Amex (AXP) Q1 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Thursday, April 23, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Stephen Squeri
• Chief Financial Officer — Christophe Le Caillec
• Interim Head of Investor Relations — Kartik Ramachandran

Need a quote from a Motley Fool analyst? Email pr@fool.com

TAKEAWAYS

• Revenue Growth -- 11% reported (10% FX-adjusted), marking the highest quarterly increase in three years and driven by card member spending across goods, services, and travel and entertainment (T&E).
• Earnings Per Share (EPS) -- $4.28, up 18%, with management reaffirming full-year EPS guidance of $17.30 to $17.90.
• Card Member Spending -- Increased 10% reported, 9% FX-adjusted, with notable momentum in both U.S. and international portfolios.
• Premium Product Penetration -- Over 70% of new card accounts globally are on fee-paying products, reflecting continued demand for premium offerings.
• U.S. Platinum Portfolio -- Spend growth accelerated following the refresh, with high retention rates maintained despite fee increases; the majority of lift comes from existing tenured card members.
• Millennial and Gen Z Engagement -- Spending by Gen Z up 38%, and Millennials up 13%; over half of high-yield savings customers are in these cohorts, contributing a third of balances.
• International Segment -- Billed business increased 13% FX-adjusted, up 20% including dollar impact, and achieved twenty consecutive quarters of double-digit billing growth.
• Credit Performance -- Delinquency and write-off rates both remain below 2019 levels; write-off dollars rose only 4%, while net interest income (NII) grew 12% FX-adjusted.
• Net Card Fees -- Fastest-growing revenue line, up 16% FX-adjusted, with expectations to exit the year in the high teens growth rate.
• Net Interest Income (NII) -- Rose 12% FX-adjusted, outpacing 7% growth in total balances, with management indicating NII will continue to outpace balance growth.
• Marketing Investment -- $1.5 billion spend in quarter (flat year over year), with full-year marketing spend now projected to grow in the mid-single digits to support new card acquisition opportunities.
• Capital Returns -- $2.3 billion returned to shareholders, including $700 million in dividends and $1.7 billion in buybacks; dividend increased by 16% this quarter.
• Return on Equity (ROE) -- 35% for the quarter, enabling distribution of approximately 75% of earnings to shareholders over the past three years.
• AI and Technology Initiatives -- Launch of Amex Agentic Commerce Experiences (ACE) Developer Kit and Amex Agent Purchase Protection; management notes 30% coding productivity benefit from AI adoption.
• Commercial Product Expansion -- Announcement of a roadmap for eight new or enhanced commercial products and features, described as the company’s largest single-year commercial expansion, including new Graphite Business Cash Unlimited and corporate cash back cards.
• Sports and Entertainment Partnerships -- Signings include a multiyear global agreement with the NFL (official payments partner), renewals with the NBA, plus new deals with MetLife Stadium and Mercedes-Benz Stadium, enhancing exclusive card member experiences worldwide.
• Airport and Travel Program Growth -- Openings and expansions of lounges in five cities; 300 new properties added to Fine Hotels + Resorts and The Hotel Collection (from a pool of roughly 1,400 applicants).
• Provision Expense -- $1.3 billion in provision with a $24 million reserve release, driven by lower card balances at period end.
• Portfolio Presentation Update -- Migration to a combined “Card balances” metric (loans and receivables) consistent with recent lending product evolution; total balances up 7% FX-adjusted.
• VCE-to-Revenue Ratio -- At 44.7% for the quarter; full-year expectation remains around 44%.
• Basel Regulatory Impact -- Management anticipates proposals will be neutral to modestly positive for capital requirements under current rules.
• Portfolio Transitions -- Ongoing small business co-brand portfolio exits expected to cause a low-single-digit drag on SME spend growth, but negligible effect on pre-tax income and fully incorporated into guidance.
• Guidance -- 2026 outlook reaffirmed for 9% to 10% annual revenue growth and EPS of $17.30 to $17.90, reflecting both observed overperformance and planned reinvestment in marketing and technology.

SUMMARY

Management highlighted elevated engagement in luxury and experiential categories, with retail spending up 11% FX-adjusted and luxury retail up 18%. Commercial client initiatives intensified, exemplified by new expense management software and targeted middle-market solutions stemming from recent acquisitions and integrations. Major sports partnerships are positioned to broaden card member engagement globally, particularly as American Express (NYSE:AXP) becomes the NFL’s official payments partner in the next season. The Platinum refresh drove the majority of U.S. spend uplift primarily from tenured cardholders, with lodging spend on Fine Hotels + Resorts and The Hotel Collection up 50%, and U.S. restaurant spend up 20%. Technology investment is set to accelerate, with proprietary AI-powered commerce features rolling out imminently, and direct evidence of improved programming efficiency already reported.

• Reserve release of $24 million helped moderate provision expense, reflecting lower ending card balances compared to the prior quarter.
• Quarterly spend growth outpaced balance growth, and management confirmed a strategic focus on high-spend, rather than revolving, customers, resulting in stable balance dynamics.
• Sports and entertainment partnerships expanded to over 50 global relationships, supporting exclusive card member experiences and "on‑site activations," at high-profile events.
• Recent technology and AI investments have enabled the company to lower internal ROI thresholds for incremental projects, fueling further reinvestment during periods of over-delivery.
• Basel proposal changes and the Federal Reserve’s tailoring framework review are not expected to materially alter the capital management approach, according to executive commentary.
• Fuel expenditures comprise less than 2% of billed business, and higher fuel prices did not lead to material or systemic spending disruptions across cohorts or geographies.
• Management directly addressed investor expectations: despite 11% revenue growth this quarter, the Amazon and Lowe’s portfolio roll-off is expected to marginally reduce revenue, but with "zero impact on PTI."
• Leadership anticipates the tailwind from new commercial product launches will become visible in 2027, with limited incremental impact expected in the current year.
• Gen Z and Millennial account acquisition rates continue to rise, with these cohorts exhibiting credit metrics that outperform both older generations within the company and industry-wide peer groups.
• The ACE Developer Kit and Agent Purchase Protection are positioned as initial steps in American Express’s broader strategy to leverage the closed-loop network for fraud mitigation and intent-driven commerce.
• Marketing spend is targeted at immediate new card acquisition initiatives, with a growing pipeline of ready-to-launch campaigns prioritized as incremental investment capacity becomes available.

INDUSTRY GLOSSARY

• FX-adjusted: Financial results adjusted to neutralize the impact of foreign exchange fluctuations for clearer underlying trend analysis.
• Pay Over Time: An American Express feature allowing card members to carry balances and pay interest on select charges, blending revolving credit with traditional charge card functionality.
• VCE-to-Revenue Ratio: Ratio of variable customer engagement (VCE) costs (rewards/provisions) to total revenue, indicating expense intensity per dollar of revenue.
• ACE Developer Kit: American Express’s toolkit enabling third-party integration of Amex cards into AI-driven, agent-based transactions, with enhanced fraud-detection protocols.
• Amex Agent Purchase Protection: New policy by American Express offering card member protection for eligible purchases made by registered AI agent intermediaries.

Full Conference Call Transcript

Stephen Squeri: Thank you, Kartik. We had a very strong start to the year. Revenue in the quarter grew 11%, or 10% on an FX-adjusted basis, and EPS was $4.28, up 18% over the prior year. Card Member spending grew 10% on a reported basis, and this is the highest quarterly growth in three years, driven by strong growth across both goods and services and T&E. We continue to see strong demand and engagement with our premium products across our customer base. Within our U.S. Platinum portfolio, we are seeing accelerated spend growth following the refresh while maintaining high retention rates after the fee increases went into effect.

Millennial and Gen Z spending growth continues to be robust and, globally, over 70% of new accounts are on fee‑paying products. International remained our fastest‑growing segment with billings up double digits for the twentieth consecutive quarter on an FX‑adjusted basis. And consistent with what we have seen for several years, our credit performance continues to be excellent and best in class. Based on our strong results to date and our confidence going forward, we have decided to increase our investments in marketing and technology to capitalize on key growth opportunities and build on our momentum. Looking ahead, we are reaffirming our full‑year 2026 guidance of 9% to 10% annual revenue growth and EPS of $17.30 to $17.90.

While the macro and geopolitical environment remains uncertain, we believe we are well positioned to continue delivering strong results given our focus on premium customers, our spend‑ and fee‑centric model, and very strong portfolio quality. Our performance once again demonstrates the power of our growth strategy as we continue to execute our proven playbook. A key part of the playbook is the ongoing investments we are making to enhance our differentiated membership model, which is fueled by our high‑spending Card Members, the value added by our world‑class partners, and the innovations and service delivered by our talented colleagues.

One of the most compelling features of American Express Company membership is the unique experiences and access we offer our Card Members in dining, sports, entertainment, and more. Sports are a powerful engagement engine across our customer base. In Q1, we announced several agreements that added to the relationships we have with over 50 top‑tier leagues, teams, venues, and events around the world. In March, we announced a multiyear global partnership with the NFL, making American Express Company the league's official payments partner beginning with the 2026 season. This broad‑based sponsorship includes exclusive Card Member experiences, ticket access, on‑site activations, and other perks at high‑profile league events including the NFL Draft and the Super Bowl.

We are very excited about the opportunity to join with the NFL as they expand internationally, with our large global footprint positioning us well to support their growth while engaging American Express Company Card Members around the world. We also announced new multiyear sports and entertainment agreements with MetLife Stadium, Mercedes‑Benz Stadium, and teams that play there, and we renewed our sponsorship with the NBA along with several agreements with NBA teams across the country.

In addition to our sports sponsorship partnerships, we continue to enhance American Express Company membership with recent openings and plans for new or expanded airport lounges in Las Vegas, Boston, Charlotte, Dallas–Fort Worth, and New Delhi, and the expansion of our Fine Hotels + Resorts and The Hotel Collection programs with an additional 300 properties recently accepted into the program out of approximately 1,400 who applied. Another key element of our strategy is the ongoing innovation of our product value propositions, and we continued our progress on this front as well.

In the quarter, we announced the roadmap for a series of commercial products and solutions that we are planning to roll out in the U.S. in 2026 for businesses of all sizes, starting with the launch of our new Graphite Business Cash Unlimited card. The roadmap includes plans to release eight new or enhanced products, benefits, and capabilities including a corporate cash back card and expense management software, making this the most significant one‑year commercial product expansion in the company's history.

Together, these new offerings will give our business customers what they want: card products that combine high spend capacity and great value, plus an integrated suite of tools to help them manage expenses and cash flow, gain insights from their spending, and automate day‑to‑day tasks — all backed by American Express Company's world‑class global customer service. In addition to these announcements, we furthered the development of our AI capabilities in the quarter. As I said in my recent annual letter to shareholders, while it is still early days, we are embarking on a new era of commerce where AI‑powered agents can make autonomous decisions on behalf of consumers and businesses.

But in addition to offering speed and convenience, agentic commerce brings added complexity and risk. This plays directly to our strengths of trust, security, and service. Given our closed‑loop network that provides an end‑to‑end view of transactions, and supported by the investments we have been making in our technology and risk capabilities, we are well positioned to deliver intent‑driven authorizations, enhanced fraud protection, and strong security features to help protect our Card Members and merchants. Earlier this month, we introduced the Amex Agentic Commerce Experiences, or ACE, Developer Kit, which will enable the integration of American Express Company cards into AI‑powered transactions with trust and control.

Along with the kit, we announced Amex Agent Purchase Protection, an industry‑first commitment to back our Card Members by protecting registered agent purchases. We have more AI‑powered products and capabilities under development that will roll out this year to help transform and grow our business. This includes upcoming announcements with leading AI companies to make our membership assets discoverable and actionable on their platforms, and building proprietary AI‑powered experiences across our own platforms. In summary, our business continues to perform at a high level, exhibiting continued momentum from executing our proven strategy and making meaningful progress on the strategic use of AI to drive long‑term growth and efficiencies.

With our loyal premium customer base, our talented customer‑focused colleagues, and a differentiated business model, we are confident in our ability to deliver long‑term sustainable growth. Now I will turn it over to Christophe for more details about the quarter, and then we will take your questions.

Christophe Le Caillec: Thanks, Stephen, and good morning, everyone. Q1 was a very good quarter. Revenue growth accelerated to 11%, or 10% FX‑adjusted, with broad‑based growth across revenue lines. Spend growth stepped up to 10%, or 9% FX‑adjusted — the highest level we have seen in three years. And we continue to see healthy demand for our premium products with over 70% of new accounts acquired on fee‑based products. Credit performance remains excellent with both delinquency and write‑off rates still below 2019 levels. And we continue to invest across marketing, technology, and our premium value propositions to support long‑term growth. We delivered very strong returns in the quarter with EPS of $4.28, up 18% year over year.

Turning to billed business on slide four, overall spend was up 10% FX‑reported this quarter. That momentum reflects an acceleration in U.S. Platinum spend following the refresh last year and the benefit of our global footprint, with tailwinds from FX and high growth in international markets. These results demonstrate the strength of our premium focus and our diversified business. Spend growth was about one percentage point higher than Q4, driven by T&E spending, up 9% FX‑adjusted, while goods and services growth remained stable, up 8% FX‑adjusted. Retail spending kept up its momentum, up 11% FX‑adjusted. And spending at luxury retail merchants was up 18%, reflecting the continued strength of our premium customer base.

Restaurant spending was up 9% once again this quarter. At the same time, airline spending picked up, growing 8%, driven by higher growth across consumers, SMEs, and large corporates. These trends sustained throughout most of the quarter, but we did see airline growth soften in the last few weeks of March and into April driven by travel disruptions from the Middle East conflict. In the U.S., we continue to see strong demand and engagement on Platinum following the refresh last year, with accelerated spend growth on the portfolio, high retention rates, and continued strong new customer acquisition. And we continue to capture a high share of the spend wallet from both new and tenured Platinum customers.

The refresh is also driving high levels of engagement with our membership assets by U.S. consumer Card Members. Lodging spend on our Fine Hotels + Resorts and The Hotel Collection programs is up 50% year over year, and in dining, spend at U.S. restaurants is up 20%. Looking at our international business, ICS had another strong quarter, up 13% FX‑adjusted. Including the impact of the weaker dollar, spend growth was up 20%. Looking at new card acquisition, we acquired 3.1 million new cards in the quarter, with continued momentum in acquiring younger customers and attracting new customers onto our fee‑paying products. Turning to balance growth, first, a quick note on presentation.

The metric shown on slide 13, which we previously referred to as total loans and Card Member receivables, is now labeled total balances. Starting this quarter in our financial statements, we have combined Card Member loans and Card Member receivables into a single line called Card balances, reflecting the evolution of our products through lending features like Pay Over Time. This is consistent with how we have been presenting balances in our earnings slides for the past few years. Total balances increased 7% year over year FX‑adjusted, largely in line with spend growth.

As a reminder, there is about a one percentage point impact on balance growth from the small business co‑brand held‑for‑sale portfolios again this quarter, as we previously disclosed. As we exit these portfolios over the course of this year, we will see impact to certain metrics at the consolidated level and within the Commercial Services segment. Most notably, we expect a low‑single‑digit impact to spend growth in SME until we lap the portfolio exits, starting in Q2. At the same time, we expect a negligible impact to pretax income. These impacts were incorporated in the guidance we provided for the year. Turning to credit on slide 14, credit performance remains very strong and stable.

Delinquency rates were flat to last quarter, while write‑off rates were slightly down. These results are consistent with our expectations for generally stable credit metrics throughout 2026. Overall provision expense of $1.3 billion included a reserve release of $24 million. The reserve release this quarter was mostly driven by lower ending Card balances versus Q4. Our reserves also reflect uncertainty in the macroeconomic environment. Turning to revenue on slide 16, revenue was strong this quarter, up 11%. We saw momentum across revenue lines with net Card fees, NII, and service fees and other revenue all growing at double‑digit rates again this quarter. Net Card fees continue to be our fastest‑growing line, up 16% FX‑adjusted, in line with Q4.

We expect Card fee growth to pick up as the year progresses as we see the impact from the Platinum refresh, exiting the year in the high teens. Importantly, about one‑fourth of the overall U.S. consumer Platinum portfolio has been billed for the higher annual fee, and we have seen no change to our very high retention rates relative to pre‑refresh. Net interest income was up 12% FX‑adjusted again this quarter, growing faster than balances. Notably, we are driving strong growth in NII while growing balances largely in line with spending, and while maintaining best‑in‑class credit results. In fact, write‑off dollars are up by only 4% year over year, while NII is growing at a double‑digit pace.

We also continue to see strong demand for our deposit products, with high‑yield savings and direct CD balances up 9% year over year. As we see with our premium card products, our savings products are resonating with Millennial and Gen Z customers, which make up over half of the accounts and about a third of the balances. Looking ahead, we expect NII growth to continue to outpace growth in balances for the year. Turning to expenses, the VCE‑to‑revenue ratio was 44.7% this quarter, in line with our expectations. There is some quarterly variability in the ratio given seasonality. For the full year, we continue to expect the VCE‑to‑revenue ratio to be lower than Q1, around 44%.

The step‑up versus the first half of last year reflects the investment we made in the value proposition of our U.S. cards when we refreshed these products last year. Marketing spend was $1.5 billion this quarter, flat to last year. Given the strong performance we saw in Q1 and our confidence in the balance of the year, we plan to increase our marketing investments to support long‑term growth. We now expect marketing expenses to grow in the mid‑single digits for the full year. Moving on to capital, we returned $2.3 billion of capital to our shareholders, including $700 million of dividends and $1.7 billion of share repurchases.

We continue to deliver very strong returns, with an ROE of 35% this quarter. Our strong ROE enables us to return high levels of earnings to our shareholders — around 75% over the past three years. And this quarter, we increased our dividend by 16%, demonstrating our confidence in the sustainability of earnings generated by our model. As we think about our capital requirements, we view the recent Basel proposals as an improvement from the prior proposal. Under the rules as proposed today, we expect the impact to capital requirements to range from neutral to modestly positive.

As we evaluate the proposal in the context of other regulatory considerations, we are encouraged by the Fed's discussion of modernizing the tailoring framework and resulting bank category designations. We remain focused on maintaining a strong balance sheet and capital position. We plan to continue to return the excess capital we generate to shareholders while supporting growth, and we do not expect a material change to our capital management approach in the near term. That brings me to our 2026 guidance. We feel really good about our momentum starting the year and our first‑quarter results. We are seeing stronger earnings than expected; we have decided to increase investments in marketing and technology.

As a result, we are reaffirming our full‑year guidance of revenue growth of 9% to 10% and earnings per share between $17.30 and $17.90. With that, I will turn the call back over to Kartik, and we will take your questions.

Kartik Ramachandran: Thank you, Christophe. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just one question. Thank you for your cooperation. We will now open the call for questions. Operator?

Operator: You will hear a tone indicating that you have been placed in queue. You may remove yourself from the queue at any time by pressing star then 2. If you are using a speakerphone, please pick up the handset before pressing the numbers. One moment please for the first question. Our first question comes from the line of Ryan Nash with Goldman Sachs. Please proceed with your question.

Ryan Nash: Hey, good morning, everyone. Morning. Good morning. So, and congratulations on all the new partnership wins — hopefully resulting in more victories for the Giants and Jets. Maybe, Stephen, to kick off: clearly we are seeing really strong performance in overall spend. For starters, do you think the momentum that you are seeing in the business is enough that we could start to trend towards that aspirational 10% revenue growth? Is that on the table for the year? And you talked about increased marketing and tech spend. Can you maybe talk about what that is offsetting in terms of where performance was tracking better than expected and where you are using that to offset? Thank you.

Stephen Squeri: Yeah, so I do not know about the Jets and the Giants, but that will all have to play itself out. As we think about the year and we think about the spending, it continues to be strong. We just had the strongest quarter of spending that we have had in the last three years, and obviously spending will drive higher revenue. If you look at the last few years, whether it is FX‑reported or FX‑adjusted, we have kind of hit the 10%. Our guidance this year is 9% to 10%, and we just delivered a quarter of 11%, so you can make your own judgment on that.

We feel really good about that aspiration; if we did not, we would not put it down. I believe the momentum, if it continues, will allow us to achieve that. When you look at the increased investment in technology and marketing, you know, you have regulators in this business, and one of the regulators is making sure that we return what our shareholders are looking for. Every year as we go through our processes, we have ROI cutoffs, and we leave what I would say are really good investments on the table.

When you have an over‑delivery like we just had in the first quarter, it gives us the confidence that we can move those ROI thresholds down and continue to hit within our guidance range. I think about this business not just for this year, but for next year and the year after. What we are trying to do is continue to build on that momentum. Where we are today is a function of the decisions we have made in the past, and those decisions include reinvesting in the business versus always dropping to the bottom line.

As far as technology goes, we have been very fortunate with some of the results we are seeing from an AI perspective — we are getting about a 30% benefit with our programmers from a coding and testing perspective. That has allowed us to get to more stuff. We have a company in so many different areas — many countries, the merchant business, the network business, the consumer business, corporate card, small business — there is just a huge appetite for technology. The overperformance we have had gives us an ability to get to those things a little bit quicker, combined with the AI efficiencies that we are seeing.

I feel really good about where we wound up this quarter against a backdrop of an unstable world. Against that backdrop, we saw record billings; Christophe mentioned luxury spending in retail up 18%, front of the cabin is up 12%, and we are seeing great engagement from our Platinum refresh. So I feel pretty confident about the rest of the year.

Christophe Le Caillec: Maybe I can take the second part of your question, Ryan, around the offset in terms of this incremental investment. You might remember the conversation we had at the end of the quarter — we had a lot of spend momentum. One of the questions was how are we thinking about 2026, and I said we will see. We are maintaining momentum; we even have stronger momentum when you look at billings, so that is a check. When you study the P&L, there were also a few unexpected items on operating expenses that went in our favor. I will mention two. One is a court decision regarding VAT in Europe — we booked that.

There was also a gain that we registered as we completed the acquisition of the half of the joint venture we had in Switzerland. So that allowed us to book a small gain. The completion of that acquisition and the court case in France gave us a little more confidence in terms of expenses and released investment capacity for marketing and technology.

Operator: Thank you. Our next question comes from the line of Sanjay Sakhrani with KBW. Please proceed with your question.

Sanjay Sakhrani: Thank you. Good morning. I have a follow‑up on the billed business trends. It is quite remarkable how strong they were in the midst of all this geopolitical activity in the backdrop. I know, Christophe, you mentioned there is some softness in airline spending that you have seen over the last few weeks. Is there a way to quantify that and is it material enough that it could deter some of the upside? And then are there any other impacts that you have seen across the spending cohorts as a result of higher fuel prices? And I guess offsetting that is the momentum you have in Platinum. I am trying to think about the interplay between these factors.

Christophe Le Caillec: On airline softness, yes, we definitely saw noise toward March–April. Where it was most visible is in the volume of refunds that we saw being processed. It is always hard to know exactly what happened with these refunds — are people booking on a different schedule or different airline — but we definitely saw a spike in customer refunds. This being said, the impact is not that large, and I do not think it is something you should worry too much about. I will take advantage of that to mention this is where our assets boost in terms of travel — the benefits we offer in airports were really valuable to our Card Members.

We were able to rebook something like 18,000 of our customers who had tickets to the Middle East, and we also saw a spike in engagement with our partner CLEAR at the airport. So I do not think this is something that should create an impact to our overall billing trends. In terms of fuel, we saw the average ticket price go up, and we definitely saw an increase in fuel spend. Fuel is less than 2% of overall billed business, so the impact is not very visible in the overall billed business.

It is really hard as well to see if there is any offset anywhere, and when we study that at different product levels, cohort levels, geography, we do not see any discontinuity. We see across the board, and across the portfolio, strength, momentum, and stability.

Operator: Our next question comes from the line of Don Fandetti with Wells Fargo. Please proceed with your question.

Don Fandetti: Hi, good morning. Stephen, can you talk a bit about your confidence in enhancing the expense management offerings for the middle‑market SME customers, and is this an area of focus in terms of the incremental investment?

Stephen Squeri: Thanks, Don. In the next few months, we will launch Center, and it certainly has been an area of focus for us. If you take the commercial business and break it into three parts — small business, middle market, and large corporate/global — where we are seeing a lot of strength is truly in small business and in large/global. Where the expense management will really come in is in those middle‑market companies, especially those small businesses transitioning to middle market. The software that we will release will help us solidify our position there. Additionally, you may have seen we just acquired a company called HyperCard.

We brought in a group of people who we have been working with for a number of years who are really in the expense management space and who have a lot of expertise in expense management; we will be integrating those into Center. For the overall commercial portfolio, it is a combination — it is eight new products, benefits, and enhancements that we will release through. It has been and continues to be an area of investment because we still see it as an area of opportunity for us. We are known for small business; middle market and corporate is still a leader in that space.

We are investing now significantly in that — with the Center acquisition over a year ago, the HyperCard acquisition, and the investment we are making. It is an area of focus and will continue to be.

Operator: Thank you. Our next question comes from the line of Erika Najarian with UBS. Please proceed with your question.

Erika Najarian: Yes, thank you. I want to make sure that your investors are taking away the right message on the revenue and expense dynamics. It sounds like, from everything you said, Stephen, you have hit 11% revenue growth, clearly trending above that 9% to 10%, and given that you are at the top or a little above that revenue range, then you are reinvesting that back into the company — that is why you are reiterating the EPS. In other words, the key takeaway from this quarter is really that upside to revenue. Is that the correct message investors should be taking away?

Stephen Squeri: I think the message investors should be taking away is that we are reaffirming guidance of 9% to 10%. While we had 11% growth this quarter, one thing I will point out: as the year goes on, the Amazon and the Lowe’s book will roll off. That will have a slight drag on revenue and zero impact on PTI. You should take away that we are reaffirming the 9% to 10%, and we are taking the over‑delivery from an EPS perspective and investing that back into the business.

Operator: Thank you. Our next question comes from the line of Mark DeVries with Deutsche Bank. Please proceed with your question.

Mark DeVries: I appreciate that it was a relatively modest acceleration of billed business in Commercial Services, but are you seeing any green shoots there that give you optimism about a bigger recovery in the organic spend? And what kind of incremental tailwind might you get from the record product launches across the commercial suite?

Stephen Squeri: One of the green shoots that we are seeing is that organic is not as stressed as it has been in the past. While we had a minor uplift sequentially, we think that the product enhancements we have been doing will play out more over the longer term as opposed to this year. Those products take some time to get into the marketplace. We just launched the cash back product from a small business perspective; we have the corporate cash back coming out later this year. As we go into next year, we expect that to give us a bit of a tailwind — not as much of an impact for this year.

Operator: Our next question comes from the line of Craig Maurer with FT Partners. Please proceed with your question.

Craig Maurer: Yes, hi, thanks for taking the questions. I wanted to ask about the Platinum refresh. We are going to lap that in September. Can you separate how much lift you got in spend from that refresh from existing Card Members versus new customers? I am trying to get my hands around how much of a decel we might see as you grow over that in terms of billed business growth later in the year.

Christophe Le Caillec: It is a good question. I guess you are looking at the slide that shows U.S. consumer Platinum accelerating by six percentage points. The majority of that, given the size of the portfolio, is coming from tenured Card Members. Although we are very pleased with new account acquisition, the majority of that 6% lift is coming from the back book, and that is a very strong sign. As you think about projecting that into 2027, we will see what happens, but I do not think at this stage we should expect a further acceleration in 2027. I expect that step‑up to maintain into 2027; I do not think you should expect to see another one.

We will lap that at some stage in 2027.

Operator: Thank you. Our next question comes from the line of Rick Shane with JPMorgan. Please proceed with your question.

Rick Shane: A really big part of the journey at American Express Company over the last decade is reinvigorating your products and penetration to younger cohorts. It has been a big part of the success. As we think about a more uncertain, more volatile economic environment, do you think the younger cohort is more sensitive to changes in terms of spending patterns and credit — is there greater sensitivity to the cycle in their behavior versus your more seasoned cohorts?

Stephen Squeri: I think, ultimately, they will be less, not more, and I will tell you why. The younger generation is more equipped for the changing dynamics in the world today than, in fact, maybe more middle‑aged people — maybe more people Christophe’s and my age. They are more adaptable, more technology‑savvy, more in tune with what is going on in the marketplace today. So I feel a lot more comfortable having a Card base that is skewed a little bit younger than what you used to see ten years ago. The other important thing is to understand that when you look at the Millennials and the Gen Z in our Card base, it is the cream of the crop.

We showed a slide a quarter ago, two quarters ago, where our Millennial and Gen Z credit performance is better than the industry’s Gen X and Baby Boomer credit performance, and is significantly better than the industry’s Millennial and Gen Z performance. One of the things we have seen with Millennials over time is we get a high share of their wallet right out of the gate, and as time goes on, that high share translates into even more spend as they continue to move through their lives and continue to be successful. I feel a lot more comfortable with the skew of our base today.

We showed a slide on the consumer: Gen Z is up 38%, Millennials are up 13%, Gen X is really strong at 8%, and Boomers are up about 4%. We will continue to depend on that for our growth. Look at our card acquisition — I feel very confident in who we are acquiring because of the characteristics they possess and their ability to deal in an ever‑changing world.

Christophe Le Caillec: Maybe I will add one data point, Stephen. I mentioned it in my remarks, but if you look at the profile of the high‑yield savings customers, half of these customers are actually Gen Z and Millennials. They represent a third of the balances, so they have lower balances, but if you had asked me a few years ago where the balances and accounts would come from, I would not have told you I am confident it is going to come from the younger cohorts. But that is what we are seeing. It tells you something about the profile of these younger customers that are joining the franchise — they have savings.

Operator: Thank you. Our next question comes from the line of Robert Wildhack with Autonomous Research. Please proceed with your question.

Robert Wildhack: Good morning, guys. I wanted to ask about the relationship between spending growth and balance growth. Back in January, I think the commentary was for balances to grow in line with spending. I know you have the co‑brands rolling off there, but if we could normalize for that, how do you think about balance growth if the acceleration in spend from this quarter continues? Would you expect to grow balances concurrently, or do you like the balance growth at the level laid out back in January?

Christophe Le Caillec: First, I like it when I see spend accelerate. The fact that balances are growing at a slower pace, 7% — some of it is just rounding, so I would not over‑interpret it. Typically, balances lag. We are not chasing balance growth; we are chasing customers who are going to spend with us, and if they feel the need to revolve, then we will put in front of them the best possible products so that they can revolve at the pace they want, including Pay Over Time, which typically has shorter revolve durations. That is the kind of revolve that we like. You have seen that 7% kind of stable over the past few quarters.

Over the last few quarters, NII outgrowing that balance growth — NII has been stable in that 12% range as well. Some of it is coming from being successful at funding those balances with high‑yield savings accounts that are a cheaper funding source for us, and that is helping NII growth as well. The dynamic is very stable and consistent over the past few quarters.

Operator: Thank you. Our next question comes from the line of Jeffrey Adelson with Morgan Stanley. Please proceed with your question.

Jeffrey Adelson: Yes, hi, good morning. I wanted to follow up on Rick’s question. I appreciate all the color and understand you have a healthier consumer and that you view Gen Z as more adept at handling these changes in technology. Given the market focus on AI jobs‑related displacement, are you seeing any impact in the customer base today, or do you have any views on what that trend might look like for you over the next few years?

Stephen Squeri: We are not seeing any impact at all. Maybe I will make a couple of comments. Technological change over the years — the internet, the cell phone, even eliminating the word processor and going to desktop PCs — has always brought a plethora of new jobs, and has fueled GDP. Will AI lose some jobs? Yes. But who would have thought about influencers, podcasters, web developers, AI programmers years ago? Probably nobody. If you think about the jobs that are out there today, more of your Gen Zs and Millennials are going to be more trained for this and more ready for this. So, will jobs go away? Yes. A number of service jobs will go away.

Even at American Express Company today, if you look at our volume increase and you look at our ratio of volume to how many people we have on the phones, it has decreased. Not as many people want to talk on the phones, and we are making the people who are answering the phones more efficient because they have AI tools at their disposal, whether that is for travel or for Card servicing. We will always have a representative there that you can call and talk to — that is never going to go away from American Express Company. We will always be able to serve our customers how they want to be served.

From an AI perspective, yes, you will see a bunch of jobs go away, but you will also see a tremendous creation of new jobs, and this cohort will be much more likely to fill those jobs and create new jobs and new opportunities. The last thing I will say is a lot of people talk about white‑collar workers. Our base is not just white‑collar workers. Our base is premium consumers and premium small businesses that, from a consumer perspective, want access to experiences, service, and special offers. That runs the gamut: from the individual entrepreneur to the TikToker and influencer and podcaster, as well as research analysts, investors, hedge funds, and everything else.

Technology has, over time, fueled GDP, not crushed GDP.

Operator: Thank you. Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.

Darrin Peller: Thanks, guys. Stephen, you recently launched your agentic commerce experience developer kit. You wrote about it at length in your letter. Our checks are indicating in general across AI and agents there has been more fraud on some of these transactions — it is early days, but there are questions on that and structural questions around networks in an increasingly agentic world. How do you think about the role your closed‑loop data advantage plays in these transactions?

Stephen Squeri: In the agentic world, data is king. Data is king from a service perspective, an identification perspective, a fraud perspective, a credit perspective — data is king. In our business model, we have the Card Member, we have the network, and we have the merchant, and we have a free flow of information — it is as perfect information as you are going to get. In many of the early forays into agentic commerce, it can be fraught with fraud, and it is a riskier environment. In a normal e‑commerce world and in a normal bricks‑and‑mortar world, our fraud is significantly less than the competition — because of data.

While agentic commerce’s story is yet to be written — we are warming up in the bullpen — it will take off fast eventually. As we released our ACE developer kit, one of the things we did is require the agent to declare intent, and we want to match that intent with what was actually purchased. We want data from intent all the way to completion. We do not even have that today in a normal bricks‑and‑mortar world. It is hard to do, but in an e‑commerce agentic world, we can get that data.

It will make our fraud and risk capabilities, our ability to detect fraud, and our ability to back our Card Members even better than in a traditional environment. That is why we came out with Amex Agent Purchase Protection, which basically says if the developer and the agent register with us and we see what the purchase was, and our Card Member is left holding the bag, we will back our Card Member and figure it out on the other side. As I wrote in the shareholder letter, this sets us up a lot better than our competitors because of the closed‑loop network and the amount of data that we have.

Anybody who talks to you about large language models will say the model is as good as the data that it has. We are trying to get as close to perfect data as you can in the agentic transaction, and that is how we are thinking about it.

Operator: Thank you. Our next question comes from the line of Mihir Bhatia with Bank of America. Please proceed with your question.

Mihir Bhatia: You mentioned that you are reinvesting the Q1 upside in technology and marketing. You have talked about technology investments a little bit on the call and even the commercial side investments, but maybe just a little bit more on the marketing. Where are you investing on that side? Is it to support the commercial? Is it more programs across the board? Is it brand marketing? And what is the payback period on these — does this drive faster growth in 2027? Thank you.

Christophe Le Caillec: Good morning, Mihir. Simply said, it is going to go against our acquisition efforts — new card acquisition efforts. As Stephen said previously, at any point in time, we have a series of marketing ideas — we call them investment opportunities — that are not funded. We rank‑order them and stop when we run out of capacity. These marketing ideas are ready to be executed, and that is what we are going to do with those incremental dollars. We are trying to take advantage of the opportunities we are seeing. We expect the returns to be very strong, and that is why we are directing this incremental performance towards these investment opportunities.

Operator: Thank you. Our next question comes from the line of Terry Ma with Barclays. Please proceed with your question.

Terry Ma: I wanted to touch on commercial. You just announced a pretty major expansion, which probably involves some level of investment. Should we expect some impact to the VCE from that kind of launch going forward?

Christophe Le Caillec: Good morning, Terry. On VCE, you should not expect any impact, at least for the reason that, as Stephen said previously, the new products and capabilities we are going to roll out will take time before they flow through the P&L and before we see a lift in terms of volume. I do not think you should expect to see a change to the VCE ratio, and 44% is still the right number for the full year.

Stephen Squeri: If you look at what we just announced, there are not a lot of additional benefits on those cards — it is more about capability. We have the OpenAI ChatGPT benefit, and the cash back product will be the rewards piece, but I think, as Christophe said, it will be benign.

Operator: Our final question will come from the line of Cristopher Kennedy with William Blair. Please proceed with your question.

Cristopher Kennedy: Yes, morning. Thanks for taking the question. I wanted to follow up on your prior comments. Stephen, in your letter, you mentioned how new technology can accelerate growth at American Express Company. Is there a way to frame the opportunity today with data and agentic relative to prior innovations such as e‑commerce or mobile payments?

Stephen Squeri: I think it is a little bit too early. The company is so big at this point, and as I said before, we are in the early stages. If you would have asked me that question when e‑commerce first started, I would have probably given you the same answer. I do not think anybody could have imagined what the phone would ultimately represent. Everybody thought the phone was for making phone calls, and the reality is nobody makes phone calls with the phone anymore — you are doing a lot of commerce on the phone. Our sense is it will be an accelerant. I just think it is really hard to quantify at this early stage.

Kartik Ramachandran: With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express Company. The IR team will be available for any follow‑up questions. Operator, back to you.

Operator: Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access a digital replay of the call at (877) 660‑6853 or (201) 612‑7415, access code 13759550, after 1 PM Eastern Time on April 23 through April 30. That will conclude our conference call for today. Thank you for your participation. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

American Express is an advertising partner of Motley Fool Money. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.