American Express Co at Goldman Sachs U.S. Financial Services Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : So, maybe just start big picture. '24 has been a very solid year for Amex. You're on track to generate greater than 15% EPS growth, on pace to acquire over 13 million cards. However, top line growth, while strong, has been a little bit slower than your aspirational target. So maybe just reflect on this year, what's gone well, what hasn't been as strong as you would have liked. And more importantly, how is the company positioned to succeed as we look ahead?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Great. So maybe to dig in a little bit further. So, several years ago, you laid out 10% plus aspirational revenue growth in 2024 and beyond. And as you highlighted, it's clear there's been economic uncertainty. We've had higher interest rates and obviously, stubborn inflation. Maybe just talk about what you need to see to reach those levels of growth? And has the algorithm changed at all since you first put this target out?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe just to dig in on that a little bit further. You noted that this year, 23% to 25%, including the Accertify gain. Maybe just expand on the comment around scale and how you're able to drive this type of earnings per share growth, even the fact that the top line is a little bit softer?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe, Steve, a little bit more near term, you've been describing for the last couple of quarters, as you said, spend has been steady. We're now two months through the quarter. Any update on either Billings performance, or what are your expectations across the rest of the holidays?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Excellent. I do think my wife helps some of those trends.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : So Steve, as I was reading through my questions over the weekend, I came upon this question and I laughed because there's two questions within one. I know you like to belittle me about doing that to you many times.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Well, the market is obviously showing excitement post the election on hopes of a more business-friendly environment. Maybe just talk about what changes you're expecting at all and if this could impact Billings or the overall performance of the company? And then second, is this enough to see organic spend across things like US Consumer or SMEs to improve?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : No.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter) Drop two zeroes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 2:20PM, AXP.N - American Express Co at Goldman Sachs U.S. Financial Services Conference

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe to spend a minute on T&E. It's been a big driver of growth post-pandemic. It slowed a bit over the last few quarters from 13% down to about 6%. Could you just talk a little bit about what is driving the deceleration? Whether it's lower inflation, a more cautious consumer. And are you seeing any signs of stabilization or improving?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Got you. So, you referenced Millennials in one of the questions earlier. I think spend was up 12% year-over-year, double-digit overall growth rate in US Consumer. Now makes up a third of US Billings. You talked at the Investor Day, the lifetime value of these customers being 2x older cohorts. Can you just maybe talk about how penetrated you are across this cohort? And does the shift towards Millennials change the economics of your business at all relative to the past strategy in terms of customer acquisition, retention, or growth?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter) Next question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 2:20PM, AXP.N - American Express Co at Goldman Sachs U.S. Financial Services Conference

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : So Steve, you and the team like to describe the business as a Membership Model. Maybe talk about what does that mean? Does it encourage partners to fund value? And how does it impact the company in terms of its overall performance versus peers?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : You referenced value prop refreshes. This year, you did 40 product refreshes, including Delta and US Gold Card. And I think you've done over 150 refreshes the last five years. Maybe talk about some of the things you've learned from these refreshes like an example, Gold, I think, tends to skew more Millennial. How does that inform what you do to future refreshes? And was this a big year for refreshes? And how does the pipeline look into '25?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter)

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : I could tell you at Cartier, there's only three.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter)

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter)

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : So, wanted to spend a minute just talking about the competitive environment. So, I think you're spending $6 billion on marketing this year. That's up over 15%. You've had obviously great customer acquisition. You even had the opportunity to increase it further, but you chose to let the Accertify gain hit the bottom line, which is something that was not a historical American Express practice. So, maybe just talk a little bit about the competitive landscape for customer acquisition. Some people have been talking about Chase wanting to make their product more competitive with Platinum. Maybe just talk about how things are evolving in your market and where are you seeing the best incremental opportunity?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe let's shift gears and talk about International, which continues to be the fastest-growing part of the Franchise. It's been growing at a steady 13% for the last five quarters. You've had -- the top 5 markets have been growing mid- to high-teens, Millennials growing 23% internationally. Maybe just give us an update on how things are developing internationally, what's driving the success? And despite low-teens growth, can we see more from your International?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : You mentioned 9% market share in Japan, 3% in some others. Maybe just talk about how the SME strategy actually differs from what you do in the US. Obviously, you're the elephants in the room in the US. And on the Consumer side, you referenced there's not a lot of lending. But just maybe how do you think about the International lending opportunity relative to --

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Makes sense. We talked about lending internationally. Obviously, lending in the US, it's a smaller part of your overall revenues, but it's been a solid contributor to revenue growth, as you've been on a journey to get more of your customers to do more with you, so you'd have their spend, maybe only a quarter of their borrowing. Talk about what is driving the success to bring over more balances? And how comfortable are you that we won't see any credit issues over the medium term?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe, we've got five or six minutes left here to hit on another couple of topics. You recently did two acquisitions with the purchase of Tock and Rooam. You've done a handful of really successful strategic acquisitions over the years. Maybe just talk about how these fit into the overall Amex strategy. And when you look across your business, where do you see further opportunities to add capabilities inorganically?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : (laughter) Probably --

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Got to build those pipelines.

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Steve. So, a couple of times we talked about scale and all the investments you've made in the business. You had a handful of years of really significant investment. And more recently, you've been very good at controlling OpEx and driving leverage across the firm. Maybe just talk about where you're finding efficiencies. Are you using AI? And how do you balance making investments with the need to grow the overall franchise?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : So, we talked before, you mentioned, you don't think there will be deregulation, but maybe a more calmer regulatory environment. What are the things you're most focused on out of DC that you think could have an impact -- on how you run the business or how you run the company?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Maybe one question to end with, Steve. So, the business model under your leadership has had tremendous success. Stocks hovering at an all-time high, for those who haven't noticed. And as you look out, '25 sounds like it could be a pretty solid year, what are you most worried about as you're looking at the year ahead? What are you paying the most -- the closest attention to? And how do you think that could impact your business?

Question: Ryan Nash - Goldman Sachs & Company, Inc. - Analyst : Great. Well, we are out of time, but please join me in thanking Steve. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 2:20PM, AXP.N - American Express Co at Goldman Sachs U.S. Financial Services Conference