American Express 2025 Q1: Revenue Hits $15.1B, Growth Slows, Defaults Provision Rises
American Express reports record-breaking revenue of $15.1 billion in Q1 2025, yet growth slows and provisions for customer defaults increase significantly, signaling cautious outlook amid shifting market dynamics.
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Highlights
- American Express achieves record quarterly revenue of $15.1 billion, surpassing previous highs.
- Growth in total network volumes decelerates to 8% after multiple quarters of double-digit expansion.
- The company allocates $1.2 billion for potential credit losses, tripling last year’s reserves.
In the first quarter of 2024, American Express (AXP) experienced a slowdown in growth despite posting its highest-ever quarterly revenue. The credit card giant’s shares fell 3.9% as earnings, while strong, failed to meet analysts’ expectations amid a cautious economic environment.
Cardmember spending rose 8% year-over-year to $426.6 billion, a notable deceleration from the robust double-digit growth seen in previous quarters. This trend reflects a more measured consumer spending pattern.
The company prudently increased its credit loss reserves to $1.2 billion, reflecting heightened risk concerns and a strategic buffer against potential customer defaults. This reserve is approximately three times greater than the amount set aside during the same period in 2022.
Despite these challenges, American Express reaffirmed its full-year 2024 guidance, anticipating earnings per share (EPS) between $11.00 and $11.40, alongside revenue growth projected at 15% to 17%.
Year-to-date, AXP shares remain up by 15%, underscoring investor confidence in the company’s long-term prospects despite short-term headwinds.
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