Executive Summary

Adjusted EPS of $0.99 and GAAP EPS of $1.04 materially beat Wall Street consensus EPS of ~$0.81, driven by NIM expansion, lower provision vs prior periods, and disciplined OpEx; core ROTCE rose to 13.6% . EPS consensus from S&P Global: $0.81*.
GAAP total net revenue was $2.08B and adjusted total net revenue was $2.06B; NIM ex-OID expanded 10 bps QoQ to 3.45%, more than offsetting the ~20 bps headwind from the credit card sale . Revenue consensus from S&P Global: ~$2.04B*.
Retail auto credit improved: net charge-offs at 1.75% (down 6 bps YoY), delinquency 30+ DPD fell YoY to 4.88%, and provision declined YoY; originations were $11.0B at 9.82% estimated originated yield with 42% S-tier .
FY25 guidance was largely maintained, with retail auto NCO range narrowed to 2.00–2.15% (from 2.00–2.25%), consolidated NCO 1.35–1.45%, and NIM ex-OID 3.40–3.50%; average earning assets now expected to decline ~2% YoY .
Capital and funding remain strong: CET1 9.9%, adjusted TBVPS $37.30, 92% deposits FDIC insured; Q3 2025 dividend of $0.30/share declared; CRT remains a likely H2 tool, share repurchases are a priority pending capital progress .

What Went Well and What Went Wrong

What Went Well

Net interest margin expansion: NIM ex-OID rose to 3.45% (+10 bps QoQ), offsetting the card-sale headwind; core pre-tax income hit $418M and adjusted EPS was $0.99, up 36% YoY .
Auto franchise momentum: $11.0B originations from a record 3.9M applications; estimated originated yield of 9.82% with 42% S-tier; portfolio yield ex-hedge increased 8 bps QoQ .
Credit trends improved: retail auto NCOs down YoY to 1.75%; 30+ delinquency improved YoY to 4.88%, marking first YoY improvement since 2021 .
Management tone: “Our results demonstrate sound strategic positioning and disciplined execution... contributing to an improving financial trajectory” — CEO Michael Rhodes .

What Went Wrong

Auto pre-tax down YoY: Automotive Finance pre-tax income fell YoY primarily on lower lease gains and lower commercial assets; lease remarketing gains were near breakeven after a Q1 loss .
Insurance losses: Insurance losses of $203M rose $22M YoY on higher weather losses and increased inventory exposure; core pre-tax loss of $2M despite higher investment income .
Deposits down QoQ: Retail deposits decreased $2.9B QoQ due to seasonal tax outflows; average retail deposit rate was 3.58%, down QoQ and YoY .
Macro/competitive watch items: Management highlighted ongoing macro uncertainty and tariffs impact on floorplan balances and rate cuts sensitivity near term .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
GAAP Total Net Revenue ($USD Billions)	$2.022	$1.541	$2.082
Adjusted Total Net Revenue ($USD Billions)	$2.064	$2.065	$2.064
GAAP EPS ($USD)	$0.62	$(0.82)	$1.04
Adjusted EPS ($USD)	$0.73	$0.58	$0.99
Net Interest Margin (as reported) (%)	3.32	3.31	3.41
NIM ex-OID (%)	3.36	3.35	3.45
Core ROTCE (%)	10.7	8.3	13.6
Pre-tax Income ($USD Millions)	279	(284)	436

Segment pre-tax income ($USD Millions):

Segment	Q2 2024	Q1 2025	Q2 2025
Automotive Finance	584	375	472
Insurance	(40)	2	28
Dealer Financial Services (Auto + Insurance)	544	377	500
Corporate Finance	109	76	96
Corporate & Other	(374)	(737)	(160)
Total Pre-tax Income	279	(284)	436

Key KPIs:

KPI	Q2 2024	Q1 2025	Q2 2025
Consumer auto originations ($USD Billions)	9.8	10.2	11.0
Estimated retail auto originated yield (%)	9.63	9.80	9.82
Retail auto portfolio yield ex-hedge (%)	8.86	9.11	9.19
Retail auto NCO rate (%)	1.81	2.12	1.75
Retail deposits ($USD Billions, EOP)	142.1	146.1	143.2
Avg retail deposit rate (%)	4.18	3.75	3.58
Deposit customers (Millions)	3.3	3.3	3.4
CET1 ratio (%)	9.6	9.5	9.9

Estimates vs Actuals (S&P Global):

Metric	Q2 2024	Q1 2025	Q2 2025
EPS Consensus Mean ($USD)	0.632*	0.424*	0.810*
EPS Actual ($USD)	0.73	0.58	0.99
Revenue Consensus Mean ($USD)	2,034,286,710*	1,970,435,030*	2,038,779,530*
Revenue Actual ($USD)	2,022,000,000	1,541,000,000	2,082,000,000

Values marked with * retrieved from S&P Global.

Implication: EPS was a clear beat versus consensus. Revenue shows a modest beat versus consensus when comparing GAAP total net revenue; note S&P’s “actual revenue” series for ALLY may reflect a different revenue definition (e.g., net financing revenue basis), so we anchor actuals to GAAP total net revenue disclosed.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
NIM ex-OID	FY 2025	3.40%–3.50%	3.40%–3.50%; path to upper half	Maintained; positive bias
Retail Auto NCO	FY 2025	2.00%–2.25%	2.00%–2.15%	Narrowed (lowered top end)
Consolidated NCO	FY 2025	1.35%–1.50%	1.35%–1.45%	Narrowed (lowered top end)
Average Earning Assets	FY 2025	Flat YoY	~2% decline YoY	Lower
Adjusted Other Revenue	FY 2025	Flat YoY	Flat YoY	Maintained
Adjusted Noninterest Expense	FY 2025	Flat YoY	Flat YoY	Maintained
Tax Rate	FY 2025	22%–23%	22%–23%	Maintained
Dividend	Q3 2025	—	$0.30/share declared	Maintained quarterly payout
Capital Actions	2H 2025	CRTs opportunistic	CRT likely in H2; buybacks a priority when CET1/earnings allow	Strategy reiterated

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
NIM trajectory	3.33% ex-OID; path to high-3s post card sale; 4% no longer required for mid-teens ROTCE	3.35% ex-OID; reiterated 3.40%–3.50% FY25; 70% deposit beta target	3.45% ex-OID; path to upper half of range; asset-sensitive near term, liability-sensitive medium term	Improving
Auto credit	Elevated delinquencies; NCOs 2.34%; vintage rollover key; used prices supportive	Retail auto NCO 2.12%; first YoY decline since 2021; servicing enhancements	Retail auto NCO 1.75%; 30+ DPD improves YoY; FY25 NCO guidance narrowed down	Improving
Originations & pricing	9.6% originated yield; S-tier 49%	9.8% yield; S-tier 44%	9.82% yield; 42% S-tier; record applications	Strong, disciplined
Deposits & pricing	90% funding via deposits; working toward ~70% beta	Liquid savings down 20 bps; managing flat balances	Liquid savings down another 10 bps; seasonal outflows; stability; 92% insured	Optimizing pricing
Insurance	Strong premiums; weather losses variable	1Q severe weather event; core pre-tax $17M	Written premiums +2% YoY; weather losses up; core pre-tax loss $2M; reinsurance renewed at higher coverage	Mixed; investing
Capital & CRT	CET1 9.8%; CRT issuance	Pro forma CET1 9.7%; card closed 4/1	CET1 9.9%; CRT likely H2; buybacks priority as capital rises	Building optionality
AI/technology	—	—	Enterprise Ally.ai rolled out to >10k employees; focus on responsible AI	Scaling capabilities
Tariffs/macro	Watch tariffs’ effect on dealers	Tariff uncertainty and seasonality shifts	Tariffs pulled forward demand; macro uncertainty remains	Ongoing headwind risk

Management Commentary

CEO Michael Rhodes: “Our results demonstrate sound strategic positioning and disciplined execution, contributing to an improving financial trajectory… Looking ahead, I am confident in the momentum across each of our businesses.”
CFO Russell Hutchinson on NIM: “NIM ex-OID was 3.45%, an increase of 10 bps QoQ… We remain confident in our ability to deliver a full-year NIM of 3.4%–3.5%; path to the upper half based on current trends.”
CFO on credit: “30+ day all-in delinquencies of 4.88% represent the first YoY improvement since 2021… Retail auto NCO 1.75% was down 37 bps sequentially.”
CEO on deposits: “We proudly serve an all-time high of 3.4 million customers… deposit balances of $143B – 92% FDIC insured.”

Q&A Highlights

NIM drivers and timeline: Linked-quarter tailwinds included securities repositioning and lease normalization; deposit repricing continues but at a slower pace; asset-sensitive near term; liability-sensitive medium term; base case assumes three rate cuts in H2 .
Credit outlook: Guidance narrowed (retail auto 2.00–2.15%, consolidated 1.35–1.45%); seasonality has muted post-pandemic; improvement depends on delinquency, flow-to-loss, used prices .
Capital return: CRTs are mid-single digit cost-of-capital tool to lift CET1; buybacks remain a priority once fully phased-in CET1 and organic capital support it; stress test not a gating item .
Deposits strategy: Managing flat balances; continued optimization of liquid and CD pricing; customer mix shifting toward more engaged, less rate-sensitive cohorts .
Competitive dynamics: Banks increased auto market share, but Ally sustained pricing and originations due to dealer relationships and selective underwriting .

Estimates Context

Ally delivered a clear EPS beat: $0.99 vs ~$0.81 S&P Global consensus*.
Revenue comparison shows a modest beat when using GAAP total net revenue ($2.082B vs ~~$2.039B S&P Global consensus*). Note S&P’s “actual revenue” series for ALLY (~~$1.914B*) appears to use a different definition; this report anchors actuals to GAAP total net revenue disclosed in Ally’s 8-K.
Values marked with * retrieved from S&P Global.

Where estimates may need to adjust:

Raise EPS/ROTCE trajectories given NIM ex-OID expansion and narrowed NCO guidance .
Trim revenue growth expectations for Insurance near term due to higher reinsurance costs and weather losses despite premium growth .
Lower average earning assets assumption (~2% decline) due to floorplan balances and card exit .

Key Takeaways for Investors

Margin story intact and accelerating: NIM ex-OID at 3.45% with a clear path to the upper half of FY range; deposit repricing tailwinds continue albeit smaller .
Credit normalization gaining traction: YoY improvement in delinquency and lower NCOs support narrowed FY ranges; watch unemployment and macro .
Auto franchise strength is a durable differentiator: Record applications, high-quality mix (42% S-tier), and strong originated yield sustain RWA-efficient growth .
Capital optionality building: CET1 at 9.9%; CRT likely in H2; dividend maintained; share buybacks plausible as fully phased-in CET1 and earnings grow .
Insurance is strategically important but volatile: Premiums up; weather losses and reinsurance costs temper near-term profitability; long-term fee growth lever .
Near-term sensitivities: Tariffs, rate-cut timing, and dealer inventory affect floorplan and NIM; asset-sensitive near term could modestly dampen NIM if cuts come earlier/faster .
Medium-term thesis: High-3s NIM, <2% retail auto NCOs, disciplined expenses/capital, and focused franchises support mid-teens ROTCE over time .

Additional Data Points and Sources

Dividend declared: $0.30 per share for Q3 2025 (common), preferred dividends also declared .
AI initiative: Ally.ai rolled out enterprise-wide to >10,000 employees, underscoring tech execution and efficiency focus .
Liquidity: Total available liquidity $66.8B; loan-to-deposit ratio ~96%; deposits 88% of funding .

Note: All company-reported figures cited from Ally’s Q2 2025 8-K release and exhibits, earnings presentation, and call transcript. Values marked with * retrieved from S&P Global.

Ally Financial Inc. (ALLY)·Q2 2025 Earnings Summary