OneMain Holdings Inc (OMF) Q3 2025 Earnings Call Highlights: Strong Revenue Growth and Improved ...

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Capital Generation: $272 million, up 29% year over year. C&I Adjusted Earnings: $1.90 per share, up 51%. Total Revenue Growth: 9% year over year. Receivables Growth: 6% year over year. Originations Increase: 5% year over year. 30+ Delinquency Rate: 5.41%, down 16 basis points year over year. C&I Net Charge-Offs: 7%, down 51 basis points year over year. Consumer Loan Net Charge-Offs: 6.7%, down 66 basis points year over year. Credit Card Receivables: $834 million. Credit Card Revenue Yield: Over 32%. Auto Finance Receivables: Over $2.7 billion, up $100 million from last quarter. GAAP Net Income: $199 million or $1.67 per diluted share, up 27% from the previous year. Interest Income: $1.4 billion, up 9% year over year. Interest Expense: $320 million, up 7% year over year. Provision Expense: $488 million. Operating Expenses: $427 million, up 8% year over year. Managed Receivables: $25.9 billion, up 6% year over year. Third Quarter Originations: $3.9 billion, up 5% year over year. Loan Loss Reserves: $2.8 billion. Dividend Increase: Annual dividend now $4.20 per share, 7% yield. Share Repurchase: 540,000 shares for $32 million this quarter.

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Release Date: October 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

OneMain Holdings Inc (NYSE:OMF) reported a 29% year-over-year increase in capital generation, reaching $272 million. The company achieved a 51% increase in C&I adjusted earnings per share, reaching $1.90. Total revenue grew by 9%, with receivables increasing by 6% year over year. The credit card business saw a significant milestone, surpassing 1 million customers, with a revenue yield increase to over 32%. The company successfully issued two unsecured bonds totaling $1.6 billion with tight spreads, enhancing its strong balance sheet.

Negative Points

Despite improvements, the back book still represents 19% of the 30+ delinquency, disproportionately affecting credit results. Interest expense increased by 7% compared to the third quarter of 2024, driven by higher average debt to support receivables growth. Operating expenses rose by 8% year over year, reflecting investments in technology, data analytics, and new products. The company faces continued economic uncertainty, which could impact future performance. The auto finance business, while stable, remains a small player in the market, limiting its immediate impact on overall growth.

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Q & A Highlights

Q: There's been a lot of chatter about the health of the non-prime consumer, maybe some cracks showing up in auto, both of which you have exposure to. Can you talk about what you are seeing more recently and how it ties to your commentary about higher origination growth in the 4th quarter? A: Doug Shulman, Chairman and CEO: We are not seeing anything negative in our auto credit, and all of our auto continues to perform in line with expectations. The consumers we have on our books and those coming through our channels are holding up well. We underwrite to net disposable income, and we see it continuing to be strong. The consumer and non-prime consumer have been stable for the last 18 months, with unemployment at a good level, wages cumulatively increased, and inflation more in check. We feel good about the health of the consumer.

Q: Net charge-offs continue to improve year over year, and delinquencies are also improving. However, the magnitude of delinquency improvement seems to have moderated. Can you provide any color on what's going on and the direction of travel for delinquencies? A: Jenny Osterhout, CFO: The direction of travel is good, and delinquencies are in line with our expectations. We expect delinquency improvements to vary, but we are focused on where the book is going and expected losses. We consistently see better roll rates and recoveries, and we expect continued year-on-year improvement in consumer loan net charge-offs, aiming to get back within our historical range of below 7% over time.

Q: Given some of your comments about macro uncertainty and the stable consumer, where do you think you sit in the spectrum of underwriting between tightening and loosening? What is your bias going forward? A: Doug Shulman, Chairman and CEO: We have maintained a conservative underwriting posture with a 30% stress overlay on expected losses. We are not loosening this up due to macro uncertainty, and we are getting plenty of customers that meet our return threshold. Our vintages are performing in line with expectations, and we prefer to innovate around product, customer experience, and channel rather than reach for growth.

Q: On funding, you mentioned that funding costs came in lower than expected for the year. Is this due to term or spreads coming in better than expected? How are you thinking about taking advantage of added flexibility in the funding markets? A: Jenny Osterhout, CFO: We were able to issue a $750 million unsecured bond at 6.13% due in 2030, using proceeds to redeem a 9% 2029 bond, reducing our interest expense. We also issued another bond at 6.5% due in 2033. We have low maturities soon and a lot of liquidity, allowing us to pay down higher-priced bonds and determine which market to enter, maintaining a conservative balance sheet.

Q: You upsized the buybacks this quarter. Are there any markers you can give us on what kind of sizing we should think about every quarter? A: Doug Shulman, Chairman and CEO: Our capital allocation strategy includes making every loan that meets our risk-return thresholds, investing in the business, maintaining the dividend, and using excess capital for strategic purposes or buybacks. We anticipate more buybacks as we generate more excess capital. We have allocated $1 billion through 2028, but it won't necessarily be linear, and we don't have specific quarterly guidance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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