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    AXP
    Earnings call· Jun 2026(Q2 FY26)

    AMERICAN EXPRESS CO AXP

    Jul 24, 2026 Source

    Executive summary

    American Express Q2 FY26 — Strong Revenue Growth and Strategic Reinvestment

    American Express delivered another strong quarter, driven by robust revenue and spend growth, particularly from its premium Platinum products and younger customer cohorts. The company raised its full-year revenue guidance to 10% but maintained EPS guidance, opting to reinvest outperformance into strategic growth initiatives like technology, customer acquisition, and the acquisition of TheFork, rather than dropping it to the bottom line. This strategy aims to sustain long-term growth and leverage the company's strong credit performance and premium customer base.

    Highlights

    5

    • Revenue grew 10% year-over-year.

    • EPS increased 11% year-over-year to $4.53.

    • Overall spend was up 9.4% FX adjusted, the highest level in 3 years.

    • Net card fees grew 15.4%, reaching record levels, with 75% of new accounts on fee-paying products.

    • Credit performance remains very strong, with delinquency and write-off rates below 2019 levels.

    Concerns

    3

    • Full-year EPS guidance of $17.30 to $17.90 was maintained despite raising revenue guidance, due to reinvestment in growth initiatives.

    • Small business co-brand portfolio sales are expected to impact spend growth by ~1 percentage point and NII by ~2.5 percentage points starting Q4 FY26.

    • The VCE to revenue ratio is now expected to be slightly higher, between 44% and 45% for the full year, due to stronger spend in rewards-earning categories.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full year revenue growth
    10%
    high materiality
    High
    Full year EPS
    $17.30 to $17.90
    high materiality
    High
    Card fees growth
    accelerate in Q3 and to exit the year in the high teens
    medium materiality
    High
    Credit metrics
    generally stable throughout the year
    high materiality
    High
    Marketing expense growth (H2)
    up by around 10% year-over-year
    medium materiality
    High
    Operating expenses growth (full year)
    mid-single digits
    medium materiality
    High
    VCE to revenue ratio (full year)
    between 44% and 45%
    medium materiality
    High
    Small business co-brand portfolio sales impact on spend growth
    around 1 percentage point
    medium materiality
    High
    Small business co-brand portfolio sales impact on NII
    around 2.5 percentage point
    medium materiality
    High
    Small business co-brand portfolio sales impact on total revenue
    about 1 percentage point
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    U.S. Consumer
    Highest spend growth since Q1 2018 (excluding pandemic periods), driven by Platinum refresh and engagement from younger customers.
    Millennial and Gen-Z spending: fastest-growing cohortsPlatinum portfolio: fastest growing
    		—11%——
    Commercial
    Spend picked up to 5% growth, with both U.S. SME and large global customers growing at the same pace. Early stages of commercial product roadmap.
    U.S. SME growth: 5%Large global customers growth: 5%
    		—5%——
    International
    Strong quarter with broad-based growth across consumer and business customers and geographies. Platinum Card refreshed in ~80% of countries since 2003, driving 20% FX adjusted international Platinum card spending growth.
    Top 5 countries growing at double-digit rate: 4 out of 5New consumer Platinum Card accounts from Millennials and Gen-Zs: ~70%
    		—12% FX adjusted——

    Operational metrics

    28
    EPS
    $4.53up 11% year-over-year
    Q2 FY26

    Reported EPS.

    Spend growth
    9.4%FX adjusted, almost 1 point higher than Q1
    Q2 FY26

    Overall spend was up 9.4% FX adjusted, almost 1 point higher than Q1 and Growth was broad-based across categories.

    Retail spending growth
    13%FX adjusted
    Q2 FY26

    Retail spending continued to be very strong.

    Restaurant spending growth
    10%
    Q2 FY26

    Our largest T&E category.

    Airline spending growth
    10%highest number in 6 quarters
    Q2 FY26

    Airline spending picked up further from the strong growth we saw in Q1.

    Global MX travel bookings growth
    22%year-over-year
    Q2 FY26

    Our customers are showing strong demand for travel.

    New cards acquired
    3 million
    Q2 FY26

    With continued momentum in acquiring younger customers and attracting new customers onto our fee-paying products.

    New accounts on fee-based products
    70%
    FY26 YTD

    Demand for our premium products remain strong with over 70% of new accounts acquired on fee-based products this year.

    New accounts on fee-based products
    75%highest level since increased focus on premium products
    Q2 FY26

    We continue to see good momentum in attracting customers on to our premium products.

    Delinquency rate
    1.2%-1.3%below 2019 levels
    past 3 years

    Delinquency rates have been between 1.2% and 1.3% for over 3 years.

    Provision expense
    $1.1 billion
    Q2 FY26

    Provision expense of $1.1 billion included a reserve release of $191 million, mostly reflecting further strengthening of portfolio credit performance.

    Pretax ROE (CCAR severely adverse scenario)
    3.8%lowest projected credit card loss rate across all banks
    over 9 quarters

    Under a severely adverse scenario, we have the lowest projected credit card loss rate across all banks and a pretax ROE of 3.8% over 9 quarters.

    Total balance growth
    9%FX adjusted, in line with Billed Business
    Q2 FY26

    Total balance increased 9% year-over-year FX adjusted, in line with Billed Business.

    Deposit products balance growth
    9%year-over-year
    Q2 FY26

    Balances from our U.S. consumer and small business banking deposit products, up 9% year-over-year.

    U.S. card members with deposit account
    10%
    current

    Around 10% of our U.S. card members currently holding a deposit account with us, we see a long runway for growth.

    Marketing expense growth
    6%
    Q2 FY26

    Marketing and OpEx each grew 6% in the quarter.

    Operating expense growth
    6%
    Q2 FY26

    Marketing and OpEx each grew 6% in the quarter.

    VCE to revenue ratio
    44.6%step-up versus first half of last year
    Q2 FY26

    The step-up versus the first half of last year reflects the investment we made in the value propositions of our U.S. Platinum cards.

    Capital returned to shareholders
    $2.9 billion
    Q2 FY26

    We returned $2.9 billion of capital to our shareholders, including $0.6 billion of dividends and $2.2 billion of share repurchases.

    ROE
    36%
    Q2 FY26

    Our business continues to generate very strong returns with an ROE of 36% this quarter.

    Earnings returned to shareholders
    over 75%
    past 3 years

    Our strong ROE enables us to return high levels of earnings to our shareholders over 75% over the past 3 years.

    Annualized OpEx
    $16 billion-$17 billion
    annual

    OpEx for us annualized like between $16 billion and $17 billion.

    Platinum Card refresh in countries
    80%
    since 2003

    Since 2003, we've refreshed our Platinum Card in approximately 80% of the countries where these cards are issued.

    Ultimate rate of redemption (URR)
    96%slightly lower than prior
    current

    We came up with a slightly lower ultimate rate of redemption, but it really hasn't changed it much. I think we report externally the ultimate rate of redemption is like 96% rate.

    Platinum card fee increase
    $200
    Q1 FY26

    We raised the fee by $200. And by the end of Q1, we had repriced, if you want, about 1/4 of the U.S. Platinum portfolio.

    USCS billing growth
    11.4%
    Q2 FY26

    USCS billing is up 11.4%.

    Revenue company size
    $80 billionup from $30 billion in 2017
    FY26

    We're looking at 10% revenue growth, almost an $80 billion revenue company, potentially by the end of the year. (ASR error in transcript, corrected from $80 million to $80 billion based on context of $70 billion current and 10% growth).

    Technology cycle time decrease (coding)
    30-40%
    current

    From a technology perspective, what we're seeing is anywhere from a 30% to 40% decrease in cycle time from a coding perspective.

    Industry KPIs

    12
    MetricValueDetails
    Fee revenue15.4%%
    Funding mix9%%
    Delinquencies1.2%-1.3%%
    Capital returns$2.9 billionUSD
    Credit quality mix65%%
    Net charge off rate—
    Loans card receivables9%%
    Provision reserve rate$1.1 billionUSD
    Rewards engagement costs44.6%%
    New accounts card acquisitions3 millioncards
    Billed business purchase volume9.4%%
    Net interest margin yield on receivables—

    Product announcements

    3
    ProductTypeDetails
    ChatGPT business annual statement creditlaunch
    Expense management platformlaunch
    Membership Rewards points redemption within Apple Payupdate

    Deals & partnerships

    3
    TheForkProposed acquisition of a leading online restaurant booking platform.

    TheFork is a leading online restaurant booking platform. It will add 50,000 restaurants to our dining network across 11 European countries. It was not in the original plan for the year but is a growth opportunity.

    All AccorNew global partnership with Accor's booking and loyalty platform.

    Partnership with All Accor, the booking and loyalty platform for Accor's portfolio of 45 worldwide hotel brands, including Raffles, Fairmont and Sofitel, to further enrich the value of membership and drive customer engagement.

    new issuersSale of two small business co-brand portfolios.

    One portfolio transferred in April, the second (Amazon portfolio) expected in Q3. These sales will create headwinds for spend growth and NII but were incorporated into guidance with negligible impact on pretax income.

    Risks & headwinds

    4
    Reinvestment in growth initiatives impacting short-term EPSFull year 2026

    Maintaining full year EPS guidance of $17.30 to $17.90 despite raising revenue guidance to 10%.

    Mitigation: Strategic choice to invest for long-term value creation, as demonstrated by high ROE and consistent growth over several years.

    Impact from small business co-brand portfolio salesStarting Q4 FY26, until lapped

    Quarterly impact of ~1 percentage point to spend growth and ~2.5 percentage points to net interest income starting in Q4 until lapped. Total revenue impact ~1 percentage point.

    Mitigation: Impacts were incorporated in the original guidance and have a negligible impact on pretax income.

    Higher VCE to revenue ratioFull year 2026

    Expected to be between 44% and 45% for the full year, slightly higher than originally expected.

    Mitigation: Driven by stronger spend in categories where customers earn and use rewards; expected to see lower growth in VCE expenses starting Q4 as Platinum refresh is lapped.

    Geopolitical eventsCurrent

    Gas spend increasing significantly (around 2% of total billings); travel to Middle East impacted.

    Mitigation: Not causing a general slowdown; people are offsetting these transactions with others in different categories; global travel and airline spend remain strong.

    What to watch in Q3 FY26

    5

    Card fee growth acceleration

    Q3 FY26 / Q4 FY26
    Current15.4% (Q2 FY26)
    Targetaccelerate in Q3 and exit the year in the high teens

    Why it matters

    Indicates the full P&L benefit realization from the Platinum refresh and overall premium product strategy.

    On card fees, we expect growth to accelerate in Q3 and to exit the year in the high teens

    Q&A highlights

    7

    How much of the 11.4% USCS growth is from new vs. existing customers, and is it sustainable? Are geopolitical events impacting spending?

    The acceleration in USCS billing is largely due to the Platinum refresh, driving engagement from both new acquisitions and tenured card members consolidating spend. Travel bookings are up 22%, and Resy restaurant spend is double the overall restaurant spend. Geopolitical impacts are seen in specific categories (e.g., gas spend up, Middle East travel impacted) but are not causing a general slowdown, with global travel and airline spend still strong.

    “One of the biggest contributor to the acceleration is the platinum refresh. It is, by far, the biggest product we have. It has the fastest growth rate. There's truly a lot of momentum.”

    asked by Sanjay Sakhrani · answered by Christophe Le Caillec

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Reinvestment for Long-Term Growth

    Management raised full-year revenue guidance to 10% but maintained EPS guidance, choosing to reinvest outperformance into growth initiatives. This strategy, consistent over several years, focuses on customer acquisition, technology enhancements, and strategic acquisitions like TheFork, aiming to drive long-term value creation rather than short-term bottom-line gains. The company believes this approach, demonstrated by high ROE, is key to compounding earnings more durably and at a faster pace than in the past.

    02

    Platinum Product Refresh Success

    The significant investment in enhancing the flagship Platinum products in the U.S. has driven accelerated spend and revenue growth, making the Platinum portfolio the fastest-growing in the U.S. consumer business. This refresh has led to increased customer engagement, strong demand, and moderated VCE expense growth as new fees kick in, attracting high credit quality premium customers and supporting strong earnings growth. The full benefits of a product refresh are typically realized a year or two after launch.

    03

    Strong Credit Performance and Premium Customer Base

    The strategy of investing in value propositions that attract high credit quality customers has resulted in consistently strong credit performance. Both delinquency and write-off rates remain below 2019 levels, with delinquency rates stable between 1.2% and 1.3% for over three years. 65% of new consumer accounts come from Millennials and Gen-Zs, who represent greater lifetime value, and 75% of new accounts acquired in the quarter were on fee-paying products, the highest level seen since the focus on premium products increased.

    04

    International Expansion and Tailored Value Propositions

    American Express has expanded its international focus, refreshing the Platinum Card in approximately 80% of countries since 2003, driving 20% FX-adjusted growth in international Platinum card spending this year. Around 70% of new consumer Platinum Card accounts outside the U.S. are from Millennials and Gen-Zs, demonstrating the success of tailoring premium value propositions to local needs and preferences. The proposed acquisition of TheFork will further enhance the international dining network.

    05

    Impact of Small Business Co-brand Portfolio Sales

    The sale of two small business co-brand portfolios, with transfers staggered across Q2 and Q3, is expected to create headwinds. Starting in Q4, there will be a quarterly impact of approximately 1 percentage point to spend growth and 2.5 percentage points to net interest income until the sales are lapped. The total revenue impact is estimated at about 1 percentage point, though the impact to pretax income is negligible and incorporated into existing guidance.

    06

    AI Adoption and Efficiency

    The company is deploying AI in multiple areas, including technology development, customer service, and marketing. In technology, AI is decreasing cycle time for coding by 30-40%, allowing more projects to be completed faster. AI-powered tools for customer service and travel agents are helping to manage business growth without proportional increases in headcount, with expectations for future headcount decreases through attrition. AI is also streamlining marketing campaigns and enhancing credit, risk, and fraud detection.

    AI-generated summary of the company’s earnings call. Not investment advice.