American Express (AXP) Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: Increased by 11% year-over-year to a record $18.4 billion.

Earnings Per Share (EPS): Rose by 19% to $4.14.

Cardmember Spending: Accelerated to 9% growth (8% FX adjusted), driven by strong retail and travel spending.

Credit Performance: Delinquency rates remain below 2019 levels, indicating strong credit quality.

New Card Acquisitions: 3.2 million new cards issued, with over 70% being fee-paying products.

Return on Equity (ROE): Stood at 36%.

Annual Card Fees: Approaching $10 billion, growing at double digits for 29 consecutive quarters.

2Strategic Updates and Business Highlights

Product Refresh: Launched refreshed US Consumer and Business Platinum cards, with initial demand exceeding expectations. New account acquisitions doubled compared to pre-refresh levels.

Market Expansion: Continued growth in merchant acceptance, with nearly five times the number of accepting merchants since 2017.

Customer Engagement: Enhanced digital capabilities and benefits, particularly appealing to Millennial and Gen Z consumers.

Travel Segment: Record bookings through Amex Travel following the Platinum refresh, with a new all-in-one travel app launched.

3Forward Guidance and Outlook

Revenue Growth: Raised full-year guidance to 9-10%.

EPS Guidance: Expected to be between $15.20 and $15.50.

Long-term Aspirations: Aiming for mid-teens EPS growth, despite anticipated increases in expenses due to product refresh investments.

4Bad News, Challenges, or Points of Concern

Expense Growth: Variable costs and expenses (VCE) rose by 14%, with a VCE to revenue ratio of 42%. This is expected to increase as investments in premium products continue.

Market Competition: Acknowledgment of competitive pressures from fintech companies and the need to maintain premium offerings.

Economic Uncertainty: While current performance is strong, there are concerns about potential macroeconomic headwinds impacting future growth.

5Notable Q&A Insights

Consumer Health: Management expressed confidence in the stability of their premium customer base, with low delinquency rates and strong engagement metrics.

Impact of Platinum Refresh: Initial results indicate a positive impact on spending, particularly in travel and dining sectors, though the overall contribution to revenue growth was deemed small.

Retention Strategies: Retention offers are not expected to play a significant role, as the perceived value of the refreshed product is high among customers.

International Growth: Strong performance in international markets, with several countries experiencing growth rates of 18% or more.

Marketing Spend: Focused on balancing increased marketing investments with efficiency, particularly in relation to welcome incentives and retention strategies. Overall, American Express reported a strong quarter with robust growth metrics and strategic initiatives aimed at enhancing customer engagement and product offerings, while also navigating potential economic challenges and competitive pressures.