AXP - Earnings call transcript Q4 2024 | American Express Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2024 Earnings Call. At this time, all participants are in a listen-only mode. [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, Mr. Ramachandran. Kartik ahead. go Please

Kartik Ramachandran

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

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

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

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

start results. We company's provide about our will performance. begin Christophe with and a Squeri, of financial today Financial will some progress more with the Steve Officer, and Chairman Caillec, who Le Chief remarks review will detailed CEO, and

Christophe. both let we'll to on Steve. and session move to turn over me Steve Q&A After that, a it results With the with that,

Stephen Squeri

per were an long-term Good for that setting record . great of results categories. morning, our year work us. our earnings XX% basis, income was year, for joining the than The XXXX and aspiration. drove records the across $XX.XX, XXXX new with for revenues XX% for share our billion had up many key higher of $XX colleagues of long-term year, which in our thanks is strong the strong up on Karthik. world delivered achieving billion metrics, Express. around another of aspiration. We American We you, record $XX FX-adjusted net Thank

a had fees and of revenues levels spending, card XX acquisitions. new record to card and million record annual record net addition income, member net we card record In

performance We spend. driven to momentum continued retention, billings year exited we card robust fourth the also holiday credit as by disciplined accelerated X% with best-in-class overall, increased high management. and expense quarter Notably, member saw growth

our appealing model, Gold products as globally enrich particularly XXXX, U.S. Z membership to including millennial co-brand our refreshing refreshing consumers well XX cards. to Gen in We continue is Consumer the and which Delta over Card, as

enhanced experiences top-tier the our partnership dining as we Tak multiyear of new and with sponsorships launched and portfolio our We several such Formula also global acquisitions and with One. Rome,

small stronger U.S. enterprise to business business and grow an improvement strong and customers quarter, continued saw throughout medium-sized card organic holiday with the our Our by acquisitions sentiment base customer spending small fourth season. linked through in we to small which in the new year the

is new coverage ago. our our growth and global in from propositions, our added percentage of merchant globally years millions is across an talent that of average in XX%, increase international XX of technology coverage travel and in that's X X and of countries, We with results well we our of ongoing backing the show value points coverage, driver customers reached working. our strategy clearly expansion XX% key entertainment an top network. categories of above These by investing A merchant our locations XXXX, marketing,

a major celebrating our business. As we milestone, be American Express year XXXX, look XXXth to will ahead in

XXXXs card-focused growth. trains, and one we in and and global horses, with travel early services the to company's into a lifestyle are becoming and premium company global delivery of evolving company company by is history payments century, From by freight operated ultimately financial in XXth Our today. a powered start as wagons into pivoting company innovation a XXXX technology our the the

we brand of earliest trust, built all have service to sizes, steady who and fueled by and on talented been stayed been a that services consumers our serving of true premium products has delivered innovative have since stream are our focused longevity and security and that colleagues Our days. on has businesses

we continued we've believe the As been I've years, growth of our discussed company. responsible customer-focused that trajectory confident small resetting high is cycle business. will Gen large past innovation, of growth while growth also across businesses, in the and which largely bring to our We consumers We're the has of over maintaining customers, numbers Z continue and sustainable. especially new millennial for international the several premium

In we the to marketplace, growth. external sustain strategic see continue looking our at to opportunities

faster the example, substantial a Z faster this For about cards, fastest-growing number the in continued and are with products premium are the consumers highly continue we cards an fee-based in upside growth. those at of we're and with have rate. than consumer opportunity. cohorts the growing indicating of U.S., the premium XX% Gen and part room even Across industry to industry millennials industry, the customers these adding creditworthy of

customers are well new resonating many needs they clear and where whose business cash SME, small offerings years. expanding the opportunities coming we meet products start management. continue beyond as to adding these to in our as businesses and the their such premium forward will of small age growth needs In spending lives checking with new move expect likely also groups with lending, see to continue U.S. we in their and It's that card more to flow in our the careers expand continued

consumer look SME. when we is And we segment, our are which international, underpenetrated both fastest-growing and at in

our we spend with International off in rapid part X/X a this capabilities growing the in X have We opportunity of share and which business. base. X% to differentiated an SME, offer, almost our the U.S. top is continue we countries, particular, our growth have an products outside the of average small revenues of represent across And

opportunities the coupled coverage international gives us expanding the our globe The U.S. our growth consumer merchant trajectory runway SME, with see can confidence continue sustain that we both long outside across for growth to in the we have we and

going high strategy. strategy levels focus growth. So product ongoing as this to we look and and technology at our with propositions, drive This beyond, innovative includes we're our at year of investing in value to marketing on our refresh continue

other products membership our both and model a customers. year, XXXX, pace XX we're and enhancements planning along to that XX for and maintain between commercial our refreshing we're to Currently, with consumer in

guidance the year. for to Turning

$XX.XX We for expect XX% increase XXXX a of the $XX to of adjusted or to XX% X% EPS game. XX% [indiscernible] XXXX revenue growth to over and

establishing our together, card component assumption guidance, of most is numbers would were in expected. and as In plan billings year's revenues. the member continue than Regarding but putting spending we've quarter our saw our largest been fourth stronger that of the we through thinking had this our we said, spend total growth steady XXXX XXXX,

how will too by it's tell out, to we're we increased While momentum this play that XXXX. soon saw exiting encouraged year

XXXX similar be billings will now, full number. year assuming For to XXXX growth we're

expect throughout higher the we revenue equal. elevated in would the else of at this being However, year, to if come spend growth level continues at end our all QX range,

XXXX and results turn I'll now it for to additional guidance. commentary about Christophe over our our

Christophe Le Caillec

Thank everyone. you, morning, good Steve, and

with superior FX-adjusted fee of by model at was basis spend year of $XX.XX, we ended led our year Given a I as and strong on year and to will performance. are revenue full up results. the an discuss our with both we full QX year-end, XXXX EPS returns, XX%. and XX%. driven growth continue ROE first we our with deliver Starting XX% year And an

We acceleration XXXX returned as saw also of an year, included [indiscernible] this environment with most a of spending in which $X.X we exited spending we shareholders Notably, gain. capital to the for the billion stable year.

our investing these drive growth best-in-class model to record high performance, we results net operating while performing for achieved well leverage. of achieved and fees. some We We maintaining are our financial as continued In and well credit loan as levels ahead. card at the confidence building driving the healthy year see blocks significant growth in our

customer in on X. by an billed from Now taking a the year-over-year customer saw in our Slide few broad-based generate the moment. segment holiday closer services FX-adjusted performance T&E geographies uptick in growth and during quarters. X% across X% and at look for across the goods we base growth past as spending we'll see Robust range increase categories business across total helped a both and premium The was QX, every period

reflecting XX% also In our accelerated engagement to core members. from in growth the quarter, greater transaction addition,

over categories look U.S. I'll highlight points year-over-year the the we consumer strong a in across a rest concentrated X% the shopping and quarter, more the was versus of momentum Growth T&E bit a QX. to slides. performance [indiscernible] this compared few period few spend holiday next holiday in accelerated our as quarter. strong at up trends businesses with spend key in both GNS

spend year sequentially. spend an services versus from up with to Gen spend to versus last spend quarter Millennial as U.S. Z was Commercial in than age the quarters grow a cohorts, last bit generations growing continues growth this past and uptick across other of in X%, compared the for improved generations, a SME XX% faster saw all an the year. Looking X% few QX QX. uptick bit organic up Notably, quarter,

across spending in an spend. well spend saw our with client base also services We increase and and client industries in large improvement as from improvement as global in goods T&E

international grew of markets international on Lastly, and top in visible make our across consumer versus continue business. strides growth QX our This teens. spend commercial our last to high and an with FX-adjusted rapid across basis, growing in categories as XX% to year was businesses, each we in X mid-

feel strong good were and we businesses, see, [indiscernible] saw. As we spend you QX about our across the can results acceleration

will in in leap impacted from grow-over by QX While be growth XXXX. the year

if same of with far, January in the At first So to look need X the weeks will see more sustain. line momentum trends. the QX we time,

we are XXXX, at point, to spend basis. what assuming full in a as environment year XXXX think this So about a we on we similar saw

basis on and grew at FX-adjusted an QX X. loans versus on X% receivables member Slide on year. last Moving core to loans total

continue of building as that behind out lap more pandemic. expect the customers. moderated grow the continue faster over a XXXX, revolving when -- more a rates of needs our meet of premium loans balances and bit borrowing coming the continue to the period the reminder, course still spend expected for were we as customers receivables to to growth largely than As to process year we us, we these growth meet With and as back we of

and Turning X. Slides X to

with These management that ensure this to still rates quality quarter customers, ago. strategy widened fewer an expense margin of was and are we of strategy be outcome results Total from stable versus capabilities, year rates growth. built years reserves. Our last our profitable our provision high attracts below from combined risk premium levels a ago are and Delinquency write-off excellent. down X the are as credit safety performance has credit continues and

rates expect we continue modest at share customers of to write-off as customers. We continue and our increase to levels time new elevated existing acquire buyers and upward some reserve from to over lending

We next revenue with X% grew Turning another FX QX starting year-over-year XX% on growth with and line in for Slide on year. in basis revenues adjusted an strong revenue Discount business up both saw FX-adjusted XX. full to revenue growth. the billed QX,

fee growth in year, the to XX% card card a drive Our for acquisition new the XX% cycle helped to [indiscernible] fee-paying level acquired of [indiscernible] of new for around product of refreshes record year quarter the on new and accounts adjusted million XX with products. --

expect the year. in through teens, moderate We XXXX to to the continue fee grow card growth as but mid- to high progress to we in

NII Turning to versus FX-adjusted increases the Slide in driven loan yield net XX. was Growth basis. XX% and prior by QX on was up balances an revolving year.

has improve quarter the it our deposit our important of the our program. driver to is funding As ability growing as of expected, as growth mix long-term moderated An a year. result of this yield course over

grew XX% account savings XXXX. balances high-yield Our in

accounts up our over that balances make with resonating Z is younger about our half Millennial and Gen premium the the customers. with we cards, [indiscernible] see X/X of of total today. customers product and As

think NII outlook. And growth rate while there and growth expect to about outpace by the in XXXX, is loans revolving in in growth uncertainty the we supported total balances. we As receivables,

liability reminder, changes small with mildly we rate. from Fed sensitive the a a to As are impact funds relatively

the on VCE grew year. In largely growth revenue XX%. turn particular, driven Rewards quarter, was to rewards in I'll the by the in expenses expense Slide in fourth to next expense ratio in QX, the prior slow XX. XX%

very the both drive we to faster that portfolio the economics as expenses card back, VCE addition, the URR as small we more Stepping program, overall as a increase and good slightly we short but expect the to the customers revenues for premium. engagement overall and to continue In invest member become our in program mentioned changes term. to small made continues in than products are in XXXX last grow of our and some we quarter, in drive

full of year growth opportunities expenses, result $X based the expect changes saw. in marketing growth We historical the year a for bit the We a growing to elevated ago, year with elevated in more as line at as XX% up attractive we rewards before in remain with from levels model URL the we ended billion QX a on the trend. invested

increase of expect increase significant expense a pool in we in XXXX, the modest marketing the for investment XXXX. Given

quarter year Finally, the at $X.X down billion operating $XX.X X% expenses basis, X%. On year were down expenses for operating versus billion. last were of a full

on Excluding the sale X% expenses for the operating Accertify up of were the business gain in full QX, year.

operating continues track still disciplined we for expect technology. -- we our such low grow XXXX growth areas digits of levels last as This levels XXXX, expenses low In as versus of year in adjusted the gain. record maintain the key expense Accertify record single management strong while to investing in from

me move Let capital on to Slide now XX.

share by billion billion of dividends our capital XX% to XX.X% to continues expect Our QX our of the We our to of growing XX% including consistent for ratio. line with $X to of XX% our in was be In XXXX, CETX also dividend we within shareholders quarterly increase per $X.XX and earnings $X.X our approach ratio and target returned and share, repurchases. dividend our billion XX% to $X.X to with payout range. year, XX%

With of beginning the we XXXX. the expect dividends to more increase, this than since plan double

me also of sustainability reduced by brings count of earnings our our to XX%, demonstrating have model. We the in guidance. differentiated confidence our share XXXX the This

We to EPS and growth. growth aspiration our to achieve revenue run with XX%-plus mid-teens an continue business

in growth the As for XX% to [indiscernible]. The for growth Steve the we and and Accertify adjusted range between per EPS XXXX, earnings share expect $XX gain year between noted, X%, reflects XX% $XX.XX. XX% full year-over-year, revenue

end of spend to that [indiscernible]. guidance range to revenue I'll in we continue, balance in growth QX reflects year the the the closer the spend saw acceleration spend between we were If be QX. saw would most environment high momentum saw the expect for we to the the and note the growth revenue we in of the

reflects are of today based what know regulatory economy range and guidance a the about on a Our also what in assumes factors stable scenarios business and It in our we seeing today. environment. competitive we

time, tax in the At rates whether policy, environment, uncertainty is there the movements. currency interest same in or

is today. rates Our as outlook under are FX they based

as strong global is closing, As the our growth. of the headwind In U.S. you strengthening to a a XXXX for a the company. dollar year heard, company, was

about We growth the continue are track strong ahead. XXXX, our record feel well year positioned to into of we and good

turn now your take back over that, to and Kartik, will the With I call will we questions.

Kartik Ramachandran

Thank will you now your Thank operator with the line you, questions. up the cooperation. Christophe. [Operator And Instructions] open for for that, Operator?

Operator

Nash first Our Instructions] Goldman from comes [Operator question the line Sachs. Ryan with of

Ryan Nash

I to didn't want Steve, I'm going growth. to disappoint ask about revenue so

So lot you comments, X different obviously, gave exiting at XX. a you're XX, of to

billings similar started highlighted the quarter. an -- elevated level, the that year fourth are You to at

be just could is of maybe feels Steve, of put that the like lower of you've the ton revenue in little acquired see kind given about it type a the XXXX would given talk of XXXX. headwinds growth. environment a towards cards could aspirational I potential the GDP what end? you So sort bit line is with this growth guess, right And in growth, Why that to revenue we line where is top of not strong, sort

Stephen Squeri

Yes.

say line So at mean long-term it that in end we end range, that aspiration. I is range the got line. has a we've in would -- with is XX% and our give the top our top I

aspiration, quarter, year long-term only full for not did year but on the a our this like year, we Just hit for the basis.

I a were So our have what to balances. of look sort to consumer middle you lot you of customers what or building at is cause last would year below go at think

that . bit moderated some into little a pretty as NII And growth year. got had of so the sort we and strong you

at giving we've I were that you in if, We've story XXXX. really the look you a end fourth it we've said us will the for in way the billing I Christophe And fact, were does down is said right. billings continue all if any said they range. for any and to then I top of you at conference, billings. range. where are come as is And plug conference, another think they we've sort like really So becomes quarter, you -- us end of And see just at revenue fourth guided think surprises. the you see it that have -- if revenue the will But as in I it, that billings guided absolutely your else at what equal, being of your don't at the quarter, think top and

can last they happen, the be year, is the them why think this we'll for see below were you were be you the give if If end. lower would in whole this year, will where middle. they I ranges, but at you And assume you don't

So it really think a story. truly billing I is

I consecutive very we've mean I confident quarters XX of think we're with had fees. fees, card double-digit card

teens. the a to a that continue, of the than lower continue expect the to low first little mid-teens you And or year. of last will at more X to quarters in We saw NII high albeit growth rate bit

I I XX, line last the came So we XX, about and quarter, got with guide is pushed we said. over billings, went in and us the in billings we year, fourth we to the and what I think truly mean think line. X it said in at which we was

that So scenarios. providing all incorporates we're we're -- just those guidance

Operator

comes the Sakhrani of question line Sanjay with from next Our KBW.

Sanjay Sakhrani

of front that. the were I we acceleration follow-up. but balanced, know get Or was then revenues, the well, upside much about versus maybe of into -- we -- I little there more how in a I be more thank guess that could so where can upside just sustain discretionary you, think the it from you it type? spending? year? range? guide. bit like we to do to Maybe And if that came can that I for the the the mentioned think Christophe, out If itself mean, kind a Steve, course then you pretty just think static. is travel an would so revenue question that's And we that to the in getting on figure about over of appreciate deeper EPS

Stephen Squeri

year And EPS This deal we've range. the provided we've things with guidance to take our over let a I this was So of years up had lower wound me marketing that we of at expectation just with. the if the the buy one year. our mean invested. reinvest we beginning shares was we million. ended using done game, we the to opportunities were we our than but certified invest, back. is And year, obviously the year we've what to increased going look and that by the at that $XXX I'll

we keep to have this back investment the a want the that. . Having we if good year we we year, could also that, good So if, fact, flexibility to had exceed we options, not we business. but do do we would we said invest have options like EPS, only investment had in in

And of happening some opportunities opportunities be, to whether do marketing, in make will the as an opportunities be I management make technology, range, basis ongoing value in be what the decision forth. would a more you the a has whether to those in shareholders. see we so those is that to be on and we more do will proposition business, what revenue that start as in get we winds So of reinvest drop we back think high up decision, that to end that

those But to revenue that, that could back more is the the said investments. you leave we that is that is want decision I growth. if at that And invest the want we made again, end to to $XX.XX. able with to higher a having of is that have commentary in. XX% that growth flexibility there top be we likely ourselves make make range So It to happen

fact, that, that, plausible happen. it's would So in

a the comment As far then for go as quarter, I'll little more. billings bit and let Christophe

made and from come to international have saw I organic X%, an which think X where been up. we a across saw consumer We an from spend picking still you consumer very, points SME SME which more SME perspective perspective points. very X what was that's we from running. continues not to to you the perform saw in also well, board, and perspective, both from X, was above lift SME, X where up and want be It

if And XX%. else. in higher I anything was be up particularly very, was think, strong. doubled to Airline restaurant number, you us. the airline. And front quarter-over-quarter, add The cabin, particular [indiscernible] Travel more this I strong and very Chris, to sequentially XX%, of quarter continues want know quarter. was for surprising the don't

Christophe Le Caillec

thing key And the I for asked don't say a lot about of season looking it. the to word, only question the And you us. That's especially you here And that's was way. hard in to it's this a it's definitive holiday strong really real most covered team shopping the that to key is will that's answer have I the The because is sustainability. question. right? -- expanding a at And going a whether the XXXX.

but As first January, in QX, more there's saw weeks X much how weeks what play. the to XX in very and my line don't come, in with I like look of we know going it's to said like we remarks,

to So this, saw but looks come what we so far very more strong. on

Operator

comes from with the Our question of Erika UBS. line Najarian next

L. Erika Penala

at acquired, building and fourth it a -- continue up after second looked when the like I in in quarter. the third the double cards And just to being bit for XXXX. look wanted net digits I slowed quarter to down proprietary story unpack the it

course, Of up X.X% year-over-year.

was account of X% up -- in in a that of the quarter, acquired particularly light cards of to noticed, the that X.X% your As the billing We about marketing account. about fourth spend drive versus increase X% increase we going split versus about course, XXXX, better bit up in for modest is in little the spend between we Should new what comment versus terms per think expenses. an per in in strength think year. Christophe, what's

Robert Napoli

Yes.

Erika. question, So there's your in lot a

Let me try to address of most the points.

the difference between quarter, cards, account is -- accounting quarterly the And million a XX the the -- here a and alignment how the because spend that invested company. there point between which there to incentives. distribution we is got another the a quarter marketing cards, it's is a lot of very NCA for in we first that in and definitely XXXX, around in like thing But is lot the the here, hard there good The in time of is X a NCA. for lot of record the welcome we the read

of very of in that in saw of that's we in low. is X, And which to growth. way predict. As about what's this are lot on billing I going hardest to very Their as stable, is the the the -- coming this 'XX from the last, for we're the organic the growth . And like we to card the And we positive sorry, out coming that's in a the the we XXXX would almost the doing source performance it's last about attrition. stronger -- And was members, consistent that from what saw what terms it not from is you we expectation is the billing the think split you one acquired and play recently there that think know, of [indiscernible] organic between is how the years going spend, math either There's about growth is last going from we X and like organic, what's coming is the softness be have QX. seen that is around attrition that saw The QX. either the we've the say card here with members. the that's over attrition puzzle XXXX. piece contribution coming softness

it's provided details the in a the for it's So the perform how to say hard in from and that growth but of new And the of customers sure. billing we balance say past, and would these the the I typically is of source attrition. is spend to the volatility comes X% XXXX, organic organic the but some going good

Operator

next of from Mark Our line Deutsche comes question DeVries the Bank. with

Mark DeVries

getting year-end. consumer accelerating confidence been business you're We're into really business growth and been we've that's As also discussing, billed climbing. seeing

also had any build was about you both So of numbers has their to historically have spend. historic conversations responded may Steve, to with confidence? hoping recently rising of And I from at that looking kind hear and your you've learned how business and kind about customers optimism what just

Stephen Squeri

look, consumer travel. fourth fourth we I'll I think, quarter. mean saw rising quarter in I and on it perspective, not us, think front go doubled Certainly, you -- the it -- for as back cabin. especially a travel X%, just is a number, saw I big in I sequentially Well, traditionally the comment on confidence in airline is the a from but not of think

service is good I consumer -- do they think a downgrade have downgrade is but don't when and of front they of cancel the trip, confidence, downgrade forth. really cabin the of because indicator class confidence may so airline what not people you may hotel, a the and the

just marching and We've done it's than we an higher after with been And COVID. has small sentiment we're X organic up from long -- has -- been good, has come consumer a since a think survey that I years really, businesses, it's saw story confidence. time. the of really just it's on. been is seeing been strong So and I think a more been International growth us strong. International for It perspective. in

So year hope is I But think that that's the gives us continue. will that what this a plan. for not hope again,

upon plan what based saw the And at do so the plan. we our of we time

we expect the again we to look first high from throw of perspective see end range the leap one growth, perspective. this where we continued revenue that a provided I we'll And be would from year. timing And is couple day of quarter, less this out at in as months have a the that that are. the due will first we at to will in there The only thing have quarter first

at on to anyway. basis look have that. -- things a we'll manage to we So days adjusted mix like we'll But

And be mean so that able we'll for determine through what and quarter. see second to that will the

We there's just be I confidence is there going quarter is a this story basic whole -- point. to be, the before what There we'd anything at But like come. don't business do see to we think So that I to confidence. to consumer it. is think year is with more here one color want small repetitive

Operator

question Craig FT the of Maurer Partners. comes from with next line Our

Craig Maurer

Wanted to -- I had X questions.

potential first will ramp XXXX for the delta we've competitors card how of expectation feel growth commentary strong area and And SME that, about good. your from and be the The second, newer future? might whether very and co-brand had an at you that be that acquisition was very competitors, I on your growth about customer-facing SME, wondering tech as of and growth in least some their some like strong seen

to you how that I comping the process travel rest book lines the up thought So on book? has delta with been your the and how the of space wanted ask versus

Stephen Squeri

Yes.

well, I closely we look, very think align remember, team. his Ed and with --

And not member also it is so is that. else. -- Delta that on what's card remember the with Delta members spend aligned just But -- card spent spent Delta, American everything what we're book Express on on

see And piece piece to of because increase. so that Delta, the to We're we're pie. increases, means we as would the the getting our increase is to We're of that expect getting we and happy that that look, well. I think provide pie continue spending our remuneration

about this And that, my that he it well bodes think he that we in it feels in And spoke confident his I with I about think I that that's And fourth hope for think during year. call. very I Ed, we the quarter, So and saw earnings how continues. know travel. conversations

And our are to but a They that far about smaller yes, customer constantly at have that's and especially on ways look obviously, I'm forth. eye like from we that we there. we As comment out everybody we keep look, improve the where that. make And acquisitions with experience. and so on-ramp, to making, good are we and Brex on tech, to acquisition But feel good they're products, we things our the some working and CABG and else progress or we're SME not responsive will base, going inroads, that. as they are sure making

Operator

Our Fargo. of next Don with the line Wells comes from question Fandetti

Donald Fandetti

have SME. don't and I the consumers, build Discover impact. Capital the like looks compete they affluent merger it's lounges they go thoughts incremental it more on going through. Steve, to do to ability One Any scale, competitive but is know

Stephen Squeri

Yes. credit only smart the largest a the a lender company [indiscernible] I really credit them, and have and bunch States Look, network debit loans scale from deal lot it picks is with you a is think but and with up what it's in really Rich United not multifaceted and a Discover for think up more that. card I CEO, I [indiscernible] so of forth. picks and becomes think student a at debit good a with a cards,

very their with fits it in nicely I strategy. So think

with making One the X Capital is within space. premium inroads Venture

full more will think they'll hands years, integrating we I to a they're forward than of competitor, we with and our look, Discover our competing our hold and evolve though, I continue -- with have but with think look to also, them. the continue, own. product we couple And they're formidable to next products over refreshes,

Operator

Shane Our next of comes question from line JPMorgan. the with Rick

Richard Shane

the say rewards. incentive other benefit operating experience tenures, your versus there's costs besides your to associated initiatives The key with with that of and reward. Is is fair been is well impact one Steve, understood. growth team than on there's that the and more there traditional growth account the higher fixed because experiences increased significant, has it leverage on focus of

Stephen Squeri

I mean, good a point. it's

fixed I experiential of mean doing absolutely think have that -- you're I do sort have cost more sponsorships. you're when you right. you

that it's it, or costs is with And You what more. add a to piece you're a then grow, but of have we rewards basis. doing lounges more you little when do then that on though, you that and continue amount things right? like that The scale. grow is when to servers fixed as you're need variable than as big, into have You just mainframe x get you. you capacity or bit have of technology, you like trick

And we'll new so some we seeing investments, as existing making not the think only in expanding but of some I lounges, be well. we'll you're more what be that's our of lounges expand some as lounges

experience of for part that they also put it. all us access is that's rewards, the think the that around I we like like while and our members, calculus But the the card they

a do. lever that to fixed the that's we And and to investments of by us, able a strive to it what enables best wider areas, so both making more across And balancing give base. these our we're little worlds, again, also in we're people bit sure cost

Operator

Jeff from line of the question Stanley. next comes Adelson Morgan with Our

Jeffrey Adelson

light little refresh to was sitting year maybe commentary. seems if what bit think if for And this is here. X light that's it's year. shed has talked Steve, more your your bit one better you been a Christophe, a could than platinum, you been with modest from of Or product you talk It see well. planned I was bit a The increase in pretty might more of little out this you strategy I why every part? actually wondering you that. do might go shed XXXX. little since could Can you've Is for there you a conservatism U.S. be on wondering a doing refreshing been that about into the credit stable Platinum about looking into credit you result that? expecting X where like sort outperformed you previously I know years could

Stephen Squeri

Yes.

I'll the I'm to ones with XX which XX. first and you and we're preannounce. But disappoint so answer. comment do to going on going -- between So not look,

on But products speculate you let when when to look what's need an happen. need we going we'll that products yes, basis think and refresh that those -- refresh. on I the to feel ongoing also we we to

wait out months what got to more and go. we you'll come And see have just to with, so but XX we

Unknown Executive

where first Unlike, competitors. metrics, Jeff, of say I'm going thing is we think, most I So on are our pre-COVID. we were materially the still that credit that below the to

the much the in about few standpoint. something you very performance all a says space. on tells that the last over we that the years -- focused as credit that It growth from well generated was So premium

So I like that.

happening So were should part stable, upward still trend of year, at I credit comment while a the of towards later the turned the the believe and the either year. made that a best-in-class. the a little are similar extent, can going low, good And seasoning because remain going so metrics trend for that here. up those lot to be they to acquiring there on from vintages. bit beginning so it and customers, actually those fairly comment especially the performance, of metrics bit up some last a metrics to up little only we're out some go I buyers, They're that are those

side. -- performance. attracts with credit in But working credit We're we're and very the that comfortable the of premium lot and the translating products issuing on strategy low credit either customers. either well these performance is just of a The risk premiumness really are the very

I And rate, like the to like by where time the hope I of to end just -- -- so looking we are, good get this we get year, the very I we're a that at it's I long position. and And is the were up bit, those credits little was run, bit. the that should you trend metrics I in and trend stable. but say little But wrong modest, expect can the think very a to a

Operator

question next line Blair. Kennedy William Our the comes Chris with from of

Cristopher Kennedy

between and customer how allocations activity. evolved the just talk acquisition, increased such investment lot sponsorship different in have has a brand about the marketing years. you Can buckets, as Marketing general recent

Robert Napoli

XX And past going call sorry, General investments. prospect acquisition. versus year, sponsorship and that the lion's acquisition been acquisition, and between has consumer you acquisition we this into over these of say, lion's that of last companion share refers growth over then months, attractive cars. marketing, And $XXX split year years. it acquisition, fairly share consumer brand upgrading the last so is are in saw the between the the the stable to we what very million Customer

balance relationship to current So and prospect try between deepening customers, find the the acquisition. our right investing with we and

first is And two, attractive the in opportunities of strict of I terms to most in and fund typically don't very that market, try have return. we maximize we the exist split try at maintain and our which that in So the underwriting to returns between look the that. the we standards terms but customer acquisition, and

have, those process but as very a know, to we dollars, high you the sophisticated story. level, I marketing think optimize a that's So at

Operator

from Our line comes next with of Moshe question Cowen. TD Orenbuch the

Moshe Orenbuch

saw we trends XXXX. the for there asked have you you said been or thoughts questions to could things bit SME the a are of you really about Most either a drill But refresh. more and specifically business? down of You answered. and little should the my already I in there talk know momentum that didn't about acceleration Any be want looking But little plans? more plans Steve, quarter. for fourth on in maybe

Stephen Squeri

attrition customers acquiring saw is the which organic be story. spending to It still really same. that the most our about we been I same of SME, acquire levels the organic back still not think -- to of is I pre-COVID. Well, what -- say SME we've of to sort the that amount has come and an would continues we And continue

and started from And ratchet so happened an little up, normalized spending a perspective, of if you it went bit. organic out all coming it of look then during down, sort really COVID, at SME to COVID, what's way the

you forth. had and interest rates higher so then And inflation,

than to be story that started to What think see start the will we a billings organic now. back of and get we overall then spending you be turn a you more it I organic -- So that that the will with stop X% lift contributor right around. see decel SME can SME deceleration think is of to see -- the of to will I is

And as acquisition that think seeing -- us. the for an story. But I out, I it's as it attrition well. refreshes. an talk I'm is just It business really story. is down you -- So going And pointed I to story is industry still to comes small an it's not it not story, an truly still organic think truly confidence. organic not And about

Operator

of Brian next Our from Truist. with line comes Foran question the

Unknown Analyst

can my I remind dollar hate you expense question the stays and the assume is you some XX% then on EPS guide X% But to hedging. impact? to mentioned FX-adjusted GAAP, think you there's And FX. I us know the because or here. use I

So any should embedded is appreciable the we to drag think XX.X% XX% EPS there in about range.

Unknown Executive

Yes.

Brian. question, your for you thank So

to from transaction, it revenue a movements think once currency, noise. to a first say standpoint, of in thing we us about to for true FX control adjusted this going and that safe FX because stable no we The currency see from I'm about reported useful reflects is on is we that the momentum talk and the like billing momentum because we that you to FX think terms

it . we reason, in speak about that for FX-adjusted So terms.

think we an As be predict going we're where predictions, standpoint. it's about impossible us to FX to from forecast and for

at currency the talk movements. -- X%. either you So of growth The think percentage way dollar was The actual growth right? way right? cannot these saw going reported was we about know don't not we're therefore, it we was QX, point, trying impact year-end of Here, FX-adjusted to is terms FX the movements, And which revenue in about to because go. we FX reported, XX%, reported GAAP a X have difference from revenue it standpoint in we to.

of the growth. percentage So is revenue point material impact X is

of EPS spread have terms complicated stories the because we expenses far impact, world. In out a it's more across

We of have excellence. centers

goes it Q So complicated we a I'm think it's where really this. or the it's to one. in you, like have I the K going sensitivity. in refer And something

dollar but negative numbers in PTI. translate X% $XXX into impact dollar check increase can precisely, increase the the increase XX% dollar you If on a the XX% the or term or -- in million

the of sensitivity. kind so And that's

not it is a bit still. it's impactful, So impactful little hugely but

Operator

comes HSBC. the of next Martinez with Saul line from Our question

Saul Martinez

Maybe you little double-click can bit international on a the businesses.

X merchant sales what of you at just growth. trajectory You the of markets, And what of I years and think it. to grew trying in I range. feel you to how guess I'm teens get you've drivers couple just you're -- comment to about talked you -- of acceptance, high-teen kind on the sustainability the of made the changes that are how the terms top high ago some the impacting of -- a are momentum Can your kind mid- about each -- mid- said you of seeing

Stephen Squeri

of it's and T&E trajectory LIF the we Well, -- in And made we're the the we're we sustainability. millions that markets. Acceptance comment international to mean merchants over from XX% continues acquired good perspective, coverage XX%. grow. key is in about at and a feel I I the really Merchant

up X years. go the X over by that saw You last points

very, Merchant continues internationally us. So grow to very acceptance for rapidly

good. bit invest for quite our we as opportunities overall international. growth, And us. are a that a growth far And from of international still in card acquisition comes in for As really, cards new card really lot acquisition in

think environment, in we nascent SME at in the is this in us. -- which with big X an in in markets really a than still opportunities we and there's share market point, top less SME X% So and for think consumer

billings double-digit the expectation And future. so is will continue foreseeable our into that

that's added was of more remember, merchant because we what And our pre-COVID, we added we business locations, saw. International and fastest-growing the part cards.

During to COVID. almost It to it where right a recall, that was back it's was was that's international, to continue but -- feel than if going stoppage, X-year you pre-COVID more continue. and we

Operator

Our next Ma the line with of question Terry comes Barclays. from .

Terry Ma

to about growth. wanted just ask net I card fee

moderation. I think you guided 'XX to some mid- to growth with in high teens

a So bit. unpack that maybe just

accelerate of historically you've to growth a more when major You've that of refreshes. done kind had runway

curious year. would just this moderate I'm actually why So that

Unknown Executive

these of that is rates thing a been time. have period first the mean, long very very for growth I strong.

something this think quarter but so As very consecutive marks that double I is it's where digit, period seen the this a like of say of when CAGR double fact, strong card over XX% growth digit. XXth fee of magnitude, growth. the matter in like And we've time, quarter I

last XX% an we the beginning right? we XX% year expect were year, started acceleration, year at We should said XX% QX, -- quarter QX. happened, XX% we with and the in the which to is of At the at exit in like and XX%, exactly what

a of it's very moving always a -- lot strong which complicated here. So factors growth, there's always

our was So and But see product we the it's actually big refreshes simplify of acceleration can driver too that to it in of not the cycle easy models. it much.

therefore, growth is at what we play mid-teens going you as acceleration to little which about XXXX, And XXXX, of saw in that still the think saw trend like QX, bit that afterwards, it this should QX And is rate. out QX more in a beginning XXXX. you either

strong that fee-paying well. So on a together renewal on continuing as see growth want this this that that are I with fee trajectory that million franchise the joining card growth. we And year, very supports of very still a the that [indiscernible] on just we as cards acquired strong XX% well to remind So product, right? rates

recently a just us, that in not it's over X last So to very is on -- but only and successful years, it's success the XXXX. for been story going keep

Operator

will America. of of line Bhatia Our the come final from question Bank with Mihir

Mihir Bhatia

on of I to little question. to a Maybe it how evolving? bit take step question has a picture back talked wanted competition and from big been about a in for You earlier about Craig's response in little just the bit fintechs commercial side just a you, that

the on So side as about it well. maybe just consumer talk

you some have market, you the Specifically, back some seeing in the customers rewards competition just that there the of offers I will. entrants on pretty from in on are what wondering, impact cash traditional Is was away from seeing the and side? drawing starting newer been the from consumer card if fintech we've rich any to

Stephen Squeri

No. I say the go I to I'd gave answer back would before.

before how think I Rick Shane about we the asked question invest.

our card think on member different. And not I focused really cash back. is a little bit they're really

We the and But balance have experience focused on those cash products more members like between back rewards, it. that card service. our for are

access it. not customer. And really not service having knowing at And have our so and does that it, that from as consumer don't of not customer look we side, a well it. But again, with fintech your is we seen about really rewards anything. as that one we're aware perspective experience it's . Not that on value the

back is more been fintechs product. able of a really something of of a Again, So the -- have to it and that's not that more replicate. more -- cash

integrated to steps And side, we'll the of SME technology the very take we're card. address appropriate I it's aware that. we'll that. said, as with On And

no, inroads So card at don't record any unpack was seen we but levels on not at we all. at consumer well. a it, our from as the consumer side, our it, acquisition, have you perspective look acquisition though, if And card

So cards we've acquired. we high, that had high consumer

to again, it. to at there nothing But point. So this watch see we'll continue

Kartik Ramachandran

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

Operator

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

code access XXX-XXXX. will our You (XXX) p.m. That at XXX-XXXX Access can participation. call you Eastern your conclude XX. Standard Time after XXXXXXXX call on a conference January the or XX of digital (XXX) Thank for X:XX also January today. replay through for

disconnect. now may You

American Express (AXP) 24 Jan 252024 Q4 Earnings call transcript