10-QPeriod: Q2 FY2023

AMERICAN EXPRESS CO Quarterly Report for Q2 Ended Jun 30, 2023

Filed July 25, 2023For Securities:AXP

Summary

American Express Company (AXP) reported strong financial results for the second quarter of 2023, demonstrating resilience and growth across its core business segments. Total revenues net of interest expense increased by a significant 12% year-over-year to $15.1 billion, driven by robust Card Member spending and strong acquisition momentum. Net income rose 11% to $2.17 billion, or $2.89 per diluted share, surpassing the prior year's performance. The company experienced broad-based growth in network volumes, up 8% globally, with notable strength in Travel & Entertainment (T&E) spend, which grew 14%. International Card Services saw particularly strong billed business growth of 15%. While U.S. small and mid-sized enterprise (SME) spend growth continued to slow, overall revenue growth was healthy, supported by increased net card fees reflecting successful premium value proposition investments. Despite an increase in provisions for credit losses, driven by loan growth and higher net write-offs, the company emphasized that its credit metrics remain best-in-class and below pre-pandemic levels.

Financial Highlights

38 data points
Beta

Revenue

$9.43B

Net Income

$2.17B

23.0% Net Margin

EPS (Diluted)

$2.89

Total Assets

$244.90B

Cash & Equivalents

$42.96B

Free Cash Flow

$3.55B

Financial Statements
Beta
Revenue$9.43B
Interest Expense$1.67B
Net Income$2.17B
EPS (Basic)$2.89
EPS (Diluted)$2.89
Shares Outstanding (Basic)740.00M
Shares Outstanding (Diluted)741.00M

Key Highlights

  • 1Total revenues net of interest expense increased 12% year-over-year to $15.1 billion.
  • 2Net income grew 11% year-over-year to $2.17 billion, or $2.89 per diluted share.
  • 3Worldwide network volumes increased by 8% year-over-year, driven by strong Card Member spending.
  • 4Travel & Entertainment (T&E) spend saw a significant increase of 14% year-over-year.
  • 5Net card fees increased by 21% year-over-year, reflecting successful investments in premium value propositions and strong new account acquisition.
  • 6Provisions for credit losses increased significantly due to higher loan volumes and net write-offs, though credit metrics remain strong.
  • 7American Express returned $1.6 billion to shareholders in the quarter through dividends and share repurchases.

Frequently Asked Questions

American Express reported a 12% increase in total revenues net of interest expense to $15.1 billion and an 11% rise in net income to $2.17 billion, or $2.89 per diluted share, compared to the second quarter of 2022.

Worldwide network volumes grew 8%, with Travel & Entertainment (T&E) spend showing a strong increase of 14%. U.S. Consumer Services and International Card Services also demonstrated healthy billed business growth.

Provisions for credit losses increased significantly, primarily due to higher loan balances and increased net write-offs. However, American Express stated that its credit metrics remain best-in-class and below pre-pandemic levels, supported by its premium customer base and risk management capabilities.

In the second quarter of 2023, the company returned $1.6 billion to shareholders through $0.5 billion in common stock dividends and $1.1 billion in share repurchases.