American Express Aktie

All right. Welcome back, everybody. With us today is American Express. Delighted to welcome Christophe Le Caillec, CFO, back to our conference. Thank you for joining us, Christophe.

Good morning, and thank you for having me.

It's our pleasure. Maybe we can start with where a lot of the recent investor focus has been recently. More of the macro backdrop, health of the consumer. What are you seeing today from your customer? Are there any notable shifts in customer behavior you're seeing or any categories showing incremental strength or weakness?

I mean the short answer to that question is that we see strength across the portfolio. For those who heard Steve speak at another conference last week, he said that quarter-to-date, the numbers like in terms of billing growth were slightly stronger than Q1. And you might remember that when we talked about Q1 billing growth, I think it was like 9% FX adjusted. And we talked about that was the strongest quarter we had in 3 years, right?

So Q2 so far is actually slightly better than that. So I feel really good about the quarter. Demand for new cards is very strong and tracking very well to our plans. And maybe we'll talk about credit, but the credit numbers remain very strong. So when we look at the details within generations, cohort, vintages, the message is consistent, and there is really no inflection point that we can see that is noticeable in the portfolio. So a lot of strength.

And what do you think is driving that? And I mean, I think with higher gas prices and inflation over time, the premium Amex consumer has showed the capacity and the willingness to spend through those higher prices. So what are you seeing with the higher gas price impact? And if we were to see another supply-driven inflation shock, is there any reason to believe this environment will play out differently than what you've historically experienced?

So we've been talking about inflation, I think, for -- I mean, since COVID basically. And I think last year, you asked me a very smart question about inflation. So my answer is not going to be that different. And it's going to be first that when inflation is like modest as it is now, it's actually slightly accretive to American Express.

And the intuition behind that is that revenue, especially discount revenue, but also NII to some extent, they kind of travel a little bit with inflation. And there are many expense lines in the P&L that lag. And so net-net, a bit of inflation is a net good thing for us. Now when I say that, I really mean a small level of inflation, right?

The problem here or the danger is the second order impact of inflation onto the economy and what it would mean in terms of unemployment, in terms of potential credit event, FX, interest rates. So that we don't know. But as it is right now, our card members typically can handle that kind of inflation. We have seen, just like everybody, gas spend kind of like increased dramatically as a result of the price changes. But it's not like we are seeing an offsetting decline elsewhere.

So I feel good about where we are. I feel good about our portfolio of consumers and their ability to navigate this situation and handle it without creating a created event or impacting their spend. So far, so good, I would say. We'll see how it evolves, especially the second order impact to the economy. But so far, we haven't seen anything like that.

Anything to highlight by category? I mean, I know Steve talked about airline picking up...

Yes, airline is doing really well. T&E in general is doing really well, but retail as well. You might remember last quarter, we talked about retail spend. Luxury spend was up, was it like 18% like globally. So it's a big category for us. So we haven't seen any really inflection points across the portfolio. And as I said before, like in aggregate, the spend is actually slightly better than Q1, which was the best quarter we had in 3 years.

Okay. Great. And maybe just sticking to the balance of the year, you had a really strong first quarter, obviously. It sounds like those things have gotten a little bit better since. Can you maybe just talk about the building blocks to the revenue guide expectation for the year, the 9% to 10%. I think a lot of questions we got post the quarter was why didn't you anchor to the high end of that guide? Maybe just help us understand that.

Yes, yes, we can talk about that. So if you unpack the building blocks, start with billing, we're just in discount revenue. We just talked about billing and the strength that we are seeing there. Card fee, we have a good line of sight in terms of what's going to happen. We've said that you should expect card fee to moderate, although from a very high growth rate, right, because card fee has been doing like really well over the past 6, 7 years.

And we expect card fee to pick up in the balance of the year. And my expectation is that we're going to be in the high teens in the balance of the year. So we have good visibility into that. And in terms of NII, balances have been moderating as we were expecting as well. But NII growth rate is in double digit, right? And so when you put all of this together, you get to that 9% to 10%.

Now -- there is something else to factor into our guidance that investors need to factor in as well is that, as you know, we're going to transfer the Amazon and Lowe's portfolio to new issuers. That's going to happen between now and the end of the year. So the impact -- so you're going to have like -- you're going to put a bit of downward pressure to some of the metrics.

In terms of bill business, the portfolios are not that big, either, call it, single-digit downward pressure on the commercial book, which is 30% to -- probably 40% of the total spend at American Express. These portfolios are revolvers and more heavy revolvers. So the impact -- there will be a small impact on NII growth.

I would say, single-digit, low-single-digit as well. And so that's going to put a bit of downward pressure on revenue. It's not going to impact EPS at all. And all of this was baked into the guidance that we gave at the beginning of the year. So I don't know whether it answers your question, but there is between, I would say, now and the end of the year, a bit of downward pressure as a result of that. But we think it's the -- like we made the right decision here from a profitability standpoint. And as I said, it has like 0 impact to earnings per share.

Okay. Great. No, that answers it perfectly. One aspect of the Amex story that's also evolved quite a bit over the last decade has been your consistent reinvestment into the value proposition of your card products. You refreshed Platinum last year, you did Gold and Delta before that. You did a little mini one, it looks like on Delta recently. Maybe you want to talk more about that. What's next on the road map? And how do you think about the long-term runway for sustaining that robust card fee growth over the long run?

Yes. I think my marketing colleagues would kill me if I were to reveal what they're working on. So I'm not going to do that. But here's what I'm going to say. First, as you hinted, those value propositions and are not like we want to keep them alive.

To your point on Delta, we just relaunched the -- refreshed the product last year, but we just announced that you would get a 3-second check bag. On the Gold Card, which was also part of the recent refresh, we just updated a little bit the value proposition, and we are incorporating the Hertz status, like 5-star status at Hertz. So what we're trying to do is just like keep these value propositions alive.

So it's not like you refresh the product and then it's frozen for 2, 3, 4, 5 years. It's really something that we keep alive to keep the demand, to keep the excitement. And we keep as well discussing with partners to enhance the value proposition of the products. So that's an important factor here.

The second important factor is that if you take a step back, Behind the refreshes, more importantly than the refreshes, what matters is the constant innovation. And what we want is our marketing colleagues to bring new news to the market. I just talked about a few in the card space, but we do the same thing in resi or talk. We do the same thing in travel. We just issued like a new travel app.

So there is a constant flow of innovation. And so you should not think only about the product refreshes, it's like step function changes in the value propositions. And so we're very kind of like aware of that. And when Steve became CEO, it's definitely something that he introduced. He was that cadence of new news that is generating demand, that is generating engagement, that is generating differentiation vis-a-vis the competitors that has been the engine towards the revenue acceleration, and we're keeping that alive.

And of course, there are going to be like some product refreshes, but I'm not going to reveal those here, as you can imagine.

I was curious if the soft refreshes you do, are those planned well in advance when you do the initial rollout? Or are you reacting to what you're seeing in the data or on the ground and the engagement?

Yes. I mean it's -- like in the case of Delta, it's a function of like we constantly talk to Delta. They have some needs. We have some needs and just like we figure out how to keep the product alive and dynamics. So I'm not going to say that 2 years ago, we knew that we would do this. But 2 years ago, we knew that we would keep the product value proposition alive, and we would be on the lookout for enhancements and the dynamic value proposition.

That makes sense. And the other, I think, big thing that is on investors' minds and a new product launch you have coming at sorts, it's going to be one of your next major growth pillars, you hope, the integrated expense management platform launch center. What are the advantages that solution will have relative to the fintechs and other large card issuers out there? And how do you maybe define success for this initiative once you launch it?

So let me take a step back and tell you what the vision here is. And this value proposition is really targeted at what we call middle market. So it's not really the small businesses. It's not the large and global businesses. It's very much the middle market where we've seen the pressure recently on the back of those fintechs, as you said.

So our approach to this, the vision and how we think we're going to win in that space is by combining in the same ecosystem, great products with high spend capacity, like no preset spend limit, great value proposition. Think about, for instance, the recent product that we just issued Graphite, which, by the way, is doing really well.

So we want to combine a great product. We want to add to that an attractive expense management value proposition, and I'll come back to it in a minute. And the third element of you want of this ecosystem is the servicing, which matters a lot to middle market customers where they want to -- they want to dispute transactions. They want to kind of like either have details about transactions. So our, if you want, vision for this segment is just to combine those 3.

I'm not sure that expense management alone is going to be the solution. And so anyway, our bet is that we combine those 3, and we're just going to bank on this. Specifically about expense management, we are a few weeks away from releasing the details of that. It's just going to be the first version of our expense management solution that is built out the center technology.

It will be limited initially. And you should expect between now and the balance of the year that we're going to expand it to a bigger population. You should expect as well that we're just going to improve that value proposition over time. We're very much -- as usual at American Express, we're very much playing a long game here.

And we think that service, no preset spend limit, attractive value proposition and expense management is just going to win the game. It's certainly going to take us a bit of time. to kind of like get that value proposition on expense management at par. But I believe that we're going to get there. And more importantly, I believe that our card members will just understand that.

And in terms of like what we're going to look at, as usual, we're going to look at the metrics around engagement, right? But what's important here is just to understand that the deployment of this capability will take time. It's not like overnight that you can implement this, you just need to hook it up to their ERP systems.

It takes time. And so we've been working on it for the better part of the last 12 to 18 months, and we are a few weeks away from really seeing it, and it's very exciting. And separate from that, -- you might recall as well that the commercial segment is like it's a massive year for the commercial segment. We're going to release as much as like 8 different products this year. So...

Sounds great. Well, we look forward to that release in the coming weeks. Thinking about expenses, investors often ask us about that, and there's a lot of scrutiny of that. And I think you've consistently framed that elevated investment as really a deliberate choice to sustain the long-term growth algorithm while maintaining strong returns.

So you did exactly that last quarter, I think you accelerated the marketing and tech spend. What do you think are the most attractive opportunities as you sort of sit here today and increase that spend or make the decision to increase it? And how do you balance that offensive investment with maintaining some of the expense and return discipline?

Yes. It's a great question. So let me take you through how we think about it. First, like just defining the word investment. So here, we're talking about the upfront cost to acquire new card members, which shows up on the marketing line. Like investors need to be clear that when we talk about this marketing line, like 6-point-something-billion-dollars, the lion's share of this is the cost of acquiring new card members.

It's not like advertising or TV advertising or sponsorship. It is the acquisition of card member and the upfront costs associated with that. The second big category of investment is like tech development. And in that, you have developing like a new app like the travel app that we released recently or improving the card app, for instance, which, by the way, was awarded the #1 ranking by J.D. Power recently or it's like work that we do to replatform large global platforms that we have at American Express, like the authorization system. But what we do here is just like calibrate this based on the opportunities and the returns.

So let me bring you back to the card acquisition. We've talked a lot about the fact that every single acquisition initiative, and you're talking about billions and billions and billions of dollars spread across many products, channels, months, we have an ROI. And that ROI, like there's an incredible level of discipline around what the return is going to be.

And part of my job and the job of the finance team is to make sure that the most attractive investment, the one that yield the highest returns will always get funded no matter what. So there is a constant ROI calculation projection to make sure that we know very well where the biggest initiatives are. So by the time you kind of like go down that list, you're talking about the marginal return on the marginal loss, say, $50 million.

This is where we need to make a decision around what do we do? Do we spend this last $50 million -- or do we let it drop to the EPS. And there, we make a judgment call based on the return and based on the promise that we made as well to investor to grow earnings per share in the mid-teens, right? And so we balance it out. But the crux of the science here is to make sure that, that tension between the 2 metrics like drop it to the bottom line to increase the EPS or reinvest it is actually done with a marginal investment that has the lowest yield from the available bucket of ideas that we have.

And so it's super important to understand that. And it has worked like really well. When you look at over the past, I would say, 10 years, we've been able to grow a lot the company, while generating a return on equity in that 30%, 35%. I think last quarter, we were at 35%, which tells you that, that marginal investment is still like super attractive, right?

And the other thing that I would say because sometimes I also get the question about the impact of competition on how much you're deciding to invest. It doesn't play a big role. When we start at the beginning of the year, we look at all the opportunities that we have. And one of the most exciting part of American Express is that there's a lot of opportunities to invest and generate a yield that will support our 30%, 35% ROE, which makes it like super compelling.

And so last quarter, as you just said, we felt good about the first quarter. We have good line of sight in terms of what to expect in the balance of the year. And we said, given the opportunities that we have in front of us, it is right to kind of like invest more to support the growth of the company to deploy more capital that will yield the kind of like amazing return that you see, right? That's how the machine works, and that's how the science works, and it's working really well.

And one aspect of the business from investing for growth is investing in high-quality customers, a premium consumer, premium product. So I think most understand that kind of story of resilience associated with the Amex consumer or customer. Credit has been clearly a differentiator for Amex. What are your views on credit from here as you kind of continue down that path of investing in the premium product and consumer?

Yes. Credit, I'm glad you're asking the question because the numbers -- the credit numbers have been so good for American Express that a lot of investors have lost sight in terms of like how difficult it is to achieve a 1.3% delinquency rate consistently every quarter for the last 10 quarters and a write-off rate that is in the 2% range.

And when I hear our competitors talk about their credit metrics and being very comfortable with their -- like for us, it would be like really bad if we were in that range. This talks about 2 things. One is, of course, the quality of our underwriting ecosystem, whether it's data, model, talent. But the biggest differentiator is the positive selection that we generate in our portfolio.

Like we create value proposition that you see expense in the VCE that actually attract card members that value this value proposition, like lounges, for instance, and therefore, that typically have a much better credit profile. And so it's super important to understand that because we build products, experiences to actually generate this positive selection. And that's what's putting downward pressure on all our credit metrics. So it's a marketing solution, if you want.

The second thing that I want to say on this is this. When post-COVID, we talked about accelerating the revenue growth, there was some skepticism, especially around the fact that investors were skeptical about our ability to do so while maintaining a very strong credit performance.

I remember a lot of questions about like you're going to underwrite a lot of young customers, like who are you -- who are those customers that don't have a card today that will have one tomorrow. And when you see like 3 years later, we have added between like '22 and '25, I don't know, like something like $20 billion of revenue and the EPS is like 50% bigger and the credit metrics have been incredibly strong and stable. And actually, the distance between us and our competitors has increased.

As we positive select, many of them negative select. And I think the impact of that, and that's super important for investors as well is that one day, there will be a credit event. One day, there will be a downturn. At that moment, you're going to see the impact of everything that I just said, right?

You can have the intuition for what that is when you look at the CCAR results, which I guess will come up soon, like at the end of the month, I think, where either like over the last at least 5 years, you look at American Express, there resilience through the cycle is amazingly strong. And that's what you get as well when you invest in American Express, right? You're not only getting a fast-growing business with a very strong ROE. What you're getting is also a business that is incredibly resilient through the cycle.

That's great. And maybe if we can switch to AI. I think there's -- obviously, there's the revenue-generating potential associated with it, and there's the efficiency aspect of it. I maybe wanted to just hone in on the efficiency aspect for a little bit.

You've consistently highlighted operating leverage created through technology investments and AI is becoming a much larger focus area as part of that. Has AI yet played a role in driving some of this OpEx efficiency you've been able to generate? And is there maybe a framework we should be thinking about in terms of how you think AI could impact that over the next several years?

Yes. So if you are an American Express and if you know American Express well, you know that when it comes to operating expenses, there's constant, constant pressure. Like every single leader in that space knows that part of the definition of success for her and for him is actually to figure out a way to make those OpEx dollars work harder, which means process more volume, initiate more cards, handle more disputes, process more accounting entries, like whatever that is, everybody has an objective in terms of efficiency.

AI is coming as like a wonderful technology to automate many of those things. Many colleagues already have developed custom ChatGPT to accelerate their work. And the impact of that is just going to be like very small because it's very hard for me as a CFO to grab that efficiency, like people use that efficiency on something else. But there are major initiatives, some that we've been public on, some we've not been public on that actually going to yield a ton of efficiency. We have deployed coding solutions across our 11,000 coders that are yielding a ton of efficiency. Like in some cases, we get to 30%.

In the case of the travel agents, we have equipped them with AI solutions that speed up our ability to handle the request from customers. So it delights the customer, it delights the colleague who is on the phone. And what it does is shortens the conversation, which means that the same colleague can process more calls during his or her day. And where we've seen a ton of efficiency as well because we started on this journey like 16 years ago was on the credit and fraud where we've been using AI solutions. But there's a lot more to come, right?

We've been working really hard in automation for years. The next tranche of automation is going to be that one. And I would be remiss if I were not talking about the work we're doing in marketing, where generating new content with AI has turned out to be very efficient, and it allows us to actually personalize those offers in a way that we were not able to do it in a profitable way in the past.

So there's a ton of activities around AI and finding efficiencies across the company. And it will contribute to that operating leverage that we've been generating consistently for the past 20 years.

And related to that, Steve, in his letter and recent calls, has spent a lot of time discussing Agentic commerce. I think he's characterized as more on the OnDeck circle than even in the first inning. But I think you have some structural advantages in place in this new world potentially. So I guess how does the closed-loop ecosystem and your proprietary data set strengthening your positioning there? And how are you thinking about the impact of development in that space in the coming years?

I think Steve said like we were built for this moment, like the closed-loop network is perfect for Agentic. I'm going to give you 2 examples. The first one is fraud and fraud detection, fraud prevention. We're doing so much better than the other networks. It's not like we -- like our fraud performance and it's public data is like 1/3 of what you see on the competitive network.

This is a function of data. This is a function of closed loop. This is a function of like knowing really well the merchant, knowing really well the card member. And this is a function of investing in that technology for years. In Agentic, you know that because more is going to rely on computers, there're going to be like a lot of fraud attempt. Like any -- like -- and we've seen it, right? When we put like Agentic solution like in the dining companion, it's incredible how immediately there are people who are just trying to break the code, right?

So there's just going to be like a lot of fraud attempt. You're better off being with us than being with someone who's just going to add a fraud rate is like 3x our fraud rate. The second example that I got to give you, and it's something that we announced as well is like the -- we want to be able to back not only customers, but also merchants in the case that the agent makes a mistake.

The challenge of Agentic Commerce is that there isn't a new player, an agent. And the agent will sometimes get things wrong. It's inevitable, right, especially at the beginning. And what we've done is introduce this new service called agent purchase protection, where because we are, again, in direct relationship with the merchant and the card member and we have the data from the agent, we can actually facilitate the issue when there is one.

But here dispute management is a big service at American Express, and we want to extend that to agents when they make a mistake. So I don't know, if Agentic Commerce is going to take off. I've yet to find someone who has like trusted an agent for a complex purchase. But if that takes off, I think we have structural advantages that will play to American Express.

That's great. That's great. And maybe as we think about the regulatory agenda out there, the capital rules were reproposed, and I think the comment period is ending soon. So maybe just any sort of thoughts or updates from your end on the benefit to Amex and how you're thinking about that?

Yes. We spoke a little bit about it during the Q1 call, and we said that investors should expect like a benefit that is somewhere in between a small upside and neutral. And -- the reason why we say this is like the -- first, this new proposal is much better than the previous one, and I'm encouraged to see that. But there are still things to define in this proposal, which makes us hedge with a range.

There are also other changes coming up in tailoring. I don't know exactly the timing of that, but probably between now and the end of the year. And with this concept of [ RBO ] versus RSA that is linked to the category you are in, given our situation, we really want to see what's going on in tailoring before we have a more -- and we see the final rules in terms of Basel before we have a more definitive quantification of the impact.

But when we run scenarios around what might happen, what could happen, we kind of like narrow it down all the time to that slightly positive to neutral. So -- from an investor standpoint, if you take a step back, it's not going to have a big impact to us. I just said we generate very strong returns. We have a very strong repo program. We're committed to managing the CET1 to a range of 10% to 11%. So you should not expect any material change to our capital management practice in the near term. That's the key message, I would say.

And maybe just as a wrap-up question for you, Christophe. As you look across the franchise today, what opportunities are you most excited about over the next 3 to 5 years? Any areas you think that investors may be under appreciating in terms of the strength or the optionality of your business model?

Yes. I mean what I'm the most excited about is, first, when I look at the TAM, how strong it is, how fast it's growing. I'm sure you're familiar with the stat that the top 10% by income distribution in the U.S. represent like 50% of the consumer spend. Like we speak to these people every day. And when I combine that in a very attractive addressable market with the fact that we have the solution, like we have a model, and we have [ 75,000 ] or almost 80,000 colleagues who know exactly what they need to do to execute on. I was telling you about the marketing cadence of innovation, the role that we play in terms of rank -- like we know exactly what to do, and everybody does focus on execution to generate what we are targeting every year, which is 10% plus in terms of revenue growth and mid-teens EPS.

And we have kind of like the solution, we have the algorithm to tap into this TAM and generate these amazing returns. And if you look at the track record that we have over the past 3, 4, 5 years, we've been delivering on that. So I feel really good about where we are. I feel that we're investing a lot. We're investing more and more because the company is growing incredibly fast.

I was telling you that over the last 3 years, between '22 and '25, we went from $52 billion to $72 billion of revenue. So that's like $20 billion of incremental revenue that we added. And importantly, to your previous question, this revenue was generated in the premium space with customers, who are incredibly resilient through the cycle, and you see all our credit metrics. So we feel really good about doing more on that and continuing innovating in the way we have innovated over the past years. And we think that in the long run, is going to be like a very successful value story.

All right. Great. I think we're about out of time. Thank you, Christophe, for joining us. Appreciate it.

Thank you.

All right. Let's get started. Good morning, everyone. Thanks for joining. My name is Rob Wildhack. I cover the consumer finance group here at Autonomous. We're very excited to have Steve Squeri with us today. Steve, of course, needs no introduction. But even so, he's the Chairman and CEO of American Express. Those are roles he's held since 2018?

2018.

And he's a 40-year-plus veteran of the company.

41 years.

Great to have you back with us here, Steve.

Good to be here.

Just a quick note for the audience. We'll be using pigeonhole for the Q&A again. Submit the questions there. I can see them up here. You can vote on them, and then I can get them over to Steve. And now we can start.

Steve, in your annual letter, you wrote a lot about AI and agentic commerce, which we'll get into. But you also led off with a reference to the company's framework for winning, which is a term that I wasn't overly familiar with. So can you describe the framework? What is it? And how does that guide the strategy you're currently rolling out right now?

Yes. So when I took over in 2018, we were coming through some tumultuous times. We had lost Costco. Prior to that, we came out of the financial crisis. And it always appeared to me, having been there that long, that the company wasn't as focused as it needs to be, number one. And number two, it was about catching up. It wasn't about winning. And so I spent pretty much a year almost coming up with this one page, a document, I called it my own manifesto. And basically, what it was, was to focus the organization on really what was important from a strategic perspective, how we were going to win, what we look for leaders, what the values were going to be.

And that has served us really well because I believe that people need a reason for being. And when you're trying to motivate an organization of 80,000 people, what they need to know is why they come to work every single day and what they need to do. And you can't have it across a host of things. So we actually called it the placement. And it's very simplistic, right? We wanted to focus on a premium consumer segment. We wanted to build on our leadership position from a commercial perspective.

We really wanted to build our global integrated network. And what's -- the other thing that we want to do is we wanted to take advantage of our globality. And if you think about American Express, American Express, like Visa and Mastercard, is a global network. But unlike a lot of the issues we compete with, we provide services, and we provide cards in lots and lots of other countries, and we're a merchant acquirer in other countries.

And so that globalness helps us compete. It helps us learn. It helps us leverage more. And so what we really wanted to do there was to make sure that the organization was leaning into that. And we just added a fifth strategic objective about 6 or 7 months ago, where what we really wanted to do was reimagine both the customer and the colleague experience. And we just announced today, we just won the J.D. Power award for the best mobile app in the card industry, again, and we've been a J.D. Power leader for years.

But I think it was really important as technology continues to change that we took more of a leadership position to think about not only how our customers are going to interact with us, but how our colleagues are going to interact with one another and how do we make it easier for them to get things done in today's environment. So it stood the test of time for us. We modify it as need be. And it allows us to focus on those things that I think are clearly important. And as you communicate throughout the organization, it gives you that framework for doing it.

Very good. Going from zooming way out to zooming way in, Amex is going to get a nice windfall from the sale of Amex GBT, 30% owner. I think it works out to a $975 million pretax gain. In the past, you've reinvested these gains. Sometimes you return them like with Accertify. And it sounds like there's always a long list of potential investments at Amex that go unfunded. So walk us through the decision process, how you think about whether or not you reinvest something like this, give it back to the shareholders at the bottom line and how you're thinking about this one?

Yes. I think the first thing is that this is not the consumer travel business. This is a business we spun off about 10 years ago. It was our business travel business. So the consumer travel business, very important to the value proposition, no intention of spinning that off. We own it 100%. It is part of the overall value proposition of our card business.

As we look at gains like this, traditionally, what we've done is we've taken advantage of investment opportunities, whether they be acquiring more cards, some more technology investment. We look at efficiencies. You've seen us take restructuring charges and things like that. And then we pretty much always return something to shareholders.

In the Accertify situation, we had had some really good momentum, and it was going to be really hard for us to effectively ramp up, whether it was those card acquisition opportunities or more technology spend, we thought we had ramped it up enough at that point. And so we decided that given the business momentum that we had, we were going to just drop the whole thing to the bottom line, which made our shareholders very, very happy.

When we look at this game, and we talked about this a little bit in the first quarter, we overdelivered in the first quarter according to the pundits out there. But we had decided we were going to make even more investments in technologies and card acquisitions. And a lot of times, we say we're making investments in marketing, which sort of freaks people out because they think marketing, they think TV, they think maybe a sponsorship.

When we say most of our marketing investments are actually card acquisition investments, okay? And so that's where we invested. So as we look and as we think about where we are in the cycle from an investment perspective this year, we'll probably do some more in technology. We'll ramp that up. We'll probably do a little bit more in card acquisition. We'll look for some efficiencies.

The other thing I'd like to point out is that while we call out something like GBT here, $975 million, $945 million, whatever it will wind up being, every quarter, there are ins and outs. I mean, in the second quarter, for example, we'll have a small gain. We're going to reinvest that back into the business. There are other quarters where either from a mark-to-market perspective, I just think back to the -- to 2023 with the Argentinian devaluation, when we looked at that, we absorbed that.

And whether we absorb something or whether we decide to reinvest it, we don't look for a pass. We make that part of our base case and off we go. So I think that we'll always look to invest. We have lots of great investment opportunities. And it depends on the timing and can we gear up the machine in time to take advantage of those. The other point that I want to make is that GBT gain was -- is not factored into our guidance in any way. So that's separate from the guidance that we provided.

Very good. Can you speak to what you're seeing with respect to the health of the consumer? And is there any update you want to give us on spending as you see it through April and May?

Yes. I think through the conference, I think you've had Visa and Mastercard, a bunch of other people here speaking. And I think it's relatively consistent, right? When we look at quarter-to-date in the second quarter, we're slightly ahead of where we were in the first quarter.

And when we look at it, I think it's -- you look at credit, you look at card acquisition, especially in the premium space, we look at delinquencies, it's the same. I mean we haven't had -- our delinquency 9 out of the last 10 quarters has been like 1.3%. The other quarter, it was 1.2%. So we've been pretty steady from a delinquency perspective. Same thing from a write-off perspective and card acquisition is still there, especially premium card acquisition.

The other thing I think that was concerning to some people in the first quarter was airline spending and what we were seeing there. And I can tell you, in April, we had 9% airline growth. So people are on planes, they're flying. We have record travel bookings in the first quarter. And so we're seeing a healthy consumer. We're seeing a resilient consumer, and that's been really consistent.

Excellent. Let's talk about the premium card category. You've characterized competition as intense there. I wanted to ask about that topic maybe in a little bit of a different way. The last real spike in competitive intensity was in 2016 when Chase rolled out the Sapphire Reserve Card. And given where you are with the Platinum today, I think it's fair to say that Amex has pared that threat successfully.

So what were the key learnings from that experience? And are they still part of your playbook or toolkit today? If a new entrant came to the space with a big bag of rewards and sign-up bonuses, how would Amex respond to that?

Yes. So I think you've got to look at -- the premium category has grown faster than any other category in the credit card space. And I think the TAM of this continues to grow because I think with all the competition, and I would say it's -- you referred to 10 years ago, I think it's as intense now or more intense than it was then. But what's happened between whether it's Chase, whether it's Citi, whether it's Capital One, whoever it might be coming in, it put a spotlight on the premium space.

And what has happened here is that creditworthy consumers have now realized that premium cards can be for them as well. And so I think you've seen a TAM expansion. And so when you look at overall credit card growth, it's growing -- I mean one thing great about this industry is that people will always spend money and it will continue. But from a premium perspective, that piece of the pie has grown even more, okay?

And so when you look at this -- and I get asked this question a lot in terms of, well, geez, how did you react to Chase back then and you had such a fast response. We're not that good and we weren't that fast, right? And so what happened was our thinking on this premium space has continued to evolve and will continue to evolve. And when you think about it, you look at all of the various cards out there. If you want to look from a points perspective, you could probably do better with lots of other cards.

I think the other thing is, from a premium perspective, it's just not Platinum. It's Gold, it's our co-brand cards that have premiumness to them and so forth. But what really sets us apart is our ability to provide people the spending power that they need, the ability to have their backs and provide service to them and the infrastructure that we have built over a period of time, whether that be a lounge network of 30-plus and more in the pipeline, plus we were one of the only ones that can actually use their partners' lounges. I mean we have -- Delta has over 50 lounges, and that's all part of it.

So you have this lounge network of almost 90 different clubs you can use. We have a very successful travel business, which provides service as well. Resy and Tock, you get over 25,000 restaurants. And so what we've learned here and then you have fine hotels and resorts like it's 3,400. What we've learned is that as you're going to go out into this premium space, it is a lot more than just points. It is about providing service. It's about providing spending power, and it's about bringing assets to bear that are going to make a difference for your cardholders.

And the other asset that we bring to bear is we bring a very powerful merchant network that wants access to these customers on an ongoing basis such that they will fund offers to actually provide extra benefits. And so when I look at this segment, I see it continuing to grow, and I see a flywheel that we have created here, which continues to differentiate us. And so we're going to continue to lean in. You go back to the Chase Sapphire, we didn't have Resy. We didn't have the lounge network that we have today, and we certainly didn't have the amount in fine hotels and resorts. And we'll continue to do those things and add that value that is going to continue to differentiate us.

The thing about points because it's not as intuitive as a statement credit, like I spend $1,000, I get 5x, I get 8x. I don't know what that's worth, but a $300 fine hotels credit is $300.

Yes, it's $300. And the other thing is if you look at this network of hotels, it's not just the $300 credit that you can use when you book it. it's the early check-in. It's the late checkout. I always get that confused. And if I do it the other way, it's really not a benefit. Late check-in and early checkout doesn't really work so well. And it's the free breakfast, and it's also -- you get a credit at the hotel. And so there's a lot of value in that. And you'll probably talk about millennials later, but that's one of the aspects of the value proposition that really resonates with them.

Yes. And with earnings in April, you gave several useful metrics on the Platinum itself and the refresh and the traction there. You also highlighted accelerating spending growth with Platinum Card members. Is that acceleration something that naturally is an outcome of the refresh cycle? Or is that a nice surprise? And if it's the latter, what do you think is driving it?

Yes. I think this goes back to the framework for winning, this whole refresh. We were not on a cadence of refreshing products. And one of the things that we did within our framework was say one of the ways we're going to win was to refresh products and refresh our value propositions on an ongoing basis.

And so what does that do? Well, what it does when you're refreshing products as consistently as we have been here, and we'll talk about the Platinum in a second. But when you're refreshing products, you're keeping them out in people's mind. You're making sure you're on a mission to understand what your customer actually wants out of your product on an ongoing basis because what they wanted 10 years ago and what they want today is very, very different. And what you also get out of this is as you're refreshing and investing in the new value proposition, that works in conjunction with your card acquisition dollars to really have a powerful 1, 2 a punch as you go to acquire. So let's talk about Platinum. So as we did Platinum, what was important in Platinum in any refresh is retention. And so what's happened is our retention has been exactly what we would have expected, probably a little bit better.

I think people are really interrogating the value proposition and realizing that for $200 incremental fee, they're getting a lot more value. We've seen retention go up. We've seen acquisition numbers surpass our expectations. And we've seen -- and we said this in the first quarter, we saw a 6% lift in Platinum spending growth above what we had expected. And that's a little bit of a surprise for us.

And where it's happening is existing Platinum cardholders. And so why is that happening? I think even as these people -- our existing holders reengage with the product, one of the things we did with this Platinum launch is we led with technology. So if you -- when you got the Platinum card, and this is -- again, goes back to the J.D. Power Award that we just won, when you got it, it was so easy to enroll in the benefits. It was so welcoming to look at that app and engage with that app. It caused engagement not only with the new benefits that we had, but with benefits beyond what we had as well.

And so we're getting -- I believe we'll do all the calculations, but I think we're just getting a higher share of our existing card member spending, and that's not what we had expected. So I think you had a double edge here, right? Number one, you're always looking for a bump up from an acquisition perspective, and you want to make sure you keep the retention. But I think what was surprising was how much more our existing card members started to spend.

Existing members spending more, new card acquisition really strong.

And the retention, right? Because if you look at it, the thing you want to do is retain as many customers as you can because it costs a lot to get a new customer. And then you don't want to have your new acquisition fill the bucket of lost volume, right? You want that to build and you want that momentum to continue.

Back in...

Exactly right. Yes.

Okay. And Amex has repeatedly talked about partner-funded value as it relates to the overall value prop of the cards. When I see a statement credit, has the amount that is partner-funded increased over time? And then are you going out and recruiting new partners? Or are they coming to you? And then lastly, on this topic, is there ever a saturation point where there's just too many credits?

Well, let's start with the last one. I don't think there's ever a saturation point because what we do is we got -- we have hundreds of products, right? And so you have statement credits that apply to Gold Card. You have statement credits for Platinum, whether it's Delta, whether it's everyday cash, whatever it might be, small business and so forth.

So I think what we try and do is not overwhelming. The other thing is we're very selective. And I mean, look, this is not a statement credit. But when we did -- as we launched into 2026, we had 1,400 hotels that wanted to be part of the Fine Hotels and Resorts program. We only took 300. So we're not just taking everybody here, right? And those were hotels that wanted to give our card members a benefit, but we didn't believe that they met that standard. So we didn't do it.

But when you look at these statement credits, the statement credits, the partner-funded value continues to go up. It's over $3.5 billion annually now. And that continues to go up, and it creates a flywheel effect. And so what happens is other people see these statement credits and they want to get in on them, and we do some category exclusivity for various products. But then if you're doing something with Platinum, we can do something with Gold, and we mix and match as we go along. But it's a little bit of a combination of us approaching partners and them approaching us as well.

And the nice part about having the merchant business that we do and the merchant network that we do, it's not an issuing business just going out and asking. It's a merchant business that understands what the objectives are of some of those merchants, and they're able then to communicate that, bring that back to the issuing business and then come up with offers as opposed to going out cold to a merchant.

Arguably could make the offers more targeted to the given card base, right, because you know where they spend?

Well, we -- look, we make the offers a lot more targeted. We also can make the offers in such a way, and we do this with Centurion and we do this with Platinum a lot. We can do an offer. And the one I've used, and this has been used for years, we did this years ago, probably 3 or 4 years ago, we had a David Yurman offer, right? And we did this David Yurman offer for Centurion cards.

And so what they did is they said, look, tell us who buys jewelry and tell us who hasn't shopped at David Yurman in the last 2 years. And we'll do a targeted $750 credit off, no minimum purchase. So you're a Centurion cardholder, you see that credit come. It's $750, you go into David Yurman and you got $750, right? And so that work -- the ROI works, jewelry has high margin. It's not going to work in a supermarket, but jewelry has really high margins. So that works. They get new customers and off it goes, and you'll see some of that stuff happen to Platinum. Now some of you in the audience will say, how come I didn't get one of these? Well, you weren't in the target. That's all.

And then success with younger consumers has also been a growth driver. You talk a lot about millennials and Gen Z specifically. So what's the driver behind the increased penetration from Amex with this cohort? Is this an active choice from Amex to steer things towards a younger demographic? Or are they just kind of finding the cards on their own? And then why don't you think peers have been as successful chasing this demographic too?

I can't answer the last piece of it, because they just have not been as successful either from an acquisition or a creditworthiness perspective. But going back again to the framework, one of the things that we knew was we had to get younger.

One of the headlines that when I took -- there were 2 headlines, and I talk about this a lot, there were 2 headlines that I still have in my mind when I was named CEO. The first headline was what an uninspired choice by American Express. That always sits well with you when you see that in print, especially when your kids see it. But it makes you work a little harder.

And the second was is the Amex customer base dying out. And that really resonated with me, right? Because the average age of our cardholder was a little bit older. And now you look at it, and we talked about this at the earnings call, I think the average age of a new Platinum Card customer is like 33 and Gold Card is like 27, around that. And you look at it and you say, well, we needed to get younger. And as you started to interrogate the value proposition, what you realized was there was a lot of things in that value proposition that really resonated with younger people. And that's why I said the fine hotels and resorts because -- and I just -- I have 4 girls aged 21 to 35, right?

So as my older one got out of school, she's traveled all over the place, and she's using the Platinum Card, and she's staying at these places. And why wouldn't others? And so as we talked internally from a marketing perspective, we were targeting this cohort with a cashback card because we believe that they would not want to pay a fee. But what you realize is the millennials and the Gen Zs are our most educated consumers.

By far, they do the most analysis and they get the most value out of the product, right? And so when you look at it and you say to yourself, okay, look, let's go after the best of the best. And you can see our credit numbers. Our credit numbers for millennial and Gen Z look better than the competitors' credit numbers for Gen X and for boomers. And forget about the disparity between the millennials that they have and the millennials and Gen Zs that we have.

But the beauty of it is, the lifetime value of this customer is extraordinary, number one. Number two, the share of wallet we get is also a lot higher. Because when I first got my American Express card, we didn't have the coverage that we have today. You did not have parity coverage in the United States. And I would always go out when I -- and even when I work, do you take American Express? A young person will not ask that question anymore because every place takes it.

Now there'll be a place you'll find and then we'll go in and I think the cost is 5%, and we tell them it's the same as Visa, Mastercard and we sign them up. But they don't have that hesitation. And so not only are they not -- they're using it, they're using it in their everyday lives. And that is a big thing. And so you look at it, 70% of our acquisition globally is millennial and Gen Zs, 66% to 70% and are -- and it's premium products. And so these premium products, you get higher engagement, you get longer retention cycles on it, and we have a higher lifetime value. So we had to realize ourselves. And once we started to market that way and then once we started to underwrite the right way, it all worked out pretty well for us.

Okay. AI and agentic commerce, certainly the latest frontier. Amex has been pretty vocal in highlighting areas where you have an advantage in an AI-led world. And I think the most notable would be in the data advantage that comes from the closed-loop network. And so I'm wondering how Amex's data advantage here compares to the data that's generated in an open-loop transaction. And where I'm going with that is to try and gauge the extent to which an open-loop model could replicate Amex's capabilities. And if it can't, does it stand the reason that AI and an Agentic commerce-led world could be an accelerant for the Amex flywheel?

Okay. So 2 points I want to make before I answer your question. The first point is when you think about Agentic commerce, I don't think we're in the first inning. I think we're warming up in the bullpen, okay? So this is -- we've got a long way to go here on this. That's number one.

The second thing, anytime you're dealing without AI, AI is only as good as the data that you have. We've been using AI at our company, machine learning, structured data since 2010. So every credit decision we make, our fraud decisioning, all of that. And when you look at our credit decisioning and you look at our fraud decisioning, specifically our fraud decisioning, that is like the greatest example of the closed-loop network, right?

It's one of the greatest examples of the -- our fraud is about 1/3 of what the networks are because the data that we have, the insights that we have into a merchant, the fact that we know that no cardholder has ever spent that amount of money at a particular merchant. An example I use all the time is if you had a $15,000 credit limit and you go into a Bodega in Brooklyn, and I'm not picking on Bodegas in Brooklyn, but you go into a Bodega in Brooklyn and you spend $13,000, you trying to do a $13,000 charge? If your credit limit is good, that's going to go through.

We're going to know that no person in the world has spent $13,000 on a Bodega. There's only so much Mortadella you can buy. And the other thing is the reality is we only probably even have $13,000 of spending in bodega in a year.

And so that tying of the data from a merchant perspective and the tying of the data from a card member perspective and having a network have that is very powerful. That's in an offline world. So now you take it to an online world when you start thinking about intent. So what's going to be really important in an agentic world?

You're going to have an agent that you're going to tell that agent to go out and buy you a pair of converse sneakers, size 13, green, okay, high tops. That's what I want you to get. And it's going to go out, and it's going to come back with size 6, yellow, low top sneakers, right? Now one of the things that we say that we're going to be able to do is we're going to be able to capture intent.

See when you're buying today in an off-line world, even in an e-commerce world today, I don't know what the intent -- you're not registering your intent with me, right? You're going out, you're going to that website, you're buying something. We're not registering intent because you're right on the website doing it.

If you give the agent instructions, and this is what we did with the ACE developer kit, we'll be able to capture that intent, match that to what actually was purchased. And if, in fact, the merchant will not take that back or we're going to make it -- we're going to either go after that merchant -- what we're going to do is back that card member, okay?

And we announced that it's probably 5 or 6 weeks ago. Nobody else has followed suit on that. And one of the things you have in an agentic commerce world that you're going to have to be really concerned about is fraud, it's trust, it's security. And so what we want to do is use the data that we have and use the relationships that we have from a -- of a closed-loop network to make sure when our card members decide to do an agent transaction, that we have their back. And here's the reality. We have their back today, but we don't have the data. So it's going to make it more secure for our card members and probably more cost effective for us going forward. So look, will we be a winner in Agentic commerce? We think we're well positioned to be a winner. Will that happen overnight? That will not happen overnight because I don't know how many people are going to just turn their lives over to agents right away. So...

You've also emphasized embedding Amex assets into AI platforms and building your own proprietary AI or agentic experiences. Can you give us an example of what that might look like? And then what are the opportunities that you see here?

Yes. So look, from a payments perspective, and this is where the ACE developer kit comes in, and we've been working with Stripe and others to actually embed Amex within. And so that's where you see embedding in other platforms. We just announced with Anthropic last week that -- or a couple of weeks ago that their agents will be able to operate within Resy. And so you'll see that, whether it's Resy or Tock and we're bringing those 2 systems together.

And then within Resy, within Tock, within our own app, within our travel business, we'll be developing agents within those ecosystems. And if you think about what we've tried to accomplish here between our Resy and Tock acquisition on our travel assets, we talk about the closed loop. The closed loop is matching consumers and merchants at a very macro level.

From a Resy perspective, we're operating within that closed loop, and we're matching consumers with restaurant tours, creating another closed loop within the closed loop. We do the same thing in travel, consumers with hotels, airlines and card rental within that closed loop. And so you'll see those flywheels get created loops within loops, which is why as we think about ads, as we turn to ads and offers from a monetary perspective, we see embedding those within those loops.

Lastly, on AI, you've laid out ways in which Amex is using it internally. So can you give us some more detail there? And then back to where we started, what do you do with the excess operating leverage that, that generates? Does that drop to the bottom line, get redeployed in marketing in BC? Or does it go through the same filter as any other sort of extra earnings, if you will.

Yes. I think -- so look, as we think about AI within, as I said, we've been using AI for credit and fraud decisioning for 16, 17 years. And it's all been structured data. So if you just start with where we've been with fraud and credit, we'll use unstructured data to see if we can get better outcomes and better results.

We're using agents within our marketing, our card member acquisition engines, which takes out time and makes it more efficient. In tech, we're seeing 30% reduction in coding right now, coding and testing. And so it allows us to get to more -- we got a backlog. I mean when you're as big as we are and you've got a network, a merchant acquiring business, issuing businesses that are in 29 different countries and you're operating corporate cards, small business cards and so forth, there's a lot of pent-up demand for technology.

And then in customer service, we're using it as well, whether it be in chat or in travel and coming up with itineraries. What we see it as, listen, when you look from an operating leverage perspective, our OpEx to revenue ratios continually to come down. But we want to grow. And when I took over, we were a $30 billion revenue company. We'll get close to probably $80 billion this year. And the reality is when you're $30 billion and growing at 6%, you're looking to add $2 billion of revenue every year. When you're $80 billion and trying to grow at 10%, you're now looking at $7.5 billion to $8 billion of revenue every year. So you've got to invest money to continue that engine to go. So look, we'll -- our goal is -- our aspiration here is 10% revenue growth and mid-teens EPS growth. And I think that requires continued investment in the value propositions and efficiencies within the company as well.

Yes. And on the balance sheet, for several years, Amex has been pushing to do more lending with card members, the rationale being that they're going to borrow from someone who might as well be hooked with us. Are you still gaining share of card member lending? Or is that effort "mature" at this point in time? Do you still want to do more lending?

Yes. I mean, look, we want to serve our customers, right? And so the lending that we're doing is you're not going to see balance transfers. You're not seeing us with crazy offers out there just to bring everybody in. We're focused on premium lending, right? And so our focus is on meeting the needs of our premium customers.

And look, the reality is the reason that we've done this is that you don't want to turn over your customer to somebody else. And so we're trying -- it's the same reason we've had Amex has high-yield savings and checking and small business and so forth. We want to be able to meet more of their needs on an ongoing way. And so when you look at it, if you look at higher FICO scores, anything over 720, we're probably growing 2x the industry right there.

But if you look at it overall, our lending growth is the same as our billings growth. But if you look at our NII growth, that growth is higher because we've been doing a better job funding because of our savings activities. We've been doing a better job pricing and our credit box is outstanding, right? I mean our write-offs are just -- we're on a 2%, 2.1%.

So we'll continue to lend that way. And what you're seeing for us is that you're seeing a lot of it from a pay overtime perspective, you're seeing Plan It and so forth. So a lot of it is short-term cash flow need lending to very high-quality customers.

Is that the way you continue to grow in lending but keep the credit outcomes really good?

Yes, you're not -- our objective is not to grow lending. Our objective is to meet our -- we define who our customer is, okay? And then we look to meet their needs. And so if their needs are lending needs, we will meet those lending needs. And that's how we stay within the credit box. The other way you stay in the credit box, when you look at where the lending occurs, a lot of it is pay over time and a lot of it is co-brand. And co-brand lending for us is very profitable, and it's also because there's an extra tie, right?

I mean people don't want to lose status. And so a couple of years ago, when we did our Investor Day, we showed the hierarchy of payments. And we showed American Express cards were always paid first. Part of that was not only because you didn't want to lose your points and your status with American Express, but you didn't want to lose your status with Delta. You didn't want to lose your status with Hilton. You didn't want to lose it with Marriott because if you default, you're kind of done.

The U.S. commercial segment, that one has been a little bit slower recently. But you've started to roll out a slew of new products and services that are intended to reignite things. I mean can you tell us how you see the consolidated offering, including expense management, stacking up to what has become a pretty competitive field?

Yes. I think when you look at -- we look at commercial space, the commercial space is made up of 3 different segments. It's the large corporate and large global, which continues to grow at a normal 4% to 5% pace. I mean there's not anybody -- there's no corporation out there saying, get out and spend more. Go out and travel, book premium hotels, eat at fine dining and buy the most expensive bottle of wine that you can find. I don't think anybody's company -- if you have a company that's telling you to do that, please introduce me to them. Maybe I'll go work there.

But we don't have that. So we're really happy with that. From a small business perspective, we see small businesses continuing to grow. Where the struggle comes in is that middle market space. And that's where I think we're a little bit off in our offering from 2 perspectives. Number one, we were slow to the uptake. We decided to partner with expense management systems versus having our own expense management system. So we pivoted. And so Center will come out. We think it will be competitive. And I think when you put the card aspects of higher spending service along with the basic functionality that we will offer and continue to improve on, I think we'll be able to regain our footing in that segment.

And so -- and then you've got the cash back card. And so what you realize is that in that segment, you saw a need for some cash back. We saw a need from a corporate cash back card, which comes out in September or so. And so I think with the things that we're doing and the investments that we're making, we'll regain some of that traction. But it's really in that middle market space that I think -- that's where I think we just haven't grown as quickly as we need to grow.

Does Center plus maybe Hyper put you back on offense in that category?

Yes. I think it does put us back on offense. I think because what happens today, and we see this, right, if we lose somebody to a ramp or to Brex, the owner still keeps their Platinum card, okay? But it's the employees that get the other product.

So I think it allows us to, a, go back in from an offensive perspective and go back to some of the accounts that we might have lost. But I think also from a defensive perspective, it prevents future loss and it allows us to -- it allows us -- I think what the big opportunity for us is, is we are stronger than anybody in true small business. As these small businesses start to ramp up, we will bring them along on that product line. We will introduce them to Center earlier. And so there'll be no reason to look any place else. And so when you look at the true small business space, the true small business space, we still have, I think, the best product, and it's not a group really that needs that technology yet, but they will over time. And so as we move in, we'll be able to embed Center right in.

International is on the other side of the ledger. That's a segment that's been growing quite nicely for some time. How long can you continue to grow double digits there?

A long time, a long time.

Yes, long time.

A long time. You could -- that will be the quote, CEO says a long time. Look, the reality is one of the things that we did, again, going back to the framework was we also identified those countries that we really wanted to double down in and focus. And we identified what we really wanted to do from a coverage perspective.

And so we identified 5 key markets, which was Canada, Mexico, the U.K., Japan and Australia as ones we would really invest very heavily in. Then we identified at the time it was 35 cities, it's up to 50 cities outside the United States that we wanted to make sure we had 80% location coverage in. Not that we wouldn't focus on coverage in other places, but we wanted 80% location coverage. Why 80%? Because at 80%, we believe we can get $0.95 out of every dollar you spend, okay, with that kind of a number.

And so at $0.95, you don't mind pulling your card out. And every once in a while, you might -- somebody might say, "Hey, look, we don't take Amex for whatever reason." And so as we think about the constant improvement, we're not stopping at 80%. We want to get to 80% and continue on. As we think about the constant improvement that we've had from a coverage perspective, as we think about the investments that we've made and as we also think about the fact that we're probably only at about 6% market share in any of these markets overall from both a business perspective and a consumer perspective, we believe there's a long runway for growth in international.

And then we have other countries that we call growth countries and in others really where we have a presence, but really more of that presence for coverage so that when people travel, they're able to use the card, right? And so I think there's a huge opportunity and a long runway for growth in International, and that has proved out. I mean, look, the only time international didn't grow was during COVID. But if you go back pre-COVID, International was growing at the same rate. And we continue to grow and we continue to add coverage. And so I think the opportunity for growth is terrific for us there.

So the coverage discussion is interesting because to me, building out international coverage sounds expensive. But despite the push there, you haven't seen -- we haven't seen much pressure on International segment margins over the last several years. And so why is that? Is it the kind of thing where the business' operations are just funding the investment? Or is there something else to it?

No, there's something else to it. So the reality is that what you're seeing now is the fruits of our labor for decades. Building an international network is wildly expensive, okay? Let me repeat, wildly expensive. And it requires many, many things.

Number one, you can't build out an international network without having local card members, which is why our GNS business is so important because our GNS business, for countries we don't operate in from a proprietary perspective, we have franchisees that are issuing cards. So you need to make sure you're issuing cards in every market or locals will not see anyone. That's number one.

You've got to go out and build infrastructure from not only a technology perspective, but a regulatory perspective to do this. The second thing that you need to do is then go out and acquire a bunch of merchants. So we've done that for decades. We're at a point now where we're at scale. And so the reason you're not seeing sort of margin compression because we're not giving coverage away. The reason you're not seeing margin compression is because we have a scale business now from a regulatory, from a technology perspective, and we know exactly what we want to do, and we have partners out there as well that are helping us and so all of that investment in time, effort and money is really coming to pay off for us now, which is why the international business, I think, has huge upside for us as we continue to move forward.

I just didn't go far enough back in my 10-K.

You should have gone back a lot further. Yes, you should have gone back a lot.

All right. One audience question. It's the only one that has any votes here. What leading indicators; spend, category mix, payment behavior; would flag AI-related white collar pressure on Platinum and Gold before delinquencies? And have any of those shown up? The question is cut off, so I'm just going to infer that.

To be honest with you, I think it's really hard to look at a spend indicator before sort of delinquencies. I think discretionary spend is the one that usually happens first, right? When people struggle, it's discretionary spend that goes down.

So I guess my answer would be discretionary spending, whether that's travel, whether that's luxury goods and so forth. And I guess I'll take you back to COVID because during COVID, before anybody went bad, you saw -- this is one of the things that people were really confused about, our balance sheet got really small from -- during COVID because our card members tend not to spend.

So before they go delinquent, they don't spend. And so I guess we would see if you saw a lot -- spending come down. But I think what we would see before that is unemployment, right? So I don't think AI and agentic commerce and so forth is going to sort of disrupt our spend so much. I think the reality would be you would have to see unemployment. The counter to this is that our card base is not just a white-collar card base. Our card base spans the gamut. We tend to over-index actually from a healthcare perspective. And I don't see healthcare workers actually on a decline. I see, if anything, AI is going to add to longevity.

I think we're all going to live a little bit longer, hopefully. But I think we're all going to need a little bit more care. And so I think if I had a kid that was going to college today, I'd say, get into the healthcare field because I think the healthcare field is going to be tremendous.

The other thing is small businesses. So many of our card members are small business owners, not only from a small business perspective, but from a personal perspective. And we have lots and lots of entrepreneurs. So our card base sort of runs the gamut. And I think the conversation around AI has been white-collar jobs gone away, and we just had Sam and Dario yesterday come out in a Fortune article and say, well, we overstated the whole thing.

And I think David Solomon has been pretty specific as well saying he doesn't think there's going to be Armageddon, and I've been the same way. My view on sort of AI and its impact on the workforce is the technology view, which says, listen, we went from a farming country to a manufacturing company to a service country to a technology company. And every innovation that we've had has spurred GDP growth. And every innovation that we've had has actually created new wealth and different people that you wouldn't think would be wealthy.

15 years ago, would you have thought you would have TikTokers making money, influencers making money, podcasters making money and who would have ever thought of an Uber driver. And so technology has been able to put private capital into the public sector, and it's been able to make entrepreneurs out of people that just like to sit at home all day, okay? So I think -- to me, I think it's completely overstated. That's not to say that AI will not replace jobs. It will replace some jobs, but I think ultimately, it will create new industries. It will create new jobs. And again, if history is our guide, technology has always spurred GDP growth and GDP growth spurs more wealth, more wealth spurs more spending and off we go.

Off we go. Very good. Okay. We have time for one last question. I'll give you a blank canvas. When we're looking back and hopefully talking about this session 5 years from today, your strategy, your framework has played out. What does Amex as a company look like then? And what will the outcome have been for shareholders?

Well, let me talk about the outcome, and I'll tell you what we look like. I think -- look, I think the reality is I think we've created a flywheel. And if you've looked -- take COVID out of it, we've been a high -- what I consider a high revenue growth company for the last 8 years. The CAGR has been almost 10% revenue growth. It's a mid-teens EPS company. It's a company with a high ROE. It's a creditworthy base in a growing segment of payments.

Payments is growing itself and the segment in premium is growing as well. And we're growing with young people. And so if you're interested in a great global brand that has those great financial economics, I think that's where you want to be.

How the strategy plays out? Look, I think our framework continues to evolve. But I don't think we get too far off our knitting here. And I just talked about International as a growth engine for this company. I think premium, the TAM is going to increase. And so I think what you're going to see is American Express being bigger internationally. I think we will continue to be a big player from a small business perspective, and we will continue to reinvent the premium space and the premium space that is a space that's open to people that want experiences, the people that want access and the people that truly value all the value that American Express can bring.

It is great place to leave it. Steve, thanks again. It's an awesome.

Thank you very much, everybody in the room.

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q1 2026 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the conference over to our host, Head of Investor Relations, Mr. Kartik Ramachandran. Please go ahead.

Thank you, Darryl, and thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our reports on file with the SEC.

The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials as well as the earnings materials for the prior periods we discussed. All of these are posted on our website at ir.americanexpress.com.

We will begin today with Steve Squeri, Chairman and CEO, who will start with some remarks about the company's progress and results; and then Christophe Le Caillec Christophe, Chief Financial Officer, will provide a more detailed review of our financial performance. After that, we'll move to a Q&A session on the results with both Steve and Christophe. With that, let me turn it over to Steve.

Thank you, Kartik. We had a very strong start to the year. Revenue in the quarter grew 11% or 10% on an FX-adjusted basis and EPS was $4.28, up 18% over the prior year. Card member spending grew 10% on a reported basis, and this is the highest quarterly growth in 3 years, driven by strong growth across both Goods and Services and T&E. We continue to see strong demand and engagement with our premium products across our customer base. Within our U.S. Platinum portfolio, we're seeing accelerated spend growth following the refresh while maintaining high retention rates after the fee increase went into effect.

Millennial and Gen Z spending growth continues to be robust and globally over 70% of new accounts are on fee-paying products. International remains our fastest-growing segment with billings up double digits for the 20th consecutive quarter on an FX-adjusted basis. And consistent with what we've seen for several years, our credit performance continues to be excellent and best in class.

Based on our strong results to date and our confidence going forward, we've decided to increase our investments in marketing and technology to capitalize on key growth opportunities and build on our momentum. Looking ahead, we're reaffirming our full year 2026 guidance of 9% to 10% annual revenue growth and EPS of $17.30 to $17.9. While the macro and geopolitical environment remains uncertain, we believe we are well positioned to continue delivering strong results, given our focus on premium customers, our spend in fee-centric model and very strong portfolio quality.

Our performance once again demonstrates the power of our growth strategy as we continue to execute our proven playbook. A key part of the playbook is the ongoing investments we're making to enhance our differentiated membership model, which is fueled by our high-spending Card members, the value added by our world-class partners and the innovations and service delivered by our talented colleagues.

One of the most compelling features of Amex membership is the unique experiences and access we offer our card members in dining, sports, entertainment and more. Sports are a powerful engagement engine across our customer base. In Q1, we announced several agreements that added to the relationships we have with over 50 top-tier leagues, teams, venues and events around the world. In March, we announced a multiyear global partnership with the NFL, making American Express the League's official payments partner beginning with the 2026 season. This broad-based sponsorship includes exclusive card member experiences, ticket access, on-site activations and other perks at high-profile league events, including the NFL Draft and the Super Bowl. We're very excited about the opportunity to join with the NFL as they expand internationally. With our large global footprint, positioning us well to support their growth while engaging Amex card members around the world.

We also announced new multiyear sports and entertainment agreements with MetLife Stadium, Mercedes-Benz Stadium and teams in play there. And we renewed our sponsorship with the NBA, along with several agreements with NBA teams across the country. In addition to our sports sponsor partnerships, we continue to enhance Amex's membership with recent openings and plans for new or expanded airport lounges in Las Vegas, Boston, Charlotte, Dallas Fort Worth and New Delhi. And the expansion of our fine hotels and resorts and hotel collection programs with an additional 300 properties recently accepted into the program out of an approximately 1,400 who apply.

Another key element of our strategy is the ongoing innovation of our product value propositions, and we continued our progress on this front as well. In the quarter, we announced a road map for a series of commercial products and solutions that we're planning to roll out in the U.S. In 2026 for businesses of all sizes, starting with the launch of our new Graphite Business Cash Unlimited card. The road map includes plans to release 8 newer enhanced products, benefits and capabilities including a corporate cash back card and expense management software, making this the most significant 1-year commercial product expansion in the company's history.

Together, these new offerings will give our business customers what they want, card products that combine high spend capacity and great value plus an integrated suite of tools that will help to manage expenses and cash flow, gain insights from their spending and automate day-to-day tasks, all backed by American Express' world-class global customer service.

In addition to these announcements, we further the development of our AI capabilities in the quarter. As I said in my recent annual letter to shareholders, while it's still early days, we are embarking on a new era of commerce, where AI-powered agents can make autonomous decisions on behalf of consumers and businesses. But in addition to offering speed and convenience, Agentic Commerce brings added complexity and risk. This plays directly to the strengths of our -- to our strengths of trust, security and service. Given our closed-loop network that provides an end-to-end view of transactions, and supported by the investments we've been making in our technology and risk capabilities, we are well positioned to deliver intent-driven authorizations, enhanced fraud protection and strong security features to help protect our card members and merchants.

Earlier this month, we introduced the Amex Agentic Commerce Experiences or ACE Developer Kit, which will enable the integration of American Express cards into AI-powered transactions with trust and control. Along with the kit, we announced Amex Agent purchase protection, an industry-first commitment to back our card members by protecting registered agent purchases. We have more AI-powered products and capabilities under development that will roll out this year to help transform and grow our business. This includes upcoming announcements with leading AI companies to make our membership assets discoverable and actionable on their platforms and building proprietary AI-powered experiences across our own platforms.

In summary, our business continues to perform at a high level, exhibiting continued momentum from executing our proven strategy and making meaningful progress on the strategic use of AI to drive long-term growth and efficiencies. With our loyal premium customer base, our talented customer-focused colleagues and a differentiated business model, we are confident in our ability to deliver long-term sustainable growth.

Now I'll turn it over to Christophe for more details about the quarter, and then we'll take your questions.

Thanks, Steve, and good morning, everyone. Q1 was a very good quarter. Revenue growth accelerated to 11% or 10% FX adjusted, with broad-based growth across revenue lines. Spend growth stepped up to 10% or 9% FX adjusted, the highest level we've seen in 3 years, and we continue to see healthy demand for our premium products with over 70% of new accounts acquired on fee-based products.

Credit performance remains excellent with both delinquency and write-off rates still below 2019 levels. And we continue to invest across marketing, technology and our premium value propositions to support long-term growth. We delivered very strong returns in the quarter with EPS of $4.28, up 18% year-over-year.

Turning to Billed business on Slide 4. Overall spend was up 10% FX reported this quarter. That momentum reflects an acceleration in U.S. Platinum spend following the refresh last year and the benefit of our global footprint, with tailwinds from FX and high growth in international markets. These results demonstrate the strength of our premium focus and our diversified business. Spend growth was about 1 percentage point higher than Q4, driven by T&E spending, up 9% FX adjusted, while goods and services growth remained stable, up 8% FX adjusted.

Retail spending kept up its momentum, up 11% FX adjusted, and spending of luxury retail merchants was up 18%, reflecting the continued strength of our premium customer base. Restaurant spending was up 9% once again this quarter. At the same time, airline spending picked up, growing 8% -- growing 8%, sorry, driven by higher growth across consumers, SMEs and large corporates. These trends sustained throughout most of the quarter, but we did see airline growth soften in the last few weeks of March and into April, driven by travel disruptions from the Middle East conflict.

In the U.S., we continue to see strong demand and engagement on platinum following the refresh last year, with accelerated spend growth on the portfolio, high retention rates and continued strong new customer acquisition. And we continue to capture a high share of the spin wallet from both new and tenured platinum customers.

The refresh is also driving high levels of engagement with our membership assets by U.S. consumer card members. Lodging spend on our fine hotels and resorts and hotel collection programs is up 50% year-over-year. And in dining, spin at U.S. resi restaurants is up 20%. Looking at our international business, ICS had another strong quarter, up 13% FX adjusted, including the impact of the weaker dollar, spend growth was up 20%. Looking at New Card acquisition, we acquired 3.1 million new COGS in the quarter with continued momentum in acquiring younger customers and attracting new customers onto our fee-paying products.

Turning to balance growth. First, a quick note on presentation. The metrics shown on Slide 13, which we previously referred to as total loans and card member receivables is now labeled total balances. Starting this quarter in our financial statements, we have combined card member loans and card member receivables into a single line called card balances, reflecting the evolution of our products through lending features like pay over time. This is consistent with how we've been presenting balances in our earnings slide for the past few years.

Total balances increased 7% year-over-year FX adjusted, largely in line with spend growth. As a reminder, there is about a 1 percentage point impact on balanced growth from the small business co-brand held-for-sale portfolios again this quarter, as we previously disclosed. As we exit this portfolio over the course of this year, we will see impact of certain metrics at the consolidated level and within the Commercial Services segment. Most notably, we expect a low single-digit impact to spend growth in SME starting in Q2 until we lap the portfolio exits. At the same time, we expect a negligible impact to pretax income. These impacts were incorporated in the guidance we provided for the year.

Turning to credit on Slide 14. Credit performance remains very strong and stable. Delinquency rates were flat to last quarter while write-off rates were slightly down. These results are consistent with our expectations for generally stable credit metrics throughout 2026. Overall provision expense of $1.3 billion included a reserve release of $24 million. The reserve release this quarter was mostly driven by lower ND card balances versus Q4. Our reserves also reflect uncertainty in the macroeconomic environment.

Turning to revenue on Slide 16. Revenue was strong this quarter, up 11%. We saw momentum across revenue lines with net card fees, NII and service fees and other revenue, all growing at double-digit rates again this quarter. Net card fees continue to be our fastest-growing loan, up 16% FX adjusted, in line with Q4. We expect card fee growth to pick up as the year progresses as we see the impact from Platinum refresh exiting the year in the high teens. Importantly, about 1/4 of the overall U.S. consumer Platinum portfolio has been built for the higher annual fee, and we have seen no change to our very high retention rates relative to pre refresh.

Net interest income was up 12% FX adjusted again this quarter, growing faster than balances. Notably, we are driving strong growth in NII, while growing balances, largely in line with spending, and while maintaining best-in-class credit results. In fact, write-off dollars are up by only 4% year-over-year, while NII is growing at double-digit risk pace.

We also continue to see strong demand for our deposit products with high-yield savings and direct CD balances up 9% year-over-year. As we see -- as we see with our premium card products, our savings products is resonating with millennial and Gen Z customers, which make up over half of the accounts and about 1/3 of the balances. Looking ahead, we expect NII growth to continue to outpace growth in balances for the year.

Turning to expenses. The VC to revenue ratio was 44.7% this quarter, in line with our expectations. There is some quarterly variability in the ratio given seasonality. For the full year, we continue to expect the VCE to revenue ratio to be lower than Q1, around 44%. The step-up versus the first half of last year reflects the investment we made in the value proposition of our U.S. Platinum cards when we refreshed these products last year. Marketing spend was $1.5 billion this quarter, flat to last year. Given the strong performance we saw in Q1 and our confidence in the balance of the year, we plan to increase our marketing investments to support long-term growth. We now expect marketing expenses to grow in the mid-single digits for the full year.

Moving on to capital. We returned $2.3 billion of capital to our shareholders including $0.7 billion of dividends and $1.7 billion of share repurchases. We continue to deliver very strong returns with an ROE of 35% this quarter. Our strong ROE enables us to return high levels of earnings to our shareholders around 75% over the past 3 years. And this quarter, we increased our dividend by 16%, demonstrating our confidence in the sustainability of earnings generated by our model.

As we think about our capital requirements, we view the recent Basel proposals as an improvement from the prior proposal. Under the rules as proposed today, we expect the impact of capital requirements to range from neutral to modestly positive. As we evaluate the proposal in the CapEx or other regulatory considerations, we are encouraged by the first discussion of modernizing the tailoring framework and resulting bank category designations.

We remain focused on maintaining a strong balance sheet and capital position. We plan to continue to return the excess capital we generated to shareholders while supporting growth and we do not expect a material change to our capital management approach in the near term.

That brings me to our 2026 guidance. We feel really good about our momentum starting the year and our first quarter results. We are seeing stronger earnings than expected, and we have decided to increase investments in marketing and technology. As a result, we are reaffirming our full year guidance of revenue growth of 9% to 10% and earnings per share between $17.30 and $17.90. With that, I'll turn the call back over to Kartik and we'll take your questions.

Thank you, Christophe. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just 1 question. Thank you for your cooperation. And with that, the operator will now open up the line for questions. Operator?

[Operator Instructions] Our first question comes from the line of Ryan Nash with Goldman Sachs.

Congratulations on all the new partnership wins. Hopefully, it results in more victories for the giants and jets. Maybe, Steve, to kick off, clearly, we're seeing really strong performance in overall spend. I guess for starters, do you think the momentum that you're seeing in the business is enough that we could start to trend towards that aspirational 10% revenue growth, is that on the table for the year? And you talked about increased marketing and tech spend. Can you maybe just talk about what that's offsetting in terms of where was performance tracking better than expected? And where are you using that to offset?

Yes. So I don't know about the jets and the giants, but we -- that will have to play itself out. As we think about -- and let me go -- let me look at this at the beginning here. But as we think about sort of the year and we think about the spending, it continues to be strong. And look, we just had the strongest quarter of spending that we had in the last 3 years. And obviously, spending will drive higher revenue. When you look at -- and I laugh a little bit about sort of the aspirational 9% to 10%, if you look at the last few years, whether it's FX reported or it's reported or FX restated, we've kind of hit the 10%. And our guidance this year is 9% to 10%, and we've just delivered a quarter of 11%. So you can make your own judgment on that.

But we feel really good about that aspiration. If we didn't, we wouldn't put it down. So I think what you're seeing is momentum that I believe if it continues, will allow us to achieve that.

When you look at the increased investment in technology and marketing, you have regulators in this business. And one of the regulators is making sure that we return what our shareholders are looking for. And so every year, as we go through our processes, we have ROI cutoffs. And we believe what I would say are really good investments on the table. And so when you have an [indiscernible] delivery like we just had in the first quarter, it gives us that confidence that we can move those ROI thresholds down and continue to hit within our guidance range. And as I think about this business, the way I think about this business is, I don't think about it for this year, I think about it the next year and the year after. And what I'm trying to do and what we're trying to do as a company is to build and continue to build on that momentum.

And so for me, I look at where we are today, it's a function of the decisions that we've made in the past and those decisions that we made in the past are reinvesting in the business versus just always dropping into the bottom line. And so that's how we said it. As far as technology goes, we've been very fortunate with some of the results we're seeing from an AI perspective and that we're getting about 30% benefit with our programmers from a coding perspective and testing perspective. But what that has done is allowed us to get to more stuff. And when you have a company like ours in so many different areas, whether it's the many countries we're in, the merchant business, the network business, the consumer business, corporate or small business, there is just a huge appetite for technology.

And so the overperformance we've had gives us an ability to get to those things a little bit quicker, combined with the AI that we've had -- the AI efficiencies that we're seeing. So look, I feel really good about where we wound up this quarter and against a backdrop of an unstable world at this point. But against that backdrop of an unstable world, we saw record billings Christophe mentioned luxury spending in retail up 18% in front of the cabin is up 12%, and we're seeing great engagement from our platinum refresh. So I feel pretty confident about the rest of the year. Christophe?

So maybe I can take the second part of your question, Ryan, around the offset in terms of this incremental investment. So you might remember the conversation we had at the end of the quarter, right? We had lot of spend momentum. One of the questions, one of you asked is like how are you thinking about 2026 and say, we'll see. We don't know. We're seeing that we're maintaining momentum. We even have stronger momentum when you look at billings. So that's the check.

The other thing is that when you study the P&L, there were also a few unexpected items either on operating expenses. I'll mention 2 that went in our favor. One is a core decision regarding VAT in Europe. So we booked that. And there was also a gain that we registered as we completed the acquisition of the half of the joint venture we had in Switzerland. So that allowed us to book a small gain. So the completion of that acquisition, the court case in France give us a little bit of more confidence in terms of expenses and releasing investment capacity on marketing and technology.

Our next question comes from the line of Sanjay Sakhrani with KBW.

I guess I have a follow-up on the bill business trends. It is quite remarkable how strong they were in the midst of all this geopolitical activity in the backdrop. I know Christophe, you mentioned there is some softness in airline spending that you've seen over the last few weeks. I'm just curious, is there a way to quantify that? And sort of is it material enough that -- it doesn't sound like it, but that it could deter some of the upside? And then I'm just wondering, is there any other impacts that you've seen across the spending cohorts as a result of the higher fuel prices? And then I guess offsetting that is the momentum you have in platinum. So I'm just trying to think about the interplay between these 2 factors?

So on airline softness, I mean, yes, we saw definitely noise towards the end of March, beginning of April. And where it was the most visible is in the volume of refunds that were still being processed. It's always hard to know exactly what happened with these refunds is that people booking on a different schedule, different airline, but we definitely saw a spike in terms of customer reform.

This being said, the impact is not that large. And I don't think that it is something that you should worry too much about. I'll take advantage of that to mention as well that this is where our assets, both in terms of TLS or the benefits we offer in airports really were valuable to our card members. We were able to rebook I think, something like 18,000 of our customers who have tickets to the Middle East and we also saw a spike in terms of engagement with our partner, clearer at the airport. So definitely, I don't think this is something that should create an impact to our overall billing trends.

In terms of fuel, yes. I mean we saw the average ticket price go up, and we definitely saw an increase in terms of the fuel spend. Now fuel is less than 2% of the overall bill business. So the impact is just not very visible on the overall bill business, and it's really, really hard as well to see if there is any offset anywhere. And when we study that at the different product levels, cohort levels, geography, we don't see any discontinuity. And we see as you mentioned, strength, momentum, stability across the board and across the portfolio.

Our next question comes from the line of Don Fandetti with Wells Fargo.

Steve, can you talk a bit about your confidence in enhancing the expense management offerings for the middle market SME customers? And I guess, is this an area of focus in terms of the sort of incremental investment?

Yes. So thanks, Don. Yes, look, we'll -- in the next few months, we'll relaunch or launch center. And it certainly has been an area of focus for us. And I think when you look at that expense management software. If you take the commercial business and break the commercial business into 3 parts, small business, middle market and large corporate and global, I think where we're seeing a lot of strength is truly in small business and in large and global where the expense management, I think, will really come in is in those middle market companies, especially those small businesses transitioning to middle market. And that's somewhere that we will release, I think, will help us solidify our position that we have there.

Additionally, to the software, and you may have seen, we just acquired a company called HyperCard, we brought in a group of people who we've been working with for a number of years who are really in expense management space and we have a lot of expertise in expense management agents and we'll be integrating those into center. And so as we think about our overall corporate commercial portfolio, it's a combination. It's 8 new products, benefits and enhancements that we're releasing through. So it has been and continues to be an area of investment because we still see it as an area of opportunity for us. I mean, we're known for small business, middle market and corporate, still a leader in that space, but we are investing now significantly in that, obviously, with the center acquisition over a year ago with the HyperCard acquisition and just the investment that we're making. So it's an area of focus and will continue to be an area of focus for us.

Our next question comes from the line of Erika Najarian with UBS.

I just wanted to make sure that your investors are taking away sort of the right message on the revenue and expense dynamics. And I know Ryan tried to get into this in his question, but it sounds like from everything, Steve, that you said that your -- you've hit 11% revenue growth. Clearly, you're trending above that 9% to 10%. And given that you are at the top or a little above that revenue range, then you're reinvesting that back to the company, and that's why you're reiterating the EPS. In other words, the key takeaway from this quarter is really that sort of upside to revenue. Is that sort of the correct message that your investors should be taking away?

Well, I think you have a couple of things. I think the message our investors should be taking away is that we're reaffirming guidance of 9% to 10%. I think while we had the 11% growth this quarter, one thing I will point out, as the year goes on, the Amazon and the Lowe's book will roll off. That will have a slight drag on revenue, zero impact on PTI. And so I think what you should take away from this is that we're reaffirming the 9% to 10%, and we're taking the over delivery from an EPS perspective and investing that back into the business.

Our next question comes from the line of Mark DeVries with Deutsche Bank.

I appreciate that it was a relatively modest acceleration in build business and commercial services. But are you seeing any green shoots there that give you optimism about a bigger recovery and just kind of the organic spend there? And what kind of incremental tailwind might you get from this kind of record year of product launches across the commercial suite?

Well, I think that one of the green shoots that we're seeing is organic is not as stressed as it has been in the past. And while we had a minor uplift sequentially, we think that as you think about the product enhancements that we've been doing is that, that will play out a little bit more over the longer term as opposed to this year. So those products take some time to get into the marketplace. We just launched the cashback product from a small business perspective. We've got the cash back better from a corporate -- cash back product from a corporate perspective, which comes out later this year. So I think as we go into next year, we expect that to give us a bit of a tailwind into next year, not as much of an impact for this year.

Our next question comes from the line of Craig Maurer with FT Partners.

I wanted to ask about the Platinum Refresh for a second. It's -- we're going to lap that in September. And I'm curious if you can -- if you can separate perhaps how much lift you got in spend from that refresh from existing card members versus new customers? I'm trying to get my hands around how much of a decel we might see as you grow over that in terms of billed business growth later in the year?

So it's a good question. I guess you're looking at the -- one of the slides that we have with U.S. consumer platinum accelerating by 6 percentage points. The majority of that, given the size of the portfolio is coming from tenure card members. Although we're very pleased with new account acquisition, the majority of that 6% lift is coming from the back book, and that's a very strong sign.

As you think about projecting that into 2027, we'll see what happens. But I don't think at this stage, we should expect like a further acceleration in 2027. I expect that step-up to maintain into 2027. But I don't think that you should expect to see another one. So we're going to lap that at some stage in '27.

Our next question comes from the line of Rick Shane with JPMorgan.

Look, a really big part of the journey in American Express over the last decade is reinvigorating your products and penetration to younger cohorts, and it's been a big part of the success here. I am curious as we think about sort of a more uncertain, more volatile economic environment. If you think about that younger cohorts, are they more sensitive to changes that we see, whether it's in terms of spending pattern credit? Is there greater sensitivity sort of beta to the cycle in their behavior versus your more seasoned cohorts?

I think ultimately, there'll be less, not more. And I'll tell you why. I think the younger generation is more equipped for the changing dynamics in the world today that, in fact, maybe more middle-aged people, maybe more people, Christophe and my age, I think they're more adaptable, more technology savvy, more into what's going on in the marketplace today. So I feel a lot more comfortable having a card base that is actually skewed a little bit younger than one that would be what you used to see 10 years ago.

I think the other thing that's really important is to understand that when you look at our -- when you look at the millennials and you look at the Gen Z that's in our card base, it's not every millennial and Gen Z. It's the creaming the crop. And we show the slide a quarter ago, 2 quarters ago, where our millennial and Gen Z credit performance is better than the industry is Gen X and baby boomer credit performance and is significantly better than the industry's millennial and Gen Z performance is.

So one of the things that we've seen with the millennials over time is we get [indiscernible] high share of their -- we get a high share of their wallet right out of the gate. But what we've seen with millennials is as time goes on, that high share translates into even more spend as they continue to move through their lives and continue to be successful, so forth and so on. So I actually feel a lot more comfortable with the SKU of our base today, then if you would have asked me this question, if my base hasn't skewed because I'd be more concerned with my GenXers and my boomers. I mean the reality is when you look at it, and we showed a slide on the consumer, you see the Gen Z is up 38%. The millennials are up 13%. Our GenX are actually really strong at 8%, but then you look at the boomers up about 4%. And so I think we're -- we will continue to depend on that for our growth and just look at our card acquisition.

So I feel very confident on who we're acquiring because of the characteristics that they possess and the characteristics that they have to deal in an ever-changing world. So that's how we think about it.

Maybe I'll have one data point, Steve. And I mentioned it in my remarks, but if you look at like in terms of like the quality of the GenZ and millennials that we attract to the franchise, one interesting data point is to look at the profile of the high cell customers. And I mentioned that half of these customers are actually Gen Z and millennials. Of course, they represent 1/3 of the balances or they have lower balances. But if you had asked me a few years ago, where are the balances going to come from, where are the account is going to come from. I wouldn't have told you that I'm confident it's going to come from the younger cohorts. And -- but that's what we're saying, right?

So it tells you something about the profile of these younger customers that are joining the franchise. They have savings.

Our next question comes from the line of Rob Wildhack with Autonomous Research.

I wanted to ask about the relationship between spending growth and balance growth. Back in January, I think the commentary was for balances to grow in line with spending. And I know you've got the co-brands rolling off there. But if we could normalize for that, how do you think about balanced growth if the acceleration in spend from this quarter continues, would you expect to grow balances concurrently? Or do you kind of like the balance growth at the level that you laid out back in January?

Yes. I think first, I like it when I see spend accelerates. And the fact that balances are growing at a slower pace, like 7%, some of it is just rounding. So I would not interpret it too much. The other thing is that typically balance lag. The final thing is that we're not chasing balance growth. We're chasing customers who are going to spend with us. And if they feel the need to revolve, then we're going to put in front of them the best possible products so that they can revolve at the pace they want, including pay over time, which typically has shorter revolve durations. And so that's the kind of revolve that we like.

So I'm not too concerned about that. And you've seen that 7% kind of like stable over the past few quarters. What you've seen as well is, over the last few quarters, NII outgrowing that balanced growth, and I think has been stable in that 12% range as well. And some of it is coming from what I just mentioned a few minutes ago, we are successful at funding those balances with either high-yield savings accounts that are a cheaper funding source for us, and that's helping the NII growth as well. So the dynamic is very stable and consistent over the past few quarters.

Our next question comes from the line of Jeff Adelson with Morgan Stanley.

I just wanted to follow up on Rick's question. I appreciate all the color and understand, obviously, that you've got a healthier consumer in there. You view the Gen Z more adept at handling these changes in technology. But just given the market focus on AI jobs-related displacement. Just curious if you're seeing any sort of impact in the customer base today? Or just if you have any sort of views on what that trend might look like for you over the next few years?

Yes, we're not seeing any impact at all on this at all. And maybe I'll just make a couple of comments. I think technological change over the years, no matter what it has been, whether it's been the Internet, the cell phone, what have you and even eliminating the word processor and going to desktop PCs has always brought a plethora of new jobs, number one; and number two, has fuel GDP. Now will AI lose some jobs? Yes, it would. But who would have thought about influencers, podcasters, web developers, AI programmers years ago. Probably nobody. And if you think about the jobs that are out there today, and where these jobs are, can I think more Gen Z and millennials are going to be more trained for this and more ready for this.

And so will jobs go away. Yes, jobs will go away. A number of the service jobs will go away. I mean, even at American Express today, if you look at our volume increase and you look at our ratio of volume to how many people we have on the phones, it's decreased. Not as many people want to talk on the phones and plus we're making the people that are answering the phone is more efficient because they have AI tools at their disposal, whether that's for travel or whether that's for card servicing. We'll always have a representative there that you can call up and talk to, that's never going to go away from American Express. We're always going to be able to serve our customers how they want to be served.

But I think from an AI perspective, yes, you'll see a bunch of jobs go away, but I think you'll also see a tremendous creation of new jobs. And I think this cohort will be much more likely to fill those jobs and create new jobs, new opportunities.

The last thing I'll say is a lot of people talk about white collared workers. Our base is not just white collared workers. Our base is premium consumers and premium small businesses that from a consumer perspective, want access to experiences and want access to service and special offers and things like that. And that runs the gamut. I mean, that runs the gamut for the individual entrepreneur to the TikToker and to the influencer and to the podcaster, to as well as people that are research analysts, investors and hedge funds and everything else. So I think that will be there, and we'll see how it all plays out. But again, technology has, over time, fueled GDP, not crush GDP.

Our next question comes from the line of Darrin Peller with Wolfe Research.

Steve, you recently launched your Agentic Commerce Experience developer kit, I know you wrote about it at length in your letter. So just given our checks are indicating in general across AI and agentic, if there's been more fraud on some of these transactions. It's early days, but you're still seeing some of the questions on that. And then just structural questions around networks in an increasingly agentic world. Just I'd love to hear how you would think about through all your closed loop data [indiscernible] these transactions?

Yes. I mean, look, I mean, I think from my perspective here is that in an agenetic world, data is king. Data is a king from a service perspective, an identification perspective, a fraud perspective, a credit perspective, data is king. And when you look at our -- when you look at our business model, we have the card member, we have the network and we have the merchant. And we have a free flow of information and it's a perfect information as you're going to get in this model. And so when you think about Agentic eCommerce and you think about a lot of the early forays into it, yes, it is -- can be fraught with fraud and it can be fraught with -- it's a lot riskier environment that you're dealing in. In a normal e-commerce world, in a normal bricks-and-mortar world, off-road is significantly less than the competition, significantly less. And why is that? Because of data.

And so while agentic commerce, that story is yet to be written. We're at the -- I would -- I think we're warming up at a bull pen. I wouldn't even say we're in the first [indiscernible] here of agentic commerce, but we're warm enough in a bull pen but it will take off fast eventually. And so as we released our ACE developer kit, one of the things that we did were a developer kit is we said, look, to control the transaction to understand what's going on, what we want to do is have the agentic declare intent, and we want to match that intent with what was actually purchased. And so we want data from an intent perspective, all the way to a completion perspective. We don't even have that today in a normal bricks and mortar world. It would be hard to do. But in an e-commerce genic world, we can get that data.

And so I think it's going to make our fraud and our risk capabilities and our ability to detect fraud and our ability to back our card members even better than we would in a brick-and-mortar world or in a traditional e-commerce world, which is why we came out with Amex agent protection. It basically says if the developer and the agent register with us and we see the intent and we see what the purchase was and our card member is left holding the bag, we'll back our card member and we'll figure it out on the other side.

So I think -- and as I wrote in the shareholder letter, I think this sets us up a lot better than our competitors because of the closed loop network and the amount of data that we have. And I think anybody that talks to you about large language models will basically say to you, the model is as good as the data that it has. And so what we're trying to do is get as close to perfect data as you can in agentic transaction. And that's how we're thinking about it.

Our next question comes from the line of Mihir Bhatia with Bank of America.

You mentioned that you're reinvesting the 1Q upside in technology and marketing. I think you've talked about technology investments a little bit on the call and even the commercial side investments. But maybe just a little bit more on the marketing. Where are you investing on the marketing side? Is it to support the commercial? Is it just more programs across the board to brand marketing and like what is the payback period on these like business drive faster growth in '27? Just maybe more on the marketing investments you're making?

Yes. Mihir, thank you for the question. You simply said, it's going to go again our acquisition efforts, like new card acquisition efforts. As Steve said previously, at any point in time, we have a series of marketing ideas. We call them investment opportunities that are not funded. We rank order them, and we start when we run out of capacity. These marketing ideas are ready to be executing, and that's what we're going to do with those incremental dollars.

So what we're trying to do is take advantage of the opportunities we're seeing. We expect the returns to be very strong, and that's why we're directing this incremental performance towards this investment opportunities.

Our next question comes from the line of Terry Ma with Barclays.

Just wanted to touch on commercial. You just announced a pretty major expansion, which probably involves some level of investment. So I'm just curious, like should we expect some impact to the BCE from that kind of launch going forward?

Terry, on VC, you should not expect any impact, at least for the reason that, as Steve said previously, either those new product and capabilities that we are going to roll out, it will take time before they flow through the P&L before we see a lift in terms of volume. So I don't think you should expect to see a change to VCE ratio, and 44% is still the right number for the full year.

Yes. And I think if you look at the -- what we've just announced, you look at those -- they're more -- not a lot of additional benefits on those cards. It's more about capabilities here. I mean we have the OpenAI, ChatGPT benefit and the cash backlog will be the reports piece of it. But I think as Christophe said, it will be benign.

Our final question will come from the line of Chris Kennedy with William Blair.

I just wanted to follow up on your prior comments. Steve, in your letter, you kind of mentioned how new technology can accelerate growth at American Express. Is there a way to frame kind of the opportunity today with data in agentic relative to prior innovations, such as e-commerce or mobile payments?

Yes. I think it's a little bit too early. And I think the company is so big at this particular point, as I said just before, I think it was so early stages. I think if you would ask me that question when e-commerce first started, I would have probably given you the same answer. And I don't think anybody could have imagined what the phone -- what the phone would have ultimately represented, right? I mean everybody thought the phone was for making phone calls. And the reality is nobody makes phone calls with the phone anymore. I mean you're doing a lot of commerce on the phone. It's been -- Uber has shown how you put private capital into the public market by having drivers out there.

So I think it's -- our sense it will be an accelerant. I just think it's really hard to quantify it at this early stage.

With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions. Operator, back to you.

Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access a digital replay of the call at (877) 660-6853 or (201) 612-7415, access code 13759550 after 1:00 p.m. Eastern Time on April 23 through April 30.

That will conclude our conference call for today. Thank you for your participation. You may now disconnect.

All right, everybody. Welcome back. We have with us right now. American Express and the CFO, Christophe Le Caillec. Thank you so much, Christophe, for joining us.

Thank you for having me.

Absolutely. So there's certainly a lot to double-click on after earnings. But first, I just want to ask how the Amex consumer is doing and what you continue to observe as major drivers of spend acceleration? And just to frame this, you did see billings growth accelerate in the second half of '25 versus the first half. Perhaps talk about the health of the American Express consumer and the sensitivity to spend, the factors that may not be relevant outside your cohort like stock market performance.

So it's a pleasure to be back here, especially with the weather in New York. So thank you for having me. So the spend has been very strong and very consistent during the year between 7% and 8%. And I'm talking global spend. And as you pointed out, in the second half of the year, we saw a little bit of an uptick, which is always a good thing to see. But in general, we see a lot of strength, a lot of confidence in our customer base. Travel & Entertainment spend was strong. And when you look at -- with double click on the Travel & Entertainment, front-of-cabin spend was very strong at 9%. And in lodging with luxury properties was also very strong at up 12%.

And if you look at in consumers, in particular in U.S. consumer, we ended the year in a very strong position. We talked about their holiday shopping season, which was up 9%, so very strong performance. And -- when you actually look at the Platinum Card members, like the biggest, I would say, product we have, it was up 12% during the holiday shopping season. So a lot of strength and a lot of consistency there.

I probably don't need to talk much about the credit side, like the balance sheet of the consumers. But for our customers, it's incredibly strong, very low write-off rate, very low delinquency rates. And very stable rates as well. So all in all, we are blessed to have such a strong, stable, confident customer base, which is which is the core of our financial performance because when you get the spend going, when you get the credit under control, everything else follows.

And we also have a customer base that loves premium experience. I was just talking about traveling at the front of the cabin. They are happy to pay a fee. We've seen the fee performance. We're probably going to talk a little bit about it as well, performing really well. So very strong performance that is providing a ton of support to our business model.

So before we dive into some of the specific metrics and growth drivers in American Express, I just do want to ask you about something that investors have been talking about recently. You've been asked about the 10% rate cap, which doesn't seem like it's going to happen, but you haven't been asked in a public forum about the Credit Card Competition Act. Obviously, you're not party to this. But what is your view here in terms of potentially having the opportunity to be the second network on the back of more cards? And in the event this becomes reality, does it really have an impact on your business given your premium economics and premium [ slants ] ?

So our position on their Credit Card Competition Act is neutral, like we're net neutral. The way to think about it is that this is going to be applicable to the 4-party networks. And the very vast majority of the volume that go through our network is actually closed-loop transactions, right, where we are the issuer of the card, we are the merchant acquirer, and we clear and settle the transaction through our network as well. So this doesn't impact us.

In terms of what it means to our business, really hard to say because they are like really conflicting messages here or objectives. On one hand, the issuers will pick a second network that will give them as much economics as possible. On the other hand, the merchants will want the ability to actually steer the transaction towards the network that has the best economics for them, which is the opposite of what the issuer are trying to achieve.

So it's very hard to see where this is going to land. And for us, it's very hard to kind of project what it means exactly. So we're not expecting much in terms of impact on our business. And as I said, we are net neutral on that CCCA.

So let's go back to your business. Hot topic during the call. Steve did say focus less on the new card acquisition number and more on the revenue side, especially given that you focused your marketing dollars to fee-paying cards versus something like cash back cards. You talked also about the seasonality of marketing spend. The reality is that given that you're considered a growth company, investors will probably continue to focus on new card acquisitions. So how should we think about the deceleration that we saw in new cards acquired in Q4 and the trajectory going forward?

Yes. So we were definitely a little bit surprised with the number of questions we got on this. So we thought it would be useful to share with you a bit more information. So Amanda is going to project you slide here. Hopefully, you can all read it.

So here's what this slide is telling you. First, if you look at the bottom of the slide, I got to take the slide as well because my eyes are not as good as they used to be.

The numbers at the bottom here represent the new costs required. So these are the numbers that were on the earnings slide and that you saw and that generated this question. You can see that in Q4, there is this sequential decline from Q3 '25 to Q4 '25 that generated those questions. If you look at what happened in the year before, we also had a sequential decline. This is a way for me to say that the marketing programs that we run are not linear. They're now going to produce always the same outcome. And we spend a bit more. We spend a bit less. We have limited time offers, we don't have limited time offers.

We have limited time offers for a month or for 3 weeks like -- so you should not expect these numbers to always be the same. But the bigger message is actually in the line. What I wanted to show you here is the average fee paid per account that we acquired. So there's a bit of a nuance. The numbers at the bottom are the number of cards and the fee that we are showing on the line is the fee per account. The account includes the basic card, if you want and supplementary cards that typically card members have. So on an account, you have all the cards of the family, if it's a consumer.

You can see here the big increase that we saw in Q4, and it's very rare in our business, given the scale and given the number of consumers we are dealing with, to see that kind of discontinuity. And that kind of discontinuity happened because of 2 things; one, there was a lot of demand for fee-paying products and especially for the Platinum Card, that lifted the average fee paid per account; the second thing is that to meet the demand, as Steve explained on the call, we actually shifted resources, dollars, talent, technology, our leadership time towards meeting that demand on the Platinum side. And it did exactly what you see on this page. It lifted for the entire U.S. market the average fee per account.

What you see on the right as well is a metric that I think we've used in the past, but as a rule of thumb, the Platinum account spends about 10x what a Blue Cash Everyday account spends. So if you put yourself in our shoes here, when there's a lot of demand for Platinum, we know that not all cards are created equal, so our priority is going to be to meet that demand, shape the resources and go after this Platinum applicants.

So if you take a step back, what's the meaning of all of this? First, you should not expect that every quarter we're going to have the same NCA which is going to go up. It's going to be a function of our marketing programs. But more importantly, not all cards are created equal, and we're not in the job of trying to maximize the number of new cards acquired. We are in the job of maximizing the shareholder value, attracting fee-paying card members, very engaged card members who are going to pay a lot more than, say, Blue Cash every day. And that's the objective function that we have in our decision models, whether it's marketing, new accounts, financial models. And that's the reason why we ended up in the situation where you have a sequential decline in terms of new cards acquired but this is more than offset by the cards are paying a much higher fee and we know that the spend on this card is going to be much higher. So I like the 1.3 million a lot better than the 1.5 million cards that we got in Q3.

Especially given that slope in terms of the average fee per new account acquired. I think this is a good segue to talk about the Platinum refresh and unpack that strong start that you mentioned on the call. Maybe if you could provide us with more details on what you're seeing around demand, engagement and other metrics you're tracking? And of course, I do have to ask for the investor base. Is there any way to quantify the new cards acquired in the first few months of the refresh, and if not the number, maybe just compare it to either the last Platinum refresh or the more recent refreshes of Gold and the Delta co-brand.

Okay. So there, at a high level, so we have a ton of metrics that we're analyzing every week and that I see and we compare on a ton of metrics. But at a high level, the Platinum card, this refresh, is more successful than what we saw with Gold or what we saw with Delta. We see a lot of demand. We see a lot of engagement. Remember that what we tried to do when we refresh the product is first, generate demand; second, generate efficiency for that demand; third, drive engagement, i.e., spend, especially with the back book. And as we reprice that back book, make sure that we maintain a very high retention rate.

So what are we saying? In terms of acquisitions, I just talked to you about it. The acquisition is very strong, and it's strong enough to actually change and bend that curve in a very visible way. In terms of efficiencies, if I look at over the last 2 years, some of the lowest cost per account were achieved in Q4. So we're definitely generating efficiencies there as well. And we have started repricing the back book in January. And we're seeing -- like the retention rate is already incredibly high, like 99% for the consumer card and something in the range of 98% for the small business card.

So it's really hard to kind of like improve those numbers. But we're saying that those numbers are either in that range again this time. So when I take a step back, that product is performing really, really well. What I will say as well, because that was an objective function for us is you know that -- when we think about cards we think about membership, and we want to provide like a surround sound of benefits and services and access to our card members.

So what we're doing is to measure how they are engaging with those servicing. We know that the more they engage with those servicing, the more -- the better it's going to be for us in terms of loyalty, in terms of consolidating their spend with us or the borrowing needs with us. And what we're seeing is beyond our expectation or our projections, to be quite honest.

To give you a few numbers, in Q4, we saw an increase of 30% of our Travel bookings and typically -- year-over-year increase. And typically, Q4 is actually a quiet month. We saw a 30% increase, and we attribute that to the new Platinum value proposition as well as the Travel app. When you look at Resy, for instance, U.S. consumers spending at Resy restaurants across the United States, it was up 20%.

So we are going with all of this is that the engagement -- like the product is working exactly the way we wanted it to work. And the engagement we're getting is incredibly strong. And so our job is just going to keep that momentum going and engage with the card members. And at the end, we're confident that, that will generate all the great outcomes, financial outcomes that we've modeled.

So speaking of financial outcomes, everything that you have just discussed really goes back to what you have been saying for a long time, which is the premiumization of the experience of the product. Can you remind your investor base how that's been playing out in your financials already?

We've always been a premium brand. But when Steve became Chief Executive Officer, he really focused us a lot more on premium products, premium experience cadence of product refreshes, and that's exactly what we've done. And that either was powerful enough to bend the growth curve and contribute to the very strong revenue growth metrics that you've seen.

So the first outcome that you see when you focus on those premium products is you see that card fee line that keeps going up. It's an amazing performance, right? I love time series. And so when you go back to pretty much the time of the decision, 2018, 2019 to now, this card fee line has been growing at a CAGR of 17%. It's very hard to grow anything by 17%, let alone to do it over such a long period of time. And as you know, we guided towards mid-teens. We plan on exiting actually on high teens at the end of next year. We are right now at 16%. We're going to end the year around high teens.

So you see the card fees first. The other thing that you see with that premium focus is on the credit line, the credit numbers are not only best-in-class, the distance from our peers has increased as we focus on more premium card members. And so it is quite remarkable. We had -- you look at the delinquency rate of American Express over the last 2 years, 8 quarters, it was like 1.37% of the 8 quarters. And the eighth quarter, when it was not 1.3%, it was 1.2%.

So it's incredibly low, very stable, completely within expectations and the distance from either to our peers is growing.

Now what you see as well in terms of the premiumness of how the premiumness is filtering through our economics, you see it through the VCE line. Premium products have a VCE ratio that is higher than the Blue Cash every day. And we have shared with you those numbers. But as a high level or a rule of thumb Blue Cash Everyday, VCE ratio is in the range of like 25%. And for a Premium Card is much higher. And if it's a Premium Card co-branded, it's even higher, it could be as high as 60%. So as the portfolio is getting more and more premium, that VCE ratio is actually drifting up a little bit. And that's the fundamental source why this VCE ratio is -- has an upward bias.

Got it. And we'll unpack that in a second. I just want to finish up the conversation on Platinum. You also just wanted to unpack something that you had said on the call and just now in terms of driving an acceleration in card fee growth to high teens by the end of this year. Could you walk us through how long that tailwind is typically for a refresh? And to your point, I mean, 17% CAGR for a very long time. It's very tough to achieve in financial services business.

Additionally, if your focus is on originating more fee-paying cards, could that high-teens growth sustain for longer than a typical refresh cycle?

So just as a reminder, the way it works is that we announced the new Platinum value proposition in mid-September. From then on, all new card members, all applicants were on the new price point. For the back book or the tenured card members, we waited until January to start the repricing. And so we are just starting repricing that back book. And that's where the biggest financial impact is, right, in the installed base of Platinum card members.

We're starting in January, and we amortized the fee over 12 months, as you would expect. It's an annual fee. So it would take us 12 months to actually reprice the entire back book.

So there is a bubble, if you want, of incremental fee that will find its way into the P&L, and that's why you see this acceleration in the back end of the year. The bubble will be at its peak in Q4 when you're going to be -- when you're going to have the entire portfolio on the new price point, and you haven't started lapping the increase. So it will pick up in terms of contribution in Q4 and then it will moderate in 2027.

Now to your question in terms of like, can you accelerate the growth any further? The answer is, to your point, very hard to grow anything by 17%, 18%. And right now, we are at the tail end of the price increase that we did with our Gold Card and with the Delta Card. So either if you want, that lifted and supported that very strong growth rate and you have Platinum now that's going to replace Gold and Delta in terms of contributing to that very strong momentum. So the guidance that we gave, I think, is still the best number that we have for now, and it's to start the year in that 16% where we ended Q4, and you should expect a bit of an acceleration towards high teens in Q4 at the end of the year.

Thank you, Christophe. You continue to see stable growth in balances while maintaining the excellent credit quality that you had talked about just now. Could you provide an update on your strategy in terms of growing lending within the premium customer base?

Yes. It always seems strange to talk about premium and lending. It feels like oxymoron and it is surprising, but a lot of premium, a lot of Platinum card members actually do have revolving needs. It's different kind of revolving needs, and this is where we innovate in that space to meet those needs. Specifically, there are 2 products. One plays a much bigger role. But I need to mention first Plan It where you can go in the app, select the transaction and transfer that transaction on to an installment plan and pay over several months.

But the biggest innovation, which has been driving a lot of the balance growth, actually, in 2025, half of the balance growth were attributable to this Pay Over Time feature, which is a revolving capacity that is attached to the pay-in-full products. So you have a Platinum card, but we give you a revolving capacity if you want to. And we do see a lot of card members use that capacity. They use it for different reasons than a Blue Cash Everyday card member, for instance. We see when we analyze what are the reasons, the triggers that get a Platinum Card member to actually revolve some of their balances, we typically see a big spike in their spend. They buy the airline tickets, for instance, for the family to go somewhere. And they don't want to spend -- they don't want to pay in full the balance at the end of the month. And so what they do is just like they're going to revolve it over a few months. And it's that Pay Over Time feature that has been incredibly successful, and that has generated, as I said, half of the balance growth last year.

And -- the good thing with that, outside of the fact that it meets the borrowing needs of our card members, which we care a lot about, the good thing with that is that because these balances are attached to a very premium card member base, their credit performance is incredibly strong. And it's the one of the biggest contributor to putting downward pressure on our credit metrics. The very reason why those credit metrics are so powerful and so strong is because there is this positive selection that happens in the portfolio, especially with the Platinum Card.

So it's core to our business model. And it's been an evolution. We used to separate the pay-in-full products and their credit cards, including in our disclosures. And you've seen us more and more blend those 2 together, and you should expect us to do more of that, because our card members are blending those 2, you see card members being a pay-in-full member for several years and 1 day, they move into revolving status. So because I think it's easier for you and for us to manage those balances if we aggregate pay-in-full and revolving balances. That's why we evolved our disclosures that way.

Let's talk about growth in international, which has been exceptional. Maybe talk a little bit about the drivers for growth here and again, the sustainability of these drivers?

So yes, the opportunity in international is incredible for us. It's a major source of growth. It's not only a source of growth. International is accretive to pretty much every metric. If you look at the credit metrics. If you look at the products, the average card fee paid, there's a lot of good things that is happening in international. What we're doing in international is the same thing as what we're doing in the U.S., focusing a lot on premium, focusing a lot on younger card members. The fastest-growing segment in International is the Gen Z and millennials. That cohort is growing at 20% in 2025. The equivalent or in Q4 2025, the equivalent number for the U.S. is 15%.

So if anything, there's even more momentum towards fee-paying products in International and younger card members. What's supporting this aside of like fantastic products and great execution, there are 2 things in International that are adding to the momentum. The first is that we're starting from a lower base. Our market share is about 6% across the big markets. So it gives us a long runway for growth.

The second thing is that they're still, and I'm sure many of you traveled overseas as well -- there's still a lot of progress that we need to make in terms of coverage. We now have about 170 million merchants who welcome American Express, but we need to grow that number further. And International is benefiting from that. A big growth in terms of the number of cards and also the growth coming from incremental coverage. We are parity coverage in the U.S. We're not at parity yet in International. So the combination of those 2 is a big source of growth for us. And to your point, there's a lot more runway for us.

So switching topics. You acquired the center, which could be launched by midyear. And for those of you that are not familiar, should offer your commercial services clients integrated expense management. There's clearly a refocus on this acquisition, given Brex and Ramp in the former acquisition of -- by Capital One. Is there any way to compare and contrast the technology at center versus these large peers? And do you expect this to drive new commercial card acquisitions as well as increasing retention?

When we think about product innovation in American Express, we always start with what is it that our card members want? And just like when I was talking about lending, the reason why we do lending is because our card members want lending. For the SME population, expense management is also a big need? It was not the case 5, 6 years ago. It is now. And therefore, it's important for us to have a solution there.

I will remind you, though, before I get to center, I will remind you that we are by far the biggest issuer in that space with the $400 billion of credit card spend, which is sometimes hard to compare with some of the fintech that you mentioned because they combine credit card spend as well as like ACH and other like debit spend. But for us, credit card spend is about $400 billion.

So in their -- back to the card member needs, when we segment our SME population, very clear that for the smaller -- small businesses, there is not a need for expense management, at least yet. But for the middle market segment, the bigger small businesses, if you want, there is definitely a need. That was rightly surface by some of the fintech that you just mentioned.

When we realized that, we looked at what was the best option for us. Is it to build our own solution? Or is it to acquire a company that has already built a solution there? And we came to the conclusion that it would accelerate the development if we were to buy a company, and we ended up acquiring Center and we're working really hard on the integration as we speak, and there are hundreds of colleagues at American Express, if not thousands, that are connecting their Center of value proposition around budgeting cards, controlling the spend by industry, the approval process, like all the things that you expect from expense management to our American Express infrastructure. And as Steve said, you should expect us to go to market in 2026. We haven't -- we don't have a date yet, but it will happen later this year. So stay tuned.

Pivoting to expenses, another hot topic on the earnings call. Of course, you noted expectations for VCE expenses to be 44% of revenues in 2026. I'm going to have to rephrase this question, don't call me Kartik because of what you just said about the premiumization of the portfolio. Does -- is there a trend line here that's more secular rather than refresh related because the way investors have contextualized that 44% is related to the refresh. But then you said this premiumization is going to continue. And so how should we think about that 44% as we think about further out?

Yes. So yes, the big force that is at work here is the premiumization of the portfolio. And that's what's lifting up that VCE ratio. But back to your previous question, there's a lot of good things that happen when you have a premium portfolio, and we talked about the card fee. We talked about engagement, loyalty, the credit performance. So you can't look at VCE in isolation from the rest.

I know that the ideal scenario here would be that VCE would go down and the growth rate would go up. But that's not possible. And you're not going to get a premium portfolio unless you actually have premium value proposition, and therefore, it comes to cost. The other component here for you to really understand well is the fact that a big driver of that VCE ratio is the cost of rewards. So it travels with spend. So it's a bit of a hedge that we have in the P&L. When spend goes up, so is the reward cost. And when spend goes down, say, because of an economic downturn, you should expect those expenses to come down as well.

So it's very much why we call it a variable card member engagement expense.

So in the case of Platinum, we have -- you see a step function increase because it's the largest product we have, Platinum in the U.S. We refreshed 2 products, the consumer one and the small business one. So a very large part of our portfolio. That's why you see a step function increase in the VCE ratio. But that is not going to come down because I hope and I expect that the Platinum Card is going to be -- keep being very successful. And therefore, you're still going to have this mix impact on the VCE over time.

So before I move on to the next question, I do just want to remind the audience that if you scan the QR code in some of your UBS conference materials, you can type in a question. It's going to pop up in this iPad for me to ask Christophe or we also have mics around the room in case you want to do it the old-fashioned way. So on the call, you also talked about reaching $5 billion in annual tech spend. How do you see your tech investments, especially those related to AI impacting productivity and operating expense levels?

Yes. Maybe before I address this point, I just wanted to make another point. The reason why we shared that number during the Q4 earnings call is because with VCE going up, one of the questions that we get from investors is like, so how do you balance your mid-teens EPS growth? What is coming down, right? And it's super important to understand the efficiencies that are generated on the operating expense base. And I also thought -- and on the marketing line. I wanted to also to make sure that investors understand that those efficiencies are not coming at the expense of investing heavily in technology. That's why we separated technology from other operating expenses. And you saw what's happening here, right? OpEx as a ratio to revenue just in the last 3 years went down from 26% to 22%. So it's a 4 point of revenue margin improvement on the back of operational efficiency and operational leverage.

Now back to your question, how do we create this operational leverage? Technology is probably the single biggest contributor. There are many others, but we obviously take advantage of our scale. We are very thoughtful about managing our own expenses and very disciplined about investing in these areas. But technology plays a foundational role to a lot of these expense efficiencies. I'm going to give you some examples, right?

We have invested a lot of money into this app or the Platinum experience in the app. It does a few things for us. One, we've seen that it generated more revenue through a higher engagement in terms of high-yield savings account enrollment, which drives our interest expense down.

We also see with the technology investments that we're making, the cost of acquiring those card members I was referring to the fact that in Q4, we saw some of the lowest cost per account that we had experienced over the last 2 years. A lot of it can be tracked back to the value proposition, but some of it needs to be attributed as well to the technology investments that we made in our marketing infrastructure and new account origination systems.

An area where we see a lot of efficiencies as well and Gen AI will add even more is in the servicing area, big expense base for American Express because it's at the core of the value of American Express and our DNA servicing. As you know, when card members call us, we pick up the phone, and we do everything we can to help them out.

We are seeing now that the cost -- that the number of calls per account is coming down, and it came down significantly over the past few years. It's a function of either all the development that we did in the app where people can self -- card members can self-serve their needs. You can dispute a transaction, for instance online. You can freeze your card, if you lost it. You can request a new card, if you want a new card. You can upgrade if you want to do it as well.

So a lot of the servicing that used to be on the phone is now happening directly online. And that is generating a lot of efficiencies combined with the fact that our focus on younger card members naturally brings these younger card members to a web or in-app experience. So the combination of those 2 is pulling and pushing our expenses down, displacing expenses. And that's the reason why we're investing so much in technology, I would say. And we're going to keep investing. We have a lot of exciting stuff in the pipeline coming up in terms of AI.

Well, the more millennials and Gen Z you acquire, I mean they are digitally native, right? They may not even want to call.

That's right. But you know what, here's the other thing. To give you an example, in terms of the number of calls and interactions, when you look at the Gen Z, 63% of their interactions with us is in online, while it's only 13% for baby boomers. But the best part is when you measure satisfaction, their happiest cohort is actually either the Gen Z and the millennials. So they go online, they self-serve and the level -- the satisfaction with the service is even higher.

That's great. So maybe the last question before I turn it over to the audience. Your stock is trading. I wouldn't actually looked at the...

It's up to date.

Yes, it's up to date. A little above 20x the midpoint of your EPS guide for 2026. So obviously, it would be below that in '27 if you continue to grow EPS in the mid-teens. In the past, you've talked about running a company with accelerated growth and obviously, above-peer profitability metrics, and that deserves a valuation commensurate with that profile. So how you weigh valuation when thinking about buying back stock?

So we always looked at it. And when I look at backwards and look at our buyback decisions, I'm very pleased with the returns it generates, a lot better than the cost of capital. But if you take a step back, when you take -- if you buy an American Express share, you get a slice of an incredible business that is, at the same time, growing at a fast rate. We talked about the last 3 years, 10%, 11%. We guided towards 9% to 10% for the coming year. It's growing at a fast rate. It's also generating a lot of earnings. The combination of those 2 is incredibly powerful. And you had a third one, which is that the return on equity of 36%.

So we generate a lot of earnings. And we are very disciplined and thorough with our capital management policy. And of course, from time to time, we make an acquisition. We talked about Center. We talked about Resy and either I'm sure we're going to do some more, but we are very diligent at either returning this capital back to the shareholders and investing in our own stock because when I look at the quality of the card member base, the momentum we have, the incredible strong strength of their credit profile, when we stress test that business through an economic downturn in the context of CCAR, we get fantastic results, it gives me a lot of confidence in the compounding aspect of our business and the ability to generate per our vision, mid-teens EPS growth, amazing return on equity and return a lot of capital to shareholders.

So we are planning to buy back more shares. And I'm pretty sure that we're going to keep doing it because I believe that the stock is just going to go up further.

Great. No questions on the iPad. Any questions in the room from the audience, old fashion way? All right. Let's end it on that note. Thank you very much for stoping and for joining us.

Thank you.

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2025 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the conference over to our host, Head of Investor Relations, Mr. Kartik Ramachandran. Thank you. Please go ahead.

Thank you, Donna, and thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our reports on file with the SEC. The discussion today also contains non-GAAP financial measures, comparable GAAP financial measures are included in this quarter's earnings materials as well as the earnings materials for the prior periods we discussed. All of these are posted on our website at ir.americanexpress.com.

We will begin today with Steve Squeri, Chairman and CEO, who will start with some remarks about the company's progress and results. And then Chris Le Caillec, Chief Financial Officer, will provide a more detailed review of our financial performance. After that, we'll move to a Q&A session on the results with both Steve and Christophe.

With that, let me turn it over to Steve.

Thank you, Kartik. Good morning, and welcome to our fourth quarter earnings call. We had another year of strong performance, continuing the momentum we delivered since introducing our long-term growth aspirations in January of 2022. Full year revenues were up 10% to a record $72 billion, and EPS was $15.38, up 15% over last year, excluding the certified gain. Card Member spending was strong throughout the year. Card fee growth continued in double digits for three straight quarters, and we maintained excellent credit quality. Importantly, we continue to invest in areas that strengthen our membership model and drive our growth. For example, we continued our successful product refresh strategy with refreshes and close to a dozen countries around the world, including the launch of our new U.S. consumer and small business flying cards. We renewed and expanded our relationships with a rational co-brand partners, including British Airways, ANA and Air France KLM. We continue to build our membership assets with new lounges, the expansion of our hotel network, the Toast partnership and a series of new card member experiences. And we expanded global merchant acceptance to over 170 million locations worldwide, and we continue to deliver innovative mobile experience.

Turning to 2026 guidance. Given the strength and stability in our premium customer base, the momentum we're generating from our investments in the business and the flexibility we have to drive leverage in our business model, we expect 2026 revenue growth of 9% to 10%, and EPS of $17.30 to $17.90. We will also continue our strong track record of returning capital to shareholders with a planned 16% increase in the quarterly dividend to $0.95.

For the last several years, we've been managing a company with a focus on accelerated revenue and EPS growth. This has generated consistently strong momentum which gives me confidence in our ability to not only deliver on our 2026 guidance, but also to continue driving strong growth over the long term. The key to driving our growth has been our investment philosophy. We consistently invest to strengthen our competitive advantages across key areas, including our customer value propositions, marketing, technology, partnerships and coverage. In 2025, for example, we invested $6.3 billion in marketing, an increase of around 75% since 2019. And in just the last two years, both marketing and technology investments are up 20-plus percent. We apply a rigorous return discipline focusing on outcomes that drive growth. For example, after a product refresh, in addition to its financial results, we measure customer demand and engagement, credit quality, retention and relationship expansion. In evaluating our marketing investments, we measure the spend and revenue efficiency of our marketing dollars across thousands of campaigns. As a result of this process, we've created a robust marketplace of ideas, where we fund the best opportunities from across the company. This return discipline, combined with our investment flexibility enables us to dynamically reallocate resources to those opportunities that represent the highest returns. A great example of this is our recent decision to quickly redirect marketing investments to our U.S. Platinum products given the strength we saw at the end of the year. One of the key lessons we've learned in executing this philosophy is that the investments we make in our value propositions pay off in multiple ways, including increasing customer demand and engagement, driving business to our merchant partners, maintaining strong credit performance and driving efficiencies by enabling marketing dollars to go further. We're seeing this in our new U.S. consumer Platinum Card, which continues to perform even better than our expectations. Customer demand is high, engagement is up, credit quality continues to be excellent, and we're seeing no change in retention rates as the new fee kicks in. At the same time, investments in our marketing capabilities have driven acquisition incentives to some of the lowest levels in the last couple of years. Powering the success of our product refresh strategy and our growth overall on the investments we're making in technology. This enables us to quickly introduce new capabilities that drive customer engagement and satisfaction, add new partners and categories at our card members value and develop new customer experiences that enrich Amex membership. We now spend $5 billion annually on technology. At a high level, we categorized our tech spending into two broad categories. One, I would call run-the-business investments things like infrastructure, software licenses and cybersecurity and investments in development activities. Development includes things like new mobile experiences and capabilities and the ongoing modernization of our core systems, which we upgrade regularly, similar to our product refresh strategy to stay on the cutting edge. For example, we're rolling out our new third-generation data and analytics platform, which will enable greater personalization and marketing, improved servicing experiences augment our industry-leading fraud capabilities, enable new gen AI and agentic use cases. The new platform, which is built on the public cloud is already reducing the time for key processes in marketing and fraud by 90%, and we expect to migrate 100% of our data and analytics processes to the new platform by 2027.

We continue to invest in enhancing our app experiences in a number of ways from the new Platinum onboarding experience and the launch of our travel app to digital journeys that enable self-servicing. As a result, we're driving more revenue generating engagement via the apps, and we're creating operating efficiencies from digital self-servicing. Over the last three years, for example, the number of calls per account coming into our service centers has dropped by 25%. We're also expanding our digital capabilities for business customers, including the integration of Center's Expense Management solution, which we plan to launch later this year as part of a suite of offerings for small and middle market commercial customers. And we've created an enterprise AI enablement layer to support the development and launch of Gen AI and agent capabilities, including those already in markets such as our travel customer assist tool, our dining companion experience as well as the deployment of GenAI tools to nearly all our colleagues worldwide. By successfully executing this investment philosophy over the last several years, we've delivered on our goals of accelerating revenue and EPS growth while maintaining best-in-class credit performance. At the same time, we are substantially increasing capital returns to shareholders. Our expectations for 2026 are no different. We expect to continue delivering the pace and quality of growth we've seen in recent years, while also continuing to invest in areas to sustain our growth and deliver strong capital returns to shareholders.

In summary, we are operating from a position of strength. Thanks to our loyal premium customers and the dedication of our world-class colleagues, and I'm confident in our colleagues' ability to continue to innovate for our customers as we invest for growth to drive long-term consistent results.

Now I'll hand it over to Christophe for more details about the quarter and full year results, and then we'll take your questions.

Thanks, Steve, and good morning, everyone. In 2025, we generated 10% revenue growth and EPS of $15.38, up 15% Accertify. If you look back at our performance over the past three years, what you see is a track record of delivering consistent and strong results. We have driven average return growth of 11% per year and have generated mid-teens EPS growth with three consecutive years. Importantly, we delivered these results while maintaining a disciplined focus on premium products and high credit standards. Our momentum continued in 2025, we saw healthy spending and loan growth throughout the year and continued demand for our premium products. Net card fee grew at 18% and reached a record of $10 billion for the year, and we drove greater scale of the business through increased investment, enhancing our ability to drive operating leverage over the long term. Overall, our business model is performing as we expected, driving our performance in the year ahead.

Turning to business trends for the quarter. Total spend was up 8% FX adjusted, consistent with Q3. Both Goods and Services and T&E continued to grow at a faster pace than during the first half of the year. Retail spending continued to show good momentum in the quarter, up 10%, and spending at luxury retail merchants was up 15%, reflecting the continued strength of our customer base. Growth in the airline and lodging spend was largely stable and restaurant spending was up 9% once again this quarter. Our dining assets are driving high levels of engagement with spend on U.S. resi restaurants by U.S. consumer customers, up by more than 20%. Momentum from younger members -- from younger customers also continued. As of Q4, millennial and Gen Z customers now make up the largest share of U.S. consumer spending, and they remain the fastest-growing cohorts. That momentum is driven by our success in attracting younger customers into the franchise. For example, the average age of new customers is 33 on the U.S. consumer Platinum Card and 29 on the U.S. Consumer Gold Card, giving us a long runway to grow our relationships with these customers over time.

International also delivered another very strong quarter, we spent up 12% FX adjusted. Growth remains broad-based across consumer and business customers and across geographies. Overall, transactions growth of 9% was consistent with what we've seen throughout the year and reflects continued engagement from our customers. Looking at the first three weeks of January, we continue to see good momentum in spend trends. As we look ahead to 2026, we are encouraged by the strength and stability that we continue to see across our customer base.

Turning to new acquisition. Demand for our premium products remains very strong. Although the overall number of new parts is down versus Q3, we reallocated marketing dollars away from lower cost cash back products to platinum and platinum new acquisitions were up significantly. In fact, the percentage of fee-paying products for U.S. consumer is up 8 percentage points year-over-year.

Turning to balance growth and credit. Loans and core member receivables increased 7% year-over-year FX adjusted, growing at a similar pace to build business. There was about a 1 percentage point impact on balanced growth from our held for sale portfolios again this quarter. In 2026, we expect loans and receivables to continue to grow largely in line with Bill business. Our credit performance throughout the year was remarkably strong and stable. Delinquency rates were flat throughout the year and write-off rates remain best-in-class. Notably, both delinquency and write-off rates are still below 2019 levels. In 2026, we expect credit metrics to remain generally stable with some seasonal variation in provision across quarters.

Turning to revenue on Slide 14. Revenue was up 10% FX reported for both Q4 and the full year. Momentum was broad-based across revenue lines with net card fees, NII and service fees and other revenue, all growing at double-digit rates. Net card fees reached record levels, driven by continued success in acquiring new customers on to fee-paying products, our ongoing cycle of product refreshes and our high retention rates. In Q4, card fees were up 16% of FX adjusted, moderating a bit as we expected. In 2026, we expect card fee growth to pick up as the year progresses as we see the impact from the platinum refresh exiting the year in the high teens. We have now started applying the new annual fee for U.S. Platinum Card members reaching their renewal anniversaries. For those customers we have seen no change to our very high retention rates relative to pre refresh. Net interest income was up 12% again this quarter, continuing to grow faster than balances. We expect NII growth to continue to outpace growth in loans and receivables in 2026.

Turning to expense performance. The VCE to revenue ratio was 45% this quarter. The VCE ratio stepped up from earlier in the year as we expected, driven by the investment we made in the value propositions of our U.S. Platinum Cards. As Steve noted, VCE investments are an important part of our model. This support revenue growth by driving customer acquisition and engagement, they improved credit outcomes by attracting highly creditworthy customers, and they drive marketing efficiency by increasing demand for our products. In 2026, we expect the VCE to revenue ratio to be around 44%, driven by these investments and ongoing mix shift towards premium products and assuming a similar spend environment to what we've seen recently. We continue to drive leverage from our operating expenses with OpEx as a percentage of revenue down 4 points since 2022, even as we increased our technology spend by 11% for the year. In 2026, we expect operating expenses to grow in the mid-single digits. Marketing expense totaled $6.3 billion for the year up 4% year-over-year. We expect marketing expense to be up in the low single digits in 2026 as we look to generate efficiencies from the investment in product value propositions and technology, as Steve discussed.

Before leaving expenses, let me add to Steve's comments about our investment approach and where those investments sit in the P&L. At a high level, when we think about growth, we consider three types of investments. The first is spin on welcome offers and distribution channels that generate demand for our cards. These expenses are reported on the marketing line. Second, a significant part of our technology spend drives growth. For example, the new travel app or the enhancements we made to the Amex app for the platinum refresh, these expenses are reported in operating expenses. And third, are the customer benefits and partnership associated with card membership, which generate demand and customer engagement. The recent step-up in car member services on the Platinum Card is a good example of this type of investment. These expenses show up in VCE. Every year, we balance how much of these investments to deploy for growth across these investment categories. For 2026, we plan for investment levels to continue to be high with a record level of technology development, the step up in the value proposition of our U.S. Platinum Cards and with a large marketing budget, and we plan to invest at these levels while generating strong bottom line growth in line with our aspirations.

Moving on to capital. We continue to deliver very strong returns with an ROE of 34% for the full year. We returned $7.6 billion of capital to our shareholders, including $2.3 billion of dividends and $5.3 billion of share repurchases. In 2026, we expect to increase our quarterly dividend by 16% to $0.95 per share, consistent with our approach of growing our dividend in line with earnings and our 20% to 25% target payout ratio. With this plan increase, the dividend will be up by more than 80% since 2022, and we have reduced the share count by 7% since then, while maintaining capital well in excess of regulatory minimum levels. This demonstrates our confidence in the sustainability of earnings generated by our model and our disciplined capital management. We also have a robust and diverse funding stack, supported by our continued demand for our high-yield savings accounts with balances up 8% year-over-year. The majority of those balances come from our com members who, on average, hold higher deposit balances than noncore members, given strong engagement with our brand and the premium nature of our cut member base. With less than 10% of our U.S. consumer card members currently holding a high-yield savings account with us, we see a long runway for growth. This brings me to our 2026 guidance. We continue to run our business with an aspiration to achieve 10%-plus revenue growth and mid-teens EPS growth.

As shown on Slide 21, for the full year 2026, we expect revenue growth of 9% to 10% and earnings per share between $17.30 and $17.90. 2025 was a very strong year for the company. We are well positioned to continue our track record of strong growth into 2026, and we feel good about the year ahead.

With that, I'll turn the call back over to Kartik, and we'll take your questions.

Thank you, Christophe. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just one question. Thank you for your cooperation. And with that, the operator will now open up the line for questions. Operator?

[Operator Instructions] Our first question comes from Ryan Nash of Goldman Sachs.

Maybe I'm going to start with the net cards acquired, Steve. Can you maybe expand on the comments regarding allocating away from cash back and putting this towards fee-paying products? And do you expect this remix to continue? And maybe just talk about how it will impact the results going forward?

Yes. So I think as I said in my comments, we have the ability when we see opportunity to be really flexible with our marketing investments, and we saw a tremendous demand for premium products, particularly the platinum card. And as we go forward, we'll continue to adjust as necessary. I don't -- again, I don't think this affects the overall results because we don't really focus so much on acquiring cards as much as we focus on acquiring revenue, and we're hitting all our revenue targets, and we're hitting our return on investment target. So again, I wouldn't focus too much. And if you look at it sequentially, it's a little bit down. If you look at it year-over-year, it's 100,000 cards, and that led to an increase in platinum cards. So we're really happy with those decisions. And we think it was the -- obviously the right thing to do.

Maybe I'll add two small things. First one is that there is variations among the quarters. Some of that is just a function of our own marketing plans, whether we're running LT -- limited time offers or not. And so that drives volatility from one quarter to another. And as you saw, Q4 last year was also lower. The other thing that I mentioned is that if you focus just on fee-paying cards in the U.S. consumer business, the percentage of NCA paying a fee went up by 8 percentage points from Q4 last year to Q4 this year. This is not exactly visible to you in the numbers that we are sharing with you, but this shows that the efficiency of our marketing dollars is improving, and that's at the end what matters.

The next question is coming from Sanjay Sakhrani of KBW.

Had a question on commercial services. Obviously, SME spend still remains pretty weak, saw a slight deceleration. I'm just curious, as we think about next or this year, like what gets things going a little bit more some of the investments you've made. Obviously, some of your competitors have made some M&A moves and are getting deeper into this space. How do you think that changes sort of the competitive backdrop in which you operate, and how would you compare your products?

Yes. Look, I think when you tease out SMB, you've got to look at middle market, you've got to look at small business. I think small business is really, really strong. I think middle market is where you see a little bit of the slowdown. I think as far as the competitive space, and look, you just saw Capital One just acquired [indiscernible]. You've got ramp out there. We acquired center last year, which we'll be launching probably by midyear. And it's a highly competitive space. Having said that, we're still 3x larger than anybody else. Our Platinum refresh has gone very, very well. And we're looking for a pickup as the year goes on, and we'll be communicating more in terms of just what's going to go on in our overall commercial strategy as the year goes on from a product refresh perspective. So yes, it's a highly competitive market. I think the other thing to look at is, it's not just us that is sort of slow on the overall growth as it relates to SMB. And I think most of it is middle market from an industry perspective. So again, competitive, I like the hand that we have. I like the plans that we have going forward, and we'll be communicating more as the year goes on in that.

The next question is coming from Don Fandetti of Wells Fargo.

Steve, can you talk a little bit about 2026 in terms of U.S. consumer build business and the health of the premium consumer. I know there's a sort of scenario where we could run a little hot. There's a lot of stimulus. And just want to get your kind of sense, I mean that you're running at 9% now. Is it like steady state from here, or could we accelerate?

Look, we saw a big uplift in Platinum over to holidays. And I think the momentum that the new Platinum launch has given us the momentum that Gold has given us we're really bullish from a consumer perspective. Will it go ahead of 9? I don't know. But I like what our card members are doing with the product. They're really engaging. I think one of the big things that is sort of lost on a lot of people was the platinum app that we launched and the ability for our card members to really engage with the product and to go out there and spend. I mean if you look at restaurant spending, for example, for the quarter, it's up 9%. If you look at resi restaurant spending, it's up 20%. And that's really due to the engagement of our Platinum Card holders, and it's due to the engagement of our Gold cardholders with our resi restaurants. So that synergy has really worked out very, very well from us. So again, I'm not projecting more than 9%, but we do have very, very strong momentum. And that momentum, and as Christophe just talked about, as well, that momentum from a Platinum acquisition perspective, we expect to continue.

The next question is coming from Erika Najarian of UBS.

I just wanted to revisit the net cards acquired number because this is a big talking point with investors before the call began. So completely understand the message. And of course, the focus should be on revenue generation and not that number. But as we think about this remix strategy, as you refocus more of your dollars towards the fee-paying cards, does that, over time, then impact the trajectory of net card fees, for example, on Slide 15 or get you closer to that plus part of your long-term aspiration in terms of revenue growth?

Erika, so yes, you're right. The overall portfolio is slowly getting more premium either the Platinum portfolio is growing at a very fast pace. The spend because of the strong engagement is also growing at a faster pace than the rest. And we have celebrated on this call for many quarters, the growth and their sustained growth on card fees, which just reached $10 billion, right? And there is in the slides that we talked about this morning, you can see the trajectory over time. A lot of that is coming from the premium cards, especially Platinum. And as you think about that card fee line in the P&L for 2026, which is right now, growing at 16%, which in itself is like an amazingly strong number for base like that is reaching $10 billion annually. We expect that growth rate to pick up in the balance as the year progresses. And as more and more of our card members on the Platinum card are facing their renewal anniversary, and we are moving them to the new price points. So that's very much the dynamic indeed that is happening. The other proof points that are either visible that the portfolio is getting more premium is the incredible performance on the credit side, right? You see those delinquency rates, those write-off rates that are not only best-in-class, but they are flat. And I compare and contrast that with many of our competitors that have guided for a small increase. And while we're talking about stability when it comes to those metrics. So the portfolio is indeed moving towards a more premium portfolio and either a lot of the P&L lines are reflecting that.

The next question is coming from Rick Shane of JPMorgan.

It's sort of a follow-on to what Erika just asked. When we look at 2025, margin, the strong -- the low expense on credit on a relative side allowed you to aggressively ramp marketing and rewards. When you think about the '26 guidance, it feels like it is more in balance in terms of more normalized growth of credit expense. If credit expense continues to be low, as Christoph you just alluded to, is there incremental opportunity for investment, or is that something we would see fall to the bottom line, American Express has historically reinvested those excess returns.

Yes. So to your point, Rick. Credit is very low and there is a hard limit to how low these numbers can be, right? And 2% is pretty much at that limit. The other core component of the model, which we also try to illustrate this quarter is the efficiencies that we're getting on operating expenses, right? So as we are extending their -- increasing the value proposition on our premium products. As premium products are getting a bigger share of our portfolio, it's putting a downward pressure on credit, and we are generating efficiencies on marketing acquisition as well as operating expenses. And that's very much how the model is working. And we try to illustrate that also by saying that this is not by constraining technology growth. We're actually growing technology. I think the CAGR is 11%. It's all the other operating expenses that are generating efficiencies. So if you think about modeling American Express and thinking about how the business is working, that's very much how you should think about it. Now when it comes to potential upside and what we would do with it, we're guiding towards mid-teens EPS growth. We're providing a range. This includes a lot of scenarios, including where we overperformed some lines and underperform on some others. The idea here is just like we are committed to that EPS, but there will be certainly movements between the lines as the year progresses.

The next question is coming from Mark DeVries of Deutsche Bank.

I had a question about kind of the impact you see on engagement and the level of spend from existing customers when you do a meaningful product refresh like you did with Platinum. Do you see existing customers actually change the way they use their card when you layer on new value. And if so -- is there also a delay in that? Is they take time to kind of gain awareness of what's kind of new and incremental kind of in contrast to new customers acquired to presumably are being acquired because they are aware of that and very immediately engage around the new value you've layered on.

Yes, I think with existing customers, they don't uptake it as quickly as new customers do, but what I will tell you is that it goes very quickly. The engagement with lululemon, the engagement with resi, the engagement with the hotel credit was pretty quick with our existing customers with the new customers, it's what draws them immediately. And I think what's really important there is that draw is why, as you move forward when you have a new value proposition, you don't need to heavy up as much as marketing. I mean -- and Christophe's point about movement between lines. So there's movement between marketing, this better credit performance is operating expenses, you got to look at the entire thing. But the bottom line is new customers look at the product, they're very rational about it, and they engage in everything they want to engage in. The existing customers have a little bit of inertia, but then all of a sudden they start to engage. And one of the things that really made a huge difference for us was the Platinum travel app, the Platinum App. It made it so easy to enroll in all the benefits. And we didn't -- I don't think Christophe mentioned this, but we certainly have it in. We had an uptick of 30% in our travel bookings in the fourth quarter. That is a direct result of that Platinum launch and the engagement of our cardholders. So you get a lot more engagement across the board. And you just see what's going on with resi. Our restaurant spending is up 20%. So all of the metrics that we look at speaks to the fact that this was a wildly successful product launch, it attracted new cardholders and it engaged existing cardholders to spend even more.

The next question is coming from Craig Maurer of FT Partners.

I actually wanted to ask the flip side to the last question, which is when we think about card member services growth as we move through the year, how much of -- I'm trying to think of how much the growth rate itself could moderate while expecting it to remain high until you lap the relaunch of Platinum. But how much do you think the fourth quarter growth rate was related to this being the new product? And now that we're moving through into the early part of the year, some of that new car smell kind of wears off. And so engagement might wane a little bit versus where we were. So I'm just trying to think about the cadence of that spend through the year.

Yes. I'll let make a couple of comments, and I'll let Christophe go a little bit further. But I think that during that -- look, we launched on September 18th or so, and I think we got to certain engagement levels. I think those are probably the engagement levels we're going to get to. I think what you'll see is as new people come on, they will engage. But I think the existing card base has planted their flag if you will. This is what they're going to use out of the new product. And a new card base, they've done what they're going to do. So as we plan for this, and we're fine with where these -- where the VCE levels are. I mean, it's expected. But as we plan for this, I think you're right, I think you get to a point where it sort of stabilizes, right? Not every card member uses every single benefit. It's just -- and that's not how we really designed the product, right? We designed the products so that it appeals to a wide variety of people. There are core benefits that a lot of people eat, right? So they'll use the resi credit and people take Ubers and things like that. But then there are other credits on the side that they may not use. They may not use a Walmart Plus. They may not use a lululemon and so forth. And so you get to that sort of balance, if you will, where it's a lot easier to project what's going to happen. Some things you get more uptake than you thought you were going to get and other things you get less uptake that you thought you could get. But in balance, we're very happy with the overall engagement, which then leads to a wide variety of spend and more spend on the product.

I don't have a lot to add. I would just say that in the guidance that we gave you, we are assuming that the VCE to revenue ratio will be around 44%. And we'll see whether we lend or not. The current level of spend, of course, because another big driver of that VCE is the rewards cost. But we are assuming around 44% for the balance of the year, and we'll be watching it

The next question is coming from Jeff Adelson of Morgan Stanley.

Wanted to just ask about the 10% credit card cap proposal are. Obviously, everybody has been quite vocal about this, the unintended consequences, et cetera. Just wondering what your view is of that, what might happen to Amex in the industry if this goes through, obviously, seems like Amex is more of a defensive moat against us with the premium card focus. But maybe just discuss that as well any conversations you've had with the administration?

Look, I think everybody has pretty much said everything there is to say on this. I think, look, affordability is really important. I don't think a 10% credit card cap is the answer to that. I think it would reduce the number of cards ultimately in the marketplace. I think it would reduce line sizes. America pretty much runs on credit. I think that would impact small businesses and so forth, and it just has -- it just has this sort of effect of a downward spiral from my perspective. So I don't think that's the answer. And I mean, obviously, we have conversations, and I'm not going to get into those. But we just -- we don't think it's a good idea.

The next question is coming from John Pancari of Evercore ISI.

Steve, you mentioned on the competitive backdrop, I know you mentioned the commercial dynamics already. Can you discuss a little bit more on the consumer side? I know competing card players are leaning in still to their travel rewards programs and all that. And then what poses the greatest risk to your 2026 outlook. Is it that competitive dynamic, or would you say it's more macroeconomic or political at this point?

I would say if you look at risk, it's more macroeconomic or political. The competitive dynamic has been here since the financial crisis. I mean this became a very interesting business after the financial crisis because it's a great return. It's a category that continues to grow about 8% every year. It's a great return on assets for people, and it's a great way to deploy capital. So the competitive dynamic in consumer is as tough as it's ever been. JPMorgan is out there, Citi is out there, Capital One is out there. And the challenge for us has been the challenge that we faced for the last 15 years is to say 1 or 2 or 3 steps ahead of our competitors. And when you look at what our competitors are doing, they are following our playbook. And so our goal is to continue to move that playbook to a higher level, and that's what we'll continue to do and to execute and provide fantastic service to our customers. The one thing I'll say that nobody has really been able to replicate is our customer service. I mean we continue year-over-year to perform and win the J.D. Power Award for service. And I think service is sometimes an underlooked component of the overall value proposition. And it's one that we invest in quite heavily. So it's a highly competitive market. We never rest on our laurels, and we'll keep fighting and keep anticipating where the competition is going to go and beat them to that point.

Next question is coming from Moshe Orenbuch of TD Cowen.

Most of my questions have actually been asked and answered. I was just hoping you could expand a little bit on how you're kind of positioning American Express with your kind of recent acquisitions versus -- in that small business arena given the competition, which obviously has always been there from some of those larger private companies. And now, obviously, one of them will be combining with a large bank.

Yes. Look, I think that, as I said, our center acquisition especially from a small business perspective, rather than partnering with expense management providers as we've done with whether it was Concur or IBM before that, will now have our own expense management offering. And I think it's what small businesses want. It's what middle market companies want. I think additionally, and I'm not going to get into the details on this call, but we will be sharing over the next couple of months, just a road map of where we are going from a commercial perspective, both from a product perspective, an integration perspective and other technical capabilities that we will be adding. I think the small business and middle market space is highly competitive. It's been very competitive as it relates to a value proposition perspective. And I think now the puck is now moving and has moved to -- from a software perspective. I think the combination of Capital One and Brex is -- it's a very good move for Capital One. It's probably a good move for Brex as well. It's great software, and you put a balance sheet together, and I think that works. They'll work on their integration issues and challenges like you do when you have an acquisition like that. But I think when we're out in the marketplace, I feel that we're going to be able to compete quite effectively. So more to come on it, but it's -- it will be a battleground just like it has been. It's just that it's going to be a battleground on even more multiple fronts now.

The next question is coming from Mihir Bhatia of Bank of America.

Steve, you kind of may preempted a little bit of my question with that last answer. But I was just wondering, obviously, in 2025, the Platinum refresh was a big thing at Amex. As we go into 2026, are there two or three initiatives that are really high impact that you're working on that we should be thinking about? Just like what are the priorities, I guess, for 2026?

I mean, look, the priority is a pretty much -- if you think about even the Platinum refresh, you go back to sort of strategic priorities that we have from a company perspective, which is really to win in the premium space to continue to build our position in commercial, obviously, our coverage and our network initiatives, and we're going to continue to focus on those things. I mean listen, the platinum the Platinum Card is launched, right? Now we want to continue to get value out of that platinum launch in both consumer and in small business. We're going to continue to build coverage, obviously, in international as that continues to grow and continues to be the fastest going overall part of our business. And we're going to continue to build more capabilities, both digital capabilities and capabilities as we just discussed for our small business customers. And then we've got resi and talk, and we're going to be combining those as the year goes on as -- and I think those two acquisitions have been really great for us as you see the differential in overall restaurant spending, overall restaurant resi spending, which is not only good for our card members, good for us, but good for the restaurants as well. So I mean, as I said to somebody on one of our calls recently. I think when you sort of look at this year, it's more of the same for us, right? It will be -- we're still going to have product refreshes, not as big as we had from a platinum perspective this year. But the fact that we continue to refresh our products that we continue to refresh our technology base that we continue to make more things available to our consumers that we continue to build on partnerships and that we continue to use those partnerships to bring value to our card members is something that we're going to continue to lean into.

The next question is coming from Brian Foran of Truist.

I guess you've touched on my question a little bit through various answers. I just want to circle back. I do hear a lot of investor concern for Amex. And for the market as a whole, just whether the cost to grow is getting too high. And it is tough to measure from the outside, partly because of the investment required upfront to get premium customers. And then partly, I feel like I've been doing this 20 years, and I still have to constantly relearn the lesson that credit card accounting pulls forward a lot of the expenses and spreads out a lot of the benefits. You've been very clear of the metrics you're watching show that you're putting on good, very good, very profitable growth. You've shared some of them with us here. You've talked about the rigor behind measured debt. But I wonder as you look across all your businesses, you talked a lot of customers, geographies, marketing, co-brand channels, rewards benefits. Is there any part of the market where you do think it's getting overheated, and where you have adjusted or might need to adjust, or is this kind of cost to grow concern in the market right now, really just kind of economic and accounting dynamics showing us all the costs upfront and the benefits more on the lag.

Well, I'll let Christophe comment after I comment. I'd look at the last 4 or 5 years, and I'd look at what our guidance is. And what we're basically saying here is consistently, we're going to grow 10% and consistently, we're going to deliver mid-teens EPS growth. Now a lot of companies do that. And we are committed to doing that. And one of the earlier questions was, well, if you have extra flexibility, you're going to drop it down to shareholders. A couple of years ago, we had extra flexibility with the certified game. We dropped it down to shareholders. I think one of the reasons we have been able to have this consistent growth trajectory over the last really five years now and going into this year is the plan is because we have stayed true to who we are, and we have made investments for the longer term and not taking any short-term shortcuts. And so while people may not be happy all the time that, hey, you had some extra money and you invested it, why didn't you drop that to shareholders this year? It's because our goal is to drive consistent shareholder returns year after year over year to continue to grow our dividend in line with how we're growing EPS, to continue to do our share buyback program, to continue to return capital to shareholders, which has allowed us to drive our market cap up and has allowed us to be consistent. It's really been the same old story with Amex for the last 4 or 5 years, and that's what we're going to continue. So I don't look at the cost to grow is all that all that expensive right now. I mean we stay out of things that we think are non-economical, and there are portfolios out there that we do not think are economical. We do not bid on it. We have a large co-brand portfolio, and we believe that, that portfolio is a 1 plus 1 equals 3 for us. And we have a great premium customer base. We're growing very strongly internationally, and we still see those growth prospects over the horizon. As I said earlier, this is a market that continues to grow on a global basis by about 8%. So again, I don't share the -- it looks like it's too expensive to be in this business. I think you may see from time to time, you'll see some rewards costs that get a little bit higher. You might see some incentives office to get a little bit higher. But I think what people fail to do is to look in aggregate at the entire expense base, and how one investment plays off another investment. And so when Christophe and I sit down and look at the expense base, we look at an investment, how it impacts our operating leverage, how it impacts our credit performance, how it impacts our ability maybe to dial back marketing or maybe we have to dial up marketing. So there's a lot of levers that we're pulling. We've been doing this a long time now. And so we feel really good about '26 and beyond at this point, given the macro environment that we have, the political -- with all the contingencies that are out there, but yes, I don't view this as an overheated market in any way, shape or form for us. It's competitive, no doubt, but I don't think it's over either from a plus perspective.

Yes. I'll add two more thoughts, Brian. The first one is when you look at the quarter we're reporting, these are an outcome of a lot of decisions we made 2 years ago, 5 years ago, 10 years ago, 25 years ago. And we -- that's the way we think about the decisions we're making now. When we are acquiring a new card member, we're thinking about that card member, not only in terms of what that car member will do to us this year or next year, we're thinking about the next 20 years. That's very much critical to the way we make all our decisions. And when you think about specifically the cost of growth, on the back of this Platinum refresh, when I look at the cost of acquiring and welcome offers that we put on the market, we've seen some of the lower cost of acquisition for Platinum in the last 2 years happening like in Q4. And so it's definitely a very competitive place. We have invested in value proposition. We have an amazing brand. We have a technology that allow us to personalize those offers and optimize the cost of origination and acquisition. And when you put all of this together, and you combine that with that long-term view that we have on those relationships. I can tell you the economics are very compelling. And that's why we -- and that's how we are allocating our investment dollars.

Our final question will come from Chris Kennedy of William Blair.

You've given a lot of great engagement metrics, and you do have the new data analytics platform on the horizon. Can you just talk about that journey and the tools that you'll have to drive more card member engagement as you get into AI, et cetera, et cetera?

Well, I think as -- look, and we're constantly -- this is, I think, in the last 10 years, the third big data mart conversion that we've done here as technology gets better and better. I think what's really exciting for us is to be able to take large language models that are out there and take our data and insert that in and really come up with great card member offers, great card member insights, be able to create archetypes of various cardholders and be able then to treat cardholders and target cardholders in a much more effective way. And so -- and we'll roll those tools out and access to that entire data mark across the entire company. And so it takes till 2027 because you're doing it sort of organization by organization, process by process, application by application. But we're already seeing some benefits of that in some of our card member marketing, which again leads to some of the reduction in overall costs. So we're excited by that. We're excited that it's on the cloud, which gives us the ability to expand that on a very dynamic basis. And so I think as we go on, we'll be able to talk more about just how the proof points of that comes out. But this is a business that not only you have to invest in value propositions, but you really have to invest in a life way in the technology behind it because ultimately, it's a technology that drives us value propositions, and it's a technology that drives the appropriate engagement with your cardholders.

With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions. Operator, back to you.

Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access a digital replay of the call at 877-660-6853 or 201-612-7415, Access Code 13757801 after 1:00 p.m. Eastern Time on January 30th.

All right. Up next, we're excited to have American Express joining us once again. Amex continued to deliver strong top line growth through increased customer acquisition, benefits from product refreshes, including its biggest product, the U.S. Platinum Card, and it continues to leverage its best-in-class brand. Here to tell us more about the American Express story is Chairman and CEO, Steve Squeri. Steve, thank you once again for joining us.

My pleasure.

So maybe let's kick it off 2025 has been another outstanding year for Amex. You're on track to generate 9% to 10% revenue growth, mid-teens EPS growth. And as I noted, you successfully refreshed your biggest product or in the process of it. With that as a backdrop, maybe reflect on this year, what were the biggest achievements? And more importantly, how do you think this positions the company to succeed as we look ahead?

Good. Well, pleasure to be here again. Let me start. I mean, this year was an important year for us. It was our 175th year anniversary. So I'm going to take the 35 minutes and go through all 175 years. I mean if you look at this company over that period of time, it's a company that's been built on trust, service and security. It is a company that has constantly innovated. We started as FedEx before FedEx was FedEx and now we are the premium card provider in the industry. And I think that's an important -- that innovation piece is really critical to our success.

I think the other thing that is really key is when you look at our business model, you look at our global premium customer base and you look at our membership model, we believe that is second to none. Having said that, when you look back when we put our aspiration out of 10% revenue growth and mid-teens EPS growth, we put that out in 2022, go to -- you look at '22, '23 and '24, FX-adjusted revenues greater than 10% or greater, mid-teens EPS growth. When you look at where we are this year, 9% revenue growth year-to-date, 11% revenue growth in Q3.

So what makes that happen? I think it's been our commitment, again, not only to innovation, but our commitment to long-term investing. And I think that then shows up. And where do we invest? If you look at this year, we've invested in product. We did our -- not only do our Platinum refreshes in the U.S. in both small business and consumer, but we also refreshed other products around the world, partnerships. We continue to lean into partnerships. And we re-signed BA, we re-signed ANA. We re-signed Air France-KLM. Now you see people like Oura and lululemon in our partnership piece.

We continue to expand our membership assets, whether that's lounges, more fine hotels and resorts. And those things are really important and coverage continues to really expand for us. And then we're leaning into technology. And so as you look at that as the foundation, it is a great foundation for growth for us. And that's what makes me excited about going into '26.

So you've been successful in terms of improving billings growth. I think we're around 8% in the recent quarter. Maybe just talk about what is driving the success? And do you think it is sustainable over the medium term? And I guess I'll add to that, since we're now 2 months through the quarter, maybe give us an update on billings performance.

Yes. So I think, look, when you look at the last 18 months or so prior to Q3, we're pretty steady, right, 7%, 6.7%, 7.2%, whatever it might have been. But in Q3, we're at 8.5% billings growth, and that was about 200 basis points greater than we had been. So what's driving that? I think what you see driving that is more organic growth. You're seeing acquisition levels and retention levels continue to be really strong for us. Goods & Services and retail spending continues to be strong. We saw an uptick in T&E in the third quarter.

But to give you a little insight on what we're seeing here in the fourth quarter, the fourth quarter so far looks pretty much exactly like the third quarter, and we're pretty happy about that. When you look at what happened in what we would call the holiday season, sort of the week before Thanksgiving to -- up to Cyber Monday, we saw 9% growth in U.S. consumer retail spending and 13% growth in platinum retail -- U.S. consumer platinum spending as well. So -- and I think that speaks to the refresh and the engagement that people have.

That's great. I'm sure Mrs. Nash contributed to that 13%.

Well, we hope so.

Definitely, maybe more.

Maybe Mr. Nash could take his wallet out too once in a while.

I'm going to leave the jokes out from here.

We're just wasting time.

Let's maybe talk about the Platinum refresh. Obviously, the hallmark of '25 has been this. And you gave some stats at earnings, which were interesting, 2x the new account acquisitions versus pre-refresh, record bookings on Amex Travel and a host of other things. Maybe just talk about so far the successes, what you've learned so far? And how do you think this distances you from others in the space?

Yes. I think -- look, I think for the last 7, 8 years now, we've really leaned into refreshes. And what we learned is refreshes work. And what we've also learned here is we're not talking about card refreshes anymore. What we're really talking about is membership model refreshes. And so if you look at how these refreshes have evolved over time, what has happened is, it's more about experiences. It's more leaning into Amex travel. It's Resy and it's Tock. And what's happened is our card members are engaging with our membership assets.

And so I think it's critically important that we continue to invest in those assets. And it's not just about credits and so forth. It truly is about experiences. But underlying everything, it's service. And so when you look at it, whether it's the millennials, whether it's the Gen Zs, boomers, Gen Xs, we continue to outdistance the competition from a service perspective and experience perspective. And I think we continue to outdistance and continue to invest in those assets, dining and travel, fine hotels and resorts and so forth to really make a difference to our card members.

So post the Platinum refresh, there was a really big focus on what it means for attracting new card members and generating growth. But in addition, investors have been focused on, obviously, the financial impact, particularly what it means for things like variable engagement costs. So can you talk about how the model works economically in terms of providing enough value for card members, but also obviously making it attractive for American Express?

Yes. I think it all starts again from the top with what the aspiration is, right? The aspiration is 10% revenue growth, mid-teens EPS growth. And I think we'll put a qualifier on that without going outside the credit box, okay? So we don't go outside the credit box. The second thing that I'll say is when we refresh a product, we look to include -- look to increase the overall profitability of that product and what its contribution is to revenue and to earnings while either improving or maintaining margin.

And so when you look at VCE, which you saw ticked up in the third quarter, and I will tell you, we will tick up again in the fourth quarter, VCE works for us in multiple different ways. When you invest in VCE, what it does for us is it helps us drive revenue because it gets more card member engagement. The other thing that it really does for us is it also attracts a higher credit quality customer for us. And so -- and there's more efficiency in marketing. If you think about this, when you have a product that has more value, you may not need to offer as much incentive from a marketing perspective. And so it makes your marketing dollars work a lot harder than they normally work. And so overall, while there is a focus on VCE, VCE is only one of the expenses within our overall model. We look at lower provision expense. We look at more efficiency from a marketing perspective.

And the other thing that you have to realize, which we don't disclose other than the high-level number is partner-funded value is such an important component of the value proposition. And so while VCE does go up, and when you look at that -- when you look at the value proposition, and how can they do this, we have some partners that really want to reach those customers. And so the bottom line is -- whether we do a refresh like this or we don't do a refresh like this, we're able to navigate within our ecosystem so that we can continue to stay with our aspirational revenue target and with our mid-teens EPS target.

No, that makes a ton of sense, and I appreciate all the color on that. I guess one of the features of the Platinum refresh was the continued integration and expansion of the assets that you've built in dining, travel and other elements of the ecosystem, which you just referenced. Maybe can you just talk a little bit more about what you're doing in some of those categories and how it's driving success in revenues for the company?

Yes. I think one of the things that we did is we made it a lot easier to access the benefits, right? So when you look at the onboarding app for Platinum, you look at the travel app that we have, it's a lot easier to take advantage of the benefits. It's a lot easier to integrate -- to engage with the company. I think the other thing that is that is really critical. When you start to look at our travel assets, you look at our dining assets, what we're doing is we're creating closed loops within closed loops. So if you think about it, we connect card members and we connect merchants across an entire ecosystem.

In dining, we're connecting card members, and we're connecting restaurants. And we're able to provide value within that. We're also able to provide value by integrating into Toast, so that now the reservation system can actually now interface with what you ordered. And so you have a better relationship at that point of sale, at that point of interaction with the restaurant. From a travel perspective, again, with the app that we did and the way that you can now interface with us, it makes it a much better experience, and we continue to upgrade from fine hotels and resorts.

And then you look at Amex Offers, which we've also continued to upgrade and then now launched Amex Ads. So think about Amex Ads existing within the ecosystem of the travel closed loop or the dining closed loop as well. So we've invested quite a bit there, and I think it makes a lot of sense for us.

I want to ask you how much exactly partners are funding in the plan because I know Kartik will get mad at me. But you recently disclosed your merchant partners offer $3 billion of value across a variety of benefits. Maybe you can just tell us more about how you work with the partners and how they support you through this model.

Yes. I mean, so look, what's -- if you take a step back, we talk a lot about the virtuous cycle, right? And so we have -- we are very fortunate to have a tremendous customer base, and that is a global customer base. It is a premium customer base, and it's a high credit quality customer base that spends a lot of money. Partners want access to that.

And so as we look to put together our value propositions. And if you look at the value propositions over the years, what's happened is they've continued to expand. They've gone beyond travel into -- obviously, into dining and into retail and health and wellness and streaming and so forth. And we have partners that want a piece of that because the virtuous cycle works. What happens is we bring in card members, merchants want access to them. As we get more offers, we bring in more card members, and it continues that overall loop.

If you look at -- like I'll give you an example from Resy. When we put the Resy credit on Gold and some of the Delta products, 97% of the Resy restaurants saw a card member that year that was eligible for the credit. And in those Resy restaurants, dining went up from those card members by 27%. So if you are a restaurant, why wouldn't you want to be part of the Resy ecosystem? And remember, we've just expanded now, and we've also got Tock. And then with the acquisition of Rooam, that allowed us to do that interface in with Toast.

So partner funded value is really important. It's important to the overall value proposition, but it's important for our partners, too, because it allows them to reach premium customers at a relatively low cost, not just on the consumer side, but on the small business side as well.

So I asked you a similar question on the earnings call, and it's only one question. When you go through a refresh like this, can you still generate mid-teens EPS growth while going through this? And just help us broadly think about some of the moving pieces.

Yes. So look, here's the reality, right? And it really goes back to what I said before about VCE. It's just asking the question a little bit differently. But the reality is, is that when you look at the size of the company, you go back to 2021, we're about a $42 billion revenue company. We're a $70-plus billion revenue company as we exit this year. Within that $70 billion worth of revenue, you have a lot more degrees of freedom that you can play within any refresh or within any initiative. It would be harder to do that as a $30 billion revenue company or a $40 billion revenue company, but you have to realize, the reason we're as big as we are is because we've been investing. We've been investing in acquisition of card members. We've been investing in value proposition. And so it gets right back down to it.

VCE, for example, as I said before, it works really hard. It drives extra revenue for us. It drives marketing efficiency for us, and it also gives us lower provision expense. And when you think about provision expense and you think about the value of having cardholders who don't go delinquent and don't write off, that pays off in spades for us. So -- and as I said, I don't want to repeat myself, but the reality is that when we do these refreshes, our focus is on making sure that the product is more -- contributes more from a revenue and earnings perspective and that we either minimally, we keep the margin or we increase the margin, and that drives the EPS.

And so when we do this, we don't walk away from the aspiration. So you're not going to hear us say, hey, we did a big refresh, give us a pass next year. Because as you know, the revenue from this refresh tends to come in afterwards, right? Because you get a card members who are in the franchise get a holiday. They don't get billed until their anniversary date. That doesn't start until January. Now the new cardholders that we're acquiring, they pay the fee right away. So you then have the revenue come in, which is a nice benefit for us as well because we're able to continue to survive. And as we move into '27, you'll see some of that revenue come in.

Got you. So you talked about this earlier. Several years ago, you laid out the 10% plus aspirational revenue growth target or aspiration. Talk about why you felt that was the right level for the company? And do you still feel that's the right level for the company?

Yes. I mean, well, the proof is in the pudding, right? I mean, so if you look at the last 3 years, and we're not going to count sort of going from '20 to '21. And when you look at '22, it was 25% growth, and we've had FX-adjusted growth of -- revenue growth of over 10% for the last 3 years, and we're in that range this year. Third quarter was really good. And I think that's the right focus for the organization. This was a company that was between 5% and 7% or so before. I just think that if we want to do bold things, we need to have a bigger business. And when I got up here for the first time years ago, we said we wanted to be a revenue-first company, but we weren't going to do that by sacrificing a credit box.

And so that revenue allows us to get the scale that we need to operate our business. We get a lot of leverage. At different points in time, we get leverage out of different expenses within our operating system. So maybe it's leverage out of marketing 1 year, maybe it's leverage out of VCE 1 year, maybe it's leverage out of provision or maybe it's leverage out of OpEx. But we're able to play with those gears as you go through. And so many times, people focus on only one of those components. We don't focus on one of those components. We focus on the entire playing field of our company because that allows us to make better decisions for our customers. And everything we do, it always has the customer in mind.

So you've had, I think, close to 30 straight quarters of double-digit card fee growth, which again is a testament to the success of the model. You referenced this before, but can you maybe just talk a little bit about what's happening in the near term with the Platinum refresh. And more broadly, talk about how the focus on the fee-paying products, which has sort of been a hallmark of your time as CEO drives the overall business model.

Yes. I think what you pay for is what you use, right? And that's just a simple sort of philosophy. And people are paying a premium price for the product and they want to engage with it. When you engage with the product, you spend. And so the model is fairly simple, right? You get fees by paying for a product that provides lots of benefits. And you don't have to be a brain surgeon to look at this and say, he's $895 for the Platinum Card, here's up to $3,500 worth of value. I think I can make this work.

And so what happens in making that work, you've got to spend. And as you spend, that drives revenue for us. Then as you're spending, you may say, hey, you know what, I need to pay over time. I need for this large purchase, I want to put this over 3 months, and we can do that. And so the model really works from the perspective of you get the card fees, you get the spending and then you get a component of the lending because the reality is our card members borrow. And I'd rather have high-quality card members borrowing from us than borrowing from our competitors.

And so that's why we've had this focus, and that's why you look at -- when you look at 70% of the consumer cards that we acquire are all fee-paying cards. And when you look at the cohorts that we're acquiring, whether that's millennial or Gen Z, they're paying that fee because they realize they're going to use the value. And again, we've said this many times, we get longer lifetime value out of these cardholders. As far as Platinum goes, we're exceeding our expectations in new card acquisitions for both small business and for consumer. And that -- we talked about that in the third quarter earnings that has continued to hold through, through November.

Great. Super helpful. So there's been a major focus on millennials and Gen Z, and how to be relevant with them. And you've been obviously incredibly successful in penetrating this cohort. However, does the enhanced product suite, how do you think about it in terms of working for all of your core customer cohorts? Like as an example, I would imagine some of the things that a baby boomer engaged in might not be as the same as the millennial. So how do you guys strike the right balance when designing products?

Well, let me talk as a baby boomer, okay? So...

I'm a little beyond millennial.

Yes. Well, you're more of a Gen Xer. But the reality is that when you look at our baby boomer population, we've retained 99% of that spending. And 25% of the 1% that we don't retain is because they die, okay? And we haven't figured out how to solve that yet. But the average tenure for our boomers is 23 years. We've got 99% retention of their spend. For the rest of the cohorts for the business, it's 98%.

When you look at the Platinum -- let's just talk about the Platinum Card. When you look at the Platinum Card and you look at the benefits on the Platinum Card, a boomer may not go to the same restaurants that a millennial or Gen Z goes to, but they eat. They travel. They use the lounges. They may or may not have an Oura ring. They may or may not go to lululemon, but there are so many components of that value proposition. So they may lean into more travel. So they may take more advantage of fine hotels and resorts. They may go to more high-end restaurants where it's harder to get a reservation because you're part of Resy or Tock.

And so when we design the value proposition, we designed that value proposition across that cohort, which is why we've expanded it. And it's also why let's not forget about the Gold Card. I mean the Gold Card has been known now as the dining card, right? And it's got a great value proposition for dining. So I think that as we look at it, we don't want to be targeted at one age group. We want to have a wide enough value proposition here so that's attractive to all our constituency. And I think we've been able to accomplish that. And so again, we use that $3,500 tagline as it relates to Platinum, but that can go up even higher or it can make it in a different way. It's all how you use the components of the value proposition.

So let's shift gears a bit and talk about small business. Small business growth has begun to pick up over the past quarter. I think it was up 4%, year-on-year, it had been running 1% or 2%. And when we go a level deeper, you noted that small businesses are actually doing very well, but it's been more of the middle market where there's been some softness driven by large transactions coming off the card as well as you've been upgrading your expense management offering. So can you talk about some of these issues you faced? And how are you addressing them?

Yes. I think, look, small business, talk about businesses under $5 million in revenue, they're doing fine. Middle market is a little bit more of a struggle, and it's an SME category. And there, a little bit more macro. It's an organic spend story, more conversion to ACH, expense management solutions are in there as well. And the way you address that, if you think about sort of even just the Platinum refresh, we put thresholds in of unlocking value over $250,000, whether it's AP One and some other benefits that you get from some of our partners. And it's also our acquisition of Center and rolling that out. But I think we're very happy with what's going on with small business, and we're addressing that middle market component.

Got you. Let's spend a couple of minutes talking about international growth. Obviously, it's been the strongest growth profile of the company. I think you've seen double-digit growth for many quarters now. And you're also growing this business double digit pre-pandemic. So maybe just talk a little bit about the drivers of growth there. Maybe let's just start on the issuing side of the business.

Yes. So from an international perspective, as you mentioned, pre-pandemic, it was the fastest-growing part of our business. It took longer to come back. But when you look at the last 3 years or so, it's again the fastest-growing part of our business. International business is 50% bigger than it was 3 years ago. You look at the third quarter, for example, within the third quarter, you had Canada, Australia and Japan grew at 18%. We've got millennial and Gen Z spending growing low 20%. We've got Platinum growing at 23%, 24%. So it's gone really, really well for us.

And the part that I think is exciting for us is we're underpenetrated. We are underpenetrated within the international markets, and we have value propositions that are playing. So that plays out with our acquisition. And we've refreshed -- I think we've refreshed like 17 out of the 23 Platinum Cards over the last couple of years within international.

But I think you said you want to talk about issuing. Let me just move to the merchant side because I think the merchant side is really where a lot of the story is because if you look at it since 2019, we have 5x more international locations than we did then. We're at 160 million locations now on a worldwide basis, including the PayFacs. And I think what's important is the way that we went about targeting it.

We looked at what were the important countries, what were the important cities, what were the important verticals. And so 12 of the top countries, we're at 80%. We've got 34 cities right now that we've reached our threshold of 75%. We got another 20% that we're targeting. And what we decided to do was to go after those cities where our card members either visited or our card members lived. And then we looked at verticals. And so I think it's like 700 transit companies that we've engaged with now, because transit is a big deal, especially from a tap-and-go perspective.

And so what makes me really excited about international is that we continue to grow coverage and there's more upside there. That coverage not only supports our international card base, it supports our U.S. card base as they travel. And our value propositions play really, really well. And we use the exact same strategy that we use in the U.S. from a membership model perspective. And so you'll see the same kinds of things. You'll see Amex offers, you'll see embedded benefits, and our co-brand portfolio is very, very strong.

So I wanted to spend a minute talking about lending. You referenced that your card members do like to borrow. And your performance has been best-in-class. I think the only issuer whose credit losses over the last few years are still well below pre-pandemic levels. And you've actually seen stabilization in the recent time, the last year or so. And you've obviously undergone this premiumization of the portfolio that has driven this. So my question is, how do you think about the ability to grow at above market levels and yet still maintain this best-in-class kind of loss rate that you've had?

Well, I think we want to grow as our card members grow. And I think if you look at it, our lending has grown pretty much the same as our spending, which we feel comfortable with. When you look at where that lending is occurring, it's occurring in the co-brand book, it's occurring in pay over time with our premium cardholders. And then when you drill into NII, what you realize is that half of that growth in NII is margin.

Back in 2017, I think 25% of our balances were funded through HYSA. Now it's 65%, 66% and that impacts margin, and we've done a better job from a pricing perspective. So again, we're not going outside that credit box. But if our premium cardholders want to borrow, we're there for them. And we feel good about the product offerings that we have.

So look, our credit numbers are not going to go any lower. They're at a point where we're very comfortable. We've had delinquency rates at 1.3% for a number of quarters now. Write-off rates are relatively stable. Could they go lower? Yes, but I'm not -- I don't want anybody to bake that in. But we feel -- look, it's been the same since 2019, and we feel really good. And part of that is the premiumization of the portfolio.

And we showed this slide, we talk about it at earnings and so forth. But when you look at our card base relative to the competition, not only are our boomers and our Gen X is better than the competition, but our millennial and Gen Zers are better than the competition's boomers and Gen Xers. And we don't even want to compare them to the competition's Gen Z and millennial. Our numbers are that good.

So we've obviously started to see an uptick in white-collar job losses. Some of the companies that presented yesterday talked about just the slowness of the labor markets recently, particularly in adding new jobs. We've seen a handful of companies cut jobs. I guess just broadly speaking, how does this impact your credit? What are your expectations if we do see some softening relative to some past cycles? And how does the amount of fee-paying card members impact the overall credit performance?

Yes. Look, I think what we have seen is fee-paying card members perform a lot better than non-fee-paying card members historically for us and historically, within the industry, we haven't seen anything at this point that would lead us to believe that there's any sort of credit cycle or any softening. We watch it very, very carefully. And I think one of the things that's really critical about our business is no preset spending limit. Remember, we're authorizing every transaction. We're not dealing so much with balances on a co-brand card. But by and large, you look at our Platinum Card, Gold Card and Centurion Card products, those we were dealing with on a transact on a transaction-by-transaction basis.

And what historically you will see is if our card members get distressed, they will just spend a little bit less. What historically you've seen if our card members get distressed, they will pay us before they pay the competition. And then, look, if it gets if it gets bad like it was at some point during COVID or what have you, what we know is we're going to perform better than our competitors performing. And COVID turned out not to be also bad anyway. It just -- it looked like it was going to be bad at the beginning. But we're going to perform better than our competitors do, and you just look at that at the CCAR. Our write-off rates are lower than anybody else through the cycle -- through bad cycles.

So maybe to shift a little bit. Obviously, there was news of a recent Visa and Mastercard proposed a potential settlement, including changes to interchange rates and which cards they accept. While you're obviously not subject to this, if it were to go through, what would you expect the impact to be on your business, if at all, and why?

Yes. Look, it's really too early to comment. The settlement hasn't been approved yet, but I'll just -- I'll make a couple of general comments. I think that as you look at this, I think what's important for us is that our card members are not discriminated against. I think surcharging in general is a bad customer experience, embedded in your prices, if you want. But I think putting on a surcharge is a really bad customer experience.

And I think the other thing is regardless of what happens, unlike a lot of the issuers in the United States, we've been through this. We've been through this in Europe. We've been through this in Australia. We've got a lot of history, and we know how to navigate these situations. And so as we do with anything, we war game things out, and we'll see how it plays, and we'll react and look to come out on the other side, just smelling like a rose.

I think I smelled already. It feels like your business should be a major beneficiary of AI, whether it's generative or agentic. Maybe just talk a little bit about how you're leveraging these -- and where do you expect the benefits to show up most costs, customer service ratings? And how are you judging the success of these?

Yes. Look, I think -- look, we've been playing -- not just playing, but really implementing AI for the last 15 years as it relates to credit, as it relates to fraud, cyber, marketing and so forth. And so that's played out. I think for us, you'll see things like AML and KYC will be able to deploy it to reduce cost, travel, chatbots, things like that. But what I really want to focus in on is, I think, the import that it can have for driving our business forward. And so I think agentic commerce is really tailor-made for the closed loop. And we've been working with Google and with others to look to set standards. We've been involved in a lot of agentic commerce pilots. We've been embedding Amex assets into large language models. We've been doing our own large language models with our own assets.

And I think the closed loop, our data, trust, service and security really does play well for us. And so yes, we'll probably save some money from a cost perspective, and we'll avoid more costs down the road. But I'm more excited about it from a revenue generation perspective and really integrating and utilizing our data. I mean one of the things everybody always talks about is how can you use your data even better. But I think with these agentic tools, it really does play to the data set that we have.

So we're in the last couple of seconds here. And maybe to wrap up, as you look out over the next few years, I guess, what is your takeaway message that you want to leave investors with today?

Look, I mean -- and I'll give you the same message I had sort of last year. You're looking at a company that at the S&P 500 is in the top quartile from a revenue perspective and an EPS perspective. If you're interested in a company with high revenue growth, mid-teens EPS growth, high ROE, good credit profile, global premium customer base and a great brand and a unique business model, you may want to consider investing in us.

With that, we will end. Please join me in thanking Steve.

So up next, we're going to hear from Christophe Le Caillec. He is the CFO of American Express. Christophe has been with American Express for over 25 years. My God, holding a global -- a bunch of global leadership roles, including CFO of the Consumer Lending business, Deputy CFO, before being named CFO of the company in 2023. Thank you for joining today, Christophe.

Thank you for having me.

Yes. So it's been a year since me and you were together at this conference, and so I appreciate your loyalty of the conference, number one. But maybe you could walk us through. What's in your mind in terms of the biggest success stories for American Express over the course of this year, the biggest challenges you have to overcome to set us up for performance over the next year and beyond?

Yes. So good morning, everyone. This year, it's been a very busy year for us. You're right that a year ago, we had a conference between last year and this year, by the time we get to the end of the year, the revenue of the company is going to be about 9% to 10% higher. The earnings per share is going to be mid-teens higher. So we've been very busy.

We have, as you know, a very clear strategy. We're executing on it. Probably the most important element of this year was the refresh of the Platinum Card, which is going like really, really well. And we've been very busy, not only at redesigning the card and the in-app experience, but we have a ton of expertise and assets in the premium space.

And we've been busy enhancing them, strengthening them, innovating in that space. We are the leader in this space, but we wonder remain the leader. Digital has been a key theme for us today. Maybe we can speak a little bit about it and GenAI, Agentic. So it's been an incredible year so far, And we're delighted with the success of the Platinum Card.

Great. So despite the choppy backdrop, both revenue and EPS growth expectations are trending better, and you raised your guidance on your recent earnings call. What do you think is driving the outperformance?

So the most important thing in our business is momentum, and we have a ton of momentum. That's why by the time we got to Q3, we had good visibility as well in the success of platinum. We know what the momentum was. We saw billing accelerate in Q3, but about 200 basis points. So we felt that it was right to kind of tighten the range a little bit on revenue as well as in EPS.

And I feel that $15.20 to $15.50 is the right target for us for this year. It incorporates the step-up in cost of card member services that we saw in Q3. You should expect to see a further increase in Q4 because the impact of Platinum, which is for 2 weeks in Q3, you're going to have the full quarter impact in Q4, but all of that is factored into our EPS guidance. So feel very good about where we are in about the guidance.

Okay. Great. So the tariff concerns as well as the fears of soften the economy persist. Given -- I'm sorry, number one, have you seen any change in behavior in the spending patterns across your customer segments, both in consumer and small business? And what do you see going forward?

So I'm not going to get into the details of Q4, but I thought it would be interesting for you to know what we've seen in terms of billing for the month of October. And I was just telling you that -- what was very noticeable in Q3 was the acceleration of growth, right, by about 200 basis points. The question is, like is that going to sustain. Well, the October billing is very much similar to what we saw in Q3 across the board, across segments and across geographies. So we feel good about what we're seeing so far. And there's been like no visible inflection point in terms of the behavior of our customers.

That's great. That's great to hear. I want to touch a little bit on the merchant litigation that Visa and Mastercard just sort of proposed. They are basically proposing to merchants significant concession on interchange rates as well as rules around on or all cards. I'm curious how you think it affects American Express?

Yes. So you're probably going to be disappointed. I don't have a lot to say on that. Just like everybody else, we're kind of like digesting this. And as you know, it still needs to be approved by the court. So who knows whether that version is going to be the final one. I just want to remind you that, first, we're not party to this.

And also, we have a very different business model. We engage directly with the card members, and we engage directly with their -- with the merchant. So it's a very different model. So we'll see what happens. You were kind enough to remind everybody how long I've been in the company. I spent most of my time outside of the U.S. I was actually in Australia when they're regulated. I was the CFO of Australia, when they started regulated interchange. I was CFO of international base in London when the EU regulated as well there.

And so we've seen it all, like all possible combinations. And the common denominator of all of this is that American Express has always been successful irrespective of what the rules and regulations were, because we have a different model, right? We focus on our card members on our merchants, and we adapt, we are agile and we'll figure it out.

Yes. Okay. That's fair. It's still early. Maybe we can switch to the Platinum Refresh because that's a big, big topic for the year. The competition on premium cards is intensifying again. What sustains your leadership in the space? And how is the refresh reinforcing that advantage?

Yes. So there's always been competition in their premium space. Just to talk about the U.S., it's been very intense over the last 10 years. And we've done very well over the last 10 years in the U.S. We refreshed the product in 2021. It was a -- thank you, Amanda -- it was a very successful refresh. We are doing it again. The early signs are very strong as well.

So we like that attention that there is on their premium products. We benefit from that increased attention, right? There's a lot of advertising. There's a lot of people who are now considering signing up for premium products. That was not the case 15, 20 years ago. Actually, 15, 20 years ago, the only way you could get a Platinum Card was from an upgrade to either from Gold. Today, you can join the franchise, trade on the Platinum product.

So it's been -- competition has been a net positive for us, I would say. And it's also making us stronger. I will also say that we have built assets over the years, global assets, I would say, over the years that are unmatched. And every year, we are working hard to improve those assets. Think about the FH&R program or the hotel collection, Fine Hotels and Resorts. We added more resorts and hotels to that program this year. And we're doing it, I would say, because a lot of hotels are reaching out to us because they want to be part of this. When we talk about the success of Platinum, this is not only the success from the perspective of the card member, this is also something that is working really hard and very well from the perspective of the merchants. That's why we've been able to create those value propositions that are very innovative, that are very distinctive.

And you saw on the recent Platinum, we added value and partnerships with the likes of Lululemon, Oura Ring. We also have YouTube, Paramount Plus. So that kind of like program, I would say, of partners is really key to the success of the Platinum product and our leadership in that space. There is another area that maybe we haven't spoken enough about, which is actually super important. And I'm sure that many of you in the room our platinum card members. And you've noticed how different the in-app experience is.

We really have invested a lot of time to think about what's the best experience we could provide to the card members in terms of either enabling the engagement. There are a few features that are fine like super interesting. First, you can navigate from the app to resi. And you see when you book a hotel or you book a restaurant, it shows up in the card app.

The other thing that we did, which is we talked a little bit about it during the Q3 earnings, but I think it's super important. We are getting smarter and much better at placement in the app. And one example of that we used is the placement for the high-yield savings account and what we saw as a result of changing the placement in the app was an increase by 45% of the number of card members who actually sign up for a high-yield savings account. So we're getting much better at harnessing the power of the technology at cross-selling the products and engaging the card members through multiple dimensions of the membership program and technology is key to that. And I would say on this one as well, I feel that we are leading the charge.

So just fundamentally, I know there's some upfront costs related to the Refresh and the revenue sort of come overtime, maybe you could just talk about the time line of the Refresh and how those revenues and expenses sort of flow through and how the margins sort of progress over that time?

Yes. That sort of -- for those of you who are trying to build models, I understand why this is critical. It's a difficult answer to give you because the program -- like the Platinum Refresh is also, I would say, more successful than what we have modeled. But let me just like help you out a little bit.

I'm going to bring you back to the refreshes that we did recently in the U.S., Delta the Gold Card, the Hilton Cards, right. When you look at 2 years later, we see very similar results across those 3 products. And we see basically revenue bigger by 30% and call it, the gross margin, so like all revenue as well as their variable expenses and the credit cost, the variable margin is up 40%. And it's a function of like what these refreshers are doing, right?

They are increasing the demand. They're increasing the engagement with the front book, like new card members as well as the back book that is kind of like reengaging with the product. And I'm sure that many of you are Platinum Card members, when you went in the app, you kind of like rediscovered some of the value of the product as well. So we see incremental spend that is coming on the card.

Of course, there was like a big increase in the fee revenue as well. For these 3 products, it was like 60% card fee increase. So very tangible increase in terms of scale and profit. And that's very much what we are projecting and expecting to do with the Platinum Carbon. And all the early signs that we have are pointing towards that.

I'm going to give you another data point to help you out as well, which is the fact that when a new card member joined American Express on a Platinum Card, by the time you get to the end of the year, say, month 12, you kind of like positive right? So all the cost of acquisition, setting up CECL reserve, like all those things are kind of recovered by the end of the year. So the payback is actually very quick.

Of course, we're going to be exposed to what we talked about during the earnings release, right? We're making the new benefit available to the entire portfolio on day 1, but we're going to charge the fee with a gap, and that is just going to create a gap in the P&L. But we know that. We've done a ton of product refreshes over the years. That was anticipated in the guidance that I just talked about at the beginning of the year and the recent update that I gave. So it's all, I would say, progressing as we had expected.

Okay. And then as we think about like the upgrades to Platinum from Gold and other products, like have you seen that being positive? And do you worry about cannibalization in any way from Gold?

So we don't worry about cannibalization. We use the word upgrade, more than cannibalization. We like it. We actually have an entire marketing organization. And I would say, decades of expertise because for those of you who have followed American Express for years, you know that one of the critical either area of expertise for American Express is this upgrade path, right, from Green to Gold, Gold to Platinum and Platinum to Centurion. So we know how to do that.

We -- and we like it when it happens. In a given year, i.e., a year without the refresh of the product, we get about 2x the number of upgrades versus downgrades because we do see downgrades as well. What we want is we want the right card in your wallet. We don't need to have everybody on the premium card. But in a given year, you see about 2x the number of grades versus downgrades.

And when you do a refresh as we did in 2021, that ratio was a bit better. It was about 2.5:1. And that's what we are seeing in the early signs of this Platinum Refresh. So it's a good thing. It's a good sign of engagement. And there's a lot of things that happen when card members engaged. They typically spend more. They are more loyal. And there's many good things that happen with an upgrade.

It's really interesting because like people were worried about the opposite given the percentage increase in the price, and it's kind of actually outperformed.

It is. And I would say as well, you remember, Sanjay, on the earnings call, we had some data points, some stats about Platinum, and we have a big increase in the number of new cards acquired. That was arguably for the first 2 weeks of refresh. But this metric, which was 2x did not include these upgrades, right? So upgrade is a critical part of their program here.

That's fabulous. Maybe we shift gears and talk about how American Express has sort of reinvented itself in some ways with the younger demographics. How are the younger card members behaving relative to the legacy cohorts in terms of spending and engagement across the ecosystem?

Yes. The first thing to say on this is that we've been very much intentional about this cohort. It was a choice that we made to focus on this cohort because we view it as an opportunity and we view it as well as a growth accelerator in the long-run for American Express. So we focused a lot on this and evolve the product, the value proposition to be -- to resonate with that cohort.

There are a few things that we are seeing with these younger card members that are behaving differently. They typically more engaged than the older cohorts. I'm just going to give you a stat. On average, they use the card, like the number of transactions, 25% more than the older cohorts. One of the big benefit that we have with this younger card members is that they don't know that 10, 15 years ago, they couldn't use their card everywhere. And therefore, they typically have -- they consolidate their spend on the card. We have parity coverage now in the United States. And therefore, we're getting a big share of their wallet.

They're very engaged as well in the benefits that's why having YouTube, just like with the new platinum or Lululemons directly speak to that population, and we see very strong engagement. What we also see is they're not calling us, right?

The cost of servicing is much, much lower. They self-serve a lot more directly in the app because we build those capabilities, but also because that's what this generation of card members is doing. So it's displacing a lot of cost. And I want to point out as well to something that was now in the mind of like many investors. And at another conference, we shared some credit metrics about their delinquency rate by cohort.

And you remember that the credit metrics, the credit cost of this generation is very attractive. It's actually delinquency rate was like 40% lower than the GenX and baby boomers of their -- of the industry. So it's working really well for us. Loyalty is very strong. Retention rate is very strong. So the lifetime value of this population is super attractive. And we -- as you know, we run the American Express for the long run. There's a lot of embedded growth in revenue in these relationships that we are building now, and that's going to play out over the coming 10, 15 years.

So there's a lot of discussion about the big wealth transfer that's going to happen between generations like the millennials and Gen Z are going to inherit a ton of money. I'm just -- or Gen X. I'm just curious sort of how is American Express positioning itself? I know you guys are doing a lot of sort of work card products into those customers or consumers' hands. But what else can American Express do?

Well. That's very much the idea, right, is to engage with those younger card members at the very beginning of their professional life and grow with them, right? And we had young card members in the past. The difference is that we have more of them now. And we've seen how -- because we retain those relationships for decades, we see how the average spend goes as their needs is increasing as well as maybe that transfer of wealth as well.

And we are very much aware that we need to remain very competitive in terms of the benefits that we offer them very relevant as well. So as they get older, I'm sure their needs are going to evolve. We're going to be listening to their needs. And every time we refresh the product, we'll take care of that and make sure that it's still the best card they can find the market for us.

So another product that seems to resonate with that demographic is buy now, pay later. So there's many buy now, pay later platforms out there that speak to this demographic and attracting this graphic. Like how do you guys think about buy now, pay later? And do you worry that at some point, it sort of displaces you in some capacity?

Yes. So we looked at the demographics of the population that is using buy now, pay later. Actually, one of the big buy now, pay later company, just issued some stat recently. And I was attracted by 2 of them, right? They said that 50% of their customers had a FICO below 660, so it's subprime. And 80% of their customers had income below $100,000 per year. You know American Express. This is not our population, right? We're not best equipped to serve the needs of this population. And so the overlap between their heavy BNPL users and their American Express customer base is very limited.

Now we know that our customers, especially the younger customer also have revolving needs, right? And that's why we introduced many years ago the Plan It feature. And for those of you who are not familiar with it, you can literally go in the app, identify one transaction and spread that transaction over 3, 6 or 9 months in an installment program. And you can see immediately kind of like the schedule and the price point for that. That is available for every single transaction, right? That is also not dependent upon the merchant, it's also free for the merchant, right?

So if you have a large transaction and you want to spread it over 3 months, definitely, there is a solution for that American Express. So we're going to keep kind of like listening to what the market says. We're going to keep innovating in the space and create solution for them and make sure we're relevant to the population that we care most about.

Wonderful. Maybe we shift gears to the small business segment. It's historically been a big growth driver for American Express, but has been a headwind of late. Is that mainly just a macro dynamic? Or is there something else?

There's a lot of things going on. There's definitely some macro components, but it's not the whole story. First, the SME segment is a very broad segment. It starts from the very small businesses to middle market that some of them are actually quite large.

And so when you bifurcate the portfolio between these 2 populations, if you were to do that, what you would see is that the smaller businesses are doing just fine. Where we see the pressure, it's in the middle segment, middle market segment. That's where we see the biggest pressure point. And there are 2 things going on here.

One, and we talked about it in the past, is there big transactions. Think about transactions north of $100,000. Those are either moving towards ACH and checks very much on the initiatives of some large merchants. You can wonder and question why it was on the card rails in the first place. We don't see those kinds of transactions on the consumer side. But on small businesses, we had many of those. So we definitely are seeing that those transactions are moving away towards ACH or checks.

There is another component, which is that for that specific segment, expense management is a key requirement. We've seen it, and some fintechs have been very innovative in that space and have created very good software. Our response to that is the acquisition of Center, which is like an expense management solution. And we are working hard at integrating Center and onto our platform and making it available to the entire small business base and medium-sized companies that we have in our base, that's our response. But it will take time to play out. I got to say one last thing on that segment because rightly so, there's a lot of focus on spend, but it's not only about spend, right?

If you look at the revenue of the Commercial segment over the last 2, 3 years, despite the spend being in the 2%, 3% range, revenue was at 7%. And so -- because there is fees as well card fees, and we've been doing a good job at meeting the borrowing needs of our customers. So it's a complicated story. I think we have it we have a good solution, a good strategy, but it will take a few more -- it will take a bit of time before we kind of roll out everything and be in market with our solutions.

This headwind from the merchant that are not accepting ACH anymore. Is that a longer-term headwind? Or do you think we're sort of at the backend of it...

So they are moving to ACH just like card, right? So it's very hard for me to make projections in terms of where that is going. It's not specific to American Express. It's across the board.

Right. No, no we have seen at other parts too.

It's across the board. Yes. I don't -- I think it will take a bit of time to play out.

Got it. Okay. And then you kind of touched on it a little bit, but expense management is an innovation that can help invigorate growth in that segment. And that will take a little bit of time in your minds. And probably some kind of marketing initiative to get these people back. But are there any other enhancements that you guys can make to accelerate the growth there?

As part of the Platinum Refresh, we also refreshed the small business right? We made their value proposition richer on the rewards side. So platinum is also one of the favorite for the small businesses, especially the smaller -- small businesses who lag their lifestyle benefit for the founders, typically. And so that's the other solution, right, which is to improve our legacy products, if you want, make them more relevant and increase the value proposition for the small businesses.

Got it. Okay. Maybe we shift to international because that's consistently been growing double digits. Maybe you could give us some insights to the growth there and how you continue to win?

Yes. So international is -- has been the fastest growing part of American Express for many years now. It's a diversity of market and you know where we're playing. Billing has been in double digits for the last 18 quarters. So very strong performance, very strong momentum. And what I like about that momentum is that it's very broad base. It's not concentrated in one geography, one customer segment. It's very broad-based. And so we're winning in many, many places.

There are a few things that are providing very strong support for that revenue growth. The first one is that, just like in the U.S., we are acquiring a lot of new card members, especially younger card members. We're also growing very fast in the small business segment out there in international. We're also benefiting from the tailwind that comes from improvement in coverage.

Now in the big markets, we are at about like the Tier 1 markets, we are at about 80%. So we -- as we increase the coverage, we also capture a bigger spend, and that provides support for that strong double-digit billing growth. And I'm going to say this as well. Out there in international, their positioning of American Express is more premium. So the price point for fees is typically higher. And when you look at the percentage of the spend that is cross border, cross currency is also higher. So it's a very attractive franchise that is growing very fast.

And just like in the U.S., we have over the last, I don't know, 25, 30 years, built a set of like partnerships as well that are very powerful. Just in the last 12 months, I don't think we have spoken much about it, but we renewed the partnership with British Airways with Air France, KLM as well as with NAA in Japan.

So these are big leading airlines who have chosen to work with American Express for like many, many decades. So we have a very strong franchise, a lot of momentum out there in international, and it's going to keep growing at a faster clip than the U.S.

That's great because one of the criticisms has been that maybe the brand doesn't resonate as much internationally, but it seems like it's gaining momentum.

Oh yes, it is.

And you obviously have history in all these different markets.

That's where I spent most of my career at American Express. They're 25, which actually is 28 years, but I do...

All right. That's even longer, wow. So maybe one of the big topics of discussion at this conference has been agentic commerce. Could you just talk about how American Express can sort of capitalize on agentic commerce? I mean you guys have a closed-loop network, lots of data. I would think you're a perfect candidate to sort of participate in that.

Yes. I think your assessment is right. We are very excited about what we can do in this space. I will say as well that our brand stands for trust, service, security, which in this kind of digital age and agentic age or attributes that are going to be critical to be successful.

So let me just tell you what we're doing here. We're essentially doing 3 things. One is partnering with the LLM to elaborate and influence their protocols that are going to be used for agentic commerce. A good example of that is the work we've been doing with Google on the AP2 protocol. And the things that we care about in this protocol are things around security, privacy of data, how we're going to handle disputes because we know 1 or 2 things about this space, and we want to make sure that in an agentic world, we can still operate and create value for both merchant and card members. So priority #1, work with the LLM and leaning in terms of how they define and ride the protocols.

Second priority is to make our assets discoverable in the LLMs, like the most intuitive example of that is think about the resi inventory. Today in Google Gemini, you can actually book a restaurant through that LLM and it connects directly with resi. So we won our assets, Fine Hotels and Resorts, the global dining access program and all those benefits to be discoverable in the LLM so that when there is a transaction, it's informed by those kind of like benefits.

And the third thing, which is probably the one that is the most exciting is doing ourselves like creating agentic experiences for our card members. So we have -- we're going to say a little bit like in market today, but it's a beta version, for about 15,000 card members. So don't be feel offended if you're not one of them, where you can actually is called dining companion, and you can -- it's very much an LLM experience where you can tag, can you find a fresh restaurants in the Hudson Yard area that would have a table for 4 at 1:00, if you want to invite me.

And so you go directly in the LLM and it connects with their resi, not only inventory, but the tables that are available at that time and just like serve up options for you. And that's very much where we want to take this, right? We have the data. We have, to your point, the relationship with the merchants. We have unique assets that we built over the years. We have the trust and confidence of our partners.

And so -- and we have the engineering capacity. We have about 9,000 engineers that are coding like all day long. We have all that, that will enable us just to be successful in that space. And as I said, right, we have the credibility with our card members and the merchants to operate in that space. So very excited about where this going to go.

Yes, absolutely. So the stock is trading at an all-time high in terms of multiple, which is great, which is a testament to both of you, Kartik and Christophe, the work that you guys have done.

And 75,000 colleagues.

And 75,000 colleagues, but telling the message as well. Maybe you can sort of convey the message to investors today sort of why they should still step up and continue to invest in American Express?

Yes. So maybe the starting point is that we have a very clear strategy, and those 75,000 colleagues know exactly what they need to do to execute on that strategy. And this is super important because that strategy is creating the momentum that we just talked about. This -- that supports the ambition that we have to grow revenue double-digit, 10% plus earnings per share in mid-teens.

So we have a very clear strategy anchored on premium, on membership and on assets that we have built over the years and that we're delivering every day. We also know that we need to innovate in that space, and that's what we're doing, and we just talked a little bit about that innovation.

Importantly as well, because it is something that we should never forget is that we are, to some extent, constraining the growth by focusing on premium. We could grow at a faster clip if we were to decide to extend more credit and we talked about BNPL and a cohort of customers that today we're not focused on. We very much want to stick to that premium space, and we don't want to compromise on that, which provides support for the sustainability of the earnings because the credit performance should be resilient and will be resilient through the cycle.

So that provides very, very strong support. So as you think about where we're taking the company, we very much want to deliver on that ambition that we laid out many times. And so if you compound that mid-teens EPS growth many times over the next few years, you eventually get to -- not eventually, you're going to get to a valuation that is going to be even much higher than where it is today. And it's very much that compounding effect that we are working on.

Also importantly, we don't have a clear -- it's always difficult to have a conversation about the multiple when it comes to American Express because we don't have a peer that you can go to and just like make a straight comparisons. What you can do though is actually compare how this financial performance is comparing against other S&P 100 or 500 companies. And when you do that, you're going to see that we are in the upper quadrant in terms of revenue growth and EPS growth, especially if you kind of strip out the big tech companies, right, we are right there.

And we have the momentum, the leadership, the talent, the asset, the skills to actually keep growing this company. So that's their kind of like promise that we're making to investors. It's just that compounding effect on revenue growth and EPS growth over the coming years.

Yes. It's definitely -- I mean, it seems like the business model has even evolved more to a recurring model as well relative to the past. Would you agree with that?

And well, yes, the company is scaling. We're leveraging technology a lot more. It's becoming a much bigger part of our -- of the time we spend at American Express. If you were at American Express 20 years ago, there's a lot of work on the marketing side. If you were at American Express now, you would hear a lot more conversation about technology. I just talked about the reinvention of the experience for the Platinum Card members, agentic commerce with resi. This is where the puck is going for us.

And think about all the use case of where we could take this technology in terms of expense management, in terms of our own operational expenses and leveraging Gen AI. This is what we're doing, right? This is what we're working on. And I feel that there's a lot of efficiencies that are in the pipeline that we're going to unlock in the coming years that will provide support for that mid-teen EPS growth ambition.

Great. We only have a couple of minutes left. I have one more question, and maybe I'm going to sort of reframe it a little bit. Definitely, post Costco, just -- you guys have rebuilt the loan portfolio to be more aligned with your customers. Maybe you could just talk about how that sort of manifested itself into the fundamentals of the business today versus when you had Costco?

Yes. Well, there are a few things that we did post Costco. One is we decided to concentrate our energy on premium products. And it's interesting how much time we spend talking about Platinum, about Gold today versus how much time we were spending at that time. So today, Platinum is our biggest franchise.

I'm not going to say it's an outcome of what happened with Costco, but it definitely created the kind of like the impetus to focus on the premium products. What we did on the lending side is innovate in terms of the lending capabilities by creating Plan It. I just talked about it earlier on, pay over time, which is a revolving capability that is -- capacity that is attached to the charge card and either doing lending to a customer base that is fundamentally premium comes with a lot of benefits, you get a lower revolve rate because they have lower revolving needs, but you get a far better credit profile.

What we're also not doing any more is like balance transfers. We don't have any kind of like 0% offers. Maybe there's like one or just I shouldn't say we don't have any maybe there's a test out there, but it's like it's de minimis today. So the book that we have today in terms of lending is fundamentally more premium and with a much, much lower credit risk profile, which you see in the credit reserve as well, which is actually flat to where we were pre-COVID despite a worse economic environment.

I will also mention something, which is something that is missed by many investors is that when you look at the NII growth in our revenue and how big it has grown over the years, you really need to strip out what is coming from volume, balance growth versus margin improvement.

And in our earnings slide, I invite you to go back, forgot which one it is. But we are splitting that between 2019 and now. And I think the numbers are like NII has been growing at a CAGR of 13%, 7% of that was balance growth and 5% is margin improvement. So think about that, right? The -- like the growth in terms of balance and balance sheet was only 7% and almost half of the NII growth was margin improvement, which effectively leads to that ROE of about 35% that we generate year in, year out.

Well, we've run out of time. Christophe, thank you so much.

Thank you.

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2025 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the conference over to our host, Head of Investor Relations, Mr. Kartik Ramachandran. Please go ahead.

Thank you, Darryl, and thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our reports on file with the SEC.

The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials as well as the earnings materials for the prior periods we discussed. All of these are posted on our website at ir.americanexpress.com. We'll begin today with Stephen Squeri, Chairman and CEO, who will start with some remarks about the company's progress and results; and then Christophe Le Caillec, Chief Financial Officer, will provide a more detailed review of our financial performance. After that, we'll move to a Q&A session on the results with both Steve and Christophe.

With that, let me turn it over to Steve.

Thank you, Kartik. Good morning, and thank you for joining us. We had a very strong quarter with revenues up 11% year-over-year to a record $18.4 billion and earnings per share up 19% to $4.14. Card Member spending in the quarter accelerated to 9% or 8% on an FX-adjusted basis, with particularly strong retail spending and a bounce back in travel and our credit performance continued to be excellent. Based on our strong performance through the first 3 quarters, we're raising the guidance we provided in January. We now expect full year revenue growth of 9% to 10% and EPS between $15.20 and $15.50.

The big news in the quarter was the launch of our refreshed U.S. Consumer and Business Platinum cards, which reinforces our leadership in the premium space. I'm very pleased to say that the initial customer demand and engagement are exceeding our expectations. In fact, while it's still early, this is the strongest start we've seen for a U.S. Platinum card refresh.

Before I get into more details on platinum, I want to provide some context. We are fortunate to have a global premium customer base that is unmatched in the industry. And our goal is to provide our customers with the best experience in the industry but continually investing and innovating our value propositions. The recent Platinum launch is yet another example of our proven strategy of refreshing our products on a regular basis to drive customer engagement and growth. In fact, we've done over 200 refreshes across our portfolio globally since 2019.

And this is the third U.S. Platinum refresh we've done in the past decade. Our refresh strategy leverages and strengthens the competitive advantages of our membership model. It starts with understanding what our customers and our prospective customers want and then enhancing our value propositions with access to compelling benefits, services and experiences at a price point that delivers outstanding value. The scale of our premium customer base gives us a distinct advantage. Our consumer and business Platinum Card franchise alone accounts for approximately $530 billion of annual spend globally. This scale gives us deep insights into customer spending patterns and emerging trends. which informs our product enhancements and where we invest.

Another key advantage is the relationships we have with 160 million merchants around the world who accept our cards. We've grown the number of Amex-accepting merchants by nearly 5x since 2017, getting our card members more places to use their cards and giving more merchants access to our high-spending customers. who spend on average nearly 3x more annually on American Express cards than the average spend per card on other networks. Ultimately, product refreshes fuel a virtuous cycle of growth for the company by continually enhancing our offerings, we drive the engagement and scale of our premium customer base.

Our high spending Card Members attract a growing number of world-class merchant partners who add more value to membership, which drives more engagement. And this enables us to generate more dollars that we can reinvest in enhancing our products. The result of all this is a loyal and growing premium customer base. mutually beneficial relationships with our merchants and strong returns for our shareholders, including higher revenue growth, excellent credit quality, expense leverage and increased profit across our product portfolios.

There's no better example of how we execute the strategy in our Platinum cards. We launched our first Platinum Card over 40 years ago. It was the first premium part of its kind in the industry and remains the category leader. Platinum was initially designed for well-established affluent frequent travelers. Several years ago, we made a conscious decision to widen our aperture for our premium products, so that we could also attract new generations to the franchise and grow with them as their needs change. With the value enhancements we've made over the past decade, the Platinum Card has evolved into the leading premium lifestyle card than it is today with a wider range of benefits and experiences that appeal broadly across generations, including millennial and Gen Z consumers who are very comfortable paying for exceptional value and are highly engaged in a product.

A good example of these value enhancements is the previous U.S. Platinum refresh we did in 2021 coming out of the COVID pandemic. We learned that our card members, particularly the younger cohorts, love the benefits we've added in categories like digital entertainment, wellness and delivery services in addition to our travel offerings, which we also continue to enrich with investments in new Centurion lounges and the expansion of our hotel programs. That brings me to our most recent platinum launch. Here again, we continued our strategy of enhancing the card's benefits and services with more world-class partners across the areas we know our customers love to deliver industry-leading value that far exceeds the card's annual fee. In addition, we continue to enhance our award-winning digital capabilities, introducing a new app experience for our U.S. Platinum members that makes it even easier to engage with the cards benefits.

As I mentioned earlier, the initial results are very strong, exceeding our expectations. For example, New platinum account acquisitions are running at twice the level before the refresh. In the first 3 weeks, we saw very strong engagement in the new benefits and over 500,000 requests for the new Miracard. And while the annual fee increase won't go into effect for a few months, retention rates have been stable post refresh. In addition to these results, we saw record bookings through Amex travel following the Platinum refresh and the launch of our new all-in-one travel app, which we introduced earlier in September in the U.S.

Looking ahead, I'm confident about our ability to sustain our growth by continuing to build on our powerful membership platform with a growing set of high-value products, benefits, services and experiences. We'll also continue expanding our digital capabilities for consumers and businesses, including the upcoming integration of center's expense management solution for commercial customers. and we'll focus on continuing to grow merchant coverage outside the U.S. to give card members more places to use their Amex cards.

With that, I'll hand it over to Christophe to walk through more detail on third quarter results.

Thanks, Steve, and good morning, everyone. Let me start with a few highlights for the quarter. Our business model is performing really well. Revenue growth accelerated to 11% this quarter with broad-based growth across revenue lines. Annual card fees are now approaching $10 billion annually and have grown at double digits for 29 consecutive quarters. Credit performance remains excellent, with both U.S. consumer and small business delinquency rates still below 2019 levels. And we've driven leverage from expenses and provision even as we have invested in our premium value propositions, marketing and technology. As a result, we continue to deliver very strong returns. EPS growth was 19% this quarter with an ROE of 36%.

Turning to bill business trends for the quarter. Total spend was up 8.5% FX adjusted, about 2 percentage points higher than Q2. The step-up in growth was driven by strong retail spending, up 12% and as well as a rebound in T&E. Airlines spending picked up this quarter. In restaurants, our largest T&E category continued to be very strong, up 9%. Premium T&E bookings saw good momentum with spending on front of cabin airline tickets up 14%. The momentum we've seen from younger customers also continued Millennials and Gen Z now account for 36% of total spend, making up the same share as GenX. International had another strong quarter. We spent up 13% FX adjusted. Momentum remains broad-based across markets with 3 of our 5 top countries growing by 18% or more this quarter.

In addition, to the strong early performance we are seeing in the U.S. following the refresh, spent on platinum cards issued outside the U.S. is up 24% this quarter, consistent with what we have seen over the last 2 years. Overall spend growth continues to be driven by transaction growth, up 10% in Q3, a good indicator of engagement from our customer base. I will note that we see strong engagement from millennial and Gen Z card members with the average number of transactions per U.S. customer about 25% higher than older cohorts. We acquired 3.2 million new cars in the quarter. And even more important than the overall number of cards, demand for our premium products remain very strong with over 70% of new accounts acquired on fee-paying products.

Turning to balance growth and credit. Loan and card member receivables were up 7% year-over-year, broadly in line with Bill business. There was about a 1 percentage point impact on balanced growth from our held-for-sale portfolios again this quarter. Credit performance remains very strong and stable. Q3 delinquency and write-off rates were low with delinquency rates flat to last quarter, while write-off rates declined. This performance is supported by our focus on premium products, which tend to attract high-income, highly creditworthy customers. We're seeing the outcome of this strategy in the latest platinum refresh, where the credit profiles of consumer applicants following the refresh or even better than what we were seeing before with average FICO score up 15 points, contributing to 2x the number of acquisitions. Overall provision expense of $1.3 billion this quarter included a reserve build of $125 million, reflecting balanced growth.

Turning to revenue on Slide 14. The Revenue was very strong this quarter, up 11% with momentum across revenue lines. Net card fees were up 17% FX adjusted, a pace that we have now maintained since 2019. Car fee growth moderated as we expected and will continue to moderate before we see an inflection upward in 2026 as a result of our product refreshes. As a reminder, Com members who held platinum costs prior to the refresh get to experience the new benefits for a few months before the increase in the annual fee goes into effect. The new car fee will then be applied at renewal anniversaries over the next 12 months. Additionally, card fees are amortized over a 12-month period.

Putting those factors together, it takes roughly 2 years to fully lap the impact of the refresh on card fees with the contribution to growth peaking 12 months following the effective date of the new annual fee. Of course, the overall trajectory of card fees is also dependent on many other factors such as volume and mix of acquisitions, retention and the food suite and cadence of product refreshes globally. Net interest income was up 12% again this quarter. We continue to grow balances largely in line with spending while driving higher NII growth by expanding the margin earned on balances. And at the same time, we've maintained best-in-class credit results.

This quarter, the service fees and other revenue line includes the impact of a transaction at the Global Business Travel Group, which contributed about 5 percentage points to year-over-year growth in this line. In addition, this is the first quarter that we have fully lapped the sale of the acidify business last May. The main takeaway here is that growth in service fees and other revenue is running higher than the low single digits that we saw in the second half of last year and earlier this year. Overall, we feel good about the momentum we have at this point in the year, and we are on track for full year revenue growth of 9% to 10%.

Turning to expense performance. VCE was up 14% in the quarter, with the VCE to revenue ratio coming in at 42%. Car member service growth stepped up for the first stepped up from the first half of the year, driven by strong early engagement with the refreshed U.S. Platinum benefits, especially some of the quarterly credits that were available to customers. This is a good early sign of interest in the product and the new benefits. And as we noted previously, the cost of benefits occurs immediately while the realization of fee revenue is lagged, given the timing and accounting of those fees. Our model also benefits from partners that offer value to our customers. Over the last 12 months, our partners have offered over $3 billion of value across Embedded benefits, Amex travel and Amex offers. We also manage our VCE expenses through constant innovation of our rewards and benefits, the latest 1 being the introduction of amount-based redemptions.

As we've noted previously, we expect the VCE ratio to increase over time as a result of our investments in the value proposition and the mix shift to a more premium portfolio. We also feel good about the ability of these investments, together with the expense leverage to drive sustainable mid-teens EPS growth under our long-term aspiration.

Moving on to capital. We returned $2.9 billion of capital to our shareholders, including $0.6 billion of dividends and $2.3 billion of share repurchases. Our business continues to generate very strong returns with an ROE of 36% this quarter. Our strong ROE enables us to return a high level of earnings to our shareholders around 70% over the past 3 years. Over the same time period, our dividend is up 58%. That brings me to the outlook for the year, while there continues to be uncertainty in the environment, given the strength of our performance. We are raising our full year guidance. We now expect revenue growth of 9% to 10% and earnings per share between $15.20 and $15.50. This assumes a stable macroeconomic outlook as we get to the end of the year. Stepping back, we feel really good about our momentum year-to-date and we are very pleased with the initial demand and engagement following the platinum refresh.

With that, I'll turn the call back over to Kartik, and we'll take your questions.

Thank you, Christophe. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just 1 question. Thank you for your cooperation. And with that, the operator will now open up the line for questions. Operator?

[Operator Instructions] Our first question comes from the line of Sanjay Sakhrani with KBW.

First of all, I appreciate all the disclosures on the Platinum card and the refresh, and it seems like things are going really well there. Steve, I guess there's been just a lot of resiliency, if not strength across your customer base, even corporate and small business to accelerate sequentially. So maybe you could just -- could you just talk about how you're feeling about the path forward? Can things actually improve here because we've bottomed some because you had this acceleration, maybe just in a stable macro backdrop specifically. And then just 1, Christophe, modeling thing. The gain that you had this quarter, I mean, should we think about it as an explicit benefit? I'm sorry if I missed that commentary if you had any.

Look, I think you saw a little bit of an accelerant this quarter from a billings perspective. But if you look back over the last 6 or 7 quarters that it's been relatively stable. Is this a sign of things to come? I don't know if this -- we're going to keep this billings up the way we are, but I don't see anything in the horizon here that would indicate that billings are going to slow down or decline. So I think the second quarter, you saw a deceleration in airline spending. I think the pickup in T&E was really good. I mean, restaurants continue to be strong. But airlines really did pick up.

And I think what was what was really encouraging for us as well was the premium part from an airline perspective. I mean that was up 14% when you think about front of the cabin. So that, coupled with quarterly billing -- quarterly bookings in our U.S. travel consumer travel business, which were at an all-time high. So I think -- look, we're still in a relatively stable environment. I would also point out, as I always point out, our card base is not representative of what's going on across the United States. It truly is a bifurcated economy. We have a small percentage of the cards but our cardholders are much more premium and we're lucky to have a much more premium card base.

So we're seeing a little bit of a pickup in spend. We hope that, that continues into the fourth quarter. I think what was encouraging for us is also the pickup in small business. We saw 4% growth, a pickup in large and global as well, which was up at about 6%. And international continues to just continues to really be really strong. And the last thing I'll say is I think the retail spending, especially in the U.S. consumer business, hopefully, is a good harbinger for what will come during the -- during the holiday season because U.S. consumer business was very strong as well at 9%. So are we going to see a big accelerant from here. It's not what we're expecting, but we're not also expecting a deceleration as well.

And Sanjay, on your question about the gain. So it's not a large gain. It's in the range of about $80 million. We called it out because it has an impact on the growth rate of that line, service fees and other revenue. There -- if you want more color, as you know, we own about 30% of their Global Business Travel Group. And I'm sure you've heard or seen that they just merged with their calls on agony -- that translated into a small gain for us, which we recognized this quarter, and that is moving the line a little bit. It's percentage point of that 17% growth that you see here, FX adjusted. Even if you control for that, we would still be in double-digit revenue growth. So it's really not changing that much the picture in terms of the momentum that we reported this quarter.

Our next question comes from the line of Ryan Nash with Goldman Sachs.

So and I echo Sanjay's comments on the disclosure Maybe, Steve, can you maybe just talk or Christophe broad strokes on the financial impact of the platinum refresh, particularly on card fees and VCs. And Christophe, you broadly comment on this, but does this in any way impact your ability to generate mid-teens EPS growth, not over time, but during the refresh period?

I'll let Christophe go through some of the numbers here.

Yes. The short answer is no the -- we try to provide some more color in terms of the dynamic. And you understand, I know the car fee dynamic is delayed and then it's amortized over 12 months while the benefit are immediate and are available to everybody. That clearly puts a little bit of pressure. And we signaled at the beginning of the year that you should expect a little bit of step-up in Kockums at the back end of the year on the back of this platinum refresh. But the year is really playing out as we were expecting it to play out. Of course, we had those inside. It was not all that visible to all of you, but we were expecting that kind of like step up in [indiscernible] in Q4. And we are expecting it as well for 2026 going forward. So we did all of this with our eyes wide open. It's a material investment, a significant investment, but it's our biggest product. And we gave you a little bit of some global numbers as well on their size of their of the product, it's very large. So it is a sizable investment for us, but we are we are still doing all of this with the ambition to deliver [ 15 ] or mid-teens EPS in terms of the coming years.

Right. And the only thing I would say is that look, we plan and we run the company medium to long term here. So as Christophe pointed out, we do all this stuff with our eyes wide open and with our aspirations in mind. And so when we think about our planning horizon, as Christophe said, it will take 2 years for everything to fully play out and expenses play out a little bit earlier. But our aspirations are still our aspirations plus revenue growth and mid-teens EPS growth.

Our next question comes from the line of Mark DeVries with Deutsche Bank.

I was hoping to get a better sense of how much you think the Platinum refresh contributed to the acceleration in bill business growth during the quarter. I was kind of surprised at how quickly you made some of those credits like the resi and lululemon available probably stimulated some spend. And also, any color on kind of the strength of demand on the consumer product versus the business?

Mark. So on the spend, if you look at the spend in aggregate, total billed business for the quarter, the impact is small. We've seen we've seen strength, as we said, in travel and entertainment airline went from being flat last quarter to being at 5% this quarter. So either those macro changes are what's driving the billing strength that you see in the quarter. If you were to look at some specific partners, though, you would see like an impact. And we are sharing, I think some of those numbers on that platinum charge platinum part where we're calling out that for those partners listening on the bottom right here, there was like a 2x increase in terms of the number of customers. But the total impact billing-wise for the quarter is not really material.

Our next question comes from the line of Don Fandetti with Wells Fargo.

Steve, can you dig in a bit on what you're seeing in SME? Obviously, it's good to see the uptick. Is that organic growth? Or is this just sort of bouncing around? And do you see any scenarios where that could normalize as you look out to 2026. There's also some fintech competition?

Yes. Look, I think what we're seeing is we're seeing still good acquisition, which is good, and you're seeing organic start to turn around a little bit, especially at the small end and at the -- in the medium -- in the middle market as well. So I think it will stabilize. One of the things that we've talked about quite a bit is our larger transactions moving off some of the cards that came on during the COVID piece. And I think we're growing over that right now. So we feel good about acquisitions. We feel good about the early indications as it relates to the business plan platinum launch. And yes, look, it's a competitive marketplace out there, no doubt about it. which is why we've done the center -- when we did the center acquisition and while we'll be looking early next year to launch our version of center, integrated in with our cards. So we think there's still a lot of opportunity in this space. And we think, hopefully, the downturn that we saw from an organic perspective is going to be behind us.

Our next question comes from the line of Craig Maurer with FT Partners.

Wanted to ask first, when you look at the Platinum Card refresh, I was curious how much of that you think has been with consumers or businesses that have high-end cards with other issuers already or upgrades within your own portfolio trying to ascertain the degree to which this investment is creating a competitive takeaway from others. And second, if you could just talk about the international strength and where you saw that most outside the U.S. and where you might still be lacking in terms of coverage?

Yes. So look, I think the -- it's a little bit too early to tell in terms of what the takeaways are at this point. I think the upgrades we're very happy with the upgrades, and we were happy with the new card acquisition that we saw, what we don't know, and we'll figure this out, but we're sort of 3 weeks in here. Were these people had premium cards before -- is this their first foray into the premium card segment. But we will look at all that data and figure that out. As far as international goes, International pretty much across the board was very, very strong for us. I think we focus on really the big 5 markets. I think 3 of those markets, we had almost 18% growth.

And coverage continues. As I said, we're -- we talked about the city strategy of getting to 75% LIF coverage, and we talked about the various country strategies, and we continue to march in that direction. We'll continue to focus on Europe, and that's been a big focus. There are still some cities that we're working on, and we'll share more color with that as that occurs. But we're really pleased with just how much coverage has increased over the last few years.

Our next question comes from the line of Erika Najarian with UBS.

Christophe, if I could just dig into Ryan's question a little bit. Thank you so much for taking us through the sort of lifespan of the increase in card fees 2 years after the refresh, it's fully baked in 12 months after the new card feet will peak. I'm wondering if you could walk us in terms of the same pacing in terms of the step-up in related expenses. Is it -- would it be the heaviest over the next like 3 to 4 quarters and then it would subside in the next -- in the back half of, let's say, '27, that walk would be helpful.

Erica, predicting what's going to happen in '27, it's going to be like really hard. But from engagement standpoint, we're certainly going to keep engaging with card members and our goal is to increase the engagement. But from a modeling standpoint, I think you can assume that the entire benefits are available to our card members, front book, back book from day one. And there are very strong engagement that we've seen the ride on the day of announcing the new product on September 18 was very high from day 1 and has remained elevated and strong since then. So I don't think we -- there is like a bit of a curve that is playing out for those benefits. The way the way it's playing out if you want for car fees, right? The accounting is also a lot more straightforward. Many of the benefits are quarterly benefits. So you kind of like expense them as soon as the comember earns them. So there is not that kind of complexity for those benefit as there is for car fees. So it's going to be like much more linear. But over time, as I said, the goal is actually to get more and more of these card members to engage with those benefits. So you should expect that kind of like modest trend up by design.

Our next question comes from the line of Brian Foran with Truist Securities.

Hey, maybe piggybacking a little on Craig's question. If I think about the tiering of gold, platinum and Black, now that there's more dining on platinum, are you seeing any interactions with gold that you would call out? And then on the other side, is there a white space available for some enhanced or new -- even new card between platinum and black now that it's clear that a lot of consumers will jump at a pretty high annual fee.

So look, gold continues to be a very strong product for us, and we continue to acquire new cardholders there. So we haven't seen Gold Card acquisition go down and we have seen upgrades, but it's still early. I mean we're only 3 weeks in here. So we'll see how that plays out. And part of our strategy is to provide card members with a path to higher-end products that potentially meet their needs. Look, is there a product between Platinum and Centurion -- maybe if you have any ideas, we're open to those ideas. But it's something that we talk about from time to time, but we'll see, but we're really happy with Centurion is -- and we're happy with where Platinum is. And I think this refresh will continue to cement our position as the leading premium product.

Our next question comes from the line of Rick Shane with JPMorgan.

I kind of like to follow up related to Erika's question, particularly related to retention offers as you -- as the new hire fees roll out. I assume that, that really sort of cascades over 12 months. And I'm curious how we should think about perhaps what percentage of customers take retention office or request retention offers? And if you expect that, that response rate is going to be higher or lower this time based on the initial responses you've seen?

Yes. So I think in general, that's a very low percentage of how we retain our base -- most of the retaining of the base is actually just explaining the product to them. And I think when you look at this product and you look at what you pay for the value that you get it's pretty easy to come to the conclusion that this is a product that I really want to keep. And so I think what we -- 1 of the things that we've really tried to do with this refresh is really make it easy to understand what the benefits are and easy to engage in those benefits. And I think that's critical because what that will do will lead to more retention, more engagement, will drive more business to our merchants, and we'll have more loyalty all the way around. So I don't see retention offers playing a -- in fact, I would argue that they may play even a smaller role than they have in the past, and they already had a small role because I think this product really works really hard for itself.

Our next question comes from the line of Jeff Adelson with Morgan Stanley.

I just wanted to maybe dig in a little bit more on Consumer Health. I know I think your results really speak for themselves, and you've been pretty clear that you're seeing a stable environment the last 6 to 7 quarters, delinquencies remain low. I guess just maybe in light of all these seemingly one-off headlines we've seen recently, which the market is maybe sharing or not so one-off. There's been a lot of focus on the health of the consumer. So obviously, your consumer base is very different than most, but maybe you could just give us a little bit more color and commentary into the health of your consumer base, maybe what you're seeing at the lower end of that spectrum. And relatedly, just anything you're noticing from the government shutdown so far, if at all?

All right. Let me make a couple of comments and then whatever I miss, Christophe can fill in. I think that there's been a little bit of noise out there in the last couple of days about defaults and especially from a commercial perspective. But if you look at what the banks reported from a card write-off perspective and a card delinquency perspective, it all got better. Write-offs are down from the bank -- from the major issuers that we follow, delinquency is down. And for ourselves, delinquencies are exactly what they've been for the last number of quarters around that [ 1.3 ]. And our write-offs sequentially are down a little bit, the [ 1.9 ], but we've been hovering around [ 2 and 1.9 ] and our gap, we still have a huge gap between us and our competitors.

So I think the health of our consumer is really, really good and they're spending. They're engaging with the product. and they're paying their bills. And I would argue that it looks like the health of our bank competitors consumers are getting a little bit better. As far as the government shutdown goes, -- this is not our first rodeo with a government shutdown. And we haven't really seen any impact at this particular point in time. And if I go back historically, I think the last -- not the last one, but maybe before it was like 35 days or something like that. It didn't really have an impact. And so -- and for card members that are impacted, we do have our programs our short-term relief programs, which will get them over the hump, enable them to continue to use the product and then come back and engage with us as they normally would. So that's pretty much what we're seeing.

I don't have a lot to add. I will say some indicators that reflect the strength of our portfolio, like retail spent up 12%, restaurant spend up 9%. And very strong acquisition as well with 70% of the card members joining the franchise, choosing to join American Express on a fee paying product. So the first thing they do is just like to pay a fee that shows confidence in the future. And of course, on the credit metric, part of our job is also to kind of look at every single customer in that just to see whether there are areas of weakness. And like it's very stable across the board, very strong and reflected in the metrics in the reserve rate we go -- there's a lot of scrutiny that goes into this modeling and we see a lot of strength and stability across the board.

Our next question comes from the line of Mihir Bhatia with Bank of America.

I was wondering if you could spend a couple of minutes on marketing spend and how you're thinking about that, not just into 4Q, but also just longer term in I guess for 4Q, I suspect you want to continue to support the platinum refresh. But any details you can provide on where that $6 billion-ish of annualized spend is going. Maybe just give us a peek under the hood. How much is broad-based sponsorships, brand building versus like more micro, like the card member bonuses, retention type stuff.

Mihir, the biggest share and the 1 that is moving from 1 quarter to another when it comes to marketing, is the size of the welcome incentives, right? That's the biggest share of this marketing line. And there is tension here in that number between we want to spend more marketing dollars, but we also want that marketing dollar to be more efficient. So if you work here in the marketing organization, you're constantly battling between let's do more let's spend more. And yet at the same time, let's make sure the dollars were really, really hard for us.

And the -- the number that we end up spending each quarter and each year is the outcome of those 2 kind of like pressure points. And we are very straight and disciplined about those 2. We really do not want a great opportunity to go. And so we're going to keep investing and we're going to keep invested at elevated levels. And at the same time, we're going to subject every single of this dollar to the level of rigor that we have spoken in the past, making sure that the return on that investment, we treat that as an investment meets our profitability criteria, right?

And we are very clear in terms of stopping those investments where they are not meeting these criteria. And we are getting more and more sophisticated measuring those, tracking those. And that's how we make that decision. It's not like, let's spend this year like $6 billion. We're kind of like going very much in the detail and it is the sum of all this kind of like analysis that beaters to that number. That's what we've done in the past, and that's what we're going to keep doing going forward.

Our next question comes from the line of Moshe Orenbuch with TD Cowen.

You've kind of answered both your question about card fees and spending in terms of the refresh -- is there some sort of like a vintage like performance in terms of spend volumes and therefore, the key revenue driver that you could share with us like as you kind of bring on both from new accounts and from higher spend from existing accounts. Any ways to think about that over the next several quarters.

So we're not -- we're not disclosing those kinds of like numbers around spend by vintage or revenue by vintage. But what I can tell you is that intentionally, we have been either back to the conversation with me here about investments and marketing dollars. We've been spending more of our dollars against fee-paying products and premium products. So there are customers that are the more recent customers over index on these fee payment products. They also over-indexed on being younger customers, and we've made that point many, many times. And either this quarter, we shared with you that everything else equal, when you look at the engagement we're getting from this younger customer, they actually tend to transact 25% more than the older cohorts. So I'm not going to share vintages and detailed numbers with you. But those are the kind of like forces that are at work here, more premium, younger car members more engaged, and that's what's kind of like the dynamic in the portfolio.

Right. The only thing I'll add is that we're getting from a younger cohort, we get a higher share of their wallet. And they stay with us longer and they grow as their lives grow. And so while we don't disclose vintage numbers, you can just philosophically look at this and say, well, if you're getting somebody younger and they're going to stay with you longer and you have a premium base that you're going after maybe you can conclude that they will spend more over time. And so those vintages as you get these cardholders now tend to add more value down the road. And that's the strategy without going through sort of this is who we acquired when. But if you just think about this from a strategic perspective, younger premium cardholders.

We're going to grow with them as their careers grow, as their families grow, as their life changes. And we're -- what we're doing here is we're really creating that loyalty and engagement so that we become that part of choice. And when you put a lot of benefits on a product, people want to engage with that product on an ongoing basis, whether they're using a benefit associated with the product or not. And so that's a dynamic that's at work.

Our final question will come from the line of Rob Wildhack with Autonomous Research.

One more on platinum. The $3 billion figure in a partner offered value was an interesting one. As you've gone through this refresh cycle and maybe looking back over the last few cycles, refresh cycles now, too, I mean how has that partner receptivity changed with respect to co-funding credits and rewards -- and then is there anything unique or different between the products like to call out on the same theme as you compare the gold refresh to the platinum refresh?

Well, I think the nice part about so that this product and our customer base is people want to work with us. And people that have been working with us want to work more with us. And I think there's no better example than that than our relationship with Uber. We always -- we've had an Uber benefit for a long time and now you have an over 1 benefit on there. And so they clearly see the value of working together, and it's a great partnership of working together to drive results for both of us. And so -- it's -- we're very discerning about who we're going to work with. We work -- we try and work with as many world-class brands as we can. And what you want to do is make sure that you're putting together a value proposition that speaks across the generations. And so as I said in my opening remarks, we've been expanding these value propositions from a pure travel to much more lifestyle, wellness and retail and so forth and digital, people live their lives that way.

And so I think that as we continue to think about this and as we continue to have success here, it gets back to what we talked about, which is our virtuous cycle that the more the more value we bring to our merchant partners, the more they want to engage with our cardholders and then the more that we drive. As you think about the various products, you look to target the various value propositions to the target audience that you're going for. And if you just take -- if you look at sort of differential between platinum and gold, while gold has certain travel benefits associated with the hotel collection. It really is targeted. It has a heavy emphasis on dining. And we've talked about the success that we had with Dunkin' and the engagement that our card base has.

And that's worked out very well for our cardholders, very well for us and very well for Dunkin' as well. And so the challenge of our marketing teams is to make sure that we not only know what our card members want but anticipate what our card members want and then build those into the value propositions by working with those partners that will, in fact, do that. And I think I think we've done a good job in that respect. And I think the team has really stepped up and created a platinum card value proposition that is the best value proposition that we have ever had, and I think our customers are really appreciating it, and we'll continue to appreciate it.

With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions. Operator, back to you.

Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access a digital replay of the call at (877) 660-6853 or (201) 612-7415, access code 13756151 after 1:00 p.m. Eastern Time on October 17 through October 24. That will conclude our conference call for today. Thank you for your participation. You may now disconnect.

Okay. We're going to get started. Thank you. Good morning. Thank you, everyone, for joining. My name is Terry Ma. I cover consumer finance at Barclays, and I'm pleased to have on stage Christophe Le Caillec, CFO of American Express. So welcome, Christophe.

Thanks for having me.

So I guess we can jump right into it. Maybe we'll just start with an update on consumer. That's probably top of mind for many investors. Amex consumer billings growth has been pretty resilient this year in spite of uncertain macro. It was up 7% FX adjusted through the first half of 2025 compared to 7% for fiscal year '24. So how is the consumer shaping up so far in the third quarter?

So good morning, everyone. As you know, we don't talk much about intra-quarter performance. And you're right, we talked about 7% billing growth year-to-date. When we talked about Q2, you might recall that I talked about some softness in the T&E space, especially in airline. So in July and August, we've seen a bounce back from that. So those numbers look better. There's a lot of continuation in terms of the trends, stability, strength we see in the consumer space. Our retail spend is also doing well. So it's -- I would say, it's looking good and much better than what the headline or the newspaper would suggest.

Okay. That's great to hear. So let's turn to Commercial. Can you maybe just update us on the trends you're seeing in the Commercial in particular, SME, that's been in a soft spot for a while? Any idea what that segment needs to see to lap some of that softness?

Yes. So the -- I think the way to think about this segment and the way we look at it internally is we bifurcate the portfolio, if you want, between what I would call, small businesses. These are the small shops, the accountants, the architects, the dentists around the corner. And the medium size, the middle market, the medium-sized businesses we call them the middle market. And what you see is like a big difference in terms of spend patterns and behaviors there.

The smaller part of that segment is actually performing very consistently with the Consumer business. And you see very similar numbers. Where you see softness is actually in this middle market segment. And there are a few things going on there. First of all, I think the macro is not very supportive there because when I look at all the other financial institutions who actually report their numbers on commercial spend, especially in that middle market segment, we kind of see the same numbers, right?

And -- either low single-digit growth and for some of our competitors, it's even negative. Whether -- so what's happening here, I think is like there are at least two things. One is -- and we talked about it in the past, where we see the biggest pressure point is on the very large transactions, transactions north of $100,000, $200,000. It's surprising in the first place that these transactions are on credit card rails, but these are the ones where we see a shift towards ACH. So that's happening. It will take time, I think, to kind of like filter through the system.

The other thing that is happening here is that more and more this middle market segment wants and needs to have expense management solutions. So having a card is not enough, they need expense management solutions and we see a clear trend there. We think that that's where the puck is going. And that's the reason why we made the acquisition of Center a few months ago because it's an expense management solution company and the team at American Express is working really hard to integrate these capabilities and make it available to all our customers, but especially those who are in that middle market segment.

So that's what I would say. So how long it's going to take to turn around? I think it will take a few more quarters probably for these very large transactions to kind of like stabilize. And for Center, soon, you'll hear back from us in terms of having this capability available to our Card Members.

Okay. That's helpful. Maybe we will just touch on International. That's been a bright spot for Amex. That segment was about 25% of billed business last quarter. It's been growing double digits and outpacing other segments. Can you just talk about the drivers of success in that segment? And how sustainable the growth is?

So it's a great success story indeed. If you take a step back, you look at the International Card Services segment, ICS. Over the last three years, we grew spend by 50%. It's very hard to grow a business of that kind of magnitude, that scale on a global basis or an international basis by 50%, but that's what we achieved. And when you look at the details, you see a lot of strength across many markets and many dimensions. So if you want to unpack the fundamentals behind what's supporting and sustaining that growth, there are a few things, right?

First, we're starting from a lower market share. Across the top five markets, we have about 6% market share. So our opportunity to grow is huge, right? And definitely, it's something we see as an upside for us. And that's one of the reasons why everything else being equal, we actually invest a bit more in international than the U.S. because we see that opportunity. Another thing that is super important for investors to understand is that we've been playing a very long game in International for years, right? And that's where I spent most of my career.

And one of the big challenges we had, and we are making a ton of progress on it, it was coverage, right? And for those of you who have traveled outside of the U.S., I'm sure you've experienced the difference in terms of merchant coverage. And we're making a lot of progress on merchant coverage. And I think we just released a few days ago a new number for merchant coverage. We have reached 160 million merchant coverage globally. That's not international, that's global. But it tells you about the progress we're making there.

In the top 12 markets for us, the coverage is now north of 80%, and we are very diligent, very focused on some cities that we want to win on verticals and digital commerce. So the coverage we make -- the progress we're making on coverage is definitely part of the growth story here, right? So we're making progress on coverage which makes it easier and more compelling for Card Members to take the card and you kind of like build those in parallel, and you get what we're getting, right, a ton of momentum across the board. And we think that there's a long runway there.

Got it. Okay. Maybe digging a little deeper, what countries are you seeing the strongest growth? And what about your strategies helping differentiate Amex? And then how do you expect the growth trajectory to shape up moving forward? Any medium-term goal post you have in mind?

So as I said, we see -- to grow so consistently for so long, you just need to have a broad-based kind of like momentum and which is exactly what we're saying. Now if you look at the more recent data, over the last -- I think it was in Q2, the biggest growth was in Australia and Japan. Japan is a super important market for us because it's a very large economy because we have very good coverage in Japan, given the partnerships that we have out there. You know that it's a -- the brand carries a lot of weight in Japan. It's also a market interestingly where cash is still playing a big role.

So the digitization of payment is also part of the success story in Japan. So it's one example of like where we've been able to grow sustainably for many, many years across the entire market. So we're very pleased with the growth there. And if you kind of like look at the kind of assets that we have and that we've developed and built over the years, partnerships is a key one. Like we have partnerships with our biggest airline out there, whether it's British Airways, Air France, KLM, NAA (sic) [ANA] in Japan, Qantas.

And so those partnerships go back decades. We know each other really well. We work really well together. I talked about the progress we're making on coverage. And we have built like an amazing franchise, which is similar to [Audio Gap]. I would say it's more premium out there in the U.S. Revolve, if you look at the P&L, you're going to see that NII is actually playing a smaller part in the economics and card fees is actually a bigger part of their revenue mix. The behaviors as well of our customers is slightly different. We're seeing much more cross-border spend, like something like 23% of cross-border spend in International versus like 5% in the U.S.

So that gives us more opportunities as well. It's more T&E heavy, more premium kind of portfolio book as well, as I said. So it's a very interesting franchise. And as I've said, we've been working on this for, I don't know, 30, 40 years, and it's very profitable, very attractive and there's a very long runway in terms of growth here.

Got it. That's helpful. Maybe just touch on revenue growth in the guide. You've guided to 8% to 10% revenue growth for the year. First half was 9% FX-adjusted year-to-date. How do you feel about that guide at this point in the year?

Feel good. I guess you would be surprised if I say anything else. But I feel good. As you said, we guided 8% to 10% revenue growth. Year-to-date, we are 9% FX adjusted, $15 to $15.50 in terms of earnings per share. We are at $7.71, I think, year-to-date. So we're tracking well against that guidance. I feel really good. We have momentum. As you know, we have a big product refresh that is coming up in a few weeks from now. The team is very busy executing on the growth plan. So I feel really good about where we are and what's ahead of us.

Got it. And what about the aspirational 10% revenue growth that you put out there? Looking out long term, what do you really need to see for Amex to potentially hit that aspirational goal?

So maybe take a step back and go back to 2022, January 2022, when we introduced that growth plan. In '22, we delivered 27% revenue growth. In '23, it was like 15%. Last year, it was 10% FX adjusted. And I just talked about the first 2 quarters where we are at 9%. So when I look back what we did, I feel that, that was definitely the right aspiration and the right ambition for us. I'll say this as well, and I've repeated it many times, but this was never meant to be a forecast. It was also never meant, obviously, to be a guidance.

What it's meant to do is articulate internally and externally what we want to do with this company and with this franchise, right? And we think that there is a very large growth opportunity for us, and we need to go after. And this vision did an effective job at energizing the entire American Express colleague base of 75,000 colleagues. And there are many things that happened as a result of laying out that ambition. The cadence of product refreshes, the innovation, the pace at which we have negotiated those partnerships. All of that, you can track it back to laying out that ambition out there and saying we're going to be a growth company.

So I feel really good about that and are -- the other thing that I'll say, because it's an important thing to understand is that we articulated that ambition and we set up a very large constraint because we said we want to grow in the premium space. And every quarter I come in front of you and I say, here is the number of new cards we acquired, and there is about 70% of those cards that are on fee-paying product, right? So we constrain ourselves to grow and to deliver on that ambition within the Premium space.

If we were to relax that and open up the credit box, we could deliver like 10% on a regular basis, but we don't want to do that. What we want to do is just deliver on that 10% plus percent on the revenue base, sustain that mid-teens EPS every year and have a very stable, resilient business that can go through business cycle. It's that -- those three things together that make it challenging. So I feel that it's the right business model. It's definitely a model that is accretive in terms of shareholder value down the road, and we are making great progress on it.

Okay. That's great to hear. We'll switch gears and maybe just address competition. There are a number of announcements this year, Chase Sapphire Reserve got refreshed. Citi is effectively reentering the market with the Strata Elite. Obviously, Capital One recently closed the Discover acquisition. TBD, what they do with Venture X bit. How would you characterize the competitive environment, particularly for Premium cards? It certainly feels like it's the first time in a decade that the Premium card space has been this competitive?

Yes. I've been in this industry for almost 30 years in different geographies. I think that there's not been a year where it was not a competitive market. For many reasons, right? One of them is because it's typically the most profitable product that our financial institution has and the Premium space is definitely the most attractive space for everybody, including for ourselves. For a long period of time, we were kind of like the only player in that space.

And part of our challenge was actually to educate consumers and small businesses and convince them to pay a fee and what the competition did was actually to either cover some of these education costs, I would say. And so the number of customers now, especially on the consumer side, who are considering signing up for Premium card is much bigger now than it was back then. And as the leader of that category, we always benefit from that. And even with the announcements that you talked about, I read a lot of those articles as well, just like many of you. I don't think I found one where they were not mentioning American Express.

I mean, they start by talking about our competitors, and then they talk about American Express, right? And those who are actually reading those articles are considering American Express as well. So we benefit from that. So I think that competition, I don't know whether it's more intense than it was back then, but it's definitely benefiting consumers. They have choice. They have more products to choose from. It definitely benefited us. Our Platinum franchise is bigger than it has ever been.

And I do recall back in 2017, when we either -- one of our competitors launched their product. There were some concerns about American Express. And we've seen nothing but growth and very strong growth in the Platinum space for a decade now. And I feel that we are ready for it.

Got it. The product refresh cycle has been a crucial part of Amex's strategy. You refreshed Delta and Gold last year. As you mentioned, Platinum Card to be refreshed in a few weeks. Can you maybe just talk about your learnings from the Delta and Gold refreshes last year? And then how you're approaching Platinum refresh this year? And then more importantly, how do you position the Platinum Card relative to the other products out there?

So first of all, I'm not going to tell you what's going to be in this new product refresh, right? You have to wait a few more weeks to find out. But if you go back to Gold and Delta, right? So we did [indiscernible] refreshes did to the financials. We saw a significant increase in the number of accounts about 10% over the last two years. The fee line of those products went up by 60%, 6-0. And the revenue on these two products is up about -- for each of them, about 30%.

And maybe what's most remarkable is when you look at what we call the spend retention, right? So we look at whether we lost any billing and any Card Member along the way, the spend retention was 98%. It's like an eye-watering 98%. So that's very much the way we think about those product refreshes. A lot of people -- and I saw a lot of those articles talk about the price point. This is not how we think about product refreshes. The way we think about it is that the marketing team, the product team, they look at what's the best value proposition we can create for our Card Members, what's the best partnerships, what kind of access we can provide them, what kind of differentiated value proposition we can put forward, execute on at scale.

And we build these products, attractive products. And then we figure out what's the right price point for that. We're not trying to flex the pricing lever. What we're trying to do here is create value for Card Members with partners and make it available to customers, right? We're talking about Gold a few minutes ago. In the case of Gold, the equation was that we increased the value proposition by $400 and we increased the price point by $75. So when you are one of those customers and you have a Gold Card and you look at, okay, I'm going to get -- I can get as much as like $400 more in terms of value and I'm going to pay $75. It's a no-brainer decision, hence, their super high retention rate.

So the reason why I'm telling you all of that is to share with you the philosophy that we have as we think about how we're managing those decisions. How we are making those decisions? It's also to -- either to help you understand how we're thinking about the economics, and you should expect exactly the same model as we think about the Platinum card. It will be a version of that, that will be revealed very soon.

Got it. Maybe this is a good point to pause for audience response question. Can you just queue that up, operator? If everyone can just use the controllers to register your response. Question is, which premium credit card do you have at the top of your wallet? 1, American Express; 2, Capital One Venture X; 3, Chase Sapphire Reserve; 4, Citi Strata Elite or 5, none of the above, other?

You see.

Platinum at almost 40% followed by Chase Sapphire Reserve, okay, and then 25% other.

Yes. I guess a lot of these other are Centurion Cards.

Yes, yes.

You should have added Centurion Cards there, next year.

I will next year. Maybe just talk about how you continue to differentiate the value prop for a product like Platinum and also how you think about that ability to price given the competitive landscape?

So I talked about pricing. So maybe I'm not going to get back to it. But the ability to create like a differentiated value proposition is critical here. I was talking about how we're thinking about partnering. Remember in the case of the Gold Card, we made a partnership with Dunkin' Donuts and either co-creating some kind of value and they are co-funding it. So what's critical here to the approach of the Platinum refresh is exactly the same thing, right? It's partnering with big brands out there to create value proposition and they co-fund that value proposition and then, as I said, we price for it.

The other thing that is critical for investors to understand here is that this value proposition is evolving, right? It's not like it's static at the time of the refresh. Of course, at the time of the refresh, we have an opportunity to rebuild the product. But we kind of keep working at it constantly. A key element of their Platinum value proposition, and I'm sure you guys are familiar with it, is their FH&R, Fine Hotels and Resorts and The Hotel Collection. We just announced recently that we increased the number of properties by -- was it like 400 more properties.

So this is -- this means that there's like 400 more properties that actually want to join the program because they see the value in this program. And they are happy to fund an early check-in, a late checkout and a free breakfast, right? It's almost like two extra nights at the hotel. So this is important because this is a way for us to create value for the Card Member and have a big part, if not all of the value being funded by the partner, I just talked about, for FH&R. So this is very much the way we think about it, right, with partnerships and in a dynamic way so that we can refresh the value, keeping it fresh.

And as I said, we then try to find the right equation in terms of pricing, what's the right price point for that value.

Got it. American Express has gained traction with millennials and Gen Z. These two cohorts have been the big driver of your card acquisitions, making up 60% of new accounts and 75% of Platinum and Gold new accounts. As we kind of think about the TAM, and the market share of those two cohorts, how penetrated are you? And what's the runway for growth?

They're -- and I'm going to bring back -- bring you back to a longer horizon here. If you go back to like 10, 15 years ago, one of the constant question we were receiving is like how much relevant you are and are your brand, your products relevant to the younger generation? And there was a real concern that we would not be able to actually be relevant to these younger folks. We addressed that question. We're now very relevant to this generation. And we did that by evolving the product, the value proposition, evolving the brand, for instance, in terms of sponsorships. We have a big sponsorship with Formula 1, for instance.

And as you saw in the various -- in the recent refreshes, we added either streaming bundle and credit, like value proposition that dining credit that resonate much more to the younger population. And that worked out really, really well. And so it's -- for us, the way to think about it is like it's increasing our TAM. These are people that we were not focused enough on 15 years ago. Now they're joining the franchise, and we are seeing their behavior, right? And their behavior is going to dictate the economics of American Express 15 years from now.

And they're paying -- they're joining us on a fee paying product. They're giving us a big share of their wallet because they have either -- we have parity coverage. They're very engaged with the product, the value proposition. They use the benefits quite a lot. Interestingly, the cost of servicing for us is much lower than for the Baby Boomers, like as much as like 40% lower than the Baby Boomers. If you look at the older generations, we still have a lot of Card Member in the older populations that are calling us every month to make a payment by phone versus that is not happening with the younger population.

So as you think about that, that's displacing as well a lot of expenses. And I talked last quarter during the earnings release about the economics and their credit profile. And I shared with investors, not only the credit performance of this population is a lot better than the GenX and -- the Gen Z and the millennials in the market, but it's even 40% better than the GenX and the Baby Boomers of our competitors. So this is a very attractive segment. They're joining American Express, they're loyal to American Express, and they're going to be with us for a very long period of time.

So you need to think about that as kind of like accretive in terms of growth. I'm going to make one more point on this Platinum conversation and the competition, which I think is an important one is that, behind the announcements and the headlines and either what -- what's critical here is the ability to execute on those promises. And this is where American Express is a different kind of company, right? And many of you -- 40% of you carry a Platinum Card probably for that reason, right? It's because you know that when you're going to call us, we're going to pick up the phone and we're going to help you out.

And this ability to service is actually critical. And recently, J.D. Power just released their leaders survey. And again, we are the best product in Platinum in its category as well as the best -- is the best product. So that speaks a lot about our heritage and the capabilities that we have, the talent that we have to execute on the servicing of these products.

Great. And as you evolve the benefits of the Premium cards in recent years to cater to the younger generations, how do you kind of find a balance and not lose appeal to the older generations? The Gen Z and Baby Boomers are still about 65% of total consumer billings.

Yes. And so you're absolutely right. The word we use internally is generational relevance. We are very much aware of what you just said, right? I mean, we still have a very large share of our portfolio, customer base and economics relying on the GenX and the Baby Boomers. So it's super important for us to focus on that. The way we think about those is that, first, as I just told you, we're not forcing you to make your monthly payment through the app, for instance, right? If you want to call us, we have people on the phone picking up the call, right? So we're very much aware that we need to have various channels that will work to the variety of our customer base. That's for one.

The second thing is, as we think about the benefits, there are benefits for everybody in the products, right, for older generation, for younger generation. The streaming benefits appeal much more to the younger folks than the older ones. This being said, when you look at a benefit, for instance, that is super popular, for instance, the Uber credit benefit. You look at the GenX versus the younger population, it's pretty much the same, right? So there's not as much difference as you might think, either assume -- maybe you think.

And finally, I'm going to come back to what I was just talking about, what all this kind of like population has in common is they want service. And they want that experience, right? And that is across the board what we're trying to provide, whether you are a Baby Boomer or whether you are Gen Z, you can expect service, quality, security and integrity from American Express.

Got it. That's helpful. Maybe would just turn to lending and credit. NII growth continues to be robust. It was up 12% year-over-year last quarter. You had mentioned a big driver is the increased margin on lending. Can you just talk about what you've done to improve the margin? And how much more room is there for you to kind of expand it?

Yes. So in last quarter, we actually introduced like a different visual because we wanted to make that point like as clear as possible because we had, over time, a lot of questions about either NII growth. And we wanted to make it more visible and easier for investors to understand how much of their NII growth is a function of volume growth versus a function of NIM growth -- margin growth. And if you look at, say, from 2019 to now, it's about -- not quite, but it's about 50-50, right? So half of the growth is margin expansion, which is super important because, first, it was intentional.

Second, when you look at that in relationship with the credit performance, it means that the margin is much, much higher because the credit performance was very stable over this period of time. So the things that are behind that NIM expansion, there are a few things. One was innovation in terms of introducing [indiscernible] new features that allow Card Members to revolve a portion of their spend. I'm talking about pay over time, which has been a big driver of growth, right? It improves the revolve rate, it grows the revolve rate.

The second thing here that has been a very important driver of that NIM expansion is the evolution of our funding mix, right? Back in 2019, I think it was 25% of the funding of the balance sheet. Now it's 60%. And there's still more to come, right, back to your question about how much more expansion there is. And the third kind of like element here that I want to point you towards is the pricing discipline that we have used and executed on over the last four or five years. Pricing for risk in a more disciplined way. We are actually not using 0% offers anymore.

And so there is that lending book benefited from all of that over the last four or five years. How much more is there to come? There's a bit more, not as much as what you've seen historically, but there's still a bit more like NIM expansion to come.

Okay. Great. And then when we think about credit performance, Amex leads the industry. Your delinquency rates are below pre-pandemic levels and the outperformance relative to the rest of the industry has been widening. So one driver is clearly the focus on the Premium segment. But aside from that shift, what else have you done on the tech side and the underwriting side to kind of help sustain that?

The first thing here that I need to say is that this was intentional, right? This was the outcome of the strategy we laid out when we say we're going to grow in the Premium space. We wanted to grow in the Premium space, not only because we are American Express and our brand resonates in that space, but also because this is the best way to take care of the credit risk. We know that we run the company for the long term. We know that we're going to go through a cycle, and it was important for us to be intentional about having a book that can be profitable through the cycle. And I want to remind you of the CCAR results and how profitable we remain through the cycle.

So that was -- like the first element was just like, let's grow in the Premium space, but that's not everything. We have for years invested in data, talent, building models, technology, infrastructure to actually manage proactively that credit exposure. And just to give -- and we have used AI and artificial intelligence for, I think it's either -- we started in 2010, right? And I think we were one of the first institutions to do that. And we keep doing that, right? We keep evolving those models.

I'm just going to give you an example on the Platinum Card, the Charge Card, it's a no preset spending limit, right? So the way the technology works in combination with data and AI is that every swipe of the card, there's like a ton of models that are being run. We have as many as like 4,500 different rules.

And in a fraction of a second, we approve a declined [indiscernible] transaction, most of the time we approve it. That's how we manage the credit risk on these big ticket items, right? This is a technology that is super sophisticated, that is proprietary. I don't think any of our competitor is getting close to that. And it's definitely part of why we are maintaining that hedge and that advantage versus our competitors. And we are -- we keep investing in it.

Okay. Great. Maybe we'll just pause and queue up those last two ARS questions. So first one, do you expect 2026 FX adjusted revenue growth to be; 1, 7-8%; 2; 8% to 9%; 3, 9% to 10% or 4, 10% or higher?

So majority, 52% at 8% to 10% -- 8% to 9%. Okay. Next question. And then over the next year, would you expect to position in Amex to: One, increase; 2, decrease; 3, stay the same?

There's a good answer to that one. Good.

Good. 46% increase, 42%, stay the same. So pretty bullish. So we have about 3 minutes left. I'll just open it up to the audience if there are any questions. We have one upfront here. You're going to get a mic.

I just wanted to see if you could provide any more color around -- you highlighted in the Gold and the Delta refreshes that the number of accounts went up 10% over two years. I think you said fees went up 60% and total revenue up 30% on those two categories over two years, right? But -- and the retention was 98%. But then you failed to mention what the VCE go up, like the expenses associated with that. I mean -- and I know I've talked about this before, but if you're offering people $400 worth of value, I know you're not paying for all of it, but you're paying for some of it.

And yet you're only increasing the card fee by $75. Can you just talk a little bit about when you do these refreshes, does profitability also go up? And -- because that was the piece that you sort of left out.

Yes. And it was not intentional. There -- so I don't have the VCE ratio. I can't share it with you. It's not because I don't want, but I don't have it. When we refreshed the product, one of the objective is definitely to improve at a minimum to maintain the profitability. The other objective, of course, is to increase the demand for the product. And so -- and of course, what we're trying to do as well is just like be intentional about that retention and engagement of the base. But maintaining or improving the profitability is definitely part of the objective here.

And I don't have there -- in mind the result of the Delta and Gold Card, but the way to think about it also is just to think about VCE, not only like -- and maybe it's because the way we talk about it. One way for us to get efficiency and profitability is also to factor into account the credit performance, right? I also failed to say that the credit performance post this refresh is just like probably at a minimum as strong as it was before, right? And so the challenge for us is to keep growing the portfolio, maintaining or improving the profitability and improving the risk profile, which in aggregate, we said, has been improving versus 2019. So it's that magic equation that we're solving for with those product refreshes.

Okay. I think we're out of time with that, so thank you.

Thank you.

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q2 2025 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to our host, Head of Investor Relations, Mr. Kartik Ramachandran. Thank you. Please go ahead.

Thank you, Dana, and thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our reports on file with the SEC.

The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials as well as the earnings materials for the prior periods we discussed. All of these are posted on our website at ir.americanexpress.com. We'll begin today with Steve Squeri, Chairman and CEO, who will start with some remarks about the company's progress and results. And then Christophe Le Caillec, Chief Financial Officer, will provide a more detailed review of our financial performance. After that, we'll move to a Q&A session on the results with both Steve and Christophe. With that, let me turn it over to Steve.

Thank you, Kartik, and good morning, everybody, and thanks for joining us on a beautiful Friday morning here in the summer. So thank you. We had another strong quarter. Revenues reached a record $17.9 billion, up 9% year-over-year. Earnings per share, $4.08, up 17%, excluding last year's gain from the sale of Accertify. Total Card Member spending was up 7%, which was consistent with the pattern we've seen this year. While spend in some of the travel categories like airlines and lodging was softer overall, spending was a quarterly record.

Based on our strong performance year-to-date, we are reaffirming our full year revenue growth and EPS guidance that we provided in January. Last month, we received the results of the Fed's annual CCAR process, which set our preliminary stress capital buffer requirement at the lowest permissible level of 2.5%. The results once again demonstrated that we had the lowest projected credit card loss and highest profitability rates under the Fed stress test among all banks subject to CCAR.

These results were a testament to the earnings power of our resilient business model and our strong capital position. Looking ahead, we're very excited about the upcoming refresh of our U.S. Consumer and Business Platinum Cards this fall. The competition for premium customers, while always intense, has been especially heated for over a decade. And it's been a very good thing for our customers, for the category and for us. In fact, the past decade has been one of the very best in terms of growing our premium card portfolios and scaling our Card Member base.

As the industry leader in premium cards, we benefit from the strong interest in the category. The total addressable market is growing at a healthy rate globally, driven by several factors, including our own value proposition innovations, the investments of competitors and generational shifts in the appeal of premium products. As a result, the basis of competition has shifted, especially among affluent consumers away from cashback and no-fee products and towards partner added value access, experiences and superior customer service where we do excel.

We believe we can continue to lead in this space as the category and competitive interest continue to grow, but let me tell you why. To start with, we've led the premium card category for over 40 years. We achieved that position by creating a multifaceted membership-focused business model, which includes a wide range of assets that set us apart and when taken together, are very difficult to replicate. To build on our success, we've increased our focus on the premium space over the last several years, strategically invested in refreshing our products regularly all around the world.

Our refreshed strategy focuses on enriching our value propositions with more benefits and offerings in areas of our customers -- the areas that our customers value most at a price point that delivers outstanding value. A key element of this strategy is our ability to attract a growing number of premier partners who fund offerings to gain access to our large-scale high-spending customer base. Beyond the individual product value propositions, we're also constantly evolving our suite of experiences and benefits that set the competitive standard, giving our Card Member access to over 27,000 of the most sought-after restaurants, wineries and other venues through Resy and Tock.

The largest airport lounge network in the industry, which includes 30 proprietary Centurion lounges today with more on the way as well as access to all Delta lounges, exclusive experiences across sports, fashion and entertainment and a wide range of benefits at over 2,600 premium hotels and resorts worldwide. This strategy has worked especially well for us. For example, in each of the recent refreshes we've done for our U.S. Consumer Gold, Delta and Hilton Cards over the last 2 years, customer demand has increased, driving double-digit account growth.

Revenue growth in each of the 3 portfolios is up over 30% with card fee revenues up at least 60% and spend retention remains very high at 98%, and we've seen no meaningful change after the refreshes. Additionally, the high credit quality of the new customers we're bringing in has helped us widen the gap between our credit metrics and the rest of the industry. As we look ahead to our U.S. Platinum launches, you can expect to see the same formula, providing the best premium experience to Card Members with more differentiated benefits and more world-class partners joining us to offer Card Members more value that substantially exceeds the annual fee.

Longer term, when you combine our proven product refresh strategy with our global premium customer base at scale, our network of world-class partners, our lifestyle-orientated membership defined brand and an addressable market that is growing at a healthy annual rate globally, especially in key areas we're focused on the premium sector and younger consumers. These are all the reasons why we believe we have a long runway for growth and can sustain our momentum in our leadership in the premium space going forward.

I'll now turn it over to Christophe to provide more detail on the second quarter results.

Thanks, Steve, and good morning, everyone. Let me start with the highlights for the quarter on Slide 2. As Steve noted, we reported revenue growth of 9% and earnings per share of $4.08, up 17%, excluding the gain from Accertify last year. On Slide 2, you'll see a list of several notable developments in the quarter. We've selected these highlights because they are great indicators of the progress we're making towards our long-term strategy across key areas of the business, like technology, partnerships or products.

Before we get into the detail of this quarter's results, let me step back for a moment to reflect on what the trends from this quarter indicate. When you look at our performance across spend, transactions, demand for new cards, retention and credit in the context of the significant macroeconomic and geopolitical developments of the past few months, what you see is remarkable resilience across our customer base.

And why there may be a bit of prudence around the edges, this performance indicates the strength of our business model and strategy. Turning to billed business trends. At the overall level, spend was consistent with Q1, up 7% for the quarter. Goods and services spending, which accounts for over 70% of our business continue to grow at a similar pace to Q1. T&E growth was down a bit versus Q1, driven by softer airline and lodging spend, while restaurant spending continued to be very strong, up 8% FX-adjusted. Our fastest-growing cohorts kept up the momentum.

In the U.S. consumer business, millennial spend was up 10% and Gen Z spend was growing around 40%, though starting from a smaller base. And our international business continued to grow in double digits, up 12% FX-adjusted in the quarter. Transaction growth was up 9% is another indicator of strong customer engagement and is largely consistent with what we've been seeing over the past few quarters. We acquired 3.1 million new cards in Q2 within the range of recent quarters. We sometimes get asked how we can sustain this space.

Starting this quarter, we are breaking out the number of cards we acquired by segment. As you can see, we've acquired about 1.5 million new cards per quarter in the U.S. consumer business over the past few quarters. When you compare that to industry-wide new account originations, even among customers with FICO scores above 660, it's a relatively small share, indicating continued runway for growth. Turning to balance growth and credit. Loans and Card Member receivables increased 6% year-over-year FX-adjusted, growing at a similar pace to billed business.

This quarter's results at about a 1 percentage point impact from the held-for-sale portfolios that we previously closed. Our premium products continue to be the primary driver of that growth. with our Pay Over Time and co-brand portfolios driving around 80% of growth in Card Member revolving loans in the quarter. Our growth in premium products over the past few years has further strengthened the credit quality of our portfolio, resulting in very strong credit performance. Q2 delinquency and write-off rates remained low with delinquency rates flat to Q1, while write-off rates declined.

Our strong credit performance is remarkable across all age groups. In fact, the delinquency rate for our U.S. millennial and Gen Z customers are not only better than the industry average for those age groups, but they are also nearly 40% better than the industry average for older age groups. The strength of our premium model also holds in a stressed environment, as demonstrated by the Fed CCAR results, which show that we have the highest ROA and lowest credit card loss rate across all banks subject to the stress test. Total provision expense was $1.4 billion for the quarter, which includes a reserve build of $222 million reflecting growth in loan volume and a worse macroeconomic outlook. As a reminder, there's scenarios used in the reserve model at the end of Q1 did not incorporate the changes in the outlook that we started to see in early April.

Turning to revenue on Slide 14. I'll hit on a few of the key points. FX-adjusted revenue growth was 9% both for the quarter as well as for the first 6 months of the year. We continue to see strong momentum in net card fees, which reached record levels and were up 20% FX-adjusted again this quarter. The exceptional growth we've seen in card fees over the past several years averaging 17% per year since 2019 really speaks to our strategy as we've increased our focus on the premium space.

This is the result of, first, acquiring new customers onto fee-based products, then driving strong retention of our customer base. And finally, consistently increasing value through product refreshes and pricing accordingly. The result is a net card fee line that has more than doubled since 2019. Taking a look next at our premium lending business. Net interest income grew at a double-digit pace against this quarter. One question we sometimes get is around the drivers of our strong growth in NII over the past several years.

Starting this quarter, we've aimed to give you a picture of how both volume and margin have led to this growth. The takeaway here is that since 2019, a bit more than half of the increase in NII has come from balance sheet growth. This volume growth has been about the same as growth in Card Member spending. The reason that NII has grown faster than volumes is because we've increased the margin generated on these balances. We have achieved that margin expansion by improving pricing for risk by rolling out more lending features, especially across our historically painful charge card products and by growing our deposit business.

Most importantly, we've achieved this growth while maintaining very low credit risk. In fact, widening the gap to peers. And looking ahead, we believe we have a long runway for growth in our premium lending business. To sum up our revenue performance, we feel good about the momentum we have halfway through the year with the overall revenue growth tracking in line with our full year guidance.

Let's turn to expense performance on Slide 18. If you think about the way we manage the expense base, we generally expect VCE to grow a bit faster than revenue as a result of the mix shift towards premium products and the investment we make in products to drive acquisition, engagement and strong credit outcomes. At the same time, we look to drive leverage from marketing and OpEx over time as we generate efficiencies and economy of scale. That continues to be how you should think about our expense base for the full year.

In Q2, VCE expenses grew a bit faster than revenue and marketing grew in the mid-single digits. OpEx excluding Accertify was up 9% in the quarter, a bit higher than our expectation coming into the year. The year-over-year growth is predominantly driven by investment in our enterprise risk management capabilities and technology as the company scales. Looking ahead, for the full year, we expect OpEx growth to be in the mid-single digits versus last year except Accertify, predominantly driven by the weaker dollar.

As you think about the ability of our business model to drive expense leverage, I'd note that since 2023, we have driven 4 points of operating leverage with operating expenses as a percentage of revenue down from 25% in 2023 to 21% this quarter. Moving on to capital. Our CET1 ratio was 10.6%, within our 10% to 11% target range. We returned $2 billion of capital to our shareholders, including $0.6 billion of dividends and $1.4 billion of share repurchases. In Q1, we increased our dividend by 17%. Based on the CCAR results, our preliminary stress capital buffer requirement remains at 2.5%.

The lowest prescribed level, allowing us to continue executing our disciplined capital management strategy while returning excess capital to our shareholders. Our business continues to generate very strong returns with an ROE of 36% in the quarter, providing us with capital flexibility. That brings me to our 2025 guidance. We're now halfway through the year, having delivered 9% FX-adjusted revenue growth and EPS of $7.71. Trends across the business have been largely stable. While there continues to be uncertainty in how the coming quarters will play out, we have increased confidence in our path forward. As a result, we are reaffirming our full year guidance of revenue growth of 8% to 10% and earnings per share between $15 and $15.50.

With that, I'll turn the call back over to Kartik, and we'll take your questions.

Thank you, Christophe. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just one question. Thank you for your cooperation. And with that, the operator will now open up the line for questions. Operator?

[Operator Instructions] Our first question comes from Sanjay Sakhrani of KBW.

Steve, Christophe, I know billed business trends have been pretty resilient in the face of this uncertainty on the macro side. I'm just curious how you guys are planning for maybe just the intermediate term on spending trends. I assume it's stable. But what gets things going? I know SMB has been sort of the hardest hit, airline spend as well. And if I could just ask on that same vein on SMB. Maybe you could just address that Amazon portfolio loss and sort of how we should think about how that plays into SMB.

So I think -- look, I think the -- we're just planning for it to continue to be consistent as it is. And I don't know what gets it going. I'm not sure anybody really knows what gets it going. We live in uncertain times, but I think people are continuing to live their lives. And what we're seeing right now is very consistent spending. You're seeing a little bit of a slowdown in airline, not necessarily front of the cabin.

You're seeing a little bit of a slowdown in lodging, but again, not necessarily on the high transactions, which are up. But goods and services continue to be resilient, and our Gen-Zs and our millennials continue to be consistent. So -- and obviously, we've said all along, it really had nothing to do with the stock market when the stock market was all the way down, people continue to spend what they're spending now; the stock market is high, people will continue to spend what they are now.

So we're just going to ride this out as it is, and I think it's going to continue to be very, very consistent. In terms -- and look, in terms of the Amazon portfolio and other portfolios that happened, Amazon and Lowe's as well, they're both good card accepting merchants, and we're going to continue to do business with them. But sometimes, things just don't work out economically. And I think one of the things that we've seen in this space, unlike in the T&E space is you've seen portfolios move in retail. I mean it's not an unusual thing to see portfolios move in retail.

And for us, it just -- it really just wasn't working out and that's just the way it is. I don't think it really is going to have much of an impact from an SMB perspective for us, either one of those portfolios. I think from SMB, I think SMBs are a little bit more circumspect, I think, than the consumers are right now. And so not buying maybe as much inventory and maybe not -- and not spending as much.

And so I think they're going to need probably a little bit more assurance from an economic perspective longer term for that to get going. So -- but having said all that, I think from an SMB perspective, while billings are probably not where we want them to be, our revenue from this segment continues to be strong. Our credit metrics continue to be strong and our lending book is strong and our fee-based business here is strong. So overall, we're happy with SMB. We'd like to see more billings.

Sanjay, just add one thing in terms of the billing and the outlook. One of the things that provides support to our billing growth is the strength of our new account origination. And you certainly saw that we added a little bit more disclosures and details on our new cards acquired and 3.1 million new cards this quarter and 1.5 million in the U.S. consumer. So we see a lot of stability there. And with the upcoming launch of the Platinum Card, that gives us confidence in our ability to originate new cards in the balance of the year and that will certainly support the billing growth.

The next question is coming from Ryan Nash of Goldman Sachs.

So Steve, you spent a decent amount of time talking about the refresh of the U.S. Platinum that's coming in the fall. We obviously had a refresh from Chase. Citi is coming out with a new card, obviously, [ cards ] coming after that part of the market. Now I know that it's always competitive, but how do you think about the risk of too many players going after the same customer, many of them are copying your value proposition? And inevitably, what do you think this means for pricing power over time?

May the best company win. That's what I think. Look, I think that it really hasn't -- it's not all that different. I mean remember, Citi took a hiatus for a while. I mean -- when you think about this space over the last 10 years, it's been extremely competitive. And you saw the Chase came out, it was like 10, 11 years ago. And since that time, we've done 3 refreshes, and Citi was in the market and then they popped out, now they're back in.

So -- and you have Capital One. But I think what's happened is, this focus by the banks in general and us on this premium space has been good for customers. I think it's been good overall for the industry. And if you look at the track record, it's been really good for us. I think since our last refresh, we pretty much doubled our base. I think what the industry has proven is that consumers will pay for value. And as long as you're delivering value, I think you still have that pricing power.

I mean I think it's all about -- I think when you look at who we're all acquiring here and we're acquiring lots of Gen-Zs and lots of millennials with these cards. They are very value conscious, and they look at this, and they basically say, "Look, for whatever the fee may be, I'm getting the value." And if they don't feel they get the value from the Platinum Card, they can look at the Gold Card, and they get that. So I think it's good for the industry. I think pricing power is much more tied to the value you provide.

And I think, as I said before, as long as we continue to do what we're doing, which is, I believe, offer the best product in the industry and leverage the assets that we do have, which some of them I'm -- obviously, I'm not going to go through again, but I mentioned in my opening remarks, I think we're going to be -- continue to be in good shape. I think for anybody in this space, complacency is a death knell, and you can't be complacent, which is why we're on a very regular cycle of refreshing these products. And anybody thinks that we're refreshing the product in response to what our competitors are doing is crazy. We have our own schedule. And I think we'll see what we see in the fall, but we feel really good about what we're going to launch on both products, consumer and small business.

The next question is coming from Mark DeVries of Deutsche Bank.

I had a related question on the coming Platinum refresh. I know you're not going to preview it now, but I was just wondering if you could just comment kind of qualitatively, should we expect the same type of meaningful step-up in added value relative to the fee that we've seen in past refreshes? And then also, how do you just think about the risk that as you do that, you're kind of asking more of the customer to both kind of track what all those incremental sources of value and engage more deeply to kind of justify the added step-up in the fee?

Well, I'll tell you what, if you don't tell anybody, I'll give you a preview. The -- look, I think that -- yes, look, I'm not going to get into ratios here, but what I would say is our strategy has always been to -- if we do raise the fee, it has always been to add incrementally a lot more value. In terms of -- so yes, that's the same playbook. In terms of -- as you think about the consumer, years ago when we used to do these things, we used to try and figure out how the consumer couldn't use the products and services.

But what we find is we make these things really easy for consumers to use now. And we make it such that it's a wide range of value. And so while not every consumer will use 100% of the value, getting back to your second point, we have enough disparity in the price and the value that you don't need to use all the value to get the value out of the product and that's a lot of value words there.

But -- and that's what we'll continue to do. And I think that one of the things that we've done here is we really have expanded over our last refresh, the set of services and benefits and premium partners that are in the product. And not every Card Member uses every benefit. But that's okay because it gives people the opportunity to pick and choose, but they do use enough of the services and the benefits that it more than outweighs whatever fee they're going to pay.

And maybe just to build on the -- how this is going to play out in the financials. The way to think about it, Mark, is that as we launch the new value proposition, you should expect to see a step-up in the cost of Card Member services. And as you know, what we do is just like we wait until the renewal anniversary of the Card Member to increase -- to move the Card Member to the new price point. So -- and then we amortize it over 12 months. So the cost of Card Member services moves kind of like immediately, and it takes maximum 2 years for the card fee benefit to flow through the P&L. But all of that was kind of like built in our guidance, in our planning and expectations since the very beginning.

The next question is coming from Don Fandetti of Wells Fargo.

Steve, can you talk a little bit about international in terms of your acceptance growth and how you're tracking versus your targets? And maybe a bit on the competitive dynamics. I think you generally felt like it's less competitive internationally.

Well, I don't know about less competitive. I think international has its own set of challenges and own set of regulations. I think sometimes the regulations can make it a little less -- maybe a little less interesting for certain players to get into the market. But overall, we feel really good about international. I mean, look, it's been double-digit growth. I don't know how many -- it take a couple of years after COVID. It's been double-digit growth since international really opened up again.

And for us, we've been focusing on a small set of those. We talk about the 5 big markets that we focus on, and we've been doing really well there. We talk about our Citi strategy, and that's on track from a coverage perspective. And we continue to add millions and millions of merchants internationally, and we will continue to do that. So I think our acceptance gets better day by day. And we feel good about the progress that we've made, and we'll talk about a lot of that, I think, when we have our next Investor Day, but international continues to make great strides.

And I think it's ultimately a huge source of growth for us because when you look at the international markets, premium plays really well in a lot of cases, just about every market actually. Our premium products are priced higher than they are in the U.S. And I think when you look at our share internationally, it's very, very low. And the other part of that, when you look at small business, which I think there's a big opportunity for us in small business, it really is a market that's really nascent at this point. So we're very excited about international, and we're getting those growth with coverage that is still improving.

The next question is coming from Erika Najarian of UBS.

I thought I'd ask the question that I've been getting. And it's that -- it's almost that you've become a victim of your success a little bit. Given your premium valuation and your previous performance, it feels like there's sort of a bearish case out there building on the stock, meaning like you've raised the bar on yourself. So what's next? And I guess the question that I have here is how do you address that? You talked a little bit, Steve, about the spend, a little bit of slowdown in airline spend, a little bit of slowdown in lodging.

But obviously, you also have this Platinum refresh. So as you think about maybe spend not accelerating, how does American Express continue to deliver this 8% to 10% revenue growth, continued consistency in billed businesses, perhaps in an environment where the macro -- the underlying spend is not necessarily accelerating. And like Ryan said, all of a sudden, we have fierce competition, even fiercer competition among your peers for your natural client base?

Well, I think we've been getting this question for a number of years now, and we've been continuing to deliver against that. But -- and again, I've been around this business a long, long time. And I'm not so sure it's much fiercer of the competition than it was. I think there may be a little bit more noise around it, people may talk about it. But when you're in the trenches, the competition is there. And I think, look, for us, we continue to deliver the EPS we need to deliver, and we continue to deliver within that revenue range.

And we're a hell of a lot bigger company than we were when we set these targets out. I mean when you look at this, the numbers that we're putting up year-over-year continue to be, if I may say, quite impressive. But I think for us, it all starts with the customer. And I think what people lose sight of is customers are not widgets. Customers are people that you really need to focus on, what their true needs are. You need to provide phenomenal service and you need to be there for them. And to us, customers -- we treat every customer as if it's the only customer we have.

And if you ever call into our servicing center, there's quite a difference between how American Express treats their customers and how a lot of our competitors treat their customers. It is a huge difference. I think the other thing that I would say is, when you think about sort of what we're doing with this product refresh strategy, not just Platinum. We've refreshed hundreds of products over the course of the last few years, and we'll continue to refresh hundreds of products around the world.

And so look, the bearish case can continue to develop, but we will continue to do what we do best, which is focus on our customers, continue to create innovative products and services and continue to make investments that are providing returns to our shareholders. So look, I mean, as I said, I've been around a long time. I think the competitive environment to me hasn't been all that much different than it's been for the last 10 years. I think there's probably a lot more press about it. But we feel it every single day, and I think it makes us a lot better.

The next question is coming from Rick Shane of JPMorgan.

I just want to follow up on Christophe's point about the timing of revenues and expenses associated with the refresh. The revenue explanation was very helpful. Can you talk about the timing of expenses associated with it? Have you pulled some of that forward in anticipation? Or should we see a step function over the next year or 2, consistent with what you're describing on the revenue side?

So we haven't pulled anything either from the very beginning. This was our plan, and we plan accordingly and guided accordingly. So the -- maybe let me kind of like reiterate what I just said previously, right? So what you should expect is an increase in our cost of Card Member services after the launch of the Platinum Card, so most likely -- say in Q4. And the card fee increases will take a little bit more time to filter through the P&L. And all in all, this will be value accretive for us and for our shareholders.

Yes. I mean just to say really simplistically, the expenses become -- come before the revenues here, right? Because what happens is once we relaunch, the Card Members have the ability to take advantage of those benefits on day 1. They don't get billed if there's an increase in the fee until they come up to their cycle. And those fees are recognized over a 12-month period. They're not recognized in the month that you get billed, but yet, the benefits. And that's a huge benefit to our cardholders, and it's something that we plan for and its something that we've always done.

The next question is coming from Jeff Adelson of Morgan Stanley.

Just wanted to focus on the airline lounges. Obviously, that's a really important part of the Amex offering. But I guess longer term, as you kind of continue to put up this really robust growth in Card Members, how do you navigate some of the concerns about lounge access and overcrowding? Is that something you'll maybe look to address in the next round of refresh?

And we've continued seemingly to see a step-up in competition from the likes of Chase and Capital One with their own build-out. And I think there's been more of a focus from the airlines lately to kind of build their own offering or enhance their own offering. So I guess how do you think about navigating that competition longer term and just maybe addressing the concern of overcrowding?

Yes. I think that, look, what we've tried to do is a couple of things. Number one, we've tried to -- like a lot of the airlines have done, a lot of the other cards have done, we did this probably before people did it, but provide some priority. The other thing is we're built -- we're trying to make the lounges bigger. I think this whole lounge game has been a boom for airport authorities in terms of how many lounges they can put in. And the other thing we get innovated.

Look, in Vegas, we just did what we call Sidecar, right, which is more of a small kind of -- I don't know, maybe call it a speakeasy kind of lounge where if you just want to go in for a quick drink or grab something quickly, you can do that. And I think we work really closely with our partner, Delta, in those airports where we have -- we don't have a lounge or we do have lounges together to try and move traffic around a little bit. But I think you'll continue to see more innovation here. You'll look at more expansion of existing lounges where we can get space. And you look at a strategy that looks at satellite locations so that we can handle the demand that we get.

The next question is coming from Brian Foran of Truist Securities.

So I want to ask about one other pushback I keep getting on the stock lately. And before I do, the slides you're adding like Slide 12 and 9, I think there was 16, kind of addressing key investor issues head on and giving that next level of detail. I really appreciate it, they're great. So I want to give that context to that. I think you guys have been really open and kind of sharing your thought process on these key pushbacks. So the other one I get is if you do this walk, spend volume is plus 7%, but then discount is a little lower, plus 5%. And then if you back out rewards to do discount, with rewards as a contra it's like plus 1% to 2%.

And then some people are even backing out new account contribution and saying like, well, discount net of rewards, net of new accounts is actually slightly negative. And I know that's like net of 8 things and your actual revenue is growing. But maybe you could just speak to any part of that dynamic for investors who are focused on kind of the discount revenue being a little lower, the discount revenue net of rewards being a little lower still, how would you think about that? Is that a valid concern? Or is that a wrong path to go down?

Well, Christophe will answer it. But the one thing I would say is, thinking about only one component of revenue associated with rewards is not really how we think about it. We think about overall revenue associated with it, but I'll let Christophe sort of go.

Brian, so the way we think about this and this type of decision and relationships between the expenses and the revenue, and we've been very transparent on it, right, probably more so than many competitors is the VCE ratio to revenue, variable customer engagement expenses as a ratio to revenue, and we've provided a lot of details and transparency on the makeup of this VCE ratio and that has been like pretty stable over the years. And as we've said, this is not an objective function for us.

This is an outcome. We make decisions product by product by product. And there -- here's what you should not do. You should not equate a low VCE ratio to something positive because the higher VCE ratios that we have are on our more premium, more attractive, more value-accretive products, right? Because we get a lot of that investment back in the form of efficiencies on the marketing line, in the form importantly, of credit and positive selection on the credit line.

So the overall balance is a -- to your point, is a complicated one. We think we're really good at managing that balance and finding the optimum point to generate value, to generate growth and sustainable value for our shareholders. So I don't quite follow your math, but I think we've got a good control over that expense to revenue ratio component. We are managing it thoughtfully, and every time there's a product refresh, that's where we spend a lot of our time in finance to find the right balance. So I think we -- you shouldn't worry too much about where this is going and where it's trending. We feel that we're in a good place there.

The next question is coming from Moshe Orenbuch of TD Cowen.

And apologies for going back to the competition kind of issue. But if you put together the questions from a couple of people and Steve, your answers to them, I guess, what strikes me is that this may be the first time that you're doing this U.S. Platinum refresh kind of into the teeth of a competitive environment. And you've got cross currents. Obviously, you have in the past, benefited from some of the advertising and marketing of your competitors.

And at the same time, there is this idea of kind of competing for a limited number of people. So could you -- is there a way to just talk about how you think it's going to play out this time versus others in terms of what you kind of are expecting? Any kind of things that you're thinking about that would differentiate your set of product refreshes from what you've seen from those competitors?

Well, I would disagree with the characterization. It's the first time we're playing into the teeth of it. Actually, we did our first -- the first Platinum refreshable -- one of the Platinum refresh we did 10 years ago, Chase just launched Sapphire with a huge, huge bang. I mean, the amount of money and the amount of press that they got with that and the -- with the intensity they went after our book, we played right into it. And the second one, we were around the same time. So I don't think it's that much different.

And really, if you think about it right now, Citi hasn't said when. And they're coming off of not having -- not really having a product, and Chase is refreshing their product. So I think it's -- actually, if I look at it, it's probably less intense this time than it was 10 years ago because I think there was so much hype around Chase coming out with this new card versus this just being an upgrade. That's just my opinion. Having said that, I'll just go back to what I said.

I think we've learned a lot, and we believe that what we're going to come out with will be more than hold its own, be very, very competitive and will continue to be innovative. And we're just going to have to wait and see and you guys are going to have to wait and see because I can't really go into more detail than that contrasting the 2. All I can do is basically say, every time we've done this, it's worked out pretty well for us. And I think it's worked out pretty well for consumers, and it's worked out well for the industry. But I just -- the characterization of this is different. I don't think that's the case at all.

The next question is coming from Mihir Bhatia of Bank of America.

So it is another question on this, competition in premium card space. But really, what I would like to focus maybe a little bit on is, you've talked about how the customer value propositions have changed and evolved. But how has this impacted the acquisition strategies? Is it becoming more expensive to attract these fee paying customers? Is the acquisition mix changing? And really putting it all together at the end of the day, are returns in the premium card space stable, increasing, decreasing? Because like, yes, value propositions are increasing, but fees are increasing, card usage is increasing. So I'm just trying to get a sense of that.

So I can help you a little bit with that. The way this competition is materializing is that it's expanding the demand for premium products. So it's definitely giving us the opportunity to deploy more marketing dollars at very, very attractive returns. That's the way it's materializing, right? Because there are a lot more consideration now among the prospect population for premium products than there was, say, 10 years ago, where we were the only player in that space.

And every time Card Members look at or consider either Platinum Card or premium card, they consider the Platinum Card. It's almost inevitable. And so that opens up an opportunity for us to put an offer in front of them. So the biggest benefit for us here, like it's really hard to compare the ROI 10 years ago to the ROI today, but the level of marketing dollars, the quantity of marketing dollars we're deploying today is much bigger than what we were doing, say, 10 years ago. And I attribute a lot of that to a lot more activity in the marketplace, a lot more competition.

The next question is coming from Terry Ma of Barclays.

I just wanted to ask about net card fee growth. It continues to be strong, coming in at 20% year-over-year this quarter. As we think about the go forward, should the Platinum refresh be kind of additive to that growth or just kind of sustain it as you lap some of the refreshes from last year?

Yes. so it's a complicated dynamic, Terry. But you might remember at the beginning of the year, we said that you should expect the card fee growth rate to kind of like moderate in the balance of the year. We still believe that's going to happen. So you should expect to see that in Q3 and Q4. And given the previous conversations that we had about the timing of the Platinum fee increase, it's only sometimes in the new year in 2026 that you should see that inflection point and a bit more acceleration. But you should still expect some moderation in the back of this year in terms of that card fee growth rates.

The next question is coming from Craig Maurer of FT Partners.

I wanted to -- competition aside and Amex is right to win aside, I wanted to ask about how perhaps the mix of new acquisition is changing. And the reason why I'm asking is, does the slowdown in travel spend put at risk the fantastic new acquisition channels you have with your co-brand partners like Marriott and Delta. Do we have to think about that at all when it comes to net new card growth?

And just secondly, just quickly on the EPS guide. You had nice outperformance in EPS. But am I just reading it correctly that the projected increase in VCE spend as a percentage of revenue in the back half of the year, which seems to be related at least in part to the Platinum refresh is what's keeping you from raising the range?

Craig, under -- on the acquisition mix, there's been -- there's not been like a big change in terms of our mix over the past few quarters and like almost, I should say, over the past few years, right? And One way we're trying to characterize it for you is just by calling out the percentage of these new cards that are coming on a fee paying product, right, and has been in that 70% range for a few quarters now. And I don't really expect to see a change there. To your second question about the earnings per share and the VCE in the balance of the year. So listen, we're not giving guidance, specifically let alone quarter-by-quarter on the VCE ratio.

There are just like so many moving parts here, and we're also lapping some product refreshes from the past. So the way I think about that VCE ratio over time, it's not new. It's just -- you should expect that VCE ratio to slightly tick up over time as more and more -- as the mix, not only in terms of acquisition, but in terms of engagement of the portfolio is trending a lot more towards premium product and fee paying product. So that's going to put a little bit of upward pressure on the VCE ratio. But that's as far as I would go in terms of commenting on where this is going to go in the balance of the year.

Our final question is coming from Cris Kennedy of William Blair.

Just wanted to change the topic a little bit. You have the announcement with Coinbase and Amex Ventures does a lot of investing in the space. Can you just give your latest views on stablecoin and implementing blockchain technology into your tech stack?

Yes. Well, let me just talk about sort of stablecoin. I think it's been a lot of conversation around stablecoin and cryptocurrencies and what have you. And I think when you start to look at digital currencies, we've got the cryptocurrencies, XRP, Bitcoin, Ethereum and things like that. I think that has sort of proven out that that's not really going to take the place of any fiat currency. It's more of a sort of an investment vehicle at this point. And I think as we've said for a long time now that when you think about digital currencies, you need to think about sort of stablecoins and you need to think about government digital currencies.

And it looks like now, while there hasn't really been a lot of progress on government digital currencies, there has been a lot of activity, at least a lot of noise around stablecoins. And I think there is a role in the payment systems for stablecoins. There is a role in the store -- in the value system for cryptocurrencies. And I think when you look at what we did with Coinbase, as we see stablecoins, stablecoins, we believe, will be used for lots of cross-border transactions, small businesses, things like that. But remember, with stablecoins you are trapping that liquidity and you do need off-ramps.

And I think the partnership that we have with Coinbase does two things. Number one, it does provide that off-ramp. But number two, what they've decided to do from a rewards perspective is to allow you to earn digital currency. And obviously, they're one of the largest keepers of digital currencies. And so I think that's a really interesting thing. As we think about stablecoins a little bit into the future here, you could see this as a way for SMBs, large corporations to do cross-border transactions, especially when you are doing lots of cross-border transactions with the same group of people.

You just -- you avoid all the currency conversion, makes it a lot easier to do business, I think, potentially cross-border. That's not a big sort of revenue driver for us, foreign currency exchange and currency revenue for us. But it is an opportunity, and it's one that we are seriously looking at and potentially to figure out how we think about either partnering or how we think about our own foray into stablecoins, especially for small businesses where we do have a large share. So I think there's a lot more to come here. I think the bill will be signed today in terms of overall regulation, and there's more to play out.

But I think what you will see is companies like American Express, Visa and Mastercard being off-ramps for digital currencies. And I think that's an important part that we play. Will they replace the existing payment rails? No, they are not going to replace the existing payment rails. Are they a good proxy and a good change and a good alternative to ACH and Swift payments and wires and things like that? I think so. And the reason I don't believe they're going to replace what we have today is, what we have today is not broken. It provides lots of other benefits such as rewards.

It provides contingent liability in terms of lending, and it also provides lots of dispute resolution and things like that and tremendous acceptance. And it's just easy to use. So that's probably all I have to say on that, but it is something that we are working with, and we'll continue to monitor and just figure out what's the right entry point for us. But we felt and we're very happy about our partnership with Coinbase, and I think we're going to be able to do some good things with them.

With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions.

Thank you. Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access a digital replay of the call at (877) 660-6853 or (201) 612-7415, access code 13754529 after 1:00 p.m. Eastern Time on July 18 through July 25.

All right. Up next, we have American Express. Before we get started, I'm going to read some quick disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative.

Getting really good at saying that, by the way.

Yes. So delighted to have with us today from American Express, Christophe Le Caillec, CFO, to our conference. Welcome, Chris.

Thank you for having me.

Second year here. Welcome back. So maybe let's start high level and talk about the growth outlook you have. Amex has been able to drive really robust top line growth since the pandemic. That's moderated somewhat over the past year, but you're still looking for growth above historical levels at 8% to 10%. How do you think about the runway for growth over the next few years? And how can you get back to that double-digit aspiration?

So I think the starting point is -- the right starting point is the TAM, the total addressable market. The way we think about it from a TAM standpoint is that the TAM is growing at about say, 5-ish percent in the U.S. It's basically GDP plus a bit of inflation. When you overlay on top of that, internationally grows at a bit faster because their cash conversion to credit is a bigger opportunity. When you put all of this together, we think the TAM is growing at like 6%, 7%. And what's specific about American Express is that we very focused on their 3 fastest-growing parts of the addressable market, international, their premium products, so say, fee-paying products. and the younger population. So when you put all of this together, we think that, that is creating the right support for our growth algorithm, and we feel confident about that.

If you think -- so that would either help you size a little bit the momentum we can go after in terms of spend. But on top of that, as you know, on the card fee, we've been growing card fees like last quarter, it was 20%. If you go over the last 5 years, been growing like in double digit for the last 5 years consistently, including during the pandemic. And so that's accretive in terms of growth rate. And NII has also been accretive for us. So we think that when you, again, put all of this together, you get to a high number -- to high growth opportunity, and that's what we're going after.

Okay. Great. And spend is obviously an important part of the revenue algorithm you just alluded to. Last quarter, billings came off a very strong fourth quarter, but it still remained above 2024 levels, including U.S. consumer growth of 7%. You noted you weren't seeing any evidence of a pull forward early April other than maybe some Easter holiday noise there and some activity in the wholesale SME side. So what are you seeing on spending trends quarter-to-date through May and June? And maybe touch on the T&E airline side as well.

Yes. So we are spending a lot of time, as you can imagine, watching this, and I look at it almost daily as well at a very granular level. The best word to describe what we're seeing quarter-to-date, I think, is consistency, consistency with Q1 once you adjust for FX and the extra day we got, the leap year we got last year. So it is consistent with what we're seeing. So consistently with Q1, we see some softness in airline spend in lodging as well. But that's not new trends. I mean those trends were discussed during the first quarter, and they were discussed by airlines themselves. But restaurant spend and other T&E remains very, very strong. So consistency, I think, is the word to describe how billing is doing.

When you look at it at the segment level, so international versus U.S. consumer or small business, it's largely consistent as well. There are some segments that are growing a bit faster and some others a bit slower. But all in all, I think it's consistent with what we saw in the first quarter. That applies as well to credit, by the way. Credit remains very strong across the board.

Okay. Great. And as we sit here and think about the prospect of inflation from here potentially with tariffs, how does that flow to Amex? You've I think, often been viewed as a bit of an inflationary beneficiary as you have higher income consumers that can spend through it. Do you think that's going to play out again if inflation creeps higher?

Yes. A modest level of inflation is a net good thing for us because it provides a bit of support for our revenue growth. And our expenses don't travel at the same speed. So net-net, we're in a good place as long as inflation doesn't translate into unemployment. So what really matters here for us, and that's what we are focused on is the second order effects on the broader economy in terms of unemployment rate, in terms of interest, in terms of funding costs, in terms of FX movement as well. That really what matters. But you're right to say that a modest level of inflation is a net good thing for American Express.

Okay. Great. And you said the word consistent a lot here, so I suspect maybe this will be your answer again. But you've done well catering to and winning over high-end consumers. So what makes the Amex premium card so attractive to these folks? How have you been able to increase your market share of premium card to 25% without maybe necessarily having to pay the highest rewards versus the competition?

Yes. At the core of this, I think, is the expertise we have in terms of manufacturing and crafting premium products. And by that, I mean that we are focused on having rational value proposition. And there are people which is like putting spreadsheets to compare Amex versus our competitors. And we compete in that space. But I don't think that's what makes the difference in terms of the attractiveness and why we've been so successful in the premium space. I think what makes the big difference is the experiential and the emotional connections that card members enjoy with an American Express product.

By experiential, I think about access to lounges, we have the biggest network of lounges. Or the treatment you get in one of those 1,500 resorts that are part of Fine Hotels of Resorts, where you can have an early check-in, a late checkout and a free breakfast. So all these experiences at scale are creating a lot of value for card members. And on top of that -- and this is probably the thing that is like the hardest for our competitors to replicate is this emotional connection that we've been able to build with our card members literally over decades, over hundreds of years. We're celebrating this year our 175th anniversary. And from the very beginning, what drove American Express was their commitment to security, to service, to trust. And this is still what's propelling American Express.

So when you get a card, a Platinum card, you know that you've got thousands of American Express professionals that are ready to take your call if you ever need any help what you're traveling, you lost your passport, you have an accident overseas, you need repatriation. And that kind of like service we provide, it creates an emotional connection with card members that is very hard for competitors to replicate and that we think is the secret sauce of American Express. And interestingly, it resonates as well very, very well with younger generations.

Right. And that's my next question. So thanks for teeing that up. So you've taken share of millennial and Gen Z. That's been a key contributor to your premium card strategy. They make up 60% of new account acquisitions, but a higher 75% of your Platinum and Gold products. So just how sustainable is your growth runway with that consumer as they mature out a little bit? And is it maybe as a follow-up, too early to start thinking about when JZ -- Gen Z, not JZ. I take the range for millennials, although maybe you can answer that one, too.

Not the JZ question, no. But I can talk about that. So the way to think about it is, and we've said it many times, it starts with the -- how we refresh products. And what we've done over the recent years is try to evolve the product so that it resonates across generations. So the value proposition includes, as you know, Uber credits or streaming benefits. And all those things resonate with all generations, but they resonate better with a younger population, thinking as well about access to Formula One Grand Prix. We have a global relationship with Formula One. Like all those things resonated with the younger card members, and they're behaving differently. They are very comfortable paying a fee because that's what they do, right, whether it's for music, whether it's for entertainment, they have this subscription model in mind and they find it completely okay to pay a fee for the experience that we are giving them.

They also tend to give us a bigger share of their wallet. They don't know that decades ago, we didn't have parity coverage. And the only thing they know is parity coverage that we have now in the U.S. So we get from the very beginning, a bigger share of their wallet than we used to, say, 20 years ago. And what I would say as well is that they engage very differently with us. All the tech investments, and maybe we'll get to it that we have developed and to make the app the best app in the industry, all the either like digital engagement and capabilities that we built, they are literally leveraging that.

They don't really call us, they chat with us. So what it means is that it's displacing expenses in our servicing center. And so you can see like over time, the portfolio is going to move in that direction to your point. So eventually, you're right, Gen Z will age, will get older as well, and they will be replaced by next generation. So at some time, we're going to break it up between millennials and Gen Z. To answer your question, I can tell you that Gen Z billing is about 5% in the U.S. of the U.S. consumer billing, but it's growing at something in the neighborhood of 40%, actually even north of 40%. So clearly, the fastest-growing segment for us in terms of generations.

And that's, I think, the first time you disclosed that, right?

I think so.

Interesting. Great. Thanks for saying that for us. So I think...

I [indiscernible] would comment about JZ.

We can talk about that offline. Related to that, I think your focus on that younger cohort has driven your credit profile as well. So maybe you could talk about how credit has been another point of differentiation for Amex your write-offs are still below pre-pandemic levels, unlike your peers, which have run above. Is this a structural shift we should expect to sustain going forward? And maybe you could just layer in the Millennial, Gen Z impact there and how maybe student loans are influencing their decisions here.

So I'll get back to that. But maybe because that credit performance is -- we have always been better than the industry, but the distance between us and the industry is increasing. And if you want to analyze this, you can track this back to our focus on premium customers and expanding the portfolio, growing in the premium space. That's the very foundation of what drives that credit performance. And to answer more specifically your question, we brought you some new numbers. So maybe we can pull up the slide. One of the most frequent questions that we get is how we think about the credit performance of the younger generations.

So what you have in front of you here, and this is also available on the website is the delinquency rate by cohort. So Millennial and Gen Z on the left-hand side and Gen X and baby boomer on the right-hand side. And we're comparing our performance versus the industry. And there are a few things that you can take away from that. The first one, which is the most intuitive is that, as you would expect, younger card members are a little bit riskier than older card members.

This is not new. But this graph will help you dimensionalize the gap and the difference. I think what matters here and the big takeaway for me are -- there are 3 of them. One is, to your point, in both categories, we're still way below where we were in 2019. And you can see as well that the industry is actually well above where they were in 2019. So the spread here is increasing. The distance from the peers is increasing. The other thing that I think is noticeable here is when you look at in absolute the delinquency rate on the millennials and Gen Z, it's actually much lower than the industry Gen X and baby boomer delinquency rate.

So this speaks a lot about the discipline with which we have executed our growth strategy. As you know, we accelerated growth. We said we are very focused on premium customers, and we did not compromise this strategy when we decided to focus on the younger generations. And you see the evidence here in those metrics, those credit metrics. And if we had shown net write-off rates, it would have been something very similar, right? So very powerful numbers, I think, and this is what we're watching.

Is there anything you noticed that maybe the competition is doing a little bit differently than you as they extend credit to that consumer? Is it maybe not underwriting the student side as appropriately or anything else to?

I'm not going to comment on what they're doing. What I can say is that the starting point for us, again, is the positive selection that we're getting from designing and focusing on premium products. I mean if you think about even for the younger generations, right, if they pay the fee for Platinum Card at $695, you're going to attract a population that is sensitive and attracted to lounge access to priority treatment in a lot of resorts to those credits and those benefits. So that positive selection is a big contributor to the performance you're seeing here in credit.

And because you talked as well about student, that's also like a very common question, student loans. what I'll say on this one is we always had student loans back in student loans -- our customers with student loans, I should say, we don't issue student loans, as you know, but we have customers who have student loans. If you go back to 2019, the proportion of our receivables and loans that was held by customers with a student loan was about 11%. Today, it's about 12%.

So despite the focus on growing with the younger card members, that proportion has really not changed at all. And as you can see, what we're getting here is the crème, excuse my French, of the younger population. And so if you focus on these student loan holders who are under stress, those people who have a high student loan and actually a lower income say, for instance, for argument's sake, you look at those customers who have a student loan north of $50,000 and an income below $100,000. Well, for us, it's less than 1% of that 12%.

So the population that is really at risk, it's a very small population. So I don't know what's going to happen exactly, especially when wage garnishment starts. I think it's in August. But I think we are in a good place. And we'll see what happened, and we'll update you as we see them.

Okay. Great. Very clear. And if I maybe squint to the disclosures there a little bit. I did notice that the Gen X, baby boomer 1.3 is in line with what you report, but I think there is some maybe differences in how you're looking at the billing statements versus the quarterly reporting. So maybe just for some of the more detail-oriented investments?

Yes. So you see like in the title, we say it's billing cycle because that's the information we get from our data provider for the industry, so on a like-for-like basis. So if you try to make it like apple-to-apple, you're going to get like a slightly different number. But the purpose of this slide was to make it apple-to-apple and compare to the industry and give you a longitudinal set of numbers.

Just wanted to make that clear for folks. Okay. Great. Moving on to the other exciting part of your business, international. Your name is American Express, but I think sometimes people forget you're a global company. You yourself are a global -- more global individual, I would say. So nonetheless, international is growing very nicely. It's outpacing the rest of your business consistently for years. It's now 20% of the business. So you've got that unique perspective due to your background. How does the international consumer or customer approach premium card? What resonates with those customers, consumers and businesses? And how does that maybe differ from the U.S.?

Yes. First is like the common platform, take Platinum, for instance, the platform is the same across the world, right? And the form factor, like the approach in terms of how we're designing and building this value proposition is like is very consistent across the world. But in every market, we try to localize it with local partnerships to make it relevant to the population and also so that like there's something local in the look and feel of the product. But I would say, on average, outside of the U.S., the population, say, the Platinum population is even more premium than it is in the U.S. They like to give you like a benchmark, we issue the Platinum Card across 23 markets. across the world and if you -- including the U.S. And if you were to stack rank by the platinum fee, the U.S. would be [ 20th ] from that 23 list of markets.

So we have one of the lowest card fee in the U.S. for the Platinum card. Outside of the U.S., you would see card members with the Platinum card traveling more overseas cross-border volume is much higher. It's something like 27%, I think, while in the U.S., it's about 5%. So it's a very global premium traveling a lot customer base that is also very much attached to the premium-ness of the brand and the quality of the servicing that we have. That global presence is important for us. It's also important for our partners. There's many partners who actually like the fact that we can deploy their brand as well across premium customer base globally, not only in the U.S.

And it's -- for us, it's also a source of innovation. Some of the biggest innovation at Amex happened in international. The Black Card, for instance, was created first in the United Kingdom. Member and member, which is like a very successful acquisition channel, especially for premium products, was actually first created in France. So it's a source of innovation. It's a source of -- it's a differentiator when we negotiate and discuss with partners. So for us, it's really an attractive part of the business. And as you highlighted, it's the fastest-growing part of the business, and we think there's a lot more momentum in that business going forward.

Yes, I'm always pleasantly surprised by the Amex as I see in the airport when I go abroad. So you're everywhere, if you like. But...

Our card members enjoy traveling.

Yes, yes. And I think also on that note, you talked about the cross-border travel, international premium travels more. We've seen a lot of headlines around international travelers or may be speculation. I'm not sure which is real versus not, but you've seen maybe fewer international travelers coming to the U.S. How important is inbound U.S. travel for your business? And conversely, have you seen your U.S. consumer customer pullback on international travel?

Yes. So we've seen what has been reported in the press quite a lot. For instance, Canadians are traveling a lot less to the U.S. That's also -- that also applies to European who are traveling less to the U.S. What we're seeing though is that they're still traveling. They're just traveling less to the U.S. So as we just talked about, we have a global presence, a global network. So Canadians are traveling to Europe instead of to the U.S., we're still going to capture that spend on the card and on our network. So for us, it's not as impactful as it might like some of the numbers might suggest.

Okay. So just replacing with travel elsewhere is. Okay. Great. Maybe let's shift gears and focus on Amex's investment strategy. I know that's something near and dear to you, Christophe. So where do you see the highest ROI across your marketing, your tech, your product development and the budget today? You added 13 million new cards last year. How and where do you decide to allocate your marketing dollars in a way that enables Amex to generate that kind of demand?

So to your point, we have a lot of discipline in the way we deploy those marketing dollars. I'll talk maybe a little bit about technology because as you think about investment, I think these are the 2 big categories, right, marketing and technology. So when it comes to marketing, and we have described this at length, so I'm not going to go down there again. But as you know, we quantify the return we're going to expect on every single -- not every single, but the vast majority of our marketing dollars, and we stack rank them. And the highest ROI win, if you want, there is like a marketplace of ideas and marketing ideas and competition for funding.

As you would expect, some of the highest ROI are seen with what we call customer marketing as opposed to prospect marketing. So this is about deepening the relationship with the current customers, cross-selling products, upgrading either companion card, for instance. So these initiatives are typically the ones that have the highest ROI. And -- but besides, I would say, the process that we use to quantify those returns, I think for me, as a CFO, the most important part here or the most valuable thing that I think is important to American Express is the this ROI culture that we have across the company.

Every single marketing person, when they design a new product, when they come up with an idea, they know that they're going to need to compute an ROI and they know that it's going to compete against other ideas. And that's a super important feature for us to make sure that every marketing dollar works really, really hard. When it comes to technology, it's a bit harder to quantify the return on technology, but there are other metrics that you can use, right? As we think about technology, we've made a lot of investments in the app. We made a lot of investments to enable card members to self-serve, and we're seeing great progress on that.

So as you may have seen a few weeks ago, J.D. Power issued their awards. And again, American Express had the best award in the industry. And it's not the first time. This is the fifth time since 2018. So that reflects all the investments that we've made to make our app the best app in the industry. We also have the best, I think, second time in a row, we have the best rating in terms of online servicing. So the point here that I'm trying to make here is that on -- we're investing a lot on marketing, and that's something that is very visible to many of you because you also receive those messages. There's also a lot of investment in the technology space, and it's paying back in terms of digital engagement from our customers, especially the younger ones, but also like the entire portfolio. And importantly, the feedback we're getting from the rest of the industry is very, very strong.

And technology underpins a lot of this, I imagine. So you alluded to some of that. So you've got this strong consumer brand with really strong customer service. Again, technology underpins that. So one example I can think of personally is your online chat functionality. It's great. I use it a lot. with that? Yes. Thank you. Where do you see more room to improve and innovate further on those features in the tech you have today?

Yes. So the way to think about it as well is like we start kind of like where you started, which is we want to make the customer journey as easy as possible, whatever channel you choose to engage with whether you want to call us, whether you want to go in the app, whether you go in the web, we want to make it like super easy for you, and we're investing our technology accordingly. Some of the things that I found the most exciting myself, for instance, is like we're using natural language processing to listen to 100% of the calls when you call us. And that allows us to analyze the calls, to rate the calls in terms of customer satisfaction, to aggregate all this feedback that we're getting from that for the entire portfolio.

Where I find it, for instance, the most exciting is in the credit and collection part of our servicing, where you can effectively by listening or aggregating the words that are being used by the card member, understand the level of stress that is going in the portfolio. So it's one way for us, and we can graph it over time to see whether the stress is increasing or not, whether they're using different words. So that's a way for us to have the thumb on the pulse of the business and to get in real-time information at an aggregated level. So we used to send -- you might remember some surveys after servicing so that you could give us some feedback. We don't do that anymore because we have this natural language processing combined with Gen AI to kind of summarize the call to aggregate the calls and generate a ton of information for us.

That's an example of the kind of things we're doing in technology or what's at the intersection of technology and servicing.

I didn't even notice that. That's probably a good thing, right? So you mentioned large language models. So as I think about AI, it's often difficult for the outside observer to understand what's reality versus hype. Can you talk about how important AI is to Amex's culture today? How are you leveraging it to run some of the more technical and analytical aspects of your business beyond just Gen AI and LLMs?

Yes. So it is a good point, and I like the question because we've been using AI for decades. And it's hard indeed to see sometimes the value of that. So I'm just going to give you like 2 tangible examples of where AI and the sophistication, not only of AI, but the data that we have allow us to create value. By that, I mean, literally shareholder value. One of the most powerful piece of AI that we have actually sits with our authorization system. And you probably don't realize, but -- or you know that we underwrite and approve or decline every single transaction. That's very different from our competitors.

And so if you're traveling overseas, say, you're in Tokyo, you swap your card in a restaurant. In that less than half a second, we're going to run something like 4,500 different rules to evaluate the creditworthiness, the profitability of these transactions or to detect potential for fraud. And we just talked about we have the best credit numbers in the industry. We also have, by far, the best fraud numbers in the industry. And when I say by far, American Express fraud cost is about 1/3 of what you're seeing with the other networks. And a lot of that is because -- not a lot of that. All of that is actually a function of this AI combined with the data that we have and the experience and talent that we have in building models and rules to identify those fraudsters.

So this is super powerful in terms of translating this technology into real value. The other example that I would give you is that -- and I'm sure you've done the math, looking at the servicing cost over a long period of time as a ratio to revenue, this is declining constantly. A lot of that has to do with the automation, the AI, the self-servicing, the capabilities we're building that allow us to generate operating leverage. And we're going to keep doing it, and we're going to do more of that in the future.

Okay. Great. And maybe in the last few minutes we have, one final question for you, Christophe. Your core customer is clearly sought after by a number of other large banks, too. Other banks have tried and failed to enter the market. Others have entered it. It seems like the competition may be heating up more recently again. You've had Capital One out there. They have made some inroads in premium consumer and small business. They just recently just closed on their acquisition of Discover. How are you thinking about the potential ramp in competition from here? And what's your plan?

So competition is a good thing. And definitely, it's making us work harder and work better. So it's a net good thing. The other dynamic that I want to highlight in terms of the competition is this one. If you go back 10, 15 years ago, we were the only provider of a platinum or a premium product in the industry. And so we were the default provider. What happened as a result of Chase entering that space, Cap One entering that space is that they expanded the TAM. I was saying earlier today that the TAM is one of -- like the TAM for the premium products is one of the fastest-growing segment. We think that we have about 25% of the fee-paying cards in the U.S. today, and that's growing.

And it's growing in part because our competitors are much more focused on that. And so that is a net good thing for us that we are benefiting from. And so the other thing that I'd say is that all these competitors, you named a few, they are trying to replicate what we're doing. We have innovated a lot over the years. We were the first one to issue a metal card. Now everybody issues a metal card. We open up lounges. Now everybody is opening up lounges. The difference is that we have over 30 lounges and our biggest competitor has about 10-ish, including the one that they will open soon.

And so we're still a lot much ahead of the competition. I would also say that we have been able to either partner and bring to bear the value of those partnerships in the premium space in a way that our competitors have not. thinking here about the partnership that we have with Delta, where, for instance, Platinum Card members can have access to the Delta Lounges. So the partnership with Delta is not only about issuing the Delta card, it's about making some of our assets available to Delta and vice versa, some of the Delta assets available to American Express. So our competitors have not done any of that.

And so we are very much ahead of the curve here, and we're working really hard to stay ahead of the curve.

Okay. Great. So I think that's all the time we have for today.

Thank you for your questions.

Pleasure as always. Thank you.

Thank you.

All right. Good afternoon, everyone. Thanks for joining. My name is Rob Wildhack. I cover Consumer Finance and the Cards here at Autonomous. We are very excited to have Steve Squeri back with us today. Steve is the CEO and Chairman of American Express. And those are roles he's held since 2018. Steve is also a 40-year veteran of the company. So congratulations on that milestone. Steve? Just a quick note...

Thank you.

We have pigeonhole for the Q&A. So you can submit your questions there directly. You can vote on questions that have already been submitted, and then we can get them up to Steve. But now we can get started.

Steve, you've highlighted in your annual letter this year that this is Amex's 175th anniversary, which is quite an achievement on its own. Many high-end brands, they come and they go, but American Express over almost 2 centuries has not wavered. Why is that? What is it about the Amex brand that's led to that staying power?

Yes. Well, thanks for having Amex here today and me in particular. Look, 175 years, not a lot of companies are around that long. And I think you have to go -- you go back in our history, we started as a freight forwarding company. And we were FedEx before FedEx was FedEx basically, except we did it on horses. And then we moved through and got into financial services with money orders and travelers checks and then in travel and so forth. But if you look at the history, I think it's always been about customer-focused innovation. And I think that's what's really been important.

If you look at American Express, American Express has always been focused on not only what the current customer needs are, but what the future customer needs could be. And there was a lot of foresight over the history of the company in terms of getting into the travel business when the railroads nationalized because that really killed our delivery business. And you think about the decision that we made to get into the credit card business when we were basically dominating the travelers check business.

And thank God, that decision was made because not a lot of people are using travelers checks today. So the company was very focused on not only dealing with the needs at that particular point in time, but also dealing with needs moving forward. And if you look at sort of the last 7, 8 years, as we have really looked to reinvent the company, and I think we'll talk about this a little bit later. But as we've changed our focus, right, we've changed our focus to become much more of a revenue-first company. We've changed our focus in terms of our product strategy, how we refresh products and also from what -- and we've expanded our TAM, right?

I mean we're really focused on millennials and Gen Z. Not that we're not focused on the Gen Xers and the boomers, but we've done that as well. And I think those are the things over time that have really been the hallmark of the company. It is willing to adapt, adjust and be flexible to meet customer needs.

You hit on the refresh cycle. But another recent scene has been a demographic shift where Amex is now incredibly relevant with and valued by younger consumers, millennial and Gen Z as well as the older cohort. How have you been able to be so successful with such a variety of customers?

I think that as we sat back and looked at it, and I remember when I first took over, a lot of the questions was, was American Express going to be able to have its staying power? Because our customer base was a little bit older, a little bit male-dominated, and -- but the reality was, if you looked at our products, our products spoke to many different people, but we just didn't market them that way.

And so -- when you think about the products and the services that we had, they were just as relevant for millennials and Gen Zers as they were for Xers and for boomers. And if you go back to 2019, we probably had about 18% of our volume with millennial and Gen Zers and I think in the last quarter, it was like 35%, growing at a 15% clip. And the reality is, is what we really did was just expand the aperture to value proposition. And when you think about it, we were focused on bringing people into the franchise with a product, a cash-back product that didn't have any other value than cash back.

But when you look at today's consumer, when they're 18 to 41, 42 now, there is value conscious, and as circumspect about the products and services that they use as anybody else. And they really know how to use the products and engage with the products. And that has really helped. And the reality is millennials and Gen Zs love to travel. Our product was travel focused. And yet we continue to add other services to that.

And so when you look at the customers that we acquire now, especially on a global basis, 60% of millennial and Gen Z. When you at the Gold and Platinum card in the U.S., that's a 75% is millennial and Gen Z. So it's not that we're not interested in Gen X and we're not interested in boomers, but the acquisition has really spoken. And the interesting thing is even as we have morphed the value proposition to speak a lot more to younger people, and I wouldn't say is morphed as much as promoted it to younger people, our retention rates with our older cohorts have increased. So the product does speak to a wider TAM at this particular point in time.

And a big part of all that and maybe the foundation is the closed-loop network that Amex has. I mean, talk us -- talk to us about how the closed loop network underpins all of this? And what does it allow you to do that drives all these benefits and advantages that you've highlighted so far?

Yes. So I mean the closed-loop networks is really key, right? And fundamentally, what it means is, we have the merchant relationship and we have the cardholder relation, we're able to connect them. So what does that do for you? Well, what it does is it gives you more data -- it gives you more information, not only from a credit and fraud perspective, which is why we're the best in the industry on that, but it also gives you more information from a marketing perspective.

But what I don't think people realize is that the way I like to think about the closed loop, the closed loop is like the auto bond, okay? You put a gold card on the auto bond. It's a Gold Card. You put a Mercedes or BMW and Audi, it will open up and go. Our premium customer base is that Mercedes and that auto that Audi and that BMW and that's what really powers the closed-loop network. What really powers the closed loop network is the premium customer base. And when you look at our customers, 55% of our U.S. card customers make over $200,000 a year.

Those are customers that our merchants want to connect to. That's why they provide offers. So having the merchant and card member relationship is really nice. Having the merchant and card member relationship with premium customers at scale, that is the differentiator. So when you look at trying to replicate that, the way you have to replicate that is not by putting Gold Cards on -- you've got to put Audis and you got to put Mercedes and BMWs on that. And that's what we tend to do. And that's what our -- that's what our merchants want to see, and that's why we're able to get value for merchants who want to connect with these premium customers who are going to spend more money with them.

The secret sauce is not just the closed loop network or the premium customer base but the intersection of the 2?

It absolutely is the intersection of the 2. And here is another interesting point. The other interesting point is, we've tried to replicate that again with resi. And so if you take Resy, Resy, becomes a closed loop within the closed loop where we're connecting diners and we're connecting restaurant tours. And the interesting part about Resy is, we've launched it and continued to promote it as an open platform with a closed component. So we have a closed loop, which is federated and open.

But then within it, we have a closed loop within that closed loop for our cardholders. So what does that do? What that does is it wants more restaurants to come in and it helps us to acquire more card members who get special offers from that restaurant. And so -- if you think about that closed loop within a closed loop, we think about travel and our travel business within a closed loop like that, that helps power the overall earnings power of the company.

And you put out an aspirational target to grow revenue at 10%. The ingredients there being high single-digit billings growth, continued card fee growth, and lending that I believe grows faster, slightly faster than billings. Let's start with billings. How much more space is there to grow billings at and above industry pace?