Bread Financial Holdings, Inc. (BFH): Business Model Canvas [Dec-2025 Updated]

You're looking to understand how Bread Financial Holdings, Inc. (BFH) actually makes its money, and honestly, it's a sophisticated play built on tech and deep retail ties. Forget the old-school bank model; BFH is running a platform that manages a massive credit book-think $17.6 billion in average loans as of Q3 2025-all while gathering $8.2 billion in direct deposits to fund it. Their recent performance, like hitting $970 million in total revenue in Q1 2025, shows this partnership-heavy engine is firing, even while managing the inherent risk, like the $296 million provision for credit losses in Q1 2025. Dive into the canvas below to see exactly how their key activities and resources translate into value for both their retail partners and millions of consumers.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Bread Financial Holdings, Inc. (BFH) relies on to power its lending and payment solutions. These aren't just names on a slide; they represent the flow of receivables and the source of capital.

Retailers for Private Label and Co-Brand Credit Programs

The private label and co-brand credit card programs are the engine here, delivering credit to consumers at the point of sale for recognized brands. Bread Financial Holdings, Inc. delivers growth for brands across travel & entertainment, health & beauty, jewelry, and specialty apparel sectors. New partnerships in the home vertical, including with Bed Bath & Beyond, are expected to fuel future growth. As of December 31, 2024, the company managed credit card and other loans totaling $17.4 billion in principal across approximately 38 million open and outstanding accounts.

Here's a look at the types of partners Bread Financial Holdings, Inc. supports:

Partner Sector	Example Partner (as of late 2024/early 2025)	Program Type
Entertainment/Hospitality	Caesars	Co-Brand/Private Label
Retail Apparel	Victoria's Secret	Private Label
Beauty	Ulta Beauty	Co-Brand/Private Label
Home Goods	Bed Bath & Beyond	New Partnership Focus

The average balance for accounts with outstanding balances was $975 as of year-end 2024.

New Industry Partners like Crypto.com for Card Programs

Bread Financial Holdings, Inc. expanded its reach into digital assets by announcing a multi-year agreement with Crypto.com in April 2025 to launch the Crypto.com Visa Signature credit card program in the U.S. Crypto.com claims to be trusted by more than 140 million customers worldwide. This card offers five tiers, from Midnight Blue to Obsidian, with cardmembers earning uncapped CRO rewards at varying rates. For the first twelve months from account open or tier upgrade, select tiers enjoy elevated CRO reward rates.

Long-Term Brand Renewals, such as Academy Sports

The existing portfolio includes established relationships, such as the one with Academy Sports + Outdoors. Accounts for the Academy Sports + Outdoors Credit Card are issued by Comenity Capital Bank, which is a subsidiary of Bread Financial Holdings, Inc. This relationship is active as of December 2025, evidenced by current cardholder benefits information.

Key operational relationships include:

• Cardholders receive 5% OFF every day for online & in-store purchases.
• Cardholders receive FREE SHIPPING on Academy.com orders of $15 or more.

Technology Service Providers for Card Processing

The operational backbone for processing transactions is secured through established technology partners. Bread Financial Holdings, Inc., tracing its roots back to Alliance Data Card Services, selected Fiserv for Credit Processing Services back in October 2020. This selection underpins the management of its integrated credit and marketing services.

Institutional Investors Providing Capital and Liquidity

Capital structure management is a key focus, with institutional backing being substantial. As of November 2025 filings, 99.52% of Bread Financial Holdings, Inc. stock is owned by institutional investors and hedge funds. The company actively manages its capital base; for instance, in November 2025, Bread Financial Holdings, Inc. launched an underwritten public offering of depositary shares representing interests in its Series A Non-Cumulative Perpetual Preferred Stock. Separately, the company priced $500 million in 6.750% senior notes due 2031, with net proceeds anticipated to be approximately $493 million after expenses, expected to close on November 6, 2025. The CET1 ratio stood at 14% as of a November 2025 presentation, placing it at the top of its target range.

Key capital and ownership metrics as of late 2025:

Metric	Value	Date/Context
Institutional Ownership Percentage	99.52%	November 2025
Senior Notes Issued (Nov 2025)	$500 million	Pricing of offering
Net Proceeds from Senior Notes (Est.)	$493 million	After expenses
CET1 Ratio	14%	November 2025
Liquidation Preference per Depositary Share	$25	Series A Preferred Stock Offering

The company also authorized an additional $200 million for share buybacks. The total debt was reduced to $900 million.

Top institutional holders by reported value (as of November 2025 data):

• Vanguard Group Inc.: $294.12 million
• Turtle Creek Asset Management Inc.: $183.12 million
• Dimensional Fund Advisors LP: $171.56 million

Finance: draft 13-week cash view by Friday.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Key Activities

Managing and underwriting a large credit card and loan portfolio

The core activity involves managing the outstanding credit exposure across general purpose and private-label products. As of the third quarter of 2025, average loans stood at $17.6 billion. For the month ended October 31, 2025, end-of-period credit card and other loans were $17,694 million, with average loans at $17,627 million. Credit sales for Q3 2025 reached $6.8 billion, marking a 5% year-over-year increase. The portfolio mix shows a concentration in the private-label space, with co-brand business accounting for 55% of credit sales as of September 30, 2025. Underwriting focuses on a segment where 42% of receivables, as of September 30, 2025, were from nonprime borrowers (VantageScore less than 660). This activity is supported by a peer-leading net interest margin of 18.2% for the nine months ended September 30, 2025.

Metric	Q3 2025 (Period End/Average)	October 2025 (Period End)	Year-over-Year Change (Avg Loans)
Average Credit Card and Other Loans	$17.6 billion	$17,627 million	(1)%
End-of-Period Loans	$17.7 billion	$17,694 million	N/A
Credit Sales	$6.8 billion (Q3)	N/A	+5% (Q3)

Developing and maintaining a tech-forward payment platform

Bread Financial Holdings, Inc. operates as a tech-forward financial services company, which necessitates continuous investment in its digital infrastructure for payments, lending, and savings. The company explicitly stated it continues to invest in technology modernization to drive growth. This platform underpins the delivery of general purpose credit cards, savings products, and pay-over-time options to millions of U.S. consumers. The focus on technology supports the growth in new partner acquisition, which drove the 5% increase in Q3 2025 credit sales. This is a foundational element, though specific platform development spend figures are not detailed as a standalone key activity metric in the latest reports.

Proactive credit risk management and loss mitigation

Managing credit quality involves setting reserves and actively monitoring delinquencies and losses. The company has increased its credit reserves to 13%. For the third quarter of 2025, the delinquency rate improved to 6.0%, down from 6.4% in Q3 2024. The net loss rate for Q3 2025 was 7.4%, an improvement from 7.8% in the prior year period. For the month of October 2025, the delinquency rate was 6.1% and the net loss rate was 7.5%. Charge-offs for the nine months ended September 30, 2025, were 7.8% of loans, which is 50 basis points lower than the prior-year period. The company's historical average for losses is about 6%.

• Q3 2025 Delinquency Rate: 6.0%
• Q3 2025 Net Loss Rate: 7.4%
• Credit Reserves: 13%
• Borrower Risk Profile: 42% nonprime (as of 9/30/2025)

Direct-to-consumer deposit gathering and servicing

A key strategic activity is shifting funding mix by growing direct-to-consumer (D2C) deposits to reduce reliance on wholesale borrowings. D2C deposits reached $8.2 billion at the end of Q3 2025, representing a 9% year-over-year increase. This funding source now makes up 47% of average total funding as of Q3 2025, up from 41% a year prior. The stated target threshold for this funding mix is over 50%. In Q1 2025, D2C deposits were $7.9 billion at quarter-end.

Deposit Metric (as of Q3 2025)	Amount / Percentage
Direct-to-Consumer Deposits (End of Q3)	$8.2 billion
D2C Deposits as % of Average Total Funding	47%
Target D2C Funding Threshold	Over 50%

Operational excellence initiatives for enterprise-wide efficiency

Efficiency is driven by disciplined expense management and modernization efforts. For Q3 2025, total non-interest expenses decreased by $98 million, or 17%, largely due to prior-year impacts from repurchased debt. Excluding these debt impacts, adjusted total non-interest expenses decreased by $5 million, or 1%, driven by these operational excellence initiatives. The full-year 2025 outlook anticipates generating positive operating leverage, excluding gains on portfolio sale and debt impacts. The company's Common Equity Tier 1 (CET1) capital ratio improved to 14.0% as of Q3 2025.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Key Resources

You're looking at the core assets that power Bread Financial Holdings, Inc. (BFH) right now, late in 2025. These aren't just line items on a balance sheet; they are the engines for their business model.

The lending capacity is substantial, backed by the bank subsidiary. As of the third quarter ending September 30, 2025, the company reported $17.6 billion in average credit card and other loans. That's the scale of the credit they are actively managing on their books. This lending activity is primarily facilitated through Comenity Capital Bank, which is a key subsidiary, chartered in Utah and a Member FDIC. This bank is the entity that actually issues their Bread Pay™ and Bread Loans™ products, making it central to their funding and lending operations.

Funding diversification is also a major resource. You see a growing reliance on direct customer funding sources. As of Q3 2025, direct-to-consumer deposits reached $8.2 billion at quarter-end, representing a 9% year-over-year increase. This funding base now makes up 47% of their average total funding, which is a significant shift toward more stable, retail-sourced capital.

Here's a quick look at those key financial anchors from the latest reporting period:

Key Financial Metric	Amount as of Q3 2025 (Sep 30, 2025)	Context
Average Credit Card and Other Loans	$17.6 billion	Down 1% from prior year period due to payment rates and losses.
Direct-to-Consumer Deposits	$8.2 billion	Represents 47% of average total funding.
Common Equity Tier 1 (CET1) Capital Ratio	14.0%	Improved 70 basis points from the prior quarter.
Tangible Book Value Per Common Share	$56.36	Increased 19% year-over-year.

Beyond the balance sheet numbers, the technology stack is a critical, though less tangible, resource. Bread Financial Holdings, Inc. positions itself as a tech-forward financial services company. This means they rely heavily on their proprietary data, analytics, and machine learning technology to manage risk, personalize offers, and drive operational efficiencies, which they noted contributed to expense reductions.

Also essential are the intangible assets protecting their operations. This includes the intellectual property related to payment and lending solutions, which is protected by copyright laws and other intellectual property treaties. This IP underpins their ability to offer their suite of products, including private label, co-brand credit cards, and pay-over-time products, giving them a competitive moat in their specific market niche. They are actively investing in technology modernization to maintain this edge.

The resources they are focusing on to drive future performance include:

• Comenity Capital Bank for lending and deposit-taking.
• Proprietary technology for risk management and personalization.
• A growing base of direct-to-consumer deposits totaling $8.2 billion.
• The protected intellectual property behind their payment platforms.
• A strong capital position with a CET1 ratio of 14.0%.

Finance: draft 13-week cash view by Friday.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Value Propositions

You're looking at the core offerings that Bread Financial Holdings, Inc. delivers to its customers and partners as of late 2025. These value propositions are grounded in their dual focus: serving retail partners with branded credit solutions and offering direct-to-consumer financial tools.

Private label and co-brand credit cards for retail partners

Bread Financial Holdings, Inc. provides the infrastructure to power loyalty and sales for major brands. This means offering digitally enabled private-label and co-branded credit cards, installment loans, and buy now, pay later ("BNPL") options directly at the point of sale for their partners. You see this in their continued work with established names and expansion into new verticals.

• Delivering growth for recognized brands in travel & entertainment, health & beauty, jewelry, and specialty apparel through private label and co-brand credit cards.
• Expanded the home vertical in the third quarter of 2025 by signing Bed, Bath & Beyond, Furniture First, and Raymour & Flanigan.
• Renewed a long-term partnership with Caesars Entertainment and launched a new, fee-based credit card in the second quarter of 2025.

Simple, personalized payment, lending, and saving solutions

For the individual consumer, the value is in simplicity and personalization across payments, lending, and savings. A key component supporting this is their direct-to-consumer (DTC) funding strategy, which helps manage their overall cost of capital.

Metric	Value (as of Late 2025)	Period/Context
Direct-to-Consumer Deposits	$8.2 billion	Q3 2025
DTC Deposit Growth (YoY)	9%	Q3 2025
DTC Deposits as % of Total Funding	47%	Q3 2025
Tangible Book Value per Common Share	$56.36	Q3 2025

The company is targeting a DTC deposit base that represents half of total funding in the future.

Pay-over-time products, including Bread Pay

Bread Financial Holdings, Inc. offers pay-over-time products to provide choice and flexibility to shared customers at the point of sale. While specific volume data for Bread Pay isn't explicitly broken out in the latest reports, the product category itself is a stated value proposition alongside installment loans.

General-purpose cash-back credit cards (Comenity-branded)

Beyond the private label space, Bread Financial Holdings, Inc. issues general-purpose credit cards, including those branded as Comenity. These cards cater to broader consumer spending needs. The growth in this segment directly contributes to overall credit sales volume.

• Credit sales were $6.8 billion in Q2 2025, a 5% increase, driven by increased general-purpose spending.
• Credit sales were $6.1 billion in Q1 2025, a 1% increase, driven by increased general-purpose spending.

Enabling partner growth in travel, beauty, and specialty retail

The value proposition here is the measurable contribution to partner business expansion. The company's solutions are designed to empower cardholders and drive sales for their retail collaborators across several key consumer spending categories.

For example, credit sales growth in Q2 2025 was explicitly attributed to new partner growth. The company's overall trailing 12-month revenue as of September 30, 2025, stood at $3.79B.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Customer Relationships

Personalized engagement driven by data and analytics

Bread Financial Holdings, Inc. serves millions of U.S. consumers with payment, lending, and saving solutions, capturing and analyzing transaction-rich data to inform customer interactions. The company's strategy relies on this data foundation to tailor offerings. The delinquency rate for accounts 30 days or more past due stood at 6.1% as of October 31, 2025, an improvement from 6.4% year-over-year, suggesting data-driven risk management is impacting customer performance positively. For the first quarter ended March 31, 2025, the delinquency rate was 5.9%.

Multi-channel communication (email, mobile, in-store, direct mail)

The communication strategy spans multiple touchpoints to reach the consumer base. Bread Financial Holdings, Inc. utilizes digital channels, including email and mobile, alongside traditional methods like direct mail. The company's payment solutions include general purpose credit cards and savings products, which are supported by these channels. The firm also delivers growth through private label and co-brand credit cards across sectors such as travel & entertainment, health & beauty, jewelry, and specialty apparel.

• Sectors served by co-brand cards include: travel & entertainment, health & beauty, jewelry, and specialty apparel.
• Direct-to-consumer deposits reached $8.1 billion as of the second quarter of 2025.
• Direct-to-consumer deposits represented 45% of average total funding in Q2 2025.

Digital self-service tools for account management

Bread Financial Holdings, Inc. is focused on enhancing self-service capabilities within its digital channels to allow customers to manage needs when and how they prefer, which also generates efficiencies. The company previously launched the Enhanced Digital Suite in October 2020 to support these efforts. The firm aims for operational excellence, which includes driving digital adoption to reduce the costs to serve customers. Analysts expect the full fiscal year 2025 Earnings Per Share (EPS) to be $6.45, reflecting operational discipline.

Dedicated customer service and collections functions

Dedicated functions manage customer service and collections, which is critical given the nature of the credit products offered. The company's credit performance is closely monitored, with key metrics reported monthly. For the month ended October 31, 2025, net principal losses were $112 million. The net loss rate for October 2025 was 7.5%, down from 7.9% in October 2024. The company's total end-of-period credit card and other loans stood at $17.7 billion in October 2025.

Here's the quick math on recent credit health metrics:

Metric	October 2025 Value	October 2024 Value
Net Loss Rate	7.5%	7.9%
30+ Days Delinquency Rate	6.1%	6.4%
Net Principal Losses (in millions)	$112	$120

Relationship management with brand partners

Managing relationships with brand partners is a core component of the business model, providing growth for private label and co-brand credit card programs. Bread Financial Holdings, Inc. renewed a long-term partnership with Caesars Entertainment in the second quarter of 2025 and launched a new, fee-based credit card with them. Furthermore, new partnerships in the home vertical, including one with Bed Bath & Beyond, are expected to fuel growth. The company also offers the Bread Rewards American Express Credit Card, launched in partnership with American Express in April 2022.

The firm recently announced a quarterly dividend of $0.23 per share, payable December 12th, which represents a $0.92 annualized dividend and a yield of 1.4% as of November 2025.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Channels

You're looking at how Bread Financial Holdings, Inc. (BFH) gets its products and services into the hands of customers as of late 2025. The channels are a mix of deep retail integration and a growing direct digital presence.

The engine room for originations remains the retailer network. For the third quarter of 2025, credit sales reached $6.8 billion, showing a 5% increase, which the company attributed to new partner growth and higher general-purpose spending. This indicates the in-store and e-commerce point-of-sale channel is still driving significant volume. For context, customer spending on co-brand credit cards made up approximately 50% of credit sales for the full year 2024.

The direct-to-consumer (DTC) channel is a major focus for funding. As of the end of the third quarter of 2025, direct-to-consumer deposits stood at $8.2 billion, marking a 9% year-over-year increase. This digital funding source now represents 47% of Bread Financial Holdings, Inc.'s average total funding, moving closer to management's target of half of total funding. This growth helps reduce reliance on more expensive funding sources.

The mobile application serves as the primary digital interface for existing customers. While specific Bread Financial Holdings, Inc. app usage numbers aren't public, the broader trend shows that 72% of US adults report using mobile banking apps as of 2025, with 68% of millennials primarily using them. This underscores the necessity of a strong mobile experience for account access and payment management.

Co-brand partner networks are critical for both origination and revenue. Bread Financial Holdings, Inc. delivers growth through private label and co-brand cards in sectors like travel & entertainment, health & beauty, and specialty apparel. A key recent event was the renewal of a long-term partnership with Caesars Entertainment and the launch of a new, fee-based credit card in the second quarter of 2025.

The company relies on third-party service providers for core processing, which supports the scale needed to manage its approximately 38 million open and outstanding accounts (as of December 31, 2024). Revenue generation from these channels is also supported by merchant discount fees received from partners to compensate for promotional financing, such as deferred interest offers.

Here's a quick look at the channel-related financial performance as of the third quarter of 2025:

Metric	Value (Q3 2025)	Change/Context
Credit Sales	$6.8 billion	Up 5% from prior year
Direct-to-Consumer Deposits	$8.2 billion	Up 9% year-over-year
DTC Deposits as % of Total Funding	47%	Up from 41% a year ago
Quarterly Revenue	$161.00 million	Up 21.97% for the quarter
Net Income (Continuing Ops)	$188 million	Reported for the quarter
Net Loss Rate (October 2025)	7.5%	Decreased from 7.9% previous year

The digital and direct channels are showing tangible results in funding stability, evidenced by the DTC deposit growth. However, the core credit business, heavily influenced by retailer channels, is managing credit quality carefully. The October 2025 net loss rate was 7.5%, an improvement from 7.9% the prior year, but the company had anticipated a full-year net principal loss rate between 8.0% and 8.2% for 2025.

The key access points for customer acquisition and service delivery include:

• Retailer point-of-sale integration for private-label card origination.
• The online platform for general-purpose card and deposit acquisition.
• The mobile application for daily payment and account management.
• Co-brand partner agreements driving spending across travel and retail.
• The underlying third-party core processing infrastructure.

The company is clearly pushing its digital footprint. Tangible book value per common share grew to $56.36 in Q3 2025, a 19% increase year-over-year, suggesting that the capital base supporting these channels is strengthening. Finance: draft 13-week cash view by Friday.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Customer Segments

You're looking at the core groups Bread Financial Holdings, Inc. (BFH) serves as of late 2025. This isn't just about who has a card; it's about the different financial needs they are meeting across the consumer spectrum.

The primary group consists of millions of U.S. consumers seeking payment and lending solutions. This base is served through both private label/co-brand programs and their general-purpose card offerings. For instance, credit sales for the third quarter of 2025 reached $6.8 billion, marking a 5% increase over the prior year period.

A significant portion of the customer base comes through partnerships with customers of recognized brands in specialty retail and travel. Bread Financial delivers growth for partners in sectors like travel & entertainment, health & beauty, jewelry, and specialty apparel. In the third quarter of 2025, the company expanded its home vertical by signing partners including Bed, Bath & Beyond, Furniture First, and Raymour & Flanigan.

The company also targets savers utilizing direct-to-consumer deposit products, which are a key part of their funding mix. As of the third quarter of 2025, direct-to-consumer deposits stood at $8.2 billion, up 9% year-over-year, and these deposits now make up 47% of their average total funding.

BFH manages consumers with varying credit profiles through risk models. As of September 30, 2025, the company had a higher-risk profile, with 42% of receivables originating from nonprime borrowers, defined as those with a VantageScore less than 660. This contrasts with the end of 2024, where 15% of credit card loans were in the 600 or Less category and 27% were in the 601 to 660 range.

Finally, the segment includes general-purpose credit card users, primarily through the Bread Financial general purpose credit cards. These users contributed to the $6.8 billion in credit sales seen in the second quarter of 2025, a 4% increase.

Here's a quick look at the scale and mix of the lending and funding customer bases as of mid-to-late 2025:

Metric	Value / Percentage	Reporting Period	Citation Reference
Direct-to-Consumer Deposits	$8.2 billion	Q3 2025
Direct-to-Consumer Deposits YoY Growth	9%	Q3 2025
D2C Deposits as % of Total Funding	47%	Q3 2025
Receivables from Nonprime Borrowers (VantageScore < 660)	42%	September 30, 2025
Credit Card Loans (VantageScore 600 or Less)	15%	December 31, 2024
Credit Sales	$6.8 billion	Q3 2025

The company's focus on digital self-service capabilities is intended to enhance the experience for all these segments.

• Customers served across payment, lending, and saving solutions.
• Partnerships span travel & entertainment, health & beauty, jewelry, and specialty apparel.
• New partners added in home vertical in Q3 2025: Bed, Bath & Beyond, Furniture First, Raymour & Flanigan.
• Loan portfolio stability supported by over 85% of loans contracted through 2025.

Finance: draft 13-week cash view by Friday.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Cost Structure

The Cost Structure for Bread Financial Holdings, Inc. is heavily influenced by credit risk provisioning, funding costs, and operational technology spend.

Provision for credit losses represented a significant cost component, reported at $296 million in the first quarter of 2025, marking an 8% decrease compared to the first quarter of 2024. The net loss rate for Q1 2025 was 8.2%.

Interest expense on funding sources is a core variable cost, tied to the mix of deposits and borrowings. As of the third quarter of 2025, interest-bearing liabilities averaged $17,436 million, incurring $210 million in interest expense for the quarter.

• Direct-to-consumer (Retail) deposits averaged $8,139 million, with interest expense of $86 million in Q3 2025, representing an average rate of 4.2%.
• Interest-bearing borrowings averaged $4,001 million, with interest expense of $71 million in Q3 2025, representing an average rate of 7.0%.

Non-interest expenses saw a reduction in Q1 2025, reflecting disciplined management initiatives. Total non-interest expenses decreased by $5 million, or 1%, in Q1 2025 compared to the prior year period.

Here's the quick math on the components driving that change in Q1 2025 total non-interest expenses:

Expense Category	Q1 2025 Change (in millions)	Direction
Other expenses (including prior year debt extinguishment costs)	($15)	Decrease
Card and processing expenses	($4)	Decrease
Information processing and communication expenses	$7	Increase
Marketing expenses	$7	Increase

Employee compensation and benefits is a substantial fixed-like cost. The reported year-to-date figure for Employee compensation and benefits in the first quarter of 2025 was $897 million. As of November 2025, the estimated average annual salary for employees in the United States is $121,692.

Marketing and partner share arrangements contribute to both operating expenses and revenue generation. Marketing expenses specifically increased by $7 million in Q1 2025. Separately, revenue in the third quarter of 2025 was negatively impacted by higher retailer share arrangements.

• The year-to-date 2025 figure for Employee compensation and benefits was $897 million.
• Marketing expenses increased by $7 million in Q1 2025.
• The estimated typical annual salary range for most roles at Bread Financial Holdings, Inc. is approximately from $106,948 to $137,767.

Finance: draft 13-week cash view by Friday.

Bread Financial Holdings, Inc. (BFH) - Canvas Business Model: Revenue Streams

You're looking at the core engine of how Bread Financial Holdings, Inc. brings in money, which is fundamentally about managing credit risk and transaction flow. The revenue streams are heavily weighted toward the lending side of the business, which makes sense for a company focused on payment and lending solutions.

The primary revenue source is definitely interest and fees generated from loans. This is the bread and butter. For instance, in the third quarter of 2025, Bread Financial Holdings, Inc. reported Net interest income of $1,032 million. This income is generated while managing total interest-bearing liabilities that stood at $17,436 million as of that same quarter.

The overall top line shows some quarterly fluctuation based on credit performance and partner dynamics. You saw that Q1 2025 total revenue was $970 million. Then, in the third quarter, the revenue was reported at $971 million, which represented a slight 1% year-over-year decrease.

Other key components feeding into that total revenue include:

• Interchange fees derived from payment processing activities.
• Retailer share arrangements stemming from co-brand programs.
• Interest and fees on loans, which is the largest component.

It's important to note how these streams interact. For example, in Q3 2025, total revenue saw a decrease partly due to lower billed late fees and, interestingly, higher retailer share arrangements, which partially offset other factors. This shows the dynamic nature of the non-interest income components.

Here's a quick look at the recent quarterly financial performance to put those revenue figures in context with profitability:

Metric	Q1 2025 Value	Q3 2025 Value
Total Revenue	$970 million	$971 million
Net Income	$142 million	$188 million
Credit Sales	$6.1 billion	$6.8 billion

The bottom line shows strong performance despite the flat-to-slightly-down revenue guidance for the full year 2025. Bread Financial Holdings, Inc. achieved a net income of $188 million in Q3 2025. That's a defintely strong conversion of revenue to profit, especially when compared to the $142 million net income posted in Q1 2025.

Finance: draft the expected Q4 2025 revenue breakdown based on Q1 and Q3 trends by Monday.