10-Q · April 27, 2026
Bread Financial reported Q1 2026 revenue (Total net interest and non-interest income) of $1,018 million, up $48 million or 5% year-over-year, and diluted EPS of $4.15, up 50% versus $2.78 a year ago. Net interest margin…
Earnings analysis · 10-Q
BFH earnings analysis
Filed July 27, 2026 · Our reading of the company's report
The latest report
Bread Financial delivered a strong Q2, with $993 million of total net interest and non-interest income, up 7% year over year, and diluted EPS of $3.55, up 21% and above the supplied $2.68 consensus estimate. Earnings…
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Bread Financial delivered a strong Q2, with $993 million of total net interest and non-interest income, up 7% year over year, and diluted EPS of $3.55, up 21% and above the supplied $2.68 consensus estimate. Earnings benefited from a 78-basis-point expansion in net interest margin to 18.49%, 11% credit-sales growth, and sharply improved credit metrics. The balance sheet shifted toward deposits while securitization debt declined, but credit provisions remained elevated at $313 million and consumer-credit, refinancing, and LVI litigation exposures remain key risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $3.55
- Segment
- Single reportable segment; total net interest and non-interest income was $993 million.
What stood out
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Revenue and EPS grew strongly year over year
Q2 total net interest and non-interest income rose 7% year over year to $993 million from $929 million, though it declined 22% sequentially from $1.28 billion in Q1 2026. Diluted EPS increased 21% year over year to $3.55 from $2.94 and exceeded the supplied $2.68 consensus estimate.
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NIM expansion lifted earnings power
Net interest margin expanded 78 basis points year over year to 18.49% from 17.71%, driven by pricing actions and improved funding costs. Net interest income increased $65 million, or 7%, to $1.039 billion.
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Sales and loan balances continued to grow
Credit sales increased 11% to $7.537 billion, average loans grew 3% to $18.197 billion, and ending loans increased 5% to $18.477 billion. Management attributed the growth to new brand partners and higher general-purpose spending.
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Credit trends improved year over year
Credit quality improved materially: the delinquency rate fell 48 basis points year over year to 5.25%, while the net principal loss rate declined 90 basis points to 6.98%. The reserve rate declined to 11.23% from 11.89%.
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Operating cash generation and liquidity strengthened
Operating cash flow for the first six months increased $101 million to $1.020 billion from $919 million. Capital expenditures and other investing items were $11 million, while cash and equivalents increased $79 million from year-end to $3.683 billion.
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Deposit funding and capital returns advanced
Funding mix improved as direct-to-consumer deposits increased 16% year over year to $9.357 billion and represented 50% of average funding, versus 45% a year ago. The company also repurchased 2.8 million shares for $241 million during Q2, leaving $449 million of authorization.
What to watch
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Consumer-credit costs remain substantial
Provision for credit losses rose 14% year over year to $313 million despite improving loss rates, reflecting a $3 million reserve release versus a $74 million release in the prior-year quarter. Management’s 2026 outlook still assumes a 7.0%-7.1% net principal loss rate, leaving earnings exposed to consumer-credit deterioration.
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Refinancing and funding-market exposure persists
The company has $850 million of senior and subordinated unsecured debt outstanding, $2.447 billion of VIE-issued debt, and conduit facilities with $1.449 billion drawn as of June 30. Management notes that future maturities may need to be refinanced in volatile or unfavorable markets.
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LVI litigation claims remain unresolved
LVI-related litigation remains a material contingent liability: the liquidating trustee seeks approximately $750 million plus interest, fees and expenses, and a Canadian proceeding seeks $775 million. Item 1A states there were no material changes to risk factors versus the 2025 Form 10-K.
Management's outlook
Management revised its 2026 outlook based on strong year-to-date results. It now expects average credit card and other loans and total net interest and non-interest income each to increase low- to mid-single digits versus 2025; full-year net interest margin to be flat to slightly higher than 2025; net principal loss rate of 7.0%-7.1%; and normalized effective tax rate of 25%-27%. No numeric revenue-dollar or EPS guidance was provided in the 10-Q.
Earlier filings 4
10-K · February 13, 2026
Bread Financial presents a technology-first payments and lending business with $18.8 billion in credit card and other loans, ~34 million accounts and a diversified partner base. Retail deposits grew 11% to $8.5 billion…
10-Q · April 29, 2025
Bread Financial reported Q1 2025 results with Income from continuing operations per diluted share of $2.86 (up $0.13, +5% vs. $2.73 year-ago) and total net interest and non-interest income of $970 million (down $21…
10-K · February 14, 2025
Bread Financial positions itself as a tech-forward payments and lending platform focused on private label and co-brand credit cards, DTC cards, Bread Pay installment/split-pay and Bread Savings deposits. The company…
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