American Express NYSE: AXP reported second-quarter results that extended its recent growth momentum, with revenue rising 10% and earnings per share reaching $4.53. The company raised its full-year revenue-growth outlook to 10% while maintaining its EPS forecast of $17.30 to $17.90, saying it plans to reinvest stronger-than-expected revenue performance into customer acquisition, technology and other growth initiatives.
Chairman and Chief Executive Officer Stephen Squeri said the company chose to prioritize investment over directing the outperformance entirely to the bottom line or additional share repurchases. “We can either drop the overperformance to the bottom line and buy back more shares, or we can invest to grow the business further,” Squeri said, adding that management believes reinvestment creates more long-term shareholder value.
Premium Products Drive Spending and Fee Growth
The company’s U.S. Platinum Card refresh, launched in September of last year, was a key contributor to higher customer engagement and spending, according to management. Squeri said the Platinum portfolio has become the fastest-growing portfolio within American Express’ U.S. consumer business.
Chief Financial Officer Christophe Le Caillec said overall spending increased 9.4% on an FX-adjusted basis, accelerating from the first quarter. Goods and services spending grew 9%, while travel and entertainment spending rose 10%. Retail spending increased 13%, restaurant spending rose 10%, and airline spending also advanced 10%.
Global American Express Travel bookings increased 22% year over year during the quarter. U.S. consumer spending rose 11%, which Le Caillec described as the strongest growth rate since the first quarter of 2018, excluding pandemic-related periods. Millennials and Gen Z consumers remained the company’s fastest-growing cohorts and represented the largest share of U.S. consumer spending.
American Express acquired 3 million new cards during the quarter. More than 70% of new accounts acquired year to date were on fee-based products, while 75% of new accounts in the second quarter came through fee-paying products, the highest level since the company increased its focus on premium offerings.
Net card fees rose 15.4%, reaching record levels and remaining the company’s fastest-growing revenue line. Le Caillec said card-fee growth is expected to accelerate in the third quarter and exit the year in the high teens, reflecting the gradual recognition of higher Platinum Card fees as customers are repriced and those fees are amortized over 12 months.
Credit Performance Remains Strong
Total balances increased 9% year over year on an FX-adjusted basis, generally keeping pace with spending growth. Management said delinquency and write-off rates remained below 2019 levels, with delinquency rates holding between 1.2% and 1.3% for more than three years.
Provision expense was $1.1 billion and included a $191 million reserve release, primarily reflecting improved portfolio credit performance. The second-quarter write-off rate was flat from the prior quarter, while the delinquency rate declined.
Squeri and Le Caillec attributed the credit performance to the company’s strategy of attracting high-credit-quality, premium customers. The company said 65% of new consumer accounts came from Millennial and Gen Z customers, and about 70% of new consumer Platinum accounts outside the United States came from those generations.
International spending rose 12% on an FX-adjusted basis, with four of the company’s five largest international countries reporting double-digit growth. International Platinum Card spending grew 20% on an FX-adjusted basis after American Express refreshed the card in approximately 80% of the countries where it is issued.
Investment Plans Include Technology, Dining and Customer Acquisition
American Express said it will increase investment in customer acquisition and technology during the second half of 2026. Marketing expense is expected to rise about 10% year over year in the second half, while operating expenses are projected to increase in the mid-single digits for the full year.
The company also expects to invest in its proposed acquisition of TheFork, a European online restaurant-booking platform with 50,000 restaurants across 11 countries. Squeri said the transaction would support American Express’ dining strategy and complement its existing Resy and Tock platforms.
Management said it does not view the dining platforms primarily as standalone profit centers. Instead, it sees them as components of the broader card-member value proposition that can support retention, customer acquisition, merchant relationships and spending. Resy and Tock are expected to come together from a front-end user-experience perspective, while TheFork is expected to remain a standalone European-focused entity.
The company also highlighted new and expanded partnerships, including a global partnership with ALL Accor, as well as sports-related relationships with the NFL and Fanatics. Squeri said these partnerships are intended to provide card members with access to events, experiences, merchandise and other benefits.
Portfolio Sales Create Revenue-Line Effects, Not Material Earnings Impact
American Express said sales of two small-business co-brand portfolios will affect reported spending and net interest income growth during the remainder of the year. One portfolio, Lowe’s, transferred in April, while the Amazon portfolio is expected to transfer in the third quarter.
Starting in the fourth quarter, management expects the portfolio sales to reduce quarterly spending growth by about 1 percentage point and net interest income growth by about 2.5 percentage points until the company laps the sales. The combined effect on total revenue is expected to be about 1 percentage point.
Le Caillec said the sales will have a negligible impact on pretax income and were already included in the company’s full-year guidance.
American Express returned $2.9 billion of capital to shareholders during the quarter, including $600 million in dividends and $2.2 billion in share repurchases. The company reported a 36% return on equity for the quarter.
For the first half of 2026, American Express reported 11% revenue growth and 14% EPS growth. Management said it expects spending momentum to continue through the second half, though portfolio transfers will create a modest headwind to reported billing growth.
About American Express (NYSE:AXP)
American Express is a global financial services company primarily known for its payment card products, travel services and merchant network. Founded in 1850 as an express mail business, the company evolved through the 20th century into a payments and travel-focused organization. Its core activities include issuing consumer and commercial charge and credit cards, operating a global card acceptance and processing network, and providing travel-related services and customer loyalty programs.
American Express issues a range of products for individuals, small businesses and large corporations, including personal cards, business and corporate cards, and co‑brand partnerships with airlines, hotels and retailers.
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