Shares of This Holding Are Moving Higher Thanks to Differentiated Model

Our shares of American Express AXP are moving higher on Friday morning in response to the company’s better-than-expected June quarter results, which also confirmed the company’s differentiated membership-driven business model.

Ahead of Friday morning’s earnings call, the company also reaffirmed its 2025 guidance that calls for EPS between $15.00 to $15.50 versus the consensus forecast of $15.24 and revenue growth of 8% to 10% growth. Based on what we learn during the earnings call, we intend to revisit our AXP price target, but we also recognize there will likely be more work to do on that front when Amex shares details about its pending Platinum card refresh.

Because of the strong influence of the high-margin net card fee revenue on the company’s pre-tax income, we will continue to focus on that line item, which is influenced by the total number of cards in force and the average fee per card. During the June quarter, while Amex benefited from higher network volume spending, net fee card revenue grew at a much faster pace of 20% compared to the 7% gain in billed business. That 20% gain was driven by a combination of a 4% year-over-year increase in the total number of cards in force to $149.4 million and a 16% jump in average fee per card. That average fee increase reflects the continued shift to premium Amex cards, like Platinum. Those gains led net card fee revenue to account for 70% of Amex’s pre-tax income in 1H 2025, up from 58% in 1H 2024.

Those figures explain the power of Amex’s membership business model and why we are very interested in the details surrounding the upcoming Platinum card refresh. If Amex can continue to deliver the right set of benefits that drive new net card additions and average fee per card higher, that is a recipe for rising EPS.

June Quarter Details

Amex delivered June quarter EPS of $4.08, handily beating the $3.88 consensus, as revenue for the quarter climbed 9.8% year over year to $17.9 billion, edging out the $17.8 billion market forecast. As we noted above, net fee card revenue rose 20% year over year, while total billed business climbed 7% year over year to $416.3 billion, quicker pace than the 6% figure booked in the March quarter as network volume increased 7% year over in the June quarter compared to the 5% gain in the March quarter.

During the June quarter, Amex issued 3.1 million new cards, which led the number of cards in force to reach 149.4 million exiting the quarter, up from 144.3 million in the year-ago quarter. Average fee per card hit $117 in the June 2025 quarter, up from $111 in the March quarter and $101 in the June 2024 one. Some other notable card metrics include 63% of global consumer new accounts during the quarter were acquired from Millennials and Gen-Z, and 71% of global new accounts were from fee-paying products.

Amex stepped up its share repurchase program usage during the June quarter, taking down $1.4 billion, up from $0.7 billion in the March quarter. We’ll get more details on this during the earnings call, but we suspect the bulk of that activity occurred in April and early May.

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At the time of publication, TheStreet Pro Portfolio was long AXP.