American Express Company (AXP) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached a record $16.3B, up 8% year-over-year (9% FX-adjusted), with net income of $3.0B and diluted EPS of $4.15, up 44%; adjusted EPS excluding the $0.66 Accertify gain was $3.49, up 21% year-over-year.

• Billed business grew 6% FX-adjusted to $441B, with 3.3M new cards acquired and double-digit card fee revenue growth for the 24th consecutive quarter.

• The sale of Accertify in May 2024 resulted in a $531M pre-tax gain ($479M after tax; $0.66 per share), reducing operating expenses by $531M.

• Full-year EPS guidance was raised to $13.30–$13.80 (from $12.65–$13.15), reflecting the Accertify gain, with revenue growth outlook reaffirmed at 9%–11% for 2024.

• Core business momentum enables $6B in marketing investment for 2024, up 15% from last year, fully funded by organic earnings.

Financial highlights

• Discount revenue increased 4% to $8.9B, net card fees rose 16% FX-adjusted to over $2B, and net interest income grew 20% to $3.7B year-over-year.

• Card member rewards expense rose 7%, business development expense 3%, and card member services expense 22% year-over-year.

• Provisions for credit losses were $1.3B in Q2 2024, up 6% year-over-year, driven by higher net write-offs.

• Operating expenses decreased 13% due to the Accertify gain; excluding this, expenses rose 3%, below revenue growth.

• Cash and cash equivalents at June 30, 2024, were $52.9B, up 23% year-over-year.

Outlook and guidance

• Full-year EPS guidance raised to $13.30–$13.80, including the $0.66 Accertify gain.

• Revenue growth expected to remain within the 9%–11% range for 2024.

• Marketing spend to reach $6B for the year, a 15% increase, supporting future growth.

• Write-off rates and reserve ratios expected to remain stable for the rest of 2024, with reserve rate guided at 2.8%–2.9%.

• Management remains confident in the business model despite macroeconomic and regulatory uncertainties, focusing on sustainable, profitable long-term growth.