Executive Summary

Adjusted EPS beat while revenue was roughly in line: Adjusted diluted EPS was $4.06 vs S&P Global consensus of $3.65, a clear beat; total net revenue was $10.00B vs $10.05B consensus, a small miss. GAAP diluted EPS was $3.45. Non-GAAP adjustments included $0.39 from legal reserve activities and $0.22 from Discover integration expenses . Values retrieved from S&P Global.*
Credit trends improved and reserves were released: Provision fell to $2.37B (−$273M q/q) with a $368M reserve release; total net charge-off rate declined to 3.40% (−19bps q/q), and 30+ day performing delinquency improved to 3.29% (−40bps q/q) .
Margin and deposits supportive: NIM was 6.93% (−10bps q/q) reflecting two fewer days; interest-bearing deposit rate paid fell 23bps to 3.22%, and average deposits grew 2% q/q to $364.1B .
Discover acquisition catalyst: Final regulatory approvals received April 18; management is “fully mobilized” to close May 18 and reaffirmed synergy assumptions/timeline (run-rate ~24 months post-close, shifted ~<6 months due to later close) .
CEO tone confident on growth vectors: “The combination of Capital One and Discover will create a leading consumer banking and payments platform… and create significant value for merchants and customers” .

What Went Well and What Went Wrong

What Went Well
- EPS beat on lower provision and lower adjusted expenses; adjusted EPS $4.06 vs $3.65 consensus; provision decreased $273M q/q; adjusted efficiency ratio 55.94% (−211 bps q/q) Values retrieved from S&P Global.*
- Improving consumer credit: 30+ day performing delinquency 3.29% (−40bps q/q), total NCO rate 3.40% (−19bps q/q); Domestic Card delinquencies improved vs year-ago on a seasonally adjusted basis, with payment rates rising y/y for two quarters .
- Discover deal approvals and synergy confidence: Approvals received; management “fully mobilized” to close May 18; synergy assumptions intact, run-rate in ~24 months from close .
What Went Wrong
- Slight revenue miss and softer card purchase volumes q/q: Total net revenue $10.00B vs $10.05B consensus; total card purchase volume $157.9B vs $172.9B in Q4 on seasonality (−9% q/q) . Values retrieved from S&P Global.*
- Legal reserve and integration costs weighed on GAAP: $198M legal reserve and $110M Discover integration expense reduced GAAP EPS by ~$0.61 in aggregate .
- Commercial revenue −7% q/q and deposits −5% q/q; criticized performing loans ticked up slightly (6.41% vs 6.35% q/q) even as charge-offs improved .

Financial Results

Headline financials and margins

Metric	Q3 2024	Q4 2024	Q1 2025
Total Net Revenue ($B)	$10.014	$10.190	$10.000
GAAP Diluted EPS ($)	$4.41	$2.67	$3.45
Adjusted Diluted EPS ($)	$4.51	$3.09	$4.06
Net Interest Margin (%)	7.11	7.03	6.93
Efficiency Ratio (%)	53.07	59.75	59.02
Operating Efficiency Ratio (%)	41.95	46.26	47.00
Provision for Credit Losses ($B)	$2.482	$2.642	$2.369
Total Net Charge-off Rate (%)	3.27	3.59	3.40

Estimate comparisons (S&P Global consensus)

Metric	Q3 2024 Consensus	Q3 2024 Actual	Surprise	Q4 2024 Consensus	Q4 2024 Actual	Surprise	Q1 2025 Consensus	Q1 2025 Actual	Surprise
Adjusted/Normalized EPS ($)	3.759*	4.51	+0.75	2.800*	3.09	+0.29	3.651*	4.06	+0.41
Revenue ($B)	9.869*	10.014	+0.145	10.217*	10.190	−0.027	10.049*	10.000	−0.049

Values retrieved from S&P Global.*

Segment breakdown (Total Net Revenue and Segment Net Income)

Segment	Q3 2024 Revenue ($MM)	Q4 2024 Revenue ($MM)	Q1 2025 Revenue ($MM)	Q3 2024 Net Inc. ($MM)	Q4 2024 Net Inc. ($MM)	Q1 2025 Net Inc. ($MM)
Credit Card	7,252	7,364	7,165	1,374	866	1,219
Consumer Banking	2,210	2,141	2,126	403	205	186
Commercial Banking	888	953	884	263	388	195
Other	(336)	(268)	(175)	(263)	(366)	(196)

Key KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Total Card Purchase Volume ($MM)	$166,203	$172,919	$157,948
Auto Loan Originations ($MM)	$9,158	$9,399	$9,210
30+ Day Performing Delinquency (Total Company, %)	3.58	3.69	3.29
CET1 Ratio (%)	13.6	13.5	13.6

Notes on non-GAAP: Adjusted EPS excludes legal reserve activities ($0.39) and Discover integration expenses ($0.22) in Q1 2025; reconciliations provided in Exhibit 99.2 .

Guidance Changes

Metric	Period	Previous Guidance/Commentary	Current Guidance/Commentary	Change
Dividend per common share	Q2 2025	Regular $0.60 quarterly dividend (historical)	Declared $0.60 payable June 5; record date May 23; management expects record date after May 18 close so Discover shareholders receive COF’s Q2 dividend (subject to Board approval)	Maintained; logistics clarified
Discover close timing	2025	Transaction pending regulatory approvals	Final Fed/OCC approvals received; expected close May 18, 2025	Timing firmed to near-term
Synergy run-rate timing	Post-close	Run-rate in ~24 months post Jan 1 close (original assumption)	Assumptions intact; timeline shifts back by <6 months given May 18 close (i.e., still ~24 months post close)	Schedule shifted, magnitude unchanged
Capital return pace	Q2 2025	N/A	Likely maintain current pace in Q2 until post-close and after CCAR/SCB in June; intent to return excess capital thereafter	Maintained
Network synergy sensitivity	Long-term	Assumed lower debit interchange under proposed Reg II in synergy model	If no reduction to current debit debit interchange, network synergy estimate lowers by ~ $170M; no impact on company revenue as debit will be on Discover network	Sensitivity disclosed

No formal numeric guidance on revenue, expenses, or margins was provided in the press release or call; management focused on strategic milestones and integration timing .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3–Q4 2024)	Current Period (Q1 2025)	Trend
AI/Technology transformation	Ongoing investment and efficiency benefits evident in improving operating efficiency ratios in 2023–2024 (41.95% in Q3’24; 46.26% in Q4’24)	12-year tech transformation enabling better data, ML/AI in marketing/credit; faster policy changes; modernization to support Discover integration	Continued emphasis, scaled to integration
Macro/tariffs/consumer	Credit normalization through 2024; Walmart program termination effects quantified across Q2–Q4’24	Consumer “in good shape”; recent spend uptick possibly timing/tariff pull-forward; vigilant on uncertainty	Cautiously constructive
Product: Domestic Card	Revenue margin lifted by Walmart termination; margin/NCO effects quantified (Q3–Q4)	Purchase volume +5% y/y; revenue +7% y/y; ex-Walmart, charge-off rate would have improved y/y	Healthy top-line with improving credit ex-Walmart
Consumer Banking/Auto	Originations trending higher into Q3–Q4’24; delinquency stabilizing	Auto originations +22% y/y; delinquencies/charge-offs improved; monitoring tariff risk to vehicle prices	Improving; watch tariffs
Regulatory/legal	Integration expenses and FDIC assessments recurring in 2024	$198M legal reserve and $110M integration expense in Q1’25	Elevated adjusting items Q1’25
Discover integration	Deal pending; integration planning ongoing (2024)	Approvals obtained; close May 18; synergy assumptions intact; run-rate ~24 months; network strategy and international acceptance roadmap	Execution phase imminent

Management Commentary

“Domestic Card… delivered another quarter of top line growth, strong margins and improving credit… Purchase volume growth ~5% y/y (6% ex leap year), revenue up 7%” .
“We released $368 million in allowance… total portfolio coverage ratio decreased 5 bps to 4.91%” .
“Final regulatory approval for our acquisition of Discover… fully mobilized to complete the transaction on May 18” .
“Assume synergy estimates and integration costs from announcement; run-rate in ~24 months following May 18 closing” .
“If no reduction to current debit interchange fee levels, it would lower our debit network synergy by about $170 million… but no impact on our company’s future revenue” .

Q&A Highlights

Allowance and macro: Reserve release driven by favorable credit; baseline macro used consensus; release tempered by heavier weighting to downside scenarios late in quarter .
Marketing investment: Leaning into three areas—customer growth, heavy spenders (lounges, travel portal), national digital bank—leveraging ML/AI; vigilant on subprime amid uncertainty .
Capital return: Expect to maintain current pace in Q2; post-close and post-CCAR will reassess combined excess capital return .
Discover integration timing/tech: Synergy and timing assumptions from announcement pushed ~<6 months; COF’s modern tech stack expected to accelerate integration; network modernization a multi-year journey .
Auto and tariffs: Strong credit from prior tightening; origination growth continuing; tariff scenarios could lift vehicle prices (mixed credit effects) and create value gyrations—team is vigilant .

Estimates Context

COF beat EPS estimates for the third consecutive quarter: Q1’25 $4.06 vs $3.65; Q4’24 $3.09 vs $2.80; Q3’24 $4.51 vs $3.76. Revenue was essentially in line to slightly below in Q1’25 ($10.00B vs $10.05B), modest miss in Q4’24, and a modest beat in Q3’24 . Values retrieved from S&P Global.*
Street models may need modest upward revisions to credit cost trajectories given improving delinquencies and the Q1 reserve release, balanced against management’s caution on macro uncertainty and potential tariff effects in auto .

Key Takeaways for Investors

Core earnings resilience: Adjusted EPS outperformed despite fewer day count; pre-provision earnings were flat q/q and adjusted operating efficiency improved sequentially (43.92% vs 44.15% in Q4) .
Credit tailwinds: Broad-based improvement in delinquencies and lower NCOs q/q, plus a $368M reserve release, signal stabilizing consumer credit, with management still weighting downside risks .
Deposit costs easing: Rate paid on interest-bearing deposits fell 23bps to 3.22%, supporting NIM ex-day count headwind .
Domestic Card momentum: Revenue up 7% y/y; purchase volume +5% y/y; ex-Walmart, card charge-offs would have improved y/y—supportive for margin and loss outlooks .
Discover integration as multi-year catalyst: Approvals received; close May 18; synergy assumptions/timing intact; long-term optionality via network international acceptance and brand investment .
Capital return cadence: Expect near-term continuity through Q2 pending close and CCAR; intent to return excess capital thereafter; Q2 dividend declared at $0.60 .
Watch items: Legal reserves ($198M) and integration costs ($110M) recur near-term; commercial revenue softness and slight uptick in criticized performing loans merit monitoring .

Additional detail excerpts and data sources:

Press release and financial supplement (Q1 2025): net revenue, EPS, expenses, provision, credit metrics, segment results -.
Earnings call (Q1 2025): management commentary on credit, marketing, technology, Discover integration and network strategy -.
Other relevant press releases: Regulatory approvals for Discover (Apr 18, 2025); Dividend declaration (May 8, 2025) .

CAPITAL ONE FINANCIAL CORP (COF)·Q1 2025 Earnings Summary