American Express reported record quarterly revenue of $17.9 billion, up 9% year-over-year, with total Card Member spending reaching an all-time high of $416.3 billion, a 7% increase from the same period in 2024.
Why it matters: The surge in spending indicates strong financial confidence among affluent Americans, particularly those who hold premium American Express cards, and bodes well for the premium market.
The details:
- Millennial spending rose by 10%, while Gen Z cardholders increased their spending by an impressive 40%, albeit from a smaller base.
- Net card fees have surged 20% year-over-year, indicating more users are opting for premium experiences.
- Card fee revenues have more than doubled since 2019, thanks to recent product refreshes and high retention rates.
- American Express plans to refresh its U.S. Consumer and Business Platinum Cards this fall, enhancing perks and rewards that appeal to affluent millennials and Gen Zers.
Despite strong spending in other categories, there was a notable weakness in travel spending, particularly in economy class domestic airfare.
What they’re saying:
- “Economy class domestic airfare has faced a decline, which impacted overall travel expenditures,” said American Express CFO Christophe Le Caillec.
- “The bear narrative is they have to push harder and harder to get growth, spending more to get more,” said Truist analyst Brian Foran.
The other side: The popularity of premium American Express cards has led to some challenges, such as overcrowding in airport lounges.
What’s next: American Express is confident in its long runway for growth as the premium segment continues to expand, driven by strong spending and reliable payments from its affluent customer base.