AXP earnings analysis
What we found in AXP's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
American Express delivered a strong Q2, with revenue net of interest expense up 10% to $19.637 billion and diluted EPS up 11% to $4.53. Revenue growth was broad based, led by 12% International Card Services growth and 11% U.S. Consumer Services growth, while a 23% reduction in credit provisions supported the 15% pretax-income increase. Offsets include 12% expense growth, a higher 23.6% tax rate, and increased regulatory and legal exposure.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue increased 10% to $19.637 billion
- Total revenues net of interest expense increased 10% year over year to $19.637 billion, driven by 9% billed-business growth, a 9% increase in discount revenue to $10.163 billion, and 15% net card-fee growth to $2.862 billion.
- EPS rose 11% to $4.53
- Diluted EPS rose 11% to $4.53 from $4.08, while net income increased 8% to $3.110 billion. Pretax income grew 15% to $4.071 billion.
- Every operating segment delivered revenue growth
- All four operating segments grew revenue: USCS rose 11% to $9.524 billion, Commercial Services rose 7% to $4.503 billion, International Card Services rose 12% to $3.619 billion, and GMNS rose 8% to $2.096 billion.
- Reserve release drove lower credit provisions
- Credit costs improved materially: provisions for credit losses declined 23% to $1.084 billion, including a $190 million Card-balance reserve release versus a $198 million reserve build a year earlier. Consumer and small-business 30+ day delinquencies improved to 1.2% from 1.3%.
- Operating cash flow remained strong despite capex
- First-half operating cash flow was $9.175 billion, slightly above $9.128 billion a year earlier. Capital expenditures, reflected in purchases of premises and equipment, were $2.047 billion, or about 22% of operating cash flow, principally including costs for the new headquarters.
- Capital returns remained substantial
- The company returned $2.887 billion in Q2 capital, including $2.241 billion of repurchases and $645 million of common dividends; it repurchased 7.1 million shares at an average $315.77. CET1 was 10.4%, within its 10%-11% target range.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Expense growth and tax rate pressured earnings
- Total expenses increased 12% to $14.482 billion, faster than 10% revenue growth, led by a 50% increase in Card Member services expense to $1.949 billion. The effective tax rate rose to 23.6% from 18.7%, reducing net-income conversion.
- Growing balances retain credit-loss sensitivity
- Although provisions declined, Card-balance net write-offs increased 8% to $1.207 billion and Commercial Services' principal-only small-business write-off rate rose to 2.4% from 2.3%. Card balances also increased $4.191 billion from December 31, 2025 to $218.054 billion.
- Heightened bank regulation raises compliance burden
- American Express became a Category II firm in Q2 2026 after cross-jurisdictional activity exceeded $75 billion as of March 31, 2026, bringing heightened capital, liquidity and prudential requirements. Its $10.4% CET1 ratio is above the 7.0% effective minimum but remains subject to evolving regulatory rules.
- Legal and AML exposures remain material
- Disclosed legal matters carry an estimated range of reasonably possible loss of $0 to $260 million in excess of accrued amounts, while the Kabbage wind-down estate seeks recovery of up to approximately $746 million. The company also expects AML-related enforcement action that could include civil money penalties.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.53
- Segment
- U.S. Consumer Services revenue: $9.524 billion, up 11% year over year; pretax segment income: $2.065 billion, up 23%.
- Segment
- Commercial Services revenue: $4.503 billion, up 7% year over year; pretax segment income: $970 million, up 7%.
- Segment
- International Card Services revenue: $3.619 billion, up 12% year over year; pretax segment income: $477 million, up 3%.
- Segment
- Global Merchant and Network Services revenue: $2.096 billion, up 8% year over year; pretax segment income: $1.128 billion, up 7%.
What they said about what is next.
The 10-Q does not provide quantitative full-year revenue or EPS guidance. Management's liquidity outlook includes a 2026 funding plan of approximately $4.0 billion-$8.0 billion of unsecured term debt issuance and approximately $1.0 billion-$3.0 billion of secured term debt issuance.
The filing reads better than the one before it.
What came before.
- 10-Q · April 23, 2026
- American Express reported Q1 2026 total revenues net of interest expense of $18,907 million, up 11% year-over-year, and diluted EPS of $4.28, up 18% vs. Q1 2025. Revenue and billed-business momentum was broad-based…
- 10-K · February 6, 2026
- American Express reported strong 2025 results driven by growth in billed business and lending: total revenues (net of interest expense) were $72,229 million (+10% vs. 2024) and net income was $10,833 million (diluted…
- 10-Q · April 18, 2025
- American Express reported a solid quarter: total revenues net of interest expense rose 7% year-over-year to $16,967 million and diluted EPS increased 9% to $3.64. Billed business and net card fees were strong (billed…
- 10-K · February 7, 2025
- American Express reported strong 2024 operating performance with total revenues net of interest expense of $65,949 million (up $5,434 million, 9% YoY) and net income of $10,129 million (diluted EPS $14.01, up $2.80 or…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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