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Mar 31, 2025
Discover Q1 2025 Earnings Report
Discover reported strong financial results for Q1 2025 driven by a solid net interest margin and favorable credit performance.
Key Takeaways
Discover Financial Services delivered a robust Q1 2025 with increased net income and EPS, reflecting effective execution, credit improvement, and higher revenue despite a decline in loan balances due to a student loan sale.
Revenue by Segment
Forward Guidance
Discover anticipates closing the Capital One merger in Q2 2025, with continued focus on credit quality and margin discipline.
Positive Outlook
- Regulatory approval received for Capital One merger
- Strong net interest margin at 12.18%
- Improved net income and EPS YoY
- Credit card delinquency and charge-off rates improved YoY
- Reserve release of $215M driven by better credit performance
Challenges Ahead
- Total loans declined 7% YoY due to student loan sale
- Total network volume down from prior year
- Operating expenses increased 2% YoY
- Personal loan charge-off rate rose YoY
- Decrease in Network Partner volume by 73%
Historical Earnings Impact
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Avg. Return Before/After Earnings
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