Synchrony Financial Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Terry Ma - Barclays Services Corp - Analyst : Hi, thank you. Good morning. Maybe just to start off with the updated revenue guide. You lowered the high end of the range this quarter after lowering it last quarter. So just curious, what was kind of incremental throughout the quarter that led you to lower it?

Question: Terry Ma - Barclays Services Corp - Analyst : Got it. Maybe just a follow-up on the PPPC modifications. You had disclosed, I think, last quarter and even on stage with me a month ago that you wrote back APRs for one partner. I did also recently noticed an updated TJ Maxx agreement with a lower APR. So I just wanted to confirm that is, in fact, the retailer you cited before, and it's not a new rollback. And then to the extent possible, any color you can provide on whether or not there are additional conversations happening? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: Terry Ma - Barclays Services Corp - Analyst : Yeah, got it. Thank you.

Question: Ryan Nash - Goldman Sachs - Analyst : Hey, good morning, guys.

Question: Ryan Nash - Goldman Sachs - Analyst : So you seem to be bucking the trend that the broader market had been concerned about this quarter, given concerns on credit in the low-end consumer. Brian Doubles, maybe just expand a little bit on what you're seeing on the consumer. And given the actions that you've taken, if we're in sort of a stable macro environment, could we continue to see this better-than-expected credit performance? And then I have a follow-up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: Ryan Nash - Goldman Sachs - Analyst : Got you. And maybe just as a follow-up to the point that you just made. Obviously, you've been in a bit of a restrictive credit environment. You talked about rolling back 30% of the credit actions. You have Walmart coming back -- coming on board, which should help, and you made some positive comments there. Maybe just talk about the path back to, call it, mid-single-digit growth that I know you guys have talked about. Maybe talk about in terms of Walmart versus everything else and do you see as the key drivers there? Obviously, the 70% unwind would be a big part of that. But maybe just help contextualize that for us. Thank you.

Question: Ryan Nash - Goldman Sachs - Analyst : Got it. Thanks for the call, Brian. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: John Pancari - Evercore ISI - Analyst : Good morning. Just back to the broader consumer, it's encouraging to hear that you're not yet seeing broader signs of weakness and the consumer is still in pretty good shape. We're clearly seeing a degree of bifurcation out there in terms of the lower income brackets. Can you talk a little bit more specifically about what you're seeing amid your lower income cohorts? Are you seeing differing payment rate behavior, greater stress in terms of spend behavior or credit dynamics, just to see how you may be seeing it within your base?

Question: John Pancari - Evercore ISI - Analyst : Got it. Okay. Great. Thanks for that. And then on the capital front, saw a nice increase in your -- CET1 buybacks came in higher than expected around $861 million. You still have the -- and now with the increase, you have the $2.1 billion authorization. Can you maybe help us frame the -- how you think about the potential pace of buybacks as we look at the fourth quarter and into 2026, given your capital levels where they stand now? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: John Pancari - Evercore ISI - Analyst : Thanks, Brian. Appreciate the color.

Question: Mihir Bhatia - Bank of America - Analyst : Hi, good morning. Thank you for taking my question. Maybe I wanted to start with just the allowance ratio and the reserve rate outlook. Maybe just talk a little bit about the puts and takes in the quarter in terms of what drove the step down. Was it just your own credit performance? How much did macro scenarios contribute? And then as we think about 4Q, should we expect the typical seasonal stepdown? Or was some of that already incorporated in this quarter?

Question: Mihir Bhatia - Bank of America - Analyst : Got it. No, that makes sense. Thank you. If I could just go back to growth and the discussion about the unwinding of credit actions in the 30% and the 70%. I guess maybe to tie that a little bit to like account average accounts are still down year over year, obviously, transaction frequency and values. It sounded like some of the unwinding you're doing is much more related to your existing accounts. So I guess, what do we need to see for average accounts to start trending up or to turn positive? Is it just going to come from like natural growth? Or is there like credit unwinding that will be happening in the short term? I guess what I'm trying to understand is the 30%, 70% discussion. That 30% sounded like very much focused on internal accounts like existing upgrades, et cetera. And I'm trying to think of like account growth and just increasing the number of consumers, what's going to drive that?

Question: Mihir Bhatia - Bank of America - Analyst : Got it. Thank you for taking my questions.

Question: Rob Wildhack - Autonomous Research - Analyst : Good morning guys. Maybe one more on potentially reversing the tightening. Could you give us some color on maybe what the rate points you might be looking for to unwind that as we go forward? I guess if we -- is it going to be more macro related? Or is it going to be more driven by your own credit results?

Question: Rob Wildhack - Autonomous Research - Analyst : Helpful, thanks. And maybe on NII and the NIM, we can back into the fourth-quarter numbers implied by the guidance. What are sort of the puts and takes you would advise us on as we're thinking about that exit rate on NII and NIM and extrapolating that out beyond this quarter? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: Rob Wildhack - Autonomous Research - Analyst : All right, thank you very much.

Question: Mark DeVries - Deutsche Bank AG - Analyst : Yeah, Brian Doubles, thanks for the comments on kind of the encouraging signs on the Walmart program. I was hoping you could just elaborate on how the value prop of that card kind of compares to the last time you partnered with Walmart, kind of what that does for your optimism about how big that program can be relative to the last time you partnered. And also just kind of what it's doing in terms of driving uptake on the card engagement and the types of customers you're attracting?

Question: Mark DeVries - Deutsche Bank AG - Analyst : Okay. That's helpful. And then just a follow-up question on your delinquency trends. It looks like they continue to trend more favorable than normal seasonality. Is that your perception? And also, if so, kind of what are the implications for trends for DQs and charge-offs as we look out kind of 6 to 12 months?

Question: Mark DeVries - Deutsche Bank AG - Analyst : Got it, thank you.

Question: Donald Fandetti - Wells Fargo Securities LLC - Analyst : Good morning. Can you talk about any potential portfolio acquisitions that you might be looking at or new de novo programs? And then I guess on the versatile acquisition, is that sort of a one-off? Or do you feel like you need -- we'll see more of these bolt-on technology acquisitions?

Question: Donald Fandetti - Wells Fargo Securities LLC - Analyst : Got it. Thank you.

Question: John Hecht - Jefferies LLC - Analyst : Good morning, guys. Thanks for taking my questions. I know you -- first question, I know you don't give details at the partner level by name. But maybe can you talk about characteristics of partners where you're seeing expansion versus maybe modest contraction? I mean, maybe like the digital mix or versus in-store or anything like that? Is there any way for us to think about the growth from that perspective?

Question: John Hecht - Jefferies LLC - Analyst : Okay. Super helpful color. And then second question, Brian, you mentioned payment rates, they've been elevated really since -- for the last several years. In your opinion, what's the source of that? Are you seeing that across a variety of income levels? And can you tell how much of that might be like debt consolidation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: John Hecht - Jefferies LLC - Analyst : Okay, thanks very much.

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Hey, good morning, guys. Thanks for fitting me into be in here. Just as a follow-up on the payment rate question, one topic that's come up more recently is there's been some more prepayment out there more in the instalment world of the lending spectrum. And some of that may be coming from increased competition or private credit demand to originate new loans. Now I know credit card is a different animal here, more of a revolving product, but just curious if you're maybe noticing any of that competitive dynamics flowing in and maybe keeping the payment rate a little bit more elevated here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Got it. That's helpful. And as my follow-up, just piggybacking off the commentary on the success of Pay Later and Amazon. You obviously have that product out there with other partners like Lowe's. Does the success of that launch maybe reinforce or shift how you're thinking about leaning to that opportunity going forward? Should we be expecting a continuous kind of launch of this multiproduct strategy going forward at every partner you have? And maybe just update us on how that's coming up in the conversations with your partners as they maybe compare you guys to the offering, some of the other buy now pay later players are giving them?

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Okay, great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:00PM, SYF.N - Q3 2025 Synchrony Financial Earnings Call