Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Earnings per share (adjusted) | $6.69 | Not stated |
| Net interest margin | 8.41% | 40 basis points higher |
| Domestic Card purchase volume growth | 11% | Year-over-year |
| Provision for credit loss | $2.9 billion | $73 million decrease |
| Common equity Tier 1 capital ratio | 13.8% | Flat |
Guidance and outlook
- Management expects the Q3 to Q4 percentage growth in marketing to be similar to the Q3 to Q4 percentage growth seen in 2025.
- The company expects continued contraction in Discover loan balances over the next several quarters before turning positive.
- Management expects remaining synergies and the Visa, Mastercard settlement to be roughly offsetting in magnitude.
How management sounded
Positive (+7 on our -10 to +10 scale). Management expressed high confidence in the Discover integration, noting synergies are ahead of schedule and the underlying earnings power is now clearly visible. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Marketing ROI
Asked: Terry Ma (Barclays) asked how the company measures the return on investment for marketing dollars, particularly given the lag in balance growth.
Answer: Management explained they use horizontal economics to measure performance rather than vertical accounting, noting that while some marketing is stimulus-response, other parts like brand building are measured over longer horizons.
Earnings Power
Asked: Ryan Nash (Goldman Sachs) asked about the takeaway from the various moving pieces like cost saves and reserve normalization regarding earnings power.
Answer: Management stated that the earnings power coming out of the Discover integration is now visible and consistent with their original deal expectations, requiring only minor adjustments to see.
Credit Performance
Asked: Ryan Nash (Goldman Sachs) asked about the drivers of credit improvement and future outlook.
Answer: Management noted that credit has been performing better than seasonality for some time, though recent trends are more in line with seasonality, and highlighted strong recovery performance as a key factor.
Brex Acquisition
Asked: Rick Shane (JPMorgan) asked about the integration of Brex technology and workflows.
Answer: Management praised the Brex tech stack and noted they are taking a targeted approach to integration, focusing on risk management requirements while leveraging Brex's tools for future product enhancements.
Discover Loan Growth
Asked: Darrin Peller (Wolfe Research) asked about the timing for Discover to return to positive loan growth.
Answer: Management expects continued contraction over the next several quarters as recent smaller vintages mature, with loan growth expected to turn positive after that period.
What to watch before the next call
- The final court approval process for the Visa, Mastercard settlement in November.
- The pace of Discover loan growth and the timing of the return to positive growth.
- The integration of Brex technology and the rollout of new product features.
