American Express Company (AXP) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the FY2025 10-K, accession 0000004962-26-000080.

American Express is a premium card issuer, merchant acquirer and card network rolled into one company. It issues credit and charge cards to affluent consumers, small businesses, mid-sized companies and large corporations. It signs up merchants to accept those cards, and it runs the global network that processes and settles the transactions. Most of its revenue comes from spending on its cards rather than from lending. Discount revenue (the fee merchants pay on each card transaction) is the largest line at $37.40 billion of 2025's $72.23 billion in total revenues net of interest expense. Next come net interest income on revolving balances ($17.36 billion), annual card fees ($9.99 billion) and service fees and other revenue ($7.47 billion), which includes network-partner royalties, foreign-exchange fees on cross-currency spending, loyalty-coalition fees and travel commissions.

Because it is issuer, acquirer and network at once, American Express sees both ends of each transaction: the Card Member and the merchant. Management treats this "integrated payments platform" as its main structural advantage over Visa and Mastercard, using the data for underwriting, fraud prevention and targeted offers. The model aims at high-spending, creditworthy customers. Card fees and merchant discount fund a heavy rewards-and-benefits package (Membership Rewards, lounges, statement credits, dining and travel perks), which is meant to draw more spending, which in turn makes the cards more valuable to merchants and partners.

The company reports four operating segments, plus Corporate & Other. Revenues net of interest expense for 2025 were:

• U.S. Consumer Services (USCS), $34.81 billion (+11%). Proprietary consumer cards in the U.S., including the Platinum Card and cobrand cards, plus travel and lifestyle services, consumer banking (savings and checking, installment loans) and the Resy/Tock dining-reservation platform.
• Commercial Services (CS), $16.93 billion (+7%). U.S. small-business and corporate cards, expense management and B2B payment tools, banking and non-card lending to businesses, and corporate cards for select global clients. The company's 2025 acquisition of Center, an expense-management software company, supports this business.
• International Card Services (ICS), $13.00 billion (+13%). Proprietary consumer, small-business and corporate cards outside the U.S., international joint ventures and the loyalty-coalition business.
• Global Merchant and Network Services (GMNS), $7.76 billion (+4%). Merchant acquiring and servicing, the global network, and partnerships with third-party issuers and acquirers in about 110 countries and territories. This includes the OptBlue program, under which third-party acquirers sign up small merchants.

The scale behind those figures:

• Worldwide billed business on cards American Express issues was $1,670 billion in 2025, across 86.6 million proprietary cards-in-force.
• Processed volume on cards issued by network partners was $227.2 billion, on 66.2 million third-party cards.
• Small business and corporate clients made up about 41% of billed business.
• About 22% of revenues net of interest expense came from outside the U.S.
• U.S. Card Members held about 79% of Card Member loans and receivables.

Partners matter a great deal:

• Cobrand cards made up about 26% of 2025 billed business and about 36% of Card Member loans.
• Delta Air Lines is the largest partner. The Delta cobrand portfolio was about 13% of worldwide billed business and about 21% of worldwide Card Member loans, under an agreement that runs through the end of 2029.
• Other cobrand partners include Marriott, British Airways and Hilton.
• Amazon and Delta are the two largest Membership Rewards redemption partners.

American Express Company and its main operating subsidiary are bank holding companies regulated by the Federal Reserve. The U.S. bank, American Express National Bank (AENB), is regulated by the OCC and funds a growing share of the business through direct retail deposits ($152.5 billion of total deposits at year-end 2025, about 92% FDIC-insured). The company had about 76,800 employees at December 31, 2025.

Management's strategy rests on five priorities:

• extending leadership in premium consumer cards;
• building on its strong position in commercial payments;
• widening merchant acceptance across its global network;
• using its global footprint across all of the above; and
• reimagining customer and colleague experiences through technology, including generative AI and "agentic commerce", in which AI agents make purchases on behalf of users.

Risk factors

From the FY2025 10-K, accession 0000004962-26-000080 (Item 1A). The June 30, 2026 10-Q added no new risk factors.

The substantive risks, condensed:

• Spending and credit cycles. Results depend on consumer and business spending. Premium discretionary spending and business spending (about 41% of billed business) tend to fall in downturns, while delinquencies and write-offs rise. Concentration of U.S. consumer and small-business exposure in California, Florida, New York, Texas, Georgia and New Jersey adds regional sensitivity. The company relies on borrowers' creditworthiness with little other recourse, and its CECL reserve models need judgment: a 10-point shift in weighting toward the pessimistic scenario would have added about $220 million to estimated credit losses at year-end 2025.
• Competition and new payment technology. Visa and Mastercard are larger in most countries by purchase volume. Big banks and fintechs compete for premium customers and cobrand deals. Alternatives such as buy-now-pay-later, real-time bank transfers, digital wallets, stablecoins and AI-driven agentic commerce could pull spending or lending off the cards, or put intermediaries between American Express and its customers. Companies that control digital wallets or AI shopping experiences could suppress the cards or demand payments to include them.
• Partner concentration and renegotiation. Cobrand portfolios are about a quarter of billed business and over a third of loans, and Delta alone is about 13% of billed business. Partner payments have risen as issuers compete for these deals. Losing or repricing a major partner could cut billed business and loans significantly. Some cobrand contracts let the partner buy the loan portfolio when the deal ends. The Amazon and Lowe's small-business cobrand portfolios have already been moved to held-for-sale. Airline spending, about 6% of billed business, also exposes the company to airline credit risk on tickets not yet flown.
• Merchant pricing pressure. Interchange caps on rival networks, merchant negotiating power and expanding acceptance among lower-rate merchants all push down the merchant discount rate. A proposed Visa/Mastercard settlement from November 2025 would cut and cap interchange, widen merchants' freedom to surcharge credit cards, and let merchants refuse some card categories. If approved, it could increase surcharging, reduce acceptance of premium cards and pressure American Express pricing.
• Surcharging and steering. Where merchants may surcharge (parts of the EU, Canada outside Quebec, some U.S. states, and Australia at the time of the 10-K), American Express has seen more surcharging of its cards, sometimes at higher rates than other networks. Steering customers to other payment methods hurts the Card Member experience, card usage and the brand.
• Rewards and benefits cost. Rewards, Card Member services and partner payments grew faster than revenue in 2025. Misjudging point redemptions or benefit usage directly hits earnings. At year-end 2025, a 25-basis-point rise in the estimated ultimate redemption rate would have added about $229 million to the Membership Rewards liability, and a 1-basis-point rise in the weighted average cost per point about $244 million.
• Regulation and supervision. Heightened U.S. and global scrutiny covers card networks, fees, interest rates (including proposals to cap credit card rates), rewards, data, AI and financial crimes. At the time of the 10-K the company was a Category III firm. It warned that cross-jurisdictional activity could tip it into the stricter Category II tier. That activity was $76 billion at year-end 2025, and its four-quarter trailing average was $73 billion against a $75 billion threshold. The move to Category II happened in the second quarter of 2026 (see Current quarter). EU rules on capping payments to cobrand partners create uncertainty for its EU cobrand and agent relationships, including KLM in the Netherlands.
• Financial-crimes compliance. The company disclosed that it was engaging with federal regulators on its anti-money-laundering and sanctions programs and working to remediate deficiencies. This was resolved through consent orders in October 2026 (see Subsequent events).
• Litigation. Merchant antitrust suits challenge the anti-steering and non-discrimination provisions in its merchant contracts. Losing could expose the cards to more surcharging and steering. Its reliance on arbitration clauses to limit class actions may not hold.
• Operational, cyber and fraud risk. Cyberattacks (including AI-assisted deepfakes and social engineering), outages at the company or its many third-party providers, fraud and model errors could cause losses, regulatory action and brand damage.
• Interest rates, funding and capital. Net interest income was about $17.4 billion in 2025, so its yield is exposed to deposit and borrowing costs that may reprice faster than loans. Funding depends on deposits, unsecured debt and securitization markets, and on credit ratings. Dividends and buybacks depend on capital rules, stress tests and the stress capital buffer. Adoption of the revised Basel standards could raise capital requirements significantly.
• FX, tax and investments. About 22% of revenue is earned outside the U.S., so a stronger dollar reduces it. The OECD 15% global minimum tax raised the 2025 tax bill and is expected to raise 2026's. VAT positions are being challenged in several countries. The company held about $1.0 billion of investment securities and $2.4 billion of equity investments (including Amex Ventures stakes, which have taken realized and unrealized losses) at year-end 2025.

Management's discussion, fiscal 2025

From the FY2025 10-K, accession 0000004962-26-000080 (Item 7).

2025 was a year of steady growth with stable credit:

• Total revenues net of interest expense rose 10% to $72.23 billion (9% FX-adjusted).
• Net income rose 7% to $10.83 billion, or $15.38 per diluted share, against $10.13 billion, or $14.01, in 2024. The 2024 figure included a $0.66 per share gain from selling Accertify.
• Return on average equity was 33.9%.
• The effective tax rate was 21.5% in both years. The global minimum tax pushed the 2025 rate up, and discrete benefits offset that.

Revenue drivers.

• Billed business grew 8% to $1,669.8 billion, broad-based across geographies and categories. Goods and services, over 70% of volume, was driven by retail. Travel and entertainment was led by restaurants, the largest T&E category.
• By segment, billed business grew 8% in USCS (powered by Millennial and Gen-Z Card Members, the fastest-growing cohorts), 3% in Commercial Services (modest U.S. small and mid-sized business growth) and 14% in ICS.
• Discount revenue grew 6%, slower than billed business because of a lower average merchant discount rate from shifts in geographic and merchant mix.
• Net card fees grew 18%, the standout line, on new fee-paying card acquisitions, strong retention and product refreshes. The refreshed U.S. Consumer and Business Platinum Cards launched at the end of the third quarter.
• Net interest income grew 12% on balance growth and a wider net interest yield (8.1% versus 7.9%).
• Service fees and other revenue grew 10%, helped by foreign-exchange fees, network-partnership revenue, loyalty-coalition fees and a gain from an equity transaction at Global Business Travel Group (GBTG), an equity-method investee, tied to GBTG's acquisition of CWT.

Credit.

• Provisions for credit losses were nearly flat at $5.26 billion (+1%).
• The Card Member loan reserve build was smaller than in 2024. It reflected loan growth and a weaker macroeconomic outlook in the reserve models, partly offset by a reserve release when a small-business cobrand portfolio ($1.6 billion of loans, effective June 1, 2025) was moved to held-for-sale.
• The principal-only net write-off rate for consumer and small business was 2.0%, unchanged. The 30+ day delinquency rate was 1.3%, also unchanged.
• Total loans and Card Member receivables grew 8% to $224.8 billion.

Expenses.

• Total expenses rose 11% to $53.18 billion.
• Rewards, Card Member services and business development together grew faster than revenue. Value-proposition upgrades and the shift toward premium products drove the increase.
• Membership Rewards and cash-back rewards expense rose $1,234 million, and cobrand rewards $576 million. A favorable 2024 model change to the U.S. redemption-rate estimate made the comparison harder. The ultimate redemption rate stayed at 96%.
• Card Member services rose on higher benefit usage and the new U.S. Platinum benefits.
• Marketing grew 4%.
• Operating expenses grew more slowly than revenue, despite continued spending on risk management and technology.
• Corporate & Other posted a $2.3 billion pretax loss, against $2.4 billion in 2024.

Capital and funding.

• The CET1 ratio ended at 10.5%, within the 10–11% target. The stress capital buffer stayed at the 2.5% floor.
• The company returned $7.6 billion to shareholders: $5.3 billion of buybacks (16.8 million shares at an average $312.87) and $2.3 billion of dividends, about 71% of net income available to common shareholders.
• It announced a roughly 16% dividend increase, from $0.82 to $0.95 a quarter, starting with the first-quarter 2026 declaration.
• Deposits ended at $152.5 billion, with about 3.9 million direct-deposit accounts. Long-term debt was $56.4 billion.
• AENB had $82.8 billion of discount-window borrowing capacity, and a $6.0 billion committed bank facility was undrawn.
• The 10-K's 2026 funding plan called for $4.0–8.0 billion of unsecured and $2.0–6.0 billion of secured term debt.

Ownership changes disclosed in the 10-K. On January 12, 2026 the company bought out its partner in the Swisscard AECS GmbH joint venture in Switzerland. Swisscard became wholly owned and is consolidated in ICS from 2026; it had previously been equity-accounted.

Current quarter, Q2 2026 (quarter ended June 30, 2026)

From the Q2 2026 10-Q, accession 0000004962-26-000322, and the earnings release furnished on Form 8-K on July 24, 2026, accession 0000004962-26-000318.

Headline results.

• Revenues net of interest expense rose 10% to $19.64 billion (10% FX-adjusted).
• Net income rose 8% to $3.11 billion, and diluted EPS 11% to $4.53 from $4.08. The share count was down 3%.
• Pretax income rose 15% to $4.07 billion. Net income grew more slowly because the effective tax rate rose to 23.6% from 18.7%, after the prior-year quarter benefited from resolving certain prior-year tax items.
• For the first half, revenues rose 11% to $38.54 billion, net income 11% to $6.08 billion and EPS 14% to $8.81.
• Return on average equity was 36.4%.

Spending and revenue.

• Billed business rose 9% to $455.8 billion. The CEO called this the fastest FX-adjusted growth in three years. Goods and services grew 9% and T&E 10%, as restaurant spending held up and airline spending accelerated.
• USCS billed business grew 11%, with the refreshed U.S. Platinum portfolio now the fastest-growing in U.S. Consumer.
• Commercial Services grew 5% as U.S. small and mid-sized business spending picked up. Management expects CS growth to moderate as the held-for-sale small-business cobrand portfolios leave.
• ICS, the fastest-growing segment, grew 13% (12% FX-adjusted).
• Discount revenue rose 9% to $10.16 billion. The discount rate slipped to 2.23% of billed business from 2.25%.
• Net card fees rose 15% to $2.86 billion. Average fee per card was $131, up 12%. Proprietary cards-in-force reached 87.6 million, with 3.0 million new cards acquired.
• Net interest income rose 11% to $4.65 billion and the net interest yield reached 8.1%. The exit of one held-for-sale small-business cobrand portfolio, sold during the quarter at a gain, partly offset balance growth.
• Card balances and Other loans grew 8% to $229.5 billion.

Credit improved.

• Provisions fell 23% to $1.08 billion. This quarter included a $190 million reserve release on Card balances, driven by lower delinquencies; the year-ago quarter had a $198 million reserve build.
• Net write-offs on Card balances rose 8% to $1.21 billion.
• The principal-only net write-off rate held at 2.0%, and 30+ day delinquencies fell to 1.2% from 1.3%.
• In June the company sold previously written-off balances to a third party. Its monthly credit disclosure says the sale lowered June's U.S. consumer net write-off rate by about 0.3 points.

Expenses.

• Total expenses rose 12% to $14.48 billion, faster than revenue.
• Card Member services rose 50% to $1.95 billion, on the new U.S. Platinum benefits and higher benefit usage.
• Card Member rewards rose 9% to $5.05 billion. Higher U.S. Business Platinum Membership Rewards costs drove the increase, partly offset by a benefit from improved redemption-rate models.
• Business development rose 10% and marketing 6% to $1.65 billion.
• Salaries and benefits rose 9%.
• "Other, net" rose 3%. Higher legal reserves and technology costs were partly offset by Amex Ventures gains and the gain on the cobrand portfolio sale.

Segments, Q2 pretax income.

• USCS: $2.07 billion (+23%), on revenue of $9.52 billion (+11%) and a reserve release.
• Commercial Services: $970 million (+7%), on revenue of $4.50 billion (+7%).
• ICS: $477 million (+3%), on revenue of $3.62 billion (+12%), now including Swisscard. For the half, ICS pretax was up 49%, lifted by the Swisscard remeasurement gain and a release of an international non-income-tax reserve.
• GMNS: $1.13 billion (+7%), on revenue of $2.10 billion (+8%).
• Corporate & Other: $569 million pretax loss, larger than a year ago because of legal reserves.

Capital, funding and liquidity.

• CET1 was 10.4%.
• The company returned $2.89 billion in the quarter: $2.24 billion of buybacks (7.1 million shares at an average $315.77) and $645 million of dividends at the new $0.95 rate. That came to about 93% of net income available to common shareholders. About 45.9 million shares remained under the buyback authorization.
• The Federal Reserve kept the 2.5% stress capital buffer in place through September 30, 2027.
• Deposits were $157.0 billion, with direct-deposit accounts at about 4.3 million, up from 3.9 million at year-end. Long-term debt was $57.0 billion and cash $45.2 billion.
• The company issued $6.1 billion of unsecured debt in the first half, including:
  • a $500 million subordinated issue in February;
  • $1.75 billion of 4.444% fixed-to-floating notes due 2030 (May 4);
  • €750 million of 3.835% fixed-to-floating notes due 2034 (June 17).
• The 2026 secured-funding plan was cut to $1.0–3.0 billion, from $2.0–6.0 billion in the 10-K. The unsecured plan stayed at $4.0–8.0 billion.

Strategic and corporate actions in the first half.

• Headquarters. In February the company committed up to $2.8 billion to build a new 1.95 million square foot headquarters at 200 Greenwich Street (the 2 World Trade Center site) in New York, and recognized a $370 million land-lease finance liability.
• Swisscard. The January buyout added $272 million of intangible assets and $136 million of goodwill in ICS.
• GBTG stake. On May 4 the company agreed to sell its roughly 30% stake in GBTG as part of Long Lake and General Catalyst's acquisition of GBTG. It expected about $1.5 billion of proceeds and a pre-tax gain of about $975 million, which was not in its 2026 guidance. Part of the gain was to be reinvested and part returned to shareholders. The deal closed after the quarter (see Subsequent events).
• TheFork. The company announced a proposed acquisition of TheFork, a European restaurant-booking platform with 50,000 restaurants in 11 countries, to sit alongside Resy. Closing depends on a labor consultation and regulatory approvals. The filings do not disclose a price.
• Products and partnerships. It piloted a new expense-management platform with middle-market clients, signed partnerships with Fanatics and ALL Accor, and enabled Membership Rewards redemption through Apple Pay.

Regulatory developments in the quarter.

• Category II. American Express became a Category II firm in the second quarter of 2026, after its four-quarter average cross-jurisdictional activity passed $75 billion at March 31, 2026. That brings stricter capital, liquidity and reporting requirements, phased in over transition periods.
• Capital rule proposals. In March 2026 the federal banking agencies proposed new capital rules. The company's preliminary estimate is that they range from a modest reduction in risk-weighted assets to broadly neutral.
• EU cobrand fee caps. On April 16, 2026 the EU Court of Justice ruled that payments to a cobrand partner fall under interchange caps only if they act like an interchange fee, judged case by case. Where caps apply, the value the partner provides is netted against the payments. A Dutch tribunal will now apply this to the KLM case.
• Australia. The Reserve Bank of Australia will stop requiring surcharging to be permitted on Visa, Mastercard and EFTPOS from October 1, 2026. American Express will prohibit merchant surcharging in Australia from the same date. In June the central bank also opened a review that covers three-party networks.

Litigation (Note 7).

• Settlements were approved in the B&R Supermarket EMV-liability case (April 27, 2026) and the Moskowitz case (July 7, 2026, after the quarter). In Moskowitz a jury had awarded $12.5 million on a single Illinois claim.
• Still pending:
  • merchant anti-steering suits (Pizza Hazel; 5-Star General Store), where the company is appealing denials of arbitration;
  • a Kabbage bankruptcy-estate fraudulent-transfer claim seeking up to about $746 million;
  • an ERISA class action over the company's retirement plan, filed May 15, 2026.
• The company estimates reasonably possible losses beyond its accruals at zero to $260 million.

Guidance (July 24, 2026 release). Management raised full-year 2026 revenue growth guidance to 10%, citing a stronger-than-expected first half. It kept full-year EPS guidance at $17.30–$17.90 and plans to reinvest the outperformance in growth initiatives.

Subsequent events

Developments after June 30, 2026, from Forms 8-K filed July–October 2026 and a Schedule 13D/A, each cited below.

• GBTG stake sale completed, September 29, 2026. Long Lake and General Catalyst completed their acquisition of Global Business Travel Group. American Express's 157,786,199 GBTG shares, held through a subsidiary, were converted into the right to receive $9.50 per share in cash, about $1.5 billion in total. The company no longer owns any GBTG shares. In May it had said it expected a pre-tax gain of about $975 million at closing; the closing filing does not state the gain actually recognized. (Schedule 13D/A Amendment No. 4, accession 0000004962-26-000356; expected proceeds and gain from Form 8-K, accession 0000004962-26-000203.)
• Financial-crimes consent orders, October 8, 2026. American Express Company and American Express Travel Related Services consented to a Federal Reserve order, and AENB consented to an OCC order, settling the regulators' previously disclosed reviews of the company's financial-crimes compliance program. AENB agreed to pay the OCC a $350 million civil money penalty, part of which was reserved in earlier periods. The company said the orders impose no asset cap, the penalty does not change its full-year 2026 guidance, and compliance costs are not expected to affect its 2027 guidance. (Form 8-K, accession 0000004962-26-000376.)
• Series E preferred issued; Series D to be redeemed, August 2026. On August 12, 2026 the company closed the sale of 1,600,000 depositary shares, each a 1/1,000th interest in its new 6.450% Fixed Rate Reset Noncumulative Preferred Shares, Series E. The 1,600 preferred shares carry a $1,000,000-per-share liquidation preference, $1.6 billion in aggregate. Proceeds were earmarked for general purposes, including redeeming the 3.550% Series D preferred. The company said it would redeem all Series D preferred shares and their depositary shares on September 15, 2026, at $1,000,000 per preferred share ($1,000 per depositary share) plus declared and unpaid dividends. (Forms 8-K, accessions 0000004962-26-000327 and 0000004962-26-000338.)
• Credit stayed benign into the third quarter. For the third quarter, preliminary figures put the principal-only net write-off rate at 1.6% for U.S. consumer and 2.3% for U.S. small business. At September 30, 2026, 30+ day delinquencies were 1.2% and 1.4%, and held-for-investment U.S. consumer and small-business Card balances were $160.9 billion. (Monthly Forms 8-K, accessions 0000004962-26-000345, 0000004962-26-000353 and 0000004962-26-000383.)
• Litigation. On July 7, 2026 the court approved the settlement of the Moskowitz class action (see Current quarter). The filings do not disclose the settlement amount. (10-Q Note 7, accession 0000004962-26-000322.)
• Still pending. The proposed TheFork acquisition was still subject to a labor consultation and regulatory approvals as of the latest filings, and no price has been disclosed. Australia's surcharging change took effect October 1, 2026, under the policy described above.