Capital One Posts $4.3B Q2 Loss Amid Discover Acquisition Costs

Capital One completed its $35 billion acquisition of Discover Financial Services in May 2025, a move that led to a complex second quarter marked by a reported net loss of $4.3 billion due to significant one-time acquisition-related expenses. Despite this GAAP loss and an $8.8 billion initial allowance build related to Discover's loan portfolio, Capital One posted adjusted earnings per share of $5.48, surpassing analyst estimates and signaling strong underlying profitability. Revenue increased 31% year over year to $12.5 billion, driven by a 32% jump in net interest income to $10 billion, though it slightly missed consensus revenue estimates. CEO Richard Fairbank emphasized ongoing integration efforts and expressed confidence in the long-term benefits and growth opportunities from owning Discover's payment network. Analysts noted the volatility in earnings estimates due to the acquisition's accounting complexities but generally see the transaction as transformative for Capital One. The company expects $1.5 billion in integration expenses for 2027, indicating that the merger's financial impact will continue to unfold over time.