Financial services company Bread Financial (NYSE: BFH) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 5.3% year on year to $975 million. Its non-GAAP profit of $2.07 per share was significantly above analysts’ consensus estimates.
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Bread Financial (BFH) Q4 CY2025 Highlights:
- Net Interest Income: $1.05 billion vs analyst estimates of $1.02 billion
- Net Interest Margin: 18.9% vs analyst estimates of 18.4% (46.7 basis point beat)
- Revenue: $975 million vs analyst estimates of $954.4 million (5.3% year-on-year growth, 2.2% beat)
- Efficiency Ratio: 57% vs analyst estimates of 53.5% (355 basis point miss)
- Adjusted EPS: $2.07 vs analyst estimates of $0.48 (significant beat)
- Market Capitalization: $3.11 billion
Company Overview
Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE: BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Bread Financial’s 3.1% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the financials sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Bread Financial’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.3% annually. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Bread Financial reported year-on-year revenue growth of 5.3%, and its $975 million of revenue exceeded Wall Street’s estimates by 2.2%.
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Net Interest Margin
Net interest margin (NIM) serves as a critical gauge of a financial institution's fundamental profitability by showing the spread between interest income and interest expenses. It's essential for understanding whether a firm can sustainably generate returns from its lending operations.
Bread Financial’s net interest margin has increased by 40.8 basis points (100 basis points = 1 percentage point) over the last four years but decreased by 105.8 basis points on a two-year basis. Although the longer-term change is reassuring, the two-year result was worse than the financials industry. The firm’s NIM for the trailing 12 months was 18.4%.
Key Takeaways from Bread Financial’s Q4 Results
It was good to see Bread Financial beat analysts’ EPS expectations this quarter. We were also excited its net interest margin outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 3.4% to $70.49 immediately after reporting.
Bread Financial may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
