- Record Revenues - Q2 2025 revenues reached $17.9 billion, up 9% year-over-year.
- Earnings Growth - Earnings per share rose 17% to $4.08, excluding last year's gain.
- Card Member Spending - Total spending increased 7%, with Gen Z spending up 40% and millennials up 10%.
- Premium Product Growth - Card fee revenues grew 20%, with net interest income rising at a double-digit pace.
- Customer Acquisition - 3.1 million new cards acquired, including 1.5 million from the US consumer business.
Valuation Overview
Trading at a P/E ratio of 21.01 and a P/B ratio of 6.92, American Express appears to be priced for growth, given its strong execution and expanding margins. The stock's dividend yield of 0.99% and a free cash flow yield of 5.25% provide a balanced return profile for investors. Management emphasized the stability of its variable customer engagement (VCE) ratio to revenue, which has remained consistent, reinforcing confidence in its ability to manage rewards costs effectively.
Premium Products Drive Growth
American Express continues to leverage its premium offerings, with card fee revenues growing 20% year over year. The company added 3.1 million new cards in Q2, including 1.5 million from the U.S. consumer business, showcasing strong demand for its high-end products. The upcoming Platinum card refresh, slated for 2026, is expected to further accelerate growth by enhancing value for card members, though the associated costs will precede the revenue benefits.
International Expansion and Strategic Initiatives
International markets remain a bright spot, with double-digit growth since COVID-19, driven by the company's city strategy and merchant expansion. American Express is also innovating in the digital space, partnering with Coinbase to enable digital currency rewards and exploring the potential of stablecoins for cross-border transactions. This diversification aligns with its long-term vision of delivering value across a broad range of payment solutions.
Competitive Position and Operational Efficiency
Despite increased competition in the premium card space, American Express maintains its competitive edge through continuous innovation and a disciplined approach to expense management. The company expects net card fee growth to moderate in the second half of the year but remains confident in its ability to deliver 8-10% revenue growth, supported by a strong capital position and a CET1 ratio of 10%. The Fed's CCAR results further underscored its financial stability, with the lowest projected credit card loss and highest profitability among peers.