Acquisition of Discover: Capital One successfully closed the acquisition of Discover on May 18, 2025. This acquisition significantly impacted Q2 results, contributing $2 billion in revenue but also leading to a net loss of $6.4 billion in continuing operations due to integration costs and purchase accounting effects. Investors can expect integration costs to exceed the previously announced $2.8 billion as the company delves deeper into the acquisition process.

Impact on Financials: On a GAAP basis, Capital One reported a net loss of $4.3 billion for Q2 2025, translating to a loss of $8.58 per diluted common share. However, adjusted net income reached $2.8 billion, translating to diluted earnings per share of $5.48. Revenue increased by $2.5 billion, or 25%, from the previous quarter, primarily due to the Discover acquisition.

Provision for Credit Losses: The provision for credit losses amounted to $11.4 billion, largely influenced by an $8.8 billion initial allowance for the Discover portfolio. This indicates challenges ahead as credit losses remain a focus, but the legacy Capital One portfolio showed stable performance, mitigating some concerns.