Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

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Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

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e7c3f8f484b638675cd8911571a70b7dcaa5d801872ef76e5ecf2d38b26ad9b0

Total interest income (USD, millions)

Total interest expense (USD, millions)

Net interest income (USD, millions)

Provision for credit losses (USD, millions)

Other income - Discount and interchange revenue, net (USD, millions)

Other income - Protection products revenue (USD, millions)

Other income - Loan fee income (USD, millions)

Other income - Transaction processing revenue (USD, millions)

Other income - Other income (USD, millions)

Total other income (USD, millions)

Other expense - Employee compensation and benefits (USD, millions)

Other expense - Marketing and business development (USD, millions)

Other expense - Information processing and communications (USD, millions)

Other expense - Professional fees (USD, millions)

Other expense - Premises and equipment (USD, millions)

Other expense - Other expense (USD, millions)

Total other expense (USD, millions)

Income before income taxes (USD, millions)

Income tax expense (USD, millions)

Net income (USD, millions)

Net income allocated to common stockholders (USD, millions)

Basic earnings per common share (USD)

Diluted earnings per common share (USD)

3dbd4877b64696622cb0dced1cf0c1670c00cd3eb1b90edd87457ff6ae190e97

Restricted cash (USD, millions)

Other short-term investments (USD, millions)

Investment securities (USD, millions)

Total loan receivables (USD, millions)

Allowance for credit losses (USD, millions)

Net loan receivables (USD, millions)

Premises and equipment, net (USD, millions)

Goodwill (USD, millions)

Other assets (USD, millions)

Total assets (USD, millions)

Interest-bearing deposit accounts (USD, millions)

Non-interest bearing deposit accounts (USD, millions)

Total deposits (USD, millions)

Long-term borrowings (USD, millions)

Accrued expenses and other liabilities (USD, millions)

Total liabilities (USD, millions)

Common stock (USD, millions)

Preferred stock (USD, millions)

Additional paid-in capital (USD, millions)

Retained earnings (USD, millions)

Accumulated other comprehensive income (loss) (USD, millions)

Treasury stock, at cost (USD, millions)

Total stockholders' equity (USD, millions)

Total liabilities and stockholders' equity (USD, millions)

7f21600066883530035ff3897bfad212cfd6a34bd1ed4b72032d9626fb169ee9

The jump in **cash and cash equivalents** in Q1 2024 was primarily driven by a significant increase in the company's **liquidity portfolio**, which grew by **$4.3 billion** during that period. This growth was accompanied by an increase in the average liquidity balance from **$22.1 billion** in Q4 2023 to **$25.2 billion** in Q1 2024, reflecting the higher levels of cash and cash equivalents.  **[0001393612-24-000032_dfs-20240331.htm:2]** **[0001393612-24-000032_dfs-20240331.htm:80]** 

Why did Cash and cash equivalents jump in Q1 2024?

The **documents indicate** that the dramatic increase in restricted cash—from **$43 million** in Q4 2023 to **$439 million** in Q1 2024—is noted, but they do **not provide specific reasons** for this large change.  **[0001393612-24-000032_dfs-20240331.htm:2]** 

What caused the dramatic spike in Restricted cash in Q1 2024?

In **Q3 2024**, DFS began reporting **Other short-term investments** because the firm acquired **U.S. Treasury bills** with maturity dates greater than **90 days** but less than one year, resulting in an entry of **$735 million**, whereas previously this category was reported as zero.  **[0001393612-24-000076_dfs-20240930.htm:11]** **[0001393612-24-000076_dfs-20240930.htm:2]** **[0001393612-24-000076_dfs-20240930.htm:84]** 

Why are Other short-term investments reported in Q3 2024 when previously not available?

The increase in **Investment securities** in **Q3 2024** was primarily driven by a significant uptick in **U.S. Treasury bills**, which rose from **$0 million** in Q4 2023 to **$735 million** in Q3 2024, and by strong growth in **U.S. Treasury and U.S. GSE securities**, which increased from **$12,937 million** to **$14,185 million**. Although there was a slight decline in **Residential Mortgage-Backed Securities (Agency)** (from **$718 million** to **$680 million**), the larger increases in the other categories drove the overall rise in the portfolio.  **[0001393612-24-000076_dfs-20240930.htm:11]** **[0001193125-25-011795_d918322d425.htm:226]** 

What drove the increase in Investment securities in Q3 2024?

The significant decline in long-term borrowings in Q3 2024 was driven by several factors. **Discover Financial Services reduced its securitized debt**, with the outstanding amount of fixed-rate asset-backed securities falling from **$10,003 million** to **$8,503 million**. Additionally, there was a **decrease in Discover Bank's fixed-rate senior bank notes** from **$3,571 million** to **$2,846 million**, and the **full repayment of the $925 million in floating-rate asset-backed securities** contributed to the overall reduction in long-term borrowings.  **[0001393612-24-000076_dfs-20240930.htm:27]** **[0001393612-24-000073_dfs-20231231.htm:171]** 

Why did Long-term borrowings decline so significantly in Q3 2024?

1f29d1543657099351d178b026a367c16285f26e9ffec8838adc9b3d35aa0797

The sharp decline in **Net Income** for Q4 2023 was primarily attributed to three factors. Firstly, there was a **substantial increase in the provision for credit losses**, which surged by **$1,026 million (116%)** compared to the prior year—this was driven by higher charge-offs and increased reserves. Secondly, **operating expenses rose by 19%**, including higher spending on employee compensation and benefits, marketing, and professional fees to support compliance and risk management efforts. Finally, the **net interest margin compressed by 29 basis points** due to elevated funding costs and interest charge-offs, which further impacted profitability.  **[0001393612-24-000004_dfs-earningsreleasex4q23ex.htm:0]** **[DFS_3370440_2]** **[0001393612-24-000004_dfs20231231ex992.htm:1]** **[0001393612-24-000010_dfs-20231231.htm:102]** 

What contributed to the sharp decline in Net income in Q4 2023?

The **significant jump** in Basic EPS in Q2 2024 was driven by several factors. **Net income increased by 70% YoY**, aided by **strong revenue growth** and a **43% decline in the provision for credit losses**. In addition, **unusual items** played a key role, including a **$869 million student loan reserve release** and a **$26 million gain** from the sale of the Lake Park facility. Improvements in **operating efficiency** and favorable **litigation and settlement outcomes** also contributed to the EPS growth.  **[0001393612-24-000042_dfs-earningsreleasex2q24ex.htm:0]** **[0001393612-24-000043_dfs-earningsreleasex2q24ex.htm:0]** **[DFS_3393444_2]** **[0001393612-24-000042_dfs20240630ex992.htm:1]** 

What drove the significant jump in Basic EPS in Q2 2024?

The remarkable surge in **Q2 2024 net income** was primarily driven by **multiple factors**. **Revenue growth** boosted total revenues by **17% year-over-year** through loan growth and improved net interest margins, significantly enhancing overall profitability.  **[0001393612-24-000043_dfs-earningsreleasex2q24ex.htm:0]** **[0001393612-24-000042_dfs-earningsreleasex2q24ex.htm:0]**  Additionally, a major **student loan reserve release of $869 million** played a crucial role, providing an extraordinary boost to net income.  **[DFS_3393444_2]** **[DFS_3393444_3]**  The company also benefited from a **$26 million gain** due to a favorable litigation settlement and the sale of its Lake Park facility, which, along with offsetting regulatory charges and stable credit performance, further supported the impressive net income growth.  **[DFS_3393444_2]** **[DFS_3393444_3]** 

What factors caused the remarkable surge in Net income in Q2 2024?

The sharp rise in **Income tax expense** in **Q2 2024** was primarily due to two main factors: the **adoption of the Proportional Amortization Method** for qualifying tax credit investments and the **recognition of potential non-deductible regulatory penalties** related to a card product misclassification issue. These changes led to an increase in the effective tax rate from **23.0% in Q2 2023** to **26.1% in Q2 2024**, contributing to the significant rise in the tax expense.  **[0001393612-24-000047_dfs-20240630.htm:30]** **[0001393612-24-000047_dfs-20240630.htm:74]** 

Why did Income tax expense rise so sharply in Q2 2024?

The documents do not provide any explanation for a *negative* Other expense in Q3 2024. In fact, one source lists **$1,032 million** as the Total other expense for Q3 2024  **[0001393612-24-000076_dfs-20240930.htm:3]** , and another source explains an *increase* in Total other expense driven by higher employee compensation and benefits, technology investments, and increased professional fees.  **[0001393612-24-000076_dfs-20240930.htm:75]**  There is no indication in the documents of a negative Other expense for that period.

What explains the negative Other expense in Q3 2024?

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ef94d5e2bf61cc10791a68ef527dca42926a293bf0ab45d0f6b33d400b85f683

f90ba340569f3e87302a1f21cb119ab7e5e18a0b27871f692591116e7ddc055c

Discover Financial Services (DFS)

Financials