American Express Q4 Earnings: Revenue Beat, Record Spending, and More

American Express (AXP) has just reported its fourth-quarter earnings, and the results are nothing short of impressive. The company's strong performance can be attributed to several key factors, including record Card Member spending and acquisitions, a 17% dividend hike, and a solid outlook for the future. Let's dive into the details and explore what these earnings mean for the company and its investors.



Record Card Member Spending and Acquisitions

American Express reported a 9% year-over-year (YoY) increase in consolidated total revenues, net of interest expense, to $17.2 billion. This growth was driven primarily by strong Card Member spending, higher net interest income, and accelerated card fee growth. In particular, Card Member spending or Billed Business grew by 8% YoY to $408.4 billion, reflecting the company's success in attracting and retaining customers.



The company also reported a record 13 million new card acquisitions in 2024, adding to its already impressive customer base. This growth in customer acquisitions, coupled with high levels of engagement and retention, has enabled American Express to build scale and drive momentum across its core businesses.

Dividend Hike and Strong Outlook

American Express plans to increase its quarterly dividend by 17% to $0.82 per share, beginning with the first quarter of 2025. This dividend hike reflects the company's strong financial performance and its commitment to returning value to shareholders. Additionally, the company expects full-year 2025 revenue growth of 8-10% and EPS of $15.00-15.50, indicating a positive outlook for the future.



Expanding Merchant Acceptance and Digital Capabilities

American Express' success can also be attributed to its strategic focus on expanding its merchant acceptance network and investing in digital capabilities. By offering new lifestyle offerings and financial services, the company has been able to enhance its Membership Model and appeal to a broader range of customers. This approach has led to sustained growth in customer acquisitions and high levels of engagement and retention.

Looking Ahead

American Express' strong fourth-quarter earnings and positive outlook for the future bode well for the company and its investors. The company's record Card Member spending and acquisitions, dividend hike, and strategic focus on digital capabilities and lifestyle offerings position it well for continued success in the years to come. As an investor, I would be confident in American Express' ability to deliver on its longer-term growth plan aspirations for double-digit annual revenue growth and mid-teens EPS growth.

In conclusion, American Express' Q4 earnings report is a testament to the company's strong performance and its commitment to driving growth and value for its shareholders. With record Card Member spending and acquisitions, a 17% dividend hike, and a solid outlook for the future, American Express is well-positioned to continue its success in the years to come.