American Express Expects 15-17% Revenue Growth Despite Small Business Slowdown

2023-07-25

American Express recently held a call meeting to discuss their business performance and growth plans. During the meeting, they highlighted their network partnerships and the launch of the Square Card. Additionally, the efforts of the GNS team to expand coverage and increase card issuance were also discussed.

The participants of the call included Mihir Bhatia of Bank of America, Jeff, Christophe, Stephen Squeri, Kerri Bernstein, Donna, and the Operator. The management provided a market outlook summary, acknowledging a slowdown in the small business sector which has impacted their SME business growth. However, they remain optimistic about a future recovery and are focused on growing their consumer business. They are prepared to expand with their customers when they are ready.

In terms of revenue outlook, the company expects billings growth to be similar to the previous quarter on a year-on-year basis for the second half of the year. They anticipate that other revenue streams, such as net interest income and net card fees, will compensate for any slowdown. As a result, they project a revenue growth rate of 15% to 17% for the full year. The company emphasized the strength of their three-legged revenue model, which includes strong growth in card fees, some benefit from net interest income, and the expectation of shifting noise.

During the meeting, the key drivers of the business were highlighted as organic growth, attrition, acquisition, small business usage, strategic priorities, and coverage. These factors play a crucial role in shaping the company's performance and growth trajectory.

The company expressed a positive outlook for the quarter and year ahead. They expect to remain within the 15% to 17% top-line guidance and are confident in their performance. American Express achieved a record quarter in billings and anticipates landing within the given range. They also expressed confidence in their credit perspective and product choices, leading them to believe they will perform well in terms of credit metrics in 2024, barring any significant changes in the economy.