American Express Q3 Earnings Beat Estimates on Rising Network Volume

Core Insights - American Express Company (AXP) reported Q3 2025 earnings per share (EPS) of $4.14, exceeding the Zacks Consensus Estimate by 4.6% and reflecting a 19% year-over-year increase [1][10] - Total revenues reached $18.4 billion, surpassing the Zacks Consensus Estimate by 2.4% and showing an 11% year-over-year growth [1][10] Financial Performance - The strong Q3 results were driven by increased Card Member spending and a premium customer base, alongside rising revolving loan balances and robust card fee growth [2] - Network volumes rose to $479.2 billion, a 9% year-over-year increase, driven by higher U.S. consumer spending, beating the Zacks Consensus Estimate by 1.2% [3] - Total interest income increased to $6.6 billion, an 8% year-over-year rise, surpassing the consensus mark by 3.4% [3] - Provision for credit losses decreased by 5% year over year to $1.3 billion, benefiting from lower reserve build [3] - Total expenses increased by 10% year over year to $13.3 billion, primarily due to higher operating expenses and elevated customer engagement costs [4] Segment Performance - The U.S. Consumer Services segment reported pre-tax income of $1.9 billion, a 12% year-over-year improvement, and total revenues of $8.9 billion, also up 11% year over year [5] - The Commercial Services segment's pre-tax income reached $1.1 billion, a 20% year-over-year increase, with total revenues of $4.3 billion, growing 7% year over year [6] - The International Card Services segment reported pre-tax income of $441 million, a 3% year-over-year decrease, with total revenues of $3.3 billion, up 14% year over year [7] - The Global Merchant and Network Services segment's pre-tax net income was $1 billion, a 5% year-over-year increase, with total revenues of $2 billion, up 7% year over year [8] Balance Sheet Highlights - As of September 30, 2025, American Express had cash and cash equivalents of $54.7 billion, up from $40.6 billion at the end of 2024 [9] - Total assets increased to $297.6 billion from $271.5 billion at the end of 2024 [9] - Long-term debt rose to $57.8 billion from $49.7 billion at the end of 2024, while shareholders' equity improved to $32.4 billion from $30.3 billion [11] Capital Deployment - In Q3 2025, American Express repurchased 7 million common shares for $2.3 billion and paid $600 million in dividends, with a per-share dividend of 82 cents [12] 2025 Outlook - American Express anticipates revenue growth of 9% to 10% in 2025 from the 2024 level of $65.9 billion, with EPS expected in the range of $15.20 to $15.50, indicating a 9.6% improvement from the 2024 level of $14.01 [13]