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AMERICAN EXPRESS CO

AXP
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Business Summary

American Express operates as a global payments and premium lifestyle brand powered by technology, with its card-issuing, merchant-acquiring and card network businesses offering products and services to consumers, small businesses, mid-sized companies and large corporations around the world. The company is the fourth largest general-purpose card network globally based on purchase volume, behind Visa, China UnionPay and Mastercard, and competes against a range of companies including merchant acquirers, processors, payment facilitators and web- and mobile-based payment platforms such as Alipay, PayPal and Shop Pay. The payments industry continues to undergo changes in response to evolving technologies, business dynamics and competition for premium customers, with the development of agentic commerce solutions and the use of stablecoins representing emerging competitive forces.

American Express competes intensely in the premium space and for cobrand relationships, with competitors including Visa, China UnionPay, Mastercard, JCB, Discover and Diners Club International (the last two owned by Capital One). The company's competitive advantages include its end-to-end integrated payments platform, which connects participants and provides differentiated value across the commerce path, and its direct relationships with Card Members and merchants that provide access to information at both ends of the card transaction. Delta is the company's largest strategic partner, with the Delta cobrand portfolio representing approximately 13 percent of worldwide billed business and approximately 21 percent of worldwide Card Member loans as of December 31, 2025 .

American Express generates revenue primarily through discount revenue, which is the largest revenue source and represents the amount earned and retained from the merchant payable for facilitating transactions, followed by net interest income from outstanding loan balances, net card fees from annual card membership fees, and service fees and other revenue including network partnership royalties, foreign currency-related fees, and loyalty coalition fees. The business model focuses on generating revenues primarily by driving spending on cards and secondarily through finance charges and fees, with the company seeking to attract premium, high-spending and high-credit-quality customers. The Membership Model of premium products, lifestyle services and business-centric solutions, along with benefits co-created and co-funded with business partners, is central to the company's value proposition.

American Express's product and service line includes credit and charge cards and complementary products such as travel, dining, lifestyle and expense management products and services, banking and other payment and financing products including deposits and non-card lending, merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services, and network services. The company offers a broad set of card products, rewards and services to premium consumer and commercial customers through its U.S. Consumer Services (USCS), Commercial Services (CS) and International Card Services (ICS) reportable operating segments. For the year ended December 31, 2025, worldwide billed business was $1,670 billion and as of December 31, 2025, the company had 86.6 million proprietary cards-in-force worldwide .

The Global Merchant and Network Services (GMNS) segment builds and manages relationships with millions of merchants globally, providing fraud-prevention tools, marketing solutions, data analytics and other programs and services. The card network business processes and settles transactions across the globe, with network partners licensed to issue American Express-branded cards in approximately 110 countries and territories. For the year ended December 31, 2025, worldwide processed volume was $227.2 billion and as of December 31, 2025, the company had 66.2 million cards-in-force issued by third parties worldwide . The company also offers banking and financing products such as high yield savings, business and consumer checking accounts, consumer installment loans and lines of credit offered to small businesses, and non-card business-to-business payment products and cash and expense management solutions.

During the year, the company launched its refreshed U.S. Consumer and Business Platinum Cards at the end of the third quarter and saw strong customer demand and engagement. The company acquired Center, an expense management software company, in 2025 to enhance non-card B2B payment products and cash and expense management solutions. The company maintained its Common Equity Tier 1 capital ratio within its target range of 10 to 11 percent and returned $7.6 billion of capital to shareholders in the form of share repurchases and common stock dividends . The company repurchased 16.8 million common shares at an average price of $312.87 in 2025 . The company also paid $58 million in dividends on non-cumulative perpetual preferred shares outstanding during the year .

Net income for the year was $10.8 billion, or $15.38 per share, compared with net income of $10.1 billion, or $14.01 per share, a year ago, which included a $0.66 per share gain from the sale of Accertify Inc. Total revenues net of interest expense increased 10 percent (9 percent on an FX-adjusted basis) to $72.229 billion . Billed business grew 8 percent year-over-year (7 percent on an FX-adjusted basis), reflecting broad-based growth across geographies and across both Goods & Services and Travel & Entertainment categories . Net interest income grew 12 percent, primarily reflecting growth in balances and net yield expansion . The effective tax rate was 21.5 percent for both 2025 and 2024 .

Business Outlook

Management did not issue specific formal quantitative guidance for the upcoming period in the filing, but stated plans to increase the regular quarterly dividend on common shares outstanding by approximately 16 percent, from 82 cents to 95 cents per share, beginning with the first quarter 2026 dividend declaration .

A key growth vector is the expansion of leadership in the premium consumer space by continuing to deliver membership benefits spanning everyday spending, borrowing, travel and lifestyle needs, expanding the roster of business partners globally and developing experiences that attract high-spending customers. The company launched its refreshed U.S. Consumer and Business Platinum Cards at the end of the third quarter of 2025 and has seen strong customer demand and engagement. The company also seeks to build on its strong position in commercial payments by evolving card value propositions, further differentiating corporate card and accounts payable expense management solutions, and designing innovative products and features including financing, banking and payment solutions for business customers, enhanced through the 2025 acquisition of Center, an expense management software company.

Another major growth vector is strengthening the global, integrated network by continuing to increase merchant acceptance, providing merchants with fraud protection services, marketing insights and connections to higher-spending Card Members, and working with network partners to offer expanded products and services. The company added millions of new merchant locations globally in 2025 and continued to increase coverage across its top international countries. The company also aims to build on its unique global position, seeking ways to use its differentiated business model and global presence as it progresses against its other strategic imperatives, and to reimagine customer and colleague experiences to drive innovation, improve productivity and efficiency and enhance customer satisfaction.

The company's margin and cost outlook is focused on driving marketing and operating expense efficiencies over time. Card Member rewards, Card Member services and Business development expenses collectively grew faster than revenues as a result of enhancements to value propositions to drive Card Member engagement and acquisition and the mix shift towards premium products. Marketing expense increased 4 percent year-over-year as the company continued to invest to acquire high-spending, high credit-quality customers . Operating expense grew at a slower pace than revenue even as the company continued to invest in enterprise risk management capabilities and technology to support business growth.

The company's operational outlook includes continued investment in technology across all areas of the business, including in transaction processing, data management and analytics, AI and machine learning (including agentic commerce), customer interactions and communications, open banking and alternative payment and financing mechanisms, authentication technologies and digital identification, tokenization, real-time settlement and risk management and compliance systems. The company continues to explore ways to deploy new and developing technologies to enhance its payments platform and customer experience, such as uses for generative artificial intelligence and the integration of its products and services in agentic commerce. As of December 31, 2025, the company employed approximately 76,800 people, with approximately 25,900 colleagues in the United States and approximately 50,900 colleagues outside the United States .

The company's capital allocation strategy includes maintaining its Common Equity Tier 1 capital ratio within its target range of 10 to 11 percent and returning excess capital to shareholders through share repurchases and common stock dividends . During the year ended December 31, 2025, the company returned $7.6 billion to shareholders in the form of share repurchases of $5.3 billion and common share dividends of $2.3 billion . The company plans to increase the regular quarterly dividend on common shares outstanding by approximately 16 percent, from 82 cents to 95 cents per share, beginning with the first quarter 2026 dividend declaration . The funding plan for the full year 2026 includes approximately $4.0 billion to $8.0 billion of unsecured term debt issuance and approximately $2.0 billion to $6.0 billion of secured term debt issuance .

Structural headwinds explicitly flagged by management include the impact of macroeconomic conditions such as slow economic growth, economic contraction, persistent inflationary pressures or shifts in broader consumer and business trends that can significantly impact customer behaviors including spending on cards, the ability and willingness of Card Members to borrow and pay amounts owed, demand for fee-based products and services and levels of customers' deposits. The company also faces headwinds from substantial and increasingly intense competition worldwide in the payments industry, including from networks, issuers, acquirers and other payment service providers, as well as evolving and growing alternative mechanisms, systems and products such as web- and mobile-based payment platforms, point-of-sale lenders and buy now, pay later products, and digital currencies. Additionally, the company faces continued intense competitive pressure that may materially impact the prices charged for accepting cards for payment, as well as the risk of losing merchant relationships.

Geographic, regulatory and macro factors management identified as constraints include the effects of geopolitical conditions, weather, natural disasters and other catastrophic events, including geopolitical instability such as tensions involving China and the United States, trade wars and tariffs, and multiple ongoing military conflicts around the world. The company is subject to evolving and extensive government regulation and supervision in jurisdictions around the world, including banking regulation, consumer financial products regulation, payments regulation, and privacy, data protection, data management, AI, resiliency, information security and cybersecurity regulation. The company noted that it is currently a Category III firm for purposes of the U.S. federal bank regulatory agencies' tailoring framework, and if it becomes a Category II firm, it would be subject to more stringent capital, liquidity and prudential requirements, as its cross-jurisdictional activity was $76 billion as of December 31, 2025, and the four-quarter trailing average was $73 billion .

Risk Factors

The company faces material credit risk from its Card Member loans and receivables, with U.S. Card Members responsible for approximately 79 percent of total Card Member loans and receivables outstanding as of December 31, 2025, and rising indicators of credit losses such as delinquencies and macroeconomic factors like unemployment and GDP could require increases in the reserve for credit losses . The company is exposed to substantial and increasingly intense competition worldwide, with Visa and Mastercard being larger in most countries based on purchase volume, and the company is the fourth largest general-purpose card network globally based on purchase volume . The company faces significant risk from the potential loss or renegotiation of cobrand partner relationships, as all cobrand portfolios in the aggregate accounted for approximately 26 percent of worldwide billed business for the year ended December 31, 2025, and Card Member loans related to cobrand portfolios accounted for approximately 36 percent of worldwide Card Member loans as of December 31, 2025 . The company is subject to evolving and comprehensive government regulation and supervision, including as a Category III firm under the U.S. federal bank regulatory agencies' tailoring framework, and if cross-jurisdictional activity exceeds thresholds, the company could become a Category II firm subject to more stringent requirements, with cross-jurisdictional activity of $76 billion as of December 31, 2025 . A major information or cybersecurity incident could lead to reputational damage and material legal, regulatory and financial exposure, and the company and other U.S. financial services providers have been the target of attacks such as denial-of-service attacks and social engineering conducted by nation state-affiliated actors .

Management Priorities

Management's message to shareholders emphasizes the earnings power of the business model driven by the premium, high credit-quality customer base and the greater scale and operating leverage achieved over the last several years, as well as the impact of strategic investments that strengthen the Membership Model and drive growth. Management noted continued momentum across the business with stable growth across Card Member spending and loans and strong growth in card fees, along with excellent credit performance. The three strategic priorities emphasized for the period ahead are: first, expanding leadership in the premium consumer space; second, building on the strong position in commercial payments; and third, strengthening the global, integrated network. Management stated plans to increase the regular quarterly dividend on common shares outstanding by approximately 16 percent beginning with the first quarter 2026 dividend declaration and to continue to return to shareholders the excess capital generated while managing the CET1 capital ratio within the target range of 10 to 11 percent and supporting balance sheet growth .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Partners and Relationships
  2. [2] Item 1, Business — Partners and Relationships
  3. [3] Item 1, Business — Card Issuing Businesses
  4. [4] Item 1, Business — Card Issuing Businesses
  5. [5] Item 1, Business — Card Network Business
  6. [6] Item 1, Business — Card Network Business
  7. [7] Item 7, MD&A — Executive Overview
  8. [8] Item 7, MD&A — Dividends and Share Repurchases
  9. [9] Item 7, MD&A — Dividends and Share Repurchases
  10. [10] Item 7, MD&A — Dividends and Share Repurchases
  11. [11] Item 7, MD&A — Dividends and Share Repurchases
  12. [12] Item 7, MD&A — Table 1: Summary of Financial Performance
  13. [13] Item 7, MD&A — Table 1: Summary of Financial Performance
  14. [14] Item 7, MD&A — Table 1: Summary of Financial Performance
  15. [15] Item 7, MD&A — Table 1: Summary of Financial Performance
  16. [16] Item 7, MD&A — Table 1: Summary of Financial Performance
  17. [17] Item 7, MD&A — Table 1: Summary of Financial Performance
  18. [18] Item 7, MD&A — Table 2: Total Revenues Net of Interest Expense Summary
  19. [19] Item 7, MD&A — Table 1: Summary of Financial Performance
  20. [20] Item 7, MD&A — Dividends and Share Repurchases
  21. [21] Item 7, MD&A — Table 4: Expenses Summary
  22. [22] Item 1, Business — Our Colleagues
  23. [23] Item 1, Business — Our Colleagues
  24. [24] Item 1, Business — Our Colleagues
  25. [25] Item 7, MD&A — Capital Strategy
  26. [26] Item 7, MD&A — Dividends and Share Repurchases
  27. [27] Item 7, MD&A — Dividends and Share Repurchases
  28. [28] Item 7, MD&A — Dividends and Share Repurchases
  29. [29] Item 7, MD&A — Dividends and Share Repurchases
  30. [30] Item 7, MD&A — Funding Programs and Activities
  31. [31] Item 7, MD&A — Funding Programs and Activities
  32. [32] Item 7, MD&A — Funding Programs and Activities
  33. [33] Item 7, MD&A — Funding Programs and Activities
  34. [34] Item 1, Supervision and Regulation — Enhanced Prudential Standards
  35. [35] Item 1, Supervision and Regulation — Enhanced Prudential Standards
  36. [36] Item 1A, Risk Factors — Credit, Market and Liquidity Risks
  37. [37] Item 1, Business — Competition
  38. [38] Item 1A, Risk Factors — Strategic and Reputational Risks
  39. [39] Item 1A, Risk Factors — Strategic and Reputational Risks
  40. [40] Item 1, Supervision and Regulation — Enhanced Prudential Standards
  41. [41] Item 1, Supervision and Regulation — Enhanced Prudential Standards
  42. [42] Item 1A, Risk Factors — Operational and Compliance Risks
  43. [43] Item 7, MD&A — Executive Overview
  44. [44] Item 7, MD&A — Dividends and Share Repurchases
  45. [45] Item 8, Consolidated Statements of Income
  46. [46] Item 8, Consolidated Statements of Income
  47. [47] Item 8, Consolidated Statements of Income
  48. [48] Item 8, Consolidated Statements of Income
  49. [49] Item 8, Consolidated Statements of Income
  50. [50] Item 8, Consolidated Statements of Income
  51. [51] Item 7, MD&A — Table 1: Summary of Financial Performance
  52. [52] Item 7, MD&A — Table 1: Summary of Financial Performance
  53. [53] Item 7, MD&A — Table 1: Summary of Financial Performance
  54. [54] Item 8, Consolidated Statements of Income
  55. [55] Item 8, Consolidated Statements of Income
  56. [56] Item 8, Consolidated Statements of Income
  57. [57] Item 7, MD&A — Table 1: Summary of Financial Performance
  58. [58] Item 7, MD&A — Table 1: Summary of Financial Performance
  59. [59] Item 7, MD&A — Table 1: Summary of Financial Performance
  60. [60] Item 7, MD&A — Table 1: Summary of Financial Performance
  61. [61] Item 7, MD&A — Table 1: Summary of Financial Performance
  62. [62] Item 7, MD&A — Table 1: Summary of Financial Performance
  63. [63] Item 7, MD&A — Table 1: Summary of Financial Performance
  64. [64] Item 7, MD&A — Table 1: Summary of Financial Performance
  65. [65] Item 8, Consolidated Balance Sheets
  66. [66] Item 8, Consolidated Balance Sheets
  67. [67] Item 7, MD&A — Table 1: Summary of Financial Performance
  68. [68] Item 7, MD&A — Table 1: Summary of Financial Performance
  69. [69] Item 7, MD&A — Table 1: Summary of Financial Performance
  70. [70] Item 7, MD&A — Table 1: Summary of Financial Performance
  71. [71] Item 7, MD&A — Table 1: Summary of Financial Performance
  72. [72] Item 7, MD&A — Table 1: Summary of Financial Performance
  73. [73] Item 7, MD&A — Executive Overview
  74. [74] Item 7, MD&A — Table 8: USCS Selected Income Statement Data
  75. [75] Item 7, MD&A — Table 10: CS Selected Income Statement Data
  76. [76] Item 7, MD&A — Table 12: ICS Selected Income Statement Data
  77. [77] Item 7, MD&A — Table 14: GMNS Selected Income Statement and Other Data

Analysis on 6/8/2026