American Express' Q4 2024 Earnings: A Tale of Record Growth and Strategic Initiatives

As the financial world eagerly awaited American Express' (AXP) Q4 2024 earnings call, investors and analysts alike were treated to a compelling narrative of record growth and strategic initiatives that have propelled the company to new heights. In this article, we will delve into the key drivers behind American Express' impressive performance, the strategic initiatives that enriched its membership model and expanded its merchant network, and the significant contribution of its U.S. small- and medium-sized enterprise (SME) segment to its overall growth.



American Express' Q4 2024 earnings were mostly in line with analysts' expectations, with the company reporting net income of $2.17 billion, or $3.04 per share, on revenue of $17.18 billion. Analysts had expected profit of $2.17 billion, or $3.05 per share, on revenue of $17.17 billion. The key drivers behind these results included record levels of annual card member spending, net card fee revenues, and new card acquisitions, as well as continued high card member retention and best-in-class credit performance. Notably, the company exited the year with increased momentum, as fourth quarter billings growth accelerated to 8% overall, driven by robust holiday spend.



American Express' strategic initiatives in 2024 played a significant role in driving its record revenues and net income. The company refreshed over 40 products globally, including the U.S. Consumer Gold Card, which appealed to millennial and Gen Z consumers. Additionally, American Express enhanced its dining portfolio with acquisitions of Tock and Rooam, and launched new top-tier sponsorships and experiences, such as its multiyear global partnership with Formula One. These initiatives helped to enrich the membership model and attract new customers, contributing to record levels of annual card member spending and a record 13 million new card acquisitions.

The company's U.S. SME customer base also contributed significantly to its overall growth in 2024. American Express saw strong new card acquisitions throughout the year, indicating a growing customer base in this segment. Additionally, there was an improvement in small business sentiment in the fourth quarter, which linked to stronger organic spending by these customers through the holiday season. The improvement in small business sentiment can be attributed to several factors, including the overall economic recovery, American Express' value propositions, marketing and technology investments, and the global expansion of its merchant network.

In conclusion, American Express' Q4 2024 earnings call painted a picture of a company that has successfully executed on its strategic initiatives, driving record growth and enriching its membership model. The company's U.S. SME segment also played a significant role in its overall growth, with strong new card acquisitions and improved small business sentiment. As American Express looks ahead to 2025, investors can be confident that the company's focus on backing its customers and investing in value propositions, coverage, marketing, technology, and talent will continue to drive its success.