Overview
American Express
AXP · NYSEQ3 2026Financial Services · Cards and Payments Network
Since the Report + 0.3%
Revenue grew 8.9% year over year, EPS beat the estimate by 3.8%; the stock fell 3.7% in its first reaction.
- RevenueQ3
- $20.06B
- ▲ 9% YoY · 0.3% Below Estimate
- EPSAdjusted
- $4.68
- Estimate $4.51 · Beat by 3.8%
Verdict
HOLDAmerican Express beat the adjusted EPS estimate by 3.8% in the third quarter, while revenue was in line. The stock closed 3.7% lower after the company said it will cut about 5% of positions and expenses grew as fast as revenue. The next thing to watch is whether expense growth drops below revenue growth in the fourth quarter.
Close on Report DayOct 23
$313.15▼ 3.7%Report-Day Move
- Market Cap(Today)
- ≈ $212 B
- 1Y Return(At Report)
- − 12%
- P/E(At Today's Price · $17.02 · Trailing 12M)
- 18.5
- PEG(Company Guidance 2026)
- 1.20
- Net Margin(Trailing 12M)
- 14.1%
Earnings Summary
In 30 Seconds- Revenue of $20.06 billion was in line, while adjusted EPS of $4.68 beat the estimate by 3.8%.
- The company raised the low end of full-year adjusted EPS guidance to $17.60 and kept its 10% revenue growth target.
- The stock closed 3.7% lower after the company announced cuts to about 5% of positions and expenses rose 9%.
The Numbers
GAAP EPS
$5.42
▲ 31% YoY · Includes GBTG Sale Gain
Billed Business
$454.0B
▲ 8% YoY · Prior Quarter 9%
Net Write-Off Rate
1.8%
Year Ago 1.9% · 0.1 Pt Improvement
Stock Reaction
▼ 3.7%
Close-to-Close · Intraday Low $311.40
Quarterly Revenue ($ Billion)
18.43
Q3 25 · $18.4 B
18.98
Q4 25 · $19.0 B · QoQ + 3.0%
18.91
Q1 26 · $18.9 B · QoQ − 0.4%
19.64
Q2 26 · $19.6 B · QoQ + 3.9%
20.06
Q3 26 · $20.1 B · QoQ + 2.2% · YoY + 8.9%
~20.8 (10% Full Yr)
Q4 26E · ~20.8 (10% Full Yr) · QoQ + 3.9% · YoY + 9.9%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Adjusted EPS (Full Year)17.6 – 17.9 $17.6 $17.9 $
Midpoint 17.75 · Market Expectation 17.61 · Prior 17.30–17.90In Line ✓
- GAAP EPS (Full Year)18.3 – 18.6 $18.3 $18.6 $
Prior 17.30–17.90 · Includes GBTG GainRaised 4.8% ▲
- Full-Year Revenue Growth10%
Prior Guidance 10% · 10% Over Nine MonthsIn Line ✓
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±1.0% around the midpoint.
Segment and KPI Data
Revenue by Segment
- U.S. Consumer Services$9.84 BShare 48.8%▲ 11.0% YoY
- Commercial Services$4.55 BShare 22.6%▲ 6.0% YoY
- International Card Services$3.68 BShare 18.3%▲ 10.0% YoY
- Global Merchant and Network Services$2.08 BShare 10.3%▲ 6.0% YoY
Key Metrics
Billed Business
$454 B
▲ 8.0% YoYPress Release
Net Write-Off Rate
1.8%
Press Release
Effective Tax Rate
18.1%
Press Release
Shares are computed over the segment total: $20.2 B. Source: 8-K.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We had another strong quarter, delivering 9 percent revenue growth and EPS of $5.42, or $4.68 adjusted, up 13 percent year-over-year. Our business momentum continues, with strength in billings, new acquisitions and Card Member retention, and excellent credit quality. Given our performance year-to-date, we are raising our full-year EPS guidance to between $18.30 and $18.60 ($17.60-$17.90 adjusted), and we're on track to deliver another year of 10 percent revenue growth.”
- Full-year EPS Guidance Raised
- About 5% of Positions Cut
- Credit Quality Remains Strong
Summary and Review
Summary
American Express reported record third-quarter revenue of $20.06 billion. That is up 9% from a year earlier and 0.3% below the market expectation, so the revenue gate is in line. Adjusted EPS of $4.68 beat the estimate by 3.8%, so the earnings gate is open. The midpoint of full-year adjusted EPS guidance is $17.75. That is only 0.8% above the market expectation, which counts as in line. Two in-line gates and one open gate put the quarter in the hold band.
The stock closed down 3.7% at $313.15, after an intraday low of $311.40. It had closed at $325.17 the day before. The first reason is the workforce plan. The company will eliminate about 5% of its positions and booked a $336 million restructuring charge. The second reason is expenses. Total expenses rose 9% to $14.5 billion, matching revenue growth. The market read this report not as an earnings story but as a cost story.
The core of the quarter is solid. Card fees grew 16% and net interest income rose 10%. The net write-off rate fell to 1.8%. On the other hand, most of the 31% jump in GAAP EPS comes from a one-time sale gain. Growth in billed business also slowed from 9% in the second quarter to 8%. That is why our view is hold. Revenue and credit quality are sound, but a rally needs proof of expense discipline in the fourth quarter.
Full Review
Revenue in line, earnings above estimates.
Total revenue was $20.06 billion. It was $18.43 billion in the same quarter last year, a 9% increase. The market expected $20.12 billion, so revenue came in 0.3% below. The largest revenue line is the discount revenue earned from merchants. It rose 8% to $10.17 billion. The fastest-growing line was card fees. Card fee revenue rose 16% to $2.97 billion. Net interest income rose 10% to $4.94 billion. Service fees were flat. Revenue growth was 11% in the first quarter and 10% in the second. This quarter's 9% is a slight slowdown. The company still holds its 10% full-year revenue growth target. Growth over nine months is also 10%.
A one-time gain lifted GAAP earnings.
GAAP EPS was $5.42, up 31% from a year earlier. That figure includes a $982 million pretax gain from selling the stake in corporate travel company GBTG. The after-tax impact of the gain is $1.11 per share. The $336 million restructuring charge booked in the same quarter took away $0.37 per share. Excluding both, adjusted EPS was $4.68. It was $4.14 a year earlier, a 13% increase. The effective tax rate also fell from 24.1% to 18.1%. That decline gave earnings an extra lift. The share count fell 3% to 674 million through buybacks. Part of the earnings growth comes from that shrinkage. The sale gain also raised full-year GAAP guidance. That is why it is better to track the company's performance with adjusted figures.
Credit quality is strong and provisions fell.
The provision for credit losses was $1.0 billion. It was $1.3 billion a year earlier, a 23% decline. The decline reflects a reserve release this quarter. In the same period last year, reserves were built. According to the earnings call, the reserve release was $211 million. The net write-off rate was 1.8%. That is a 0.1-point improvement from 1.9% a year earlier. The delinquency rate has also stayed between 1.2% and 1.3% for fifteen quarters. This picture shows that Card Members' ability to pay has not weakened. Still, part of the earnings comes from the reserve release. That item does not repeat every quarter. If provisions return to normal levels, earnings growth slows somewhat. So the credit improvement should not be read as a permanent earnings gain.
Expenses and the workforce plan.
Total expenses rose 9% to $14.5 billion. The main driver was customer rewards and service costs. The Platinum Card refresh also lifted this line. Expense growth is running at the same pace as revenue growth. The company is responding with an efficiency program. CEO Stephen Squeri said on the call that about 5% of positions will be eliminated. The program's cost hit the quarter as a $336 million charge. The company also returned $2.2 billion to shareholders in the quarter. Of that, $1.6 billion was buybacks and $0.6 billion was dividends. The CET1 ratio of 10.9% sits within the 10-11% target band. That means the company has the capital to keep buying back stock. According to the earnings call, management expects growth in rewards costs to slow markedly in the fourth quarter. If that holds, expense pressure eases.
Next quarter, watch expense growth.
Next quarter, watch one comparison: expense growth versus revenue growth. Both were 9% this quarter. If expense growth falls below revenue growth in the fourth quarter, the workforce plan is paying off. Earnings growth would then outpace revenue growth, and the $17.90 top end of full-year guidance would look within reach. If expense growth stays at the pace of revenue, the restructuring remains just a cost. The second measure is billed business. Growth was 8% this quarter. If it falls below 8%, the 10% revenue target comes under pressure. If it rises above that, the slowdown was temporary. If both measures point the same way, the story becomes clear. Our guide on how to read earnings day explains the logic of this comparison.
Looking Ahead
Strengths and Risks
4 Strengths · 4 RisksStrengths
4- Card fee revenue rose 16% to $2.97 billion and was the fastest-growing line.
- The net write-off rate of 1.8% came in below 1.9% a year earlier.
- The low end of full-year adjusted EPS guidance was raised from $17.30 to $17.60.
- The company returned $2.2 billion to shareholders through buybacks and dividends in the quarter.
Risks
4- Total expenses rose 9%, matching revenue growth and limiting margin expansion.
- Billed business growth slowed from 9% in the second quarter to 8%.
- Part of the provision decline comes from a reserve release that may not repeat.
- The workforce plan covering about 5% of positions carries execution risk.
What to Watch
3- The quarterly dividend of $0.95 will be paid on November 10, 2026.
- Fourth-quarter earnings will be reported in January 2027.
- The expense impact of the workforce plan will show up in fourth-quarter results.
Upcoming Earnings
To Understand This