American Express Company Q2 FY2025 earnings call

• Stephen Squeri noted a strong quarter with record revenues, 7% total card member spending growth, and reaffirmed full-year revenue and EPS guidance. Mentioned upcoming refresh of US consumer and business platinum cards in fall. Highlighted the strength of the premium card business model and competitive position.
• Christophe Le Caillec discussed 9% revenue growth, 17% EPS growth excluding last year's certified sale gain. Noted spend consistency, transaction growth, 3.1 million new cards acquired in Q2, strong credit performance with low delinquency and write-off rates, CET1 ratio at 10%, and returned $2 billion to shareholders.

Revenues reached a record $17.9 billion, up 9% year over year. Goods and services spending, accounting for over 70% of the business, continued to grow at a similar pace to Q1. T&E growth was down due to softer airline and lodging spend, while restaurant spending was very strong, up 8% FX adjusted. In the US consumer business, millennial spend was up 10% and Gen Z's spend was growing around 40% (starting from a smaller base). International business grew 12% FX adjusted. Net card fees grew 20% year over year this quarter. Premium lending net interest income grew at a double-digit pace.

• Reaffirmed full-year revenue growth guidance of 8% to 10% and EPS guidance of $15 to $15.50. Midway through the year, 9% FX adjusted revenue growth and EPS of $7.71 were achieved. Trends across the business have been largely stable, leading to increased confidence in the path forward.

• Macroeconomic and geopolitical uncertainties. - Intense competition in the premium card space. - Potential impact of SMB slowdown on business. - Regulatory uncertainties around stablecoins and digital currencies.

Q: Sanjay Sakhrani asked about spending trends and SMB.

A: Stephen Squeri said spending is consistent, SMBs are circumspect, but revenue and credit metrics from SMB are strong. Christophe Le Caillec added stability from new account origination.

Q: Ryan Nash asked about competition in premium card refresh.

A: Stephen Squeri said may the best company win, focus on value delivery, and regular product refreshes.

Q: Mark DeVries asked about platinum refresh value.

A: Stephen Squeri said refresh strategy adds incremental value, and Christophe Le Caillec explained timing of expenses and revenues related to refresh.

Q: Don Fandetti asked about international business.

A: Stephen Squeri said international has double-digit growth, focusing on key markets, and has big opportunity in small business.

Q: Erika Najarian asked about addressing bearish case.

A: Stephen Squeri said focus on customers, innovative products, and competitive environment makes company better.

Q: Richard Shane asked about timing of expenses with refresh.

A: Christophe Le Caillec and Stephen Squeri explained expenses come before revenues, with card fee increases recognized over 12 months.

Q: Jeffrey Adelson asked about airline lounges and competition.

A: Stephen Squeri said they focus on priority, lounge innovation, and working with partners to handle demand.

Q: Brian Foran asked about discount revenue concerns.

A: Christophe Le Caillec said VCE ratio is complicated, managed thoughtfully, and product refreshes balance expenses and revenues.

Q: Moshe Orenbuch asked about platinum refresh in competitive environment.

A: Stephen Squeri said not different from past, believes new refresh will be competitive.

Q: Mihir Bhatia asked about acquisition strategies and returns in premium space.

A: Christophe Le Caillec said competition expands premium product demand, allowing attractive marketing ROI.

Q: Terry Ma asked about net card fee growth and platinum refresh.

A: Christophe Le Caillec said card fee growth rate expected to moderate in back half of year, with platinum fee increase impacting in 2026.

Q: Craig Maurer asked about new card mix and EPS guide.

A: Christophe Le Caillec said new card mix has been stable, and EPS guide considerations involve VCE ratio trends.

Q: Cristopher Kennedy asked about Stablecoin and blockchain.

A: Stephen Squeri said stablecoins have potential for cross-border transactions, partnership with Coinbase, and ongoing monitoring of regulation and adoption