American Express (AXP) 20 Apr 232023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q1 2023 Earnings Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today's call is being recorded.

to Investor conference Relations, like host, to now of Head Ms. would turn over the our I Kerri Bernstein. Please go ahead.

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

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

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

will our our with Q&A begin that, ir.americanexpress.com. more Chief who on Campbell, a website detailed the provide Jeff the and on session move of remarks CEO, and review All at Steve Steve start Chairman progress we'll with of results today Financial with some company's and then will about both are Jeff. We'll Squeri, After results; these and performance. to Officer, financial a posted

me With to it Steve. turn over that, let

share morning, earnings out XXXX today joining thanks and our first growth. to XX% we on XX% of double-digit quarter Thanks, for per our and Good call. Kerri. earnings January, everyone, in for Back us laid guidance growth revenue

in a higher record offset expectations. U.S. the original above in expectation. bit outside results tracking well softness Stronger in year billion are Revenues to EPS $XX.X business quarter and spending. T&E growth first our were quarter, full U.S. spending Our year came small which in up a this the full plan than our is some XX%, guidance.

sequentially for calls to Our our as plan EPS revenue growth continues. through the grow year quarterly

an over from – on grow of XX% the to year-over-year grow due variant types. adjusted XX% Omicron was spending to up in FX-adjusted an basis up We benefit year-over-year. last adjusted with year-over-year be due was saw and the across over XX% results. at customer business Billed strong effect T&E continues Spending FX basis. spot year's on to demand categories basis accelerating an globally to FX bright the restaurants growth on all T&E a impact

was March X reservations The last than platform Resy fact, the a increase record In through million an XX our in of for has booked users month now globally, six platform. million months. more

travel travel demand high since consumer their remains pre-pandemic. business Consumer highest QX also bookings with levels our through reaching

small management we accelerate increase recall, and you'll our consumer, teams last large and business our the reorganized As U.S. outside corporate growth. bringing efficiency business international to our together and year, scale agility,

Our up businesses before were an the which international the Results we're on to seeing growing on International by the driven trends. quarter, pandemic, XX% a Card were increased fastest basis. accelerate growth XX% return to adjusted in issuing basis. Services and spending, robust adjusted FX T&E an continued FX billings those in year-over-year

acquisitions in all on Consumer of in We acquired new card Gold are fee-based Business account levels. Platinum XX% Delta and quarter. over in with continued Platinum million and the the quarter the reached acquired momentum new cards also products. saw U.S. co-brand globally X.X record Notably, acquisitions accounts

came of in all billings continue in U.S., time, growth some These to the of are consumer our Z. Millennial XX% Gen age the in highest customers business Millennial More Gen cohorts among growth and Z products. driving and than accounts from for fee-based quarter. the also XX% new noted we billed consumers in premium up globally and As acquisitions contribute acquired

thoughtful management underwriting base, basis. by taken capabilities our the On strong credit, nature our of supported and ongoing on customer metrics remain premium we've the actions risk an best-in-class, our

higher and in have of thus resilient inflation customers the face growth slower been economic far Our environment.

our our mixed, from customers' to confidence is the in near-term to the new our achieve our continued high-quality for credit spending products reinforces along outlook performance ability strong customers, and While with our demand date, economic aspirations. long-term

Our to [indiscernible]. flexibility significant are balance capital, periods maintain a in of strong and uncertain and strong have sheet to funding we liquidity continue positions

you know, the run As for we long-term. our company

management We strategy of in it current and investments enabled continued be risk retain with environment. initial We inflation in we've rates. has making Through higher have XXXX. to and we're and the economic the throughout seen elevated in the us last economy, the have growth, which momentum a we've deal resulted all, recovery to place the period to successful the and through customers high-quality decisions around in into feel strategic navigating interest and attract the and our swings pandemic, environment year about good

strong. are our to of drive opportunities our core customer metrics growth. plentiful. strategy And businesses value in continues proposition see global are market The innovations, and key Our in investing we merchant acquisitions our coverage

XX% between growth Based of share remain get on a delivering and our between $XX.XX. we achieving revenue XX% more than our of and performance year per greater to are date, $XX focusing delivering mid-teens to earnings guidance XX% we as full revenue committed macro sustainable growth We to and environment. growth steady-state of aspiration on reaffirming our and EPS

it and to you, Thank I'll Jeff. now turn over

income X, reported fourth billion reaching our the on a This were momentum high of which to the results, XX% revenues Well, per gave first of FX the and with our record everyone. quarter talk tracking share here $X.XX. reflect good quarter Slide our against for long-term Starting on $XX.X for steady line first $X.X basis. thanks, to quarter, billion, and be Steve, up an good adjusted year and are with earnings growth morning, aspirations. progress we straight in drove our financials full guidance net summary It's about revenue

same the the in the time pretax versus sizable pre-provision was year; underlying this had momentum up income a quarter. release of we again Given year, last this included our last earnings. of supplemental period On credit reflecting basis, as pandemic-driven pretax billion, reserves in reserve we've income also the first disclosure $X.X pre-provision XX% quarter growth

see a results, X. the get a first always into at look model our and X through let's billed you which basis. adjusted at on an with FX Slides both now in quarter on detailed XX% in more network were up year-over-year spend-centric which volumes, our business business So volumes look Total begins

categories business quarter's recovered Given our spending levels, versus quarter that have we XX%, XX%. pre-pandemic with more of we of growth this fully rates billed expected most saw above growth just first the quarter stable of last growth

dining particularly see As growth earlier, driven spending did QX entertainment continued and in noted of by Steve we in travel and travel experiences. for demand XX%, strong

the early quarter of impact rate prior in this growth the elevated Omicron in year. As January expected, was the of we as lapped

categories. would moderate remain forward, demand seeing I growth strong expect see types but to we customer are So to and the T&E moving high geographies, across given

growth in both rate We this consumer also we the spending for year-over-year. for slow and in the as that up saw services through U.S. X% growth quarter, I sequentially would solid SME goods did see we went note and quarter. the

reached their billed customers Millennial above grew last these said, within a again segment segment, of spending year-over-year quarter, with growth the and growing our So and billed Z spending level Gen growth. quarter. business continuing billings business accelerating That trends. XX% record this a first bit we month in drove XX% U.S. are monitor largest overall Consumer, this highest quarter's in to March, the our

but growth growth year-over-year International X% overall. highest global in U.S. really by Services. somewhat quarter, came saw And Card lastly, in Services. We of Commercial see to XX% U.S. large you corporates, XX% at just growth this growth SME and offset up in was a Turning good our year-over-year.

still strong benefits the early respectively. SME among were XX% and its our what the fastest-growing demonstrated customer it pre-pandemic, by announced was This XX% guidance Overall, the of seeing XX% to our types. are pandemic than Card We start changes especially our and support who our organizational the are pre-pandemic. recovery at to grew last large volumes is long-term customers, robust and international Spending and across sustainable from a rates growth currently growth we geographies mode for year in year for and quarter. growth tracking play Services given entertainment segments. corporate than seeing revenue consumer travel greater year-over-year, for and International started out we other recovery aspirations later spending were segment international

our Card balances who mostly moving the result, Slide of are and Member year-over-year existing loan well from growing receivables is XX% as balances, continues growth XX% a loan the as balances rebuilding in as our Loans and to come loans. on customers, growth portion X. total in than of continued we on growth This see We saw our to Now growth. sequential faster interest-bearing

growth this is of the customers. XX% existing in over our from coming U.S. Specifically,

balances expect forward, the moderate generating. you through versus with this overall the growth remain XXXX, it lending of We bit our elevated rate we loan with said, would are we pleased That as and to see but may looking progress economics we a are pre-pandemic levels. growth

credit provision through our turn and on to then XX, customer X best-in-class If show you Slides of the quality continues credit high credit in performance. base our to through

up pre-pandemic expected, card Our view below you We as as now they the talked functionality. we our comparable charge loans to remain which write-off did and levels, Slide delinquency quarter though on receivables rates X. this continue member can and these move we last rates have pre-pandemic and about in lending many individual to receivable rates embedded than delinquency more instances as and rates products write-off because, consolidated quarter, loans see

they delinquency and are to increase to write-off remain levels continue XXXX. below time, we these Going in likely forward, over but to pre-pandemic rates expect

in Turning This increases the releases net balances volatility in as credit provision of combined resulted past caused rates build, the now we for drove this XX, item on million builds to reserve the line in with reserve reserve a our combined in the much during CECIL build. Slide in write-offs, first expected quarter-over-quarter the $XXX moved the the growth delinquency that $X.X this performance with billion loan quarter expense pandemic. of accounting

reserve we the day XX, quarter we see basis first representing the card member ended $X.X rate total had and or you our loans Slide pre-pandemic reserves X.X% below CECIL. one This on XX about As of points receivables. of levels billion and remains with

We below through rate as to expect to we this but remain levels. increase reserve pre-pandemic move to continue XXXX,

to total quarter the XX, adjusted XX% next or on FX revenues Slide Moving up XX% on basis. first in were revenue year-over-year an

driven revenue largely few slides, I in fees the tremendous the would Before about details by seen accompanied the increases the demand XX% largest travel. next that in in up quarter, was we've that our note travel-related get revenue other year-over-year and revenues for I drivers more service into

XX, in adjusted rate. on growth just last year-over-year see Slide above our can to similar discount quarter’s growth largest grew revenue line FX volumes, you [indiscernible] QX spending is an which on XX% As basis,

strong. This year-over-year by Growth, XX. expected which bringing see products Slide continues fee quite as card adjusted remains level did revenues value paying as in basis the made on high on extremely quarter slightly from Net growth driven result we onto the can our we've quarter last an up FX of quarter moderate were as saw a first fee in our XX% this new propositions. accounts largely investments the premium you

This for quarter, fee-based the X.X demonstrating demand acquired million new cards our products. we're premium seeing, especially we

can net I'd their Moving quarter was a levels that you increase increased our interest FX on basis basis customers reaching balances. this year-over-year, on growth accelerating see net card XX member pre-pandemic sequentially our balances. XX% versus our due on that points quarter, the to loans as income to adjusted loan Slide also revolving primarily note yield XX, up in revolving last

net been credit net right below rates our maintaining while margin. have increase able our levels, net pre-pandemic to off yield expanding We

Slide on against To for revenue expectations forward, we're expect looking XX% revenues, and to sum see the XX% up still tracking year XXXX. to of growth on XX, we our well full

by we up around expenses, driven been across expense revenue has investments these total Slide run just XX% lines The the with them full our year on basis. costs of show in right the came made. a quarter, momentum investments XX. customer engagement for total revenues tracking we've Starting you XX% revenues Those expectation see with in the variable on at discussed of first to

year full billion. with that invested years spend to the track our for than marketing fairly driving to expense, quarter to We is dollars revenues in $X.X the line, many billion so have on slower efficiencies On we the marketing pandemic. prior XXXX flat expectation on that remain grow as we focused far our $X.X our marketing did

a billion expenses, operating in net first some Ventures example, the $X.X for around portfolio. volatility the see similar Slide quarterly to impact were expenses There Moving mark-to-market with But saw from this usually can $XX you first quarter. quarter be $XX marketing, operating to to losses we number expectation off and for quarter, investment us based on our this XX our results our full are Amex bottom in tracking billion of to the that is million year. for we brings which

of moving relative high as forward operating far key We have revenue expect leverage. source continue to to to OpEx growth a expenses of our see growth. in less And level

Turning of XX% we capital first already the XX, to note Slide our range our to our I AOCI on quarter CETX flows next would through target at today. that XX.X% ratio ended capital with regulatory with XX%.

on XX.X% would I or most also reflected U.S. that investment our that short-dated any $X investment hold only quoted. are in So of gains fully I the losses treasuries. point unrealized are securities, just out we billion of which portfolio

sheet capital we intent first we the returned $XXX we to capital of capital With supporting growth. capacity to our to strong quarter, regenerate, balance both and to continue return million shareholders. excess our shareholders the position, In our while the have the

that extremely of highest $XX the pandemic ended our ever excluding as note balance, our remains strong the quarter period. position cash; with we also I'd liquidity billion

XX% We deposits a the banking following volatility also quarter, including inflows increase this saw our in sector. in in weeks recent the the

you'd XX to Slide more bit the look on of have at appendix, do, we numbers. if of like On the deposits detail provided a than typically some we

plan That XXXX to on guidance XX. Slide and our brings me growth then

the guidance full and per some and run At contrast, we earnings already level, the the operating the to see growth XX% reaffirming between increase quarter. year the sequential always as and is share XXXX, year revenue $XX with in first a to volatility. amount There our For we are $XX.XX. having our growth, of revenue XX% expect through we for more significant, revenues line quarter-to-quarter in the year. year-over-year of of rate were expenses go marketing in In this

Steve it to then in math the environment. full-year you customers sequential our as higher simple the macroeconomic the EPS resilient But relates clearly have slower the earnings growth phase uncertainty is our environment. our to inflation economic the thus of discussed, There as So guidance. consistent underlying in growth, remained gets far with

though based is recession. outlook for continues though not are a Our to on term. focused blue-chip which the running growth, the slowing on consensus, company macroeconomic long the significant any environment, expect we In

of Looking achieving aspiration of mid-teens sustainably focusing remain and to we forward, excess on revenue a as environment. committed XX% our we EPS get to more delivering in growth growth state steady

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

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

Operator?

Our coming KBW. ahead. Sanjay Please Instructions] from [Operator go Sakhrani first of question is

quite spending because growth spending the morning. credit, seemed which the pretty some it heard to Steve, like new among Good Thanks. millennials the third this worry seems like think, strong. number is Z, about but are of remains that's Gen relatively striking strong a U.S. I've like I obviously the cohort volumes. and they

them or are you you risk. little how risk of sort can less feel you seeing more in Jeff, the curious on then, whether spending just like more not you trends there maybe a Thanks. collaborate saw things I'm March. is or bit So And trend weaker that for

I the that a the company. for spending was little the more, in but Jeff history well, Yes, ever elaborate we Overall, a month think, can it had highest us. of record was bit March month

But and part a Jeff. about millennials pre-pandemic, if billings. that, on big elaborate to our represented free back our XX% of they growth feel of story, So have go been you

of they cards mean, this XX%. XX% at XX%, at, our acquiring Now And XX% acquired. they billings, quarter we're I they new and at they of are last quarter our grew represent growing grew

plays like risk tenure low they out. I out play much perspective, from think

anything really acquisitions. any millennials not with so with than seen seen And we different of our have other we card have

concerns And that, so, like right to but that. watch anything now you need any we you watch, have don't with

And making generational attractive I relevance focus the getting cohort. out on millennials whole that our an concept and our thing and will were that this across other really products with is that services entire of started more sure point

you've our that really of working base is us so And change. composition seen for as the

as lot benefits, value to we move are in forward and confidence a right customers. and from acquiring the right perspective that we're that making invest we continuing of the right a so gives proposition moves And me the

have uncertain on continue bar we I the we as an before raise phase economic in environment, calls these said continue the who And of to read to on the are acquiring. we bar

stay for last with because me a really point make, think, it's The this relevant, that and second. I will on I

to at back members. first same XXXX what the first card look you quarter and we and the XXXX, and at was higher thing quarter all spending at XXXX, we meaning, looked spending acquired are and go the you in the did looked acquiring are XXXX If was higher, in cards what we XX% XXXX spending in in that

have fees of getting quarter And [ph] spend, long getting time. members, card for card done will of I think and card members getting so paying are but a and the card getting only that us job phenomenal members that that members teams really sort a with getting through more not be the

just – of good just we So long of a picture think continue is pretty will about but it’s because how a is that’s to that gives that believe performing sort relevant are of how how you I looking were it you I a perform. what it’s at to answer, that we think terms millennials in talking segment segment really and and

want March, you So Jeff? to talk about

be is, Sanjay. I would trying thing add only we’re transparent, the to Well, just

as people describe I the think lot a of environment economic current mixed.

is Entertainment growth March, went from rate really Services you our in ever slow see a the the sequentially. volumes Travel types and February globe to In Goods as to spending the bit company. a across little January month was strong. spending March in U.S., strongest terms and did as you so of on And customer But

you’ve that. the sort On other got through how into last does February fit hand, also Omicron to January,

signals. through that’s think So, trying what we of to overall the come shown back we’re signals the and about the in mixed to resilience in great customers all mixed sorting have I face economy, we’re just the company all the But be transparent our running on.

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

particular was you Are a spending my slowdown broad-based could you’re on think side. I you you both the elaborate taking I curious, I bit a Hi the and business thank And you mentioned more across questions. there U.S. little small on of the seen, that in think you’ve Is seeing? for customers? mentioned types it consumer if bit.

could you have just if April you data can So that. elaborate any if you on And share. on

Well, on XX%. the consumer in side, fourth sequentially, consumer the grew look just quarter at

XX%. growing We’re

really now. there So look X% slowdown When was grew at SME, we’re and we no growing you there. X%, U.S.

really think I So, of business, economy. remember, don’t believe when bit a representative look is a And business, in there consumer slowdown our of U.S. SME. little the at consumer you was our entire I

Our premium consumer really business high-end consumer a is base. representative of

you small – that small a for is you’re have, in. small of where And business Services. What level you businesses volumes unless is Our going small. businesses, is because more can I’ll small where of business, and grow, the – unless you see probably that what really you they’re are Goods business representative. is slowdown in a because then and a are And to what happens little only do taking we spend to bit remind are spending, people

a the efficient the number advertising we and more get if push year, our a same when number, you we’ve that, been is seen, lot look last of corporations, of spending. to not I seen what partners more that this with a this try we look it, $X.X mean amount year has you will slowdown a plan mean, that of any I in spent ours that lot is what as at think But well. marketing I And than and spend from – you’ve But point more become billion. seen is, out efficient we I at to and ourselves. and trend that in more continuing that’s and our and – different and you’ve

And a of in little I that well. to think just get we’re scale of a don’t as you point where seeing you so spend business small And anymore.

point X% with But and we with line we’re business small it’s the okay our overall have, look, us is growth growing much is international much, small would segments. now to amount in U.S. from and faster with perspective is that I our plan. international out right than volume What the fastest not that. a is making that, business back that of growing like in International

watching for right it, plan going the consumer. kind but with think of rest have keep for is where of I line our now, So, business in we of the small with year. it happy we’ll really the rest the And

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

thanks. Yes,

heard get alluded the into International Jeff, Card segment acceleration the of a improvement? specifically Just could in really from wanted the about bit But did what seeing talk results kind fact that growth to what of drive reorg. you business the of you to drove little to in I Services. more you

no is part. I correct look one, the card was in if than our place wrong, internationally, T&E base I XX% base. more international this I’m is high world by me impacted Well, And there’s at – a think is T&E-orientated things, card a the really our it increase think you And there International. when couple pandemic so – in right? of a Number

So you been that that’s down, pushed built-up continue just – number Number have one. coverage our have just tremendously number in think two, I some international. demand mean, one. improve to I we merchant had you

more drives And overlooked the and really coverage in use And important. growth, understated to places international. or So especially more in think there cannot think that’s are I it be I card. how

to continue new think members international I as we in acquire card well.

us makes efficient. lot the the as us does far more for it what as And a reorganization, reorganization is

me you so let example. an give And

in hard go way. we’re ways. you business now them consumer. we’re resources determine potential a a both that customer customer you Well, is, do what attack is a a you And Sometimes is more doing holistic really is whether looking potential small at a whether in, to what – it’s against or put you

everything, to now and of like instead refer Ark business, two both small Noah’s what and we acquisition, a in as card large having market as the of of and market someone well. I on syndrome corporate international focused to have so And consumer

I share so perspective given because And We’ve been more much we’ve as with a investment intellectual across an really our marketing. achieve become able done we’ve property opposed we’re to to, more running running more we’ve able make what to a giving is, been business a to market, as as better think segments. trade-off And it giving lot And in think decisions able more team been flexibility efficient and to lines. it global the I market that’s lot goals. ability them their a from

So – international it look, back was where moves it of And made to fastest-growing to efficient become business – is our was go is and and pre-pandemic. more this were part to that. the the beyond these reality get

feel good we on international the is start so at about And that the moment.

are you comment geographies. Latin Yes. remarkable when broad-based. it’s look Europe, strength breadth where It’s across in right the it of America, add, the it’s now The It’s only UK, the we really I’d is Mark, is it’s Asia.

So, we progress. really good about feel the

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

good Hi morning.

Good morning, Betsy.

to want here. ask top-line And couple a have line question about did from items. know spoken we drivers already on I an different of I Hi, just growth overarching

the But Thanks. unpack here, if are little from XQ your you and from growth us give I I strong? a we still think bit. think could just, you would drivers large where like extremely could something U.S. vantage also corporate which is point,

of just think you would to of because the senses P&L. the first one Well, across almost breadth our point I lines of Betsy, the quarter of strength the I we drivers confidence is [ph] see many all the results,

like growth, So going look this discount and are did look revenues, look about forward you quarter. at when to they

you’ll to tailwind to But a because that’s driver tail-down bit see and a look nice volumes and think growth. slightly, of be Omicron double-digit continue have little good, a of in going I January you maybe February.

it’s the couple net We they’ve for have double XX% been Steve last have continue, to and that, fees given in on through that cards. more talked remind fees It’s quarter about; higher drive pandemic, helps. above card of digits card right are any of quarters. grown acquisition the mostly of That’s is we for every because increases to single people particularly it the not consistently what although to year’s in constantly steady fee-paying going for people

than bit income, kind as growth through our the higher a to it get rebuilding was as balance pre-pandemic, of I said, I but interest Net process our moderate customer’s probably of think loan will continue be overall balances.

– pretend don’t suggest rest impact exactly some think That can will I the I predict growth rate. to the I to rates on of want the through have interest year. what

– most banks, modest. of I’d very Although remind another very, you, unlike one we’re the on impact rates moving is us or way

about anyone that we’re We’re interested, reasonably who’s hedged. not that disclosure There’s but heavily a XX-K impacted. for

And that will continue. service And I line, then you travel-related strength. have the fee and revenue other which is from benefiting think

rest the than us about across and the It’s So, look what drivers I gives first you revenue the the it you what think saw that’s different of quarter. growth doesn’t year, of as that very broad-based, think in confidence.

Yes.

opportunities, have try invest come that what do said have investing And than have how what dollars example one of opportunities we how our we’re – opportunities me in opportunities nothing say better we I return. which and in been our we these And good a a on better of to that I just make we good much and than is this is – in opportunities things answered XXXX. more I in And first think XX% think he So, I acquiring than for could in sure But just take now first I level. talking for the in we’re this quarter, were they greatest Sanjay back are the anyway, it have how cards question XX% the about Jeff up looking said. calls, how the many, let that invest. times those better many to

is we're I is and at we customer, paying pretty we that three-legged that acquiring a Jeff cards acquiring do, looked which you cards, we and with revenue Then us. would look a the line members say, is us really XX% it majority at and huge where now when revenue differentiator discount at at pay then but and discount important That's revenue thing the revenue other right product to much are customer I a a report the you we card said, as use fee, a and for now. fees. think going acquire in We is when for was And look of stool. we grow acquiring what that

our pay products interest And is want with how income. choices credit how then in and they payments. so we their to and to manage we're on card legged stool lots over customers it, have the manage lives And of time, their we've lots they our and us that giving modified financial planted have so third we want

And and all acquire [indiscernible] look going it's really is at going be account. we're basket to focus when because that's of customers. what of a to entire fee. we our and we what to us of literally going at lot drive look that a that lending so gives the confidence revenue going gives that's acquire on we for as revenue. okay, a into a to We ROIs, And it's this We're acquire customer customer, lot – not, us lot taken

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

morning. this of marketing. fees in think recognized amortized expense in on strategy guys waived, there's question accreted about fees I'm way assuming fees expenses discuss and and Is waivers. the to quarterly? an the I'd it? both are taking Are are my that terms should the that Thanks the for like offsetting and we When accounting fee

there's that ways people incentives and the think, I when there's offer in we misnomer what's – card And what's to variety there are is marketing to the we $X.X Rick? portion many in that line, maybe we billion when when of So about members offer step back, you, actually marketing But marketing, of in new because more. line small at of kinds incentives customers a I in So that overwhelming sometimes you can $X.X franchise. into to very involved the the costs about probably called we right? have majority Well, the ads I a sometimes are partners acquire many customers. million think a are bringing in look the that of customers that talk spend that that of that

waivers cost are those the rates amortized to And or levels, in welcome so but can interest balances that varying are incentives over fee periods, right? incentive on promotional be be of general going at

of We incentives, to so different offer exact lots I kinds they're generalize of going over but period, be period. marketing generally a amortized to can't the

the we of in wrestle So when bringing their it you look one as than the things are you're of recognizing ramp-up. is into them more more you and quickly bringing in revenues spending customers with total, generally they're the cost franchise, always at

which And bit you have create a so long-term. a for run the like many thing companies, bring of headwind. little sometimes that good good economic problem short the in, new that can is customers more you the In a the

So that's I about way the would think this.

from next Maurer Thank Partners. ahead. FT coming of you. question Please is The Craig go

Hey, good morning. question. Thanks taking for

Craig. Good morning,

welcome Hey, back.

And the Partners. FT and question. business up the It's for fun been running appreciate taking Thanks. you I again, getting

was with look the So the amount. provisioning what expense less despite if looks build quarter, materially was – quarter relatively provisioning than about we provision like the actually credit, in similar the it allowance it in at fourth thinking drove

a were only delinquencies the the So season saw soaking in the last in the it that by back up like quarter. half small increase rise were year, very driven you but delinquent in in of losses seems you

into I where especially So going is, you they're comfortable higher were the with the now where than guess question allowance levels materially are considering pandemic? are they

work me, always complex is way think number you take ratio I encourage as end this is divided That compare people the CECL, know, quarter this the backwards? let subject to X.X% at such I of what X.X%. that I was this, about total by can the reserves a loans because day-one sheet Craig is simple receivables. Well, the on that and balance to it the think was

others us think number would can as versus every You to you still what to history CECL our say and shot last of noise. that's the what one CECL And companies. institution When about is reports, have. I will quarter sequential what last that compare refer best-in-class a other track as financial both fourth way same know, to other X.X% a accounting, year long us I that was quarter's by pandemic that's think and relative is to you versus probably simple of I the

all institutions; released different I financial think from any the all In and is at of big reserves, these institutions us, different other other that. built times words, of past them for this we're kind

don't as all I a some because so we of know why back of from And noise at is not It's in the what rate. as BAU run going really here all of then such accounting for built drove released back the fourth not done fairly steady in the have and reserves. CECL forward there's last pandemic in you if we're see But world. think influenced a normal of a sort state year, starting to, thing the that quarter, in view a you're by us ways accounting us CECL I quarter none first

continue So if think it, to we about loan you to expect build. balances

continue to bit to that a will build is to and the that that into quarter, continue built today. moderate guidance of little each cause bit metrics we're little us to credit expect and all We of up referring a reserve

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

morning. Hey good guys,

Good morning.

Thank you questions. for taking my much so

of a business. obviously the lot the So know commercial have I a consumer, you large but depends very on business do unique

– if perspective. to belief spending you large or Thanks if kind Domino's do you credit think think whatever be the those about out That'd your you And businesses to so affecting hear changes? credit And levels how how your of tightening, the do elements in so bank plays FMB much. and fall think you some think will are great their there? this key occur, through access

T&E even let's – get at look travel spending. at of that, most look and especially up XX%. sort right? layoffs much things going X% in T&E let's normally to What layoffs out the segment affects We're look were. are for companies accounts been represents, back to that or but trying game. spend that how if occur that think, that – that is are and And to and drive sure where about be I to to is right an get really so really you and at to now at more credit that don't trying in tightening has segment a a we and when where to credit predominantly not their think think – – credit in starts tech late really consulting of a That represent is us spending the like it we're them tightening issue. is global their spending Well, I – people going go and not Large unique of still situation out look face be our going like is segment I that, to in and just overall things going

I of where an – do we're encouraging that. earning don't think there traveling And travel; do in again spot crazy layoffs? story. and a a people such aren't it's see I people most going of to they more be But to are anyway

having out access really say in and small we small things so businesses from to credit would tightening I I one Kabbage to think you the business see – have is when with – some businesses bit small some a is with that launch What forth. go and businesses of Blueprint harder and do our and quite are that capital. you working perspective look some a at we some small could of

we're banks these short-term loans, same capital and loans, of not so other in working smaller position as have are. a We have forth the we and lot

so will to is, worthy we actually, is good. extend small for for be could credit credit opportunity credit the us and And continue an credit provided to businesses it those

grow, But an think economy may lender not us right think judiciously, it but provides to for also an think it affect I business be opportunity first maybe with to us opportunity can the general our capital. these we an small resort the and to I opportunity. it So in be because business of again ability now, small I and get working could

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

low the thanks. of about been talked in seasonally year, beginning Is you think, of I OpEx Great, a course that? had end. and changed over that's at bit flattish the kind being the historically respect the there the of kind high little something Jeff, seasonally mean, year to the with had of that I

Yes.

growth out And to have because pretty were of ramped guidance, way is the well, have – this as is fully out a as very think, this be. needed of I in a we our was what and we rate OpEx actually XX% with as think every ramp-up, that way were different think year's about this late of XXXX, quarter came in in the we we a I many sort where pandemic, really the it XXXX. high and we attrition the in a talk set mean, to about year. we to confidence you internally XX% higher little about year-over-year, revenue look, some as Moshe, growth you all and were XXXX lot companies, we we high rates we have in dealt

and the of this year level through last volume We to infrastructure the that company end of manage revenue. of built

why flat. that, be to manage year are find this where pretty to we So, to we’d we that which OpEx is need sequentially expect

for OpEx provided of guidance $XX So, about billion. we

to million that. ventures the right $XX mark-to-market to we was driven which out And think one we’re our portfolio, had by I take record, tracking decade pretty or company, our you If track on mainly over loss much I that. you tell think suggest, going I a record number certain doing of have more a when would a than we control OpEx we OpEx, pretty is we’re hit good

would about So I it. how that’s think

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

bit I will, and look know from around just in your Question like that you Apple that Amazon large picture, morning. good thoughts if risk little involvement on to big more and getting financial and be from at in companies – financial you their service a you tech getting the the what partners. some competitive more, be big if Thank ways, They services cards they’re the are credit and seem types involved and more But and other might competitive. companies? in tech

them, very, – work Amazon. we We decade. Apple been Amazon we very with have obviously, obviously, for they against and else Well, value competition, better only a you the when big traditional but Pay look compete that’s say, not so is customers And large fintechs It’s we at always they’re the Apple you. and way to the compete against the want to all fintech. forth. closely – the look that just at it’s not large It’s what and it’s to look, players that with have why continually think and your look they’ve banks. you what partner. startups a at. propositions. and have and everybody and reality I just merchant you And and the partner on give involved to And And we a develop not Apple you We tech is, the have

us great great companies. Apple consumer. consumer our yes, are and so that raise as know There there. help these game are well, great Amazon the banks overall. And out and the companies they we are – are phenomenal know We There believe,

We coming focus and And on after us. reasons the that going to one’s services. The of enough go down that to sort everybody it’s and one we’re way paranoid. come can things street is naïve about. we of upgrading is we after of think us. products just who And compete But constantly talk think one strolling our we’re it’s – we going no the on to not that ever here thinking, the

the products. We’re easier probably better value constantly be not but challenge that, team Yes, we value do constantly to develop adding it to would our to propositions.

worry the do best best sure make do are about that to years, we what products thing offer everybody. we’ve done the can for and offer about our customers And so that only happy. is the service, And it continue we

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

from Do any sharing adjustment? impact And banking I Jeff. wondering crisis. was that ability Delta was the to if be stock? And will impact your Good could expect there talk morning, any the back to year? there buy you this you also,

two So questions. different very

liquidity Don, position. mean strong So we very a and capital I are in

the capital to requirement. actually well regulatory CETX is a basis on XX% Our above target XX% of

target rating by view. agency Our the driven is really

some any hold need change on the happen I but increase what’s exactly we we perspective, So, capital is to today. going in the even what impact unlikely regulatory to hold from have know regulatory actually to a significantly that environment

our our tremendous support better. ROE look, that of growth. generate has a so of amount capital And much We capital. organic We to need a or XX% company don’t

to Board, us buy So the earlier fact, approved share see new the continue shares, you’ll in is which in – aggressively a quarter. huge multi-year back repurchase why for target

is position I strong, liquidity also in very as Our talked about our remarks.

out you they’re the I’d is us January headwind a And unlikely exist that rates interest a XXXX. really on to you another in remind points. basis basis When headwinds call, about year a pointed XXX I for in think year-over-year in XXXX, in point XXX XXXX, in increase won’t do which

I talked had impacted steady-state year, reserve Craig’s still last its matter, by that to just kind of this the in see For year response our a greatly back whereas releases. to provision question it you is level, about that fact

in So are not XXXX XXXX. those have headwinds two we in will

expire, is which the time. have the effective we it economic have we is XXXX, a the contract see great for work some all week it partnership your in every agreed rates on Steve we XXXX to a in the work year practically. us. true original to renewed XXXX. through You together back headwind, when like and partnership that with of together them, how sharing of works is early to the the finger Delta extended in change which the Seem going is third great for works fabulous But put We

So generally line. into that customer the variable engagement a this flows but the step-up falls P&L lines there in through is year various

the part what face headwind out, that’s this that up in little a have year year. XX% I we that on to another sort earnings to drove XX% will we of us that’s would target not of So our this growth point XXXX. bit

question. the for you thank So

you. Thank

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

the driving you a like question been folks bit think a Do start to have you U.S. on not clearly I that clearly again has and as expecting at of highlighted, Terrific. for up bit? little moderate sense we that’s when question. to a particularly might some year-on-year, at covers this see your still beginning dynamics under a happening the renormalizing how taking outside piece much that looking it’s already renormalization. Thanks that my growth happening. might the T&E With had but post-pandemic, it’s XX% further T&E go have disproportionate been I the spending year,

So, how I’m we’ve wondering on many go to more much Thank – that? how you. got

as total every have. to have T&E corporations their go is start spending in up it keeps and growing. T&E XX%, about segment is commercial we Well, on XX%. a we think up And we And It about I consumer just T&E T&E XX%, single to bring international, up still keeps as up you spending that is I XX%. – quite well. up bit talked mean, back especially talked

we’ll So, have about grow room grow. bookings we to capacity. And And their we airlines, with with I capacity, expand and also airlines think still as continue more will their they to talked expand them.

in So, there’s I more upside there’s airlines. becomes think when still airlines, more more upside upside it And in lodging. in

of Resy other me, has thing members’ a to have – of you are people And if spending the – to they cardholders our their who as card get at new that a and do I want eat it even spending as point through propensity is think T&E. to restaurant Resy. acquisition reservations I’d that – as lot continuing fact with been out. But of share a to and have able the strong Resy be nice And to is. restaurant restaurants addition about And surprises spending eating to Resy, ask probably gotten a about has for to really our we would larger book us, the anything restaurant it be used me that

to still strong outpace and So, very throughout Services. going this I see our Goods certainly year. you’re think will It T&E

– we’re getting to back. continuing we’re And climb back

we is to it should XX-XX And no way around pre-pandemic, were that in XX% our was. terms T&E. really remember, there of Services not XX% reason spending: the and and you If back Goods go

So, we think we have upside in T&E.

for American call Operator, that, IR back be to team your will for with for will you you. operator continued available any interest questions. call. the close in And Okay. follow-up and Thank The again Express. joining today’s

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

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