American Express Q2 Earnings Surpass Estimates, Driven by Strong Customer Base and Fee Growth

American Express Q2 earnings beat estimates with EPS of $4.08, a 17% YoY increase. Total revenues net of interest expense reached $17.9 billion, a 9% YoY increase. The strong results were driven by growing card member spending and a premium customer base, with rising revolving loan balances and robust card fee growth aiding the performance. However, escalating customer engagement and operating costs partially offset the results.

American Express (NYSE: AXP) reported strong second-quarter (Q2) earnings, beating market expectations with an earnings per share (EPS) of $4.08, a 17% year-over-year (YoY) increase [1]. Total revenues net of interest expense reached $17.9 billion, marking a 9% YoY increase. The robust performance was driven by growing card member spending and a premium customer base, with rising revolving loan balances and strong card fee growth contributing to the positive results.

Key highlights from the Q2 earnings include:
- Card Member Spending: American Express saw a 7% YoY increase in card member spending, reaching $416.3 billion. This growth was supported by strong demand for premium products and high-value transactions [2].
- Revenue Growth: Total revenue without interest expenses grew by 9.3% to $17.9 billion, surpassing the consensus estimate [2].
- Card Fee Revenue: Net card fee revenue grew to $2.48 billion, up 20% YoY, reflecting the company's success in attracting and retaining high-value customers [2].
- Credit Performance: The company maintained its best-in-class credit performance, with a net write-off of 2.2%, indicating strong credit quality [1].

However, escalating customer engagement and operating costs partially offset the results. Consolidated expenses climbed to $12.9 billion, up 5.8% YoY, reflecting increased spending on marketing, technology, and other operational costs [1].

American Express reaffirmed its full-year 2025 revenue and EPS guidance, indicating confidence in maintaining the strong momentum seen in the second quarter. The company plans to continue its strategy of enhancing digital capabilities and developing more personalized offerings, particularly targeting younger professionals with entry-level premium products [3].

References:
[1] https://seekingalpha.com/news/4468810-american-express-q2-earnings-rise-on-robust-spending-healthy-credit
[2] https://www.linkedin.com/news/story/amex-thrives-as-sector-heats-up-7508218/
[3] https://lnkd.in/efvw2BgA