American Express Company

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 that 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 0. 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, Mr. Kartik Ramachandran. 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 Squeary, Chairman and CEO, who will start with some remarks about the company's progress and results. And then Christophe Lecayac, 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 Christophe. With that, let me turn it over to Steve.

Good morning, and thanks for joining us. As you saw in our earnings release issued a short time ago, we reported strong second quarter results and raised our EPS guidance for the full year, based on the continued momentum we're seeing in our core business. Revenue in the quarter reached an all-time high, and earnings grew 44% year-over-year, or 21% after excluding the gain of 66 cents we realized from the sale of a certifier. The strong performance of our core business year to date and our expectations for the balance of the year will enable us to increase our investments in marketing and other strategic areas that drive our growth without using any of the proceeds from the certified sale, while still delivering exceptional earnings results. In fact, we now expect to invest around $6 billion in marketing this year, up about $800 million versus last year, all of it funded from the results of our core business. As a result, we are raising our EPS guidance range for the full year to 1330 to 1380, up from 1265 to 1315 previously, and we continue to expect revenue growth in line with our 9% to 11% range for the year. As we've seen through the first half of the year, our core business continues to generate strong momentum, even against the backdrop of a slower growth environment. The continued momentum we're generating reflects the earnings power of our business model, which is driven by several interrelated factors, including first and foremost, the quality of our loyal premium customer base, plus the increasing scale of our business, a well-controlled expense base, the success of the strategic investments we're making to enhance Amex membership, and our talented colleagues around the world. Our continued strong performance starts with our premium customers, who are high-spending, long-tenured, and have excellent credit profiles. And we continue to attract large numbers of high-quality premium customers with our superior products as seen in the consistently strong new account acquisitions and 24 consecutive quarters of double-digit growth in card fee revenue we've delivered. Next is scale. Over the past few years, the scale of our business has grown significantly. Compared to year-end 2021, revenues have grown by nearly 50%. Card member spending has increased by almost 40%. Cards in force globally have risen by around 23 million or about 20%. And a number of merchant locations on our network has grown by over 30 million or nearly 50%. This increased scale drives growth and gives us significant flexibility in running our business for the long term. At the same time, our operating expenses are growing well below revenues as we drive efficiencies across the business. The combination of our increasing scale and our well-controlled expense base produces significant operating leverage that generates more investment dollars we can inject into our business. Another key factor driving our momentum is the success of the strategic investments we've been making in critical areas like marketing, value propositions, technology, control management capabilities, and talent to sustain our growth. And to keep the momentum going, we're continuing to invest in enhancing our unique membership model through ongoing product innovations and new capabilities and benefits. For example, as we execute our strategy of regularly refreshing our products, we focused on embedding additional value in our premium cards to make them highly attractive to customers across generations and geographies. This enables us to add large numbers of new premium card members to our customer base. drive greater engagement with existing customers, and price for the value we add. We are on track to refresh approximately 40 products globally by the end of the year. As part of that number, we look forward to announcing our Refresh US Consumer Goal Card in the coming weeks, adding to the nearly two dozen refreshed and updated products we've announced through the first half of the year. We also continue to add new capabilities and benefits through both internal innovation and bolt-on acquisitions. For example, our Resi dining reservation platform has seen significant growth since its acquisition in 2019, and our planned acquisitions of Tock and Rome will further expand our dining portfolio, giving our customers access to more great restaurants and increasing the digital offerings we provide to restaurants and merchants in the food and beverage industry. Finally, our talented colleagues across the company are the engine that drives our growth. Their creativity, determination, and deep commitment to providing the best customer experience every day is what has made American Express what it is today and will continue to make us successful in the future. The combination of all these factors is what drives our premium business at a scale that can deliver superior earnings on a sustainable basis. The power of our unique business model and the ongoing momentum we're seeing in the business driven by our loyal customers and dedicated colleagues gives us confidence in our ability to achieve our expectations for the year and our long-term aspiration for the business. With that, I'll now turn it over to Christoph.