- Key insight: American Express’ earnings beat Wall Street analysts’ estimates.
- What’s at stake: The company is refreshing its high-end cards, saying the reboot has gotten off to a strong start.
- Supporting data: Amex boosted its full-year revenue growth outlook to 9% to 10% and EPS of $15.20 to $15.50 per share, up from its earlier outlook of 8% to 10% and $15 to $15.50.
American Express took a victory lap after its latest premium card refresh, saying demand for the high-end cards is strong and boosting the company’s overall outlook for the rest of the year.
“While it’s still early, this is the strongest start we’ve seen from a U.S. card refresh,” Amex Chairman and CEO Steven Squeri said during Friday’s earnings call.
For the third quarter ending Sept. 30, Amex reported earnings per share of $4.14, compared to $3.49 for the prior year, and revenue of $18.4 billion, compared to $16.6 billion the year before. That beat analyst estimates of $3.96 and $18 billion, according to Zacks. Net income was $2.9 billion, compared to $2.5 billion the prior year.
Consolidated provisions for credit losses were $1.3 billion, compared to $1.4 billion the prior year; and the write-off rate was 1.9%, the same as the third quarter of 2024. Amex boosted its full-year revenue growth outlook to 9% to 10% and EPS of $15.20 to $15.50 per share, up from its earlier outlook of 8% to 10% and $15 to $15.50.
“The quarter was strong, [and] the momentum was supported by better-than-expected spend volume and loans and receivables balance, partially offset by [operational expense] moderately higher than expected card member engagement costs,” Jeffries’ analysts said in a research note issued after Amex’s earnings release. “The upward adjustment of the lower end of the guidance range … suggests management’s confidence in the spend momentum and [the company’s] consumer health.”
High-end upgrade
Amex’s premium cards dominated discussion during Friday’s earnings call. At the end of September, Amex released updates to its U.S. consumer and business platinum cards, including a limited edition design and expanded benefits for hotels, restaurants, ride-sharing apps and other features.
The updates are part of what Amex calls its “
Amex’s upgrades come amid heightened competition in premium cards.
Read more about earnings.
Spending in Amex’s premium segment grew 9% during the third quarter, which was largely before the premium reboot. In a release, Squeri said “the initial customer demand and engagement exceeded our expectations, with new U.S. platinum account acquisitions doubled compared to pre-refresh levels.”
Amex’s platinum card refresh also boosts the average fee to $895 from $695. These new fees do not go into effect for “several months” for existing consumers, Amex said, adding the increases are amortized over a year.
“What we try to do is make it easy to understand the benefits and make it easy to engage,” Squeri said of managing the impact of fee increases.
Amex has done more than 200 refreshes since 2019. Amex’s consumer and business platinum card franchise generates $530 billion of annual spend globally, which provides data and other information that guide further product enhancements.
In recent refreshes, Amex added entertainment, digital and other expanded benefits beyond travel to attract younger consumers. The growth has also aided Amex’s scale, noting the company has relationships with 160 merchants globally, up 500% since 2017.
“This enables us to generate more dollars that we can reinvest,” Squeri said.
What analysts think about the refresh
In an Amex research note, analysts at William Blair said “refreshing products remains a key strategy for Amex as it drives new customers and increases member engagement, and we believe Amex will win its fair share given its superior value proposition, brand loyalty, and ability to evolve with consumer preferences.”
From 2019 to 2024, Chase’s Sapphire Preferred/Reserve accounts grew at an 11% compound annual clip, while Amex’s U.S. consumer platinum and gold accounts grew at a 16% compound annual clip between 2018 and 2023, according to analysts at William Blair.
“Higher engagement drives revenue growth and expense growth, thus Amex’s customer service expense is expected to grow at a faster pace than revenue,” a William Blair analyst note said, noting it believes Amex has multiple levers to drive leverage as non-VCE expenses were 31.2% of 2024 revenue (versus 38.6% in 2021). “Furthermore, Amex’s implied cost per reward point has been mitigated through various initiatives including new ways to use/redeem points and partner-funded benefits and offers,” William Blair analysts said.
They further said that following the 2021 platinum card refresh, average spend per new account rose 18%, while profit per account rose 28% with 99% billed business retention.
The Wiliam Blair analysts also noted that earlier this week JPMorganChase indicated that new account additions for its Sapphire portfolio (launched June 23) were “the best ever.”
“The premium card market has always been competitive, and we believe recent announcements by peers are helping promote the premium card space to consumers,” William Blair analysts said.
Not worried about the shutdown
Analysts also asked Squeri about the impact of the government shutdown. Investors have been looking for signs of consumer weakness for the past year, primarily following President Trump’s tariff announcements and more recently the government shutdown.
“The health of our consumers is really good. They’re spending and paying their bills,” Squeri said, noting the recent round of
In a research note on Amex, KBW said Amex’s September credit data showed similar trends to recent months, but noted the improvement in net charge-offs thus far in 2025 has declined in recent months.
“We are encouraged by U.S. card delinquencies remaining stable and the declaration of the recent rise in SMB delinquencies,” KBW said.
“We’re still in a relatively stable environment,” Squeri said, noting the difference in Amex’s consumers, which are relatively higher income, compared to other financial institutions. Amex also noted a 4% pickup in U.S. small business billings and 13% in international spending. Premium airline spending has also improved from 10% growth in the second quarter to 14% in the third quarter.
“We aren’t expecting a big acceleration in spending, but we’re not expecting a deceleration as well,” Squeri said. Among other large payment companies, Visa and PayPal report earnings Oct. 28, Mastercard Oct. 30.