American Express delivers $17.2bn Q4 revenue and plans 17% dividend increase for 2025

Overview

American Express delivered another year of record-breaking performance in 2024, with strong growth across revenue, earnings, and customer engagement, further solidifying its position as a leader in the payments industry. The company closed 2024 with record-breaking financial results, highlighted by revenues of $65.9bn, net income of $10.1bn, and earnings per share of $14.01.

CEO Stephen J. Squeri attributed this success to increased Card Member spending, robust fee revenues, and strategic global expansion, including 13m new card acquisitions and millions of additional merchant locations. As the company prepares to celebrate its 175th anniversary in 2025, Squeri emphasized a commitment to sustaining momentum through investments in premium value propositions, innovation, and key international markets, with expectations of further revenue and EPS growth in the year ahead.

Q4 2024 vs. Q4 2023:

• Fourth quarter consolidated total revenues net of interest expense were $17.2bn (+9% YoY), driven by strong Card Member spending, higher net interest income supported by growth in revolving loan balances, and accelerated card fee growth.
• Net income rose to $2.2bn (+12% vs. Q4 2023), supported by disciplined expense management and strong revenue growth.
• Diluted EPS reached the value of $3.04 (+16% vs. 2023), reflecting higher spending activity during the holiday season and improved credit performance.
• Consolidated provisions for credit losses were $1.3bn (compared with $1.4bn in 2023). The decrease reflected a lower net reserve build YoY, partially offset by higher net write-offs.
• Consolidated expenses were $13.1bn (+11% YoY), increased by investments in marketing and higher variable customer engagement costs, partially offset by lower operating expenses.
• Billings grew 8% in Q4, reflecting strong consumer and commercial spending during the holiday season.

Full-Year 2024 performance:

• Consolidated total revenues net of interest expense for the full year were $65.9bn (+9% vs. 2023), supported by increased Card Member spending, card fee growth, and higher net interest income from revolving loan balances.
• Net income increased to $10.1bn (+21% YoY), reflecting strong growth across all key revenue streams and disciplined cost management.
• Diluted EPS reached an impressive value, above analysts’ estimates, of $14.01 (+25% YoY), driven by record levels of annual Card Member spending and fee revenues.
• Consolidated expenses for the full year were $47.9bn (+6% vs. 2023), the growth being determined by higher customer engagement costs and marketing investments.
• Consolidated provisions for credit losses for the full year were $5.2bn (compared with $4.9bn in 2023), primarily due to higher write-offs resulting from growth in Card Member receivables.

For 2025 outlook, American Express projects revenue growth of 8–10%, expects EPS to range between $15.00 and $15.50, driven by operational efficiency and continued investments, and plans a 17% increase in the quarterly dividend to $0.82 per common share.

Even though the main figures reported represented true records for American Express, the announcement of the results was not received with such enthusiasm by investors, the share price falling by approximately 5.5% in the pre-market, after which, towards the end of the evening, it recovered slightly to around the $322 threshold.

Author: Ionuț-Adrian Lazar