AmEx Posts Strong Numbers As It Looks to Add Card Features And Cardholders

American Express Co. reported record revenue and record earnings early Friday as it posted a fourth-quarter 2023 performance that the company says proves it has put the languor of the pandemic behind it.

“Looking back over two years, we have achieved what we set out to do. We are a larger company,” chief executive Steve Squeri told equity analysts tuned in to the card company’s conference call early Friday to discuss its December quarter results.

Indeed, at least some of the numbers gave reason for the company to cheer, and apparently the stock market agrees. AmEx’s shares were trading up just over 6% in the early going Friday following the conference call, delivering a price per share of just under $200.

AmEx’s card volume for the quarter hit an historic high of $434 billion in the quarter on some 141 million cards, both proprietary cards and so-called network cards issued by partners, helping to drive revenue to just shy of $15.8 billion, up 14% year-over-year. The growth, said Squeri, “is why I’m feeling good about where we are today.” He projected annual growth rates for revenue in the range of 9% to 11%.

For the immediate future, he added, AmEx will be “aggressively acquiring new cardmembers. We’ll focus on getting billed business acquired”—a strategy that would appear to portend even more energetic marketing in a business where AmEx must compete with networks like Visa and Mastercard, which have long eyed the travel-and-entertainment segment of the card business.

That plan requires new features for existing products, a project Squeri says AmEx is already working on. “We’re committed to refreshing about 40 products this year—it’s important to keep our products fresh as trends change,” he said, without adding details. The refresh will include AmEx’s super-premium Platinum card, though here again Squeri was tightlipped about the details. “You’ll have to wait and see,” he told the analysts. “We don’t announce that.”

Clearly, business has rebounded nicely for AmEx in its key travel-and-entertainment business. Restaurant spending—AmEx’s largest T&E segment—alone has reached $100 billion annually, reported chief financial officer Christoph Le Caillec, with T&E overall up 19%.

Growth rates for volume have slowed since the immediate burst after pandemic restrictions lifted, but Le Caillec argued rates are normalizing. “I’m not too worried. We have a card base that loves traveling and I’m sure they’ll keep traveling,” he said.

For the quarter, AmEx reported $15.8 billion in revenue net of interest expense, up 14% year-over-year. It took in $1.93 billion in net income, an 11% increase. Total dollar volume on the network reached $434 billion, a 5% rise.

On the merchant side of the business, AmEx reported $8.6 billion in discount revenue for the quarter. For the year, this fee—the toll paid by merchants on each transaction—totaled $33.4 billion, up 9%. This category has historically accounted for well over half of the company’s total revenue.