All right, everybody. Welcome back. We have with us right now American Express and the CFO, Christophe Lekayek. Thank you so much, Christophe, for joining us.

Thank you for having me.

Absolutely. So there's certainly a lot to double-click on after earnings, but first, I just want to ask how the Amex consumer is doing and what you continue to observe as major drivers of spend acceleration. And just to frame this, you did see Billings' growth accelerate in the second half of 2025 versus the first half. Perhaps talk about the health of the American Express consumer and the sensitivity to spend to factors that may not be relevant outside your cohort, like stock market performance.

So it's a pleasure to be back here, especially with the weather in New York. So thank you for having me. So the spend has been very strong and very consistent. during the year, between 7% and 8%. I'm talking global spend. And as you pointed out, in the second half of the year, we saw a little bit of an uptick, which is always a good thing to see. But in general, we see a lot of strength, a lot of confidence in our customer base. Travel and entertainment spend was strong. And when you look at, you know, we double-click on the travel and entertainment, front-of-cabin spend was very strong at 9%. And, you know, in lodging, lodging with luxury, you know, properties was also very strong, up 12%. And if you look at, in consumers in particular, in U.S. consumer, we ended the year in a very strong position. We talked about their holiday shopping season, which was up 9%, so very strong performance. And when you actually look at the platinum card members, like the biggest, I would say, product we have, it was up 12% during the holiday shopping season. So a lot of strength and a lot of consistency there. I probably don't need to talk much about the credit side, like the balance sheet of the consumers, but for our customers, it's incredibly strong, very low write-off rate, very low delinquency rates. and very stable rates as well. So, you know, all in all, we are blessed to have such a strong, stable, confident customer base, which is, you know, which is the core of our financial performance. Because when you get the spend going, when you get the credit under control, everything else follows. And we also have a customer base that loves premium experience. I was just talking about traveling at the front of the cabin. They are happy to pay a fee. We've seen the fee performance. We're probably going to talk a little bit about it as well, performing really well. So, you know, very strong, you know, performance that is providing a ton of support to our business model.

So before we dive into some of the specific metrics and growth drivers at American Express, I just do want to ask you about something that investors have been talking about recently. You've been asked about the 10% rate cap, which doesn't seem like it's going to happen, but you haven't been asked in a public forum about the Credit Card Competition Act. Obviously, you're not party to this, but what is your view here in terms of potentially having the opportunity to be the second network on the back of more cards? In the event this becomes reality, does it really have an impact on your business, given your premium economics and premium slant?

So our position on the Credit Card Competition Act is neutral, like we're net neutral. The way to think about it is that this is going to be applicable to the four-party networks, and the very vast majority of the volume that go through our network is actually closed-loop transactions, right? where we are the issuer of the card, we are the merchant acquirer, and we clear and settle the transaction through our network as well. So this doesn't impact us. In terms of what it means to our business, it's really hard to say because there are really conflicting messages here or objectives. On one hand, the issuers will pick a second network that will give them as much economics as possible. On the other hand, the merchants will want the ability to actually steer the transaction towards the network that has the best economics for them, which is the opposite of what the issuers are trying to achieve. So it's very hard to see where this is going to land. And for us, it's very hard to kind of project what it means exactly. So we're not expecting much in terms of impact to our business. And as I said, we are net neutral on that CCCA.

So let's go back to your business. You know, hot topic during the call. You know, Steve did say, focus less on the new card acquisition number and more on the revenue side, especially given that you focused your marketing dollars to fee-paying cards versus something like cashback cards. You talked also about the seasonality of marketing spend. The reality is that given that you're considered a growth company, investors will probably continue to focus on new card acquisitions. So how should we think about the deceleration that we saw in new cards acquired in Q4 and the trajectory going forward?

Yeah, so we were definitely a little bit surprised with the number of questions we got on this. So we thought it would be useful to share with you a bit more information. So Amanda is going to project her slide here. Hopefully you can all read it. So here's what the slide is telling you. First, if you look at the bottom of the slide, I'm going to take the slide as well because my eyes are not as good as they used to be. The numbers at the bottom here represent the new cards required. So these are the numbers that were on the earnings slide and that you saw and that generated these questions. You can see that in Q4, there is this sequential decline from Q325 to Q425 that generated those questions. If you look at what happened in the year before, we also had a sequential decline. This is a way for me to say that the marketing programs that we run are not linear. They're not going to produce always the same outcome. And we spend a bit more, we spend a bit less, we have limited time offers, or we don't have limited time offers. We have limited time offers for a month or for three weeks. So you should not expect these numbers to always be the same. But the bigger message is actually in the line. What I wanted to show you here is the average fee paid per account that we acquire. So there's a bit of a nuance. The numbers at the bottom are the number of cards, and the fee that we are showing on the line is the fee per account. The account includes the basic card, if you want, and supplementary cards that typically card members have. So on an account, you have all the cards of the family if it's a consumer. You can see here the big increase that we saw in Q4. And it's very rare in our business, given the scale and given the number of consumers we are dealing with, to see that kind of discontinuity. And that kind of discontinuity happened because of two things. One, there was a lot of demand for fee-paying products, and especially for the platinum card, that lifted the average fee paid per account. The second thing is that to meet that demand, as Steve explained on the call, we actually shifted resources, dollars, talent, technology, leadership time, towards meeting that demand on the platinum side. And it did exactly what you see on this page. It lifted for the entire U.S. market the average fee per account. What you see on the right as well is a metric that I think we've used in the past, but as a rule of thumb, a platinum account spends about 10 times what a blue cash everyday account spends. So if you put yourself in our shoes here, when there's a lot of demand for platinum, we know that not all cards are created equal. So our priority is going to be to meet that demand, shift the resources, and go after this platinum applicants. So if you take a step back, what's the meaning of all of this? First, you should not expect that every quarter we're going to have the same NCAO is going to go up. It's going to be a function of our marketing programs. But more importantly, not all cards are created equal, and we're not in the job of trying to maximize the number of new calls acquired. We are in the job of maximizing the shareholder value, attracting fee-paying card members, very engaged card members who are going to pay a lot more than, say, blue cash every day. And that's the objective function that we have in our decision models, whether it's marketing, new account, financial models. And that's the reason why we ended up in this situation where you have a sequential decline in terms of new cars acquired, but this is more than offset by the cars are paying a much higher fee, and we know that the spend on these cars is going to be much higher. So I like the 1.3 million a lot better than the 1.5 million cars that we got in Q3.

Well, especially given that slope in terms of the average fee per new account acquired. I think this is a good segue to talk about the Platinum Refresh and unpack that strong start that you mentioned on the call. Maybe if you could provide us with more details on what you're seeing around demand, engagement, and other metrics you're tracking. And, of course, I do have to ask for the investor base, is there any way to quantify the new cards acquired in the first few months of the refresh? And if not the number, maybe just compare it to either the last platinum refresh or the more recent refreshes of gold and the Delta co-brand.

So at a high level, so we have a ton of metrics that we're analyzing every week and that I see, and we compare on a ton of metrics. But at a high level, the platinum card, this refresh, is more successful than what we saw with gold or what we saw with Delta. We see a lot of demand. We see a lot of engagement. Remember that what we try to do when we refresh the product is first, generate demand. Second, generate efficiency for that demand. Third, drive engagement, i.e. spend, especially with the back book. And as we reprice that back book, make sure that we maintain a very high retention rate. So what are we saying? In terms of acquisition, I just talked to you about it. The acquisition is very strong, and it's strong enough to actually change and bend that curve in a very visible way. In terms of efficiencies, if I look at over the last two years, some of the lowest cost per account were achieving Q4. So we're definitely generating efficiencies there as well. And we have started repricing the back book in January. And we're seeing the retention rates are already incredibly high. like 99% for the consumer card and something in the range of 98% for the small business card. So it's really hard to kind of like improve those numbers, but we're saying that those numbers are either in that range again this time. So when I take a step back, that product is performing really, really well. What I will say as well, because that was an objective function for us, is you know that when we think about cars, we think about membership. and we want to provide surround sound of benefits and services and access to our call members. So what we're doing is to measure how they're engaging with those servicing. We know that the more they engage with those servicings, the better it's going to be for us in terms of loyalty, in terms of consolidating their spend with us or their borrowing needs with us. And what we're seeing is beyond our expectations or our projections, to be quite honest. To give you a few numbers, in Q4, we saw an increase of 30% of our travel bookings, and typically year-over-year increase. And typically Q4 is actually a quiet month. We saw a 30% increase, and we attribute that to the new platinum value proposition, as well as the travel app. When you look at Resi, for instance, U.S. consumer spending at Resi restaurants across the United States, it was up 20%.

Guilty.

Thank you for that. So where I'm going with all of this is that the product is working exactly the way we wanted it to work. And the engagement we're getting is incredibly strong. And so our job is just going to keep that momentum going and engage with the current members. And at the end, we're confident that that will generate all the great outcomes, financial outcomes that we model.

So speaking of financial outcomes, everything that you have just discussed really goes back to what you have been saying for a long time, which is the premiumization of the experience of the product. Can you remind your investor base how that's been playing out in your financials already?

So we've always been a premium brand, but when Steve became chief executive officer, he really focused us a lot more on premium products, premium experience, cadence of product refreshments, and that's exactly what we've done. And that was powerful enough to bend the growth curve and contribute to the very strong revenue growth metrics that you've seen. So the first outcome that you see when you focus on those premium products is you see that card fee line that keeps going up. It's an amazing performance, right? I love time series. And so when you go back to pretty much the time of the decision, 2018, 2019 to now, this card fee line has been growing at a CAGR of 17%. It's very hard to grow anything by 17%, let alone to do it over such a long period of time. And as you know, we're guided towards mid-teens. We plan on exiting actually on high teens at the end of next year. We are right now at 16%. We're going to end the year around high teens. So you see the card fees first. The other thing that you see with that premium focus is on the credit line. The credit numbers are not only best in class. The distance from our peers has increased as we focus on more premium card members. And so it is quite remarkable. You look at the delinquency rate of American Express over the last two years, eight quarters. It was like 1.37 of the eight quarters. And the eighth quarter, when it was not 1.3, it was 1.2. So it's incredibly low, very stable, completely within expectations, and the distance to our peers is growing. Now, what you see as well in terms of the premiumness of, you know, how the premiumness is filtering through our economics, you see it through the VCE line. premium products have a vce ratio that is higher than the blue cash every day and we have shared with you those numbers but as a high level or a rule of thumb a blue cash every day vce ratio is in you know in the range of like 25 and for a premium card it's much higher and if it's a premium card co-branded it's even higher it could be as high as 60 so as the portfolio is getting more and more premium, that VCE ratio is actually drifting up a little bit. And that's the fundamental source why this VCE ratio has an upward bias.

And, you know, we'll unpack that in a second. I just want to finish up the conversation on Platinum. You know, you also just wanted to unpack something that you had said on the call and just now in terms of driving an acceleration in card fee growth to high teens by the end of this year. Could you walk us through how long that tailwind is typically for a refresh? And to your point, I mean, 17% CAGR for a very long time. It's very tough to achieve in financial services business. Additionally, if your focus is on originating more fee-paying cards, could that high teens growth sustain for longer than a typical refresh cycle?

So, just as a reminder, the way it works is that we announced the new platinum value proposition in mid-September. From then on, all new card members, all applicants were on the new price point. For the back book or the tenured card members, we waited until January to start the repricing. And so we are just starting repricing that back book. And that's where the biggest financial impact is, right, in the installed base of PlatinumCard members. We're starting in January, and we amortize the fee over 12 months, as you would expect. It's an annual fee. So it would take us 12 months to actually reprice the entire back book. So there is a bubble, if you want, of incremental fee that will find its way into the P&L, and that's why you see this acceleration in the back end of the year. The bubble will be at its peak in Q4 when you're going to have the entire portfolio on the new price point and you haven't started lapping the increase. So it will pick up in terms of contribution in Q4 and then it will moderate in 2027. Now, to your question in terms of like, Can it accelerate the growth any further? The answer is, to your point, very hard to grow anything by 17%, 18%. And right now, we are at the tail end of the price increase that we did with our gold card and with the delta card. So, you know, if you want, that lifted and supported that very strong growth rate, and you have platinum now that's going to replace gold and delta in terms of, you know, contributing to that very strong momentum. So, you know, the guidance that we gave, I think, is still the best number that we have for now, and it's to start the year in that 16 where we ended Q4, and you should expect a bit of an acceleration towards high teams.

Thank you, Christophe. You continue to see stable growth and balances while maintaining the excellent credit quality that you had talked about just now. Could you provide an update on your strategy in terms of growing lending within the premium customer base?

It always seems strange to talk about premium and lending. It feels like an oxymoron, right? And it is surprising, but a lot of premium, a lot of platinum card members actually do have revolving needs. It's different kind of revolving needs, and this is where we innovated in that space to meet those needs. Specifically, there are two products. One plays a much bigger role, but I need to mention first Planet, where you can go in the app, select the transaction, and transfer that transaction onto an installment plan and pay over several months. But the biggest innovation, which has been driving a lot of the balance growth, Actually, in 2025, half of the balance growth were attributable to this pay-over-time feature, which is a revolving capacity that is attached to the painful products. So you have a platinum card, but we give you a revolving capacity if you want to. And we do see a lot of card members use that capacity. They use it for different reasons than a blue cash everyday card member, for instance. We see when we analyze what are the reasons, the triggers that get a platinum card member to actually revolve some of their balances. We typically see a big spike in their spend. They buy the airline tickets, for instance, for the family to go somewhere. And they don't want to pay in full the balance at the end of the month. And so what they do is just like they're going to revolve it over a few months. And it's that pay-over-time feature that has been incredibly successful and that has generated, as I said, half of the balance growth last year. And the good thing with that, outside of the fact that it meets the borrowing needs of our card members, which we care a lot about, the good thing with that is that because these balances are attached to a very premium card member base, their credit performance is incredibly strong. And it's one of the biggest contributors to putting downward pressure on our credit metrics. The very reason why those credit metrics are so powerful and so strong is because there is this positive selection that happens in the portfolio, especially with a platinum card. So it's core to our business model, and it's been an evolution. We used to separate the painful products and their credit cards, including in our disclosures. And you've seen us more and more blend those two together. And you should expect us to do more of that because our con members are blending those two. You see con members being a painful con member for several years, and one day they move into revolving status. So because I think it's easier for you and for us to manage those balances if we aggregate painful and revolving balances, that's why we evolved our disclosures that way.

Thank you for that. Let's talk about growth in international, which has been exceptional. Maybe talk a little bit about the drivers for growth here and, again, the sustainability of these drivers.

So, yes, the opportunity in international is incredible for us. It's a major source of growth. It's not only a source of growth. International is accretive to pretty much every metric. If you look at the credit metrics, if you look at the products, the average card fee paid, there's a lot of good things that is happening in international. What we're doing in international is the same thing as what we're doing in the U.S., focusing a lot on premium, focusing a lot on younger card members. The fastest growing segment in international is the Gen Z and Millennial. That cohort is growing at 20% in 2025, the equivalent, or in Q4, 2025. The equivalent number for the U.S. is 15%. So if anything, there's even more momentum towards fee-paying products in international and younger card members. And what's supporting this outside of like fantastic products and great execution? There are two things in international that are adding to the momentum. The first is that we're starting from a lower base. Our market share is about 6% across the big markets. So it gives us a long runway for growth. The second thing is that there's still, and I'm sure many of you travel overseas as well. There's still a lot of progress that we need to make in terms of coverage. We now have about 170 million merchants who welcome American Express, but we need to grow that number further. And international is benefiting from that. A big growth in terms of the number of cards and also the growth coming from incremental coverage. We are parity coverage in the U.S. We're not at parity yet in international. So the combination of those two is a big source of growth for us. And to your point, there's a lot more runway for us.

So switching topics, you acquired the center, which could be launched by mid-year. And for those of you that are not familiar, should offer your commercial services clients integrated expense management, there's clearly a refocus on this acquisition, you know, given Brex and Ramp and the former's acquisition by Capital One. Is there any way to compare and contrast the technology at center versus these large peers? And do you expect this to drive new commercial card acquisitions as well as increasing retention? You know, when we think about product innovation

and American Express, we always start with what is it that our card members want. And just like when I was talking about lending, the reason why we do lending is because our card members want lending. For the SME population, expense management is also a big need. It was not the case five, six years ago. It is now, and therefore it's important for us to have a solution there. I will remind you, though, before I get to center, I will remind you that we are by far the biggest issuer in that space with $400 billion of credit card spend, which is sometimes hard to compare with some of the fintech that you mentioned because they combine credit card spend as well as like ACH and other like debit spend. But for us, credit card spend is about $400 billion. dollars. So in their, you know, back to the con member needs, when we segment our SME population, very clear that for the smaller small businesses, there is not a need for expense management, at least yet. But for the middle market segment, the bigger small businesses, if you want, there's definitely a need. That was rightly so surfaced by some of the fintech that you just mentioned. When we realized that, we looked at what was the best option for us. Is it to build our own solution or is it to acquire a company that has already built a solution there? And we came to the conclusion that it would accelerate the development if we were to buy a company, and we ended up acquiring Center. And we're working really hard on the integration as we speak, and there are hundreds of colleagues at American Express, if not thousands, that are, you know, connecting their center value proposition around budgeting cards, controlling the spend by industry, the approval process, like all the things that you expect from expense management to our American Express infrastructure. And as Steve said, you should expect us to go to market in 2026. We don't have a date yet, but it will happen later this year, so stay tuned.

Pivoting to expenses, another hot topic on the earnings call. Of course, you noted expectations for VC expenses to be 44% of revenues in 2026. I'm going to have to rephrase this question, don't kill me, Cardick, because of what you just said about the premiumization of the portfolio. You know, is there a trend line here that's more secular rather than refresh-related? Because the way investors have contextualized that 44% is related to the refresh. But then you said this, you know, premiumization is going to continue. And so, you know, how should we think about that 44% as we think about, you know, further out?

So, yes, the big force that is at work here is the premiumization of the portfolio. And that's what lifting up that VCE ratio. But, you know, back to your previous question, there's a lot of good things that happen when you have a premium portfolio. And we talked about the card fee, we talked about engagement, loyalty, the credit performance. So you can't look at VCE in isolation from the rest. I know that the ideal scenario here would be that VC would go down and the growth rate would go up, but that's not possible. And you're not going to get a premium portfolio unless you actually have premium value proposition and therefore it comes to cost. The other component here for you to really understand well is the fact that a big driver of that VC ratio is the cost of rewards, so it travels with spend. So it's a bit of a hedge that we have in the P&L. When spend goes up, so is the reward cost. And when spend goes down, say, because of an economic downturn, you should expect those expenses to come down as well. So it's very much why we call it a variable card number engagement expense. So in the case of platinum, you see a step function increase because it's the largest product we have, platinum, in the U.S. We refresh two products, the consumer one and the small business one, so a very large part of our portfolio. That's why you see a step function increase in the VCE ratio. But that is not going to come down because I hope and I expect that the platinum card is going to keep being very successful, and therefore you're still going to have this mixed impact on the VCE over time.

So before I move on to the next question, I do just want to remind the audience that if you scan the QR code in some of your UBS conference materials, you can type in a question. It's going to pop up in this iPad for me to ask Christoph, or we also have mics around the room in case you want to do it the old-fashioned way. So on the call, you also talked about reaching $5 billion in annual tech spend. How do you see your tech investments, especially those related to AI, impacting productivity and operating expense levels?

Yeah. Maybe before I address this point, I just wanted to make another point. The reason why we share that number during the Q4 earnings call is because with VC going up, one other question that we get from investors is like, so how do you balance your mid-team CPS growth? What is coming down, right? And it's super important to understand the efficiencies that are generated on the operating expense base. And I also thought, and on the marketing line, I wanted to also to make sure that investors understand that those efficiencies are not coming at the expense of investing heavily in technology. That's why we separated technology from other operating expenses. And you saw what's happening here, right? OPEX as a ratio to revenue just in the last three years went down from 26% to 22%. So it's a four-point of revenue margin improvement on the back of operational efficiency and operational leverage. Now, back to your question, how do we create this operational leverage? Technology is probably the single biggest contributor. There are many others, but we obviously take advantage of our scale. We are very thoughtful about managing our own expenses and very disciplined about investing in these areas. But technology plays a foundational role to a lot of these expense efficiencies. I'm going to give you some examples. We have invested a lot of money into this app or the platinum experience in the app. It does a few things for us. One, we've seen that it generated more revenue through a higher engagement in terms of high-yield savings account involvement, which drives our interest expense down. We also see with the technology investments that we're making, the cost of acquiring those card members. I was referring to the fact that in Q4, we saw some of the lowest cost per account that we had experienced over the last two years. A lot of it can be tracked back to the value proposition, but some of it needs to be attributed as well to the technology investments that we made in our marketing infrastructure and new account origination systems. An area where we see a lot of efficiencies as well, and Gen AI will add even more, is in the servicing area. here. A big expense base for American Express because it's at the core of the value of American Express and our DNA servicing. As you know, when card members call us, we pick up the phone and we do everything we can to help them out. We are seeing now that the cost, that the number of calls per account is coming down. And it came down significantly over the past few years. It's a function of either all the development that we did in the app where people can And card members can self-serve their needs. You can dispute a transaction, for instance, online. You can freeze your card if you lost it. You can request a new card if you want a new card. You can upgrade if you want to do it as well. So a lot of the servicing that used to be on the phone is now happening directly online. And that is generating a lot of efficiencies, combined with the fact that our focus on younger card members naturally brings these younger card members to a web or in-app experience.

So the combination of those two

is pulling and pushing our expenses down, displacing expenses, and that's the reason why we're investing so much in technology, I would say. And we're going to keep investing. We have a lot of exciting stuff in the pipeline coming up in terms of AI.

Well, the more millennials and Gen Z acquire, I mean, they're just digitally native, right? they may not even want to call. That's right.

But you know what? Here's the other thing. To give you an example, in terms of the number of calls or interactions, when you look at the Gen Z, 63% of their interactions with us is online, while it's only 13% for baby boomers.

Oh, interesting.

But the best part is when you measure satisfaction, their happiest cohort is actually the Gen Z and the millennials. So they go online, they self-serve, and the level, the satisfaction with the service is even higher.

That's great. So maybe the last question before I turn it over to the audience. Your stock is trading. I haven't actually looked at the...

It's up today.

Yes, it's up today. A little above 20 times the midpoint of your EPS guide for 2026. So obviously it would be below that in 27 if you continued to grow EPS in the mid-teens. In the past, you've talked about running a company with accelerated growth and obviously above-peer profitability metrics, and that deserves a valuation commensurate with that profile. So how do you weigh valuation when thinking about buying back stock?

So we always looked at it, and when I look at, you know, backwards and look at our buyback decisions, I'm very pleased with the returns it generates a lot better than the cost of capital. But if you take a step back, if you buy an American Express share, you get a slice of an incredible business that is, at the same time, growing at a fast rate. We talked about the last three years, 10%, 11%. We guided towards 9% to 10% for the coming year. It's growing at a fast rate. It's also generating a lot of earnings. The combination of those two is incredibly powerful. And you had a third one, which is that a return on equity of 36%. So we generate a lot of earnings. And we are very disciplined and thorough with our capital management policy. And, of course, you know, from time to time we make an acquisition. We talked about Center. We talked about Resi. And, you know, I'm sure we're going to do some more. But we are very diligent at, you know, returning this capital back to the shareholders and investing in our own stock because when I look at the quality of the card member base and the momentum we have, the incredible strength of their credit profile, when we stress test that business through an economic downturn in the context of CCAR, we get fantastic results. It gives me a lot of confidence in the compounding aspect of our business and the ability to generate, per our vision, mid-teens EPS growth, amazing return on equity, and return a lot of capital to shareholders. So we are planning to buy back more shares, and I'm pretty sure that we're going to keep doing it because I believe that the stock is just going to go up further.

Great. No questions on the iPad. Any questions in the room from the audience, old-fashioned way? All right. Let's end it in that note. Thank you so much, Christophe. Thank you for joining us. Thank you.