COF earnings analysis
What we found in COF's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Capital One delivered a substantial year-over-year earnings recovery, with Q2 revenue up 27% to $15.850 billion and diluted EPS of $4.73 versus a prior-year loss of $(8.58), principally because the 2025 Discover acquisition allowance build did not recur and card balances/revenue expanded. Credit Card and Consumer Banking grew, while Commercial Banking revenue fell 9% and credit losses rose in auto and commercial portfolios. Balance-sheet liquidity remains strong, with $144.104 billion of liquidity reserves and a 165% LCR, although CET1 declined 60 bps from year-end to 13.7%. Item 1A states that management is not aware of any material changes to the risk factors in its 2025 Form 10-K.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue accelerated to $15.85B
- Q2 total net revenue rose 27% year over year to $15.850 billion from $12.492 billion; it was also $619 million above the implied Q1 2026 level of $15.231 billion derived from six-month revenue of $31.081 billion.
- Profitability rebounded sharply
- Net income swung to $3.020 billion, or $4.73 diluted EPS, from a $4.277 billion loss and $(8.58) diluted EPS a year earlier. Pretax continuing income was $3.818 billion versus a $5.929 billion loss, equating to a calculated 24.1% pretax margin versus negative 47.5%.
- Card business drove earnings recovery
- Credit Card revenue increased 29% to $11.765 billion and segment profit reached $2.411 billion versus a $4.917 billion loss. Average card loans increased 29% to $271.197 billion, while the card net charge-off rate improved 49 bps to 4.71%.
- Consumer Banking and network scaled
- Consumer Banking revenue grew 26% to $3.209 billion, supported by Global Payment Network volume rising 156% to $189.612 billion. Segment profit increased 8% to $486 million and period-end auto loans grew 7% to $89.311 billion.
- Deposits grew while debt declined
- Funding remained deposit-led: deposits increased $8.486 billion from year-end to $484.257 billion, while total borrowings declined $5.629 billion to $45.371 billion. Liquidity reserves were stable at $144.104 billion and the average LCR was 165% against a 100% requirement.
- Strong operating cash flow and buybacks
- Six-month operating cash flow was $14.467 billion and premises/equipment spending was $920 million, implying strong cash generation at modest 6.4% capex intensity relative to operating cash flow. The company also repurchased $5.2 billion of common stock in the first six months.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Commercial earnings and losses deteriorated
- Commercial Banking weakened: Q2 revenue declined 9% to $850 million and segment profit fell 15% to $239 million. Its net charge-off rate rose 20 bps year over year to 0.53%, with commercial-and-industrial charge-offs of $113 million versus $76 million.
- Auto loss rates remain a headwind
- Auto credit losses increased despite better delinquencies: Consumer Banking net charge-offs rose 27% to $329 million and the auto net charge-off rate increased 18 bps to 1.48%. The auto allowance increased 14% to $2.162 billion.
- Integration costs and execution risk persist
- Acquisition execution remains costly: Discover integration expense was $298 million in Q2 and $713 million in the first half, bringing cumulative expense since announcement to $2.1 billion. Brex added $96 million of Q2 integration expense following its $4.521 billion purchase consideration.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.73
- Operating margin
- 24.1%
- Segment
- Credit Card: $11.765 billion of Q2 2026 total net revenue, up 29% year over year from $9.095 billion.
- Segment
- Consumer Banking: $3.209 billion, up 26% year over year from $2.556 billion.
- Segment
- Commercial Banking: $850 million, down 9% year over year from $937 million.
- Segment
- Other: $26 million of revenue versus a $96 million loss in Q2 2025.
What they said about what is next.
The 10-Q contains no explicit numerical revenue or EPS outlook. Management states that net interest income and net interest margin are expected to fluctuate with rates and balance-sheet mix; at current rates, projected 12-month NII is expected to remain largely unchanged in higher-rate scenarios and decrease in lower-rate scenarios.
The filing reads better than the one before it.
What came before.
- 10-Q · May 7, 2026
- Capital One Financial Corporation reported strong Q1 2026 results with net income of $2.2 billion, or $3.34 per diluted share, reflecting a 55% increase in net income compared to $1.4 billion in Q1 2025. Total revenue…
- 10-K · February 19, 2026
- Capital One completed the acquisition of Discover on May 18, 2025 and materially expanded its payments and deposit franchise (purchase consideration $51.8B; identifiable assets acquired $168.6B, including $108.2B of…
- 10-Q · November 3, 2025
- Capital One reported a strong Q3 2025 quarter reflecting the Discover acquisition: total net revenue of $15,359 million and GAAP diluted EPS of $4.83, up versus Q3 2024. Results were driven by materially higher net…
- 10-Q · May 7, 2025
- Capital One reported Q1 2025 net income of $1,404 million ($3.45 diluted EPS) on total net revenue of $10,000 million, representing year-over-year increases of 10% in net income and 6% in revenue. Net interest income…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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