American Express delivered a strong performance in 2025, with full-year revenue increasing 10% to a record $72 billion and EPS rising 15% to $15.38 (excluding gains). The company demonstrated robust momentum across key metrics, including double-digit growth in net card fees for 30 consecutive quarters and best-in-class credit performance. Management attributed this success to a strategic focus on premium products, highlighted by the successful refresh of the US Platinum card, which drove high engagement and retention despite fee increases. Looking ahead, Amex provided confident 2026 guidance, projecting revenue growth of 9-10% and EPS between $17.30 and $17.90, supported by continued investments in technology and marketing, and a 16% increase in the quarterly dividend.
| Metric | Value | Change |
|---|---|---|
| Full Year 2025 Revenue | $72 billion | +10% year-over-year |
| Full Year 2025 EPS | $15.38 | +15% year-over-year (excluding gain) |
| Net Card Fees | $10 billion | +18% year-over-year |
| Return on Equity (ROE) | 34% | Stable/Strong |
| Marketing Expense | $6.3 billion | +4% year-over-year |
| Q4 Billed Business Growth | Up 8% | FX adjusted |
| US Consumer Platinum Retention | No change | Despite new fee |
Premiumization Strategy: American Express is aggressively shifting its customer mix toward fee-paying premium products. The percentage of fee-paying products for US consumers rose 8 percentage points year-over-year. The Platinum refresh is driving this shift, with management noting 'customer demand is high, engagement is up, credit quality continues to be excellent' and 'no change in retention rates as the new fee kicks in.' This strategic move improves unit economics and supports sustained revenue growth.
Technology and GenAI Integration: The company is making significant technology investments ($5 billion annually) to modernize core systems and leverage GenAI. A new third-generation data platform is reducing process times by 90% and is expected to be fully migrated by 2027. This investment aims to drive personalization, fraud prevention, and marketing efficiency, supporting the 'return discipline' management emphasizes.
International Expansion: International card spending grew 12% FX-adjusted, described as the 'fastest-growing overall part of our business.' Management is refreshing products in 'close to a dozen countries' and renewing partnerships with airlines like British Airways and ANA, signaling a strategic priority to capture growth outside the US market.
Commercial and SMB Evolution: Despite current weakness in the middle market, Amex is positioning for a competitive battle in commercial cards. Following the acquisition of Center, management plans to launch an integrated expense management solution by mid-year to compete with Capital One/Brex. This indicates a strategic shift from simple card issuance to holistic software solutions for businesses.
Declining Net Card Acquisitions (NCA): Net card acquisitions declined sequentially, a metric management attempted to downplay. Squeri stated, 'We don't really focus so much on acquiring cards as much as we focus on acquiring revenue.' While the shift to premium cards explains some volume drop, a sustained decline in top-of-funnel acquisition could limit long-term growth if premium penetration saturates.
Middle Market and SME Weakness: Management acknowledged specific softness in the middle market segment. 'I think middle market is where you see a little bit of the slowdown,' Squeri noted. This weakness persists despite heavy investment, suggesting structural headwinds or intense competition from fintechs like Ramp and Brex that could dampen commercial revenue growth.
Rising Rewards and VCE Costs: The Value of Card Member Rewards (VCE) to revenue ratio stepped up to 45% in Q4 due to Platinum investments. While management guides this back to ~44% in 2026, the structural increase in rewards costs to maintain premium engagement creates margin pressure. Analysts questioned if the 'cost to grow' is becoming too high, though management insists the ROI remains compelling.
Regulatory and Political Risks: Management highlighted the '10% credit card cap proposal' as a significant risk. Squeri argued it would 'reduce the number of cards ultimately in the marketplace' and 'reduce line sizes.' This represents a tangible threat to the high-fee premium model that Amex is successfully pivoting toward.
Overall: Management, led by CEO Stephen Squeri, projected a tone of high confidence and disciplined execution throughout the call. Squeri was particularly assertive regarding the company's strategic pivot toward premium customers, firmly dismissing concerns about lower net card acquisition volumes by emphasizing revenue quality and ROI over volume. The team remained steadfast in their investment philosophy, framing increased costs as necessary drivers for long-term leverage and growth, while expressing optimism about the 'momentum' seen in early 2026.
Confidence: HIGH - Management provided specific 2026 guidance ranges and detailed multi-year investment plans, indicating strong visibility into their business model. Squeri's dismissal of 'cost to grow' concerns and emphasis on 'best-in-class' credit metrics suggests high conviction in their premium strategy.
Management expects revenue growth of 9% to 10% for the full year 2026, consistent with their long-term aspirations of 10%+ growth.
EPS is projected to be between $17.30 and $17.90, representing mid-teens growth off the 2025 base of $15.38.
The VCE to revenue ratio is expected to be around 44%, while operating expenses are projected to grow in the mid-single digits. Marketing expense is expected to grow in the low single digits.
Management expects credit metrics to 'remain generally stable with some seasonal variation in provision across quarters,' maintaining best-in-class status.
The quarterly dividend is planned to increase by 16% to $0.95 per share.
Hedging & Uncertainty: Management used hedging primarily regarding macroeconomic factors and specific quarterly cadences, but was declarative about long-term strategy. Squeri used temporal hedges like 'as the year progresses' regarding card fee growth, and 'if you look at risk, it's more macroeconomic or political' to qualify external threats. However, he was notably unhedged regarding the Platinum product success, stating flatly, 'I don't share the... it looks like it's too expensive to be in this business.' This mix suggests confidence in internal execution but caution regarding the external environment.
We don't really focus so much on acquiring cards as much as we focus on acquiring revenue. - Stephen Squeri, Chairman and CEO
I don't think a 10% credit card cap is the answer to that. - Stephen Squeri, Chairman and CEO
The portfolio is indeed moving towards a more premium portfolio. - Christophe Le Caillec, Chief Financial Officer
We're seeing no change in retention rates as the new fee kicks in. - Stephen Squeri, Chairman and CEO
I think middle market is where you see a little bit of the slowdown. - Stephen Squeri, Chairman and CEO
Analyst Sentiment: Analysts were skeptical regarding the decline in Net Card Acquired (NCA) and the sustainability of high investment levels (VCE/Marketing). Questions from firms like Goldman Sachs and Wells Fargo focused on the 'cost to grow' and whether the shift to premium cards would limit volume growth. There was also notable interest in the competitive landscape following the Capital One/Brex news.
Management Responses: Management was direct and unapologetic about their strategy. Squeri firmly redirected focus from card volume to revenue quality and ROI. They provided detailed explanations for the investment logic behind the Platinum refresh, citing specific engagement metrics (e.g., 30% uptick in travel bookings) to justify the costs. They were transparent about the middle market slowdown but confident in their competitive positioning.
Net Card Acquisition (NCA) Strategy: Analysts pressed on the sequential decline in NCA. Management emphasized that they are optimizing for revenue and high-quality customers rather than volume, shifting spend away from 'lower-cost cash back products' to Platinum.
Premium Product Engagement: Multiple questions focused on the Platinum refresh. Management highlighted 'wildly successful' engagement, noting a 30% uptick in travel bookings and 20% increase in restaurant spend, proving the ROI of their value proposition investments.
Commercial and SMB Weakness: Analysts inquired about the sluggishness in SME/Middle market spend. Management acknowledged the weakness but attributed it to broader industry trends and pointed to upcoming product launches and the Center acquisition as catalysts for 2026.
Regulatory Risks: Questions arose regarding the proposed 10% credit card cap. Squeri strongly opposed the idea, arguing it would reduce credit availability and harm small businesses, signaling a defensive stance on potential regulatory changes.
American Express is executing a highly successful 'premiumization' strategy that is driving superior revenue growth and EPS expansion. The shift toward fee-paying products like Platinum is yielding better-than-expected engagement and retention, justifying the higher VCE costs. Credit quality remains best-in-class, providing a strong buffer against macroeconomic uncertainty. The 2026 guidance for 9-10% revenue growth and mid-teens EPS growth demonstrates confidence in the durability of this model. Key success factors include maintaining the premium value proposition, successful integration of tech/AI investments to drive efficiency, and share gains in the international market. Risks include regulatory intervention on card fees and potential saturation in the premium segment, but the current momentum and ROE of 34% support a positive view. We recommend buying the stock.
The 'K-shaped' consumer recovery is evident. Management reported 'luxury retail merchants was up 15%' and 'restaurant spending was up 9%', indicating that the affluent consumer remains resilient. However, the 'middle market' slowdown highlights a divergence where smaller businesses and non-premium consumers are under more pressure.
The payments industry is seeing a convergence of banking and software. The Capital One acquisition of Brex and Amex's acquisition of Center signal that 'the puck is now moving... from a software perspective.' Competition is intensifying beyond rewards to integrated expense management and software platforms.
There is a significant threat of government intervention in the payments sector. The '10% credit card cap proposal' was highlighted as a major risk that could 'reduce line sizes' and 'reduce the number of cards,' potentially disrupting the economics of the entire credit card industry.