American Express Co Q1 2025 Earnings Call Summary

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

Question: Sanjay Sakhrani - Keefe, Bruyette & Woods North America - Analyst : Good morning. So, Steve, we've heard a lot about pull forward of spending. And I'm just curious if you guys have seen any indication that that's sort of propping up spend volumes? And then just sort of along the lines, if we do see some volatility or weakness in spending and revenues, how far do you want to go in terms of sort of protecting earnings? How low does revenues need to go for you to sort of just cut the line in terms of expense reductions? Thanks.

Question: Mark DeVries - Deutsche Bank - Analyst : Yeah, thanks. So, if some of these steeper tariffs go through as initially proposed, Steve, can you just talk about which segments of your business you would expect to be under the most pressure? And is there anything you can do from a risk management perspective to get out in front of that?

Question: Donald Fandetti - Wells Fargo Securities, LLC - Analyst : Good morning, Steve, can you talk a little bit about card refresh and fee growth? I know one of your competitors recently raised fees on co-brand cards. And in this environment, do you still feel like you have the ability to sort of grow fees?

Question: Rick Shane - JPMorgan - Analyst : Thanks for taking my question this morning. Steve, you talk about investing across the cycle basically as a strategic initiative. I'm curious tactically given where we are, where you see opportunities. And I'm curious sort of where you're going to be more aggressive, more -- where you're going to be more defensive. And I did note that the amount of capital you retained from first-quarter profits was the highest it's been since COVID. So, I'm curious how you're looking at capital offensively, defensively as well.

Question: Erika Najarian - UBS Equities - Analyst : Hi, thank you. I just wanted to confirm the 8% to 10% revenue guide, you said something to the effect of that now takes into account a 5.7% unemployment rate. I just wanted to confirm that you feel like you can generate 8% to 10% revenue growth even in light of an unemployment rate that we haven't seen in a while. And to that end, I think, Steve, you mentioned that the stock market really didn't impact spend. I'd be curious to understand, since your data is so good, in terms of how spend progressed January through March, particularly in your affluent consumer segment, as you had mentioned in the last call that January is off to a strong start. And then just wondering whether or not the resilience had sort of carried through even though we had all the headline risk and stock market volatility in March.

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Good morning. Thanks for taking my question. Steve, I know that Millennial and Gen-Z cohort continues to be a source of strength for Amex. You're calling out the continued 60%-plus of acquisitions, the better FICO and DQs versus the industry, and your spend growth is running higher there. But just curious, are you noticing any sort of under the hood issues with that group from things like student loan repayments starting. There's been some reporting of some servicing issues for that group with the repayments starting. I'm just wondering if there's any stats you can give on maybe spend per card or account for that cohort just given that it's represented so much of your account growth so far. Thanks.

Question: Craig Maurer - FT Partners - Analyst : Yeah, thanks. I appreciate you taking the question. I wanted to go back to something you said earlier. Investors are spending time hardening their books for what is expected to be a significant change in the economy over the next sort of 9 to 12 months. So, you had mentioned FICO scores, consumer confidence wealth effect, not to channel John Wick, but the bogeyman of the last recession was FICO creep and companies getting caught thinking they were making better loans, plus with consumer confidence falling and the wealth effect, especially how that might impact the younger cohorts. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:30PM, AXP.N - Q1 2025 American Express Co Earnings Call Maybe you can talk about what you're basing your view on that consumer confidence and wealth effect won't impact spend. And sorry, not sneak this in, but could you also let us know what percentage of SMB Billed Business is related to e-commerce businesses? Thanks.

Question: Cris Kennedy - William Blair & Company - Analyst : Good morning. Thanks for taking the question. Steve, you mentioned the acquisition of Center that comes after a string of other deals, whether it's Kabbage, Nipendo, others. Can you just talk about that journey and kind of give a state of the union on the SME technology investments and then how can that translate into better organic spend over time? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:30PM, AXP.N - Q1 2025 American Express Co Earnings Call

Question: Terry Ma - Barclays - Analyst : Hi, thank you. Good morning.

Question: Terry Ma - Barclays - Analyst : Maybe to just follow up on your comments around refresh strategy, you called out about 35 to 50 planned product refreshes for this year, last quarter. And I get that you want to invest in the long-term, and you don't want to stop the refresh strategy. But just given that there's so much macro uncertainty and maybe potential uncertainty around the ROI of those refreshes, do you kind of adjust or delay some of those until there's more clarity? And what does that mean for your marketing budget for the year? Thank you.

Question: Gus Gala - MCH - Analyst : Good morning, Steve. Good morning, Christophe. I wanted to ask around restaurants. It seems like a lot of the work done there has been key in winning Gen-Z, Millennial share versus other premium value props available in North America. How do you think about enhancing the value proposition there? And similar vein, can you talk about other categories or maybe your experiential differentiation where you're not really competing on the rewards, but more like the services to further help capture that Gen-Z, millennial base.

Question: Rob Wildhack - Autonomous Research - Analyst : Morning guys. I wanted to follow up a little bit more on the SMB technology side with Kabbage, Center, etc. Steve, I think you mentioned eventually having one ecosystem. Could you speak to the integration effort there, how all these platforms come together, how that looks for the end customer today? And then when do you expect you could go to market with the full expanded product suite inclusive of Center? Thanks.

Question: Mihir Bhatia - Bank of America - Analyst : Hi, good morning and thank you for taking my question. Steve and Christophe, you're now striking a pretty confident tone on the call today about the outlook in a variety of macroenvironments. I think you've also talked before about being more confident in achieving the mid-teens EPS versus maybe some noise in year over year revenue. So I just wanted to go back to where we started the Q&A, where Sanjay started the Q&A. Can you just talk a little bit more about the cost structure and the potential for cost optimization if things get choppy? Like I understand there's rewards costs and things like that that naturally get lower, but big picture, just talk a little bit about the expense flex in the model as you continue to invest. Thanks.