Axos Financial Inc (NYSE:AX) Reports Mixed Q1 2026 Results with EPS Beat and Revenue Miss

Axos Financial Inc (NYSE:AX reported financial results for its first fiscal quarter of 2026, delivering a performance that presented a mixed picture for investors. While the company's earnings per share notably exceeded analyst projections, its top-line revenue fell short of expectations, contributing to a muted market response in the immediate aftermath of the announcement.

Earnings and Revenue Performance

The digital banking company posted adjusted earnings of $2.07 per share for the quarter ended September 30, 2025, comfortably surpassing the analyst consensus estimate of $1.93. This represents a 5.6% increase from the adjusted EPS of $1.96 reported in the same quarter last year.

However, the company's revenue performance told a different story. Total sales of $323.4 million essentially matched the year-ago quarter's figure but came in below analyst expectations of $330.0 million.

Key financial metrics from the quarter include:

• Adjusted EPS (Non-GAAP): $2.07 vs. $1.96 in Q1 FY2025
• Reported Revenue: $323.4 million, flat year-over-year
• Net Income: $112.4 million, nearly identical to the $112.3 million from the prior-year period
• Net Interest Income: $291.1 million, a slight decrease of 0.3% year-over-year

Market Reaction and Price Action

The market's response to these mixed results has been cautious. In the period leading up to the earnings release, the stock experienced downward pressure, with shares declining approximately 5.7% over the past month. The immediate after-hours trading showed little movement, suggesting investors are weighing the positive earnings beat against the revenue miss and other fundamental factors presented in the report.

Operational Highlights and Strategic Developments

Beyond the headline numbers, Axos demonstrated significant operational growth, particularly in its balance sheet expansion and strategic initiatives. The quarter was notably impacted by the acquisition of Verdant Commercial Capital, which closed on September 30, 2025.

Significant operational achievements include:

• Loan Portfolio Growth: Ending net loan balances reached $22.6 billion, reflecting the addition of $1.0 billion from the Verdant acquisition and $565.2 million of organic loan growth
• Deposit Growth: Total deposits increased to $22.3 billion, up $1.4 billion from the previous quarter
• Credit Quality: Non-performing assets declined to 0.64% of total assets, down from 0.71% in the previous quarter
• Book Value: Book value per share increased 17% year-over-year to $49.31

President and CEO Greg Garrabrants highlighted the "strong organic loan growth" during the quarter, noting that "net interest income increased 15.5% linked quarter annualized" excluding the impact of the Verdant acquisition.

Looking Ahead

While the press release did not provide specific forward-looking revenue or earnings guidance, the company's continued balance sheet growth and successful integration of acquisitions will be critical factors for future performance. Analysts currently project sales of $345.8 million for the upcoming second quarter of fiscal 2026, with full-year sales estimates standing at $1.38 billion.

The company's expansion in both its banking and securities business segments, coupled with improved credit metrics, provides a foundation for potential growth, though investors will be watching for improved revenue momentum in coming quarters to complement the strong earnings performance.

For a detailed breakdown of historical earnings performance and future analyst estimates, review the comprehensive earnings data for AX.

Disclaimer: This article presents financial data and analysis for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.