AXP - Earnings call transcript Q4 2021 | American Express Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2021 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions].

call recorded. today's reminder, a is being As I to Relations, our like to Ms. conference over turn the host would now Head of Investor Vivian Zhou. Please ahead. go

Vivian Zhou

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

results future these reports today's reminder, our financial in file and GAAP slides a well presentation forward-looking the today's materials the could performance. today current this non-GAAP in on before SEC. as that the contains financial are begin, in for discussion expectations statements as subject actual prior measures. on The business earnings As included and included discussion with comparable and uncertainties. financial materials and Factors to periods quarter's earnings are we measures statements we from contains also about based are are The discussed. differ management's materially These company's to cause risks

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

progress it start Jeff who remarks a will about Chairman and will Officer, to We CEO, more to our With detailed move we that, Company's results; will and Steve Squeri, provide the Q&A me both session today After with some begin Chief on let turn Financial that, of and financial results Jeff. will and performance. Steve. with with the Campbell, then review a Steve over

Stephen Squeri

and Vivian, everyone. good Thanks morning

dedicated revenue our in in of earnings release you we Thanks talented a full-year the press quarterly the our globe. efforts and growth As reported for saw short colleagues while strong ago, to around XXXX. and

has results levels spend to talking excited my higher me aspiration deliver last I and about revenue growth, of years time few pandemic. levels these growth. than sustainable were before and that the our new delivering plan higher today the provided revenue resets EPS what future progress our we for the and over so for announced aspirations in also our and EPS a are we the years why XXXX want We about guidance that to longer-term profitable growth and

past by As capabilities our in helping continue the years that our to improve. that customers, And few share, relevance believe global our and for full-year, scale and are over results in and seen will QX to the growth. investing we as profitable talent the drive us brand, we've economy the we've continues built leads our

XX% Our and across quarter the strong fourth and number business a revenue of the key full-year. for $XX.XX driven help expect environment. growth macroeconomic XX% we recovery the reaching full-year. by the Diluted performance for near-term, deliver for In the in XX% improvement continued at was our plan of growth $X.XX levels, revenue EPS anticipate XX% the quarter growth in metrics XXXX full-year execution tailwinds the elevated to of in the to remain from we and

We of $X.XX and between expect EPS in XXXX. $X.XX

recovery in of for growth. mid-teens tailwinds the the think mid-teens, provide in we should turn about the EPS drive XXXX, growth revenue As which continuation could a platform

beyond. talent We've Looking mid-teens to growth to We've is help decisions the our our good high over years Most we as and growth absolutely environment, for new XXXX delivered a number further few XXXX. the achieve experience aspirations. focused in out results a levels this brand will be that strategies under investments more for first the excess period growth lot a the recovery protect cycle our revenue play of hit our EPS has up proved to strategically early growth. that our learned growth driving we our of reinforced in and our aspire steady-state of customers conviction we in been through in and throughout on out, made we colleagues, ramp we the imperatives to believe XX% business COVID-XX past that the and achieve plan customers when return economic that seen investing pre-pandemic, The critical right and plan we and have business. key to areas, all in pivot importantly, moves our us in

spending, trends over of very our saw versus and spending growth also we we XXXX levels. XXXX. Customer travel areas strong saw retention the was levels. record consumer all in pre-pandemic satisfaction in continued remained fourth And core and QX Our Overall spending, pre-pandemic small to goods reached long-term. which grew services levels, in to robust BXB services number driven Global quarterly driven are continued a improve by continue XX% year XX% that performance in over spending growth continued growth above stronger and Spending levels. high, XX% by quarter goods XX% spend. continued quarter and above consumer increases the a the of business T&E be increased reaching to pre-pandemic which

by first Satisfaction near for global our satisfaction example, I pace. well engagement be rates in For years, card ranked as and value propositions, balances above our metrics new in quarter. our and ongoing digital year retention about second helping the to with loan spoke modest products, performance the Customer lows loan members just billings in continued in is key are capabilities levels. in The also Annual strong and Card XX%, Power's results which services XX the levels growth U.S. and Study consumers. JD engagement, to and high is consumer marketing with and investments Credit drive customer retention historical the Credit a we continued XXth and time building in at at services row outstanding fueled of in a are as

customer driven has numbers which new to large strategy, engagement has innovation customer-focused increases customers. of continued attract in our Additionally,

Expanding resolve account driven driving U.S. focus our the The strategic in we year-over-year. on In QX of fee-based our products double QX, around our on XXXX the part space Gen-Z out laid XXXX. we range a payments acquisition. position our reached on the position expanding our places representing customers' technology edge members lifestyle-focused new leadership commercial working acquisitions for and services saw small to to merchant card globally and customers nearly of New out leading digital their strong premium by expanding we our where $X.X of consumer, essential and Express being card back digital and generated by propositions. commercial, the seen momentum lives. the cards accounts demand acquisitions million imperatives we've continue best make in payment to SME businesses, our Millennials of and XX% premium XXXX. the medium-sized give in and by in to strong our payments more new ever acquisitions staying In an providing throughout globally network solutions use closed of differentiated one we as further acquired strengthens key capital of American in Building and ever growth value for years consumer are leadership solutions provider for the in

with in position our after over that XXXX see and we'll that, for you. the based us XXXX questions. to to future. and in and will well in good We our about on of expectations performance we feel quarter plan momentum which XXXX a our the achieve take for entering it strength and Thank in I'll continuing the your high opportunities our more aspirations we strategy implement we growth details believe position turn and now talent the Jeff? Jeff on as brand investing beyond. of seek are fourth future. our to We exited ahead, we very customers And our provide we as growth levels the

Jeff Campbell

results, what full-year about about, thank XXXX Steve means to fourth and for here you, Steve. Good talk great all everyone. our quarter it It's Well, growth new XXXX morning, the talked beyond. and plan and that to be ambitious just

from release that full-year magnitude provision, see volumes. billion, detailed benefit with the as up of to quarter in summary had a financials $XX.X expect our Getting billion sizable $X.X XX% repeat few would into well the with results, and earnings investments. of not up in both net equity point including income $X.X forward, let's look $X.X per a billion basis. at understanding billion of as significant $XX.X gains In an that just do Steve You our FX and momentum full-year $XX.XX, out growth that Slide we revenues share billion, we XX%, on impacts on X items adjusted reserve I credit net start in on around same going a fourth of more of discussed revenues our

than XX% as is and and business a in will XXXX notice show and our from several during Slides that driven X volumes the these you Slides in relative trends spending momentum up the the volume spending growth in investment insights full-year shown our even effect versus year-over-year highlight on goods conviction as plan. are across and seen changes an of and fourth we throughout network slides resumed XXXX grew on growth in spending which billed deliver key demonstrating I to more basis we've in been Slide in quarter, of continued on of with strengthen that services, You to fully a billed see the few in through FX QX. views XXXX pandemic. growth, volumes, This is momentum continued the to on There that we recovered being a To in strengthened continue focused both card-not-present record XX% as online the network sequentially can XXXX. on both basis the total offline and have fourth This both adjusted quarter X. to X and relative business spending growth X X on and new start, the would volumes on that by XXXX, we on our lasting strong XXXX saw strategy levels behavioral

past spending Millennial digital Importantly, younger our rate two QX growth fueling attracting in rate exceeded is through and on of versus levels from improvement XX% our cohorts other a members age the our were propositions the our growth this seeing also capabilities we focus cumulative pre-pandemic. all growth in showed expanding is QX. on steady represents engaging and and Slide that and growth value In throughout over customers in Gen-Z XXXX X, XX% years consumer well above card you business, cohorts see pre-pandemic and from XXXX spending the

trends the and on their SME the of pre-pandemic and business our driving spending SME billed QX. range XX% capabilities Slide products enterprise on clients expanding above strong goods payments throughout capital and businesses their needs, Global growth BXB run the focus to X. services our and expanding BXB spending by reached XXXX meet driving that particularly strategic in has is Our helping and see been levels you commercial of small working medium-size on

the X% fourth across view lifestyle customer spending T&E and reaching travel spending On our in T&E quarter. have that our travel with balance, consumer grew slowed varying types T&E the XX% in with T&E continues leadership see some on seen of commercial position at variant quarter, recover, in spending in that December. slowdown, with line recovered pace differentiated did X modest and of and throughout above geographies, overall bit XXXX operating XXXX levels we remain as spending, as to focused We only to Slide we travel. But consumer the expectations, reinforce turning recovery fully maintaining see not paces from recover on fully and but was benefits they even you our impacts XXXX return that eventually fourth modest to to entertainment and it can Now customers the but -- Omicron offering trends levels. will in a in U.S. T&E actually our the

billed continues shown by and the QX. on XXXX almost spending be the levels also that improved in see improvement fourth U.S., fully has sequentially Finally, in X, recovered with momentum XX% continued billed to business our XXXX where business grew steady smaller International though above Slide throughout quarter. you led spending

U.S. Importantly continues U.S. services to of the strong goods be growth both in and though, outside in spending and

Millennial member we've and relationships So, expanding all importantly, in XXXX and given propositions mean of with card and customers, acquisition, and these beyond? spending Gen-Z the what strong for we momentum that Prospect engagement, particularly our partners. coverage premium our takeaways made in to growing SME expect investments the Most appeal value services do goods key continue to

would T&E, XXXX and the expect U.S. we've SME components and last large total to global For corporate will we be in by International spending be spend, T&E the also of slower spending the recovery that fully the growth will recovered and the customer the our The across end of cross-border said consumer led for recover the long global types. T&E by be

So spending tailwind represent these steady and may they 'XX in types XXXX a both gradually as recover.

lending balances are we and sequential growth in receivable XX, is led Slide to balances spending. that on on seeing Moving loan our good by

strong so continue slowly. are XXXX balances loan more we to the lending balances do take portion interest-bearing due in levels to the amongst to rates our spend-driven, with the Because revolving see our our customer a XXXX, And expect time balances are recovering of to surpassing base. that paydown is strength balances for as these more but expect rebuild we to it portion remain to liquidity continue of elevated rebound and

you XX, member are lows. few Turning I'd around loans to next to rates performance on there delinquency credit a provision Slides extremely flip you to credit and as slides, these receivables, write-off key we continue importantly, and see card with XX historical Most and like away. take through through points strong remaining

strong outlook remain combined as to rates This write-offs shown pre-pandemic the the to slowly drove As we performance move rebuild to by a time, up in throughout loan begin with in balances levels releases meaningfully, we macroeconomic and delinquency XXXX. offset credit provision expect them benefit loss over the full-year, were but XXXX XX. more below low expect the as $X.X on continued billion Slide for improvement reserve fully expense do

see performance X.X% strong representing reserves, XXXX, release member over our seen. since will releases forward. balances be is the going to of XXXX, of the receivable of saw credit see expect magnitude would $X.X X.X% reserve you loan not growing reserve had we've billion the respectively. same benefit with we I given pre-pandemic the of we below and on we This $X.X in card balances In Slide we well As levels ended reserve billion XX, XXXX our

our need fact, trends we which on sheet may and grows, modest balance it's credit some In pace at level of the build possible depending to reserves.

the our it year-over-year Total fourth revenues us Moving This XX. quarter, next for driven plan. successful strategy up in were is part year, and original to new our investment XX% expectations to of our revenues Slide XX% above of launch by the on well up full-year. for emboldens the growth is the what execution

the a that Before into few and International I largest uptick likely along primarily levels, quarter second revenue travel-related revenue note both in XXXX. next fees below full-year, in we began into revenues commissions well and up recovery slides, more XXXX in travel-related the the and will other and in lag about driven of year-over-year details to fourth and the for our get the would other XXXX complete half by drivers and remain still however were see be tailwind revenue travel. These with their cross-border I

XX% made it Turning to our XXXX. services XX% largest we QX throughout investments those revenue were pandemic our fee and resiliency the line, discount in you revenue, both of consistently is up for the up on propositions Slide and continued The momentum XXXX of on of year-over-year basis. have grown XXXX full-year XX% as XX, you and XX. the the value grew driven goods revenues versus saw propositions and we've existing impact by attractiveness to adjusted spending customers. subscription-like Slide an throughout the in see the and demonstrates full-year prospects value primarily card revenues growth and the see of for year-over-year XX% on these FX can Net in This premium

As a XXXX. from net high growth card expect fee to I growth result, in rates these accelerate already

is the and clearly is is net in growth and to income in year-over-year lending it point earlier, strong second quarter. to The the see hit net in paydown XX% lower loan credit that high spoke that as in Slide demonstrated you driving up interest growth, growth year-over-year I which interest historically liquidity second This recovery half the fourth XX, due inflection both of Turning low slower that to of quarter to was slower income leading customers the in net on can costs XXXX. our interest we consecutive are a rates about yields than AR our the balances. by revolving an

XXXX revenue to and Looking to balances. interest in growth loan ahead, our due the in slower revolving income net we to be tailwind a recovery likely XXXX expect

Slide successful on has investment to see up So, XX. execution on momentum, sum of recovery revenue you The strategy the revenues. our driven

those our revenue lingering propositions with expense XXXX, top by from in the growth the clearly in into recovery investments fee investments Slide revenue saw Starting income interest expenses driving the net investments revenues. accelerated our we technology engagement continued about. customer value expect show across to in lines we the revenues XX% in premium Most spend card at and growth momentum the see XX. is in The with XXXX on travel-related tailwinds forward this and of propositions, Slide lines. you of XX% strong the driven by to to in are up course customers Looking and see people growth and we made we value few there was XX, are and are of making importantly, expense things think a resonating variable these marketing,

travel-related injection new course The temporary our around costs engagement more mean variable cost effort however Putting XXXX, expect not revenues the marketing over dynamics gradually year-over-year injection wound the these expense the at we of costs. growth as value as were This the value added value in long-term customer the of in addition, down our benefits well an is all we and of with total you because as we as In introduced refreshes. to in the able our of of incremental many in our I'd to a this recent all and overall see offers propositions. XXXX. to engaging terms engagement customer our rewards these showed injection It we advantage of good aspects refer effort XX% in through products the does propositions, thing of line. again growth run prospects. with premium variable travel benefits of retention take our together, more some aspects pandemic, the were many to customers product up of value generally value customer Throughout customers

operating In full-year Moving results gains in strategic net are and investment the with XXXX. out to reported and were OpEx of XXXX in benefited line however, the expenses Amex that in billion just we've slide, mark-to-market portfolio million it's to OpEx our in XXXX gains for in over from our $XXX bottom these understanding point that the $XX important line. Ventures

XXXX these our in talented of investments increased investments and grow this year. areas and in in technology also We our base to continue critical expect colleague to areas

expect expenses rate as rate for operating a relative Last, around similar I'd expect these was XXXX any leverage XX% we costs much legislative effective XXXX, bit our in our tax to $XX effective we be tax to For our key over absent and revenue billion XXXX changes. of growth. see of level source a a higher and

record for $X.X acquisitions ramp these on bring we continue our fee revenue to the overall million point, of year-over-year and than for billion X.X Card highs acquisitions. this the up from to new investments, XX% total quarter Slide card of of products small on are next Turning consumer new Acquisitions down just premium we efforts. up billion the we marketing around internally we the acquired were growth U.S. emphasized Steve spend fourth invested injection Much in being on both the critical acquisitions growth build as year-over-year. and year representing of value XX% new and particular, members however, new $X.X that refresh these XX on full-year more to marketing new and with accounts our level fee-based in quarter for can new business We products while our acquired we great you importantly Platinum almost number with focus see making winding that momentum, in new of cards, a products. demand of see in doubling QX all-time the account acquired accounts quarter. these cards, the though we

we trending that significantly to pre-pandemic. acquisitions from pleased are stronger revenues than We saw what see XXXX's are the

XXXX. we Looking forward, billion $X to marketing expect in spend around in

in stock capital strong on XX, XXXX in back of $X capital excess $X.X to stock next dividends shareholders Turning of billion generation. including the billion common returned common and starting repurchases on Slide a our $X.X capital of billion we and position to earnings

our revenue near-term, of which we guidance that long-term the in to my significantly growth. I over expect morning. XX% tailwinds the XX% that remarks built range the good remarks, from expect come helps my as our XXXX then growing embolden to to momentum does strong our to ratio learnings notable for items me while the EPS XXXX, XX% $X.XX Slide grow As by we $X.XX. given revenue the have We dividend a your we brings in growth up the certainly to to discussed achieved earnings prospects, pandemic XXXX, the of within also to announce our In of to capital strategies, financially? That momentum very for growth why sign we our together back our same our and questions. of of year us our due range repeat open I've side We've to as confidence combination in the we ended around we'll our growth. call with to XX%. shareholders The to pre-pandemic XX and another CETX plan. feel this benefited revenue generate continue to sheet higher talked target our the us to number magnitude XX% we In guidance guidance, increase to of XXXX our return the the on results given XXXX of growth throughout this about all we our beginning be about to growth the have QX $X.XX result, that don't on plan excess expect balance is pandemic we that our What aspiration have than have recovery mean and new supporting

on we long-term get our excess environment. our exchange will committed and expect XXXX. see a would as we and closing, more guidance to our remain reflects XXXX, growth. against on new in not environment, improve will call above that revenue EPS plan producing be a we does It revenue go for on XX% also based significant our to an growth In lingering the Longer-term, EPS sustainable beyond. assume impact assumes due delivering growth growth what should Our macro reported to of revenue that, and our that a economy to rates, competitive a tailwinds which basis XXXX mid-teens platform to current to company are in regulatory focus growth in know today to we and mid-teens continue the have accelerated aspiration aspirational achieving aspirations. we recovery the executing With we growth growth and to on the an In a FX steady-state of targets create from back with running over I Vivian. will turn XXXX about

Vivian Zhou

Jeff. you, Thank

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

Operator

Instructions]. [Operator

with Ryan from comes Please go Goldman question Sachs. first Our Nash ahead.

Ryan Nash

Hey, good morning everyone.

Stephen Squeri

Ryan. Hey

Jeff Campbell

Good morning Ryan.

Ryan Nash

of EPS to revenue and good better-than-expected excess about it's So XX% in XXXX growth the aspirations for long-term mid-teens plus growth. hear

should investors' more And business give you're leverage key investing costs. a that reinvesting variable and maybe to XXXX, what confidence talking historically a So allowing about just the expect and you to just point the about the the able EPS well lastly, it you of engagement platform better of making, what mid-teens business. to versus that it more Steve, mentioned get operating going Jeff in you we is you Jeff. what drive to the just in resonating mid-teens growth, positioning drivers clearly brand you this you was could structural just Thanks. clarification, mid-teens the 'XX are the be for I near-term. as into would within or investments mentioning for investors, were you're heavily 'XX? Can talk clarify lot view hoping higher is drive growth, talk maybe one Can with maybe -- you than

Jeff Campbell

one. take the backwards. last work we I'll maybe Well, Steve

Stephen Squeri

Okay.

Jeff Campbell

is I steady and language a credit revenue point meant high have to earnings reserves XXXX think that drive is creates play growth, is some make the volatility EPS how very given in The the going for just, are you around on growth. may platform growth again that Ryan, certainly, tailwind still we to great out. caution there the

And the sort you of have releases another of that total growth actual core to given the power and moves the I bit, be revenue will next. year-over-year some reserve think about is Steve there but and pretty so between XXXX skew a which talk might, number the going when one 'XX, you you result confident. Could that feel about year in earnings growth level earnings think I high

Stephen Squeri

of just and at growth that, XX% growth. you But higher if expense when this to Yes. because you it, at a contract sort we because you to you're to you much for year. don't that XX% you too, particular leverage the normal -- of even revenue have sort venture normalize will operating looking look And a and the expense mentioned year you growth second will. to you're going When have if talk had revenue leverage operating at about look the Jeff operating this with gains

the going talk throughout me to expense over bookings exiting, first drive see we're have quarter, the journey. about in we're X.X particular what at way of still gotten over the we're you we 'XX. -- in this back When me three at XX% the is we we years, at XX% travel up moment, to I what It growth the you've this but So When forward. was to But XX% growth, and operating billings four quarter, we've of when throughout weeks the haven't over into let at what last we Look our I the growth sort revenue we confidence look work gives done how in would look this, it's 'XX. strategy high acquired, and you've put January, things. going mean that that sum now the fourth my are bookings. momentum. historically cards looked tailwinds from this we million that up of a place. travel I got it start I'm we couple the you and in secular we got combination got is where It is and up,

our have XXXX we and the we about in premium the Gen-Z, think from being in acquired tremendous next made remarks, XX% cards And card over, and to done a and was best talked just the SME. Millennials the my U.S. is the was back X at and -- XX% perspective this Millennials this in be talked had last online added and that at growth digital year spending growth our within in provider. the we've with internationally, look people's XXXX. last year imperative just had. We ability year we and about to had spending we've at strategic over parity go secular we that I that over I'll SME XX% I move ever And then tailwinds. acquisition million over lives XX% of We perspective, of entering online skepticism and premium what momentum my So merchants, probably from in the quarter; merchant look are and Gen-Z we're to the cards Millennials XXXX from the we strategy. beginning We skepticism were

online moved And to we're getting than at has the pandemic and at business look the T&E of our years we're share. five overall for fair years business, three more XXXX. spending think XX% from I forward then our

it but in rest up levels. is the were doing the we really well, below fourth XXXX quarter, of consumers Now, X%,

Gen-X and our more increased as from we members, T&E to our, once at Millennials sort is When we out. believe segment have and over leave large over of large that hit we've card and travel up come get and International the and grow Millennials he global We And international the about got at again. global. we reserve member will balances get to to as all look so to money go. on spending once in XXXX and going both you over had but our start going with boomers modest not comment were, our talked made flat are XX% and at tends we consumer. because to business time, it and People room increases, they card Gen blowing remote traveling loan of is traveling more a our Gen-Z are traditionally be business and we and boomers Jeff travel is has from look XXXX that here, are to not we about from we're look skeptical some a our this pandemic they're I'll workforce. and where we perspective, endemic back consumer about back which and

need completely get all In is you travel together it, come let's had I And front realize come there the back to people of going sit to think face opportunity we front that customers. your sit of better in just to Tournament have different. where times came I come before. as they remote may my a to never headquarters an customers. to in at more lot And three, maybe nothing locations, business to than five Amex from four, locations of Golf to is they year And be more a in to think fact, to or I

we move tailwinds, at why but forward. it's the that's when only as sustainable So we look doable we secular not believe

Ryan Nash

apologize Thanks packing and so many for for in my questions taking there.

Vivian Zhou

Alan?

Operator

Our will next from Morgan Graseck with come question Betsy Stanley.

Betsy Graseck

good Hi, morning.

Stephen Squeri

Good Betsy. Hi, morning. you morning good to

Betsy Graseck

leader, is on do my little what's the what I have Thanks. Gen-Z, TAM to the I'm as Give us and is and to of at is that. bit opportunities impressive, U.S. you really in side the in sets? and were TAM to set, were you or of acquiring you that penetration quoted clear mean product now more customers the I the about the in more for customer run, percentage what that you the you do you're of it a XX%. when is by room it dig or very think numbers type various the you're feel that And you XX% you increasing wanted Millennial think recently where SME addition, I i.e. sense announced you sit I'm thinking market the but revolving credit in how do you you're just right a wondering of the in just seat, where on have line discussing. new question some from of the wondering that

Stephen Squeri

I the closer XX%. sort what Look, perspective, to in. be at start, Jeff can and a can we I I'd Millennial from So XX% let are. Gen-Z. you of exactly XX% jump is the than But but know where don't me tell the we're Millennials not

From some pushing perspective that bit loans, that acquisition shape. had, push the be of SME and total we all think revolver we've same done have an we'll the a little I From loans been and perspective, said you the that on working a I what we've that's have as and From a so obviously are the the -- So we've on when that. we the we do done. perspective, created on card, capital And and to always term on runway right, and we look, What an now of clear there's debit bit try what an want opportunity we'll there is of leader in have we've that's and the lot opportunity of lot at where from come more flows Investor Day, we is important are card, our a look share capital the we perspective. out. be great the card money created look checking with a from Kabbage little because of work don't gone is SME other providers and maybe go in account we'll guidance out perspective we've you we've and we've you we and in well. the account, give revolver of and we've will a at on checking so SME set, working think some on

when perspective you we corporate think the position together growth in of go a and for perspective put business lot our holistically, to leverage an only So international card we a our from not it. in we SME room have small where after from that U.S., consumer international but

grow. of very we right think to very, still those both areas are So,

Operator

ahead Mihir question come the will from Our next please. Bhatia with Go Bank of America.

Mihir Bhatia

and taking morning you my Good for thank question.

Stephen Squeri

Mihir. Hey

Mihir Bhatia

about internal we a for guide bit ask could just Maybe I to imply little the that. different line is bit specifically this which expenses, more year. item little three And variable to wanted seems driving to actually little a year, I'm lines just just what that line color compared is give the leverage wondering I'm operating on of what next that, a maybe talk items in within you wondering can your in bit there.

Jeff Campbell

I your very first Mihir, part get didn't of question. the

Mihir Bhatia

percent is of like is as saying I revenue like XX% guidance sorry, lower XXXX, am right. a -- what I'm than your of of

be So little I that items line like was would just more a line trying to is which understand the services, maybe what development driving that. bit business there or

Jeff Campbell

start. will I okay. Yeah,

giving So with, there XX%. people think started volatile is of that few during things three about very to think Remember, in help this all easy was lines. time start an about percentage it because about pandemic, a when we to you these think the to a you way

about you revenues, commissions think I'd net that's revenue our travel out other a talked because lot We slowly. other we As fees are next point talked and about about related. interest recovering of of year, more and number a lines income,

both great programs to are are back customers our spend has in we from XXX% seeing our behaviors our member back a those coming --come those come than engagement So in back. ways, the quickly more many reward with card many are costs of come services, robustly engagement and because more causing because revenues

about the the revenues steady revenue many recover. because you being we're the recovery other our bullish above reasons one 'XX in ways, both and aspiration growth as have really 'XX long-term of So is very

at investments our you The made I'd results, value the back in is a do revenue so, is point our when to is at at create right that clearly would the learnings for are learning have the say out thing when a other that our for it on you retention I look acquisition from platform the Mihir growth you look our to see in investing, as comment company. from long-term that Boy, you when off pandemic to propositions and for the and we us Steve's great look and XX% thing pandemic paying growth,

Operator

Bill from come Wolfe will Carcache with question next Research. Our

Bill Carcache

good morning, Jeff. Thanks, Steve and

the cut global of level the one was into not dividend, I during crisis. it an financials, view to your do you to guess your of optimal Steve you the its payout? dividend Amex that increase to as sustainability not did by for XX% how financial if So important and factor decision what the few only is dividend

Stephen Squeri

we and many since XX% growth. and a is XXXX the feel the is say said, on our about it that that of I'd It's on to important important fact that we're what Bill is that dividend again time view, time first Well, us. for it's dividend. to policy have to to in our raising around the shareholders the of XX% payout sign our be offense long-standing confident a a is All having the

in With behind we we fall in next growth bit the that. tremendous or what this earnings 'XX, year and year little expect a

expect what And forward. but we're going that really to level, up that's shareholders so catching should

of was it. just that to believe, a shareholders. signal dividend as not incrementally I was it back grow and company time the payout and on it see over showed to our to the important time it stability the earnings to financial important the will But grow. you to Bill, So crisis, as an during our grow commitment you're resilience show that the but our pulled going I think

it's about So it.

Operator

Our will question from ahead. come next Donat with Sandler. Chris Piper Please go

Stephen Squeri

Chris?

Vivian Zhou

Chris?

Chris Donat

me? hear you Can

Stephen Squeri

Now we can.

Chris Donat

-- Sorry

Operator

to your have some you Donat, with trouble line. seem

If we've go feature. lost line. Suisse. please Donat's sorry, check you pick Moshe up could your mute hand Mr. Credit set, We'll Orenbuch to with next I'm

Moshe Orenbuch

XXXX, post probably consensus kind there, Great, of were think billion of better the guidance to revenue operating end guide above bit have consensus side. very just wanted in of of thanks. I can through. of but the idea that billion billion the did EPS And is, and expectations the categories, that clearly, and is is where where then a I we it roughly focus leverage a so costs so $X is high $X $X kind for more on sort to how comes of the to strong Thanks. big between little implies a don't about cost have that kind you you credit guess that way there

Jeff Campbell

and in fading you were little admit I bit. a will out Moshe, Well,

take and you just So I'm going what shot think I to asked. a

first one, revenue to be I our guidance, guidance, I would point XXXX people to think I the you when look didn't right. at think back EPS it the actually,

XX% our shareholders. fourth our platform we in growing growth we revenues platform in just that value scaled quarter best think creating long-term for growth of that about of on all in creating top the showed for the to XX% we're So kind the the the XX% is is and that

beginning point items of Second at the as that about think XXXX you repeat. remarks, in is when my expect make, I'd I don't pre-tax the I said billion you earnings, $X.X earnings to XXXX around of had

releases. of billion $X.X credit reserve So

we're think a that. on position to closer steady-state I

Travel our Another portfolio on on our venture. Business FinTech billion mark-to-market joint and Global both gains $X

for think drive And growing it see so we about to look at and making investments sustainable Steve revenue and XX% $X.X about our we to customers that XXXX growth. ourselves talked earnings creates the growth, that XX% that guidance And a and Boy, platform good brand great feel in we colleagues billion, really over outcome. while long-term

Stephen Squeri

$X.X it simplistically, Yeah, I the mean, $X.XX. it look, billion call off take $X.XX, call $XX.XX,

we'd our So we've top end of XXXX that our as be range. we our of $X.XX plan to said the use end as top range of the of $X.XX number guidance that at we've always the the and end from we and see the bottom given it to thought range, going

the operating we operating decide of pure it's perspective, you believe think not. a numbers EPS are you that So from numbers. whether in But or guys a lot think I it's the can XXXX,

Operator

We'll Chris again line Please with once Piper go to the go of Donat Sandler. back ahead.

Chris Donat

time? Hi, can me hear you this

Stephen Squeri

We clearly. can, very

Chris Donat

around think discount good about pick recovery. just that wanted T&E you with the and discount and forward shift your up GNS rates in also expected mix with and online, of if do a tailwinds expect businesses there even from business That's any as the -- Okay. tailwinds the in ask as one going thing to factors we better I rate, you of mix the

Jeff Campbell

dramatically. goods mean I services because and are growing not. Probably so

and Our of XX% We XX-XX. services traditional T&E. steady wind mix and of business at XX-XX, goods state up being was XX% a may

of but day, positive lower, revenue at and driving does a were overall the discount we're rate XXXX, we're be as that's that's focused the where look, services T&E so obviously XX% in on. and a bit back, little but we And what goods we're discount to to come here. of at And the end tends

we're the goods well, growing not over XXXX, would only you I particularly, happy it online and is But for combination is services got us up growing in even as and XX%, mean offline over of with 'XX look I what when at online is out XX%. over point the is but retail tremendously And and so growing online very it's offline growth, over a you XX% XXXX. so you've up retail got up and offline

using good feel how the card really are members we our So about products.

Operator

Blair. go the for our next Bob with Go We'll to line of Napoli ahead. William question

Bob Napoli

Thank you and good morning.

Stephen Squeri

Hey Bob.

Bob Napoli

Good Steve. morning, Good morning, Jeff.

cards. investment feel one to American and on is maybe FinTech’s for and it So, Express the and invest to credit stack to what disruptor built but pay relates rails tech payment because thought your I How the of potential your have about as investment in. blockchain do to you and as I returns of to buy I of the against large disruptors now guess what lower a compete bank and need later guess the, cryptocurrency you targeted or, need tech guess kind do competitors

Jeff Campbell

Pay a you you tends it in we do not and FICO, the our looked as stack game. technology as Bob. I've to and a how continued over or you to a you targeted that from customers. audience. yes, now card debit later not and to into the a Well, by constantly stack users later and your Pay we of look as of tends flattish the invest. that's say card sort It pivot and It when your Look, mean made time know charge run pay XXXX course I increasing been know again, pay -- pick card and X we been of credit years perspective, think average many growth, talked the and payments would driver And installments it's pay I our you taking an no XX we other many it Gs, you we've times. we've time. And up pay is, perspective, basis, Pay gives be over potentially X these overall development it be it's technology and card money past. other, off invest believe possible, anymore not opportunity later, this comments and the Plan at and not a that investments and non-revolve not at your that's our you now the as years about be our cyber where and this and at our I tech major constantly have it's buy buy as some there. or cost of with lot. I play I to as it it's I'd had target keep customers almost Look, It here and buy little a so. here, year you Look, you flexible think, now we're could bit more to before. because just the Pay in reality in It be on ago committed usage refreshing believe pay a and many, is far a ability as we've that's this It you charge about tech then those then than from you lower if utilized is is tool Plan and because to types their advantages offering used reduced making tech be our is And to And we've Look, in a acquisition an anyway, but time. days to operations tends

at buy with all concerned now pay I'm later. So not

you again. some you as a lot are there through driving option look of that but I It now and later, the think know Plan and successful Pay volume our buy some an We companies revenue are at driving out pay can with the it it transaction, It do where of everybody It later not doesn't the of point is, at nice has part pay at not about just any a because point buy now to Plan sale have it feature. Pay sale, be it's It

So that. that's

about this you and think as Bank think at I space, we asset you about an of that's we think you've view use think currency the Central this, just to we way. watch we in hard guys coins, you in digital look, from point about know about that currencies me coin about a a have crypto payment goes, particular to utilize class. talk thing you crypto mean the time, currency seen crypto spectrum as and As more crypto, go Currencies digital currencies, a we coin. heard we far Bitcoin know, currency $XX,XXX that stable $XX,XXX

look, for Blockchain be So, and companies Blockchain investments constantly Blockchain, figure are cases and we've us. out, as look far use got at as to there in

a ways at to but like we a get use FTEs look going mean with obviously I've and So, it's digital the not as times, and to card, a and partnering in involved, and I've coins said, far stable said option we're as as Topshop wouldn't many doesn't as we're crypto things we'll and itself. currency and that, NBA probably MR redemption offer

right later it, medium-term our keep keep now, it case eye on we an changes, I cryptocurrency our now we immediate our to on stable, it So eye as business. keep don't that threat buy our case pay eye but — see in in more becomes or side

Operator

with from Go Cyganovich Citi. question will come Arren Our ahead. next

Arren Cyganovich

return do if or the go think but in starting year, about now dividend, balances you're a your obviously, for the you to talk next a plans bit your wonder at buybacks range receivable target you're since amount? at little I within Thanks. by grow could from particularly capital your decent you where here nice XX.X%, increase CETX

Jeff Campbell

tremendous CETX talked we mind dividend pretty the as of uniquely excess we're to balance in staying from I about, capital produce so years in earnings XX% pretty we results on more within support to a thing that up. to will Well, range spend-centric committed growth The than far also returns XX%, need though up year, and on that in is very generate business steadily to our that ratio, go we amount the XX% sheet the model recent when the that. our in go of earlier each equity keep

within in consistent where back of quarters catch-up, a big XX% last has with earnings ROE above each steady to down So been kind share us continue our what and of there levels XX% to and to the the generation you'll us of call will see share right a level of quarter get to Clearly, kind that repurchase from two saw staying -- that target that trend I you repurchase range. range.

Operator

next We'll Shane Morgan. go to Rick with Go ahead. JP

Rick Shane

over mean life look Thanks of I is the revenue my the guys questions. one much play Millennial of Z to Gen there your a towards that related up out for expect the come how or cycle how and of embedded you sort the taking the repeatedly growth, does when you is guidance, would consumer that's of time? things growth that growth younger strength

Jeff Campbell

key who in lifetime demographics a very card of see and bringing about uncharacteristically talking you when beyond, right. that is the us in at long-term value think and aspiration members, about aspirations we're thinking I looking part of Well, 'XX of

business could a about customers. the of thinking value started we think the We relative to rates business, any acquire we that we when with And that things That's company. call think lifetime prospects are the excitement Steve to bringing with are into those about. are off that you the about customers we of extremely the almost retention one demographic other increasingly of growth the contributes the high when longer-term

Operator

the to ahead. DeVries of go Go We'll line Mark with Barclays.

Mark DeVries

to a somewhat years growth higher XXXX much algorithm business a that tighter this revenue back related that? this opposed And bringing healthy asked, as EPS between operating look the spread. the pre-financial plan, a be of Is Rick prior kind crisis to a And aspirational Are kind I of to you're to what's of and question more at it growth may almost there just expecting thanks. so, different. you're pandemic, kind like observation. is pretty return growth like looks Yes, spread what's what if you if the behind leverage, growth fair with is on

Jeff Campbell

time and Steve EPS growth. straight quarters we growth out Well, refer to what and revenue I'd maybe very first, for the the algorithm everyone pre-pandemic interrupted, I'll successfully till as executed our financial so X% I double-digit Mark, in start growth on at range XX% the remind which to was pandemic we XX to we have think

of bolder side ambitions the to of much be we [Technical XX% now in revenue and have growth So mid excess Difficulty].

Operator

voice have we if AT&T, host is feature. lost connection. your We've This lost your the you line, could check mute

If you please. Ladies feature check standby. could please mute your please gentlemen, and

Jeff Campbell

have lost We connection. the

Operator

your You are back on line.

Jeff Campbell

are? We

Vivian Zhou

Yes.

Jeff Campbell

we Are Alan? back,

Operator

connected. are you Yes,

Jeff Campbell

Okay.

idea I've the have no why little unnerving a We just head is we lost started. which Alan? connection,

Operator

sure how You had you went. far not a little gotten exactly into I'm bit.

Jeff Campbell

to want start I again.

Okay.

we're apologize in so quite sorry, sitting everyone tech in York. not is, the New our sure So where office Tower the problem in

levels now executed at OpEx that's of pre-pandemic, OpEx revenue a in kinds excess see revenue 'XX anywhere rates. for a EPS growth, and ourselves that that We on quarters steady in XX% because, a line marketing We to after line growth, bolder gives kind and pandemic So we X% on tremendous Boy, for grow of those platform that at scale for to much need the were interrupted. the marketing you in of growth the XX and growth than until XX% to aspiration growth us near terms higher growth, revenue double-digit relevance mid-teens straight come and forgetting on leverage don't being of EPS clockwork. going 'XX and like and revenue

maybe math you to the want comment. that's So

Stephen Squeri

XX% only perspective, mentioned post I excess say, but mean then where not Yes, crisis. competitive we've But a we we thing mid-single in are yes, regulatory years perspective. post on, crisis, we're there no, say a revenue company I'd digits from is well. growth. right the then larger and financial been of were And crisis. crisis, financial as more other the revenue pre-financial now growth pre-financial much just sort I from changed look, game of you were would And

start and looking at in revenue are per to you year excess growth. XXXX think you when $X revenue billion about so growth, of And think you about

steady different. in competitive large terms as Millennials So the whatever what's generation to a a the And in going catch this in that's global that you terms if mentioned that's we business after moving lifetime focus two now this, value from got and we've next started and right to we've expand -- they is the question said, just a even I some that core in contrast, strategy we of key this of our state, call implemented fact quite highly think with going think about growth in But is and those the on years post-financial just be growth and start pre In at T&E put but in get strategy of international. numbers when the universe again you look, as and to as loan perspective. reliance Z in to strategy the us are card -- as in I I with perspective. in members look answered what's and crisis, and premium in to to to of higher those a X the be our Gen more those the have we with a I us our and faith move as the what then and environment, and Jeff and moving our in that all areas Rick certainly next do and the mentioned up revenue

how very, it So you very will are plays all but see confident. we out,

Operator

will Our Lisa next from with question MoffettNathanson. Ellis come

Lisa Ellis

out I squeezing outlook for about the toward build more beyond, me you you're Thanks investing I'm role in as three-year areas the adjacent and about can thinking M&A Terrific. plan or question that a M&A about tuck-in talk focused to thing kind broadly in. guess investment support that of XXXX of plan. you two- And on that

about in you've I like think things done resi past. like and the Kabbage

Jeff Campbell

hit we world. as build adjacencies tried the there were on in we I is but sense. how could about the We all with SMEs, into way Yes, you think or to three to it, as -- I made the look head. product, make there, this the moved think I going we have we move for could at choices target is, think least, think it. that about Then singular the nail at serve that are Kabbage and look, buy investment a could of you mean, you at, platform Look, as looking the the think, you we you definition no had sense strategies into try broader partner it the to I

overall we've When Amex-only think it has perspective resi was is an to also how it's about an giving able what good time our it's great it opportune a And and product investment that's base. of for to is our resi our we're and resi in only we the that. travelness and card consumer and SME Is buy from example some customers know to of re-platforming our so done dining product, for extension an offers acquisition and Amex were not members you access that, of it you a a tool an customers. because

it as continue build it and we makes when when and and make ourselves, the things it we'll in if buy So or to make they determinations if right. will strategy, for to partner they sense build those overall we is price the sense us tuck out those whether

at provider digital strategic appropriate. more as along to you is capital it, we how more that's adding that have, about for continuing for working just strategic continuum, the customers you will the our that best even to if four more being and sense So provider make bring we'll know to and SME, which act imperatives that things looking merchants becoming premium back consumer, we think but be card and

Operator

Fargo. with Don Our Wells from next question will Fandetti come

Don Fandetti

see Good Hey, morning. to good hear -- me? can know, I EPS. guys don't you

Jeff Campbell

can we you, yes, Don. hear Yes,

Don Fandetti

I what and see. guess. on Okay. bit the mean and little and could did double And beyond. December dip all maybe digits. mid-teens of about, I All January to dig of Good a talk kind think of to dip, it in Good we 'XX low see right. just Omicron think stabilized. slowdown. sort you growth it you Steve, I has see

give to things on comfort are. where Just us some

Stephen Squeri

people know, biggest for on going of as we to shopped us, one because leading us the is -- what's of for most travel, think I right, -- leading indicator You have how know, want the people online.

from We the perspective, quarter about travel the and a haven't bookings is are perspective. seen much and XX% of fourth being a talked a delineating as and up factor is about, services people what we goods out slowdown really from

we are bookings people XXXX. rightfully However, see travel over XX% the Omicron, slowdown December, last weeks got our some first a but so and up of our of nervous, travel as the terms of bookings few January, in did in weeks little two

think to And call, as with how said to learning will this. earnings endemic deal ultimately get how with that what peaks about Omicron again and learn get is variant. people Ed out Bastian when we'll from is are ready society we'll to and we we I and tells me to pandemic out next when deal this. on So I see get think the move his But and and

slowdown really haven't we our in So billings seen at a all.

travel we've an fact, In bookings. acceleration seen in

So of that gives us a lot confidence.

would though perspective T&E thing and at -- fourth from that over we mean a we quarter north. up we I is were we're XXXX consumer moving a perspective, the anticipate were other back, perspective, I further a The from X% in that say consumer from remember

Operator

from will question KBW. Sanjay come final Our Sakhrani with

Sanjay Sakhrani

to be mix economic that's I guess you we just an your right, be shift Investor it of higher drive would the I'm for this know it'd key from maybe aspirational anything the I if I be whether sort accounts aspirational that's going guidance you're seeing understand cetera. question new open-ended Day to revenue question, drivers segments, long-term we unit think sort above it'd average will right, morning. like an want or is Yes, base, customer don't share response long-term BXB baseline but history, economics out, it. the versus good But what look growth inside on versus the as be businesses, to growth Thanks, good, about ask to and your evolving different could, shift algorithm, thing, whether to -- curious there different about just revenue et that the if of that the or again. is relative

Stephen Squeri

thinking for Thank you when is things All help a of But it. the of Day. outline members. you. Investor people got don't know, look, us that I account take card retention about little Yes, think future revenue one growth right, our you I bit what into

a big card been lot who so retention One are and it's and when members, an of you all-time of you at our drivers members onto has forth of fact that the growth keep the is card with easier your spending and high.

our had in in other grew is XX% -- in goods overall we that's theoretically had history look, as than billings at driving the right. T&E XXXX thing shift and the more we're this obviously from and services T&E company The known and we're we we I of of perspective, billings mean, the a a product, XXXX

are but of So I this, things. I think number we'll talk about think a there

think I it's retention.

I from think longer back an balances revenues continue we back rates our life, SME we'll we'll members perspective we to if -- industry and the loan balances think getting to have if you their value there. growth to above that from average evolve set going product and above to and bring earlier a our Rick's card obviously card as were loan the perspective we get of lifetime Jeff retention continue in mentioned keep We'll have. you're especially them in question before to members response

but I give in some all level the from on we'll perspective, those confidence think of that, look, insight that high you So sort more things those world. the are us a the give

Vivian Zhou

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

Operator

will Ladies at be available Investor the replay call. gentlemen, Relations and shortly on our after ir.americanexpress.com webcast website the

for replay call of PM for conclude February the That Thank code midnight today, You code at is digital January XXX-XXX-XXXX today. call access or you area access participation. conference our after X. your XXXXXXX Time Eastern The can XX also X:XX will through the XXX-XXX-XXXX.

disconnect. now may You

American Express (AXP) 25 Jan 222021 Q4 Earnings call transcript