American Express Company

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q2 2022 earnings call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. If you wish to ask a question, please press star then one on your touch tone phone. You will hear a tone indicating that you have been placed in queue. You may remove yourself from the queue at any time by pressing star then two. 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. Carrie Bernstein. Thank you. Please go ahead.

Thank you, Donna. And thank you all for joining today's call. As a reminder, before we begin, today's discussion contains certain forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our 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 materials 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 Squarey, 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'll move to a Q&A session on the results with both Steve and Jeff. With that, let me turn it over to Steve.

Thanks, Kerry. Welcome to the IR team and your first earnings call. And good morning, everyone. Thanks for joining us for our second quarter call. We're in an outstanding quarter. Revenues were up 31%, reaching a record high, and earnings per share were $2.57. Card member spending was at record levels. Built business was up 30% from a year earlier on an FX-adjusted basis, led by a vigorous rebound in travel and entertainment spending, and continued strong growth in goods and services. We added 3.2 million new proprietary cards in the quarter, driven by continued strong demand for our fee-based premium products. Acquisitions of our U.S. consumer platinum, gold, and Delta co-brand cards were all at record highs. Customer retention and credit quality both remain at exceptionally strong levels. While our strong growth may be somewhat surprising given the uncertainties in the external environment, there are a number of reasons for our continued momentum. First, the decisions we made through the pandemic continue to pay dividends. At the outset, we made it a priority to be there for our customers, focusing on delivering great service, providing financial relief programs, expanding our shop's small initiatives, and injecting new value into our premium consumer and business products with benefits that were relevant to the times. We then ramped up investments early in the recovery to rebuild our momentum and grow our customer base, refreshing our premium products with a series of new benefits that enhanced our generational relevance, and we accelerated our acquisition engine. These decisions laid the foundation for the strength in customer retention, engagement, and acquisitions, that you've seen over the past year in our results today. Other key factors driving our performance include the many competitive advantages that we have that differentiate us, as well as several structural shifts, some near-term recovery tailwinds, which you'll remember we discussed at our investor day. A critical competitive advantage is our global premium customer base, which is, at scale, unrivaled in the industry. With millions of high-spending, super-prime, loyal consumer and business customers across generations, and geographies. Importantly, millennials and Gen Z consumers are a large part of our existing customer base and our fastest growing age cohort, making up 60% of all new consumer card members we're acquiring and around 75% of new U.S. consumer platinum and gold card members. Our new customers have excellent credit profiles, are highly engaged in the premium benefits that come with American Express membership, and are spending more from the start of their relationship with us than previous newcomers. giving us a long runway for growth. In fact, spending by this age group grew 48% in the second quarter, significantly outpacing other generations. Our momentum is also being aided by several structural shifts, which we believe give us significant opportunities to sustain our growth across all lines of business over the longer term. These include the growth of the premium consumer card space around the world, the ongoing increase in online commerce and digital engagement among consumers, consumers, the strong pace of small business creation, and the acceleration in digitizing of commercial payments. Finally, in the near term, we're benefiting from recovery tailwinds in our businesses outside the U.S., in the large and global corporate space, and in travel and entertainment. The travel rebound in particular has been faster and stronger than anyone expected. Total T&E spending exceeded pre-pandemic levels in April for the first time. It was at 108% of 2019 levels for the quarter. led by strong growth in global consumer and SME spending, and a significant uptick in large and global corporate travel. We don't see demand in the T&E categories declining significantly anytime soon. Based on the strength of future bookings coming through our consumer travel agency and the trends our partners in the travel industry like Delta are experiencing, particularly in the premium space. Of course, we are wary of the uncertainties in the current economic environment and the impact it's having on our business. The historically low unemployment rate is a positive factor, as it's helping to drive our strong credit metrics, and we continue to see no significant signs of stress in our consumer base. Inflation is a bit of a mixed bag. It's a modest contributor to our strong growth in volumes, but inflation, when combined with low unemployment, also puts pressure on operating costs. For example, like everyone else, we're seeing intense competition for the best talent. But because our colleagues are a key driver of our success, we're continuing to invest in talent, which is having an impact on our operating Looking forward, as I've emphasized many times before, we run the company for the long term, and our investment strategy is grounded in this principle. As we sit here today, we have an abundance of great opportunities, and we will continue to make our decisions with a longer-term view like we did during the pandemic. That means we will continue to invest at high levels in those areas that will drive sustainable growth, including our brand, value propositions, customers, colleagues, technology, We remain confident that the successful execution of this strategy will position us well as we seek to achieve our long-term growth plan aspirations of revenue growth in excess of 10% and mid-teens EPS growth in 2024 and beyond. Thank you, and I'll now turn it over to Jeff.