Core Viewpoint - Discover Financial Services (DFS) reported strong first-quarter 2025 results, with adjusted earnings per share of $4.25, exceeding estimates by 28.8% and showing a 31% year-over-year increase [1] Financial Performance - Revenues, net of interest expenses, reached $4.3 billion, a 2% year-over-year increase, surpassing the consensus estimate by 0.7% [1] - Interest income decreased by 3% year over year to $4.8 billion, missing the estimate of $5 billion, while interest expense fell 15% year over year to $1.2 billion, lower than the estimate of $1.4 billion [3] - Non-interest income grew by 3% year over year to $693 million, beating the consensus estimate of $691.2 million but falling short of the estimate of $708.1 million [3] - Total operating expenses were $1.6 billion, up 1% year over year, but lower than the estimate of $1.8 billion [4] - Net income climbed 30% year over year to $1.1 billion [4] Segment Performance Digital Banking - Pretax income in the Digital Banking segment increased by 30% year over year to $1.4 billion, exceeding both the consensus estimate of $1.06 billion and the estimate of $1.04 billion [5] - Provision for credit losses decreased by 17% year over year to $1.2 billion [5] - Total loans decreased by 7% year over year to $117.4 billion, with net interest income increasing by 2% year over year to $3.56 billion [6] Payment Services - The Payment Services segment reported a pretax income of $91 million, an 11% year-over-year increase, surpassing the consensus estimate of $83.5 million but missing the estimate of $99 million [7] - Payment Services volume declined by 4% year over year to $96 billion, with PULSE dollar volume growing by 3% and Diners Club volume advancing by 18% [8] Financial Position - As of March 31, 2025, total assets were $147.9 billion, a 0.2% increase from the end of 2024 [9] - The liquidity portfolio amounted to $30.2 billion, improving by 10.7% from December 31, 2024 [9] - Total liabilities decreased by 0.6% to $129 billion, while total equity increased by 5.8% to $19 billion [10] Merger and Dividend Update - Capital One Financial Corporation secured regulatory approvals for its merger with DFS, expected to close around May 18, 2025 [11] - A quarterly cash dividend of 70 cents per share was sanctioned, payable on June 5, 2025, but DFS shareholders may not receive this dividend due to the merger [11] 2025 Guidance - Management anticipates loan growth to follow pre-pandemic trends, with net interest margin expected to remain consistent with the fourth-quarter 2024 level of 11.96% [12]

Financial Data and Key Metrics Changes - Net income for Q1 2025 was $1.1 billion, a 30% increase from the prior year [8] - Earnings per share increased by 31% compared to last year, driven by a healthy net interest margin and good credit performance [6] - Provision expense declined by $253 million, reflecting a reduction in credit reserve balance and lower net charge offs [8] - Net interest margin ended the quarter at 12.18%, up 115 basis points from the prior year [9] Business Line Data and Key Metrics Changes - Card receivables were down 5% year over year due to modestly lower sales [9] - Discover card sales decreased by 2% compared to the prior year, attributed to past credit tightening actions [10] - Personal loan balances remained flat, with robust demand but slowed new originations due to conservative underwriting and increased competition [10] - Non-interest income increased by $20 million or 3%, driven by an increase in net discount and interchange revenue [12] Market Data and Key Metrics Changes - Average consumer deposits were up 6% year over year and 1% sequentially [11] - Direct to consumer deposit balances grew by $2 billion in the quarter, now accounting for 74% of total funding [11] - The thirty plus day delinquency rate decreased by 18 basis points compared to last quarter [7] Company Strategy and Development Direction - The merger with Capital One has been approved by regulatory bodies and is expected to close on May 18, 2025, which is anticipated to enhance competition in payment networks and broaden product offerings [5][6] - The company aims to increase resources devoted to innovation and security through the merger [6] Management Comments on Operating Environment and Future Outlook - Management is closely monitoring economic developments and consumer health amid increasing macroeconomic uncertainty [7] - The company has not provided an update on 2025 trends due to the upcoming merger [16] Other Important Information - The common equity Tier one ratio for the period was 14.7%, up 60 basis points compared to the prior quarter [15] - A quarterly cash dividend of $0.70 per share was declared, but shareholders will receive dividends from Capital One post-merger [16] Summary of Q&A Session - There was no question and answer session following the remarks [4]

Exhibit 99.3 1Q25 Financial Results April 23, 2025 2 1Q25 Highlights 3 • 1Q25 net income of $1.1Bn; diluted EPS of $4.25, and return on equity of 24% • Financial performance remains solid ◦ Revenue growth from margin expansion ◦ Good credit performance highlighted by a reserve release and lower net charge-offs ◦ Strong capital position; CET1 ratio of 14.7% • Prudently managing our business ◦ Customer trends are stable ◦ Monitoring economic developments • Secured all necessary approvals for our pending merge ...

Core Viewpoint - Discover (DFS) reported quarterly earnings of $4.25 per share, significantly exceeding the Zacks Consensus Estimate of $3.30 per share, and showing a substantial increase from $1.10 per share a year ago, indicating strong financial performance [1][2] Financial Performance - The company achieved revenues of $4.25 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.67% and showing a slight increase from $4.21 billion year-over-year [2] - Discover has consistently outperformed consensus EPS estimates over the last four quarters, achieving earnings surprises of 28.79% and 61.20% in the most recent quarters [1][2] Stock Performance and Outlook - Discover shares have experienced a decline of approximately 0.5% since the beginning of the year, contrasting with the S&P 500's decline of 10.1%, indicating relative resilience in a challenging market [3] - The current consensus EPS estimate for the upcoming quarter is $3.48, with projected revenues of $4.3 billion, and for the current fiscal year, the estimate is $13.76 on revenues of $17.35 billion [7] Industry Context - The Financial - Consumer Loans industry, to which Discover belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable environment for the company's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could influence Discover's stock performance [5]

Financial Performance - Interest income for Q1 2025 was $4,801 million, a decrease of 3% compared to $4,948 million in Q1 2024[1] - Net interest income increased by 2% to $3,558 million from $3,487 million year-over-year[1] - Total non-interest income was $693 million, reflecting a 3% increase from $673 million in the same quarter last year[1] - Net income allocated to common stockholders rose by 31% to $1,069 million from $813 million year-over-year[1] - The effective tax rate for Q1 2025 was 23.5%, down from 24.0% in Q1 2024[1] - Digital Banking's Net Interest Income increased to $3,558 million in Q1 2025, up 2% from $3,487 million in Q1 2024[8] - Net Income before Income Taxes for Digital Banking increased to $1,353 million in Q1 2025, a 30% increase from $1,037 million in Q1 2024[8] Asset and Equity Changes - Total assets decreased by 3% to $147,914 million from $152,707 million in Q1 2024[2] - Total assets decreased by $3,731 million, or 2%, to $148,045 million compared to March 31, 2024[4] - Total equity increased by 29% to $18,963 million compared to $14,670 million in the same quarter last year[2] - Tangible Common Equity per Share rose to $70.14 in Q1 2025, up from $53.31 in Q1 2024[13] Loan and Credit Metrics - Average credit card loans remained stable at $100,088 million, with a slight decrease of $222 million, or 0%[6] - Total loan receivables decreased by $9,152 million, or 7%, to $117,403 million compared to March 31, 2024[6] - The allowance for credit losses decreased by $1,150 million, or 12%, to $8,108 million compared to March 31, 2024[6] - The gross principal charge-off rate increased to 6.31%, up 57 basis points from the previous quarter[6] - Total Private Student Loans decreased to $0 in Q1 2025 from $10,480 million in Q1 2024, representing a 100% decline[7] Interest and Yield Metrics - The net interest margin improved to 12.18%, an increase of 115 basis points compared to the previous quarter[4] - The interest yield on total loans was 15.35%, an increase of 64 basis points compared to March 31, 2024[6] - Interest Yield for Personal Loans improved to 13.95% in Q1 2025, an increase of 55 basis points from 13.40% in Q1 2024[8] Deposit and Transaction Metrics - Non-interest-bearing direct to consumer deposits increased by $124 million, or 12%, to $1,161 million compared to March 31, 2024[4] - Discover Network transactions processed totaled 3,255 million in Q1 2025, a 2% increase from 3,195 million in Q1 2024[8] Delinquency and Reserve Rates - The delinquency rate (30 or more days) improved to 3.31%, a decrease of 7 basis points compared to the previous quarter[6] - The Delinquency Rate for Personal Loans was 1.68% in Q1 2025, a slight increase of 22 basis points from 1.46% in Q1 2024[8] - The Reserve Rate for Personal Loans was 7.66% in Q1 2025, an increase of 18 basis points from 7.48% in Q1 2024[8] Stock Performance - The common stock price at the end of the period was $170.70, a 30% increase from $131.09 in Q1 2024[1] - The Tier 1 risk-based capital ratio improved to 15.6% from 11.7% in Q1 2024[3] Revenue Changes - Total Payment Services revenue decreased to $96,384 million in Q1 2025, down 4% from $100,324 million in Q1 2024[8]

Group 1: Market Overview - The U.S. equity markets experienced significant volatility due to President Trump's tariff policies, particularly the 25% tariffs on steel and aluminum imports from Canada and Mexico, which led to retaliatory measures from Canada and the European Union [1] - Canada proposed a 25% import duty on over $20 billion worth of U.S. goods, while the European Union announced counter-tariffs on $28.33 billion worth of U.S. imports starting in April [1] Group 2: Economic Indicators - A better-than-expected Consumer Price Index (CPI) reading for February showed a 0.2% increase from the previous month and a 2.8% increase year-over-year, alleviating some recession concerns [2] Group 3: Investment Strategies - Momentum investing is highlighted as a strategy to capitalize on current trends, based on the principle of "buying high and selling higher," which relies on the tendency of stocks to continue in the same direction once a trend is established [3] - Momentum strategies have been effective in generating alpha over time and across various market conditions, although they require skill in trend detection [4] Group 4: Screening Parameters for Momentum Stocks - The screening process for momentum anomaly stocks includes selecting the top 50 stocks with the best percentage price change over the last 52 weeks, followed by identifying the 10 worst performers over the past week to find those experiencing a short-term pullback [5][6] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of A or B are likely to outperform others [7] Group 5: Featured Stocks - Masimo Corporation (MASI) has seen a 25% increase in stock price over the past year but a 9.9% decline in the past week, with a Momentum Score of A [9] - Robinhood Markets, Inc. (HOOD) has experienced a 126.8% increase in the past year but a 19.1% decline in the past week, also holding a Momentum Score of A [10] - Discover Financial Services (DFS) has surged 29.9% in the past year but declined 9.6% in the past week, maintaining a Momentum Score of A [11]

Core Insights - Discover Financial Services (DFS) is highlighted as an exciting investment opportunity in the financial services sector, with insights provided by expert analysts [1]. Company Overview - The stock price of Discover Financial Services was noted as of January 29, 2025, indicating a specific timeframe for market analysis [1]. - The video discussing Discover Financial Services was published on March 6, 2025, suggesting recent developments and insights into the company's performance [1]. Market Trends - The episode emphasizes the exploration of market trends related to Discover Financial Services, which may influence investment decisions [1]. - Potential investment opportunities within the financial services sector are discussed, indicating a focus on growth and profitability [1].

Core Insights - Discover Financial Services (DFS) has partnered with Skipify to enhance cardholder experience during digital transactions, focusing on security and efficiency [1][2] - The integration of advanced tokenization technology is expected to reduce fraud risks and improve transaction security, potentially increasing authorization rates and merchant conversions [2][3] - This partnership reflects DFS's commitment to innovation in response to the growing adoption of digital payments and associated risks [3][4] Company Performance - DFS's payment services segment volume improved by 4% year over year in Q4 2024, indicating positive growth in the digital payments space [4] - DFS shares have gained 35.7% over the past six months, outperforming the industry growth of 23.5% [5] Market Position - The partnership with Skipify positions DFS to capitalize on the booming digital payments market while strengthening its global network [4] - DFS currently holds a Zacks Rank 2 (Buy), indicating a favorable outlook among analysts [7]

Core Insights - Skipify has partnered with Discover Global Network to enhance the checkout experience for Discover cardholders, aiming to improve shopper satisfaction and increase authorization, conversion, and security for merchants [1][2][3] Company Overview - Skipify is a fintech company based in San Francisco, focused on creating secure and seamless digital shopping experiences through its Commerce Identity Cloud, which aims to reduce friction and abandonment at checkout [6][8] - Discover Financial Services is a major player in the digital banking and payment services sector, recognized for its commitment to cardholder security and benefits, and operates a vast network of merchants and cash access locations [5] Partnership Details - The partnership will integrate Discover's advanced tokenization technology into Skipify's platform, enhancing security by replacing sensitive card information with encrypted tokens, thereby reducing fraud and safeguarding customer data [2][4] - Skipify's Commerce Identity Cloud is projected to recognize 1 in every 2 U.S. shoppers by the end of 2025, leveraging its existing network of over 100 million consumer cards [4] Strategic Goals - Both companies are committed to advancing the future of commerce through innovation, aligning their product development roadmaps to create new digital shopping experiences that cater to the evolving needs of consumers and businesses [3][4]

Revenue Sources - PULSE's primary revenue source is transaction fees from ATM and debit transactions, with additional income from optional products like fraud detection services[36]. - Diners Club generates revenue primarily through royalties from licensees who issue Diners Club cards and provide acceptance services[39]. - Discover Global Network has agreements with various financial institutions and technology firms, earning merchant discount and acquirer assessments for processing transactions[41]. - Interest income from credit card loans was $16.1 billion for the year ended December 31, 2024, accounting for 90% of net revenues, compared to $14.4 billion for the year ended December 31, 2023, which was 91% of net revenues[209]. - PULSE's transaction processing revenue was $345 million and $303 million for the years ended December 31, 2024 and 2023, respectively[224]. Market Competition - The company faces intense competition in the credit card market, which could result in fewer customers and lower account balances, adversely affecting financial condition and results of operations[215]. - The competitive landscape includes significant pressure from larger competitors with greater financial resources, affecting the company's ability to attract and retain customers[219]. - The company competes with other consumer financial services providers, including financial technology firms, across multiple dimensions such as brand, customer service, and product offerings[72]. Risk Management - The company employs a rigorous credit risk management process, utilizing proprietary analytical tools to assess creditworthiness and manage exposure across millions of accounts[43]. - The company has made changes throughout 2024 to enhance compliance with its risk management framework, demonstrating strong risk management discipline[86]. - The company actively manages compliance risk to prevent material financial loss and reputational damage through a comprehensive compliance program overseen by the Management Risk Committee and Compliance and Ethics Committee[108]. - The Management Risk Committee oversees the enterprise risk management program, ensuring effective identification, measurement, monitoring, and reporting of risks across the organization[140]. - The company identifies potential risk exposures through a structured risk identification process, focusing on significant enterprise-level risks and granular risk exposures from both on-balance sheet and off-balance sheet positions[113]. Regulatory Environment - The company is subject to extensive regulation by the Federal Reserve and the Consumer Financial Protection Bureau (CFPB) as a bank holding company[143]. - The Dodd-Frank Act requires DFS to submit annual capital plans to the Federal Reserve, with the latest submission made on April 5, 2024[150]. - The regulatory environment surrounding consumer financial services is extensive, with multiple federal laws governing operations and compliance requirements[167]. - The Consumer Financial Protection Bureau (CFPB) has mandated that financial institutions, including Discover Bank, provide consumers with access to their transaction data by April 1, 2027[167]. Employee and Corporate Culture - The company employs approximately 21,000 individuals as of December 31, 2024, with 100% of customer service agents based in the U.S.[79]. - In the fourth quarter of 2024, 77% of employees recommended the company as a great place to work, exceeding global and financial services benchmarks[85]. - The company offers a total compensation and benefits package that can total up to 8% of an employee's wages per year for 401(k) contributions[82]. Merger and Acquisition - The company is in the process of a pending merger with Capital One, which is subject to various regulatory approvals and could impact stock price and future business outcomes[190]. - If the merger is not completed, the company may face significant risks, including potential declines in stock price and challenges in pursuing other business opportunities[191]. - The merger agreement includes conditions that must be fulfilled, such as shareholder approvals and regulatory consents, which could delay or prevent completion[201]. - The company has incurred substantial costs related to the merger, including legal and advisory fees, which will be incurred regardless of the merger's completion[195]. - The company must effectively manage operational and reputational risks, including fraud and cybersecurity, while navigating the merger process[191]. Technology and Innovation - The company invests in technology systems through owned and hosted data centers to support payment networks and transaction processing[68]. - The company must invest in new initiatives, including technology enhancements and marketing, to remain competitive in the consumer financial services industry[218]. - The company emphasizes the importance of cybersecurity and information security, led by the Chief Information Security Officer, to protect information assets and mitigate risks[107]. Compliance and Legal Risks - Compliance expectations and expenditures have significantly increased, necessitating further investment in risk management and compliance functions[214]. - Discover Bank's compliance with anti-money laundering regulations is critical, as failures could lead to legal consequences and affect merger approvals[172][173]. - The Dodd-Frank Act requires that debit card transaction routing be controlled by merchants, impacting Discover Bank's debit card network operations[171].