American Express (AXP) delivered another impressive quarter marked by record cardholder spending and higher-than-expected earnings.
Yet, despite the upbeat numbers, shares slid as investors reacted to the company’s decision to stick with existing full-year guidance rather than raise expectations.
Record Cardholder Spending and Robust Earnings Underscore Premium Strength
In the second quarter, American Express posted adjusted earnings per share of $4.08, handily beating analyst expectations of $3.89. Total revenue rose 9% year-over-year to $17.86 billion—setting a new high for the company.
The quarter’s standout figure: $416.3 billion in billed business, up 7% from a year ago. Spending gains were broad-based, with growth in both goods and services and travel and entertainment (T&E). While T&E growth cooled to 5% after last year’s surge, it remained at healthy levels, especially among international cardholders.
Net interest income climbed 12% to $4.19 billion, nearly matching forecasts, while card fees jumped 20% to $2.48 billion thanks to continued strength in premium product uptake.
CEO Stephen Squeri credited the momentum to strong demand for AmEx’s high-end offerings. “We saw record card member spending in the quarter, demand for our premium products was strong, and our credit performance remained best in class,” he said.
New Generations Drive Growth as AmEx Doubles Down on High-End Strategy
American Express added 3.1 million new proprietary cards in Q2, continuing its successful push into younger demographics. Millennials and Gen Z accounted for 63% of new global consumer accounts, and 71% of all new cards came with annual fees—a testament to AmEx’s ability to market premium experiences.
Executives emphasized the company’s edge in the premium segment, citing unique assets such as dining platforms Resy and Tock, which offer exclusive access to thousands of restaurants. Updates to the Consumer and Business Platinum cards—set for rollout later this year—will mark the company’s “largest investment ever in a card refresh.”
When asked about Citigroup’s (C) upcoming Citi Strata Elite launch, CFO Christophe Le Caillec was unfazed. “Bring it on,” he said, underscoring AmEx’s confidence in its long-standing position among affluent customers.
Credit performance also remains a bright spot. The company’s net write-off rate declined slightly to 2%, and delinquency rates stayed low, bolstering its reputation for high-quality lending. The Federal Reserve’s recent stress tests confirmed AmEx’s superior credit card loss projections and the highest projected return on assets among its peers.
Outlook Remains Steady Despite Momentum, Frustrating Investors Seeking Upgrades
Despite the strong quarter and six consecutive EPS beats, American Express left its 2025 outlook unchanged. The company reiterated its forecast for 8% to 10% revenue growth and earnings per share between $15.00 and $15.50.
That decision disappointed investors who had hoped for a more bullish tone—especially with the stock hovering near record highs and outperforming most of its financial sector peers. The share price dipped about 2.4% following the report.
The company did raise its provision for credit losses to $1.4 billion, up from $1.3 billion last year, citing ongoing economic uncertainty and increased reserves. Still, executives emphasized that customer spending remains “very consistent,” and reiterated their confidence in AmEx’s ability to navigate a complex macroeconomic environment.
Conclusion
American Express delivered a solid second quarter, powered by affluent consumers and a product lineup that continues to resonate with younger generations. While investor enthusiasm was dampened by the company’s cautious guidance, the fundamentals remain strong. With a growing premium customer base, top-tier credit performance, and a renewed focus on product innovation, AmEx appears well-positioned for steady growth—even if it’s not yet ready to revise the scoreboard.
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!