American Express Company (AXP) Earnings & Analysis

Latest quarter

American Express reported Q2 FY2026 revenue of $21.6 billion, compared with $19.9 billion in Q2 FY2025, a year-over-year increase of 8.34%. The company reported diluted EPS of $4.53, compared with $4.08 a year earlier, an increase of 11.0%.

As the consensus counts it, American Express reported adjusted EPS of $4.53 against consensus adjusted EPS of $4.41, a 2.72% beat. Revenue, as the consensus counts it, was $19.6 billion, matching consensus revenue of $19.6 billion.

The company reported gross margin of 90.9%, compared with 89.6% a year earlier, and operating margin of 18.9%, compared with 17.8%. American Express also reported free cash flow of $4.5 billion, compared with $3.7 billion in Q2 FY2025. Christophe Le Caillec said the company returned $2.9 billion of capital in the quarter, including $2.2 billion of share repurchases and $600.0 million of dividends.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Steve Squeri said American Express saw stronger momentum than it had expected six months into 2026, citing accelerated spending and revenue growth from investments in its value propositions. He said the company’s Platinum portfolio had become the fastest-growing portfolio in its U.S. consumer business, while 65% of new consumer accounts came from millennials and Gen Z customers.

Christophe Le Caillec said overall spending rose 9.4% on an FX-adjusted basis, with goods and services spending up 9% and travel and entertainment spending up 10%. He said U.S. consumer spending rose 11%, commercial spending rose 5%, and international spending rose 12% on an FX-adjusted basis. Le Caillec said credit performance remained below 2019 delinquency and write-off levels, and that the Q2 provision expense included a $191 million reserve release.

Squeri said American Express chose to reinvest its outperformance in growth opportunities rather than direct it to additional share repurchases. Le Caillec said marketing and operating expenses each rose 6% during the quarter, while the VCE-to-revenue ratio was 44.6%, reflecting investment in U.S. Platinum value propositions and higher spending in reward-earning categories.

When asked about commercial spending, Squeri said the middle-market business had shown softness, while small-business and large-and-global customer spending had been moving higher. He said the company’s middle-market expense-management offering was intended to support retention and new business.

Asked about attrition following card repricing, Le Caillec said the company was not seeing attrition effects and said retention rates remained high. He said the delayed recognition of repriced card fees was the main contributor to expected card-fee growth acceleration later in 2026.

Le Caillec said transfers of two small-business co-brand portfolios would affect spending and net interest income but have negligible effect on pretax income. Squeri said the company was using AI in technology, servicing, marketing, credit, risk and fraud processes, while he did not quantify future savings.

Guidance

American Express raised its FY2026 revenue-growth guidance to 10.0% from its previous guidance of 9.00%–10.0%. The company now expects its FY2026 VCE-to-revenue ratio to be between 44% and 45%, compared with its earlier expectation of around 44%.