10-K: American Express Reports Strong 2025 Growth, Increased Dividends

American Express Company delivered robust financial results for the fiscal year ended December 31, 2025, with significant growth in net income, billed business, and card fees, alongside a planned 16% increase in quarterly common stock dividends.

Summary

• Net income for the year ended December 31, 2025, was $10.8 billion, or $15.38 diluted earnings per share, compared to $10.1 billion, or $14.01 diluted earnings per share, in 2024.
• Total revenues net of interest expense increased 10% (9% on an FX-adjusted basis) to $72.2 billion in 2025.
• Worldwide billed business grew 8% (7% on an FX-adjusted basis) year-over-year to $1,670 billion, driven by broad-based growth across geographies and both Goods & Services (G&S) and Travel & Entertainment (T&E) categories.
• Net card fees increased 18%, primarily due to high levels of new card acquisitions on fee-paying products and strong Card Member retention.
• Net interest income grew 12%, primarily reflecting growth in loan balances and net yield expansion.
• Total loans and Card Member receivables increased 8% to $224.8 billion.
• Credit performance remained strong and stable, with net write-off and delinquency rates described as 'best-in-class'.
• The company returned $7.6 billion of capital to shareholders in 2025, comprising $5.3 billion in share repurchases and $2.3 billion in common stock dividends.
• A 16% increase in the regular quarterly dividend on common shares outstanding is planned, starting with the first quarter 2026 dividend declaration.
• The acquisition of Center, an expense management software company, was completed in 2025, enhancing non-card business-to-business (B2B) payment products.
• The U.S. Consumer and Business Platinum cards were refreshed in 2025, showing strong customer demand and engagement.
• Swisscard AECS GmbH, a Switzerland joint venture, became a wholly-owned subsidiary on January 12, 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, with significant growth across key financial metrics, robust capital returns to shareholders, and strategic investments positioning the company for continued success despite competitive and regulatory challenges.

Positives

• Net income increased by 7% year-over-year to $10.8 billion in 2025.
• Diluted earnings per common share grew 10% to $15.38 in 2025.
• Total revenues net of interest expense increased 10% to $72.2 billion.
• Billed business grew 8% to $1,670 billion, reflecting broad-based growth across geographies and categories.
• Net card fees increased 18%, driven by strong new card acquisitions on fee-paying products and high Card Member retention.
• Net interest income grew 12%, primarily due to growth in loan balances and net yield expansion.
• Total loans and Card Member receivables increased 8% to $224.8 billion.
• Credit performance was strong and stable, with net write-off and delinquency rates remaining 'best-in-class'.
• The company maintained its Common Equity Tier 1 (CET1) capital ratio within its target range of 10% to 11%.
• Returned $7.6 billion of capital to shareholders in 2025 through share repurchases ($5.3 billion) and common stock dividends ($2.3 billion).
• A 16% increase in the regular quarterly common stock dividend is planned, starting with the first quarter 2026 dividend declaration.
• The acquisition of Center, an expense management software company, enhances the company's B2B payment and expense management solutions.
• Successful refresh of U.S. Consumer and Business Platinum cards led to strong customer demand and engagement.
• Continued global expansion of the merchant network, adding millions of new merchant locations globally.

Negatives

• Provisions for credit losses increased by 1% to $5.256 billion in 2025, primarily due to a higher reserve build driven by increased loans outstanding and deterioration in the macroeconomic outlook used in reserve models, partially offset by lower delinquencies in USCS Card Member loans.
• Card Member rewards expense increased 11% to $18.4 billion, driven by higher billed business and a prior-year benefit from enhancements to U.S. Ultimate Redemption Rate (URR) models.
• Business development expense increased 10% to $6.457 billion, primarily due to increased partner payments and higher client incentives.
• Card Member services expense increased 27% to $6.057 billion, mainly due to higher usage of Card Member benefits and the introduction of new U.S. Platinum benefits.
• Other expenses increased 10% to $6.987 billion, primarily due to the absence of a prior-year gain on the sale of Accertify and higher professional services and technology costs.
• Cross-jurisdictional activity was $76 billion as of December 31, 2025, with a four-quarter trailing average of $73 billion, nearing the $75 billion threshold that could result in the company becoming a Category II firm, subjecting it to more stringent capital, liquidity, and prudential requirements.

Risks

• Macroeconomic conditions, including slow economic growth, contraction, persistent inflationary pressures, or shifts in consumer and business trends, can significantly impact Card Member spending, borrowing, and demand for products.
• Geopolitical conditions, terrorist attacks, military conflicts, supply chain issues, natural disasters, widespread health emergencies, and cybersecurity incidents can materially adversely affect business, operations, and partners.
• Substantial and increasingly intense competition worldwide in the payments industry from networks, issuers, acquirers, and alternative payment service providers (e.g., digital wallets, AI-driven platforms) could negatively impact market share and profitability.
• Intense competition for partner relationships, particularly cobrand arrangements, could result in less favorable terms, loss of exclusivity, or termination of agreements, significantly impacting billed business and Card Member loans.
• Reliance on third-party providers for customer acquisition, servicing, technology, and other integral services exposes the company to risks of disruptions, operational issues, control weaknesses, or actions inconsistent with its interests.
• Operational and compliance risks, including inadequate or failed processes, human error, misconduct, or adverse external events, can lead to financial misstatements, regulatory non-compliance, and reputational damage.
• A major information or cybersecurity incident, including sophisticated cyberattacks (e.g., AI-assisted deepfakes, ransomware), could lead to reputational damage, material legal, regulatory, and financial exposure, and reduced use of products and services.
• Fraudulent activity associated with products and services, exacerbated by new technologies like generative AI, could materially adversely affect financial condition and results of operations.
• Evolving and comprehensive government regulation and supervision globally, including new laws on consumer financial products, payment networks, data privacy, and AI, could increase costs, limit business opportunities, and affect profitability.
• Litigation and regulatory actions, including class action lawsuits, arbitrations, and governmental inquiries (e.g., antitrust, merchant contracts, sales practices, transfer pricing), could subject the company to significant fines, penalties, judgments, and changes to business practices.
• Legal proceedings regarding provisions in merchant contracts, including non-discrimination and honor-all-cards provisions, could have a material adverse effect on business, potentially leading to increased merchant surcharging or steering.
• Inability to successfully invest in, and compete with respect to, technological developments and new products and services across all businesses, including AI & ML and agentic commerce, could materially adversely affect revenue and profitability.
• Inability to protect intellectual property rights or successfully defend against infringement or misappropriation assertions could negatively affect revenue and profitability.
• Tax legislative initiatives or assessments, such as the global minimum tax or challenges from tax authorities (e.g., IRS transfer pricing audit), could adversely affect results of operations and financial condition.
• Climate-related risks, including physical risks from extreme weather events and transition risks from changes in consumer preferences or legal requirements, could adversely affect operations, revenues, and expenses.
• Exposure to credit risk and trends affecting Card Member spending and the ability of customers and partners to pay, which could lead to greater delinquencies and credit losses.
• Interest rate changes could materially adversely affect earnings if borrowing costs and deposit interest rates increase at a greater magnitude than the interest earned on loans.
• Failure to meet capital adequacy and liquidity rules could compromise competitive position and result in restrictions imposed by regulators.
• Restrictions on the ability to pay dividends and repurchase capital stock due to regulatory oversight and capital plan requirements.
• Adverse market conditions may significantly affect access to, and cost of, capital and ability to meet liquidity needs.
• Any reduction in credit ratings could increase funding costs and restrict access to capital markets.
• Adverse currency fluctuations and foreign exchange controls could decrease earnings from international operations.
• An inability to attract or maintain deposits could materially adversely affect liquidity position and ability to fund the business.
• The value of investments may be adversely impacted by economic, political, or market conditions, potentially resulting in impairment charges.

Future Outlook

The company plans to continue returning excess capital to shareholders while maintaining its CET1 capital ratio within the 10% to 11% target range and supporting balance sheet growth. A 16% increase in the regular quarterly common stock dividend is planned, starting with the first quarter 2026 dividend declaration. The 2026 funding plan includes $4.0 billion to $8.0 billion of unsecured term debt issuance and $2.0 billion to $6.0 billion of secured term debt issuance. The global minimum tax is expected to continue increasing the company's tax liability in 2026. Starting January 1, 2026, Swisscard AECS GmbH will be consolidated into the company's financial results. The company will continue to assess and enhance its cybersecurity capabilities and engage in industry and government forums to advance its cybersecurity ecosystem.

Management Comments

• "Our strong results for the year reflect the earnings power of our business model, driven by our premium, high credit-quality customer base and the greater scale and operating leverage we have achieved over the last several years, as well as the impact of strategic investments that strengthen our Membership Model and drive growth."
• "We continued to see momentum across the business, with stable growth across Card Member spending and loans and strong growth in card fees, along with excellent credit performance."
• "We remain focused on driving marketing and operating expense efficiencies over time."
• "Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet."
• "The resiliency of our differentiated business model and the strength and stability of our performance give us confidence to navigate evolving competition and a range of economic environments."
• "While we recognize the uncertainty of the geopolitical and regulatory landscape, we continue to manage the company for the long term, focusing on backing our customers and colleagues, exercising disciplined expense management and strategically investing in our business."

Industry Context

StockSavvy.ai notes that American Express operates in a highly competitive global payments industry, facing challenges from traditional networks (Visa, Mastercard, China UnionPay) and emerging fintechs offering alternative payment mechanisms (digital wallets, buy now, pay later, digital currencies, agentic commerce). The company's integrated payments platform and focus on premium customers and co-brand partnerships are key differentiators, but increasing competition for these relationships and the evolving regulatory landscape (e.g., interchange fee caps, data privacy laws, AI regulation) pose ongoing pressures. The acquisition of Center and refresh of Platinum cards indicate a strategic focus on enhancing B2B solutions and premium consumer offerings to maintain market leadership amidst these trends.

Comparison to Industry Standards

• American Express is the fourth largest general-purpose card network globally based on purchase volume, behind Visa, China UnionPay, and Mastercard.
• Spending on American Express cards is higher on average on a per-card basis compared to network competitors.
• Net write-off and delinquency rates remained 'best-in-class', indicating superior credit quality relative to industry averages.
• The company's Liquidity Coverage Ratio (LCR) of 212% and Net Stable Funding Ratio (NSFR) of 123% for Q4 2025 exceeded the regulatory requirement of 100%, demonstrating strong liquidity compared to industry standards.
• The company's Common Equity Tier 1 (CET1) capital ratio of 10.5% is within its target range of 10-11% and exceeds the effective minimum of 7%, indicating a strong capital position relative to regulatory benchmarks.

Management Changes

Corporate Governance

Legal Proceedings

• Pizza Hazel, Inc., et al. v. American Express Co., et al.: Plaintiffs allege anti-steering and non-discrimination provisions in merchant agreements violate federal antitrust law, and the arbitration provision prevents antitrust challenges. Seeking unspecified damages and an injunction. The company appealed the court's rejection of its motion to compel arbitration.
• 5-Star General Store aka Bento LLC, et al. v. American Express Co., et al.: Similar allegations to Pizza Hazel, seeking an injunction and a declaration of antitrust violations. The company appealed the court's rejection of its motion to compel arbitration.
• David Moskowitz, et al. v. American Express Company and American Express Travel Related Services Company Inc.: Plaintiffs (non-Amex cardholders) alleged higher prices due to anti-steering and non-discrimination provisions. After trial, the jury awarded $12.5 million for an Illinois consumer law claim. The company reached a settlement agreement with class representatives, subject to court approval.
• B&R Supermarket, Inc. d/b/a Milams Market, et al. v. Visa Inc., et al.: Plaintiffs allege a conspiracy through EMVCo to shift liability for fraudulent transactions to merchants. The court granted the company's motion to compel arbitration for some class members, and the company appealed for a stay of claims. A settlement agreement was reached, subject to court approval.
• KServicing Wind Down Corp., et al. v. American Express Kabbage Inc. and American Express Travel Related Services Company, Inc.: Alleges a fraudulent transfer in the Kabbage acquisition, seeking up to approximately $746 million. The company disputes the claim.
• Mawarid Investments Limited arbitration: An ongoing confidential arbitration regarding the allocation of acquirer discount revenue related to airline transactions in the Middle East. The tribunal rendered the final award in January 2026.
• Value-added taxes (VAT) challenges: The company is being challenged in a number of countries regarding its application of VAT to certain international transactions, which are in various stages of audit or being contested in legal actions. The current estimated range of possible loss in excess of any accruals related to these matters is zero to $250 million.
• IRS transfer pricing audit: The company received a Notice of Proposed Adjustment from the IRS for the 2017 and 2018 tax years, proposing an increase to U.S. taxable income that would result in an additional estimated U.S. federal income tax payment of approximately $185 million and asserts penalties of approximately $50 million. The company strongly disagrees and plans to vigorously contest the adjustments.

Related Party Transactions

• Delta Air Lines: The largest strategic partner, with cobrand arrangements representing approximately 13% of worldwide billed business and 21% of worldwide Card Member loans as of December 31, 2025. The current agreement runs through the end of 2029.
• Global Business Travel Group, Inc. (GBTG): The company has an equity investment in and commercial arrangements with GBTG, including a long-term trademark license agreement. GBTG also supports certain strategic partnerships and the Commercial Services business.
• Swisscard AECS GmbH: A joint venture in Switzerland, which became a wholly-owned subsidiary on January 12, 2026.
• The Bank of New York Mellon: Serves as the trustee for the company's notes, registrar for common shares, and paying agent and calculation agent for the notes. It also provides custodial services, extends credit, and provides corporate trust services to the company and its affiliates.

Stakeholder Impact

• Shareholders: Benefit from strong financial performance, increased dividends, and share repurchases. Exposed to risks from competition, economic downturns, and litigation.
• Card Members: Benefit from refreshed premium products, enhanced rewards, travel and lifestyle services, and expanded merchant acceptance. Potentially impacted by surcharging, steering, or changes in partner benefits.
• Merchants: Benefit from increased Card Member spending and marketing solutions. Impacted by discount rates, surcharging, and competition from alternative payment methods.
• Employees (colleagues): Supported by competitive compensation packages, holistic well-being programs, and opportunities for career growth and development. Compensation practices are subject to regulatory oversight.
• Regulatory Authorities: Increased scrutiny and evolving regulations impact business practices, compliance costs, and capital requirements.
• Business Partners: Relationships are crucial for value propositions and network reach, but intense competition and renegotiations pose risks to these arrangements.

Next Steps

• Increase the regular quarterly dividend on common shares by approximately 16% beginning with the first quarter 2026 dividend declaration.
• File the definitive 2026 proxy statement with the SEC in March 2026.
• Hold the Annual Meeting of Shareholders on May 5, 2026.
• American Express National Bank (AENB) is required to submit its initial resolution plan under the revised FDIC rule on or before July 1, 2026.
• Continue to make significant investments in the Delta cobrand partnership, which runs through the end of 2029.
• Continue to assess risks and changes in the cyber environment and invest in enhancements to cybersecurity capabilities.
• Engage in industry and government forums to promote advancements in cybersecurity capabilities.
• Work on a revised proposal for the implementation of Basel Committee standards, with future rulemaking remaining uncertain.
• Continue to enhance the privacy program to comply with applicable requirements and regulatory expectations.
• Continue to enhance existing Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) programs, policies, and procedures and identify and remediate deficiencies.
• Manage the company for the long term, focusing on backing customers and colleagues, exercising disciplined expense management, and strategically investing in the business.

Key Dates

Recommendation

American Express demonstrated strong financial performance in 2025, with significant growth in net income, revenues, and billed business, driven by its premium customer base and strategic investments. The planned 16% increase in quarterly dividends signals management's confidence and commitment to shareholder returns. While competitive and regulatory risks exist, the company's robust capital position, disciplined risk management, and ongoing innovation in products and services (e.g., Platinum card refreshes, Center acquisition) position it well for continued growth and market leadership. The 'best-in-class' credit performance further underscores its financial health.

Keywords

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