest OpenAI models like GPT-6 Astra to enable deeper engagement with advanced capabilities, more meaningful product development and faster technology innovation. Of course, Synchrony's AI strategy extends beyond adopting emerging technologies to helping define how they will operate across the broader commerce ecosystem. We have joined the Personal Agent Protocol POPI initiative led by Sierra and Meta as a DYN partner, reflecting our commitment to helping define the open standards that will underpin the future of agentic commerce.

By contributing to the development of secure, transparent and permission-based protocols for AI agents, Synchrony is helping advance an ecosystem that can deliver greater customer choice, trust and scalability across digital commerce. So as we look to the remainder of this year and the years ahead, Synchrony is executing on what we set out to do. We are extending our reach, enhancing the experiences we deliver and driving optionality for our customers and partners, and as a result we are delivering attractive growth and strong risk-adjusted returns that position us to drive significant long-term value for our stakeholders.

With that, I'll turn the call over to Brian to discuss our financial performance in greater detail. Brian Wenzel (Executive Vice President & CFO) Thanks, Brian, and good morning, everyone. Synchrony continued our focused execution and delivered another strong financial performance in the third quarter. We achieved record third quarter purchase volume, which grew across all five platforms.

Ending loan receivables growth continued to accelerate, while credit performance remained strong, resulting in attractive returns for our shareholders. More specifically, we generated net earnings of $892 million, or $2.68 per diluted share, a return on average assets of 2.9%, a return on tangible common equity of 25.2%, and a 6% increase in tangible book value per share. Focusing on our performance in more detail, purchase volume grew 8% versus last year and reached almost $50 billion, the second consecutive quarter at this level, while maintaining our disciplined approach to credit.

Annual receivables increased 3% to $103 billion as higher purchase volume more than offset ongoing effects of elevated payment rates. The payment rate of 16.9% was approximately 60 basis points higher than last year and approximately 180 basis points above the pre—pandemic third quarter average, primarily reflecting the impacts of new portfolio seasoning, shifts in portfolio and product mix, and our previous credit actions. Net interest income increased 2% to $4.8 billion, primarily driven by the combination of higher interest and fees and lower interest expense, partially offset by lower investment income.

Interest and fees increased 1%, primarily reflecting growth in average loan receivables. Interest expense decreased 3%, primarily due to lower benchmark rates. Our third quarter net interest margin decreased 12 basis points versus last year to 15.5%, reflecting three key drivers: 1) a 20 basis point decrease in our loan receivable yield, which was primarily driven by lower assessed late fee incidence resulting from our strong credit performance. The decline in loan receivables yield reduced our net interest margin by approximately 16 basis points; 2) a 62 basis point reduction in our liquidity portfolio yield, primarily due to lower benchmark rates.

The decline in liquidity portfolio yield reduced our net interest margin by 10 basis points; and 3) a 22 basis point decrease in the mix of loan receivables as a percent of interest—earning assets versus last year. This reduced our net interest margin by approximately 5 basis points. These factors were partially offset by a 27 basis point decline in our total interest—bearing liabilities cost, primarily due to lower benchmark rates, which contributed approximately 19 basis points to our net interest margin.

On a sequential basis, net interest margin increased by 42 basis points, primarily due to two key factors: 1) the decline in earned income reversals as net charge—offs decreased from the seasonal high in the second quarter to their seasonal low in the third quarter. This increased net interest margin by 20 basis points; and 2) the increase in the mix of loan receivables as a percent of interest—earning assets, which increased our net interest margin by approximately 17 basis points. This was generally due to accelerated receivables growth, which utilized some of the excess liquidity we held for pre—funding in the prior quarter.

Next, let's turn to the remainder of our P&L. RSAs of $1.1 billion were 4.3% of average loan receivables in the quarter and increased $72 million versus the prior year, primarily reflecting program performance. Provision for credit losses increased $120 million to $1.3 billion, primarily driven by a reserve build of $30 million versus a $152 million release in the prior year, partially offset by a $62 million decrease in net charge—offs. Other income increased $22 million to $105 million, primarily reflecting the impact of higher loyalty costs resulting from the growth of new programs and refreshed value propositions.

Other expense increased 10% to $1.4 billion, primarily driven by higher operational losses, technology investments, and increased marketing expenditures. The third quarter efficiency ratio was 35.9%, approximately 330 basis points higher than last year. This was from higher overall expenses and the impact of higher RSAs. Turning to our portfolio credit on Slide 8, both our 30—plus and 90—plus delinquencies at the end of the third quarter were in line with the prior year.

Our net charge—off rate was 4.79%, reflecting a decrease of 37 basis points from 5.16% in the prior year, and our allowance for credit losses as a percent of loan receivables was 10.01%, a decrease of approximately 8 basis points from 10.09% in the second quarter and a decrease of approximately 34 basis points from 10.35% last year. Slide 9 shows Synchrony Financial's funding, capital, and liquidity, which continues to be a core strength of our business. We grew our direct deposits by $2.4 billion versus last year and our broker deposits by approximately $575 million.

At quarter—end, deposits represented 83% of our total funding, while secured debt represented 9% and unsecured debt represented 8%. Total liquid assets increased 7% to $19.5 billion and represented 15.9% of total assets, 33 basis points higher than last year. Turning to capital, Synchrony ended the quarter with a CET1 ratio of 12.9%, reflecting a 140 basis point reduction versus last year; a Tier 1 capital ratio of 14.5%, reflecting 100 basis points of reduction; a total capital ratio of 16.5%, reflecting a 110 basis point reduction; and a Tier 1 capital plus reserve ratio of 24.3%, reflecting a 130 basis point reduction versus last year.

Synchrony returned $1.2 billion to shareholders during the third quarter, which included $1.1 billion in share repurchases and $110 million in common stock dividends. At quarter—end we had approximately $4.6 billion remaining of our share repurchase authorization. Finally, I would like to discuss our 2026 outlook on Slide 10. Given the performance of our business through the course of this year, we now expect to deliver approximately $9.50 in diluted earnings per share for the full year, the high end of our original expectations.

This reflects our continued full—year expectations that year—end loan receivables will grow by mid—single digits, net interest income will increase, net charge—offs will be less than 5.5% with delinquency and losses following normal seasonality, RSAs remain within our long—term target range of 4% to 4.5% of average receivables, and other expense dollars in the fourth quarter will generally be in line with the third quarter as we continue investing in Synchrony's capabilities and future growth opportunities.

To conclude, Synchrony's core business drivers are strong, and we reinforce our disciplined approach to growth, which positions us to deliver consistent, market—leading returns, and we're investing in our competitive differentiation to drive long—term earnings power and intrinsic value while also returning significant capital to shareholders. With that, I'll turn the call back over to Brian. Brian Doubles (President & CEO) Thanks, Brian. Before I turn the call over to Q&A, I'd like to leave you with three key takeaways from today's discussion.

First, Synchrony is delivering sustainable growth.