AMERICAN EXPRESS Q1 FY26 earnings call AXP

Overall billed business rose 10% reported (9% FX-adjusted), the highest quarterly spend growth in three years and about one percentage point above Q4, led by T&E up 9% FX-adjusted while goods & services held stable at 8% FX-adjusted. Retail spending was up 11% FX-adjusted with luxury-retail merchants up 18% and front-cabin (premium airline) up 12%, underscoring premium-customer strength. International Card Services grew 13% FX-adjusted (20% reported with the weaker dollar), its 20th consecutive double-digit FX-adjusted quarter. Management attributes the momentum to its premium, spend-centric, fee-based model and diversified global footprint.

The U.S. Platinum refresh continued to lift results, with U.S. consumer Platinum spend accelerating by roughly 6 percentage points, the majority of the lift coming from tenured ('back book') card members rather than new acquisitions. Engagement with membership assets surged: lodging spend on Fine Hotels & Resorts and Hotel Collection rose 50% YoY, and dining spend at U.S. Resy restaurants rose 20%. About one-quarter of the U.S. consumer Platinum portfolio has now been billed the higher annual fee with no change to very high retention rates. Management expects the step-up to persist into 2027 but not accelerate further, with the refresh lapping at some point^⏳ in '27.

Over 70% of new accounts globally were acquired on fee-paying products, with 3.1 million new cards in the quarter and continued momentum in younger customers. Consumer spend growth skewed young: Gen Z up 38%, millennials up 13%, Gen X up 8%, and boomers up ~4%. Management stressed the quality of these cohorts — millennial and Gen Z credit performance is better than the industry's Gen X and boomer performance — describing them as the 'cream of the crop.' Half of high-yield-savings customers are Gen Z/millennials (about one-third of balances), signaling savings behavior among younger members.

Revenue rose 11% with net card fees, NII, and service fees & other revenue all growing double digits. Net card fees, the fastest-growing line, were up 16% FX-adjusted (in line with Q4). Net interest income grew 12% FX-adjusted, faster than the 7% balance growth, while write-off dollars rose only 4% YoY — evidence of growing NII without compromising credit. AmEx is increasingly funding balances with cheaper high-yield savings and direct CD deposits, which were up 9% YoY, supporting NII growth. Total balances (a newly relabeled line combining card member loans and receivables into 'card balances') grew 7% FX-adjusted, roughly in line with spend.

AmEx returned $2.3 billion to shareholders in the quarter — $0.7 billion of dividends and $1.7 billion of share repurchases — at an ROE of 35%, and raised the dividend by 16%. Management noted a ~75% payout of earnings over the past three years. On regulation, management views the recent Basel proposals as an improvement over the prior version, expecting a neutral-to-modestly-positive capital impact, and welcomed early discussion of modernizing the tailoring framework and bank-category designations. It does not expect a material change to its capital-management approach near term.

Management framed agentic commerce as a new era where AI agents transact autonomously, bringing added complexity and fraud risk that plays to AmEx's closed-loop network and end-to-end transaction data. Earlier in April, AmEx introduced the Amex Agentic Commerce Experiences (ACE) Developer Kit — enabling card integration into AI-powered transactions with declared intent matched to actual purchase — alongside Amex Agent purchase protection, an industry-first commitment to back registered agent purchases. More AI-powered products are slated for this year, including making membership assets discoverable/actionable on leading AI platforms. Internally, AI coding/testing tools are delivering about a 30% productivity benefit for programmers, freeing capacity for a large technology backlog.

AmEx announced a roadmap for its most significant one-year commercial product expansion in company history — 8 new/enhanced products, benefits and capabilities for U.S. businesses in 2026 — starting with the Graphite Business Cash Unlimited card and including a corporate cash-back card and expense-management software. The push targets the middle market and small-businesses transitioning to middle market, supported by the earlier Center acquisition and the recent HyperCard acquisition (expense-management expertise). Management expects the new products to be a tailwind mainly into 2027, as they take time to flow through the P&L, with no expected impact to the VCE ratio.