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Jun 30, 2025
Capital One Q2 2025 Earnings Report
Capital One reported a net loss in Q2 2025, primarily due to significant allowance build for the Discover acquisition, despite strong revenue growth.
Key Takeaways
Capital One Financial Corporation reported a net loss of $4.3 billion, or $(8.58) per diluted common share, for the second quarter of 2025. This loss was largely driven by an $8.8 billion initial allowance build for Discover non-PCD loans following the acquisition. Despite the loss, total net revenue increased by 25% to $12.5 billion, and pre-provision earnings rose by 34% to $5.5 billion, indicating strong underlying operational performance.
Capital One reported a net loss of $4.3 billion, or $(8.58) per diluted common share, in Q2 2025, a significant decline from net income in previous quarters.
The net loss was primarily attributed to an $8.8 billion initial allowance build for Discover non-PCD loans and $299 million in Discover integration expenses.
Total net revenue increased by 25% to $12.5 billion, driven by a 25% increase in net interest income and a 26% increase in non-interest income.
Period-end loans held for investment grew by 36% to $439.3 billion, largely due to the Discover acquisition, with Credit Card loans increasing by 72%.
Revenue by Segment
Forward Guidance
The company is focused on the integration of Discover, which is progressing well, and anticipates expanding opportunities for growth and value creation as a combined entity. The significant allowance build for Discover non-PCD loans indicates a proactive approach to credit risk management post-acquisition.
Positive Outlook
- Successful completion of the Discover acquisition on May 18th, 2025.
- Integration efforts with Discover are fully mobilized and progressing well.
- Anticipated expansion of opportunities for growth and value creation as a combined company.
- Strong increase in total net revenue (25%) and pre-provision earnings (34%) in the current quarter.
- Significant growth in period-end loans held for investment, particularly in Credit Card, driven by the Discover acquisition.
Challenges Ahead
- Reported a net loss of $4.3 billion for the quarter, a substantial decline from previous periods.
- The net loss was heavily impacted by an $8.8 billion initial allowance build for Discover non-PCD loans.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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