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During an otherwise strong earnings report, American Express CEO Steve Squeri said his firm is keeping watch on the progress of rivals, such as small-business-focused fintechs and potential competition that would result from Discover's acquisition of Capital One.
During analyst questioning on Friday, Squeri was asked about the progress of firms like Ramp and Brex, which offer small-business payments technology. Other payment firms such as Stripe and Block also sell payments and offer credit to small businesses.
"We feel good about the progress that we are making, and yes, we keep an eye on Ramp and Brex. They both have good products and are making some inroads and we will make sure we are responding to that," said Squeri, who would not comment on whether Amex was pursuing acquisitions in the fintech industry. He also suggested Amex's mix of loyalty programs and customer experience matches consumer preferences more than the "cash back" focus of consumer payment fintechs.
Squeri also weighed in on the potential Capital One acquisition of Discover, a deal that could create one of the largest payment and card companies in the U.S. The Capital One-Discover deal ran into political headwinds during the Biden administration. The Trump administration is more likely to take a friendly posture to large acquisitions in the financial services industry.
"It's a really good deal for them," Squeri said. "[Capital One] will have their hands full with integrating Discover over the next few years. We will evolve with our regular product refreshes."
Bullish on consumers
For the quarter ending Dec. 31, Amex reported net income of $2.17 billion, or $3.04 per share and total revenue net of interest expense of $17.18 billion, in line with Zacks' analysts consensus estimates of $3.03 per share on revenues of $17.18 billion. Earnings per share for the fourth quarter of 2024 was up from 2023's fourth-quarter EPS of $2.62.
The company additionally reported full-year revenue of $65.9 billion, up 10% on a foreign exchange-adjusted basis over 2023, record net income of $10.1 billion and EPS of $14.01, up 25% over 2023. For the full year 2025, Amex projects revenue growth between 8% and 10%, and EPS between $15 and $15.50. Analysts have forecast 2025 EPS of $15.24. Consumer spending trends in the first few weeks of 2025 were in line with a strong holiday season, Amex said, noting that could push 2025's outlook to the high end of its projection. "Consumer sentiment is higher than it has been for some time," Squeri said. "That's what gives us hope for the year."
Amex recorded record levels of annual card member spending, record net card fee revenues and a record 13 million new card acquisitions, Squeri said. "We are encouraged by accelerating billings growth as we believe it will be a key factor for American Express to meet its aspirational target of at least 10% revenue growth," the analyst firm William Blair said in a research note. "We believe the company has multiple levers to support midteens EPS growth in the current environment."