American Express, or Amex, is a global financial services company. It offers various credit and charge cards for consumers and businesses. Founded in 1850, it started as an express mail business. Now, it is a major financial sector player. The company is headquartered in New York City and is part of the Dow Jones Industrial Average.
Amex is known for its good customer service and premium benefits. These include rewards programs, travel, and dining benefits, and exclusive event access. They have products for different market segments, from everyday consumers to large corporations.
American Express earns money from card processing fees that businesses pay when they accept Amex cards. It also earns from annual membership fees and interest on outstanding balances. Additionally, Amex provides business financing solutions and travel-related services for extra income.
American Express Fiscal Q1 2025
American Express (AXP) reported strong first-quarter results, with revenue of $17 billion, up 7% (or 8% after adjusting for currency changes). Earnings per share (EPS) rose by 9% to $3.64, beating expectations, while revenue came in below estimates.
Highlights:
- American Express earned $2.6 billion in the first quarter of 2025, or $3.64 per share, an increase from last year.
- Revenue rose by 7% to $17.0 billion, or 8% after adjusting for currency changes, thanks to more interest income, higher spending by Card Members, and strong card fee growth.
- The company set aside $1.2 billion for credit losses, which was less than last year, but more loans and receivables led to slightly higher write-offs.
- Operating costs increased 10% to $12.5 billion, mainly because of higher customer rewards and travel benefits, along with updates to redemption models.
- The write-off rate stayed steady at 2.1%.
- The tax rate dropped slightly to 22.4%.
Guidance
Considering the consistent spending and credit trends observed so far, along with the current economic outlook, Amex reaffirmed its full-year forecast of 8-10% revenue growth and earnings per share (EPS) between $15 and $15.5, as outlined in January, while remaining mindful of broader economic conditions.
Board Statements
Stephen J. Squeri, Chairman and CEO of American Express, highlighted the company’s strong first-quarter results, which showed the strength of its premium customer base. FX-adjusted revenue grew by 8% year-over-year, or 9% when excluding the leap year impact, reaching $17.0 billion. Total Card Member spending also increased by 6%, or 7% when adjusted for the leap year.
Squeri noted that performance across key areas, including Card Member spending, customer retention, demand for premium products, and credit performance, remained strong, often surpassing 2024 levels. He confirmed the company’s full-year guidance for revenue growth of 8-10% and earnings per share (EPS) of $15.00 to $15.50, contingent on the broader economic environment.
Looking forward, Squeri emphasized the company’s commitment to long-term growth by supporting customers and employees, managing expenses carefully, and making strategic investments in the business.
Impact on the Market
American Express (AXP) stocks stayed flat following the earnings report. While the company beat expectations for earnings per share (EPS), its revenue came in slightly lower than estimates, leading to no significant changes in the stock’s performance. Investors seem cautious but steady about the stock’s outlook.
