American Express Raises 2026 Revenue Outlook, Profit Up 8%

A Beat, a Raise, and a Premium Consumer Still Spending

American Express delivered a quarter its wire-service coverage will summarize in a single line: revenue up, earnings up, guidance raised. Total revenues net of interest expense reached $19.6 billion, a 10% increase, driven by heavier card spending, more net interest income on growing card balances, and strong card-fee growth. Earnings per share of $4.53 rose 11% from $4.08 a year earlier, and on the strength of the first half the company raised its full-year revenue growth guidance to 10%. Shares of American Express (NYSE: AXP) are a Dow component and one of Berkshire Hathaway’s largest holdings.

The spending signal underneath was the real story. Billed business, the total dollar volume charged on Amex cards, hit $455.8 billion, and spending growth of 9% on a currency-adjusted basis was the fastest in three years. Chief Executive Stephen Squeri said the Platinum portfolio is now the fastest-growing part of the U.S. consumer business, with Millennial and Gen-Z customers joining in large numbers. For a premium card issuer whose fortunes track affluent spending, an acceleration is the opposite of what a cautious macro backdrop would predict.

Why Profit Grew Only 8%

Look one line further down the income statement and the story changes register. Pretax income jumped 15% to $4.1 billion, but net income rose just 8% to $3.1 billion, the slowest-growing of the headline numbers. The gap is almost entirely tax: the effective tax rate climbed to 23.6% from 18.7% a year ago, when Amex booked one-time tax benefits that did not repeat. The 11% rise in per-share earnings, meanwhile, outran the 8% profit gain in part because the average share count fell 3% on buybacks, which lift per-share figures without adding a dollar of actual profit.

The choice management made with its outperformance is the more revealing detail. Amex raised its revenue outlook but left full-year EPS guidance unchanged at $17.30 to $17.90, and Squeri said the company plans to reinvest the first-half beat into growth initiatives. That is why expenses rose 12%, faster than revenue, led by customer-engagement costs and a refresh of the U.S. Platinum Card. The beat, in other words, is being spent rather than dropped to the bottom line, a deliberate wager that today’s spending buys tomorrow’s members.

The Credit Cushion Doing Quiet Work

Amex’s provision for credit losses, the money it sets aside for charges it may never collect, fell to $1.1 billion from $1.4 billion a year earlier. The decline came from a reserve release during the quarter, meaning the company lowered that cushion and fed the difference into results, against a reserve build in the prior-year period. The underlying loss experience was steady rather than improving: the net write-off rate held flat at 2.0%, and write-offs actually rose. Best-in-class credit, as the company calls it, is real, but a reserve release is a lever that cannot be pulled every quarter. Amex also announced a proposed acquisition of TheFork, a European restaurant-booking platform spanning 50,000 restaurants across 11 countries, extending its dining reach.

What to watch

1. Whether the reinvestment pays off. Management is spending its revenue beat on engagement and the Platinum refresh, so the third-quarter numbers will show whether that buys sustained spending and revenue growth or simply thinner margins.

2. How long credit stays benign. This quarter’s profit leaned on a reserve release while write-offs edged higher, and the next filing will reveal whether Amex keeps releasing reserves or has to start rebuilding them.

3. The tax rate and the EPS math. With the full-year EPS target of $17.30 to $17.90 unchanged, watch whether a higher tax rate and heavier spending leave the company leaning on buybacks to reach the range.