Capital One reported fourth-quarter 2025 earnings per share of $3.86, falling short of the consensus estimate of $4.11, while generating revenue of $15.58 billion versus an expected $15.48 billion. Total net revenue rose 1% year-over-year to $15.6 billion, but non-interest expense climbed 13% to $9.3 billion, driven by a 38% increase in marketing spend and an 8% rise in operating expenses. Pre-provision earnings declined 12% to $6.2 billion, and the provision for credit losses increased by $1.4 billion to $4.1 billion. Net charge-offs totaled $3.8 billion and the company built loan reserves by $302 million. Net interest margin contracted by 10 basis points to 8.26%.

In conjunction with the earnings release, Capital One announced a definitive agreement to acquire Brex for $5.15 billion in a 50% cash, 50% stock transaction. Brex’s integrated platform combines corporate cards, spend management software and banking services, extending Capital One’s reach from personal liability cards into corporate liability and broader payment workflows. The acquisition targets a business payments market estimated at $2 trillion in annual purchase volume, and will leverage Brex’s technology to serve startups through global enterprises without redeveloping infrastructure.

Management highlighted continued improvement in credit metrics, with domestic card charge-offs declining and delinquency rates tracking normal seasonal patterns. CEO Richard Fairbank noted that credit performance appears to be stabilizing after a year of steady improvement. Consumer purchase volumes on Capital One cards grew 6.2% year-over-year, excluding the impact of the Discover operations integration. Employment remains robust and real wage growth supports card usage, although cumulative inflation and higher interest rates are exerting pressure on some households. Tax refunds are expected to provide a temporary boost to early-2026 credit performance.

On the earnings call, executives cautioned that proposed caps on credit card interest rates and interchange fee changes could have unintended consequences, reducing credit availability and potentially dampening consumer spending, which accounts for roughly 70% of U.S. GDP. CFO Andrew Young confirmed that the Brex acquisition will initially dilute earnings but will not alter Capital One’s capital allocation plans or share repurchase cadence. Looking ahead, the company plans to integrate Brex alongside existing initiatives while maintaining disciplined investment in technology and marketing to sustain long-term growth.