The Q3 figures for 2023 show that American Express pulled in record revenue despite increased expenses especially with customer engagements. Credit card giant American Express (NYSE: AXP) has published its revenue report for Q3 of 2023, pointing to record revenue for six consecutive quarters. According to an official press release, the company’s total revenue net of interest expense came in at .38 billion, a 13% increase over the .5 billion recorded for the same quarter in 2022. The company said this increase was mainly from “higher average loan volumes and increased Card Member spending.” American Express also announced that its net income for the quarter was .5 billion or .30 per share, much higher than the .9 billion or .47 per share realized in the same period last
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The Q3 figures for 2023 show that American Express pulled in record revenue despite increased expenses especially with customer engagements.
Credit card giant American Express (NYSE: AXP) has published its revenue report for Q3 of 2023, pointing to record revenue for six consecutive quarters. According to an official press release, the company’s total revenue net of interest expense came in at $15.38 billion, a 13% increase over the $13.5 billion recorded for the same quarter in 2022. The company said this increase was mainly from “higher average loan volumes and increased Card Member spending.”
American Express also announced that its net income for the quarter was $2.5 billion or $3.30 per share, much higher than the $1.9 billion or $2.47 per share realized in the same period last year. The report also noted that total Card Member spending rose 7% from last year on an FX-adjusted basis, with US consumer Card Member spending increasing 9%. International Card Services also climbed by 15%.
Chairman and CEO Stephen J. Squeri said the company’s investments are helping brand relevance across generations. Noting that the fastest-growing consumers are Gen Z and millennials, Squeri said both generations accounted for 60% of all new customer accounts in 2023 and spent 18% more than last year.
Squeri is optimistic that American Express will meet its guidance for the year. The CEO said:
“Based on our performance to date, we remain confident in our ability to achieve revenue growth and EPS for the full year consistent with the annual guidance we provided at the start of the year. We believe we are well positioned as we seek to achieve our long-term growth plan aspirations in 2024 and beyond in a steady-state macro environment.”
Q3 Report Shows American Express Spent More on Customer Engagement
Notably, higher customer engagement costs from network volumes and increased usage of travel-related benefits drove consolidated expenses 7% higher, from $10.3 billion a year ago, to $11 billion.
In the US alone, total expenses for Q3 2023 grew 8%, from $4.5 billion last year to $4.9 billion, caused by increased customer engagement costs. American Express provisions for credit losses also climbed to $752 million, higher than the $403 recorded in the year-ago quarter.
For International Card Services, total revenues net of interest expense climbed 17% (12% FX-adjust) from $2.3 billion last year to $2.6 billion this year. This was mainly from higher Card Member spending and increased card fee revenue.
American Express stock is at a $149.25 price in premarket trading after falling 0.25% from its previous close at $149.62. While AXP has gained nearly 7% in the past year, the stock only climbed 1.27% year-to-date (YTD). Over the last three months, AXP has dropped by more than 12%.
In May, Coinspeaker reported that American Express is deploying artificial intelligence (AI) tools to validate transactions and approve lines of credit. In addition, the company plans to use AI to better customer experiences by analyzing sentiments to make predictions. The company is looking to partner with an existing large language model (LLM) instead of creating its own.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.