American Express Beats with 18% EPS Growth, Accelerating Spend Drives Q1 Revenue Up 11%

American Express delivered strong first-quarter 2026 results, with earnings per share jumping 18% to $4.28 from $3.64 a year ago, driven by accelerating card member spending and robust revenue growth across its premium customer base.

Key Numbers

The payments giant reported first-quarter revenue of $18.9 billion, up 11% year-over-year (10% on a foreign exchange-adjusted basis), beating the momentum from recent quarters. This growth was powered by a notable acceleration in card member spending, which increased 10% to $428 billion (9% FX-adjusted) — marking the highest quarterly growth rate in three years.

Net income climbed 15% to $2.97 billion compared to $2.58 billion in Q1 2025. The earnings per share growth of 18% outpaced net income growth due to a 2% reduction in average diluted shares outstanding, reflecting the company's ongoing share repurchase program.

Credit quality remained a bright spot, with the net write-off rate improving to 2.0% from 2.1% a year ago, demonstrating the strength of American Express's premium customer base even as loan balances grew. Provisions for credit losses increased modestly to $1.3 billion from $1.2 billion, primarily due to higher net write-offs and a lower reserve release.

The company maintained its full-year 2026 guidance, expecting revenue growth of 9-10% and earnings per share between $17.30 and $17.90. This implies continued strong performance throughout the year, building on the $15.38 per share earned in fiscal 2025.

Operating expenses rose 11% to $13.9 billion, in line with revenue growth. The increase reflected higher variable customer engagement costs tied to increased spending, the U.S. Platinum Card refresh, and greater usage of travel and lifestyle benefits — all indicators of strong customer engagement with the premium offerings.

What Management Said

CEO Stephen Squeri struck a confident tone about the company's trajectory, emphasizing that the strong start to the year "reflects continued momentum across our premium customer base and execution of our proven growth strategy." He specifically highlighted that card member spending growth of 9% FX-adjusted represented the highest quarterly growth in three years, attributing this to "strong demand and engagement with our premium products."

Squeri also revealed the company's decision to increase investments in marketing and technology despite already meeting guidance, stating they would "capitalize on long-term growth opportunities." This suggests management sees runway for growth beyond current expectations.

The CEO emphasized American Express's expansion in sports partnerships, announcing it had become the Official Payments Partner of the NFL globally and extended its partnership with the NBA. He also highlighted the "largest one-year expansion of our commercial product suite in our history," starting with the new Graphite Business Cash Unlimited Card launch.

On innovation, management pointed to AI initiatives, including the announcement of the "Amex Agentic Commerce Experiences developer kit and industry-first Agent Purchase Protection," positioning the company at the forefront of payments technology.

Notably, Squeri expressed confidence in the company's "differentiated Membership Model, fueled by our premium Card Members, world-class partners, and the innovations and services delivered by our talented colleagues," suggesting the premium strategy continues to resonate despite economic uncertainties.

What to Watch

Investors should monitor several key developments in coming quarters. The acceleration in spending growth to its highest level in three years raises questions about sustainability, particularly as the company laps easier comparisons. The 10% spending growth significantly outpaced recent quarters and will be crucial to maintain for hitting full-year guidance.

The decision to increase marketing and technology investments mid-year, while maintaining guidance, suggests either conservative initial targets or confidence in operational leverage. Watch for these investments to translate into customer acquisition metrics and spending volume in subsequent quarters.

Credit quality bears watching as loan balances grow. While the 2.0% write-off rate improved year-over-year, any deterioration could impact profitability, especially if economic conditions weaken. The company's premium customer base has historically shown resilience, but this remains a key risk factor.

The commercial expansion, particularly the new Graphite Business Cash Unlimited Card and promised "largest one-year expansion" of the commercial suite, represents a significant growth initiative. Success in capturing small and medium business spending could provide an additional growth driver beyond the core consumer business.

Finally, the company's ability to sustain premium engagement will be critical. The increased usage of travel and lifestyle benefits, while driving costs higher, indicates strong cardholder engagement. The U.S. Platinum Card refresh and new partnerships need to continue delivering value to justify premium annual fees and drive the spending volumes necessary for revenue growth.

With American Express trading near historical highs and delivering consistent double-digit earnings growth, execution on these initiatives will determine whether the premium valuation remains justified.

_Source: American Express Q1 2026 SEC Form 8-K filed April 23, 2026_

_StockCliff Research_