American Express Company (AXP) Q4 2023 earnings summary

Executive summary

• Q4'23 revenue net of interest expense was $15.799B, up 11% FX-adjusted YoY; net income was $1.933B, up 23%, and diluted EPS was $2.62, up 27%.

• FY'23 revenue net of interest expense reached $60.515B, up 14% reported and 15% FX-adjusted; net income was $8.374B and diluted EPS was $11.21, up 11% and 14%, respectively.

• Strong customer engagement and premium-product demand supported record Card Member spending of $1.5T FX-adjusted since the January 2022 growth-plan launch, up 37%.

Financial highlights

• Q4'23 pretax pre-provision income was $3.949B, up 36%; FY'23 was $15.436B, up 31%.

• Q4'23 net interest income increased 31% to $3.604B; net card fees rose 17% to $1.907B and service fees and other revenue rose 10% to $1.294B.

• Q4'23 total expenses were $11.850B, up 8%; FY'23 total expenses were $45.079B, up 10%.

• Q4'23 provisions for credit losses increased 40% to $1.437B, driven primarily by higher net write-offs and partly offset by a lower reserve build; the Q4 reserve build was $400M, below $492M a year earlier.

• Q4'23 processed revenue declined 3%, primarily due to lower volumes following decommissioning of an alternative payment solution.

Outlook and guidance

• 2024 revenue growth guidance is 9%–11%; EPS guidance is $12.65–$13.15, implying EPS growth of 13%–17%.

• Long-term aspirations remain revenue growth above 10% and EPS growth in the mid-teens, subject to contingencies and factors beyond management's control.