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American Express (AXP) delivered another quarter of robust financial performance in 2Q25, surpassing EPS expectations for the sixth consecutive quarter as Billed Business, a critical measure of card member spending, grew 7% yr/yr to $416.3 bln, a slight acceleration from the 6% growth reported in 1Q25. The growth was driven by record card member spending that underscores the resilience of the company’s younger, higher-income customer base.

Despite this strong performance, AXP opted to reaffirm its FY25 guidance of 8-10% revenue growth and EPS of $15.00-$15.50, a cautious stance that disappointed investors expecting an upward revision given the consistent EPS beats and with shares trading near all-time highs.

• The 7% growth in billed business was propelled by a balanced performance across spending categories, with Goods and Services spending rising 7% yr/yr, outpacing Travel and Entertainment (T&E), which grew at a more modest 5%. This marks a slowdown in T&E growth compared to the double-digit increases seen throughout 2023 and 1H24, a period when pent-up travel demand fueled exceptional performance in this category. Nevertheless, T&E spending remains at healthy levels, supported by AXP’s premium cardholder base, particularly in international markets.
• New card acquisitions remained a bright spot, with AXP adding 3.1 mln new proprietary cards in Q2, a testament to its strong brand appeal and targeted marketing efforts. Notably, 63% of global consumer new accounts were from Millennials and Gen Z, reinforcing the company’s success in resonating with younger, affluent consumers who are drawn to its premium, fee-based products. 
• Of the new accounts globally, 71% were on fee-paying products, highlighting the effectiveness of AXP’s strategy to prioritize high-value, premium card offerings, such as the Consumer and Business Platinum Cards, which are set to receive significant updates in the U.S. this fall.
• Credit quality continues to be a cornerstone of AXP’s financial strength, with metrics remaining best-in-class. The net write-off rate stood at 2.0%, and the 30+ days past due rate was 1.3%, both consistent with recent trends and significantly outperforming industry averages across all generations. The Federal Reserve’s recent Comprehensive Capital Analysis and Review (CCAR) results further validated the company’s robust risk management, with AXP posting the lowest projected credit card loss rate and the highest projected return on assets among banks subject to the stress test.

AXP delivered another quarter of solid results with adjusted EPS rising 17% yr/yr on record card member spending of $416.3 bln, reflecting its top-tier execution and ability to attract high-spending, premium customers. However, the decision to reaffirm rather than raise its FY25 EPS and revenue growth guidance has disappointed investors, particularly with shares recently trading at record highs, signaling expectations for a more bullish outlook.