American Express (AXP) 26 Jan 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2020 Earnings Call. [Operator Instructions] As a reminder, today’s call is being recorded. I would now like to turn the conference over to our host, Head of Investor Relations, Ms. Vivian Zhou. ahead. go Please

and Alan, all joining for Thank thank call. today’s you, you

are today’s before The business forward-looking These slides, uncertainties. current the Factors contains well today’s reminder, results for presentation earnings risks in a GAAP measures. SEC. cause differ non-GAAP discussed. subject discussion and and we on discussion are expectations we in on performance. that future As are and company’s materially quarter’s begin, with contains from prior our the are included file as to measures also statements management’s The today financial the statements this financial materials included comparable actual could financial reports based periods the in to about earnings as these materials

our are website ir.americanexpress.com. these of posted at All on

detailed that, review With a with provide will remarks and Jeff. After and We will with of Jeff to it Financial both start Chairman today Steve Steve. the we and Squeri, results; progress will performance. session Steve more over begin who on Q&A Chief then our and will me results turn CEO, with financial a about Campbell, let move company’s to the some Officer, that,

Good hope and to safe. Vivian. families New are and everyone happy you Year Thanks, morning belated and healthy your and

into company on these our on beginning priorities, same progress time, plan colleagues, against of our fourth for supporting visibility had four pandemic saw, on. At we uncertainty period COVID our each went and while taking growth. And strong quarter. a pandemic, of we’re improved company this made of the the longer have business, the billion $X.XX future, through of priorities. did customers as the we still have in the structure steadily you We’ve As the at year to steps for term substantial financially our revenues earned protecting managing $X.XX and remaining and brands, the the per we the but focusing little in the seeing impacts trends share our

we out we cycle peak of about playing I about on uncertainty, three what XXXX. is for managing quarter, Phase last As has talked most phases. see been which through focused the of X this the in

solidly We is growth momentum. rebuild now in phase are investing to which about X, our

Our of goal in earnings X us financial pre-COVID for a growth to phase algorithm. levels is our X, prepare in to return phase

of and next Our model, progress given of differentiated confirms payments phase foundation through in managing a brand, elements solid we customer global our merchant our as network into on our the to scale build the our strength X model. such move and phase. this of platform Key the base, as and us have resilience diversity integrated business our

in Member since lows As we’ve seen period, throughout mid have and spending our been resilient improved. customers steadily April the overall has Card adaptive this

XX% grow Our levels with Consumer spending. their acceleration continued in strong growth of year-over-year, season and shift online spending XX%. Card to to QX pre-COVID to to in up holiday card-not-present exhibiting adapted Members quickly holiday and globally spending an recovered the Non-T&E throughout QX. current was in online the environment particularly

annual number satisfaction In brand year years made as addition, the U.S. in Study be million Credit Attrition the customers. above underwriting of our levels remain products ranked merchant XXth network the study management continued lower locations consumers with globally. we’ve merchant and than to continued and risk robust our in conducted. Satisfaction pandemic in to the Credit our levels. the grow outstanding, one in more rates and we J.D. sustained than performance added parity value the year, our virtual continue for Card hit. XXXX. capabilities We United pre-COVID to to our in propositions States Throughout resonate coverage and internationally again We the proprietary time our last has been XX customer remain quick and thanks adjustments X.X Power’s

Our few years are QX lowest delinquencies and and write-offs a seen levels in some best-in-class. of are at the we’ve

can strategy helped what That is for good forward. I Slide some confident this – the further with and with model been has right business the which at even and even home. you accomplished said, highly of capital more also highlights in vaccines already that can that working strengthen XXXX the the effects brought the our X. I one at more to the moving about our lives dealing growth pandemic be course has And going have continue Despite position economic of was linger being liquidity period. agile dependent will on am to speed in strong pandemic virus on is in engaged of forward. to of short-term. to Our the proven the us recovery we see and the The colleagues to pace over our all, which of that their disruptions which brought to feel All all there distributed. and of in the position be company

and public of timing dependent soon traveling and how again. feel lockdowns lift restrictions quickly phase spending, we how get can return to to begins ease, also and earnings to pre-pandemic comfortable general therefore and the consumer of to X recovery travel the us, tied entertainment is on and travel levels For

on levels. We how and continue predict confident entertainment now come can’t to that right be We back just quickly. pre-COVID will to consumer travel spending

focus we retaining we rebuilding into consumer looking products. the core investments our horizon and in flexibility key momentum. of a during and opportunities at model. growth continue targeted this strategic rebuilding areas the retention environment, accomplish next businesses, our we acquisition plan which To commercial aggressively following. year financial our momentum, are continue Member In we activities, our inject value our periodic our transition premium and additional engines, on ramp specific of up scaling up to increase be to our acquisition on XXXX products refreshes focus in core business firing will growth with and Given – plan mean, this, a as to By our Card building strategy

in commercial invest in already our Kabbage’s we solutions small alone. examples to work suite to few and A where Additionally of supplier products, as our scaling business, in of including card. digital last this a seen cash checking businesses, flow expand our well we’re to automation volumes our accounts how as beyond include AP and re-launch we penetration continue the business year efforts of the integrate for payment solutions, continuing underway plan doing double the have to the

increasing coverage and welcome to as globally. improving of we side, network focus coverage, the perceptions well On plan continue as acceptance on our

China. investing to We’re partners support deliver to various also debit our and in to of enhancements network our value growth capabilities in the to

continue these our through and that with trends At we customer rolled Finally, carry in think digital those we and we expanded businesses. level, will areas to and here high are services the many in where investing digital out the to across to new investments and future. features, our engagement capabilities key and us The a of help stay. past into the the plan generate recovery nature momentum plan experiences the are this increase heavily has years, year to accelerated pandemic XXXX of we several the over

Jeff, thinking beyond. in about hand XXXX I with our over we're let few and to how call me financial end the about performance Before a words

about quarter earnings confidence and about remain the long-term. the last call, to I'm how still confident potential growth though even the precise was predicting long-term But in in growing, I'm my of about recovery Our the in talked predict. harder cautious Today, the pace near-term I XXXX. more our medium

the be on year provide target this on reflecting been growth quarters had those calls mind, we and minutes. XXXX. XX in a our not in at particular on in areas for EPS XXXX. to this the As as as before with our in period momentum. rebuild previous for business will the XXXX few for Though, we this a are I where in growth In pause consecutive generating look maximizing began. Jeff enable momentum pandemic discussed, economy a and in outcomes will had, COVID the us of some potential that We begin plan scenarios investments two-year you With impact we focused

we focused aspiration. XXXX. be I expectations positioned for algorithm our right we our going in to for And to have back result, financial execute of on the forward. being will believe XXXX on original achieving had the be company EPS a the business this to growth solid. achieving of aspiration we for is The As its plan foundation

and Our brand, customer are partnerships strong. relationships

you can we over then results. have and after review that. committed, we I'll we'll that conditions. to for Jeff shown the and time. call now rapidly And focused questions financial Thank our hand to changing adapt your are your to take colleagues Our

year an how thinking our discuss I'll what thank Steve, in XXXX. you, provide everyone. context clearly a results scenarios, XXXX. Today, for we're you the and full the some I'll was of sense of morning, good potential with also outcomes future quarter Well, fourth about unprecedented

financials right get our Let's X. Slide on into summary

XX% by travel Our the we're and results by related driven the $X.X Fourth down taking revenues. improve global in lend are year-over-year, fourth world. impacted governments declines in quarter the that to of significantly containment the quarter other sequentially, still pandemic were continue resulting but billion and measures spend, revenues around

down grow. While year billion a card XX% was was share quarter $X.XX Net to in fourth fee per a continued earnings and income ago. $X.X revenues the from

performance financial past this three key the remain in credit the volume over said I've trends. environment as of our quarters, and drivers Now,

I'll spend two So the again, on these most topics. time

business, of to slowed The of start since on see first, several through billings of Turning Slides build details in which has let's X change volumes, with XX. views will rapid pace our the you September.

you business quarterly think quarterly trends have XX% we see quarter. meaningful, noise returned since so the And timing holidays. of the on slide, declined build the due year-over-year we more in in days in Starting and fourth mix is trends basis monthly at a business X, build overall to our from Slide with looking trends showing

remaining of XX% think which the makes financial volume had same adjusted non-T&E the and was all mean our on When and XX% in XX%. our build total billings, our overall spending most about was what separately, and Our which impacts, trends. important proprietary of think at comes fourth spending build the given from to these at basis. the performance of you billings down network quarter, an FX on might results in drives And T&E about different XXXX, our look up our has pandemic down XXXX, very GNS for XX% business, it's business, business this

was long year-over-year declining Slide Members, volumes T&E and above hand fourth see has XX% X% As year-over-year to the grew the but behaviors you Card the been in spending trough spending, adapted our X of our second as environment. has quarter, can pre-pandemic quarter back the in consumers third majority quarter the significantly which fourth or non-T&E other much particularly by on remained current levels down their on SMEs the have in the more quarter. and spending hit

driven So show modest, sequential consumers. it did improvement primarily some continued by

of to proprietary non-T&E And represents Slide as prior was reminder, almost our spending the a As around today you pandemic build it can on see XX% XX% business. X.

of corporations. that mixed chain bottom large today. that Taking the recover spending of and see is come of billings even see the customer by closer a continued consumer X, you historically our the at the look Slide on slide, the and has at at true business you T&E Looking SMEs consumer type than our that faster from to T&E majority more

particularly to given large for We continue base travel for see expect time. continue consumer this in pent-up and corporations, our trend T&E that demand spending some we their expectations our ones, limit will the the to

restrictions of We been but also slower to a of within geographies. QX. airlines, in of the during the recovery different Restaurant throughout, part most renewed sequential the hand dining been slightly paces and see QX recover, both spending, business due colder certain are our the has U.S., Cruises, weather followed categories improvement small modest which decelerated showed the to to have T&E. on other continue resilient very in by in

in Slide global card-not-present during acceleration X% the to spend growth which on fourth growth on online Moving we especially continue holiday throughout XXXX, X, spending an season, quarter. non-T&E in and in consumer the to see drove

commercial of has most you has been the of resilient and small and been pre-COVID from and who see XXXX. different to medium-sized build quarter. fourth spending Slide spending which Within the global during two X% highest from continue returned pandemic. throughout remind of spending historically corporate commercial customers, grew to enterprise our our non-T&E non-T&E the T&E the tale our types XX% has large the a mix business. has build to spending here Whereas customers very global represents business primarily segment, our next commercial that most customer and SME I spending, been now will historically have down Turning X, on year-over-year levels we in

already happens look pattern, mixes which expect normal You remains it with that current while of when line by also the in steadily of recovered, XXXX, how of spending QX remarkable XX% the levels thus has generally, declines international T&E spending historically, related volume. XXXX in volume seasonality, XXXX in of similar currently substantially from of XXXX and at you more XXXX to overall showing feel we T&E much will the QX and spending to what will to of see on XX, our grow sum QX overall non-T&E spend, broadly which larger travel impact More regions impact pandemic. Slide QX T&E, primarily have driven about have good on by recovery around different remain pandemic pace volumes, expect continue of are recovered this XXXX. throughout is of of XXXX world more to To impact in fairly speaks in our be the non-T&E pre we But in since some spending a is levels. global our upside recovery up assumption relatively moving to will with it

to higher fourth receivable were next the quarter spending third receivables Moving Slide and X% the up loans volumes in the quarter, XX. X% holidays. and to by and driven relative sequentially Loan on during balances

that driven I the XX% the in and year-over-year declines volumes down receivable XX% fourth spoke. were loan spending quarter, respectively However, just volumes continued and in by

continue also higher Card pay cards. our see down from rates credit Members revolving to We on

XXXX, XXXX we continue. into the balances trends lag if loan to forward expect recovery I saw would the recovery spending and paydown and Looking volumes, the rate in higher

due remind In quarter decline the see I’d year, typically spending patterns. in to of in you every balances seasonal addition, that first a we modest sequential

Member XX, will write-off to remarkably receivable GCP credit with that down our dollars, excluding XX% strong traditional in see loans next on Slide Turning year-over-year credit the trends Card the remained you quarter metrics fourth and XX% and respectively.

continued down rates lowest delinquency loans several rates in both Member In year-over-year in quarter, years write-off in to addition, quarterly sequentially for the fourth loss down receivables. our we’ve be the Card seen reaching and and

sequentially Card now in XX% well to all loans It balances Looking at programs the the a XX, risk gave line our in credit outcomes members higher are the to Card and in financial solid place card with our environment card with this. enrolled of currently years billion continued support of unusual in is had in that the or billion enrolled have in strong mobilize we see our few ensure experience. than It programs to the the or of of made to who Historically, like enrolled do and assistance. historical completing that us the receivables are FRP delinquent performance they credit around programs $X of this give as over members we’ve $X.X last that way us organization one are total programs balance the starts our were starting practices, been trends changes the these end Members an pre-pandemic. with we position balances in at people as Members a better those needed our in repayment Slide relief appropriate which that solid status of on financial to these management stand decline and successfully than not delinquent and QX

of the as programs. course forbearance record government our availability are broad stimulus customers also such external Of others, by factors, and helped like levels of

caution and that potential outlook cautious pace of downturn we for about a result, our reserves. As the that in reflected remain a macroeconomic significant recovery credit the the is economic informs in do

of continued downside for QX, Slide sharply on reserve In that do losses respectively you reserve a We low Moving our million expense believe and balances, used for receivables the scenarios economic reserves divergent. modelling Member Card in reserves release baseline range billion our coupled appropriate the write-offs the and downside fourth I downside of the the of of this can that of us that see reserves performance the to receivables which scenarios our we XX, economic our you will models this $X.X the two set are fourth to in spoke calculations balances to impact pessimistic $XXX our of economic expected in our outcomes in downturn modestly the XX. continued credit of scenario recovery. year are in significant caution, our potential the caution broad X.X% on macro about. reserve the modest reserves the caution towards Slide just of that fourth as This remain weigh heavily were on lifetime envisioned a the macroeconomic quarter. drove and quarter, since loans and of the the sheet, in with due the improvement X.X% giving improved more the representing our levels led in assumptions have see up pace but both of and for provision of we benefit $XXX to the ended our $X.X the million and CECL about pre-pandemic on billion strong balance from baseline assumptions with release the loan quarter, Despite scenarios

the revenues lend net to discussed. now the XX% through Slide and to as throughout card of down on XX. that our we in XX. pull second continued of quarter, been decelerating driven fee Card in strong to XXXX Steve Slide remained spend, the continued on the fees travel-related were card Net managing declines were uncertainty demonstrating you growth card other decision growth of on year-over-year, has crisis peak XX% revenues Turning by performance while because acquisitions see of impact can back during this new But Fourth quarter. details the as Member the our quarter in revenue steadily grew fourth grow and engagement

Although this card quarter area to this we the fourth started ramp continue year, will card and to up growth we’ll reaccelerate. take third and in acquisition in fee to increase investments for it new time

a dip it midway card year eventually single through to growth starts reaccelerate. into fee do the result, to before this I As expect digits

FX yield on on the yield Moving adjusted line income in declines and income we declined roughly in tailwinds in the loans Member basis Card Net loan Slide on of by quarter. net for our saw XX, XX quarter, offset interest an modest third increased basis, net and interest fourth to interest details funding on with the loan XX% mostly points year-over-year balances. pricing risk, driven the in costs revolving declines by from

I’d be recover. loan first forward, then as income QX and increase to modestly Looking to expect flat relatively quarter net volumes interest in the

next Turning largest revenue our component XX. of to Slide discount revenue, on

quarter larger contraction business typically a as since the fourth As in was reminder the higher discount down we difference in earned expected, be we than due discount due continued and decline non-T&E discount billings bit T&E rate in in see the merchants. difference year points average the to sequentially in a in the also average on T&E the discount trend fourth and merchants drove basis quarter. prior The decline to to seasonal the modestly relative the to versus with revenue rates non-T&E This rate billed XX trends.

by centric model. broadly pace XXXX with overall Slide the revenue line into in T&E trends, you given spend generally our I’d revenues business rate see trends to in of business trends on impacted moved with discount Coming of nature billed recover billed XX, back the have recovery. in to expect revenue business forward the with that Looking line the discount total XXXX,

or higher than T&E revenues While recovers of some line X% overall year you mentioned XX%. full revenue more from year outside I or broadly would full levels of quarter to of XXXX. see seasonality, spending earlier, And see XXXX be I T&E as with if in around for to somewhat you quickly, XX% to to around QX slowly expect would revenue growth XX% impact XXXX first that recovers growth lower that QX by X% probably if

OpEx, declines were to expenses spend and moved between management volumes quarter engagement In year-over-year marketing XX% in into are see around would on and our in expenses spending some we’re the that we the and driven usage to of which Variable XX, in a quarter we year variable benefits variable provided Moving expect to which of close the lower travel full by first continuing The XX% down benefits. breakout lower usage the full customer I higher engagement expenses, offset travel-related fourth declines XXXX. total and Slide offset line year spending as to and of with was revenue naturally expenses usage for and to XXXX. engagement XX% continue to relationship related customer customer driven decisions. in began benefits that by saw

we onto marketing acquisition the line, billion our in the fourth in expense card invest $X investments as Moving value ramped injection. up invested and we to continued quarter in new

so. XXXX, our mentioned, Steve in to As investments and on focus momentum do growth our is rebuilding maximizing

a much As this spend $X.X marketing over we billion little as result, could a year. as in

investment down governed the begin the we marketing universe to move the attractive customers year again that as propositions. ultimate the throughout by we full value be investment as value our our existing efforts we benefits and which Our pace injection see wind experience at of will levels opportunities of

our around on year operating I’d and in rate absent to down tax in can In they long-term our billion tax control operating over over to kept XXXX as the changes. legislative continue expenses expect our effective also keep expenses selectively as Turning below expect saw effective base below quarter that XXXX control rate X% our strategies. areas expense you $XX.X XXXX, final quarterly investing year-over-year you be while Last, critical fourth we volatility in levels XXXX, see for expenses, we investing was to any a tight we were a while operating some while XX% rebuild rate, our bit around tax growth to tight this momentum. XX%,

remain Slide our capital all tremendously on capital positions been Turning liquidity and XX, year. as they next strong to liquidity have and

We at our our since this ended year reporting after the ended ratio and a at balance level, CETX have strong pandemic our XX.X% to investment liquidity began countercyclical a high the hitting in $XX.X sheet since the of third balance to the significant and has remain billion due in distinctly and balance year maintain confident record highest start the in we cash Our and quarter we of heightened the flexibility ratio. been stress uncertainty. sheet. And periods

are Looking forward, dividend to up around ratio to authorized We distribution target and in our that our our long-term to CETX capacity $XXX we to plan quarter resume committed of starting XX% this to XX%. repurchases of maximum share QX. million

our challenges the about performing the reserves XXXX the in unprecedented customers through is to The and for that We of are though earlier. we this the know feel on business growth QX, XXXX. our said impactful to growth momentum same in be how our Fed’s about about talked our the as Beyond outcomes of To credit pace XXXX. are credit of the spending, the environment. to now in recovery mentioned I of our the performance rebuild potential range harder we’ve a XXXX we we most outcomes how That remain began, sum and and our navigated two in pandemic T&E generation have distributions the capital predict two and since areas guidelines, up, ultimate do sheet. the function well-positioned and feel a capital balance will lot in good our

investment have economic current pace likely of importantly, pressure no to outcome reserves. in The our out X of stronger Slide leading see two a XX% performance on have a of to as an revenue assumes credit an recovery economic these This likely strong EPS sort reserves that would and combination Most a most turns much could outlined the area to a credit these to economic be we stronger scenarios. do our to potential somewhat caution the EPS recovery combination us we of warranted. downturn in some recovery on around need not of our likely outlook level Scenario assumes somewhat drive and maintain factors continued outcome In outcome our also growth of shown of The attractive outcome. recovery. by universe focusing scenario, on momentum our in the downturn our governed not rebuild be Scenario us so efforts, EPS for put significant trajectory value levels pace economic this Such $X. would in recovery. long-term. lead X the opportunities XX, to shareholders the things as value that specific for with to QX importantly of We company investment the credit significant the by would by weaker help the that will maximize to $X. we having about could injection QX of lead run assumption low along T&E the a a drive And either of revenue a us current

momentum the our EPS where original to or EPS have we this and positioned is turn to on guidance predict growth be algorithm. XXXX back with one XXXX can’t at expectations to EPS provide Vivian. and aspiration we land call the for time, the us XXXX, focus Although on the of to And company company financial its that, back to we an I’ll will for believe over that managing being precisely help growth achieve our right the range rebuild to execute

Jeff. you, Thank

that, for open Before operator we for Thank will with you ask one And now cooperation. open to the those the limit yourself questions. in the to line will up queue Operator? question. I line for please up just your Q&A, the

Go [Operator please. ahead Instructions] Our first with question will come Sakhrani from of the Sanjay line KBW.

I morning. appreciate... Thanks. Good

Sanjay. Hi,

of it’s guess confident broad because rebound pretty a the reopening? And XX% you? much be $X quarter, of know XXXX, I additive to context an in just you I the the naturally outlined, the the in then acquisitions are versus were we last appreciate all just you’ve be mean, one of kind I your in assumptions, will quarter guidance? number as behaviors customer could need are like XXXX last much think releases, assumptions How then your started when how about fourth the you you do year this are assuming I’m that uptake T&E of But assuming post-COVID? this on better that do we scale XXXX? that XXXX? you you on the reserve and in you. And year Thank how versus think for wondering new are I fluid. the year from how Or shock last just

three try questions. those Well, we’ll

all one It’s beam. around

guidance. thing first sort Yes. Yes. I and the was first string talk I can of some think Jeff we the But different about the mean, didn’t mean, no last we’re year. I let’s a say completely Well, given But year the of when jump will any at the here scenarios. point gave is then real we part have a we last of we I with time, talking in were at end in in vaccine. releases. sort than were there spot

is there to so what And there I wasn’t of beginning would right distribution. the places now – fits at while enough – its enough to starts, vaccine mean, vaccine – call sort I is and do the

of sort of sort so have there’s distribute, Now, itself of to points, enough to couple appointments, not over out period vaccine hard out. disconnect, vaccine it’ll a couple itself but get over lot of distribution And a that a we will have you a don’t years. months,

of And so, herd or or you June either a immunity. have so, immunity believe perceived herd by will sort that we

same to go there want a believe on demand or know nobody don’t or doesn’t that is to travel. huge that someplace probably or that pent-up – family I thing and The that do this call other their for thing. the is friends guess want we travel

you here And travel, think States, United travel of travel you’ll domestic see I so, domestic and at domestic see widespread international when Union, will travel in like but it, travel a the domestic the within being we that. – European look don’t sort things

You’re going this to probably year. not lot a haul of see long

but you year it the what travel some marketplace. next a that sort look, in we’re into come happening. in XX come you the through to vaccines and States something to travel we’re these as I of mean, so we or relates being XX% are at slower, only consumer geez, sitting will that we will XX%, fairly lot point back United get travel. and shocked have don’t that, have on talking And I’m travel time do I we a mean, that I people this confident January. potentially being here just this I it’s see the at but little what we million about back it really take like vaccines, to see predictions vaccinated missed confidence overall would time say, back of be travel. the again business about going I’d about, if like have bit

travel, we And a to air so I as July, people get and this these travel. into believe you for rush September, especially will see that summer season, June, August

I think cruise XXXX more a lines you phenomenon. know that’s of

consumer consumer coming good really travel feel, we So, – back. about

partner I think, his our with airline call. the Delta, same on said thing Ed earnings

mix, behave slightly the of back, as gate, booked second to get to but year So, Card traveling while is as we I that. cards, forecast, right will would more internal the of new not scenarios be that cards a that about normal our than not own of cards slower feel booked just behave, half get you’re And out phenomenon. probably have Members going they’ll the the those probably mean, sort in last because have new take to we we into confident our real look, cards a what far

lot but lot lead spending a are about talk their focused we cards, may business getting – normal. little a Having really so cards bit a slower acquired, said that, about. to do And talk we which than build we on ramp don’t

We believe up lot out of a there us there good cards. for good focused are engine, and acquisition ramping a we – to cards acquire our of opportunities lot are on really

good Sanjay, talk platinum add Card levels. in sign things quarter on two were then cards us. reserves. were the in pleased gold new to really out consumer fourth to see point business, That’s and and XXXX cards. about acquisition I’ll I U.S. the a really would We Member at numbers essentially our on

then its guess numbers. I’d is credit. are It a rebuilding XXXX said, what that the your impact The the about XXXX affect other great point it’s is to really results think what to about card go XXXX make is everyone And two question I new all a acquisition because about much, XXXX reiterate won’t happens, last that to encourage I just to to extent. results Steve numbers.

in reserves. of in cited script So, end billion to credit relative I more the that the now $X.X the beginning we my with year, year

dollars pointed We and also, end in relative that and our that to with. up then the programs. $X.X with fine out the billion year beginning doing of financial relief financial of accounts And the year, ended into the historically go XX% programs, we relief in I accounts more our also collecting delinquent

you a very is credit that So, outlook. economic that our conservative should what reserves tell assume

of more so, you happen to laid see small lots businesses the going have bankrupt, And off. stuff consumers being bad economy, in

You things those all be happen have to for needed. bad to that like to reserves more expect of

not we’re Sanjay. call, economic making an So,

fairly comes the to are Rocky, probably a there stuff those of from. of and reserves to steady We’re have forecast, scenario. towards and economic probably of like where – saying, we’re well, sort recovery, you scenario happens, we if low the downside need Wall that all release, high books the a of we leads excess bad real the then all if reserves in you going going scenario sort is that that lot you’re our on Conversely, have that

our XXXX. year, this So, we’ll have rebuilding momentum focus about way see, remains to all it’s but because either growth

of For with our next question the Morgan we’ll go Betsy to Graseck line Stanley.

Hi, good morning.

Betsy. Hi,

Okay.

trends, get you programs put which to was and had which you understanding just drive I acquisition as wanted card deck, I proprietary of… are your an kind to question this the around in seeing this So,

Operator? Betsy?

feature. open. check Please line Ms. Graseck, mute your your still is

answer Well, for Betsy in go acquisition? card asking the think what new Steve of we was and ahead just we our middle should

Jeff think I I are, answered card levels look when new and just we it. our gold And our levels Yes. platinum at mean, XXXX. acquisition, really we’re of at

feel And we so about really good that.

back co-brand the you in our not the stay flights, hotels, our between such what said from in you And value or better cards, co-brand demand actually to than to proprietary trips so right co-brand, of not well Having but are you were those acquisition, said, well. a travel. is the quite acquisition. same co-brand points markets as they all lot retention makes people spending lot get combine – pent-up for cash also What our us I’ve that do our not now, you were either are performing this those doing we those take co-brand distribution. to seen United our our lose And sense our along because the in of because think world have levels people reason a taking and cards tremendous a distribution And all propositions States cards have perspective, do cards and people take I I mean, gather as look, they our XXXX. on that, opportunities. though or other to at our cards in spend the a that co-brand numbers at in partners,

So, we feel proprietary back. is acquisition, by being about driven and gold and which good cash platinum again some

acquisition co-brand good comment comment, that, co-brand the is earnings made ramped performance his our said made co-brand remarks that we – well. having really on Our our Ed as is and because that really, But depend Bastian not in as up Ed channels.

we answer question answered you got somewhere provided before bit little cut you off. quite Betsy, trying the So, of – around a were the ask to hopefully,

Our Barclays. of with Mark line next come the ahead. DeVries question will Go from

had Yes. the questions scenarios. some Thanks. about I

expectations revenue kind everything things you outlined in rebound Just And the second XXXX spend Jeff, as in for the scenario, to see OpEx to as part marketing from aspiration, benign such XXXX as clarifying or you XX% essentially, growth kind - of need the well X% the X% guys get to all your just then there? of and the T&E XX% Scenario credit. do that what and of X, is

take and should second. the take Steve the Well, first I’ll part, you maybe

guess XXXX high driver the on as minutes scenario I are low credit, the or going point said what what happens scenario I overwhelming ago. to is few is a be or Mark, a of with So happens a

going do, turns to year. side versa. be manage And sure, a you revenue a give just really But to the credit it spend be all if of go a scenarios and things little what this on going do outcome credit ultimate And why and but the the going just external how year, you on going Now and I you your company discount two scenario, high come we’re is be those environment. vice out growth OpEx out. too And by strong throughout that’s to comes we’re clear low not which we’re company the we strong, manage my really rebuilding marketing. driven if sense quickly to about why because is impact going trying the how and momentum going revenues run what that’s to those told to remarks you year, this we’re might to this we a how very is have of back we’re to

So by XXXX? that’s you talk guidance then And communicate range. maybe want calling opposed Steve, to scenarios what a we’re to as to these about trying

have a two and reasonably you fully think consumer you have T&E I XXXX. recovered XXXX a healthy top-line assumptions, economy in

don’t come to it. driver I of So going travel be back. we’re a to think that’s not expecting corporate

right they’ve been. And is, we key do have we’re investment we we’ve need you our your want to both as through think this our said as And so I the if levels ever that then where our be higher be. thing remarks, within that baseline, That’s plan. went to will we than and

planning end opportunities will us. If not But we they at are to for have investment invest we back. what light are believe there. of investment light we and that we’ll tunnel pull we We they’re do to be – will have available opportunities, of we see there, and in the continue terms take advantage of those to all the

to look will ramp up our Card We acquisition.

on year. We’ll at injection look value year. value look will early at refreshes the We the throughout proposition in

coverage welcome acceptance in parity going States. the focus and keeping to on We’re United

I take international China table including for signed China, second. we not million the at We’re acceptance. going to really off look, merchants last year, mean, drive hard X.X internationally a

We’re we’ve drive said. as acceptance, going to international

China primacy as small and in work network, to going Kabbage We’re going to account in going well. invest we’re and continue our traction in get our some small checking our to with business And to customers. get launch business we’re more

we for across up fully of our continuing acquiring will in and our building ones T&E digital ourselves just capabilities strong are and that of focused one consumer dimensions retaining by to really foundation be Card recovered XXXX, XXXX economy and building all lines with each business We network So, build investing in our about – believe of spending, range. Members, capabilities. new network merchant the within healthy and and preparing

Go with JPMorgan. We’ll next go Rick Shane ahead. of the to line

about Hey line versus non-rewards questions I’d that was to like for was a this item my In literally question guys, expense. levels. only with XXXX thanks start that comparable non-marketing, taking the opportunity you to operating morning. QX, if be the in drove metric of normal to rate what sort on better for the going everything that that there I’m and curious else there’s saw leverage think business? we

customer we’ve is take level it is clear focused sold $XX.X operating If other frankly me if years, this let look costs what a some over at everything to expenses marketing. was levels. we up it’s come which – than one and of you think ago the and the And Well, then the where XXXX are below we’re we billion XXXX XXXX. mean, those variable company, is responsive. don’t Rick, in about number XXXX have the decade I managing and a plan manage on in very to back about is overall the engagement that to businesses

track the we and noise, But history, billings the we’re go leverage that company, bit. always what XXXX of I of the long little as costs grow, OpEx at infrastructure you being think and revenues QX level. that’s year, about record managing which taking go that a we particularly little of disciplined holding think you’ll see up quarterly look a approach tremendous of here. lines little if in a bit disciplined the that back as There’s very some recover the and have of So below a very from there’s means every

Rick, I about number think if we the to know don’t how got I of probably that’s your So it. question, but

Yes.

thing the XXXX. the it other face this we’ve But perspective. operating yet from look the same if on is The number XXXX it, much it’s in business had that, is than in was of you an I would pretty add number at different expense very

are which We’re our focused focus bunch things. completely on and been We’ve here a of different in acquired has different. companies,

think, ongoing in. I has good putting taking on team done job basis investment So expense in out a back then an the of really and

do about think to you and this, look constantly that’s you as need what so, this we look at is base at it, providing when operating And leverage. us

be we’re and that years, we fund think be LoungeBuddy if so the at the whether leverage enough or or business out XX so getting the about we that the business, within had, a a we’re opportunities core go of that So that to whether Kabbage, forth a other back on. And Resy place. same acquisition you Mezi yet

we add it. a of so getting at that’s managers look layering costs. believe, operating things of we on look we’re And able as the when how And these it on without operating we to because business, lot we’re tremendous leverage

Ryan of line with the Sachs. Goldman to next go Go Nash We’ll ahead.

Good morning, Good morning, Jeff. Steve.

morning. Good

Good morning, Ryan.

So two-part a question. maybe

in be XXXX, expect noted – fully a T&E the for your economy. that to color recovered to consumer side you you on and healthy be Steve, So

below about growth could then talked drivers attrition higher of what in we this and just shortfall the billion. of you So Member earlier and remarks maybe about first, $X.X can be year pre-COVID Will OpEx be potentially up? you as pullback Card the could from maybe travel some corporate lower levels. you outlined marking in terms accelerating a talk there picks in spending, And spending? be the would see revenues Or then your secondly, being

kind myself, near-term. can’t period in leverage anything the in We’re right like pent-up of but demand consumers weird have here this transition where

value you just proposition? you at all refreshes? thinking the Thanks. about comments product what’s And in does about included greater approach change the in and expand how the in maybe on can the you’re value way So refreshes of terms pandemic injecting

Yes.

to mindset use short-term, value to the on teasing think people the seems I was look injection, it. to second to about couple of the do card. first shift we travel, So when do remember one ago, I only I But not to tried come of we think, question, in like they couldn’t things, two but let’s their the a because just at minutes sort value what I’ll Ryan. sort provide if back It how of them talk you and first,

really our on But when those in base at things in customers you what They advantage by of U.S. of wireless so putting that platinum take platinum, card. And look our Members and putting we XX% interesting XX% not of was did point and some had advantage their streaming and consumer value centurion, XX% wireless with small now. credits of platinum take about the of – credits credits, our open-platinum with are business had of injection. that. and We like shipping we Card

So we had a uptick of XX%.

difficult. that stickiest payment who to something in is your you probably it Recurring is have. stream try a this you Now of embedded the have and very billing get out card is thing any

you for actually so card first put streaming put our on wireless base the card. XX% spending is, surprising, on compartments. And the the which but platinum might time, XX% of think card, people put in And

And and those. as I that. course because value one, think last think we’ll And Number meant the people value has years people we’ve I propositions to the and – obviously do of us we them the do perspective the to continue things. we retention refresh refreshed steer of injection those real where then want want that we’ll did and value helped we’ll at see that that just two, had look really go, number to to that. our overall is So for over from aperture provide And two us a them. to three you’ll expand continue and

look A beyond because value we’ll put to partners holders with funded, our premium and will or enhancements co-funded proposition even traditional the I card work value in continue proposition lot expand more either T&E other that. think to will traveling we work to T&E value become So at and merchant our you We’ll is we’ll our important with and enhancements. partners. safety of do

it be good is that sticky, feel behavioral about a spending retention and basis. we sequential why you drove, will we increase it’s on the really we that And – feel good injection, an which we non-T&E we see our a that believe the value really have we in So and believe about will because that shifts that continue. saw,

So that’s the first part.

a As that question, the that particular about the see be herd pent-up back point. issue quarter. vaccines, do about we the forbid we got because look, see proves the the work. for be and the demand. coming, go. believe God it Express consumer economy, vaccines If work, different certainly we will far it and second will we different will the at will things vaccine first and doesn't of not travel on is fourth It all off part the whole the believe But efficacy I this happening distributed indications American working, see question we're was, we traveling, entire as we're by talking that immunity talking

There look, T&E. of spending, across corporate to the it's multiple corporate about dear as corporate far T&E card As piece well. X% our across of as and is lodging, all it's across restaurants, that rental of traveling still about and our car overall billings near is us, are which and that is disciplines. and business, of companies spending it's across air across are drives XX% It's

actually still and said And that still get to to think spending hotels some travel to anticipate profitability. salespeople a they have that's we spend but believe going don't industrials cannot lot their of of need see sales so stay driver accounts. is you not But overall on. in food. and still they we big where our don't that car, back, of by about But you clients. on, think that, when pharmaceutical local as reps they That's coming out we their manufacturing, go a for about going T&E consultants who you having And that

card X% we business. up not what said, corporate of consumer a that perspective X% our billings X% revenue shortfall big profitability it's would occur we more does will not that or make from that in a for our and either our driver any we've gain and small will revenue to As business equate than believe

the just businesses already sort a other things, their business, I'd steady other spending. just travel just are big leg recovery. isn't Ryan, continue of going to that of we the where is add stool those two strong of piece them small need And small and the And

January guidance And on I call, aspiring thing, into that, kind reminding targets everyone to went achieve we want that $X.XX you of just for to $X.XX. years we're XXXX, of like other in The ago, when a for seems XX clarify the ago you gave is we XXXX XXXX. months to that's

of Chris next come from with Donat Sandler. line will question Our ahead. the Go Piper

my Good question. morning. Thanks for taking

would there depend terms the downward just MDR T&E scenarios on on increase of MDRs, it spend, the in or T&E you merchant see downside the…? Are basically recent discount and we rate, that you and we the on where a to that in the spending. I'm In some wondering years. Jeff, risk longer-term you'd we the of said are that likely see you more seen more taking can is pressure expect through OptBlue view maybe any an

said, right and with at X.XX%, god, view that any mix. at you down OptBlue. That's industry by mix we right rear were you at it's sort rate or T&E through if happened of focus is are where we I And you mirror. is, are now rate my the completely on I've now driven discount we're like, – you're always been I look oh what's discount things, XX% obviously, think X.XX% at in two at if And X.XX%, So always pressure but X.XX% that's has is overall, discount by rate, from look downward decline. where because

OptBlue rates. comes so and T&E move But all back discount will And will at up. have at not MDR back that pressure as any

lower puts overall having fine. So pressure rate that. But will if but I control continues this the okay average I up T&E on MDR, that. we winds be in said grow, which to expect go T&E on and that with and industry-by-industry going manage again, non-T&E non-T&E fact that's would everybody MDR than has our and we discount moves if as that, overall, happy think grow mix, with that roof up, Because through up. a can't if We're

the America. line of go with of to Bank Mihir We'll next Bhatia

the you my did appreciate it – growth. and about taking Good investment to a as for It positioning maybe view company XXXX, you're I want little questions. at bit for morning. looking repositioning, Thank

the – much investors I how should should you focus that maybe not go progress that? through to, it's you year American could on, EPS a like else maybe card there through So new Thank you. is or getting on million before as something but it book growth, could acquisitions, provide maybe $X there that the think goal we will in do is whether guess, metric towards acquisitions is the maybe, talk billings back that $X a something a you throwing that, Express's about another Is something acquisition, year, call judge the anything focus we you a of XXXX share. that new or XXXX, in like card

Well, I moment. as comes think Mihir, all it back, to you pointed out growth rebuilding

putting about the And with and you credit, some that you watch think of key new about, an function we'll quarter. that company success with hands how with give we're products our our success China, the on in happening franchise watch for in we're and are the new we're spending. customers. Steve how and and the what's doing of a doing what acquisition, into things with our talk each the what those Watch want talked to into term quarter. Kabbage happening that managing what's that's externally the recovery T&E And existing update we'll the I things watch, so on longer it's of customers bringing in every And

those And be which important. is acquisition, to going we'll as as well merchant also on continue things to update

see I exactly as is answer about what that card – acquisition a in you the So first sort sign. just we don't my said, I momentum, we good of that Jeff things think said, talked more as again,

the You in put our see a as general. more in well, macroeconomic and take value only not also of United the States, world sort and – us health in health merchant network the of state in propositions look there. the the but But at the in

We'll Go of MoffettNathanson. ahead. move with on line to Lisa Ellis the

of in banking are because be in proposed next kind these is, in boost glad good the Biden stimulus, like two question the other Good the would to more and debt On reduction. this administration, bad with to joining consumer and on And how reduction your areas, or and of you experience overall, indicated because on call. of round just a morning. meaning My stimulus aspects regulation, regulation. delinquencies, of increased consumers overall stimulus I'm regulation. expect given XXXX, XXXX, lot using an of Biden spending has on focus funds for protection then second affect

you. what you most So on for? are keeping out Thank his eye are policy an areas focused

to they this of kind figure consumer will will at out what from be hard done it's point, perspective. what a regulation Well, do,

be if You going to collection. debt done don't on that's know

been But our around that and And will started, think, look all journey, last years You we've XX guess, it We over don't through on really lots industry of of lots be. over administrations. started I what comply. we'll regulatory UDAP so. this or know the I and the years where XXX focused sort look, last –

talking in going really to mean, is years? do. economics don't it's I've have and I've think, If And just as plays you comply all Express, many our do underlying we regulation business, we could then not lending Could we're – our our on about talking we through out. rate is has our we'll to will more I probably regulators? more, American conversations. more? with dependent we required through success is, all think which card, about way. are, I any think on. we in can and We're need the we'll been a that not or – at We've they're impact see but under that Yes, lending about people we fee more in, revenues what be if deterrent how not what's be been business Do demonstrated don't protection, about competitors of it Yes. administrations spend not come the what since of probably have Yes. discount consumer a, it these profits all lend. moved talking compliance model and we've will do We been And as us you about where be scenarios. have spend, broached a when model, our the spend, see over lot added our in. think major get they're look, have to we've at so does regulation running come to a it's really of any we'll I that And going will and been time

base, we a not and would consumers our part demographic comment as we the are on of customer – spending, healthy clearly only who small Lisa, I is are stimulus of business healthy our model. is our big add given want, lending what not businesses The

in rates, the if So higher and and in healthier system happy for to we're spending well that's, take economy a recovery. being trade down results liquidity more for awash that for pay more

view we've political far good as the have for about performance us. be a credit Should more outcome the good performance stimulus. we thus spend So feel to and had the and that here? I thing

to on of line William Blair. Bob move Napoli with the We'll

Thank you, and good morning. Very good call.

geographically XXXX prior the think I And your also, the Kabbage, watching that international highest growing I guess a I the think BXB couple I I are about mean, segment, think to was then On the targets, some comments Kabbage. Steve reacceleration of payments of pandemic. the keys

internationally. are around what just So you share confidence that locations, commentary you’re at know – your seeing market adding but confident share? I gaining some least you’re or and you’re that maintaining

is I what than we being more here’s lot U.S., Obviously interesting, challenged would adding the Well, our are spending. of that say. bit little is a international Bob, international a What’s locations.

lot a tend cards international be to more focused. T&E Our

they’re a more, will back. believe come but down And that so, we bit little

again market that we this certainly gaining we sort at we that key – you as the participate in. that numbers share there’s And of demand the so, travel. share And we markets for eight believe, we were of haven’t like – where on run pent-up market point, particular in but know

global are is in attrition the attrition and showing When States. how really the signs the we how show performing sort performing. the is we talk versus same, there between that is international, numbers attrition, difference no U.S. of same they international United about talk Our about

the that come small So, international were we business in consumer back feel growing two and of both areas. good fastest that’ll

that interact As businesses. that we’re Kabbage think, as I with goes, we thing small the gives far about a as our us Kabbage really excited is platform can it

serve be small be go to flow we business of not of couple loan, continuing of to one been and and for a we’ll working do card very did a to platform enhancements fortuitous acquisition and last gives be just loan, that the QX, to one us end only why in fortuitous and over a the time is have what It Kabbage. businesses, all your we shooting get to the to sort to us for very be so out, which that’ll platform now able – on to product, into analysis term have on needs able checking have was that of get years. to a cash QX rolling it And a account, capital an to to platform, make

really we’re excited a from it So, small brings the about that business it perspective. and opportunities

to please. the Bill with line go Carcache Go Research. We’ll Wolf of ahead, next

and Steve morning, Jeff. Good Thanks.

Hey, Bill.

the trending the acquiring versus you’re new And the today side? on how commercial on costs are versus did How of assessing consumer return profitability the investments? levels and of investment discuss acquisition each IRR you is spending accounts the pre-pandemic compare how dollar of those you Can historical side, on levels? today

right Bill, budget. you in to particular that necessarily driven are I’d investment by back be XXXX I Well, I opportunities, attractive take of a universe what by think is, our comments not to our overall, levels say going that

with we saw co-brands strong. citing example really the that were about what we U.S. have earlier, side some of been also we non-travel progress the we gold the and in and on very So, consumer business talked QX have platinum pleased

So, we the feel good about returns.

I or momentum. fund many in you’ve with good opportunities off positive have rebuild opportunities our think growth aggressively to always marketing years, generally more and and that Steve setting for we than heard, we’re say investment I can we XXXX returns

Fargo. next go to Don We’ll line the with Fandetti Wells of

open. is line Your

competition, was maybe up, My sense on weaned then, to into you’ve morning. hard there but from there just is And Chase? that Good was any more the acquisition? strategic competitively? seeing you catch pretty was cxLoyalty their anything offense. to Steve, significance it thing Are playing same like

wide there’s is across compete. think, about no we’ve more space the places some we got for the got than competitive and a I competition to think corporate States. United when got that competition, space range obviously Look, We’ve mean, so think in here, consumer you business we obviously, competition And I there in – forth. competition of about small the competition UK.

think highly to into the consumer and the and most you a many competitive fronts for businesses only not understand while drive of Look, is compete and be years. been going of So, looking get Card piece it’s it out probably top-line to has I just Citi on to important bring it JPMorgan, many, XX large probably America, and that but is everybody Bank anticipate more there we to Members Capital, fold the revenues.

think competition. a I down been in there’s step don’t So,

call, every said stepping think and pretty will his investments on is CEO say see a – he thing. the his I same think I think, I you would just up much Jamie

stand look to forward our to be our seen look last few believe that So, just been to and that I as look the for And acquisition their them. a and JPMorgan don’t have Look, will and we to continue to know achieve, propositions respect we about they up business, as anticipate they’re and great going it’s is we competitors. their it we years. people value of competing and what as lot we it’s we smart well at of get do competitive over to forward they as I got a it really trying running over job think lot a

happens, that, we I do what awful but we and for about see most And Jamie going, they the the and out this to hand I sure value feel into their deem what continue how way propositions it. think to I’m is color hold And good we’ll ask in that and on they’ll way so, do, go we right we’ll that figure compete to more integrate to about Gordon. effective the would

Maurer Go our Research. Autonomous final please. come ahead, the with And question of will line from Craig

Good Yes. morning. everybody. Hi,

Hi, Craig.

Craig. Hi,

free? what into quickly in trends volume wanted the now COVID Australia? at country that Is of the ask Thanks. and quarter type first I discuss of how end And you about to seeing. become see lockdowns quarter? UK, you’re you relatively do rebound can their impacted secondly,

UK significant Well, December other and you in T&E. would spending. comments. see generally, the some Craig, Europe in as in and continue But expect, into saw and restaurants In though non-T&E two declines the what January, more to you you stability now is

Australia, country doesn’t heavily world Europe driven within doing as heavily many by on state were it locally, And than to has the that the cross travel U.S. Australia. of lodging it’s has interesting it that heavily, restrictions from on T&E. in locked was observation non-U.S. terms Australia, or travel So, more, down are restaurants have T&E markets and impact that and an off there many an people And expected the border shut of of more non-T&E. to has course, on impact also go but completely itself like cross our

spending The other to be are. as elsewhere on are lockdowns. world, of to while government might dollars restaurants going the and stronger But lessening in than bigger travel. to it’s it parts And the T&E little you there the come in going back that’s where not So, is does good. bigger around the a dollars that’s looks slower a Australia spending world the non-T&E see

for American and you continued call, again follow-up for team today’s With the you, available back Thank Steve. that we interest Operator, joining questions. Thank end. thank Jeff. Express. Thank you will to will any be you, for an bring The you. IR in to call your

Ladies be available at our the shortly call. investor and gentlemen, after will website on ir.americanexpress.com webcast the replay relations

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