SYF Q3 Deep Dive: Credit Actions and New Partnerships Shape Flat Revenue, Outlook Hinges on Consumer Resilience

Consumer financial services company Synchrony Financial (NYSE:SYF) beat Wall Street’s revenue expectations in Q3 CY2025, but sales were flat year on year at $3.82 billion. Its GAAP profit of $2.86 per share was 28.9% above analysts’ consensus estimates.

Is now the time to buy SYF? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Synchrony Financial’s third quarter results showed steady performance, with revenue coming in flat year over year and exceeding Wall Street’s expectations. Management pointed to continued strength in credit performance and the impact of selective credit actions, which helped drive a 2% increase in purchase volume across the company’s five sales platforms. CEO Brian Doubles highlighted that “trends across our five platforms improved even as the effects of our previous credit actions continue to impact average active accounts,” noting particular strength in digital and dual/co-branded card spend. Management acknowledged that while customer engagement and transaction frequency rose, higher payment rates and lower late fees softened net interest income.

Looking ahead, Synchrony’s guidance is shaped by expectations for continued credit discipline and incremental easing of previously tightened credit standards, with a cautious approach to expanding the credit box. Management believes new product launches, such as the Walmart credit card and Pay Later at Amazon, along with selective growth initiatives, will drive volume. CFO Brian Wenzel cautioned that “modifications to our credit strategy…are not expected to have a material effect on growth in 2025,” but added that better-than-expected credit performance is contributing to a more favorable loss outlook. Synchrony aims to balance growth opportunities with prudent risk management as macroeconomic signals remain mixed.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to a mix of disciplined credit actions, resilient consumer spending in targeted segments, and investments in technology and new partnerships.

• Selective credit tightening: Synchrony maintained a disciplined approach to credit, with management noting that elevated payment rates and fewer late fees stemmed from actions taken in 2023 and early 2024. CFO Brian Wenzel explained, “our non-prime is down about 80 basis points year over year,” resulting in improved delinquency and charge-off trends.
• Digital and co-branded card strength: Dual and co-branded cards grew as a proportion of purchase volume, up 8% year over year. CEO Brian Doubles cited “higher broad-based spend across these card programs and Synchrony’s branded general-purpose card,” with particular engagement in restaurants and electronics.
• Segment-specific performance: Growth was strongest in the digital, health and wellness, and diversified value segments, while home and auto and lifestyle platforms lagged, affected by lower discretionary spending. Management noted that “purchase volume in Home and Auto was down 1%...Lifestyle platform was down 3%.”
• New and expanded partnerships: Synchrony renewed or expanded more than 15 partnerships, including the Toro Company, Regency Furniture, and notably, the Lowe’s commercial program. The launch of the Walmart credit card and acquisition of Versatile Credit were highlighted as strategic moves to drive future growth.
• Technology investments: The company continued to invest in digital integration and product enhancements, such as embedding credit offerings into partner platforms and rolling out multi-product strategies like Pay Later. Management emphasized these efforts as key to deepening customer and partner engagement.

Drivers of Future Performance

Synchrony’s outlook is shaped by a cautious credit strategy, new product rollouts, and monitoring for macroeconomic headwinds that could affect growth and risk.

• Gradual credit easing: Management plans to selectively reverse prior credit tightening in areas with strong risk-adjusted returns, but will proceed incrementally and monitor both macroeconomic signals and portfolio performance. CEO Brian Doubles said, “We’re optimistic that we will continue to adjust our credit actions subject to macroeconomic conditions.”
• Product and partner expansion: Synchrony expects momentum from recent launches, such as the Walmart credit card and Pay Later at Amazon, to support growth, with additional opportunities arising from ongoing partner acquisitions and renewed contracts. These initiatives are expected to drive higher purchase volumes and customer engagement over time.
• Potential risks and uncertainties: Management remains alert to mixed macroeconomic signals, including employment trends and consumer discretionary spending, which could impact credit quality and growth. CFO Brian Wenzel warned that “while our past credit actions have contributed to slower loan receivables growth over the short term, they have meaningfully strengthened our portfolio’s credit performance.”

Catalysts in Upcoming Quarters

In future quarters, we will watch for (1) signs that new product launches like the Walmart credit card and Pay Later at Amazon drive sustained growth in purchase volume, (2) incremental easing of credit standards and any resulting shifts in account openings or loan growth, and (3) the resilience of credit metrics as macroeconomic conditions evolve. The trajectory of technology integration with new partners and the ongoing performance of co-branded card programs will also be key indicators of Synchrony’s execution.

Synchrony Financial currently trades at $73, in line with $72.81 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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