Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- American Express Co (AXP, Financial) reported record revenues of $17.9 billion, up 9% year over year.
- Earnings per share increased by 17% to $4.08, excluding last year's gain from the sale of Accertify.
- The company reaffirmed its full-year revenue growth and EPS guidance, indicating confidence in its financial outlook.
- American Express Co (AXP) achieved the lowest projected credit card loss and highest profitability rates under the Fed stress test among all banks subject to CCAR.
- The company continues to see strong momentum in net card fees, which reached record levels and were up 20% FX adjusted this quarter.
Negative Points
- Spending in travel categories like airlines and lodging was softer, despite overall spending reaching a quarterly record.
- The company experienced a slowdown in airline and lodging spend, impacting T&E growth.
- Provision expense was $1.4 billion for the quarter, including a reserve build of $222 million due to a worse macroeconomic outlook.
- Operating expenses, excluding Accertify, were up 9% in the quarter, higher than expected, driven by investments in risk management and technology.
- The company faces intense competition in the premium card space, with new offerings from competitors like Chase and Citi.
Q & A Highlights
Q: How are you planning for spending trends given the current macroeconomic uncertainty, and what impact does the Amazon portfolio loss have on SMB?
A: Stephen Squeri, CEO, stated that spending trends are expected to remain consistent, with no clear catalyst for change. The Amazon portfolio loss is not expected to significantly impact SMB, as the focus remains on maintaining strong revenue and credit metrics in this segment. Christophe Le Caillec, CFO, added that strong new account origination supports billing growth, with 3.1 million new cards acquired in Q2.
Q: With the upcoming US Platinum Card refresh, how do you view the competitive landscape and its impact on pricing power?
A: Stephen Squeri, CEO, emphasized that competition in the premium card space has been consistent over the years. He believes that as long as American Express continues to deliver value, pricing power will remain strong. The company is confident in its ability to lead in the premium space through regular product refreshes and leveraging its unique assets.
Q: Can you provide insights into the expected impact of the Platinum Card refresh on financials?
A: Christophe Le Caillec, CFO, explained that the cost of card member services will increase immediately after the launch, while the card fee benefits will take up to two years to fully reflect in the P&L. This strategy is built into their guidance and planning, ensuring it remains value accretive.
Q: How is American Express addressing concerns about lounge access and overcrowding amid robust card member growth?
A: Stephen Squeri, CEO, mentioned efforts to expand lounge capacity and innovate with new concepts like the "sidecar" lounge in Las Vegas. The company is also working with partners like Delta to manage traffic and enhance the lounge experience.
Q: What is American Express's stance on stablecoins and blockchain technology?
A: Stephen Squeri, CEO, highlighted the potential role of stablecoins in cross-border transactions, particularly for SMBs. He noted that while stablecoins won't replace existing payment rails, they offer an alternative to ACH and Swift payments. The partnership with Coinbase is seen as a strategic move to provide off-ramps for digital currencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
