Digital banking company Axos Financial (NYSE: AX) reported Q3 CY2025 results topping the market’s revenue expectations, but sales were flat year on year at $323.4 million. Its non-GAAP profit of $2.07 per share was 10.3% above analysts’ consensus estimates.
Is now the time to buy Axos Financial? Find out by accessing our full research report, it’s free for active Edge members.
Axos Financial (AX) Q3 CY2025 Highlights:
- Net Interest Income: $291.1 million vs analyst estimates of $288.8 million (flat year on year, 0.8% beat)
- Net Interest Margin: 4.8% vs analyst estimates of 4.7% (in line)
- Revenue: $323.4 million vs analyst estimates of $319.1 million (flat year on year, 1.4% beat)
- Efficiency Ratio: 48.3% vs analyst estimates of 47.8% (56 basis point miss)
- Adjusted EPS: $2.07 vs analyst estimates of $1.88 (10.3% beat)
- Tangible Book Value per Share: $45.21 vs analyst estimates of $46.35 (13.9% year-on-year growth, 2.5% miss)
- Market Capitalization: $4.46 billion
“Net interest income increased 15.5% linked quarter annualized due to strong organic loan growth,” stated Greg Garrabrants, President and Chief Executive Officer of Axos.
Company Overview
Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE: AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.
Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Thankfully, Axos Financial’s 15.3% annualized revenue growth over the last five years was incredible. Its growth surpassed the average banking company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Axos Financial’s annualized revenue growth of 15.8% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Axos Financial’s $323.4 million of revenue was flat year on year but beat Wall Street’s estimates by 1.4%.
Net interest income made up 85.9% of the company’s total revenue during the last five years, meaning Axos Financial barely relies on non-interest income to drive its overall growth.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Tangible Book Value Per Share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
Axos Financial’s TBVPS grew at an incredible 19.3% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 20.3% annually over the last two years from $31.22 to $45.21 per share.
Over the next 12 months, Consensus estimates call for Axos Financial’s TBVPS to grow by 21.7% to $55.01, elite growth rate.
Key Takeaways from Axos Financial’s Q3 Results
It was good to see Axos Financial beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its tangible book value per share missed. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 2.1% to $77.48 immediately after reporting.
So should you invest in Axos Financial right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
