American Express Company ((AXP)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for American Express Q1 2025 conveyed a generally positive sentiment, underscoring strong revenue and income growth, robust card member spending, and resilient credit performance. However, the company acknowledged challenges such as a slowdown in airline billings growth and prevailing macroeconomic uncertainties.
Strong Revenue and Income Growth
American Express reported impressive financial results with revenues reaching $17 billion, marking an 8% increase year-over-year on an FX-adjusted basis, or 9% excluding the leap year impact. The company achieved a net income of $2.6 billion, translating to earnings of $3.64 per share.
Robust Card Member Spending and New Accounts
The quarter saw a 6% growth in total card member spending, or 7% when adjusted for the leap year. The company successfully added 3.4 million new cards, with Millennials and Gen-Z consumers accounting for over 60% of new consumer accounts.
High Card Fee Growth
Card fee growth continued its upward trajectory, registering a 20% increase on an FX-adjusted basis. This marks the 27th consecutive quarter of double-digit card fee growth, highlighting the company’s strong fee-based revenue model.
Strong International Growth
International Card Services experienced a 14% increase in spending, with each of the top five markets showing double-digit growth, indicating robust global demand for American Express services.
Resilient Credit Performance
Credit performance remained solid, with delinquency and write-off rates staying below pre-pandemic levels and flat compared to the previous year, demonstrating effective credit risk management.
Sequential Slowdown in Airline Billings Growth
The company observed a deceleration in airline spending compared to 2024 trends, although spending on front of cabin tickets remained robust, increasing by approximately 11% in the quarter.
Macroeconomic Uncertainty
American Express noted an increase in macroeconomic uncertainty, with a peak weighted average unemployment rate of around 5.7% factored into their guidance, reflecting cautious optimism in their outlook.
Impact of Foreign Exchange on Revenue
The strengthening U.S. dollar posed a headwind to reported revenue growth, albeit less severe than anticipated earlier in the quarter, impacting the company’s international revenue figures.
Forward-Looking Guidance
During the earnings call, American Express reaffirmed its guidance for the fiscal year, projecting full-year revenue growth of 8% to 10% and earnings per share between $15 and $15.50. This outlook is based on a macroeconomic scenario that includes a projected peak unemployment rate of around 5.7%. Despite uncertainties, the company emphasized its resilient business model and strategic investments aimed at long-term growth.
In summary, the American Express Q1 2025 earnings call highlighted a positive financial performance, driven by strong revenue and income growth, robust card member spending, and resilient credit performance. While challenges such as a slowdown in airline billings and macroeconomic uncertainties were acknowledged, the company remains optimistic about its future prospects, supported by strategic investments and a solid business model.