American Express Reports 9% Revenue Growth, Affluent Spending Surges 7%

American Express recently provided a unique glimpse into the spending habits of affluent Americans, revealing that these high-net-worth individuals are thriving in the current economic environment. The company's second-quarter 2025 earnings report showcased record-breaking revenue of $17.9 billion, a 9% year-over-year increase, and total Card Member spending surged 7% to $416.3 billion. This data serves as a barometer for the financial confidence and spending willingness of upper-income Americans, who form the core of American Express's customer base.

The affluent cardholders are not only spending more but also showing a renewed interest in premium products and experiences. American Express is continuing to invest in enhancing these offerings, despite the 14% year-over-year increase in expenses due to technology investments and risk management expansions. The company also noted higher variable customer engagement costs driven by increased spending and usage of travel-related benefits, which slightly impacts their margins. However, American Express reaffirmed its outlook for 8%–10% revenue growth and full-year earnings per share of $15-$15.50.

During the conference call with analysts, company management highlighted that the momentum is particularly strong among millennials and Gen Z, who are embracing the brand’s luxury value proposition. This generational shift is significant as it indicates that not only older, established wealth but also younger, upwardly mobile clients are adopting the brand’s premium offerings.

Millennial spending rose by 10%, while Gen Z cardholders increased their spending by 40%, although from a smaller base. This trend is positive for the premium segment, as it shows that younger generations are also embracing luxury experiences. Net card fees increased by 20% year-over-year, indicating that more users are opting into premium experiences. Card fee revenues have more than doubled since 2019, with recent refreshes on Gold, Delta, and Hilton cards driving double-digit account growth and 98% retention. The company’s strategy of acquiring new customers onto fee-based products, driving strong retention, and increasing value through product refreshes and pricing is proving successful.

American Express is preparing a significant refresh of its U.S. Consumer and Business Platinum Cards this fall, aiming to bolster the luxury perks and rewards that millionaire millennials and aspiring Gen Zers crave. The launch of the new Coinbase One Card on the Amex network adds a crypto-forward element, targeting younger, high-earning professionals interested in digital assets. The company is confident in its long-term growth prospects as the premium segment continues to expand.

Despite strong earnings, the share price fell 2.6% in afternoon trading. This suggests that while the perks of premium cards are attractive to members, the rising cost of servicing them has investors concerned about American Express's reliance on its affluent customer base. The company’s financial health remains robust, with the lowest projected credit card loss rate and the highest projected return on assets in the Federal Reserve’s 2025 stress tests. This indicates the resilience and stability of its cardholders even in theoretical economic downturns.

For the second quarter, American Express’s net write-off rate decreased to 2.0% from 2.1% a year ago, meaning bad debts that are uncollectible. The overall credit performance remains “best in class,” indicating that the majority of customers are not only spending but also reliably paying their bills. This trend extends to younger card members, with delinquency rates for U.S. millennial and Gen Z customers being nearly 40% better than the industry average for older age groups.

American Express is also addressing the popularity of its airport lounges, which are dealing with access and overcrowding issues due to the high demand from affluent cardholders. The company is exploring innovative solutions, such as a “sidecar” arrangement in the Las Vegas airport, to accommodate the growing number of users seeking the lounge experience. The record revenue and climbing expenses indicate that this trend will continue for some time, suggesting a long runway for growth in the premium segment.