Bread Financial (BFH) Q4 2025 earnings summary

Executive summary

• Achieved strong Q4 and full-year 2025 results, with responsible growth driven by new and renewed partnerships, expanded verticals, and disciplined credit risk management.

• Direct-to-consumer deposits increased 11% YoY to $8.5B, now 48% of average total funding.

• Advanced technology transformation and accelerated AI adoption to drive efficiency and operational excellence.

• Returned $350M to shareholders in 2025, including $310M in share repurchases and a 10% dividend increase.

• Received credit rating upgrades and positive outlooks from Moody's, Fitch, and S&P.

Financial highlights

• Full-year 2025 revenue was $3.85B, with net income of $521M and adjusted net income of $578M; Q4 revenue was $975M, net income $53M, and adjusted net income $95M.

• Diluted EPS was $10.96 and adjusted diluted EPS was $12.16 for the year; Q4 adjusted EPS was $2.07.

• Tangible book value per share grew 23% YoY to $57.57; return on average tangible common equity was 8% for Q4 and 20.4% for the year.

• Q4 credit sales rose 2% YoY to $8.1B; full-year credit sales were $27.8B, up 3% YoY.

• Total non-interest expenses decreased 3% for the year; adjusted expenses down 1% YoY.

Outlook and guidance

• 2026 outlook anticipates low single-digit growth in average loans and revenue, with net loss rate guided to 7.2%-7.4%.

• Net interest margin expected to be near or slightly above 2025 levels, with positive operating leverage targeted.

• Full-year normalized effective tax rate expected at 25%-27%.

• Anticipates modest pressure on net interest income from expected Federal Reserve rate decreases.

• Continued investment in AI, technology, marketing, and product innovation.