American Express Boosts Profit as Card Member Spending Rises

American Express (AXP) announced strong financial results for the second quarter of 2026, with both revenue and profit increasing due to a surge in card member spending. The company's total revenues, net of interest expense, rose by 10% year-over-year to $19.6 billion, while net income increased by 8% to $3.1 billion. Diluted earnings per share (EPS) saw an 11% jump to $4.53, surpassing analyst expectations.

These positive outcomes were primarily fueled by a 9% growth in card member spending, also known as billed business. Stephen J. Squeri, Chairman and CEO, described the quarter as “excellent,” highlighting that the FX-adjusted card member spending growth was the highest seen in three years. Strong performance across the goods and services and travel and entertainment segments were key drivers of this growth. Additionally, an increase in net interest income, supported by growth in card balances, and robust card fee growth significantly contributed to the revenue expansion.

The strong earnings report from American Express elicited a mixed reaction in the markets. Despite beating EPS estimates, the company's shares fell over 5% in premarket trading, as investors reacted to the slight revenue miss compared to market forecasts and the decision to maintain full-year profit guidance unchanged. The market's focus was on the company's plan to reinvest the better-than-expected first-half performance into growth initiatives, rather than raising the full-year earnings outlook.

This development further underscores the success of American Express's premium card strategy. The company continues to benefit from this approach, which has driven higher spending rates, increased card fees, and resilient credit performance. Notably, there was a significant increase in new card acquisitions, particularly among Millennials and Gen Z customers, emphasizing their long-term value. The company acquired 3 million new cards during the quarter. Credit quality remained stable, with a decrease in net provisions for credit losses compared to the prior year, and the net write-off rate stood at 2.0%.

Based on its stronger-than-expected performance in the first half of the year, American Express raised its full-year revenue growth guidance to 10%. However, it maintained its full-year EPS guidance in the range of $17.30 to $17.90. Management stated their decision to reinvest this outperformance into strategic growth initiatives and their “Membership Model”. This reinforces confidence in delivering sustainable long-term growth and shareholder returns, although it can influence short-term market reactions. American Express also delivered strong returns to shareholders, distributing $2.9 billion through dividends and share repurchases in the first half of the year.