Key highlights First quarter 2025 results April 24, 2025 © 2 0 2 2 B r e a d F i n a n c i a l | C o n f i d e n t i a l & P r o p r i e t a r y 1 $970 million Revenue • Closely monitoring the impact of the new administration's policies including tariffs, trade, immigration, tax and deregulation, and the impacts they have on consumers and our business. • While consumer financial health was relatively steady in the first quarter, we will remain disciplined with our credit risk management given ongoing macroe ...

Core Insights - Bread Financial Holdings (BFH) reported a revenue of $970 million for the quarter ended March 2025, reflecting a decrease of 2.1% year-over-year, while EPS increased to $2.86 from $2.73 in the previous year, indicating a positive trend in earnings despite revenue decline [1] - The revenue exceeded the Zacks Consensus Estimate by 1.28%, while the EPS surpassed the consensus estimate by 36.19%, suggesting stronger-than-expected performance in earnings [1] Financial Performance Metrics - Efficiency Ratio stood at 49.1%, better than the average estimate of 52.4% from three analysts [4] - Net Interest Margin was reported at 18.1%, slightly above the estimated 17.8% [4] - Total Risk-based Capital Ratio was 15.5%, exceeding the average estimate of 14.2% [4] - Common equity tier 1 Capital Ratio was 12%, below the estimated 12.8% [4] - Total interest income reached $1.23 billion, slightly below the average estimate of $1.25 billion [4] - Interest on cash and investment securities was $46 million, lower than the estimated $49.26 million [4] - Interchange revenue was reported at -$83 million, better than the estimated -$96.84 million [4] - Interest and fees on loans totaled $1.19 billion, slightly below the estimate of $1.20 billion [4] - Net interest income matched the average estimate of $1.01 billion [4] - Total non-interest income was -$36 million, outperforming the estimate of -$51.58 million [4] - Other Non-Interest Income was $47 million, exceeding the estimated $44.74 million [4] Stock Performance - Shares of Bread Financial have returned -7% over the past month, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Bread Financial Holdings (BFH) reported quarterly earnings of $2.86 per share, exceeding the Zacks Consensus Estimate of $2.10 per share, and up from $2.73 per share a year ago [1] - The earnings surprise for the quarter was 36.19%, and the company has surpassed consensus EPS estimates three times in the last four quarters [2] - The company generated revenues of $970 million for the quarter, surpassing the Zacks Consensus Estimate by 1.28%, but down from $991 million year-over-year [3] Earnings Performance - The earnings surprise of 36.19% indicates strong performance relative to expectations [2] - The company has consistently exceeded revenue estimates, achieving this three times in the last four quarters [3] Stock Performance - Bread Financial shares have declined approximately 21.6% year-to-date, compared to a decline of 8.6% for the S&P 500 [4] - The current Zacks Rank for the stock is 3 (Hold), suggesting it is expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.77 on revenues of $952.44 million, and for the current fiscal year, it is $6.50 on revenues of $3.9 billion [8] - The industry outlook is favorable, with the Financial - Miscellaneous Services sector ranking in the top 36% of Zacks industries, indicating potential for outperformance [9] Related Industry Insights - Upstart Holdings, Inc. (UPST), another company in the same industry, is expected to report quarterly earnings of $0.19 per share, reflecting a year-over-year increase of 161.3% [10] - UPST's anticipated revenues are projected to be $200.74 million, representing a 57.1% increase from the previous year [11]

Core Insights - Bread Financial Holdings, Inc. reported a performance update highlighting its financial metrics for the month and three months ended March 31, 2025, indicating a net loss rate of 8.1% and a delinquency rate of 5.9% [1] Financial Performance - End-of-period credit card and other loans stood at $17,815 million as of March 31, 2025, with an average of $17,818 million for the same period [1] - There was a year-over-year decrease of 2% in average credit card and other loans [1] - Net principal losses were reported at $123 million for the month and $365 million for the three months ended March 31, 2025 [1] - The net loss rate slightly improved from 8.2% in the previous year to 8.1% [1] - Delinquency rate decreased from 6.2% in March 2024 to 5.9% in March 2025, with 30 days or more delinquencies amounting to $973 million [1] Company Overview - Bread Financial is a tech-forward financial services company that offers personalized payment, lending, and saving solutions to millions of U.S. consumers [2] - The company provides general purpose credit cards and savings products, aiming to empower customers and enhance their lifestyles [2] - It also supports growth for recognized brands in various sectors through private label and co-brand credit cards [2]

Financial Performance - Net income for Q1 2025 was $142 million, with diluted earnings per share of $2.86, reflecting a year-over-year increase of 5%[10] - Revenue for Q1 2025 was $970 million, a decrease of $21 million or 2% compared to the previous year[10] - Net income for Q1 2025 was $138 million, showing an increase from $7 million in Q4 2024, representing a significant growth[67] - The company's pretax pre-provision earnings (PPNR) for Q1 2025 were $493 million, compared to $390 million in Q4 2024, indicating a rise of about 26.5%[69] - The company reported an adjusted net income per diluted share of $2.82 for Q1 2025, compared to $0.40 in Q4 2024, marking a substantial increase[67] Credit Quality - The delinquency rate improved to 5.9%, down from 6.2% in Q1 2024, while the net loss rate decreased to 8.2% from 8.5%[13] - Delinquency rates peaked at 6.5% in 3Q23, compared to a 15-year average of approximately 4.9%[54] - Net loss rates reached a peak of 9.4% historically, with the current rate at 8.0% in 3Q23, reflecting ongoing credit quality challenges[54] - The provision for credit losses in Q1 2025 was $296 million, down from $417 million in Q4 2024, indicating improved credit quality[69] - The company expects to see a negative impact on net loss rates in 2Q25 due to the effects of recent natural disasters, estimating a benefit of over 20 basis points in prior periods[58] Funding and Deposits - Direct-to-consumer deposits reached $7.9 billion, up 13% year-over-year, now representing 43% of average total funding[8] - End-of-period direct-to-consumer deposits increased by 13% to $7,922 million in 1Q25 from $6,984 million in 1Q24[43] Loans and Sales - Credit sales amounted to $6.1 billion, a 1% increase driven by general-purpose spending[13] - Average loans decreased by 2% to $18.2 billion, attributed to macroeconomic conditions affecting consumer spending[13] - End-of-period credit card and other loans decreased by 2% to $17,815 million in 1Q25 from $18,185 million in 1Q24[43] - Credit sales increased by 1% to $6,106 million in 1Q25 from $6,030 million in 1Q24[43] Expenses and Efficiency - Total non-interest expenses decreased by 1% to $477 million in 1Q25 compared to $482 million in 1Q24[36] - Adjusted total non-interest expenses for Q1 2025 were $475 million, down from $536 million in Q4 2024, reflecting a decrease of approximately 11.4%[67] - The efficiency ratio for 1Q25 was 49.1%, compared to 48.6% in 1Q24[43] Capital Ratios - The CET1 capital ratio decreased to 12.0% in Q1 2025 from 12.6% in Q1 2024, while the total risk-based capital ratio was 15.5%[21] - Common equity tier 1 capital ratio increased from 11.8% in 1Q23 to 12.9% in 3Q23, with a rolling 4 quarter average of 12.9%[51] - Total risk-based capital ratio improved from 13.2% in 1Q23 to 14.2% in 3Q23, with a rolling 4 quarter average of 14.8%[51] - Tangible common equity to tangible assets ratio rose from 9.1% in 1Q23 to 10.0% in 3Q23, indicating stronger asset backing[51] Future Outlook - The 2025 outlook anticipates average loans to be flat to slightly down compared to 2024, with revenue expected to be flat to slightly up[26] - The company anticipates continued challenges from macroeconomic conditions, including interest rates and consumer spending behavior, which could impact future performance[64] - Forward-looking statements indicate that actual results may differ materially from projections due to various risks and uncertainties, including regulatory changes and credit performance[64] Strategic Initiatives - The company plans to strategically invest in technology modernization and product innovation to drive growth and efficiencies[30] - The average daily balance calculation was revised in 2024 to align with industry practices, which may affect future financial reporting[58] - The company continues to evaluate its operations excluding the volatility from repurchased Convertible Notes, focusing on adjusted metrics for clearer insights[66] Share Repurchase - The company repurchased a total of 3.2 million shares, completing a $150 million share repurchase program[8] - The company repurchased a portion of its outstanding $316 million Convertible Senior Notes due 2028, impacting total non-interest expenses and net income positively[66]

Core Viewpoint - Bread Financial has entered into a multi-year agreement with Crypto.com to launch the first Crypto.com credit card program in the United States, aiming to enhance customer access to cryptocurrency rewards and payment options [1][4]. Company Overview - Bread Financial is a tech-forward financial services company that provides personalized payment, lending, and saving solutions to millions of U.S. consumers [5]. - The company focuses on delivering growth for recognized brands through private label and co-brand credit cards, as well as pay-over-time products [5]. Product Details - The Crypto.com Visa Signature® Credit Card will feature five tiers, allowing cardmembers to earn uncapped CRO rewards at varying rates, with elevated rates for the first twelve months for select tiers [2][4]. - Cardmembers can pre-qualify or apply for the credit card through the Crypto.com app, and once approved, they can add the card to their digital wallets [3]. Customer Benefits - The credit card program is designed to help both novice and experienced traders maximize their investments through straightforward rewards [4]. - Higher-tier cardmembers will receive additional benefits, including unlimited rebates for services like Spotify and Netflix through Crypto.com's Level Up program [2][4]. Market Position - Crypto.com is recognized as an industry leader with over 140 million customers globally, committed to accelerating cryptocurrency adoption through innovative solutions [4][7].

Core Insights - Bread Financial Holdings, Inc. reported its first quarter 2025 financial results, emphasizing its position as a tech-forward financial services company [1] - The company provides flexible payment, lending, and saving solutions to millions of U.S. consumers, enhancing customer experiences and supporting various brands [3] Financial Performance - The financial results for the first quarter of 2025 were announced, with all related materials available on the company's investor relations website [1] - A conference call was scheduled to discuss these results, indicating a commitment to transparency and communication with investors [2] Company Overview - Bread Financial specializes in personalized financial solutions, including general purpose credit cards and savings products, aimed at improving customers' lives [3] - The company collaborates with well-known brands across various sectors, including travel, entertainment, health, beauty, jewelry, and specialty apparel, through private label and co-brand credit cards [3]

Company Overview - Bread Financial Holdings (BFH) is expected to report a year-over-year decline in earnings due to lower revenues, with a consensus EPS estimate of $2.08, reflecting a -23.8% change [3][12] - Revenues are anticipated to be $957.76 million, down 3.4% from the previous year [3] Earnings Expectations - The earnings report is scheduled for April 24, 2025, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has been revised down by 7.66% over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP for Bread Financial is +4.18%, suggesting a likelihood of beating the consensus EPS estimate [11] - The stock currently holds a Zacks Rank of 3 (Hold), which indicates a moderate outlook [11] Historical Performance - In the last reported quarter, Bread Financial exceeded the expected EPS of $0.33 by delivering $0.41, resulting in a surprise of +24.24% [12] - Over the past four quarters, the company has beaten consensus EPS estimates two times [13] Industry Comparison - Moody's (MCO), a peer in the financial services industry, is expected to report an EPS of $3.57, reflecting a +5.9% year-over-year change, with revenues projected at $1.89 billion, up 5.7% [17] - Moody's has a consensus EPS estimate that has been revised up by 0.1% over the last 30 days, but it currently has an Earnings ESP of -0.38%, making predictions about beating the consensus EPS challenging [18]

Company Overview - Bread Financial Holdings (BFH) shares increased by 12.7% to $48.28, following a broader market rally after President Trump's announcement of a 90-day pause on reciprocal tariffs for most countries [1] - The stock had previously experienced a 10.1% decline over the past four weeks [1] Earnings Expectations - For the upcoming quarterly report, Bread Financial is expected to post earnings of $2.08 per share, reflecting a year-over-year decrease of 23.8% [2] - Revenue projections stand at $957.76 million, which is a 3.4% decline compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Bread Financial has been revised down by 12.4% over the last 30 days [4] - A negative trend in earnings estimate revisions typically does not lead to price appreciation, indicating potential caution for future stock performance [4] Industry Context - Bread Financial operates within the Zacks Financial - Miscellaneous Services industry, where Applied Digital Corporation (APLD) also resides [4] - APLD's shares rose by 8.7% to $5.52, but the company has seen a 20.3% decline over the past month [4] - APLD's consensus EPS estimate remains unchanged at -$0.11, which is a 78.9% improvement compared to the previous year [5]

Core Viewpoint - Bread Financial Holdings, Inc. will host a conference call on April 24, 2025, to discuss its first quarter 2025 results [1] Group 1: Company Overview - Bread Financial is a tech-forward financial services company providing personalized payment, lending, and saving solutions to millions of U.S. consumers [3] - The company offers payment solutions, including general purpose credit cards and savings products, aimed at empowering customers [3] - Bread Financial collaborates with recognized brands in various sectors, including travel & entertainment, health & beauty, jewelry, and specialty apparel through private label and co-brand credit cards [3] Group 2: Conference Call Details - The conference call will take place at 8:30 a.m. ET and will be available on the company's investor relations website [1][2] - Participants are encouraged to register in advance and download necessary software at least 15 minutes prior to the call [2] - The webcast will be archived on the investor relations website for future access [2]