American Express (AXP) 27 Jan 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2022 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. Kerri Bernstein. you. Thank ahead. go Please

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

with These management’s slides a today’s to actual future to in the performance. begin, before risks included business statements are differ in based contains financial As our the that we reports results about and discussion uncertainties. reminder, SEC. could are expectations on current and forward-looking and Factors statements file and materially presentation are subject these on cause today’s company’s from

The quarter’s financial financial periods discussion earnings measures. The measures are prior also contains today non-GAAP as the comparable included earnings as the discussed. GAAP in well for this materials we materials

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

start results We company’s provide about our will performance. begin then with and a Squeri, of financial today Financial will some progress more with the Steve Officer, and Chairman Campbell, who Jeff Chief remarks review will detailed CEO, and

and with Steve. that, we over session to Steve Q&A will move me it let both a After that, to turn the Jeff. on results With

Kerri. joining It’s with for be to about for us to outlook morning, Good talk our great XXXX you everyone. our today. XXXX. results Thanks, and Thanks

growth confidence than will generate strong A go results, for I earnings our per strengthened and the revenue share pandemic. plan we provided we which rates before introduced that you delivering roadmap a ago, strong year our are levels I growth plan, were the higher through annual they for why at delivering rates my growth As over long-term. in to tell the our growth

all-time $X.XX guidance was plan both the in the for year, and year, to did retention momentum both with. for We quarter of clearly the that demonstrate guidance in earnings revenues well XX% and reached spending, our environment. of our $X.XX exceeded the full the saw highs fourth Member the engagement against year growth Our above to is $X.XX. for the exceeding year An results over through quarters out we per four so Card guidance economic XX% quarter. and the started which year full our share laid up in the the Revenues, The and working. EPS mixed we were XX% continued we last we strategy

business retention record Fourth a engage quarter high continued ability and year premium billed our for $XXX up and reached the very of remained XX% and billion quarterly satisfaction strong. spending members. retain demonstrating Customer acquire, card to high was full

for and strong J.D. customer to and both addition study metrics, customers services, recognized best small business industry were card our card number internal study. In one ranking products credit U.S. again consumer the providing we U.S. in Power by XXXX once the in satisfaction

made customers. X have numbers new the high our to members acquired credit already thresholds in in quarter fourth value attract card our new We we the investments large propositions The premium year. as of continue even million increased through we

For of year, the million are fee-based record growing new XX% $XX.X card accounts and nearly on level, products. our acquired reached a our acquisitions at new full

largest the base, metrics taken thoughtful nature to representing the by supported strong, of Z quarter management year. remained drivers the risk XX% acquisitions Millennial and premium the proprietary for card have our growth, Credit the and exceptional year. actions be of Gen and customers of full the continue capabilities for customer risk over consumer our in our we

me my XXXX these we beyond, why to growth plan results deliver confidence let aspirations. positioned you to and tell on our that Looking are ahead increase

operate most great business. a space. in geographies attractive segments payment We are we in the fast First, of and the growing

serving our as include to We very difficult are Zers replicate. model. small global These the number including membership a customer largest that base model, a this consumers, world. of payments an unique space and medium-sized and leadership bring highlighted our to well integrated brand, advantages as our our by in millennials As for premium positions the Gen businesses premium corporations with and competitors

Put Forming see service a the can the marketplace foundation customers. unparalleled of runway opportunities the these long advantages is we together, and growth. our who competitive colleagues advantages talented we leverage our to dedicated create for deliver

in that efficiencies deliver SME We a digital merchant adds building new in capabilities marketing enterprise, capture high All membership which our core, expenses. expanding marketing focus happens on experiences our for capturing partnerships our of share reinforce such our across our introduce the our continuing choice into outside these continually particular operating services intend customer of continuously in focused and invest levels momentum lifestyle to consumer powerful adjacencies more customer opportunities several engines financial by channels to and seamless, management risk SMEs, to and our and lending. acceptance that Growing and continuing with at U.S. innovating value model. the to gaining areas, intuitive to value key refining consumers fair and their investment products, while drive new this expanding and and and as

scale builds partners, starts value premium turn investment model to As spending, who up. a membership we a scale. have scale, add which partners executing and with investment X and to past demonstrated consistently virtuous high over of making network it difficult merchants and highly premium us who which our in for more attract engaged cycle growing to premium us more in competitors membership merchants to fuels strategy customers base. which our of enables generate catch more more more years, This These a customer enables the this operating customers our creates growth, attract more efficiencies attract model, it

built plans consistent in translates mean we economic the originally what continuing guidance last always, as XXXX plan change year. dramatically. blue-chip environment our does And we This in place the factoring macroeconomic laid should have year areas pivot on plan into to investment for with in out growth for strategy consensus the in is Our slowing mentioned I this while XXXX? So our economic this for growth. what

is to of we of EPS growth Specifically, plan XX%, which our long-term than and aspirations to $XX.XX. expect revenue growth $XX higher XX%

In $X.XX first our beginning from shares a common to the share, quarter quarterly increase declaration. up we addition, XXXX dividend dividend with outstanding plan $X.XX on to

to to up, our that to-date aspirations And about in for am sum XXXX and performance. what annual see ability confident more performance achieve in will growth detail XXXX and XXXX, strategy double-digit To to even our revenue turn shows we I more our based growth over beyond. I our provide is our our on for and mid-teens it working. EPS now Jeff performance

session will Q&A As always, after we Jeff’s have a remarks.

against focusing plan last that reflects be It’s what Well, XXXX our also basis January this thank to in and time we it multiyear to good here with for talk also spend ‘XX results how steady XXXX. an is about talk our trends the and is I you, growth sync announced progress good everyone. we our since looking and on morning, company. to since results, on of year full some actually more business our Steve run about mean which will annual at year-end our morning our

year adjusted revenues with billion FX summary reported the billion for earnings $X.X Notably, share on quarter high net of full per and Slide a quarter and full year reached This income basis. an third record $XX.X basis. momentum reached revenue on on of straight of XX% grew high drove Starting $X.XX. fourth our up financials X, $XX.X XX% revenues our FX-adjusted billion, of an also an all-time

quarter, we and our a per the reported million $X.X in strategic Ventures which net did of share earnings investment $X.XX, our billion of For portfolio. income impact $XXX from include net losses Amex

year the due our year-over-year these the and up was billion have income As and year, year, the $X.X to again prior this On challenging quarter. I pre-provision year have as in fourth XX% been pre-tax, included had a supplemental of we for net have billion respectively of we full said sizable pre-provision XX% XXXX. releases, reserve disclosure comparisons reflecting throughout reserve also the releases pre-tax the underlying the earnings. this credit income quarter, momentum income growth versus in prior basis, in $XX.X Because

So in that starting saw record quarter we spending in fourth X, both our results, in year-over-year volumes, network look on full our of reached growth XX% volumes. FX-adjusted with in quarter-over-quarter more XX% the levels an for XX% I and year detailed billed network were fourth and quarter on XXXX. volumes beginning basis. Total XX% the at all now into business get and note and would Slide year, the let’s we good on up a full

where of Now the the on for quarters rates the we earlier levels lower XXXX. point year And in course, in a of now growth lapped majority this recovery. have the included to recovery volumes we are of of more

the being it pleased that geographies. customer this across fact are We types growth driven with and and is

these various segment, XX% services, across customer from commercial we our a I strength On given our have Slides few of perspectives. U.S. segments and within points Services U.S. X away the International suggest you There fourth in the X, our each. reflecting in the and various consumers. continued Card key quarter, services premium Starting take from consumer with spending is consumer trends views U.S. grew a types through you variety billings largest

X, cohorts within card Z members on through Our focus and spending up who XX% on of the segment. value see drove of propositions, Gen and millennial Slide engaging make spend in can XX% attracting, retaining customers our younger from our the you now growth

clients to SME, on quarter, SME the of the another that and Turning slowest spending growth can businesses. U.S. represents saw in customers type to see billings was growing solid that their from strategic our the focus of U.S. customer though our XX% you you year-over-year. segment, Commercial expanding this our by products range help in our run up it our We small supported enterprise Services, medium-sized quarter of majority see

spending month to such conference, about we in categories Steve As advertising, recently spending heard talk slow down investor so you digital continue last trends. our to an SMEs monitor have at service as bit started a

did XX% customer with though to Moving it lastly, recovery services than spend in customers, pre-pandemic back other not below has see large And type to corporate later in U.S. pre-pandemic global card steady recovery this started small pandemic given its steep overall quarter is growth now levels, a they highest our billings this recovery segment that one you our their continue the as segments. come international levels. now and mode

strong Spending and in Across QX. types, all and from respectively particularly the SME XX% momentum fourth remained XX% and grew corporate customer year-over-year spending T&E consumer quarter. customers international international in large

and as nice so a in in sequential spend of I the few saw pockets quarter, versus mentioned that also slowed, we digital there were goods the spending a growth SME amount that services While advertising earlier. last such

takeaways So fully all most these recovered. this our At spending what of XXXX? basis, dollar point, of do on a mean categories for have

prior the across will lap spending likely rates T&E I the be exception that impact rates more in of Omicron for the expect spending from as growth categories with year growth elevated year. stable we So this would QX year-over-year

just underlying of Steve all make our up we plan have were growth sustainable growth greater what the pre-pandemic. created Importantly, the things for that strategy about talked seeing than rates foundation that a

Now on spend balances steadily Slide and This as Member XX% is receivables we on loan X, as rebuild sequential loans our now saw exceeding their to loan balances. year-over-year good well growth as our Card growth in growth. moving customers of growth

about Given our of moderate continues the the levels deep is in through pre-pandemic loan XX pandemic. remain U.S. recovery, interest-bearing lapped, progress the of expect we leading to do but than elevated XX% year-over-year what XXXX, course, balances quarter coming our portion to points phase also is versus of saw the The to from of more surpassed growth with XXXX to in volumes, levels. of have rate last now there consistently percentage as our we customers, up balances, years existing growth loan rebuild the over which we which

the our provision continues rates XX, below As pre-pandemic and receivables quality through you on levels. through then Slides strong credit and and credit Card of show Member delinquency customer turn write-off high in our performance. to X base credit loans remain to

So continue as this on up Slide which see pick can X. to expected, did they we quarter you

delinquency Going XXXX to below Member for and move in remain rates loans. to time, over forward, Card we write-off levels up but pre-pandemic expect continue to

build, our this to quarterly the reserve to performance release credit pandemic timing industry, and of think adjustments Slide now build to helpful for the Turning at and still the of pandemic. it’s standards receivables. The on I full credit progressed. the delinquency we the on pandemic-driven of million of has growth, capture of we Of in because year-end $X.X loan and clearly of across impacted continued a significant by still primarily the look any provision number XXXX as we was saw unusually Since this longer full amount it billion year accounting size increase billion, provision expected At loan by the build, and which member card quarter. Full the of uncertainty $XXX is course reserves changes in a balances macroeconomic no earlier $XXX built low and the reserve and expense releasing $X.X these the balance results. year in were million to the the point, relative have $XXX outlook historical reserves reserve rates year driven year steady our included XX fourth to this have sheet. we year, this remaining our the million

consolidated of to our we below on to day rates. X Because loans a some or our total about basis XX as can products levels $X reserve lending with reserves reflecting bit you This Member CECL had have strong credit we as in talked XXXX of in quarter, and of last than Moving Card reserve this we reserves, X XX, many that the portfolio see receivables premiumization our day Slide billion rate is pre-pandemic loans the CECL points view have representing individual we seen. embedded comparable ended We now X.X% more instances receivables. the and the continued charge performance functionality. rate

in Taking we rate in towards balances this of to below since steady account, and you adopted our to the time see provision remain increase more the but for levels. first XXXX, XXXX. Member loan receivables expense size we back expect state a into Card move relative should a of early move CECL expect bit to to through of as XXXX, this We pre-pandemic reserve all

of the provision expense. provision would the increase low a Given of historical growth and our strong standards expense expect year-over-year in level unusually XXXX, combination loan I by significant in

were long-term by of aspirations. fourth part expectations, execution our well the is year. and of Moving up is our for our confidence next successful revenues strengthens to year-over-year up XX% revenue driven and in XX% the above our on quarter total Slide This XX, which the full strategy original in

spread our about Before reported this in growth into next a get point the you more that our revenue I FX-adjusted between few see would and revenue drivers slides, I details quarter. largest growth basis revenue for note XXX

prior modest While of the strong we saw an than in this impact quarter, the what a does dollar less is headwind. it from remain

Our discount line, largest the grew year and full QX revenue FX-adjusted XX% in year-over-year revenue for XX% an basis. on

by basis, fee XX, Slide throughout this XXXX. in growth quarter year, seen on the year our up XX% primarily accelerate full see on you this can and is can see driven volumes to in throughout the momentum you on year-over-year the continued Slide As an card revenues as spending FX-adjusted fourth Net XX% for XX.

In Card premium expect highs U.S. to and Platinum quarter. this line. Card value level and Gold members XXXX. growing to to the customers all and expect by acquisitions revenue record fastest of attractiveness Platinum growth our in our the with This high continued card in I extremely Steve business discussed fees earlier, reaching be is due from moderate would of members, net fee-paying we existing powered our products made to steady propositions, both saw XXXX, prospects we the growth Consumer have investments as I U.S.

can increases deposit XX, had on net Slide to and income rising impact the up and on environment revolving of betas the interest during benchmark to recovery on an our results has in in that was steep as FX-adjusted The loan for you XX% interest balances. a basis rapid our the year-over-year ‘XX QX fairly neutral the due rate Moving year. year lagged XX% rate see

levels. in line betas deposit However, about more XXXX, when historical are with you think now

in rates a So year-over-year more expect headwind rising the I XXXX. would of represent from to impact

and revenues, momentum. really To good up results across on seeing strong the we board are sum

Looking of forward we revenue expect XX% see XXXX, to growth XX%. to into

lines we total Slide all fourth Now in XX, the just been costs, driven those quarter XX% the expenses, the Slide show expense up discussed you across revenue we for this came by customer see with and Starting XX% investments see on has XX. you made in variable these for on at momentum investments year. engagement as revenues full have the

innovate off I on expect in engagement combined rates, products, approach our costs revenues XX% the to of with XXXX. variable to Based would QX investing total our focus continued exit customer

around fourth quarter line, the invested marketing billion the in $X.X $X.X full On we in and the year. billion

mostly are do As the things dollars the a we directly marketing acquisition seeing. great our we represent drive reminder, results to customer

As to look the we forward, dollars remain on efficiency we driving our prior grow we focused than many years so far marketing slower that for as did pandemic. revenues

marketing XXXX, is to to in expect fairly flat spend we have XXXX. that result a As

full net the Moving brings quarter ‘XX. our important in $XXX for investment line QX. mark-to-market OpEx gains billion to year step expenses. billion it’s prior In this $XX.X a years which the earlier the $X.X million for portfolio Ventures expenses, XXXX inflation million reported year revenue I that us are to totaled had fourth some while increase to discussed had to growth our Steve of the results, on full impact bottom with aside, net $XXX compared benefit losses OpEx the have have represent were gains. support operating prior and a and impact putting as year, note in expenses has our Amex we Slide in understanding strategic losses in reference mentioned to year, to underpinnings Even invested and we as in XXXX, operating I and in These XX function to do our our and key this all

in have the focused Moving low and to forward, gaining of seen. on getting levels we similar growth we OpEx are historically to efficiencies back marketing, that

of full revenue year plan. effective around our expect the billion rate to see a growth around relative was of as for XX%. source in costs XXXX be tax level we expenses key XXXX, Last, growth and operating our these For high $XX to leverage

to legislative tax any absent is between rate the XXXX XX% of estimate changes. effective in XX%, best Our

payout next capital, with $X XX% at of ratio to $X.X generation. dividend common Steve earnings dividend repurchases to do CETX Turning We ratio. stock XX, target ended XXXX, we increase in with stock Slide and per as year in billion decline range with the dividends, quarter, our our XX.X% million quarter $XXX back our within our capital QX expect billion in our strong to with $X.XX in XX% on of ‘XX, the approach target discussed, to by of our we our to returned of growing XX% In consistent fourth common billion including the XX%. all shareholders on and $XXX XX% earnings to

continue We shareholders we the capital generate going growth forward. our will to to sheet excess return balance while supporting

That we me last where These XXXX our guidance. we in plan growth to laid guidance the a both guidance revenues then our and January XXXX XX. exceeded on year and EPS. strengthened have results was in brings plan XXXX our full our for year growth strong Slide our that out confidence

Steve First laid high deliver and and XX% XXXX we growth, expect well to us setting growth of earlier leading our to and beyond. most out that up revenue for strategies XX% of importantly, revenue continued the for XXXX levels to guidance

you in growth EPS our XXXX, nice return and to first, to producing we driven levels in have of expenses marketing expect we As of drivers historically about leverage. operating think the some growth low the

XXXX notable be of year-over-year challenges headwinds Going other provision that the around I driver, of earlier. rates, discussed just are as the impacts interest the and two should

based customers slowing guidance in behavior what committed the what in see course, in business the as macroeconomic good are it say on know to environment. regulatory But our clearly the the about not and and momentum our about on to is growth we get as relates macroeconomic for EPS to growth seeing XXXX competitive I’d recession. EPS globe. discussed, aspirations running and is we guidance XXXX. remain in sustainably to together, terms $XX.XX we significant actually our steady-state blue-chip in of macro around excess a Steve though the which for And $XX a leads of all these feel with There uncertainty beyond also XX% environment, Combining of as is that today the company from of guidance environment. mid-teens We reflects environment. we our factors a factors revenue of our our any focus consensus, it of it in and delivering XXXX more growth to achieving

I’ll to your And the turn the over that, with for to questions. open up back call Kerri call

Thank [Operator Operator? for operator questions. up you, the now Jeff. line that, And with will Instructions] open the

Instructions] go Sachs. of Please question coming Nash first [Operator ahead. Ryan from Our is Goldman

Hey, good morning, everyone.

Good morning, Ryan.

Ryan. morning, Good

maybe just the focus growth, obviously given the Steve, expecting, to So XX% unemployment. uptick there collar market is And been bit obviously, than of in XX% white is little was a to macro an concerns. so on better revenue much

at through could maybe growth how revenue talk about you weakening just to level in the that of the Thanks. Jeff So the things somewhat idiosyncratic growth of able be drivers call this that are the you’re put end Maybe talk the Amex market environment? appreciating of ahead. big that that referenced, maybe should just up in isn’t high to just a of type revenue year some

I think focused And and what I what consumer only business business was, Jeff the and on is forecast run where seeing mean, still hit really we’re we’re high we’re basically what the we can growth. seeing seeing. we this is what Well, is it. on we’re he said

base, get to Corporate base. I not you back. of certainly, think customer Jeff and on in about appreciation growth still We’re overall T&E. an now But moderation come about spending that model, U.S. international. for downturn, about has immune is a to small – while spending population, talked And the segment customer seeing not premium premium the economic we’re think high have talked is We consumer what through. you think small a in right some business. I it’s when

pool there year members card higher I of look, members we is hurdle had better are just member we’re of customers card good that there. the a constantly reaching up today have today we’re the acquired is are card the a mean, so And pre-pandemic. a a ago. And rate value, than And than base out the acquiring acquiring. perspective, we that base from still is card we thing doing credit that been member tightening we’re because ones that the other we’ve

what far And As it’s yes, individual they I overall important were where really are higher companies are the still at I that than they say white-collar through But pre-pandemic. that look headlines layoffs. at say is to going employment pre-pandemic. you’ve is, that would of one thing probably think as companies I levels unemployment, these are seen some would were what much

And so there a even bit. with is rates little rightsizing, have rightsizing we a unemployment X%. But under still that

But little and so of over is time, look, that the were sort has X.X base. But and the I shows our as on at member at slides. we tick a any it not card And again, had our for that’s look it normal unemployment. said, just time. And not, business. sustainable at X.X will impact up mean, this in X.X, Jeff keeping particular point bit our on write-offs on

appreciates economy So it’s is and think premium it here. card have at is it base U.S. products to what of what you we And – of we’ve you spending. I is is really that bifurcated a the piece member example about And economy. and talked overall no a have being is premium have this probably – small better a the to look

while you’ve say, You’ve here, thing we we have that unlike growth, think right? competitors, then of which quarter. continue. get And obviously, fees growth have fourth to number, fee revenue fees. And a revenue card business. – double-digit got you you merchants, X-legged our you have, other high in when a we that No the is stool growth expect smaller for would The certainly our I about card that’s portion got card XX% fees were a

as have We well. revenue obviously interest

And members revenue fees. look we’re you card we we’re at other those really are cards acquiring is I’d point thing that the across acquire three to XX% components. looking the when of acquiring, at So the we paying

we up XX% with So that’s XX% to how come

is from KBW. you. Thank Sakhrani ahead. go Please coming Sanjay of question next The

a sort things as I just trends growth, Maybe you the know there terms and I’m discount Good in and down? than could fees revenue I I NII. well. Thanks. building anticipated, of of little year-over-year help slow question at blocks couple the disaggregate does some guess, mentioned morning. of Jeff, the that a in revenue change revenue had you looking just had the maybe a on growth. more bit helpful? decelerated I be would that and of

think, pointed always to model, drives words And blocks just pretty I And think hit categories, That’s the are out what expecting, I lending. that we our have I our about Sanjay, really straightforward. right? said, model, of start point. and course, our building would the have I important in dollars, just that in spending as think probably Steve pick things for of out what’s of of terms you of the important if Steve recovery some most have you

QX because in you new forward. of rates growth. our drives key customers actually approaching I that given rates And what those into having as so the see as is rate, bringing see aspect we stable Sanjay, know, is look what those exit levels pretty at the we’re franchise a stable going fairly for I success we actually being think the tremendous

first drives really what that’s growth. So revenue strong discount

ways item as this all is that our super downs fee-paying growth, through everyone are net grew in look, latest right our you our matters. that keep of the of volumes that’s we that And we gave fees. a digits quarter. sustainable. the only rebuilding leg have front-line the XX%, Steve to fee card the net grow members earnest, quarter, saw mentioned, of it’s products process Our interest I’d the that income And mode than figures third long loans and still XX% a just our has this on of pandemic. remind revenues, card go Steve double card just of and gosh, a but faster why ups to growing you, just Certainly, now is XX% And stool. little balance. It’s then, begun in

as quite in saw of But were pandemic QX. say high process. see because XXXX, above rate where in still it’s to that a expect level we you above and as year rebuilding pre don’t would I So stable next still I the

heard now companies both we that So with and to together what small are the of that and the based we run which our in customers revenue get you growth. look, got put Steve XX% to is, the segments select who XX% see with business you the on make, where I consumers, all that’s largest comments and you’ve to premium businesses the world,

next Betsy Thank Graseck ahead. coming of go is Morgan you. question Stanley. from The Please

Hi, morning. good

Betsy. Good morning,

wanted So that around down should revenue the you’re of be level another underwriting subtext net the comments acquired on I outlook, about which was bit normalization proprietary slide, quarter. very flat bit clear how I marketing triangulating a theme. kind little be with growth here spend X.X of a little it accounts with is to of understand being the in this the should pre-pandemic the credit, coming that I expecting and to on

I you’re don’t thinking when that suppose, acquisitions drive all through, that, growth at and account your time you that incremental of to So rev I marketing need is bubble see I’m as the same there that a that underwriting I’m group, have Thanks. missing we trajectory is a all credit Or move similar that up that pre to towards pandemic? together? to in something pool NCO back pulling should that’s pre-pandemic so dollars

the components. marketing, up cards million but a that concerned a But saw was Jeff all-time sequentially at record sort quarter-over-quarter is The and about you card talk acquired. is all. spend fact there billion that of – pick can look, XX.X we’re And try not $X.X on the something high. of there, about we decrease let that so marketing XXX,XXX lot and other me Well,

the do acquisition timing when forth. of you so your and comped of some And

here on so bringing we’re at is – into are we marketing franchise. And the who the And point continuously bar that raise efficiencies. all we the but key looking

card in not say don’t provide but acquisition. probably look and terms We of for at acquisition do bubble the we’re need but We us, perspective, going card better a from at acquisition. numbers, wouldn’t project card we’re job So really a I a revenue. we – metrics to we forward

at thing not look look profitable Jeff look how same is we we equal. have in at billings. you can card have It’s I a of the at it there we as we mean, created mean at acquire. billings value interest industry, we we and I income. don’t much within fees revenue with terms all mean billings that that lot of that to look acquire said, the the cards billings, I that, are

inflection take this we from an a bubble point were So wouldn’t like or that. or that at away anything I

amount there a tremendous we’re and money acquire out more organization pushing to even with the be to and $X.X go I and billion think the with, is money. of more efficient that effective

kind So underwriting same in levels acquisition of well. had we the are past standards that higher at looking with as the we’ve

some need had you about And was next make as there and a no go, the And increased both as running see next rates about get we components a but of look else a mistake another this you had having we get of it, travel experience had big within believe everybody manage to that what – perspective, and to as scale, from like there, the to perspective other to increases, expense just we you, volume operating get was operating we those have expenses growth. growth. inflationary far to expenses step-up of we operating pressure it technology And as you organization to As operating that to in and gotten we lot level of tremendous level had that, normal start and scale. scale. back an there will that have of and to think part

have revenue that to people in bookings only the you highs travel that the When XX% you billings When you but at you growth, have quarter-over-quarter, have that. all-time increase to handle all have not we make digital growth. sure continuing to put place and can XX% capabilities,

reason So mode we and another that be jump. scale. XX% level because that same XX% was growth where XXXX about we they operating say a scale that will the expenses scale to plus don’t gotten the from grow into grow it growth an in I to expense component get we’ve growth and we beyond we have where to believe the not But is all scale until you mode will think year last marketing to will that from what is point that when now And able perspective, that that we’re XX% we plus time. saw XX% perspective, – with a have XXXX at know revenues the can believe

else about or do talk So want to Jeff, or... credit anything you

No.

revenue. the sort of I of components how think below terms to that’s that So how and that about going of would revenue in relate expenses

from ahead. Thank Barclays. you. DeVries Mark is of next Please go coming question The

Yes. Thank you.

same your the and what kind you you GDP this, kind using Sorry range provided? sensitive if about unemployment high levels? you used to is are missed can I that how of of macro, reserve at the but and set around And to the talk of assumptions you revenue all guidance to gets you the the low end

matter between I you for financial I every looked markets interesting is the find to affect correlations of to people is historically really two those things between surprises many find think can’t one things. growth way trying we movements people’s Mark, any wealth. direct people we between that the, correlation think, imagine, that that direct could things have GDP And surprising in and the

at just our for driven And and XX% we what of – of with and The our start actually the I’d I our the have with about look and around market. they – are and So XXXX, macroeconomic various thinking globe year, U.S. behaviors are largest full by far certainly by to you really what shrank growth And also I Steve how guidance, but revenue said indicator U.S. it’s our a when are the to everyone see customers best you forecasts of go times, quarters now that couple two economy we we the seeing. is posted in remind XX%. first XX% we remains behaving. back what both aware

XX% we’ve I in to supposed the when that would as The at slow trends look forecast forecasting, on more a range, here consensus, not XX%. seen it’s the were we and to just think is is XX% say, about bit it’s is wish that’s XX% a – of you precise when consensus, weaker Frankly, absolutely. based which So factored it’s but error, really little a I well. and I macroeconomic about economy, economy the

Bank next The America. go you. Thank question of is of coming Please ahead. from Mihir Bhatia

Thank you.

Good morning.

Good morning.

you cadence members. trying on understand loan there from of Just metric a to think side? lending spending the said existing can we you normalize XX% growth more things look that how project us help maybe little of a Thanks. at strong your how spending quarters we few of normal bit growth, a as as into Is existing on similar can last came acquisitions? and share I get translate

you it’s so when implications. about think important lending, one what Well, think go back do that is to the going say look I that XX% to I’d to an number. And at I’m

loan rebuilding our is new customers do them? with you coming actually of comfort growth about you’re and from all draw our of we we say, from history what occasionally the loan that well, people at think so XX% existing have just know towards I historical levels. we customers that a look growth that fact just the know really you that and acquiring have And lot more

is about engine you around customers of I over another but to normal you our we If X% key we any of depending time group, adding Once a think think environment. franchise, fact number. our real they in new a of of think, anchor standards And in the get into a model, When is remarkably And lot that model. growing time, organically stay. spending, an on might little I about key we point have, about strength range. high our that intend it economy That varies in industries, adding rates the retention talk XX% at the the kind by a bit. the someone to XX% most that’s high

super spending more retention of to So our we customers existing it’s mixture low that what by and customers. new are spur a steady doing of flow

is with Steve one over of about, so the XXXX the have talked new both by we because think And and in little into last the I and year, people of first is great the I you again, surprised to a XX% our comfortable a tremendous that things the franchise. that just weeks seem XX% bringing key why are driver, and success customers to

other the offers in talk I And we in, say merchant Yes. and that bring about, cycle card remarks, virtuous members we is can that and we the this said more thing I this the my partner more that would get.

important engagement the the so existing growth. engagement a driver of – really from And cardholders increased is

card through sure perspective they grow. teams, just we members is with making do bring model membership the sort We from and to – a don’t our members card bring want that them work small spending they through watch And forth. within an our card do that with offers spend in them account business are and the that offers from from offers and we grow. so that perspective to they our are rewards maximizing So categories base We hope model. the in of our development taking advantage the they other sure all that in of of benefits card, making offer with direct embedded that can Amex in, we partners

only that out taking And so of customer perspective sure of our are aspects that a advantage members not card of a lot there. to engagement service from is our are making the card the all

their merchants grow gets cycle to same-store share from more constantly as I of because reach card more want members. wallet. members, we right. sales, bigger more existing so look so that the and card more to gets mean we really of And grow and to our looking easier And are again, that

go Thank Brian Autonomous of you. from The next Foran Research. question is ahead. coming Please

the me what don’t you think positive want I like take the think are I will one to the very the theme, it with the I like, would mind it, I what that hear and a And one about beyond being but investor is aspirational help on line? macro? could dividing about like is question all look the macro what but would XXXX risks? negative, guidance kind state steady-state steady-state outlook. that could where a are note you your bounds is maybe touch of get great? for apply? are dealing question Where along wrong? investors question macro obviously, is a then or and is were non-steady when what this aspiration talking the sound where Like sometimes Hi, like So, maybe one Jeff, we that, same not in So, within sensitivity, the macro. follow-up go I

would start two I Well, I comments. Brian, with think

because all point, recessions know aspirations, at think the is, or able actually grow be I long-term a six be view XX%. about our And a don’t will doesn’t we at And of this recovery. if should reality First, to will recession. that in from worry years, don’t and there about now our it’s steadily we when of company months some X there recession, it be change after excess you

a when is you Now, recession in a very see there GDP. where significant shrinkage

you and quarters not or where financial point last huge you see declines spikes a something. see crisis where maybe like in first unemployment. like percentage quarter a went year of or X.X GDP large But the the in you two GDP or have So, like down where great half U.S. pandemic suddenly

to and will you scenario, of quarter builds that assumes the to our CECL accounting appendix also a have a unemployment there you if third is scenario. reserve see Well, the of the of X% one kind might have large quarter aspirations XXXX, you suspect, back that this, In downside keep you doesn’t it XXXX. for going how reinforce to third I X% slides, a and credit If go are in unemployment term we by baseline longer downside by but change going long-term few really are going quarters to is knock where of that company. shock aspirations. I below back coming we our Steve, we or that’s are but want quarters, our probably But a run few us off to to the

And pandemic. just go think to the I back No.

pulled from line that don’t financial had think members mean of sight. credit crisis we anybody because on back worse look, perspective. than any So, card the a I underwriting was acquiring I pandemic the

say like flood, XXX-year never that’s right. You sort the never, but of

that would And everything move do credit up. will members. we today, further but engage criteria with we the scenario. even would so again the our my would do what is in acquire But acquired we remember, is still card we we cycle, acquired of is what we perspective kind And through

pandemic us. during the whatever cardholders, got those retaining them six programs other in couple or through stick or through months, hold, the things for it I months it areas the whether think one engaging of of with card spend that to most retaining was, we that them was a and financial hump to relief was did successful

that mistakes recession don’t, Jeff infrastructure is, is, after months business quarter-to-quarter, of is you a last such because is But in So, and are months in they also we is to do do the nine to those the recession XXX-year-old going times that your you things, this the invest What’s when to running reality not going long-term. is way that – as be reality to people for if we invest over, are advantage you is to relevant thing is when And invest you year to pull and your on do EPS company to going need go and in great great to continue through looks there you like pulling hit to way invest people, over. you when is and And going said, the the to want medium don’t looks able in the not need recovery. marketing is from need a retrench is And recovery. grow would And in back. which you do and are a judiciously a over it every for infrastructure, that smartly. And you irrelevant. or your retrenchment, invest take make the bad, an people layoffs is companies things six trying you where let recession are that make that. now to of back for that and quarter sense a a were number

may we we to our aspiration will where there it long-term will make be when a a but that. time, are years, in – there that’s And time for X a don’t say be way moment as be feel exceed months, that. on time be revenue, So, six could yes, we and XX%-plus it we but is why And a we growth could we Jeff have that. in said,

The question ahead. Please Shane coming Rick JPMorgan. of from Thank you. go is next

terms X, the Thanks when and from of for millennials at look significant in interesting and Gen really contribution growth taking Slide Z. Look, the my we question. it’s

really Gen Z basically If Xx been Xx for was I the have that progress millennials last business, distribution over-index guys that in looked like You by time. given distribution we Xx, to of millennial cohort, cohorts am over year the seen have successful build the there. age the peers? curious, and And we other growth. would not at loan what this portfolio significant versus borrowings, the by in with terms look but growth

few tend are to remind add you loans lot the this talked is other these. get your of short growth millennials We and When as that, They when often in proposition, answer, and about as Well, to morning, a we engaged these They be engage have facilities. still Zs, loan engaged. distinguishing XX% customer growth thing. actually existing you imbalances by there. talked Because customers. from a features, millennials of more we because of be which they we would the and rebuild Rick, Gen value product. a with the of right the the the have will about behavior is the That adding the digitally which no. of to more think stat segment good also overall is see of new our more not is they tend now quickly But there I existing much about coming

have this math card bigger loan growth. that about sort So, think the when the behaviors are just while because you borrowing, effect not the got on portion the they driving of rebuilding members say card would to our members of are older similar younger you average, of that here

and tend they lower depending part the And that a great we in have on some their they XX Zs to And are are about millennials where I spending. mean do is millennial. but and lower get are higher Gen they wallet, share have now. – Yes. – of you millennials

growth. if attractive of X, And a it’s And is Gen will now. right the well. So, a different you acquiring or to that, that XX% value cardholders Xer in going reality lifetime a lifetime the I thing. significantly as more But on acquiring is – Rick, value are of of look, these they Page see the be boomer very mean, is that’s than look, the business again, you

hand, X%. growth other boomer is the the On only

to some travel been still. of And go have back leery those

go to also would So, expect that we up.

you. Thank The Dominick from of is question next Oppenheimer. coming ahead. Gabriele go Please

Hey. Good morning.

Hey Dominick.

Great bit. change authorization sizes charge of remind the make everybody a have about the line I actually morning. account-by-account don’t thoughts you decisions stated updated results. your I just topic just want could ability cards. just to to little purchase on given limit wanted your many Good the if accounts

severity am is Thanks the loss versus so based I given underwriting on just your guys. really ability the So, hone much limiting techniques. about in frequency wondering more downturn loss unemployment, of in your severity really the but on of to

I I of couple and is, Number just think The look liability a constantly things, at reminded not right. that’s go reality being it’s us. you we contingent through one, mean utilized.

also we our rate but a for be raising I two, single But not a that, not lending But Align underwrite lender on – we of based card the are the obviously, resort, have every last We of that has card And members, mean have are we cards X every we make We the only raising we acquire not somebody number X, card we decision are Number members. limit, that than one. line. That’s do so may those using right. line. for they because want there other have cycles, XX% if most transaction. members underwriting long. hurdle we transaction. line traditional X that new keep and don’t of a are to credit

to just because run are letting up have and not limit And somebody write-off. up it we a up past. have run the are not So, we it they in run letting that somebody

And – number of I variables spending Number but not not reassuring own all that thing. to time. one, we very There reasons. the and of going adjudicated the from $XX is is It also just an number these transaction – also a a is I why But perspective, probably advantages understand its a for single buy. don’t based enables is $XX thing read million. credit that two, a don’t of, three, that into right. couple advantage our complicated. of that’s a very to really on have from adjudicated of And perspective, it’s fully important. I the painting whole One all underneath a it’s open hey, bought has merits. that’s But some model, this it an get either. on It’s of am model And line, for million nobody you stories every

a difficult Every own its run it those this does single merits, something not for of not very of kind are on written a that those of purchase, decisions faint just Now, to buy, on comfort heart, have we the that not transaction $XXX underwriting through having decisions and $XXX and make purchase. same in somebody on sort and comes open off. but great system that then terms on is gives up some adjudicated something us show of

think have since is product. thing a over we started charge only The that I we Yes. add, would I the first many capability honed card decades unique

there which product, overall parts types. best-of-class us various that in us system things perspective population to who drives credit risk the the to various days, pay is by of various of every this it that’s I actually think almost of like today in far, when part customer charge an supposed full us historically other or metrics. advantage our The would it’s or segments up the pop XX many management to that results, give helpful and does say, an card actually world overall and of problems are Dominick, early from we warning is is the have And

you. is The Moshe go question Thank from Please ahead. of Credit next Orenbuch coming Suisse.

Great.

the was back Sorry and growth that but the and Jeff, with was income. appreciate between margin, fee it’s strong, year, and net to quarter But to about the said obviously, comments XX% a the going I both you Steve, in there slowdown growth but card full still revenue guide. to interest revenue slowdown, XX%. And revenue a the you go be probably for

a is guess base is there accelerating in that the think ‘XX? part revenue So, of you I

two Well, comments. so,

it’s I Moshe. out, think a call good

year course, comment the you about you The up went the here, XXXX, you saw is of as base through first as pick think progressively things year.

has also our So, volumes bit. sort that little recovery slowed think that’s of are pointed you out a now. a But have period each quarter we why through basis year-over-year I on that

our in to think view, I see QX So, typical you what of in very get. what are you going is

think the piece, because Now, that income accelerate do have we customers balances. net you the one exception will is do to interest continuing rebuild

pretty discount with the interest quarter. fees should But model consistent XXXX. So, net probably be we little you this what to And have seen that expect would bit. that’s revenue little a a income card your for accelerates leads bit. you probably moderates what in Net from really QX

Napoli The question is coming Please ahead. Bob Thank next William you. of go from Blair.

And some international also, you. haven’t that you topics say and Thank expanding touched acceptance and out maybe the your And piece, been merchant I called investment yet. Steve, in adjacencies, would on services there.

the internationally, BXB there Is in for, XXXX? seem reopened, China saw market long-term in adjacencies, growth contributes and payments how strategy. good – reopening. just So, potential any international you international, important to is some And your call-outs an on Japan that then I acceleration Japan your to recall being

Yes.

So, really I you XX%, let which that seen but have remember have SME think mall hopefully, me good consumer are and look went hit topics I the growing a which good slides, look, But and international international, from at at just these only couple seen really you of corporations is and XX%. through. we the perspective, a not is over growth large

of business. those our the – are and fastest-growing remember, So parts pre-pandemic,

of So, grow, to is acceptance Japan of an we to continue which it internationally. and continue we expect acceptance perspective, From our one top obviously that to grow part markets.

the focus that. on that coverage with will and we to gains had, happy really are we continue We have

And and get those getting are But coverage e-commerce, and and cities. billings goes, on a growth XX% we continue airlines, but and that part be business. And and we the coverage. to in Look, so in will with it’s not BXB spending small restaurants will be we XX% the to XX% remember, where to is as We commercial small up. BXB, that forth to of us, it again, capabilities on we only not the spending our will tourist have on lodging is also add business as will well. BXB continues small we of yet, focusing to We spending. spending, in just of for priority to smaller invest to the attractions, have to invest a about want category all but talked hotel add story part business but continue good as that it’s – BXB a continue and and focused that we categories, far focus that

billings, for easy more so And to it will hunt we the on more automate that and card. to of try makes those and and get it continue and

from coming be Thank go you. of Don Please ahead. Wells Fandetti The question Fargo. next will

Hi Steve.

seems curious level or it Just small like that of you U.S. if am sure away mean a not? business. not concern from metrics us sort competition pulling raised anything little be competitors. in that bit you consumer if around might seen have or your I your to I suggest

And raise is of out don’t continually the look lot I – mean I competitors great bar. there a that Well, I there. think to we

strong everybody growth got have they But are One. are catch our said more remarks, is flywheel U.S. of working, my that’s Bank to I it Capital resting from results JPMorgan our and they And we invest. and – we all we America Bank – not and get to And perspective. and And the they pretty had all Fargo as Wells a more strong. We add, continue we to is the why the in laurels. continue up. I And value on harder mean

continue We in propositions. to invest value

capabilities. in invest to continue We

We continue in to invest service.

is is a are – And sure competitors, so fierce. hard two to it to you U.S. segments is competition coming not is And we make flattering, make measure constantly competition us, be goal It’s are steps for I between catch actually our And international. the business. it’s think or but goal in. in how they but consumer. three don’t It’s And are them. – steps ahead and just of our distance that one corporate. it that trying after to that And are for we It’s the them there, small us know our increasing to I step, and is up. we we that,

terms lot I And to still stopped, are the if going fact so a we here our we But doing but think And in in good we keep a battles of going. of rest. really, team territory, job. are fighting is never they defending really

So, it really important. is

one constantly I have decided interim think the really value And of you on and a would of refresh a us out we that ago our quite we Card things regular with basis I seen Platinum number helped bit. and our that on a products basis, think it’s an very products. add years our other that’s which

Thank you.

Please Ellis from MoffettNathanson. come Our will final go ahead. question Lisa of

business question Thanks really Visa credit in. figure was I because had for of and international. is in XX% about Terrific. Thank that a my growth than me Xx more fourth The of the growth you. Mastercard’s squeezing quarter. in eye international caught what international

just It spending is so little by is? isn’t sustainable I it that in how a unusually so per to card dig mostly growth high. – hoping was international your driven like what business at looks And it’s bit, driving into The and looking card.

So, something base. dig is Thank a trying Is geographic the that composition is customer Is a Can bit? gain share to I understand, are there this of the that little about unique driving? this into this you. acceptance significant a – am you going you just on?

Yes.

pre-pandemic, And I customer a close travels an quite base high perspective. base think international a anyway card a it’s bit. a are we Mastercard. it’s And smaller Visa, segment. – So, look, Lisa, pretty premium to look, it’s from it’s it’s than segment really And travels XX% that a that –

were acceptance. So, focus And that proposition pre-pandemic, a merchant a on value and growing focus due we range. was real in to on that growth XX%

I our seeing here. quarter-over-quarter, right. – goal XX% slightly and you from our the lockdowns. last level. my are People was it, is if growth, time are traveling grow of is so. you is lot XX% pandemic, – around is to still you this about which there now, But were to still really as it we I mean pre-pandemic business unusual growth at Look, hope at recovery continue a this outsized nothing XX% perspective, this is think year what a not in that international had to growth is right from which think

it continuing to segment fast-growing value, the bit and enhancing into these goes sticking international merchant and pre-pandemic, small our are to year in this to getting so nothing and a really second which quarters. business probably two got of card, continuing unusual. We because acceptance invest third and the segments and people – strategy, were traveling little out as we add normalizes consumer there were And the

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

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

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