American Express stock trades near record high as spending and earnings grow

American Express Co. (ISIN US0258161092) reported another period of growth in cardmember spending and earnings, and American Express stock is trading close to its recent record levels on the New York Stock Exchange. In its results for full-year 2023, the company disclosed total revenue net of interest expense of about $60 billion, which marked a solid increase compared with the prior year, while net income also expanded on the back of higher cardmember engagement and fee income.

Revenue and earnings expand year over year

According to the companys most recently available annual financial report for fiscal 2023, American Express generated approximately $60 billion in total revenue net of interest expense, representing an increase versus fiscal 2022 that reflects continued growth in cardmember spending, discount revenue and fee-based income. The company also reported net income attributable to common shareholders for 2023 in the multiple billions of dollars, illustrating that profitability improved relative to the previous year as operating leverage and scale effects supported the bottom line.

Management highlighted in that annual disclosure that billed business, which captures total cardmember spending, rose compared with 2022 and continued to be driven by travel and entertainment categories as well as everyday spending. In addition, the report showed that provisions for credit losses increased from the low levels seen during the pandemic period but remained manageable in relation to overall receivables, with credit metrics such as net write-off rates still contained by historical standards. For investors, the combination of higher revenue, rising earnings and controlled credit costs underscores a business model that remains resilient in the face of changing economic conditions.

Quarterly trends and comparison with prior year

In its latest available quarterly update for 2023, American Express indicated that quarterly revenue net of interest expense advanced compared with the same quarter of 2022, reflecting continued cardmember spending growth and higher discount revenue. The quarter also saw earnings per share rise year over year, supported by operating income growth and disciplined expense management. These quarterly figures complement the full-year trend and show that the company was able to sustain its performance across multiple reporting periods rather than relying on a single strong quarter.

On a year-over-year basis, the company reported that cardmember spending volumes increased at a high single-digit to low double-digit percentage rate in key segments, led by consumer and small-business customers. This expansion in billed business contributed to higher discount revenue, which American Express earns from merchants that accept its cards. The quarterly results also pointed to continued growth in fee-based revenue, including annual fees on premium cards and fees from value-added services, which form an important recurring component of the revenue base.

At the same time, the quarterly filing showed that expenses rose from the prior-year quarter, partly due to higher marketing and customer-engagement spending as American Express continued to invest in acquiring and retaining high-value cardmembers. However, the increase in expenses was offset by stronger revenue growth, enabling the company to deliver higher operating income and net income compared with the same quarter of the previous year. For investors, the quantified comparison between revenue and expense trends helps to assess whether growth is profitable and sustainable.

Premium cards support spending and fee income

American Express generates a substantial portion of its revenue from premium consumer and small-business cards, which typically carry annual fees and offer rewards focused on travel, lifestyle and business services. In recent reporting periods, the company indicated that the number of proprietary cards in force increased versus 2022, supporting higher billed business and fee revenue. American Express also emphasized that its premium cards attract customers with higher average spending levels, which amplifies discount revenue from merchants.

Cardmember spending in travel and entertainment categories has remained a key driver, with volumes in these areas showing strong recovery compared with the years affected by pandemic restrictions. The companys disclosures show that travel-related spending has climbed noticeably from the depressed levels of 2020 and 2021, contributing to the overall increase in billed business and revenue. At the same time, everyday spending categories such as retail and services have also grown, broadening the base of cardmember activity beyond purely discretionary travel.

Fee-based revenue from annual card fees has grown as well, reflecting both new account acquisitions and product upgrades where existing customers move to higher-tier cards with more benefits. By focusing on cardmembers who are willing to pay for premium features, American Express aims to maintain a differentiated positioning versus mass-market card issuers that rely more heavily on interest income. The companys recent results suggest that this strategy continues to bear fruit, as fee revenue contributes a rising share of total revenue net of interest expense.

Credit metrics and capital position

The latest annual and quarterly filings from American Express show that credit quality remains an important focus. After unusually low write-off rates during the pandemic period, net write-offs and delinquency rates have normalised upwards but remain within ranges the company considers acceptable. Provisions for credit losses increased in 2023 compared with 2022, reflecting the more normalised credit environment and growth in loan balances, yet they are still moderate relative to the overall size of the loan portfolio.

In addition to credit metrics, the company reports on capital ratios and liquidity. As a regulated financial institution, American Express maintains capital levels designed to meet regulatory requirements and support its business growth. The annual report indicates that the company operates with capital ratios above minimum regulatory thresholds, supported by retained earnings and disciplined capital planning. This capital position provides a buffer against potential credit stress and allows the company to continue investing in marketing and product development.

American Express also uses share repurchases and dividends to return capital to shareholders when management deems surplus capital available. In recent periods, the company has declared quarterly dividends per share that contribute to the total shareholder return, and it has executed share repurchase programs, reducing the number of shares outstanding. These actions can support earnings per share growth over time, even when net income grows at a moderate pace, by spreading profits across a smaller share base.

American Express business model and competitive position

American Express operates as a global payments, network and card-issuing company, with a business model that combines card issuance, payment network services and value-added offerings to both cardmembers and merchants. Unlike some competitors that either focus primarily on card issuance or on operating a card network, American Express integrates both functions within its proprietary network, allowing it to capture discount revenue from merchants as well as fee and interest revenue from cardmembers.

The company faces competition from other card issuers and payment networks, including major global brands that operate widely accepted card schemes. However, American Express differentiates itself through a focus on premium cardmembers and small-business customers who tend to have higher spending and lower credit risk profiles. This focus helps to support higher average revenue per account and enables the company to invest in rewards and services that reinforce customer loyalty.

In addition to card issuance and network services, American Express offers business financing, working capital solutions and various digital tools to help small and medium-sized enterprises manage cash flow and expenses. These offerings contribute to the companys revenue and deepen relationships with business customers. Over time, the company has also invested in partnerships with travel and hospitality brands, creating co-branded cards and exclusive benefits that are designed to strengthen its position among frequent travelers and affluent consumers.

Technology and digital capabilities

American Express continues to invest heavily in technology and digital capabilities to support secure and convenient payments. The company has expanded digital wallet integrations, contactless payment options and mobile app functionality, enabling cardmembers to manage their accounts, track spending and redeem rewards through digital channels. These investments are important in a competitive landscape where consumers increasingly expect seamless and secure digital payment experiences.

Cybersecurity and fraud prevention are also critical components of the business. American Express allocates resources to monitoring transaction patterns, verifying cardmember identity and preventing fraudulent activity. Effective fraud prevention helps protect both cardmembers and merchants and reduces credit losses associated with fraudulent transactions. The companys disclosures highlight ongoing investments in data analytics and machine learning to enhance risk detection and credit decisioning.

On the merchant side, American Express offers analytical tools and marketing support to businesses that accept its cards, helping them better understand their customer base and tailor promotions. These services can make the American Express network more attractive to merchants, particularly those targeting premium consumers and frequent travelers. While discount rates paid by merchants are an important revenue source for American Express, the company balances pricing with value-added services to maintain and expand merchant acceptance.

American Express product focus: premium consumer cards

A central product category for American Express is its premium consumer card portfolio, which includes charge cards and credit cards that offer extensive rewards and benefits. These cards typically carry annual fees but provide cardmembers with perks such as travel credits, airport lounge access, hotel program status upgrades and enhanced rewards on travel and everyday spending. By structuring rewards programs around categories that are important to affluent consumers and frequent travelers, American Express seeks to encourage high levels of card usage and loyalty.

Premium cards also often include concierge services, purchase protection and extended warranty features, which can enhance the overall value proposition for cardmembers. The companys disclosures indicate that cardmembers who hold these premium products tend to generate higher billed business, contributing disproportionately to discount revenue and fee income. In addition, premium cardmembers may be more resilient in terms of credit quality, supporting the risk profile of the lending portfolio.

American Express stock and market valuation

American Express stock trades on the New York Stock Exchange and is included in major equity indices such as the S&P 500, reflecting its large market capitalization and role as a significant financial services company. As of a recent trading day in 2026, American Express shares were changing hands at a price in the low to mid three-digit dollar range, with the market capitalization in the tens of billions of USD, illustrating the companys scale and the markets assessment of its future earnings power.

Investors often compare the valuation of American Express stock with that of other payment and card-issuing companies, using metrics such as the price-to-earnings ratio and price-to-book ratio. The companys recent expansion in revenue and earnings, combined with its capital-return policies through dividends and share repurchases, contributes to the way the market values its shares. The positioning in the S&P 500 index also means that American Express stock features in passive investment portfolios and exchange-traded funds that track the index, providing an ongoing source of demand for the shares.