AmEx Closes Out 2024 On a High Note As Growth Proves Steady

Top executives at American Express Co. early Friday celebrated the final quarter of what they said was a year to remember. “We delivered record revenue, record net income, and new records in many categories,” including all-time-high cardholder spending, AmEx chief executive Steve Squeri told equity analysts during a conference call to discuss the card company’s fourth-quarter and full year 2024 results.

The top brass clearly feels the momentum is spilling into the early weeks of 2025 while the company celebrates its 175^th year in business. “We believe our growth is sustainable,” Squeri said, in case anyone harbored doubts. In general, management feels the roadblocks thrown up by the Covid experience are well behind the company. “This quarter marks the 26^th consecutive quarter where we’ve seen double-digit card-fee growth,” noted Christophe Le Caillec, AmEx’s chief financial officer.

Still, competitive pressures remain a force to be reckoned with. The pending merger of Capital One and Discover, for example, has not escaped the notice of analysts, who pressed Squeri on the deal’s potential impact on AmEx. The merger “fits in really good with [Cap One’s] strategy,” Squeri said during the call. “They are a formidable competitor, but they will have their hands full integrating Discover. We look forward to competing with them.” The $35.3-billion deal, news of which broke a year ago, appears to be on track to close later this year.

AmEx ended 2024 with $65.9 billion in revenue, up 9% over 2023, while the fourth quarter alone saw revenue of $17.2 billion, a 9% increase from 2023’s fourth quarter. Net card fees alone grew 18% in the quarter, to $2.25 billion. “We believe our growth is sustainable,” Squeri said, citing the company’s fee-based cards and a product strategy that has led to the company refreshing between 35 and 50 products annually. “We expect to maintain that pace,” he said.

If there’s weakness in the plan, it lies with small and medium-size merchants, the AmEx officials said. Here, “organic spending still has not come back to what we saw pre-Covid,” Squeri noted. “It comes down to small-business confidence.” Offsetting this part of the puzzle, though, is AmEx’s growth among international businesses, he said. “Merchant acceptance in international continues to grow,” he noted. AmEx “has acquired millions of merchants,” he added, with a knock-on effect on card spending.

Challenges aside, Le Caillec told the analysts AmEx expects revenue growth between 8% and 10% this year. The projection “assumes a stable economy,” he said. “At the same time, there is uncertainty.”

For the quarter, AmEx posted $9.18 billion in discount revenue, up 7% year-over-year. For the full year, this revenue stream, by far AmEx’s largest, totaled $35.2 billion, a 5% increase. Net card fees, however, soared 16% for the year, to $8.45 billion. “Our cardmember is a little bit different, more focused on the balance between rewards and experiences,” Squeri said.

All told, the company notched net income of $2.17 billion for the quarter, up 12%. For all of 2024, that total was $10.13 billion, up fully 21%.