AXP - Earnings call transcript Q3 2019 | American Express Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2019 Earnings Call. [Operator Instructions] 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, Ms. Rosie Perez. ahead. go Please

Rosie Perez

and Alan all joining for Thank thank call. today's you, you,

SEC. are file today's before in business on forward-looking These uncertainties. current Factors reminder, results risks a included cause differ subject discussion with and and on reports are expectations our we performance. that future As are and company's materially and begin, contains from today's to statements management's the slides the statements financial on actual could based to about these

discussion non-GAAP in GAAP quarter's as The contains financial measures the earnings well comparable also measures. The discussed. for today financial as periods materials are this the we prior included earnings materials,

these of ir.americanexpress.com. posted at website All on are our

about Campbell, today And Squeri, with We'll with move the both Steve performance. will who CFO, on Chairman progress Jeff. Steve Q&A will we'll that, results and financial a to of then our CEO, the review results. session more some After detailed Jeff begin and company's provide remarks start and with the

With that, to Steve. me over turn let it

Stephen Squeri

Thanks and thanks us. everyone Good morning, for joining Rosie.

third you our release revenue EPS last we've in quarter years. delivering the in results are the $X.XX our steady of earlier XX% and been over today, continuation growth performance last strong was had year. of saw FX-adjusted We few consistent than a X% As our of the quarter higher

we is model. executing result the business growth delivering of approach are our of and strategy our in revenue the we've focused Consistently taken high strength levels differentiated the of

continues spend, fees. driven a FX-adjusted This revenue especially was that X% be was growth or by revenue growth I'm where of pleased loans, the mix straight higher. our well-balanced and quarter Xth to

for albeit a products, the with billion time. growing exceeding pace us to $X in expand, the that XX% fee-based than recurring an last the are revenues. more acquired this business were at XX% particularly of we providing remain strong, trends saw economy this Card we've continues fee cards first subscription-like The revenues modest year. year Nearly and quarter consistent

our U.S. FX-adjusted X%, Our billings consumer grew proprietary international and strong growth businesses. in led by

We continue deliver performance credit remained growth, loan our healthy to at levels. industry-leading and

had fact, of than the at expectations In year. the better the we beginning

you as our investing scale, in deliver enabling and us of global with economic and can some So, see, steady environment, solid uncertainty strategy relevance the share, political in is even to results.

I'd initiatives in at I company-wide discuss Investor that With on three mind, like the laid progress out to Day. our

strategic growth. a growth, cut platform on of across As reminder, these investments a and international partners, to in drive focusing of leveraging our strategic all customer expanding imperatives. for are as our prioritizing and network They our our

Let's start with customers as a platform for growth.

diverse global source has for growth customer Our base us. a major become of

relationships existing customers just One ways are through cosmetic approach with These changes. the taken to of disciplined continuously we're the deepening strategic not refresh is refreshes our products. we've

respond innovative, adding In rational by value. across membership redefining quarter, customers Gold similar our Cards. We're to, value experiential, third refresh the with following a the and for our and portfolio playbook that Platinum well we're of pricing we're Card our markets, international several continued and additional that we

Green updating we're Now, Card. our iconic

is changes Plastic array And focus. a product, Ocean this yesterday, and new a an design; month, just introduced we ago, weeks program, our airport we expedites we'll Uber, with and which digital to features, number benefits, few new that and announce system the benefits biometric of flexibility, payment A refresh the later broader including the announced Hilton, process. major of Card the including new enhanced security Corporate which newer includes of identification a CLEAR,

dynamic spending extension capacity. Card an liability our of of announcement, Corporate needs corporate that designed include meet we introduced to program start-ups with that the of As part features and

here. Card significant when members Amex product and additional increase opportunity typically to wallets, occasions, prior our As customers I've Corporate see great their on an we a add our spending, in represent a said

carrying Card of many members personal Card Corporate that one product. as an incentive card, our to benefits customers, obtain their creating we're that To add for of cards. for select offers new to our such ways Corporate a consumer provide American is encourage first the both, them Express a For program

proving members, for are on in are initiatives to the customers more These a to refreshed be additional loan revenues fee-based engagement as stream total earning we're coming Over priced products, which our growth. seeing to we're a from value is We're of our platform and existing spending terrific delivering. lift a of steady products. XX% move growth card and

also we've our the customers Through members and of over one into far. referral bring to new Our this card year the become XXX,XXX have so program, acquired Member-Get-Member ways franchise. new best most customers efficient

referrals In year's increased third XX% addition, to last quarter. successful have compared

partnerships. to Turning

continued of demonstrate help quarter powerful benefits The the value us to of network enhanced deliver our who partners the across enterprise. third

our and merchant said our our forms take the the many we recent talk we to partnerships are imperatives, I've before, deepest, about with have longest-running As relationships partnerships to from each XX our to relationship. to network. essential Delta, partnerships, have around of expanding they digital and strategic co-brand largest, we When world over start

in card of customized a of of co-brand U.S., consumers both which our seven will be as new agreement XX-year At we the members. benefits range cards announced the renewed business travel part small will with The the cards, for end September, refreshed feature SkyMiles available in and airline. Delta January

with Also small with launched and we consumer in Scotiabank. we credit refreshed and in cards Singapore a Canada in the announced Airways MILES new British business card in Singapore AIR third and quarter, Airlines, one with U.K. the

addition to our co-brands, digital In been expanding we've partnerships.

Venmo card offerings Earlier with consumer and this U.S. for announced we members. new week, two PayPal

First with also within made mobile Amex with the we're is the membership through introducing purchases app. pay bill And ability PayPal points. functionality for rewards to the

help the U.S. with by parity side, track On on the we the virtual remain achieve the end our OptBlue merchant of coverage of year. the in partnerships, to

and selectively economic business. through growth remains political strategy of Despite uncertainty share, drive a to international In country-by-country highest and area strong some investments increasing international, delivering is regions, in our our our results. scale, approach of the relevance

continued allocated the Since and showed by new across network cards, countries beginning in both refreshed year, consumer of and segments, driven co-brand the results results XX investments. quarter where strong XX our across cards incremental or business growth we've proprietary three international. strategic launched top small Third cards, we've

generating in As XX% share quarter, the finally, a making up our countries, and Consumer most of in up billings coverage, is good result, which FX-adjusted with our billings we're growth key SME we're growth overall expanding proprietary progress Billings, strong international taking merchant XX%. to And overall strategy. FX-adjusted Proprietary on and

see, In our we've quarter made performance can and feel areas good of since progress each priority in about our I the you year-to-date. three As very there's March lot a and in to come. summary, of more

ahead, to into As we and we've I in revenue look into $X.XX. of reaffirming trends $X.XX X% seen expect are we and to our translating quarter between guidance the growth XX% full-year of the EPS continue consistent adjusted QX,

confidence about Our of our shareholders. updating to lie for double-digit ability today's in opportunities the which ahead high performance environment creates growth in my and revenue I'm value consistent and reinforces on progress. sustain you our look to our that excited levels EPS growth, forward

it Jeff. Now, to over let me turn

Jeffrey Campbell

Steve morning, you, and everyone. thank Well, good

talk steady and be about to of yet performance. solid quarter good consistent to here another It's today

on Slide Let's our X. summary to financials get right

driven basis, well-balanced quarter with spend, growth Third by grew a again an $XX fee revenues on of lend FX-adjusted of this mix revenues. billion, X% and

revenue our revenue of growth between spread growth a FX-adjusted see X% and to reported of X%. continue We

reported between the lessened has Although relative the revenue growth U.S. recently, dollar FX-adjusted spread strengthened our to slightly has QX. and

recall, dollar strengthening you U.S. third the the As the of year-over-year of quarter in began last year.

revenue and roughly is in you FX-adjusted stays growth levels reported should see today, dollar quarter the to XXXX. each other fourth it where more similar Assuming the

we our count enabled net drove EPS returned in ago, our representing capital to growth quarter. quarters. reduction in business performance X% $X.XX, in capabilities continued in share X% was of capital and last of excess per model revenue by a from income shareholders our the topline EPS up repurchases billion, $X.X through supported prudent share by and This strong Our billion generating XX% of $X.X of earnings was four third share growth the dividends management the year the as

FX-adjusted you with billings quarter X%. several our for business, which views billed Starting now X on see our I'll the the through third of Turning details X, was to total Slides X. on Slide of start growth performance,

breakout differing continue think network Europe we billings We Australia. and businesses though, as the to business is proprietary growth trends and due our to the between to it exit in important, our network

to fully lap XXXX. from the expect billings these We exits in impact

an and XX% FX-adjusted third up network business, basis. proprietary which results, billings on FX-adjusted in remaining Our which the comes makes XX% X% down our drives of our total financial The most our overall basis. quarter quarter GNS third an from business, was the X% billings, on our of in up of was

the with of to growth trends higher diverged growth bit commercial as through some we on have that XXXX. levels business lapping with a from consumer growth even Turning modest have quarter gone consumer to and The our be U.S. our Slide even consumer tone. customers proprietary trends the continue show this to consistent international strong a spending XXXX The X. particularly segment. are continues shows The solid with acceleration billed economic

to We strong spending caution to about in potential of this trends see You spoke commercial relative in signs consumer. Slide as and you see growth the X. we steady turn first quarter last

base. continue, macro our that few and corporations the customer the trends among last suggests Over months, larger particularly which these headlines the data, within

in billed trends, and these see had on an business in large third FX-adjusted global We card where dynamics the in quarter. we decline corporate basis X% a our

this we growth been above So, client-specific X% spending decreases, adjusting in large some quarter. just customers, two for have rate where a the from saw bit would reduction the

enterprise In the growth X% contrast, of mid-sized with SMEs card grew third quarter. quarter our small the or stable solid relatively importantly three the months spending and members throughout U.S. from a in

both are and types. our business about of advantage to ago, model strong customer leadership these investments opportunities. few Steve the differentiated minutes continue making opportunities with position We a great these we take highlighted to long-term feel And that as of leverage

the remains growing FX-adjusted type in SME customer with our XX% growth third highest billings quarter. International

where Given business the products, we international believe low growth. top our segment we have offer sustain long this to focus strong the on in countries we runway have penetration this a we small and

existing stronger solid the from Moving the These strong This taking to up XX% growth of growth the in X%. a customers. reflects QX. and trends And consumer made and the highlight continued bit billings of third spend out company's in were the also QX continued the than U.S. U.S. performance billings up which decimal, underlying acquisition of strength quarter, actually number consumer,

remained consumer Moving basis. to the in right, XX% on an at the growth FX-adjusted teens international

we and our environment. across mixed earlier, the in geopolitical mentioned to macroeconomic growth despite we have key As markets, widespread continue proprietary business

FX-adjusted of While well as basis. Japan markets Australia as growth continued strong an this across the high-single top we EU, growth digits growth XX% U.K. in double-digit see to in our and the to all Mexico quarter, and moderated the both on in

far the network we as the on Global impacts process down FX-adjusted basis, in on exiting of in European our the X% Services are mentioned business. earlier, by Finally, was Australia, an regulation right, driven Union I the Network where of and

Although in we on see X% the an network basis. regions, billings the across are good you range GNS feel operate. of of we our continue of geographies segments the down to were European up exclude customer we and about billings which remaining Union to breadth then, portion growth and was and Australia, FX-adjusted opportunities Overall in if the these the

loan that our unique We borrowing. opportunity the deepen coming third with existing feel lending was XX% we our from this existing strategy, our which to loan the to in customers. have have we Total good on on next long continue is Turning runway of believe X. of a customers to of focused over about strategy. advantage We X% performance share Slide again taking growth growth quarter, our

Net reflecting relative yield Moving to pricing for the right-hand the basis prior third XX continued points X. positive from in the mix quarter, XX.X% risk. Slide year, interest impacts was up side of and to

this lending yield remain the and net products. to balances quarter. growth We capabilities lower offers, increases income as loan we The have that promotional in we contributing combination on shifted more loan pricing seen constructs, towards growth are our optimizing focused interest delivered on we and premium XX% have of and

implications of our Slide shows the X strategy. then credit

remains see rates to than continued delinquencies net across and As these segments. and on you the GCP in ratio trends reflecting The both stable consumer the low can unemployment We loss commercial write-off benign, our in part rate and economy. last year. both relatively see, trends lower be stable

commercial steady. environment, we tables that each conclusion seen earnings small the both the also side. the And see have consumer as release, credit remained credit in in so suggest accompany this do both lead and reached you've to quarter consumer business portfolio far in trends our trends These change that our anything We a significant not the year. on and would in same

are expected year. these than all the the better fact, we of performing of beginning at much In portfolios

expense. In that X%, reflecting performance as the us quarter, brings half expense through stability our provision Clearly, year, in to credit expected. That's trends the now for in for XXXX. and third has the third the This around was what again provision of growth in full-year we result, the better of XX%. the industry growth provision saw we've we as others as in gone well greater second began credit us than a been as quarter expect

are we minutes let to though, CECL. provision about take the few on While subject of talk a me

roughly we stick This implemented on making efforts to our somewhat card good XXXX. our a progress are billion charge We last offset estimate so includes on today, we short X, a reserves our card prepare our a would XX% implementation to by work far, charge January increase current extremely XX%. We estimate total to CECL based on life reserves, quarter, if significantly for with that roughly by of reserve, $X.X given in receivable. the XX% increase lending of lower XX% comments

takeaways that would CECL leave I on like there you are three back, with. Stepping to important

manageable, believe one-time XX% the likely sheet, ROE will capital increase model. very implementation reserves spend-centric balance and in of that impact our we First, plus strong be the given

mind important is forward. our keep to that in impact will have it an provision Next, going expense CECL on

grow as CECL we'll will the from CECL loan the impact continue we more methodology, on book. and to be finalizing our have on to on working are Although expense provision higher will Since next quarter's the plan, currently dependent ultimate likely our we impact color we call. accounting on our CECL models factors, many XXXX heavily current under relative expected XXXX provide

view merely in is CECL economics, or losses losses. estimated the Finally, profile, risk the is expected of no accounting-driven our change our the an acceleration to There ultimate underlying portfolios. of

do investment well as this intend have of growth not of change CECL impact investing strategy to Given our as our growth, XXXX. because will for expense provision the we on plans in

scale to The our back share, and on of that focus results strategies both and growth environment of This to has get topline occurred our somewhat more an revenue the robust Slide years. of driven turn economic of environment revenue let's relevance you consistent growth growth basis in on on for Now, and X% execution has over XXXX or see XXXX. and in the consistent our X% FX-adjusted the slower strong XX. revenue two performance of investing

recent fee quarter, this coming see and deceleration XX. of view XX% our Slide fee revenues and the X.X% history. both the flat on lend revenue And the our by in as And revenue at across our can importantly, of again the of This those portion broad-based from growth spend quarter. longer despite line third spend, was with in modest relatively a the revenues was quarter much history you remained sequential we and in in last volume growth revenue driven to third saw growth delivered quarter, we X.X% growth growth

up card X% was reported basis the as basis, his which FX-adjusted $X opening third and a outcome on on growth the was quarter and the accelerated back next on talked remarks. value refreshment Steve unique X% approach fee also surpassed time. to said up slide. to Steve propositions come revenue the about the an billion first I'll XX% Net This our in to and for in disciplined that financial product is of Discount

customers earlier, members, the really continue around subscription-like as far see XX% pay as in our that these our repeating, but Steve the pleased new choosing majority our bears they fee-based fees. this it And of so year, value I that confidence are when choose are card products propositions to We mentioned well. we by our think place to

breadth forward, about are strong Going across and in we geographies growth products feel momentum to these good segments. our across the membership maintain ability given driving that revenues, this of customer

and I loans the interest that few income third ago. driven Net just yield mentioned moments the growth by quarter, XX% grew in a in net

Slide largest back revenue, our come of discount to let's now the XX. revenue, So component on

basis, On with above on discount last on as We revenue making the revenue, line revenue eighth the continued the this consecutive discount average this the evidence see rate, working. quarter that our strategy X%. two growth is discount FX-adjusted the right, an focusing driving with of X% in grew you not quarters, see discount

now the drive Moving on in to are things to growth. we revenue investing our strong

Let's Starting third the versus Slide our third with marketing quarter, XX% in last the QX. you costs start were business in were engagement line and which customer the XX% on up costs, quarter $X with billion bottom, year. can at in and see up were development XX,

has and banks and we line make this and marketing clients, primarily traditional expenses GNS components, payments corporate that to two Remember co-brand partners. then certain our partners, promotion partner

Also development outlook remember marketing of the renewed our million that is our which quarter, costs full increased the are original relative where $XXX agreement for seeing impact year. with Delta, the we business our to this second and by

Continuing prior it on rewards than value billing X% evolving bit year, you relative up our was our to the see a given to that can expense, higher propositions. trends,

to Card of Member then the were top quarter. costs slide, the up services XX% the third Moving in

fee-based continue difficult support many the are includes we and be We differentiated which expense to cost other access value fastest for travel category, and strong line as on such our lounge as components others products. propositions engagement it of seeing we replicate this airport expect of the our to acquisition believe our are and growing benefits, to help

two in a XX. getting OpEx record then here. comments We saw consistent slowly expense by the a leverage Moving with long increase offer revenues. on track operating more growing of Slide I to X% on operating quarter, expenses would than third

capabilities, for to of cause making force, in deliver than these First, digital the us in will growth, to we years. this year premium sales strong see continued line have revenue quarter, growth are as growth some this in I more investments servicing, recent we seen mentioned last

as have over investment group, portfolio XX of a our Second, strategic investments. a Ventures reminder, Amex through we

This benefit quarter's portfolio, we confident that we long more grow runway saw OpEx related to investment slowly is roughly the the adjustments to that sum last our $X.XX than have our than somewhat included which I are to saying a impact revenues. we continue of net expenses on year. just up by benefit operating strategic mark-to-market of Altogether, our would higher a

Turning to capital on XX. Slide

XX% of the our top was $X.X in ratio at shareholders. we to our capital to the billion XX%, CETX Our returned of and range second XX% end target quarter

our said, our range as to on focus XX% distribution we've governor within primary maintaining As our ratio XX% is target capital CETX of our plan. the

historically will very we capital focused been our going while We've capital on excess continue philosophy aggressively to maintaining strength, with that and shareholders returning forward.

EPS brings open progress that our your our year, revenue and then of of we'll us double-digit for objectives to against call demonstrated delivering the growth we've each So this levels With growth. outlook, consistent quarter and questions. high of

looking given see performance. economic a Now this today's ahead, we sustain to long environment, runway

term, give a quarter. the near stay dollar they growth the fourth in should within XX% continue with X% where to range more the if strong And to have In our bit headwind be levels are, on guidance quarter, from to and seen revenue strong the we you to we fourth the rates lessen the expect the quarter. color FX for

course, our throughout seen for earnings in mark-to-market credit And other trends three performance be and with line quarters the any investment bring excluding seen we QX the saw we results $X.XX We us in have very reaffirm we will much that given guidance of of to fourth consistent the our expect the expect the trends quarter, the that year, the operating first XX%. we the our portfolio our $X.XX to $X.XX in would EPS year. continue; stability of provision occur contingencies full-year of in the growth our full around may third adjusted to year-to-date quarter which results, benefit have

middle In EPS of range. showing EPS are off XXXX and our XXXX part addition, we double-digit guidance plan of working growth having towards growth revenue the a high

in impacts it economic comments course, in from the Of my and see assumes today versus factor are not CECL, does material XXXX. earlier this not where CECL around we we deterioration do environment in potential any given a

year-to-date execution remain demonstrate at with and performance EPS the algorithm financial as you growth our I strategies levels Investor our expectations last high environment our Day. growth. and close, year focused full We as growth To shared double-digit of on for consistent against sustaining in revenue well today's the

With that, back Rosie. the turn to over I'll call

Rosie Perez

Jeff. you, Thank

your the questions. Q&A, question. the the cooperation. to we will Before that, in with for up operator now lines lines open open up Operator? Thank one ask please yourselves queue just for I'll for to limit those the And you

Operator

line Craig Maurer [Operator first come from Research. will Go ahead, question from the please. Instructions] of Our Autonomous

Craig Maurer

card have year. largely you U.S., fees that been I a to showed on I'm cards trying throughout in question has as acceleration in net net get what the card range-bound some growth, basic basically fee cards-in-force the

accelerate So, should card cards should how or growth again we to in flattish and continue can net somewhat U.S. remain that? fees the if card accelerate think about

Jeffrey Campbell

of recall, the fee-based products. are tend gross looking quality because Craig, I Steve and discourage on you important quality bringing is the that that we're Both cards of of card people fact and bringing the bit members as a have you're XX% the the talked really the in. cards at from we cards-in-force you new about in what's little here to number

now quarters cards-in-force number inactive oriented by members. to bringing of mix is card We've card premium about periodic efforts, our talked of frankly, some also cancel couple back generally and more in and a go that influenced for members

fee So, there we growth card I long and that continue. feel tremendously runway are strong products the breadth driving a about to of is the think

Stephen Squeri

but consistently point, also I the even see seen we to other of existing growing Yes. is uptick think is strategy recent it's our to products think really the critically cardholders. other spending card just in important we've that's not fees, important an And is thing refreshing what I only from add one

of deceptive, upgrades is have think I there and also got you well. number a the lot clean you've a out as a So in because bit little a switch, again, got you've

the about feel strategy on. we're we really So confident

Operator

Bob ahead, of Go to from Napoli go please. line William We'll the Blair. next

Bob Napoli

payment A your question BXB on strategy.

during and Pay it acquired automated the AP. ACOM does You quarter,

there market for could I long update AP materially so needle partnerships a over and different have on for payment Amex the in space you term? it lot You can in of the Can and AR the area it's that your automation an investments the Express. if that thoughts TAM, move American and needle your massive move would BXB think

Stephen Squeri

like think, I small MineralTree entered we've I we've think belief bill.com with into we Day this look, done Yes, WEX of opportunity. - and Bob, Having end partnerships at are that, a said as our the and Tradeshift, this we've said is well, as people real is we long-term Investor said, in done the mid-space, done market. we've We've of sort Ariba. at

an I BXB spending of to help point spending our that thing But continues an segment sort while is, a is it grow. have play, those in of automate We to most investment is and one out processes. SME now long-term in will today ACOM

do it's So integration we make a just BXB, believe what BXB still that's C&E. into takes partnerships, where we majority it especially of I've procurement not these why why feel and long-term play. we really as investments and But are we're a perspective, before, our confident time process, integration tough it's seeing the the from and we the about value said a these spending in is we but SME, doing, that's why that's

Operator

of ahead, line Rick we'll question, go the to please. with JPMorgan. Go Our Shane next

Rick Shane

at basis that of to? a the signal the business. divergence Historically, we provided that should Just want any delve has deceleration to account the of level between and an consumer into commercial be on billed on attention paying sort acceleration business

Stephen Squeri

No, not necessarily.

the first if would last would you commercial. think reverse, at seen you of look and I then recession, you sort coming have have down seen the consumer

I at So, signal is think a that all. don't

the strong consumer SME our whether U.S. all segments slightly it's as out, growth. double-digit to pointed business across mid-teen has it whether international, really Jeff in it's As quarter-over-quarter, grown relates or consumer,

Let may at as on the be where softness we some seeing numbers. me you comment look

X% of we're as with It A adjustments like off XX% growth couple to coming almost also to jet seen realize, a there in year. You've global. in have but you third that, some a the fuel of or decline high. quarter maybe things was relates last it

So, long involved large I and time, real me I'm to about been comfortable almost when I haven't pretty this stable think global, that. and about for that's with

When look in the of a our double-digit again, at we're and year-over-year, U.S. X% about you up high. off SME

got You to we it, at three of we into look of when look delve components that sort it and at billing.

us, in continuing little been either we we at competitive bit a seeing for and from a go business We account steady that the where sort accounts organic been to perspective acquire just perspective a of are out softening losing look has that has of we're losses spend. from steady, are the or to of and is

last If you think trend. again, think of that, third about we same-store the even and year, perspective, it a from in But a of that's quarter still sales. retail you off would came high a positive

albeit, sort it we honest, be to before. So, growth that is still saw. it seen what that And would same the concern of not in that we growth is down, me territory, in gone positive had is not if that had same account not, was spending significant

questionable that on of So, the was sustainability anyway. our minds

still feel credit pristine. again, pretty credit as is good we And it. so, Jeff quality quality, mentioned, the about And

Operator

go next Instinet. Nomura of We'll Bill Carcache Go the line ahead, please. with to

Bill Carcache

follow-up a on fee-based had your question I products.

enjoying through customer account use success in players primary Square their some unbanked Some innovative deposit. it bank their getting Cash as targeting segment, and fintech customers of direct like the and goal are App for with underbanked example, to

give Bluebird on You some guys this products general you like something of when segment How innovation seeing use direct Can in? Thanks. customers deposit? you attractive? Serve color Serve. and continued were in some Do us you enhancement an fee-based are income investing thinking there identified just you to opportunity growth are of focused ago well opportunity about with today? still and you years the on guys are generate how the and trend ahead see products growing you products as are general, you for as Bluebird in that underlying guys those And the app, those

Stephen Squeri

We're all. on at it not focused

it and you In that an InComm. The that not our for product upgrade That's into the the fact, a that us. at theory a took product too - year is opportunity bridge see customers to far we case reality run last was segment be able was of sold those into We would traditional that cross. we set. as to a our to

And do And with last we really opportunity happy that transaction, a Gift Cards and growth InComm see with of that InComm's think off [indiscernible] we happy at as and really that Bluebird, all. We transaction. are for so I sold to us year. portfolio not that

Operator

Suisse. Go of next line Our from ahead. question the Moshe with Credit Orenbuch be will

Moshe Orenbuch

is course as Recognizing Any that think CECL fact, kind increase probably think of impact of piece to next of the percent growth year? provisions just to credit, relative provisions the how the no about into ongoing over improved we sign on the credit to sense that deterioration, the XX-ish as of actually in on year. about of

Jeffrey Campbell

obviously, some to segments the into of and also us given we've to a ready you we're math models CECL. complex very many be other That's accounting XXX incorporate Obviously, the of XXX-plus variables one-time I will that Yes, will provision question forward-looking there customer of for still so economic back pieces range over the fair our drive can impact, amongst do quantify. require do this. sort part are envelope CECL to that forecast that but that, the Moshe. not of think off the

our financial to pure I give from though remarks, higher said acceleration run that zero are not just in provision ultimately have my earlier impact has directionally, which our a I economic given under on It normal saying I of comfortable economics. expense perspective, environment some what to - CECL. that expect is statements in would losses exact is this So an there you anyway. our real am through ready number. accounting-driven want would emphasize growth, very some really I'm of levels

as and are CECL fall zero and of series for the risk to we drive impact It we're to that and on our continuing we'll a prudent region what has is then term, in the XXXX, view think we long changes what the where willing is we about they think decisions about to business to let why we think invest make will. of the going

Operator

please. with Betsy Stanley. of We'll to ahead, go Morgan line now the Graseck Go

Betsy Graseck

little bit, earlier customers already the this ask a the I reason well was but personal maxed in is, card done your out thought Steve, that dig your opportunity and And with the comment card. around it's would question comments something to not. to suggest was you to I penetrate wanted just I that the corporate were was have So making

is wanted to understand and - this I could is you So different get? strategy the kind of go-to-market set opportunity what

you reiterate $X.XX in out? of. supposed exactly a we're just I'm could that the that strip strip if we're questions that Jeff, you had getting supposed couple on out where then, mark-to-market to Thanks. benefit to of and where And

Stephen Squeri

it base, us the The that. with do access pretty for year. have they changed, The a us Yes. Part to but customers on base really corporate changed. come of some can our the employees, bring corporate as we is forever. to reality focused our reluctance penetrating tide - personal companies and more card to look did our ask has their we've had to tide has not last in was test we card We much cards with for our value us

And us. so, this for welcome a is opportunity

new say us. I territory So for absolutely is would it

at not been it's all. maxed out So

to but card. corporate companies not never to opportunities our we corporate personal card utilized the have that - corporate say say distribution card corporate is card our cards, within Let's that that have not our do holders it

that to overall our lift So we're going to provide opportunity another the about it's cards. excited opportunity and think

Jeffrey Campbell

I'll On the points. mark-to-market, make Betsy, two

XX have to that we margins have the have been and investments we material. Ventures us Just to those last general means through In began or everyone remind Fund. Amex investments beginning not our all for various mark-to-market January, companies so to really

they materially it more little about positive. to This $X.XX bit a netted were quarter

business. see of, to in We out. $X.XX stripping phrase the your to only mine our as Betsy not reference Was terms ongoing of use I part My an when that that QX, to the three – consistent the I to that And look we of very first similar about expect about we quarters. made feel talked operating performance QX the really company. observation good the

in company you quarters. pure about three the performance of first the as think So the operating

take merchant In QX, I charge the out. litigation

going puts in performance and level. In operating $X.XX that So back a to the share. that to concept this about QX $X share a again QX takes you it's $X.XX you

Thank which question. to the for up that's bring the $X.XX. only the was you in context I trying So

Operator

the Mark with on DeVries move will of to Go ahead. We Barclays. line

Mark DeVries

revenue sounds just a the given growth, confident. revenue some while growth questions of been control I you're growth have don't much revenue question outlook have in asking it should as for but pretty to how you've your And and gotten imagine like been this and getting growth. further well strong how XXXX has around I from investors you room OpEx guys

for – your getting here revenue So weak and who in is there? is guy OpEx control I mentioned the those thoughts on when guess responsible is under comments Steve,

Stephen Squeri

sort you Yes last look OpEx think I how we've if years. controlled at over the mean, eight look I of

think I about aggregate growth so. or it an X% probably was

sort growth. at, little revenue of from had. walk As of some OpEx at made to look these opportunities It away bit a we as changed it not that high look sense philosophy we've to we

I to run, playbook have this our in but control in consistent we're As is think to don't OpEx. confidence I the Jeff a that the ability all said, going control world to

you operating We're revenue here, we've when to of you got of which four leverage, one. you're you growing nine at revenue is you're five still and grow about sort that OpEx is problem five to The want if at about providing growing when leverage done. think what

– investment really been to So the Delta right. good relatively similar doing. we're but And what opportunities, we've is looking you're

to to make I will that revenue. and And the lot about am. continue as opportunities as it known OpEx drive crazy not believe I going that, was we're but still I here to I – guy relates for foolish any leverage And still it. a OpEx and years have still of operating we people decisions. do

Operator

question Togut of a ahead. from Evercore the David line with ISI. have We Go

Stephen Squeri

you David, there.

Jeffrey Campbell

David?

Operator

your Please phone. check feature on mute your

Stephen Squeri

right. All

Operator

Donat to O'Neill. Sandler the on move line will of We & Chris with

Chris Donat

I in about just And the last XXXX do I'm about year on XXX there built that I will the led with refresh against even agreement, up product then refreshes. then spend these comps about year got – absorb And spending. or all likely had you elevated XXXX. a easier pipeline Delta some in and million of as are spend to wondering XXXX this some spend XXXX. into you in question things also as marketing the think come marketing marketing we you spending elevated think had which that's the brand had you

about think Just to how to compare XXXX? XXXX

Jeffrey Campbell

your think call of the Because I why Chris, spending you we we cite what around category customer began on ways wonderful many examples partner are Delta. at spending years to to illustration in different a We in the encourage our or and few in costs, ago. we right. Yes people engagement to marketing focus the do payments department area brand in or the times category pull rewards levers traditional point, different with broadly

use services. resources And Member other at Card put to into we times

for of the The So environment some growth. to year-to-year In expect consistent lines little today's group of do of from are anyone growth. trends grow a going may collectively levels those little or drive to going very faster that's that of using years XX% what But Chris. us X% revenue quarter-to-quarter. those we're to them is however, bit we've high to what's revenue saying, vary costs broad than been enable now in we bit a drive And revenue. from in all to

grow mitigate talked to that just because leverage is you to from engagement margin more important than the about revenues. Steve so slowly help OpEx customer get compression, why OpEx It's our

strong You model how combine is that's and producing double-digit our balance have with sheet a that we consistently that EPS.

Operator

Oppenheimer. will [Dominic Gabriel] Go be of Our next line please. with the from question ahead

Unidentified Analyst

taking revenue really for of my is question. much so diversity strong. thanks growth the Look, Hey, the

by talked that rate. to For investors discount I or thing this for been about the on only you is a the is trajectory. not expanding nice I sure, extent, and to the has quite rate one discount taking some quarter. fee some managing the that NIM card But surprise know really but And think not

the at nice strategy as moving of you what's rate well. shown the has number as and about up last Can natural just here? into you've piece that is discount going benefit puzzle and expanding the quarters that's as discount much. over your what so rate a talk just well Thanks lapped But a least the of

Stephen Squeri

but got some There you always going and so there business in renegotiations little all bit strategic any up, a I discount Australia, you've mix and don't it's been, there this, activity there is I much. that and of on. lapped activity we Yes the say rate a as been given a I got was I all those was quarter, and in of on focus in you've contribute. Europe. know that things mean things it's think couple It's really consistent. Yes

to you have rate margin so, you're you on if is same out right project is focus expand reality BXB. really on going like at growth. to BXB, consistent I'd is, that And – focused is and What what if the to in what I that want revenue rate. But as into in of is not look discount kind discount the lower a again you discount there, this

at You’ll and rewards things lower cost also look like that.

we and along those that discount so, what go the the ultimately in really billings. the And rate with between costs margin focused is

in But the the numbers it’s the and that's with too. all okay, when discount we're way revenue pleased to has rate And come really up gone. flattish discount is –

Operator

question. the line for ahead to your Go go Friedman Susquehanna please. with James We'll of

James Friedman

X regard Jeff the I just wanted to ask up GNS with Slide to X% adjusted.

lapping made kind about – in you were tough this what It in we compares. prepared X% when the of contact like might might be, that that your as norm business? the said we think over remarks Is be meaning thinking I you should new XXXX. we be

Jeffrey Campbell

Remember important Yes, one. and network partners of us countries in And XXX a countries so ways GNS for of or rely many comments our couple these couple do of that first. coverage great so that's James days globe. on priority or most network aspect to in many the of we is the questions around in driving

billings contribution. than billing In thing is is you as that more from modest Second at the know, its all same. financial not the GNS general, GNS itself contribution

few be have a whole varies to more and economics quarter-to-quarter. also drive large contribution country-to-country we from countries modest much That little billings, and a a a can bit billings lot those volatile of lot

take wouldn't a will I don't So lapping, consistently of the Europe I as X% once finish see – what and you we mark Australia.

is is in the probably coverage. a the around bit But important keep it see trend globe back mind really GNS most thing to up network the about from you'll think there. little I

Operator

Go We have a Bank America. of please. the from question in Jason with Kupferberg ahead line queue of

Jason Kupferberg

And year full or EPS narrow pointing us which the or for range. would around on Jeff point get sounds finer your full three or EPS XXX to think because QX, so I know it two you a there, to just But around you're put the wanted for I so didn't formally math year. us like to

And just do you that. of but... I we've were I some terms volume there moving down large then the growth, wanted So to think one troughed there just enterprise parts clarify quarter. in that this know

Jeffrey Campbell

we're is going full original here to our we that. if us year our the color some report can it And maybe this to each And Steve, then global something Let that which tell of of philosophy, on dramatically we our guidance, the tried Look the beginning we you so tell for year as true as you and around me make expectation is, be few year a you range. we the at large and give out our customers. Jason. on quarter comment is and have including takes that philosophy, results comments to expectation we come out happened you

to we're just color going going. are how things you that, some about beyond But give

results, earnings but commitments. really we We emphasize we to want the to running term. long it are We're quarter-by-quarter true running for annual will the kinds that not produce of our company also be to certainly

important So, background. that's just I think

consistent math, to but your to As I operating been that Jason, going three due the our your I'm math, to look, clear across be was think I think, math, the trying quarters. very confirm to not has really I confirm performance specific not or first specific

look, share, $X expect the quarter like this quarter and measure something three for two a probably to we or at fourth share, can that that. a You $X.XX

Stephen Squeri

global accounts, and terrific, large a really far global as had and in large year. accounts XXXX As terrific

as were And our weren't they year. into going year, last so this same expectations the expectations

the planning think which us, historical of think then and back levels would and X% anywhere for quarter to between sort for global is I accounts. fourth for X%. about gets range forward, And think sort we about As of it the X% large I

because just that is T&E. think lot I it's a of

the CFOs not T&E penetrate to so to more their for space, I BXB they start go we us manage spend see them but to T&E driving met with that forth help and actually what their looking spend into move up, you'll think said, you're As down. is do up are as I've traditionally then to I

that actually it's so a providing through in retain we an proposition help retained is, you And bit. our through by - your that accounts so manage help insights business value And We business we down. do that that benchmarking. them and do it's very interesting we to do where cost you helping them and negotiate little shrink the interesting count a

more get And you go to need account. so, some then

this last bit about just So we're T&E, levels, think think I the to spending but and the actually going with fair you to in very year of more comfortable ourselves a including sort think it's I sort of forward. X% traditional on range was X% people more saw what out lot just little getting a

Operator

next line with Don Wells please. ahead Fandetti Go of We'll the go Fargo. to

Don Fandetti

change in you position at is share your on So getting your a in core small caution Is little bit any to want you're know got the that's sort front. still same this a year-over-year and secular weaker spend I there's like in holding is or of rate, mean, peers. But just factors, tougher then business potentially caution I also wanted happening I business, And the you've couple of to all if still growth small are comps. obviously, rate. on business the normal higher assume or more than I that there remarkably dig penetration, competition,

And when accounts in accounts thing, automated same the small does around businesses receivable. payable kick lastly BXB as that then

I you. think in XXXX, spend in I in What as we XX% just happens. it a Thank mean you had uplift that process. that said see you so get early is XXXX?

Stephen Squeri

Yes.

Don. early So, I The last it's first, still in process. think the question

of are and other some what what interfaces procurement these with always spend ACOM that. do whatever you You the of systems their they know, and it's someone that like to have that automating, not to accounts sort receivable do with providers, do you or automating priority

little of time. a takes that So bit

so let's see I penetration. - you'll that think forth XXXX, a Look, of on. talk and sort in XXXX, little about just So secular uptick bit so

acquiring accounts I rate we look we've and the at at counts We're much as so business it. think still pretty of we we billed don't acquired are been acquiring acquiring at bill same business. much look

we're As the level consistent lower I pretty level mentioned probably before, on or that. quarters. any accounts losing at last not had higher eight We're we've for than

really in it's changed. really, the market, consistent our far hasn't position think and overall As as really I

I is what we've in downturn call I think said organic. I around here point would really rate that to what seen I'll you we growth the our before, back think

space, Tax it's it at there great this rate just than or the long more last banks have time like is in area because said a this year all momentum, Act. not it's seen had especially found that we've did of that business much the now enough an attractive recession long, a banks consumer growing found in sort And growing, not area of that, competition well. fast that when is after not same credit not card Having it was the the is growing as attractive from lot

for issuers together. next small last the I bigger that the the space, if said Having refrain I've have you five the had same than added we're up largest years put business them that, two in all

step up from we to it that any perspective anything where So competitive competition. other are, different the don't we keeps we're than a comfortable see really is

border our obviously products. continued to capital whether products, enhancements small of business it's and But, it's our and whether merchant the financing, add continue we to rate to working cross terms,

business feel small in So really we this perspective. are still about where good we

Operator

will Sanjay Go please. ahead with final come Our Sakhrani from KBW. of question the line

Sanjay Sakhrani

follow the in high delivering numbers year, moderation those to about volumes? the how saw possible within When just in it the guys I think range comfort previously. of lines Maybe to assume some your up which we and is questioning XXXX, more hit with revenue next what of with of growth business of some levels is you build

the persist. because income feel do like of levels comfort will of high of level you growth investments will type your or growth you've some that Is made business fee of the sustain you expect build

on Thanks. color fees, would Any XXXX. Delta the in be Given come helpful.

Stephen Squeri

right, pay as know I the goes that off making think - mean you many next pay year. so Yes, here's when issue make they this I year, year you're this it investments you look, don't off

what revenue about done the sort digital the And we've so properties. about delta due would discount that think on on cards maniacal and nail that we've high refreshes. you from a the revenue about the to to you've When we've billings think acquired, yet of Card will think of fee that the down of our hit focus in about consistent some that be sort you made continued perspective When had, you think yes, head. of in when even we've some you positive investments when tick our the still

story growth other This in The growth this is not thing States. is that a point a globally. out United I would story is just the

much you hurt you even two down to billings consistent all And SME been think or an about and pretty is not so going SME that XX% XX% when tick and perspective. consumer really we've in growth consumer growth a from internationally, there

and sort good XX. of the Jeff his stool of have that's think income comfortable, discount in when environment and I revenue his the why, from really feel about you perspective revenue, same So three-legged economic said we interest that end we about think in feel a of we at remarks to X as this fees,

exactly perspective. weren't from we look projected where issue and we billings are the had what a Look revenue

our comfort is level yes, So, there.

Rosie Perez

Steve. With today's for IR continued you any you, for Jeff. again The that, be your you you, end. questions. joining Thank call follow-up Express. the Thank thank will team Thank for call an American we'll bring to and interest in available

to you. back Operator,

Operator

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American Express (AXP) 18 Oct 192019 Q3 Earnings call transcript