American Express Company (NYSE: AXP)
Company Overview
American Express delivered exceptional Q4 2025 earnings on January 24th—about five weeks ago—reporting revenue of $17.4 billion (up 9% year-over-year) and earnings per share of $3.04 that crushed analyst expectations of $2.78. The financial services giant demonstrated remarkable momentum across all key metrics, with total card member spending reaching $432 billion for the quarter (up 7% year-over-year) and credit performance remaining exceptionally strong with write-off rates of just 1.8%—well below industry averages.
What makes American Express particularly compelling right now is the success of its millennial and Gen Z customer acquisition strategy announced during the January 24th earnings call. The company added a record 3.3 million new card members in Q4, with 60% coming from millennials and Gen Z customers who represent the future of premium spending. These younger cohorts are demonstrating spending patterns similar to older affluent customers while maintaining excellent credit performance. Travel and entertainment spending—American Express’ highest-margin category—reached record levels at $156 billion for the full year, up 11% as international travel fully recovered.
Key Technical and Fundamental Drivers
Strong Q4 Beat → January 24th Results
American Express reported Q4 2025 results five weeks ago showing $17.4B revenue (up 9% YoY), $3.04 EPS (crushing $2.78 estimates), and $432B in quarterly card member spending.
Millennial/Gen Z Surge → 60% of New Accounts
The company added 3.3 million new card members in Q4 with 60% from millennial and Gen Z customers, successfully attracting younger affluent consumers to premium products.
Travel Spending Records → $156B Annual
Travel and entertainment spending reached $156 billion for full-year 2025 (up 11%), American Express’ highest-margin category, as international travel fully normalized.
Credit Performance Excellence → 1.8% Write-Offs
Credit write-off rates remained at just 1.8%, significantly below industry averages, demonstrating the high quality of American Express’ affluent customer base.
Merchant Network Growth → 74M+ Locations
American Express now accepted at over 74 million merchant locations globally (up 12% YoY), reducing historical acceptance gap versus Visa/Mastercard.
Market Takeaway
American Express’ January 24th earnings—five weeks old—shatter the narrative that younger consumers don’t value premium credit cards or that the travel spending boom was temporary. The 60% of new card members coming from millennials and Gen Z is particularly significant because these customers are in their prime spending years with decades of lifetime value ahead. Unlike older generations who adopted American Express later in their careers, younger affluent consumers are starting with premium cards and demonstrating loyalty through high engagement rates.
The travel spending hitting record levels of $156 billion annually is the key profit driver. American Express earns significantly higher margins on travel and entertainment transactions compared to everyday purchases, and these spending categories have not only recovered from pandemic lows but exceeded 2019 levels substantially. The company’s closed-loop network model—where American Express is both the card issuer and payment processor—allows it to capture more value per transaction than competitors while building direct customer relationships. Credit quality remaining exceptional at 1.8% write-offs demonstrates the company’s disciplined underwriting and affluent customer focus, providing downside protection even if economic conditions deteriorate. The merchant acceptance network expanding to 74 million locations addresses American Express’ historical Achilles heel, making the card usable nearly everywhere while maintaining its premium positioning. With management raising 2026 guidance for 9-11% revenue growth and expanding margins, American Express offers a compelling combination of secular spending growth, demographic tailwinds from millennial adoption, and best-in-class credit performance in the payments sector.