American Express Company

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q4 2022 earnings call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question, please press star, then 1 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by pressing star, then 2. If you are 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 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 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'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. Good morning, everyone. Thanks for joining us today. It's great to be with you to talk about our 2022 results and our outlook for 2023. As I go through our results, I'll tell you why they strengthened my confidence in our plan to generate strong growth over the long term. A year ago, we introduced our growth plan, which provided a roadmap for delivering annual growth rates for revenue and earnings per share at levels that are higher than the strong growth rates we were delivering before the pandemic. Our results over the last four quarters demonstrate that our strategy is clearly working. We exceeded the full-year guidance we laid out in our growth plan for both revenues and EPS, and we did so against the mixed economic environment. Revenues, which reached all-time highs for both the quarter and the year, were up 25% for the full year, exceeding the 18% to 20% guidance we started the year with, And earnings per share of $9.85 was well above our guidance of $9.25 to $9.65. The momentum we saw through the year in card member spending, engagement, and retention continued in the fourth quarter. Fourth quarter bill business reached a record quarterly high of $357 billion and was up 25% for the full year, demonstrating our continued ability to acquire, engage, and retain high-spending premium card members. Customer retention and satisfaction remain very strong. In addition to strong internal metrics, we were recognized once again by our customers for providing industry-best products and services, ranking number one in customer satisfaction in both the 2022 J.D. Power U.S. Consumer Credit Card Study and the U.S. Small Business Card Study. The investments we've made in our value propositions continue to attract large numbers of new premium customers. We acquired 3 million new card members in the fourth quarter, even as we increased our already high credit thresholds through the year. For the full year, new card acquisitions reached a record level, growing to 12.5 million, and nearly 70% of our new accounts acquired are on our fee-based products. Millennial and Gen Z customers continue to be the largest drivers of our growth. representing over 60% of proprietary consumer card acquisitions in the quarter and for the full year. Credit metrics remain strong, supported by the premium nature of our customer base, our exceptional risk management capabilities, and the thoughtful risk actions we've taken for the year. Looking ahead to 2023 and beyond, let me tell you why these results increase my confidence that we're positioned to deliver on our growth plan aspirations. First, We're in a great business. We operate in the most attractive segments and geographies of the fast-growing payment space, as highlighted by our leadership positions with premium consumers, including millennials and Gen Zers, small and medium-sized businesses, as well as serving the largest corporations in the world. We bring to this space a number of advantages that are very difficult for our competitors to replicate. These include our brand, our unique membership model, a premium global customer base, and an integrated payments model. Forming the foundation of these advantages is our talented, dedicated colleagues who deliver unparalleled service to our customers. Put together, the marketplace opportunities we see and the competitive advantages we can leverage create a long runway for growth. We intend to capture these opportunities and build in our momentum by continuing to invest at high levels in several key areas. Continuously innovating our consumer and SME products refining our powerful marketing and risk management engines, and capturing our fair share of lending, growing merchant acceptance with a particular focus outside the U.S., and expanding partnerships to drive customer value across the enterprise, continuing to introduce new digital capabilities that deliver seamless, intuitive customer experiences in their channels of choice, and expanding into adjacencies that reinforce our core, such as new lifestyle and financial services for consumers and SMEs. which adds more value to our membership model. All this investment happens while continually focused on gaining efficiencies in our marketing and operating expenses. As we've demonstrated consistently over the past two years, executing this investment strategy builds scale, which fuels a virtuous cycle of growth that starts with a high spending, highly engaged premium customer base. These premium customers attract a growing network of merchants and partners who add more value to our membership model, which in turn enables us to attract more premium customers who attract more merchants and partners, which creates more scale. This scale enables us to generate more investment and operating efficiencies in our membership model, making it more difficult for our competitors to catch up. So what does this mean for 2023? Our plan for this year is built on continuing our investment strategy in the areas I mentioned. while factoring in the blue chip economic consensus for slowing macroeconomic growth. And as always, we have plans in place to pivot should the economic environment change dramatically. This translates into 2023 guidance consistent with what we originally laid out in our growth plan last year. Specifically, we expect revenue growth of 15 to 17 percent, which is higher than our long-term growth plan aspirations, and EPS of $11 to $11.40. In addition, we plan to increase our quarterly dividend on common shares outstanding to 60 cents a share, up from 52 cents, beginning with the first quarter 2023 dividend declaration. To sum up, our 2022 performance shows that our strategy is working, and based on our performance to date and what we see for 2023, I'm even more confident in our ability to achieve our aspirations for double-digit annual revenue growth and mid-teens EPS growth in 2024 and beyond. I'll now turn it over to Jeff to provide more detail about our performance. As always, we'll have a Q&A session after Jeff's remarks.