Below are the transcripts from the Q3 earnings call.
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Operator
Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2025 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. If you wish to ask a question, please press star then 1. On your touch-tone phone you will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by pressing Star then two. If you are using a speakerphone, please pick up the handset before pressing the numbers. Should you require assistance during the call, please press Star then zero. As a reminder, today’s call is being recorded. I would now like to turn the conference over to our host Head of Investor Relations, Mr. Karthik Ramachandran. Please go ahead.
Head of Investor Relations
Thank you Daryl and thank you all for joining today’s call. As a reminder before we begin, today’s discussion contains forward looking statements about the company’s future business and financial performance. These are based on management’s current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today’s presentation slides and in our reports on file with the SEC. The discussion today also contains non GAAP financial measures. The comparable GAAP financial measures are included in this quarter’s earnings materials as well as the earnings materials for the prior periods we discuss. All of these are posted on our we’ll begin today with Steve Squeri, chairman and CEO, who will start with some remarks about the company’s progress and results and then Christophe Lakayak, Chief Financial Officer will provide a more detailed review of our financial performance. After that we’ll move to a Q and A session on the results with both Steve and Christophe. With that, let me turn it over to Steve.
Steve Squeri
Thank you. Karthik, good morning and thank you for joining us. We had a very strong quarter with revenues up 11% year over year to a record $18.4 billion and earnings per share up 19% to $4.14. Card member spending in the quarter accelerated to 9% or 8% on an FX adjusted basis with particularly strong retail spending and a bounce back in travel. And our credit performance continued to be excellent. Based on our strong performance through the first three quarters, we’re raising the guidance we provided in January. We now expect full year revenue growth of 9 to 10% and EPS between $15.20 and $15.50. The big news in the quarter was the launch of our Refresh U.S. Consumer and Business Platinum Cards which reinforces our leadership in the premium space. I’m very pleased to say that the initial customer demand and engagement are exceeding our expectations. In fact, while it’s still early, this is the strongest start we’ve seen for a US Platinum Card refresh. Before I get into more details on Platinum, I want to provide some context. We are fortunate to have a global premium customer base that is unmatched in the industry. And our goal is to provide our customers with the best experience in the industry by continually investing in innovating our value propositions. The recent Platinum launch is yet another example of our proven strategy of refreshing our products on a regular basis to drive customer engagement and growth. In fact, We’ve done over 200 refreshes across our portfolio globally since 2019 and this is the third US Platinum refresh we’ve done in the past decade. Our refresh strategy leverages and strengthens the competitive advantages of of our membership model. It starts with understanding what our customers and our prospective customers want and then enhancing our value propositions with access to compelling benefits, services and experiences at a price point that delivers outstanding value. The scale of our premium customer base gives us a distinct advantage. Our consumer and business Platinum card franchise alone accounts for approximately 530 billion of annual spend globally. This scale gives us deep insights into customer spending patterns and emerging trends which informs our product enhancements and where we invest. Another key advantage is the relationships we have with 160 million merchants around the world who accept our cards. We’ve grown the number of Amex accepting merchants by nearly five times since 2017, giving our card members more places to use their cards and giving more merchants access to our high spending customers who spend on average nearly three times more annually on American Express cards than the average spend per card on other networks. Ultimately, product refreshes fuel a virtuous cycle of growth for the company. By continually enhancing our offerings, we drive the engagement and scale of our premium customer base. Our high spending card members attract a growing number of world class merchant partners who add more value to membership which drives more engagement. And this enables us to generate more dollars that we can reinvest in enhancing our products. The result of all this is a loyal and growing premium customer base, mutually beneficial relationships with our merchants and strong returns for our shareholders, including higher revenue growth, excellent credit quality, expense leverage and increased profit across our product portfolios. There’s no better example of how we execute this strategy than our Platinum cards. We launched our first platinum card over 40 years ago. It was the first premium card of its kind in the industry and remains the category leader. Platinum was initially designed for well established, affluent frequent travelers. Several years ago we made a conscious decision to widen our aperture for our premium products so that we could also attract new generations to the franchise and grow with them as their needs change. With the value enhancements we’ve made over the past decade, the Platinum Card has evolved into the leading premium lifestyle card that it is today, with a wider range of benefits and experiences that appeal broadly across generations, including Millennial and Gen Z consumers who are very comfortable paying for exceptional value and are highly engaged in a product. A good example of these value enhancements is the previous US platinum refreshment we did in 2021. Coming out of the COVID pandemic, we learned that our card members, particularly the younger cohorts, love the benefits we’ve added in categories like digital Entertainment, Wellness delivery services in addition to our travel offerings, which we also continue to enrich with investments in new Centurion lounges and the expansion of our hotel programs. That brings me to our most recent Platinum launch. Here again we continued our strategy of enhancing the card’s benefits and services with more world class partners across the areas. We know our customers love to deliver industry leading value that far exceeds the card’s annual fee. In addition, we continue to enhance our award winning digital capabilities, introducing a new app experience for our US Platinum members that makes it even easier to engage with the card’s benefits. As I mentioned earlier, the initial results are very strong, exceeding our expectations. For example, new Platinum account acquisitions are running at twice the level before the refresh. In the first three weeks we saw very strong engagement in the new benefits and over 500,000 requests for the new American Express Platinum Card. And while the annual fee increase won’t go into effect for a few months, retention rates have been stable post refresh. In addition to these results, we saw record bookings through Amex Travel following the Platinum Refresh and the launch of our new all in One Travel app which we introduced earlier in September in the U.S. looking ahead, I’m confident about our ability to sustain our growth by continuing to build on our powerful membership platform with a growing set of high value products, benefits, services and experiences. We’ll also continue expanding our digital capabilities for consumers and businesses, including the upcoming integration of Center’s expense management solution for commercial customers. And we’ll focus on continuing to grow merchant coverage outside the US to give card members more places to use their Amex cards. With that, I’ll hand it over to Christoph to walk through more detail on.
Christophe Le Caillec
Third quarter results thanks Steve and good morning everyone. Let me start with a few highlights for the quarter. Our business model is performing really well. Revenue growth accelerated to 11% this quarter with broad based growth across revenue lines. Annual card fees are now approaching 10 billion annually and have grown at double digits for 29 consecutive quarters. Credit performance remains excellent with both US consumer and small business delinquency rates still below 2019 levels and we’ve driven leverage from expenses and provision even as we have invested in our premium value propositions, marketing and technology. As a result, we continue to deliver very strong returns. Eps growth was 19% this quarter with an ROE of 36%. Turning to build business trends for the quarter, total spend was up 8.5% FX adjusted, about 2 percentage points higher than Q2. The step up in growth was driven by strong retail spending up 12% as well as a rebound in T&E. Airline spending picked up this quarter and restaurant, our largest T and E category, continued to be very strong up 9%. Premium T&E bookings saw good momentum with spending on front of cabin airline tickets up 14%. The momentum we’ve seen from younger customers also continued. Millennials and Gen Z Now account for 36% of total spend, making up the same share as Gen X International had another strong quarter. We spent up 13% FX adjusted. Momentum remains broad based across markets with three of our five top countries growing by 18% or more this quarter. In addition to the strong early performance we are seeing in the US following the refresh spent on platinum cards issued outside the US is up 24% this quarter, consistent with what we have seen over the last two years. Overall spend growth continues to be driven by transaction growth, up 10% in Q3, a good indicator of engagement from our customer base. I will note that we see strong engagement from Millennial and Gen Z card members with the average number of transactions per US customer about 25% higher than older cohorts. We acquired 3.2 million new cards in the quarter and even more important than the overall number of cards, demand for our premium products remained very Strong with over 70% of new accounts acquired on fee paying products. Turning to balance growth and credit loan and card member receivables were up 7% year over year. Broadly in line with bill business, there was about a 1 percentage point impact on balance growth from our held for sale portfolios. Again this quarter. Credit performance remains very strong and stable. Q3 Delinquency and write off rates were low with delinquency rates flat to last quarter while write off rates declined. This performance is supported by our focus on premium products which tend to attract high income, highly credit worthy customers. We’re seeing the outcome of this strategy in the latest Platinum refresh where the credit profiles of consumer applicants following the refresh are even better than what we were seeing before, with average FICO score up 15 points contributing to 2x the number of acquisitions. Overall provision expense of 1.3 billion this quarter included a reserve build of 125 million reflecting balanced growth. Turning to revenue on slide 14, revenue was very strong this quarter, up 11% with momentum across revenue lines. Net card fees were up 17% FX adjusted, a pace that we have now maintained since 2019. Card fee growth moderated as we expected and will continue to moderate before we see an inflection upward in 2026 as a result of our product refreshes. As a reminder, card members who held Platinum cards prior to the refresh get to experience the new benefits for a few months before the increase in the annual fee goes into effect. The new card fee will then be applied at renewal anniversaries over the next 12 months. Additionally, card fees are amortized over a 12 month period. Putting those factors together, it takes roughly two years to fully lap the impact of the refresh on card fees, with the contribution to growth peaking 12 months following the effective date of the new annual fee. Of course, the overall trajectory of card fees is also dependent on many other factors such as volume and mix of acquisitions, retention and the full suite and cadence of product refreshes. Globally, net interest income was up 12% again this quarter. We continue to grow balances largely in line with spending while driving higher NII growth by expanding the margin earned on balances and at the same time we’ve maintained best in class credit results this quarter. The service fees and other revenue line includes the impact of a transaction at the Global Business Travel Group which contributed about 5 percentage points to year over year growth in this line. In addition, this is the first quarter that we have fully lapped the sale of the acidified business last May. The main takeaway here is that growth in service fees and other revenue is running higher than the low single digits that we saw in the second half of last year and earlier this year. Overall, we feel good about the momentum we have at this point in the year and we are on track for full year revenue growth of 9 to 10%. Turning to expense performance, VCE was up 14% in the quarter, with the VCE to revenue ratio coming in at 42%. Card member service growth stepped up from the first half of the year driven by strong early engagement with the refreshed US Platinum benefits, especially some of the quarterly credits that were available to customers. This is a good early sign of interest in the product and the new benefits. And as we ...
