American Express Company

And ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2021 earnings call. At this time, all participants are in listen only mode. Later we will conduct a question and answer session. If you wish to ask a question, please press one then zero on your touch tone phone. You will hear a message indicating you've been placed in queue. You may remove yourself from the queue at any time by pressing one then zero again. If you're using a speakerphone, please pick up the handset before pressing the numbers. Should you require assistance during the call, please press star, then zero. As a reminder, today's call is being recorded. I would now like to turn the conference over to our host, Head of Investor Relations, Ms. Vivian Zhou. Please go ahead.

Thank you, Brad. And thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management and are subject to risk and uncertainty. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides or reports on file with the SEC. The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings as well as the earnings materials for the prior periods we discussed. All of these are posted on our website at ir.americanexpress.com. We'll begin today with Steve Swery, Chairman and CEO. We'll start with some remarks about the company's progress and results. And then Jeff Campbell, Chief Financial Officer, will provide a more detailed review of our financial performance. After that, we will move to a Q&A session on the results with both Steve and Jeff. With that, let me turn it over to Steve.

Thanks, Vivian. And hello, everyone. Welcome to our third quarter earnings call. Earlier today, we reported third quarter revenues of $10.9 billion, up 25% over last year's third quarter, and earnings per share of $2.27. These strong results once again reflect accelerating momentum in our core business as billings on our network reach record highs for the third quarter, driven by goods and services spending. In my remarks this morning, I want to put into context the decisions that we've made pre-pandemic, when the pandemic hit and during the pandemic to drive the growth we are now seeing and the increased confidence we now have in our business model. In 2018, we introduced a new financial growth algorithm, which called for high single-digit revenue growth and double-digit EPS growth. Prior to the pandemic, we achieved those objectives for 10 straight quarters through focused and increased investment levels in our business. We executed strategies for profitably growing the business, which were based on initiatives to attract new customers and deepen relationships with existing customers in both our consumer and commercial businesses. And while our differentiated business model gave us confidence in our ability to capitalize on the opportunities we saw, we also knew that the favorable economic conditions we had at the time could change. So we also developed a plan for winning through the down cycle that focused on protecting our customers and our colleagues and maintaining our capital strength while investing strategically and at the right time to rebuild momentum so we could win during a recovery. Through it all, the driving force behind everything we do, from product innovations to our investments decisions, is to continue to make the American Express brand special and back our customers. Over the last several years, we focused our strategies on broadening the appeal of core products to attract new customers, particularly millennial and Gen Z customers, as well as expanding our leadership position with SME customers by providing more ways to help them manage and grow their business. To accomplish those objectives, we made a series of investments, and I'll highlight a few. We put in place a strategy for consistently refreshing our core premium products, adding value with expanded and relevant new benefits targeted at key consumer and small business customers, and we charged for that added value. We added a host of new digital capabilities for consumers and small businesses and expanded and enhanced our mobile app to appeal to the digital lifestyles of our target customers. We're an early mover in launching our buy now, pay later capability, Pay at Planet, which we introduced to address the evolving borrowing preferences of our customers. We increased our focus on working with strategic partners to help us enrich our value propositions, expand our network, and broaden our digital capabilities and offerings. For example, we negotiated wide-ranging, long-term agreements with key co-brand partners such as Delta, Hilton, and Amazon, We also expanded partnerships with digital giants such as PayPal and added a variety of new partners to our ecosystem, including fintechs such as Bill.com and Better and lifestyle brands such as Equinox. We achieved virtual parity coverage in the US and we increased coverage internationally through a more targeted approach while increasing the number of compelling offers and benefits that our merchants delivered to our card members. When the pandemic hit unexpectedly in early 2020, we responded by activating our plan for winning through the cycle using the same customer-focused approach to concentrate on retaining our customers and addressing their immediate needs. We moved quickly to enhance and expand our financial relief programs to assist our customers who suddenly face financial hardships. Our frontline servicing team stepped up to ensure we continue to provide the world-class service our customers have come to expect from American Express. We pivoted the value propositions of several of our premium products, adding temporary benefits on categories that were relevant to how customer spending behaviors had changed, such as wireless, streaming, food delivery, and others. This has produced lasting behavioral changes as spending in a number of these categories, including wireless and streaming, has proven to be sustainable. Soon after, we turned our attention to small businesses who needed help by launching the largest global small business campaign in the company's history, creating the Stand for Small Coalition. and supporting minority-owned small businesses in the United States. As last year progressed, we learned from our customers what resonated with them in this unprecedented environment, and we grew more confident to seize the growth opportunities we saw emerging. So we revved up our investments in card member acquisitions and value proposition innovations to capitalize on those opportunities and start rebuilding of our growth momentum. We also saw an opportunity to accelerate our strategy to bring new digital beyond the card capabilities to our small business customers and acquired Cabbage, one of the leading providers of digital cash management platforms. Importantly, the increasing demand we are seeing for our products and what we learned from the early value proposition enhancements encouraged us to restart our product refresh strategy last year. And in July, we launched our new consumer platinum card in the U.S., We're repeating this customer-led product innovation strategy with the refresh of the U.S. Business Platinum card, which we launched last week. As with the consumer card refresh, the new benefits we added to our business platinum in key spend categories such as electronics, software, shipping, wireless, and others were informed by our card member desires. Coming into 2021, we were emboldened by the strong results we were seeing toward the end of 2020 from our customer retention and acquisition efforts. And we decided to double down on our investments in marketing, product innovations, technology, and people to accelerate our growth momentum. All these decisions, those that we made before the pandemic, when the pandemic hit, and through this year as conditions began to improve, are driving the results we're seeing today. For example, customer acquisitions have gained momentum over the last five quarters with 2.6 million new cards in force in the third quarter. Demand for our premium fee-based products has been particularly robust with acquisitions of our U.S. consumer and small business platinum and gold cards reaching all-time highs in the quarter. In consumer, millennial and Gen Z customers have driven this growth with 75% of new U.S. gold and platinum consumer cards coming from these customers. In commercial, we had one of the best quarters ever, the U.S. small business card acquisition. Our focus on meeting the needs of SMEs and millennial and Gen Z consumer customers has resulted in these groups being the most resilient throughout the pandemic, leading to growth in spending. In fact, spending from these groups continued to accelerate in the third quarter, with goods and services spending from SMEs growing 21% above 2019 levels, and overall spending from millennial and Gen Z customers particularly strong, up 38% over 2019 levels. Our initiatives to protect our customers at the beginning of the pandemic has driven retention and satisfaction metrics higher than pre-pandemic levels, and the digital capabilities we've introduced have driven steady increases in digital engagement. For example, approximately 85% of active card members are digitally engaged with us, and we had the highest ever daily active user engagement across the web and mobile in August, with a nearly 17% increase year over year. As these examples show, the strategies we implemented to properly grow our business before the pandemic began, coupled with the decisions we made in executing our strategy to manage through the pandemic and to win during the recovery, have generated strong, consistent momentum as the environment continues to improve. And what we've learned through these past years in forming our strategy for investing to profitably grow our business moving forward. Looking ahead, we're operating for a position of strength. and we see even more opportunities to build in the momentum we've created. So we will continue to invest strategically in seeking to drive even higher levels of sustainable long-term revenue and EPS growth. With that, I'll turn it over to Jeff to discuss our third quarter results in detail, and then we'll take your questions. Thank you.