Synchrony Financial

Good morning and welcome to the Synchrony Financial third quarter 2026 earnings conference call. Please refer to the company's investor relations website for access to their earnings materials. Please be advised that today's conference call is being recorded. Currently, all callers have been placed in listen-only mode. The call will be opened up for your questions following the conclusion of management's prepared remarks. If at any time you should need operator assistance, please press star zero. If you wish to ask a question following the prepared remarks, please press star one. I will now turn the call over to Catherine Miller, Senior Vice President of Investor Relations. Thank you. You may begin.

Thank you and good morning, everyone. Welcome to our quarterly earnings conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release, detailed financial schedules, and presentation are available on our website, synchronyfinancial.com. This information can be accessed by going to the investor relations section of the website. Before we get started, I wanted to remind you that our comments today will include forward-looking statements. These statements are subject to risks and uncertainty, and actual results can differ materially. We list the factors that might cause actual results to differ materially in our SEC filings, which are available on our website. During the call, we will refer to non-GAAP financial measures in discussing the company's performance. You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call. Finally, Synchrony Financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website. On the call this morning are Brian Doubles, Synchrony's President and Chief Executive Officer, and Brian Wenzel, Executive Vice President and Chief Financial Officer. I will now turn the call over to Brian Doubles.

Thanks, Kathryn. Good morning, everyone. Synchrony delivered strong third quarter results highlighted by broad-based purchase volume growth across each of our five sales platforms. Spend within our diversified value platform increased 13% compared to last year, primarily reflecting the impact of partner expansion and higher gas prices. In home and auto, purchase volume increased 9% compared to last year, primarily reflecting the performance of new programs, select furniture retailers, and the impact of higher gas prices. Purchase volume was 6% higher in our lifestyle platform, primarily reflecting strength in categories like other apparel and luxury, as well as the impact from our new programs. Meanwhile, digital platform sales grew 5%, driven by strong customer engagement across partners with broad diversified offerings and refreshed value propositions. And in health and wellness, purchase volume grew 3%, primarily reflecting growth impact. Total purchase volume reached nearly $50 billion again this quarter, the highest third quarter level in our history, and an increase of 8% compared to last year. Approximately 53% of that spend occurred through Synchrony's co-branded cards in the third quarter, which increased 23% versus last year and was driven by the combination of new programs and product upgrades delivering enhanced value propositions and increased utility and higher broad-based spend across our card programs. Both discretionary and non-discretionary out-of-partner spend on our consumer co-brand cards grew by double digits. Strength in discretionary spend came from categories like electronics and entertainment, while in non-discretionary, gas station and discount store spend grew fastest. And as slide 3 shows, spend across Sinkley's portfolio is growing fastest among Gen Z and Millennials. particularly in our diversified in value digital and home and auto platforms where the strong value propositions and broad utility of our offerings resonate deeply. The significant growth across the younger age demographics has been enabled by our proprietary underwriting and data analytics platform PRISM. Synchrony leverages over 9,000 data variables and cash flow underwriting to responsibly deliver purchase power to credit-ready customers, even when they are earlier in their financial journeys and often overlooked by other traditional lenders. And because we can meet our customer wherever and however they want to be met with the right product for that purchase, Synchrony is building relationships and delivering experiences that can unlock greater financial flexibility over time. To that end, we recently introduced CareCredit PayLater, an enhanced and rebranded installment loan product that will appear alongside CareCredit's existing credit card as another way for eligible customers to plan and pay for health and wellness related products and services. It is now available at nearly 20,000 health and wellness locations, including dental, cosmetic, vision, and audiology care providers. By providing tailored choices up front after one seamless application, this multi-product experience empowers customers with financing flexibility and payment structure optionality that aligns to their preferences. In addition, Synchrony and Venmo collaborated on a refreshed value proposition for the Venmo credit card with an industry-first feature that rewards social spending, offering carholders more cash back for splitting purchases with friends on Venmo. The Venmo credit card issued by Synchrony delivers unlimited daily cash back deposited directly into the account and offers a simple way to manage money and rewards together all within the Venmo app. As we all know, the spending experience is constantly evolving. Digital wallets and agenda commerce are changing the way consumers discover, decide, and buy. So Synchrony remains focused on the heart of what matters, connecting our customers, partners, merchants, and providers through seamless experiences and unmistakable value. Our new integration with Stripe, the programmable financial services company, will make it easier for both Synchrony's and Stripe's providers and health and wellness retailers to offer care credit financing as part of their online checkout experience. More than 12 million care credit cardholders, as well as new approved applicants, will have opportunities to access trusted care credit financing for health and wellness purchases through participating Stripe providers. Synchrony is also integrating with Vetspire, a leading cloud-based veterinary practice management software provider, to embed care credit financing options directly within Vetspire's AI-enabled cloud-based platform and give veterinary practices a more modern way to offer real-time payment solutions at the point of care. Vetspire is used by more than 1,000 veterinary hospitals and clinics nationwide, and about 85% are already care credit and role providers. By operationalizing checkout workflows and making financial options easier to access, our collaboration aims to improve the experience for pet owners, reduce administrative friction for clinic teams, and support timely care for pets. Meanwhile, Synchrony's enterprise collaboration with OpenAI is designed to strengthen our positioning at the center of AI's next chapter in shopping and payments. We have launched our Synchrony Chat GPT plugin, which allows consumers to discover savings and offers within the Synchrony marketplace directly within Chat GPT and browse promotional financing deals and everyday value from participating partners in a fast, conversational experience. and from a corporate perspective, we are deploying the latest open AI models like GPT-6 Astra to enable deeper engagement with advanced capabilities, more meaningful product development and faster technology innovation. Of course, Synchrony's AI strategy extends beyond adopting emerging technologies to helping define how they will operate across the broader commerce ecosystem. We have joined the Personal Agent Protocol, POPI initiative, led by Sierra and Meta as a design partner, reflecting our commitment to helping define the open standards that will underpin the future of agenda commerce. By contributing to the development of secure, transparent, and permission-based protocols for AI agents, Synchrony is helping advance an ecosystem that can deliver greater customer choice, trust, and scalability across digital commerce. So as we look to the remainder of this year and the years ahead, Thanks, Brian, and good morning, everyone.