AXP · Q2 2025 Earnings
BullishAmerican Express
Reported July 18, 2025
30-second summary
Revenue grew 9.3% YoY to $17.86B and GAAP EPS landed at $4.08, with management reaffirming FY revenue growth of 8–10% and EPS of $15.00–$15.50 while explicitly stating "increased confidence in our path forward." The signal that matters: net card fees +20%, ROE 36.3%, and a widening credit-quality gap versus peers — including Millennial/Gen Z delinquency rates ~40% better than industry averages for older cohorts. The bear case (competition, SMB softness, valuation) was directly engaged on the call and management did not flinch.
Headline numbers
EPS
Q2 FY2025
$4.08
Revenue
Q2 FY2025
$17.86B
+9.3% YoY
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $17.86B | +9.3% |
| EPS | $4.08 | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Segment performance
Q2 FY2025| Segment | Q2 FY2025 | YoY |
|---|---|---|
| U.S. Consumer Services | $8.553B | +11.0% |
| Commercial Services | $4.212B | +6.5% |
| International Card Services | $3.232B | +14.5% |
| Global Merchant and Network Services | $1.933B | +3.2% |
Capital & returns
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Return on Average Equity (ROE) | 36.3% |
| Return on Average Common Equity (ROCE) | 37.8% |
| Common Equity Tier 1 Ratio | 10.6% |
| Tier 1 Capital Ratio | 11.3% |
| Total Capital Ratio | 13.2% |
| Customer Deposits | $149.4B |
Other KPIs
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Network Volumes | $472.0B |
| Billed Business | $416.3B |
| Card Member Loans | $142.3B |
| Cards-in-Force | 149.4M |
| Net Write-Off Rate (Card Member Loans, principal+interest+fees) | 2.7% |
| Net Write-Off Rate (Card Member Receivables, principal+fees) | 1.2% |
Management tone
This is a more affirmatively bullish posture than AXP's typical wait-and-see framing on macro. Three shifts stood out.
The macro stance flipped from defensive hedging to validated resilience. For most of 2024 management's language around consumer spend treated uncertainty as the operating assumption; this quarter, with arguably more macro and geopolitical noise in the tape, CFO Christophe Le Caillec instead said: "When you look at our performance across spend, transactions, demand for new cards, retention, and credit in the context of the significant macroeconomic and geopolitical developments of the past few months, what you see is remarkable resilience across our customer base." That is not a hedge — it is a claim that the business model has now been stress-tested in real time and passed. The reaffirmed (rather than lowered) guide is the operational expression of that claim.
The competitive narrative inverted. Rather than defending against Chase Sapphire, Capital One Venture X, and Citi Strata, management argued the basis of competition itself has moved away from where competitors fight: "The basis of competition has shifted, especially among affluent consumers, away from cashback and no-fee products, and towards partner-aided value, access, experiences, and superior customer service, where we do excel." This reframes a crowded category as a category that has come to AXP's strengths rather than threatened them. Whether that holds post-Platinum refresh is testable.
The new-customer credit story was inverted from risk to moat. Standard concern in any acquisition-heavy franchise: are the new customers worse than the back book? Management's answer: "The high credit quality of the new customers we're bringing in has helped us widen the gap between our credit metrics and the rest of the industry... the delinquency rate for our U.S. Millennial and Gen Z customers are not only better than the industry average for those age groups, but they are also nearly 40% better than the industry average for older age groups." If accurate, this turns the acquisition flywheel into a credit-quality flywheel — the opposite of what bears typically assume about late-cycle card growth.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Ryan Nash · Goldman Sachs
How does Amex think about the risk of too many competitors (Chase, Citi, Capital One) targeting the same premium customer segment, and what does this mean for pricing power over time?
Management emphasized that competition has been intense for 10 years, not new. They noted that competition has expanded demand for premium products overall, which is good for the industry. Pricing power remains tied to value delivery. Management stated they have their own refresh cycle independent of competitors and feel confident in their upcoming product launches.
Erica Najarian · UBS
Given Amex's premium valuation and past performance, how does the company plan to continue delivering 8-10% revenue growth and consistent earnings growth if underlying spend is not accelerating and competition is intensifying?
Management argued competition hasn't meaningfully changed in 10 years and emphasized customer focus and service differentiation as key advantages. They highlighted that they've been delivering against these targets consistently while becoming a much larger company. Management noted they refresh hundreds of products globally, not just Platinum, and invest in innovations that drive shareholder returns.
Mark DeVries · Deutsche Bank
Should investors expect a meaningful step-up in added value relative to fee in the Platinum refresh similar to past refreshes, and how does management think about complexity risk—that customers may struggle to track and utilize all incremental value?
Management confirmed they will follow the same playbook: if raising fees, they add incrementally more value. They emphasized making benefits easy to use with wide disparity between price and value, so customers don't need to use 100% of benefits to justify the cost. Management explained the P&L timing: cost of cardholder services steps up immediately post-launch, while fee revenue flows through over up to 24 months.
Sanjay Sakrani · KBW
How is Amex planning for intermediate-term spending trends given macro uncertainty, particularly on SMB weakness and the impact of Amazon and Lowe's portfolio losses on SMB?
Management expects consistent spending to continue, noting resilience in goods and services and Gen Z/millennial spending despite uncertainty. On SMB: the Amazon and Lowe's portfolio losses are not expected to materially impact SMB, as these are good card-accepting merchants but the relationships weren't working economically. Portfolio movement is normal in retail. SMB remains cautious but credit metrics, lending book, and fee-based business remain strong.
Brian Foran · Truist Securities
Investors are concerned about discount revenue growth, especially when netted against rewards and new account contributions. Is backing out rewards and new accounts to show near-flat or negative net discount revenue growth a valid analytical framework?
Management rejected the single-metric framework, arguing that thinking about only one component of rewards revenue is not how they analyze the business. They emphasized the VCE (variable customer engagement expense) to revenue ratio as the key metric, noting it's been stable and managed thoughtfully. They stressed that high VCE ratios on premium products are actually positive because they generate efficiency gains in marketing, credit selection, and positive ROI.
What to watch into next quarter
Platinum refresh launch timing and initial economics. Management telegraphed the cost step-up hits immediately and revenue amortizes over up to 24 months. Watch whether Q3 cardholder services expense growth accelerates as the leading indicator of launch, and whether net card fees growth holds the ~20% pace through the amortization window.
SMB / Commercial Services billings inflection. Commercial revenue grew 6.5% — the slowest of the three card segments. Watch whether SMB billings re-accelerate or whether the Amazon/Lowe's portfolio exits continue to weigh on Global Merchant & Network Services growth (which printed +3.2%).
Credit quality gap vs. peers. Management's strongest claim was that the Millennial/Gen Z delinquency gap is widening. Watch whether the 2.7% loan write-off rate stays stable or improves as the reserve build ($222M this quarter) suggests management expects worse macro but not worse Amex.
FY guidance posture in Q3. Management reaffirmed in Q2 despite an explicit confidence upgrade. If Q3 prints similar trends, watch whether the FY guide gets raised or whether management continues to bank the upside as a buffer against H2 macro risk.
International Card Services growth durability. +14.5% YoY makes this the fastest-growing segment. Watch whether the comp holds above the consolidated 8–10% guide as international becomes a larger share of the mix.
Sources
- American Express Q2 2025 press release (Exhibit 99.2), SEC filing: https://www.sec.gov/Archives/edgar/data/4962/000000496225000082/q225exhibit992.htm
- American Express Q2 2025 earnings call transcript and prepared remarks (management commentary and Q&A)
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