American Express Company · NYSE:AXP
American Express — Q4 2024 Earnings Presentation
41 slides from American Express's earnings presentation, Jan 24, 2025
Slide 1: American Express Earnings Conference Call Q4'24
American Express Earnings Conference Call Q4'24 JANUARY 24, 2025
Slide 2: Summary Financial Performance
Summary Financial Performance ($ in millions; except per share amounts) YoY% YoY% Q4'24 FY'24 Inc/(Dec) Inc/(Dec) Total Revenues Net of Interest Expense $17,179 9% $65,949 9% FX-Adjusted* 10% 10% Net Income $2,170 12% $10,129 21% Diluted EPS** $3.04 16% $14.01 25% Adjusted EPS*** $13.35 19% Average
Slide 3: Total Billed Business
Total Billed Business % Increase/(decrease) vs. Prior year (FX-adjusted) 15% 10% 8% FY’24 7% 7% 6% 6% 6% 5% 0% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'23 Q1'24 Q2'24 Q3'24 Q4’24 FY’24 G&S 5% 6% 6% 6% 8% 6% T&E 9% 8% 7% 6% 10% 8% All growth rates reflect FX-adjusted rates. See Annex 2 for reported billings
Slide 4: U.S. Consumer Services Billed Business
U.S. Consumer Services Billed Business % Increase/(decrease) vs. Prior year 15% 10% 9% G&S, 8% YoY 8% T&E, 11% YoY 7% 6% 6% 5% 0% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Millennials + Q4'24 Gen-X Baby Boomer + Total FY’24 Gen-Z YoY 16% 7% 4% 9% 7% % of Total 34% 36% 30% 100% 4
Slide 5: Commercial Services Billed Business
Commercial Services Billed Business % Increase/(decrease) vs. Prior year (FX-adjusted) 15% 10% G&S, 3% YoY 5% 4% T&E, 5% YoY 2% 2% 1% 1% 0% Q4’23 Q1’24 Q2'24 Q3'24 Q4'24 Q4'24 U.S. SME U.S. Large & Global Corp. Total FY’24 YoY 3% 7% 4% 2% % of Total 82% 18% 100% SME refers to small and mid-sized bus
Slide 6: International Card Services Billed Business
International Card Services Billed Business % Increase/(decrease) vs. Prior year (FX-adjusted) 20% G&S, 15% YoY 15% 15% T&E, 14% YoY 13% 13% 13% 13% 10% 5% 0% Q4’23 Q1’24 Q2'24 Q3'24 Q4'24 Q4'24 Int’l Consumer Int’l SME & Large Corp. Total FY’24 YoY 15% 15% 15% 14% % of Total 65% 35% 100% All growth
Slide 7: Worldwide Total Loans and Card Member Receivables
Worldwide Total Loans and Card Member Receivables $ in billions (on a reported basis) - % Increase/(decrease) vs. Prior year (FX-adjusted) $208 $202 $199 $193 $194 9% 10% 12% YoY Growth 13% 13% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Total Loans reflects Card Member loans and Other loans. YoY growth rates adj
Slide 8: Credit Metrics
Credit Metrics 30+ Days Past Due Net Write-off Rates % of Card Member Loans and Receivables % of Average Card Member Loans and Receivables Pre- Pre- Pandemic Pandemic 2.2% 1.5% 2.1% 2.1% 2.0% 1.9% 1.9% 1.3% 1.3% 1.3% 1.3% 1.2% Q4'19 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'19 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 N
Slide 9: Total Provision
Total Provision ($ in millions) $1,437 $1,356 $1,269 $1,268 $1,292 Total Provision $400 $101 $264 $153 Reserve $148 Build/(Release) $1,121 $1,167 $1,092 $1,139 Write-offs $1,037 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Reserves as a % of Total Loans & 2.8% 2.9% 2.8% 2.9% 2.9% CM Receivables See Variance Commen
Slide 10: Revenue Performance
Revenue Performance ($ in millions) YoY% YoY% YoY% Q4'24 FY'24 Inc/(Dec) Inc/(Dec) Inc/(Dec) Discount Revenue $9,177 7% $35,192 5% Net Card Fees $2,245 18% $8,449 16% Service Fees and Other Revenue $1,290 0% $5,129 2% Processed Revenue $429 4% $1,636 (4%) Net Interest Income $4,038 12% $15,543 18% R
Slide 11: Discount Revenue
Discount Revenue $ in billions (on a reported basis) - % Increase/(decrease) vs. Prior year (FX-adjusted) FY'24 $B YoY* Discount Revenue $35.2 6% $8.9 $9.2 $8.6 $8.8 $8.4 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 YoY Growth* 5% 6% 5% 4% 8% * Discount Revenue YoY growth rates adjust
Slide 12: Net Card Fees and Proprietary New Cards Acquired
Net Card Fees and Proprietary New Cards Acquired Net Card Fees Growth Proprietary NCA % Increase/(decrease) vs. Prior year (FX-adjusted) (in millions) FY'24 $B YoY FY’23 FY'24 30% Net Card Fees $8.4 17% Proprietary NCA 12.2 13.0 3.4 3.3 3.3 25% 3.0 2.9 19% 20% 18% 17% 16% 16% 15% 10% 5% 0% Q4'23 Q1'
Slide 13: Net Interest Income
Net Interest Income $ in billions (on a reported basis) - % Increase/(decrease) vs. Prior year (FX-adjusted) FY'24 $B YoY* Net Interest Income $15.5 18% $3.8 $4.0 $4.0 $3.6 $3.7 YoY 26% 20% 17% 13% 30% Growth* Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 WW Net Interest 11.7% 12.0% 11.7% 12.0% 11.8% Yield on CM Lo
Slide 14: Total Revenue Net of Interest Expense
Total Revenue Net of Interest Expense $ in billions (on a reported basis) - % Increase/(decrease) vs. Prior year (FX-adjusted) 15% 11% 11% 10% 10% 9% 8% FY’24 10% 5% 0% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 FY’24 $B $15.8 $15.8 $16.3 $16.6 $17.2 $65.9 Revenue Net of Interest Ex
Slide 15: Expense Performance
Expense Performance ($ in millions) YoY% YoY% Q4'24 FY'24 Inc/(Dec) Inc/(Dec) Card Member Rewards $4,430 15% $16,599 8% Business Development $1,637 10% $5,886 4% Card Member Services $1,278 20% $4,782 21% Variable Customer Engagement Expenses $7,345 15% $27,267 9% VCE Expenses % of Revenue 43% 41% M
Slide 16: Capital
Capital Common Equity Tier 1 Capital Return ($ in billions) $9.0 10.8% 10.7% $1.4 $7.9 10.5% 10.6% 10.5% $2.0 Dividends $5.3 Share $4.9 $0.5 Repurchases - Accertify $1.8 Gain** $1.6 $7.6 Share $2.3 $5.4 Repurchases** $1.4 $3.3 $3.5 $0.9 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'20 FY'21 FY'22 FY'23 FY'24 Q4
Slide 17: Long-Term Aspiration & 2025 Guidance
Long-Term Aspiration & 2025 Guidance Long-Term Aspiration 2025 Guidance Revenue Growth: Revenue Growth: 10%+ 8% - 10% EPS Growth: EPS: Mid-teens $15.00 - $15.50 (Adjusted EPS Growth*: 12% - 16%) Subject to contingencies. *EPS growth guidance adjusted for the 2024 Accertify gain on sale is a non-GAAP
Slide 18: Appendix
Appendix
Slide 19: Travel & Entertainment Billed Business
Travel & Entertainment Billed Business Q4'24 Restaurants Lodging Airlines Other Total T&E YoY Growth 8% 6% 13% 13% 10% % of Total Billed Business 7% 5% 6% 8% 26% All growth rates reflect FX-adjusted rates. See Slide 2 for an explanation of FX-adjusted information. 19
Slide 20: Q4'24 Network Volumes Growth by Customer Type
Q4'24 Network Volumes Growth by Customer Type % Increase/(decrease) vs. Prior Year (FX-adjusted) U.S. Consumer Services: Commercial Services: International Card Services: 9% 4% 15% 15% 15% 9% 7% 6% 3% % of Total U.S. U.S. U.S. Large & Int’l Int’l SME & Processed Network Volumes Consumer SME Global C
Slide 21: Card Member Credit Metrics
Card Member Credit Metrics Q4'19 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Card Member Loans Net Write-off Rate* 2.3% 2.1% 2.3% 2.3% 2.1% 2.1% Card Member Receivables Net Write-off Rates* 1.9% 1.7% 1.7% 1.5% 1.4% 1.2% Corporate Net Write-off Rates** 0.8% 0.7% 0.5% 0.6% 0.6% 0.5% Card Member Loans 30+ Days Past
Slide 22: Credit Reserve Macroeconomic Scenarios: Select Variables
Credit Reserve Macroeconomic Scenarios: Select Variables U.S. Unemployment Rate % U.S. GDP Growth* % 10% 6% 9% 5% 4% 8% 3% 7% 2% 6% 1% 5% 0% 4% (1)% 3% (2)% 2% (3)% 1% (4)% 0% (5)% Q3’25 Q4’25 Q1’26 Q2’26 Q3’26 Q4’26 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q2’24 Q4’24 Q2’25 Q2’26 Q4’25 Q4’26 Q1’24 Q3’24
Slide 23: Funding and Deposits
Funding and Deposits Funding Mix Deposit Programs ($ in billions) ($ in billions) 92% FDIC insured at Q4'24 $191 $191 Short-term $134 $138 1% 1% Funding Third Party 7% 5% 6% CDs 9% Card ABS* 11% Third Party 11% Unsecured Sweep 19% 1% 1% Checking 19% Funding** 82% Savings and 81% Direct CDs 71% 73% D
Slide 24: FX Impact on Network Volumes and Revenue Growth
FX Impact on Network Volumes and Revenue Growth Network Volumes Revenue Net of Interest Expense % Increase/(decrease) vs. Prior year % Increase/(decrease) vs. Prior year 25% 25% 0% 0% Q4’23 Q1’24 Q2'24 Q3'24 Q4'24 Q4’23 Q1’24 Q2'24 Q3'24 Q4'24 Reported FX Adj Reported FX Adj Euro € UK £ Japan ¥ Aust
Slide 25: Additional Commentary – Variance Analysis
Additional Commentary – Variance Analysis The following summary provides selected variance information for the three months ended December 31, 2024 compared to the same period in the prior year. It should be read in conjunction with the statistical tables for Q4'24, available at ir.americanexpress.c
Slide 26: Additional Commentary – Variance Analysis
Additional Commentary – Variance Analysis • Card Member Rewards Expense: Increased 15 percent versus Q4'23, primarily driven by higher billed business and an increase in the cost of redemptions. • Business Development Expense: Increased 10 percent versus Q4'23, primarily due to increased partner pay
Slide 27: Annex 1: Adjusted EPS and Operating Expenses
Annex 1 Adjusted EPS and Adjusted Operating Expenses, Excluding the Impact of Accertify Gain on Sale ($ in millions; except per share amounts) YoY% FY’24 FY’23 Inc/(Dec) GAAP Diluted EPS $14.01 $11.21 25% Accertify Gain on Sale (pretax) $0.74 — Tax Impact of Accertify Gain on Sale ($0.08) — Accertif
Slide 28: Annex 2 (1 of 2): Billed Business Reported & FX-Adjusted
Annex 2 (1 of 2) Billed Business – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 Billed Business Reported 6% 6% 5% 6% 8% 6% FX-Adjusted* 6% 7% 6% 6% 8% 7% G&S Reported 5% 6% 5% 6% 7% 7% FX-Adjusted* 5% 6% 6% 6% 8% 6% T&E Reported 9% 8% 6% 6% 9% 5% F
Slide 29: Annex 2 (2 of 2): Billed Business Reported & FX-Adjusted
Annex 2 (2 of 2) Billed Business – Reported & FX-Adjusted* % Increase/(decrease) vs. Prior year Q4'24 FY’24 Q4'24 FY’24 Reported FX-Adj.* Reported FX-Adj.* Reported FX-Adj.* Reported FX-Adj.* International Consumer 11% 15% U.S. Large and Global Corp. 7% 7% Commercial Services International SME & Lar
Slide 30: Annex 3: Total Loans and Card Member Receivables
Annex 3 Worldwide Total Loans and Card Member Receivables – Reported & FX-Adjusted* ($ in billions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4’24 GAAP Worldwide Total Loans and Card Member $171 $172 $179 $183 $193 $194 $199 $202 $208 Receivables FX-Adjusted Worldwide Total Loans and Card $17
Slide 31: Annex 4: Discount Revenue Reported & FX-Adjusted
Annex 4 Discount Revenue – Reported & FX-Adjusted* ($ in billions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 GAAP Discount Revenue $8.2 $7.9 $8.5 $8.4 $8.6 $33.4 $8.4 $8.9 $8.8 $9.2 $35.2 FX-Adjusted Discount Revenue* $8.2 $7.9 $8.4 $8.4 $8.5 $33.3 YoY% Inc/(Dec) in GAAP Disc
Slide 32: Annex 5: Net Card Fees Reported & FX-Adjusted
Annex 5 Net Card Fees – Reported & FX-Adjusted* ($ in billions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 GAAP Net Card Fees $1.6 $1.7 $1.8 $1.8 $1.9 $7.3 $2.0 $2.1 $2.2 $2.2 $8.4 FX-Adjusted Net Card Fees* $1.6 $1.7 $1.8 $1.8 $1.9 $7.2 YoY% Inc/(Dec) in GAAP Net Card Fees 17
Slide 33: Annex 6: Net Interest Income Reported & FX-Adjusted
Annex 6 Net Interest Income – Reported & FX-Adjusted* ($ in billions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 GAAP Net Interest Income $2.8 $3.0 $3.1 $3.4 $3.6 $13.1 $3.8 $3.7 $4.0 $4.0 $15.5 FX-Adjusted Net Interest Income* $2.8 $3.0 $3.1 $3.4 $3.6 $13.1 YoY% Inc/(Dec) in
Slide 34: Annex 7: Consolidated Net Interest Yield
Annex 7 Consolidated Net Interest Yield on Average Card Member Loans ($ in millions) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Net interest income $3,604 $3,769 $3,730 $4,006 $4,038 Exclude: Interest expense not attributable to our Card Member loan portfolio* $821 $882 $912 $940 $865 Interest income not attribu
Slide 35: Annex 8: Revenues Net of Interest Expense and Processed Revenue
Annex 8 Revenues Net of Interest Expense and Processed Revenue – Reported & FX-Adjusted* Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 GAAP Revenues Net of Interest Expense (billions) $14.2 $14.3 $15.1 $15.4 $15.8 $60.5 $15.8 $16.3 $16.6 $17.2 $65.9 FX-Adjusted Revenues Net of In
Slide 36: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements, which address American Express Company’
Slide 37: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • net card fees not growing consistent with the company’s expectations, which could be impacted by, among other things, a decrease in the ability and desire of Card Members to pay card fees, such as due to a deterioration in macroeconomic conditio
Slide 38: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • the actual amount the company spends on marketing in 2025 and beyond and the effectiveness and efficiency of its marketing spending, which will be based in part on continued changes in the macroeconomic and competitive environment and business p
Slide 39: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure and competitor settlements and mergers that may materially impact the prices charged to merchants that accept American Expre
Slide 40: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • the company’s ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, favoring local competitors or prohibitin
Slide 41: American Express
AMERICAN EXPRESS
American Express Company — Q4 2024 Earnings Presentation on 6ix