American Express Co Earnings - Q2 2026 Analysis & Highlights
American Express reported strong Q2 2026 results with double-digit revenue growth and accelerating earnings, driven by successful premium product investments and younger customer acquisition, while raising full-year revenue guidance and maintaining disciplined capital allocation despite reinvesting outperformance into growth initiatives.
Key Financial Results
Revenue growth of 10% year-over-year, marking the fourth consecutive quarter of double-digit revenue growth.
Earnings per share (EPS) of $4.53 for Q2 2026, with EPS up 11% year-over-year.
Pre-tax income up 15% while net income was up 8% due to prior-year tax discretes.
Net card fees reached record levels, up 15.4%, representing the fastest-growing revenue line.
Net interest income up 11% this quarter, with around a 1 percentage point impact from the sale of one small business co-brand portfolio.
Return on equity (ROE) of 36% this quarter, demonstrating strong returns on shareholder capital.
Provision expense of $1.1 billion included a reserve release of $191 million, mostly reflecting further strengthening of portfolio credit performance.
Business Segment Results
US Consumer spending up 11%, the highest level of growth since Q1 2018 excluding pandemic-impacted periods.
Platinum Card portfolio is now the fastest-growing product in the US Consumer business, with accelerated spend and revenue growth driven by product refresh investments.
Commercial spending picked up to 5%, with both US SME and large and global customers growing at the same pace.
International spending up 12% FX-adjusted, with growth broad-based across Consumer and Business customers and across geographies, with four of the top five countries growing at double-digit rates.
Retail spending continued to be very strong, up 13% FX-adjusted in the quarter.
Restaurant spending, the largest T&E category, was up 10%, though Resy restaurant spend was double that rate.
Airline spending up 10% year-over-year, with global Amex Travel bookings up 22% year-over-year in the quarter.
New card acquisitions of 3 million in the quarter with continued momentum in acquiring younger customers and attracting new customers onto fee-paying products.
Total balance increased 9% year-over-year FX-adjusted, in line with billed business.
Over 70% of new accounts acquired on fee-based products this year, with 75% of new accounts acquired on fee-paying products in the quarter, the highest level since increased focus on premium products.
Capital Allocation
$2.9 billion of capital returned to shareholders, including $0.6 billion of dividends and $2.2 billion of share repurchases.
Over 75% of earnings returned to shareholders over the past three years.
Strong ROE of 36% enables the company to return high levels of earnings to shareholders.
Industry Trends and Dynamics
Card fees have grown at a double-digit rate for 32 consecutive quarters.
Demand for premium products remains strong, with over 70% of new accounts acquired on fee-based products this year.
Strong demand for travel, with global Amex Travel bookings up 22% year-over-year in the quarter.
Spend growth stepped up to the highest level in three years, up 9% FX-adjusted in both Q1 and Q2.
Younger customers (Millennials and Gen Z) represent the largest share of US Consumer spending and remain the fastest-growing cohorts.
65% of new consumer accounts coming from Millennials and Gen Zs, with around 70% of new consumer Platinum Card accounts outside the US coming from these younger generations.
Competitive Landscape
Company is competing from a position of strength with a more premium fee-paying customer base with strong loyalty, less credit risk, and more younger customers representing greater lifetime value.
Premium value propositions are competitively differentiated through reward points, spending power, access to travel and dining experiences, partnerships with world-class partners, and dedicated customer service.
Membership Model is very difficult to replicate on a global scale.
Closed-loop advantage in agentic commerce provides benefits from understanding both customer intent and merchant delivery, enabling better fraud prevention and customer protection compared to competitors.
Competitive advantages in middle-market expense management through the launch of Center expense management system to compete with fintechs like Ramp and Brex.
Macroeconomic Environment
No evidence of a general slowdown despite geopolitical events, with people offsetting transactions across all categories.
Some impacts from geopolitical events including increased gas spending (around 2% of total billing) and travel impacts to the Middle East, but these are not meaningful at the macro level.
Travel globally up 10%, with airline spending at the highest level seen in the last six quarters.
Strong credit performance with delinquency and write-off rates remaining below 2019 levels and delinquency rates between 1.2% and 1.3% for over three years.
Fed's CCAR stress testing results showed the company has the lowest projected credit card loss rate across all banks and a pre-tax ROE of 3.8% over nine quarters under a severely adverse scenario.
Growth Opportunities and Strategies
Strategic focus on strengthening leadership in the premium space through significant investment in enhancing flagship Platinum products in the US.
Expansion of lounge and luxury hotel networks to build deep, enduring relationships with premium customers.
Acquisition of Resy, Tock, and proposed acquisition of TheFork, a leading online restaurant booking platform that would add 50,000 restaurants to the dining network across 11 European countries.
New sports sponsorships including the NFL and Fanatics to provide access to exclusive membership-only experiences.
New digital payment capabilities, such as Card Members redeeming Membership Reward points directly within Apple Pay.
Global partnership with ALL Accor, the booking and loyalty platform for Accor's portfolio of 45 worldwide hotel brands.
Tailored value propositions for different customer segments, including the Platinum Card for premium travel and lifestyle, Gold Card for dining and everyday benefits, and co-brand cards with specific customer bases.
$300 ChatGPT Business Annual Statement Credit introduced for US Business Platinum and Gold Card Members.
Pilot of new expense management platform launched for initial group of middle-market customers.
International Platinum Card refreshes in approximately 80% of countries where these cards are issued, driving 20% FX-adjusted growth in international Platinum Card spending this year.
Investments in customer acquisition and technology development to capitalize on growth opportunities.
Agentic commerce initiatives with agentic insurance product providing advantages in trust, service, and security through understanding both customer intent and merchant delivery.
AI deployment across multiple business areas including technology (30-40% decrease in coding cycle time), customer service and travel (equipped with AI-powered tools), marketing streamlining, and credit/risk/fraud decision-making.
Financial Guidance and Outlook
Full year revenue growth guidance raised to 10%, up from previous guidance, based on better-than-expected performance year-to-date.
Full year EPS guidance maintained at $17.30 to $17.90, despite raising revenue guidance, as the company is reinvesting outperformance in growth initiatives.
Card fee growth expected to accelerate in Q3 and exit the year in the high-teens.
Credit metrics expected to be generally stable throughout the year.
Marketing expected to be up by around 10% year-over-year in the second half of the year, driven by increased investments in customer acquisition.
Operating expenses expected to grow in the mid-single-digits for the full year, including additional investment in technology.
VCE ratio expected to be between 44% and 45% for the full year, given the higher level of spending seen this year.
Lower growth in VCE expenses expected starting in Q4, as the company laps the impacts of the Platinum refresh.
Approximately 1 percentage point impact to spend growth and approximately 2.5 percentage point impact to net interest income from the sale of two small business co-brand portfolios, with full impact by Q4.
Total revenue impact of approximately 1 percentage point from portfolio sales, with negligible impact to pre-tax income.
Guidance does not include potential impact from the sale of equity interest in Global Business Travel Group, expected to close in the second half of the year.
Momentum expected to continue in the balance of the year, supported by ongoing investments in customer acquisition and technology.
Product and Customer Strategy
Platinum Card refresh driving significant engagement acceleration, with 600 basis point acceleration across the entire Platinum portfolio in US Consumer.
Engagement improvements from Platinum refresh including 22% increase in travel bookings and double the restaurant spend at Resy restaurants compared to overall restaurant spend.
Repricing of Platinum Card with $200 fee increase, with retention rates flat year-over-year and not seeing attrition impacts.
Attrition levels remain very consistent with historical levels and very low for the past few years despite product refreshes and repricing.
Resy, Tock, and TheFork positioned as open platforms accessible to non-Card Members, creating acquisition opportunities through special offers and table access for Card Members.
2x spending at Resy restaurants compared to non-Card Member spending, with higher ticket prices for Card Members versus non-Card Members in all restaurants.
Resy and Tock integration planned from a user experience perspective, especially front-end, while TheFork remains stand-alone given European focus.
Travel representatives will have access to both Resy/Tock and TheFork for restaurant booking integration with travel bookings.
