American Express (AXP) Q4 FY25 earnings call: guidance and Q&A

Can you elaborate on the reallocation of marketing dollars from cashback to fee-paying products and its expected impact on future results?

Management explained their flexibility in marketing investments, focusing on acquiring revenue rather than just card count. They noted a significant increase in Platinum card acquisitions and an 8 percentage point year-over-year rise in the percentage of fee-paying new U.S. consumer cards, indicating improved marketing efficiency.

“if you focus just on fee-paying cards in the U.S. consumer business, the percentage of NCA paying a fee went up by 8 percentage points from Q4 last year to Q4 this year.”

asked by Ryan Nash · answered by Christophe Le Caillec

What are the drivers for commercial services growth in the coming year, especially given increased competition and M&A in the space?

Steve Squeri noted that middle market spend is the primary area of slowdown, while small business remains strong. He acknowledged the competitive environment, including Capital One's acquisition of Brex, but expressed confidence in Amex's plans, including the upcoming launch of the Center expense management solution.

“I like the hand that we have. I like the plans that we have going forward, and we'll be communicating more as the year goes on, on that.”

asked by Sanjay Sakhrani · answered by Stephen Squeri

What is the outlook for U.S. consumer billed business in 2026, and is there potential for acceleration beyond the current 9% growth?

Steve Squeri highlighted strong momentum from the Platinum and Gold card launches, particularly in engagement metrics like restaurant spending (up 9% overall, 20% for Resy). He expressed bullishness on consumer engagement but did not project growth beyond the 9% guidance.

“I like what our Card Members are doing with the product. They're really engaging.”

asked by Donald Fandetti · answered by Stephen Squeri

How will the strategy of refocusing on fee-paying cards impact the trajectory of net card fees and contribute to long-term revenue growth aspirations?

Christophe Le Caillec confirmed that the portfolio is becoming more premium, driving strong and sustained card fee growth, which reached a record $10 billion. He expects card fee growth to accelerate in 2026 as Platinum Card Members renew at the new price point, contributing to the overall premiumization and strong credit performance.

“The overall portfolio is slowly getting more premium with -- either the Platinum portfolio is growing at a very fast pace.”

asked by L. Erika Penala · answered by Christophe Le Caillec

If credit expense remains low, will Amex use the incremental opportunity for further investment or allow it to flow to the bottom line?

Christophe Le Caillec explained that the model leverages low credit costs and operating efficiencies (outside of technology) to fund investments in premium products and marketing. He stated that the company aims for mid-teens EPS growth, and while there may be movements between lines, the commitment to that EPS target remains.

“The other core component of the model, which we also try to illustrate this quarter is the efficiencies that we're getting on operating expenses, right?”

asked by Richard Shane · answered by Christophe Le Caillec

Do existing customers change their card usage after a significant product refresh, and is there a delay in their engagement compared to new customers?

Steve Squeri noted that existing customers engage quickly, though not as immediately as new customers. He highlighted the Platinum app as a key driver, making it easier to enroll in benefits and leading to a 30% increase in Q4 travel bookings, indicating successful engagement across the board.

“The engagement with lululemon, the engagement with Resy, the engagement with the hotel credit was pretty quick with our existing customers.”

asked by Mark DeVries · answered by Stephen Squeri

Is the cost to grow getting too high, and are there any market segments where Amex sees overheating, or is this concern primarily due to economic and accounting dynamics?

Steve Squeri and Christophe Le Caillec asserted that Amex's consistent 10% revenue and mid-teens EPS growth over the past five years demonstrates their effective investment strategy. They do not view the market as overheated for Amex, emphasizing their long-term view, rigorous return discipline, and ability to avoid uneconomical ventures.

“I don't look at the cost to grow as all that expensive right now. I mean we stay out of things that we think are noneconomical.”

asked by Brian Foran · answered by Stephen Squeri

How will the new data analytics platform and AI tools drive more Card Member engagement?

Steve Squeri explained that the new platform, leveraging large language models, will enable better personalization, Card Member insights, and targeted offers. This will allow the company to create archetypes of cardholders and engage them more effectively, with benefits already seen in marketing.

“I think what's really exciting for us is to be able to take large language models that are out there and take our data and insert that in and really come up with great Card Member offers, great Card Member insights...”

asked by Cristopher Kennedy · answered by Stephen Squeri