American Express Co Earnings - Q4 2025 Analysis & Highlights
American Express Co. (AXP) discussed strong financial performance in Q4 2025, with record revenues and double-digit EPS growth, driven by premium product demand and strategic investments. The company provided optimistic 2026 guidance, including increased dividends and continued focus on its membership model, technology, and international expansion, while acknowledging a competitive landscape and macroeconomic risks.
Key Financial Results
Full year revenues were up 10% to a record $72 billion in 2025.
EPS was $15.38, up 15% over last year, excluding the Accertify gain.
Card Member spending was strong throughout the year.
Card fee growth continued in double-digits for 30 straight quarters.
Net card fees grew at 18% and reached a record of $10 billion for the year.
Total spend was up 8% FX-adjusted in Q4, consistent with Q3.
Retail spending showed good momentum in the quarter, up 10%.
Spending at luxury retail merchants was up 15%.
Restaurant spending was up 9% in Q4.
Net interest income was up 12% in Q4.
Revenue was up 10% FX reported for both Q4 and the full year.
Business Segment Results
International spend was up 12% FX adjusted in Q4.
Growth in international markets remains broad-based across consumer and business customers and across geographies.
Small business is performing very strongly, while the middle market segment has seen a slight slowdown.
US Resy restaurants by US consumer customers saw spending up by more than 20%.
Capital Allocation
Planned 16% increase in the quarterly dividend to $0.95.
Returned $7.6 billion of capital to shareholders, including $2.3 billion of dividends and $5.3 billion of share repurchases.
Dividend will be up by more than 80% since 2022.
Reduced share count by 7% since 2022.
Industry Trends and Dynamics
The credit card category continues to grow about 8% every year.
Demand for premium products remains very strong.
Younger customers (Millennial and Gen Z) now make up the largest share of US consumer spending and are the fastest-growing cohorts.
The average age of new customers is 33 on the US Consumer Platinum Card and 29 on the US Consumer Gold Card.
Competitive Landscape
The commercial space is highly competitive, with recent acquisitions like Capital One acquiring Brex.
American Express is three times larger than its competitors in the commercial space.
Competitors are following American Express's playbook, and the company aims to stay ahead.
American Express's customer service is a key competitive advantage, consistently winning the J.D. Power Award.
The company believes its co-brand portfolio creates a synergistic effect.
Macroeconomic Environment
The greatest risks to the 2026 outlook are macroeconomic or political factors.
A 10% credit card cap proposal is not seen as a solution for affordability and could reduce the number of cards and line sizes, impacting small businesses.
Growth Opportunities and Strategies
Continued investment in areas that strengthen the membership model and drive growth.
Successful product refresh strategy with refreshes in close to a dozen countries, including new US Consumer and Small Business Platinum Cards.
Renewed and expanded relationships with key international co-brand partners, including British Airways, ANA, and Air France-KLM.
Building membership assets with new lounges, expansion of the hotel network, the Toast partnership, and new Card Member experiences.
Expanded global merchant acceptance to over 170 million locations worldwide.
Delivering innovative mobile experiences.
Investing $6.3 billion in marketing in 2025, an increase of around 75% since 2019.
Marketing and technology investments are up 20-plus percent in the last two years.
Applying a rigorous return discipline focusing on outcomes that drive growth.
Redirecting marketing investments to US Platinum products due to strong demand.
Investments in value propositions increase customer demand and engagement, drive business to merchant partners, maintain strong credit performance, and drive marketing efficiencies.
Customer demand for the new US Consumer Platinum Card is high, engagement is up, credit quality is excellent, and retention rates are stable.
Acquisition incentives are at some of the lowest levels in the last couple of years due to marketing capabilities.
Spending $5 billion annually on technology.
Rolling out a new third-generation data and analytics platform to enable greater personalization, improve servicing, augment fraud capabilities, and enable GenAI and Agentic use cases.
The new platform, built on the public cloud, is reducing the time for key processes in marketing and fraud by 90%.
Expects to migrate 100% of data and analytics processes to the new platform by 2027.
Enhancing app experiences with new Platinum onboarding, a travel app, and digital self-servicing journeys.
Calls per account to service centers have dropped by 25% over the last three years due to digital self-servicing.
Expanding digital capabilities for business customers, including the integration of Center's expense management solution.
Created an enterprise AI enablement layer to support GenAI and Agentic capabilities, including Travel Counselor Assist and Dining Companion.
The overall portfolio is slowly becoming more premium, with the Platinum portfolio growing at a very fast pace.
Marketing dollars were reallocated away from lower cashback products to Platinum, resulting in significantly increased Platinum new acquisitions.
The percentage of fee-paying products for US consumer is up 8 percentage points year over year.
Financial Guidance and Outlook
Expects 2026 revenue growth of 9% to 10%.
Expects EPS of $17.30 to $17.90 for 2026.
Expects loans and receivables to continue to grow largely in line with billed business in 2026.
Expects credit metrics to remain generally stable in 2026, with some seasonal variation in provision across quarters.
Expects card fee growth to pick up as 2026 progresses, exiting the year in the high-teens.
Expects NII growth to continue to outpace growth in loans and receivables in 2026.
Expects the VCE to revenue ratio to be around 44% in 2026.
Expects operating expenses to grow in the mid-single digits in 2026.
Expects marketing expense to be up in the low-single digits in 2026.
Committed to achieving 10%-plus revenue growth and mid-teens EPS growth.
