• Revenue: $15.8 billion, up 11% year-over-year.

• Net Income: $2.4 billion.

• Earnings Per Share (EPS): $3.33, up 39% year-over-year.

• Spending Growth: Overall up 7% on an FX-adjusted basis; U.S. Consumer Card spending up 8%, International Card Members up 13%.

• Fee Revenues: Increased by 16% on an FX-adjusted basis.

• New Cards Acquired: 3.4 million new cards in the quarter.

• Credit Metrics: Continued to show strong performance.

• Provision Expense: $1.3 billion due to a $148 million reserve build and net write-offs.

• Net Interest Income: Up 26% year-over-year.

• Marketing Spend: $1.5 billion, with plans to increase in 2024.

• Operating Expenses: $3.6 billion, flat year-over-year.

• Capital Return: $1.6 billion returned to shareholders in Q1.

• 2024 Full Year Guidance: Revenue growth of 9% to 11%, EPS of $12.65 to $13.15.

• Warning! GuruFocus has detected 8 Warning Signs with PINE.

Release Date: April 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: What is driving the softer spending environment mentioned, and what could potentially reinvigorate spending? A: Stephen Joseph Squeri, Chairman & CEO, explained that while overall spending grew by 7%, with consumer spending in the U.S. at 8% and international consumer spending at 14%, there was noticeable softness in SME spending, which only grew by about 1%. He attributed this to the unique dynamics faced by small businesses but remained optimistic about future opportunities for growth as SME spending rebounds.

Q: Can you elaborate on the Membership Rewards expense and the impact of model enhancements? A: Christophe Y. Le Caillec, CFO, clarified that the $196 million benefit from model enhancements to the Membership Rewards program is a one-time adjustment. The ultimate redemption rate (URR) remains at 96%, and the benefit represents a minor fraction of the total Membership Rewards balance, emphasizing its insignificance in the broader financial context.

Q: What drove the reacceleration in new card growth this quarter? A: CEO Stephen Joseph Squeri attributed the increase in new card acquisitions to heightened marketing investments and a series of product refreshes, including new offerings in partnership with Delta, Hilton, and British Airways. These initiatives have successfully stimulated demand and engagement.

Q: How are assumptions about the macroeconomic environment influencing your financial strategy for the upcoming quarters? A: CFO Christophe Y. Le Caillec noted that while they are observing a firmer macroeconomic environment, they are maintaining their EPS guidance due to the unpredictability of various factors that could impact financial performance throughout the year.