American Express Earnings Call Signals Lasting Growth

American Express Company ((AXP)) has held its Q1 earnings call. Read on for the main highlights of the call.

American Express struck an upbeat tone on its latest earnings call, pointing to double‑digit revenue growth, an 18% jump in EPS and resilient card member spending as proof its premium strategy is working. Management acknowledged pockets of pressure, from geopolitics to higher reinvestment spending, but framed them as manageable trade‑offs in pursuit of durable, long‑term growth.

Strong Top-Line and Earnings Momentum

Revenue climbed 11% in the first quarter, or 10% on an FX‑adjusted basis, underscoring solid demand across the franchise. Diluted EPS reached $4.28, up 18% year over year, and executives used the beat to validate their long‑term plan rather than reset expectations higher.

Robust Spending and Premium Account Growth

Card member spending rose 10%, the fastest pace in three years, helped by strong travel and experiences demand. American Express added about 3.1 million new accounts, with over 70% on fee‑based products, as refreshed U.S. Platinum benefits fueled higher spend, strong retention and surging lodging and dining volumes.

Healthy Revenue Mix from Fees and Interest

Net card fees were the standout, growing 16% on an FX‑adjusted basis, reinforcing the depth of Amex’s fee‑paying customer base. Net interest income increased 12% FX‑adjusted, outpacing 7% balance growth, while deposits in high‑yield savings and CDs rose 9% year over year, adding funding flexibility.

International Business Extends Its Lead

International operations remained the company’s growth engine, delivering double‑digit billings expansion for the 20th consecutive quarter on an FX‑adjusted basis. The International Card Services unit grew roughly 13% FX‑adjusted, with management highlighting around 20% spend growth in certain markets as global customers deepen engagement.

Credit Quality and Capital Returns Shine

Credit metrics were described as “best in class,” with flat delinquencies, slightly lower write‑off rates and only modestly higher write‑off dollars. Against this backdrop, provision expense totaled $1.3 billion with a small reserve release, while the company returned $2.3 billion to shareholders, lifted ROE to 35% and boosted its dividend by 16%.

Partnerships, Product Pipeline and AI Push

Management spotlighted a slate of new and renewed partnerships, including major sports leagues and stadium deals, alongside airport lounge expansion and the enrollment of roughly 300 more hotels into Amex programs. On the product front, a new commercial roadmap introduced eight initiatives and early AI‑enabled tools such as the ACE Developer Kit and Amex Agent, aimed at deepening corporate engagement and streamlining commerce.

Travel Wobble from Airline Softness

The one soft spot was airline spending, which slowed late in March and into April as Middle East tensions disrupted travel and triggered a spike in refunds. Executives stressed the impact was visible but not material to overall billed business, noting broader travel demand and lodging spend remain robust.

Co-Brand Portfolio Drag on Metrics

Held‑for‑sale small business co‑brand portfolios are set to marginally cloud reported growth figures in the near term. Management expects roughly a one‑point drag on balance growth and a low‑single‑digit hit to SME spending growth in the second quarter, though pretax income effects are seen as negligible.

Reinvestment Drives Higher Expense Ratios

The value capture or expense ratio rose to 44.7% in the quarter, with full‑year expectations around 44% as American Express plows more into marketing and technology. Marketing spend was $1.5 billion, flat year over year in Q1, but is now projected to grow mid‑single digits as the company reinvests upside to fortify future revenue and EPS.

Managing Through Macro and Geopolitical Risks

Executives acknowledged ongoing macroeconomic and geopolitical uncertainty and signaled a cautious stance despite strong results. The modest $24 million reserve release reflects confidence in the portfolio, but management emphasized that reserves still embed a buffer against potential economic or geopolitical shocks.

Guidance: Confident Path to 2026 Targets

American Express reaffirmed its 2026 targets for 9% to 10% annual revenue growth and EPS between $17.30 and $17.90, leaning on Q1’s 11% revenue gain and 10% spending growth as early proof points. The company plans to lift marketing and tech investments, keep capital returns intact and maintain an expense ratio near 44%, signaling it aims to balance shareholder payouts with funding long‑term growth.

American Express’s latest call painted a picture of a premium franchise firing on most cylinders, powered by fee‑based revenues, strong credit, international expansion and disciplined capital returns. While airline softness, co‑brand exits and heavier reinvestment will trim some near‑term optics, management’s steady guidance and high ROE suggest investors are being asked to trade a little short‑term margin for a longer runway of growth.