American Express Q2 Earnings Beat Estimates on Premium Customers

American Express Company AXP reported second-quarter 2025 earnings per share (EPS) of $4.08, which beat the Zacks Consensus Estimate by 5.7%. The bottom line climbed 17% year over year.

Total revenues net of interest expense amounted to $17.9 billion, which outpaced the Zacks Consensus Estimate by 1%. The top line improved 9% year over year in the quarter under review.

The strong second-quarter 2025 results benefited from growing Card Member spending and a premium customer base. Rising revolving loan balances and continued robust card fee growth aided its performance. The results were partially offset by escalating customer engagement and operating costs.

American Express Company Price, Consensus and EPS Surprise

American Express Company price-consensus-eps-surprise-chart | American Express Company Quote

AXP’s Q2 Operational Performance

Network volumes of $472 billion rose 7% year over year in the second quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 1.3%. Total interest income of $6.3 billion increased 8% year over year and beat the consensus mark by 0.4%. Provision for credit losses rose 11% year over year to $1.4 billion due to higher net write-offs and net reserve build.

Total expenses increased 14% year over year to $12.9 billion due to higher operating expenses and an elevated customer engagement cost level, which resulted from expanding Card Member spending and usage of travel-related benefits. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

AXP’s Q2 Segmental Performances

The U.S. Consumer Services segment’s pre-tax income of $1.7 billion improved 7% year over year in the second quarter but missed the Zacks Consensus Estimate by 4.7%. Total revenues, net of interest expenses, climbed 11% year over year to $8.6 billion. Growth in the customer base of Gen-Z and Millennials also favored this segment’s results.

The Commercial Services segment recorded a pre-tax income of $905 million in the quarter under review, which was in line with the prior-year figure but missed the Zacks Consensus Estimate of $911.8 million. Total revenues net of interest expense amounted to $4.2 billion, which grew 7% year over year due to an increase in net interest income. The reported figure beat the consensus mark by 1.1%.

The International Card Services segment reported a pre-tax income of $465 million in the second quarter, which jumped 60% year over year and beat the consensus mark of $276.3 million. Total revenues net of interest expense improved 15% year over year to $3.2 billion and beat the consensus mark of $3.1 billion.

The Global Merchant and Network Services segment’s pre-tax net income of $1.1 billion fell 31% year over year in the quarter under review but beat the Zacks Consensus Estimate of $1 billion. Total revenues net of interest expense increased 3% year over year to $1.9 billion.

Corporate and Other incurred a pre-tax loss of $550 million in the second quarter, wider than the prior-year quarter’s loss of $502 million.

Balance Sheet (As of June 30, 2025)

American Express exited the second quarter with cash & cash equivalents of $57.9 billion, up from $40.6 billion at 2024-end. Total assets of $295.6 billion rose from $271.5 billion at 2024-end.

Long-term debt amounted to $58.2 billion, up from $49.7 billion at 2024-end. Short-term borrowing was $1.5 billion.

Shareholders’ equity of $32.3 billion improved from $30.3 billion at 2024-end. Return on average common equity was at 37.8%, below the year-ago level of 43.2%.

Capital Deployment Update

American Express bought back 5 million common shares in the second quarter of 2025 for $1.4 billion and paid $600 million worth of dividends. In the quarter under review, the company paid a per-share dividend of 82 cents.

AXP Reaffirms 2025 Outlook

American Express still anticipates revenues to increase between 8% and 10% in 2025 from the 2024 level of $65.9 billion. Management expects EPS in the range of $15-$15.50, the midpoint of which indicates an improvement of 8.9% from the 2024 level of $14.01.

The company earlier stated that it expects revenue growth of more than 10% over the long term, while EPS is likely to continue registering mid-teens growth.

AXP’s Zacks Rank & Key Picks

AXP currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader finance space are Virtu Financial Inc VIRT, Marex Group PLC MRX and Acadian Asset Management Inc. AAMI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Virtu Financial’s current-year earnings of $4.31 per share has witnessed three upward revisions in the past seven days against none in the opposite direction. Virtu Financial beat earnings estimates in each of the trailing four quarters, with the average surprise being 20.2%. The consensus estimate for current-year revenues is pegged at $1.8 billion, implying 12.5% year-over-year growth.

The Zacks Consensus Estimate for Marex Group’s current-year earnings of $3.52 per share has witnessed one upward revision in the past seven days against no movement in the opposite direction. Marex Group beat earnings estimates in each of the trailing four quarters, with the average surprise being 26.3%. The consensus estimate for current-year revenues is pegged at $1.8 billion, calling for 12.4% year-over-year growth.

The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.18 per share, implying 15.2% year-over-year growth. In the past 30 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $560.8 million, calling for 10.9% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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