AI Takeaway
Synchrony Financial's Q2 FY2026 net earnings declined 8.5% year-over-year to $885 million despite record purchase volume of $49.8 billion, as higher provision for credit losses (lower reserve release) and elevated other expenses offset improved net interest income and lower net charge-off rates.
EPS (Basic)
$2.61
++3.98% YoY
Filed · Source: SEC EDGAR 10-Q filing
The company posted net income of $885M, down 8.5% from a year earlier, with diluted EPS of $2.59.
Total purchase volume increased 8.1% to $49.8 billion for the three months ended June 30, 2026, with Digital platform purchase volume up 9.2% to $14.9 billion (led by partners like PayPal/Venmo and Amazon) and Diversified & Value up 11.7% to $17.2 billion, reflecting partner expansion and higher spend per average active account.
Source: 10-Q Item 2 MD&A
Provision for credit losses increased $55 million (4.8%) in Q2 FY2026 primarily due to a lower reserve release of $163 million versus $265 million in the prior year period, partially offset by a $47 million decrease in net charge-offs; the net charge-off rate improved 27 basis points to 5.43%, below the company's long-term target range of 5.5%-6.0% expected for full-year 2026.
Source: 10-Q Item 2 MD&A
In April 2026, Synchrony completed the acquisition of $0.7 billion of loan receivables associated with the Lowe's commercial co-branded credit card portfolio, now included within the Home & Auto sales platform, contributing to the 2.4% YoY growth in total loan receivables to $102.2 billion.
Source: 10-Q Item 2 MD&A
The company repurchased $1.8 billion of common stock during the six months ended June 30, 2026 (up 60.3% YoY), issued $500 million of 7.250% Series C perpetual preferred stock in June 2026, and announced a quarterly dividend increase to $0.34 per common share starting Q3 2026, supported by a total remaining share repurchase authorization of $5.7 billion.
Source: 10-Q Item 2 MD&A
Other expense increased $86 million (6.9%) in Q2 FY2026, primarily driven by higher operational losses and information processing costs of $248 million (up from $215 million) related to technology investments, pushing the efficiency ratio up to 35.8% from 34.1% a year ago.
Source: 10-Q Item 2 MD&A
Net income fell 8.5% YoY to $885 million in Q2 FY2026 even as purchase volume rose 8.1%, driven by a smaller reserve release ($163M vs $265M prior year) and rising operating expenses, indicating margin pressure that could persist if credit reserve dynamics normalize further.
Source: 10-Q Item 2 MD&A
Despite improvement, the net charge-off rate remains elevated at 5.43% and 30+ day delinquencies stand at 4.16% of period-end loan receivables, reflecting ongoing consumer credit stress in Synchrony's core private-label and co-branded card portfolios.
Source: 10-Q Item 2 MD&A
Cash and equivalents declined 16.8% YoY to $16.2 billion, while investing cash flow swung to -$3.66 billion (YTD) from +$1.36 billion in the prior year, reflecting significant securities purchases or portfolio acquisitions that reduce liquidity buffers.
Source: 10-Q Balance Sheet and Cash Flow Statement (XBRL)
Total liabilities of $105.0 billion against stockholders' equity of only $16.9 billion results in a debt-to-equity ratio of approximately 6.2x, with ROE declining and equity essentially flat YoY (-0.3%), leaving limited absorption capacity for asset quality deterioration.
Source: 10-Q Balance Sheet (XBRL)
The effective tax rate increased to 25.4% in Q2 FY2026 from 23.0% in the prior year period, primarily due to the absence of a prior-year tax benefit from deferred tax asset remeasurement, directly contributing to the decline in net earnings.
Source: 10-Q Item 2 MD&A
Reported EPS of $2.59 versus the $2.13 analyst consensus — a +21.5% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Income | $885M | $967M | -8.48% |
EPS (Basic) | $2.61 | $2.51 | +3.98% |
EPS (Diluted) | $2.59 | $2.50 | +3.60% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $121.93B | $120.5B | +1.18% |
Total Liabilities | $105.03B | $103.55B | +1.43% |
Stockholders' Equity | $16.9B | $16.95B | -0.32% |
Cash & Equivalents | $16.19B | $19.46B | -16.78% |
Long-Term Debt | $16.43B | $16.01B | +2.64% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $4.6B | $4.76B | -3.30% |
Investing Cash FlowYTD | $-3.66B | $1.36B | -368.94% |
Financing Cash FlowYTD | $1.28B | $-698M | +283.81% |
Share BuybacksYTD | $1.78B | $1.11B | +60.32% |
D&AYTD | $288M | $247M | +16.60% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | 5.2% | — | — |
ROA | 0.7% | — | — |
Debt to Equity | $6.216 | — | — |
Expected release date, analyst estimates & what to watch
Synchrony Financial (SYF) delivered solid Q1 FY2026 results with net income rising 6.3% YoY to $805M and EPS surging ~20% to $2.27 diluted, supported by strong capital returns and a stable balance sheet despite a slight contraction in total assets.
Synchrony Financial (SYF) delivered solid FY2025 results with net income rising 1.5% to $3.55B and EPS surging 8.6% to $9.38, supported by stable operating cash flow of $9.85B and aggressive share buybacks of $2.94B.
Other companies in Consumer Finance
The filing does not disclose analyst consensus estimates, so a beat/miss cannot be confirmed from this data. However, net earnings of $885 million were down 8.5% YoY from $967 million, while diluted EPS of $2.59 was up 3.6% YoY due to share buybacks reducing share count.
Synchrony reported $49.8 billion in quarterly purchase volume (up 8.1% YoY) and $102.2 billion in loan receivables (up 2.4% YoY), but net earnings fell to $885 million due to a smaller reserve release ($163M vs $265M prior year) and higher operating expenses. The net charge-off rate improved to 5.43%, and the company expects full-year 2026 charge-offs to stay below its 5.5%-6.0% target range.
The filing highlights ongoing credit risk with a 4.16% over-30-day delinquency rate and 5.43% net charge-off rate, along with margin pressure from a declining reserve release and rising technology/operational costs that pushed the efficiency ratio to 35.8% from 34.1% a year ago. A formal risk factors section was not provided in the excerpt reviewed.
Interest income was roughly flat at $5,583 million in Q2 FY2026, as a 1.0% increase in interest and fees on loans was offset by lower income from the liquidity portfolio. Total loan receivables grew 2.4% YoY to $102.2 billion, aided by the April 2026 acquisition of $0.7 billion in Lowe's commercial co-branded credit card receivables.
SYF maintains a stable funding base with $82.8 billion in deposits (83% of total funding) and $121.9 billion in total assets, though cash and equivalents declined 16.8% YoY to $16.2 billion. Leverage remains elevated with a debt-to-equity ratio near 6.2x, and the company continued returning capital via $1.8 billion in YTD share buybacks and a new $500 million Series C preferred stock issuance in June 2026.