Q3 2024 American Express Co Earnings Call

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Operator: Landing by, welcome to the American Express Q3, 2024 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 Q. You may remove yourself from the Q at any time by pressing star, then two. If you are using a speaker phone, please pick up the handset before pressing the numbers. Should you require assistance during the call, please press star, then zero.

Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2024 earnings call.

Speaker Change: 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 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.

Speaker Change: If you are using a speaker phone, 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 Conduct Relations, Mr. Kartik Ramachandran. Thank you, please go ahead.

Operator: As a reminder, today's call is being recorded.

Donna: I would now like to turn the conference over to our host, head of Investor Administration, Mr. Cartic from a Chondron. Thank you. Please go ahead.

Kartik Ramachandran: 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 gap financial measures are included in this quarter's earnings materials, as well as the earnings materials for the prior periods we discussed.

Kartik Ramachandran: 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 our subjects to risks and uncertainties.

Kartik Ramachandran: 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-gap financial measures.

Kartik Ramachandran: The Comparable Gap 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

Kartik Ramachandran: All of these are posted on our website at ir.americanexpress.com.

Kartik Ramachandran: We'll begin today with Steve's query, Chairman and CEO, who will start with some remarks about the company's progress and results. And then, Christophe Kuyak, Chief Financial Officer, will provide a more detailed review of our financial performance.

Speaker Change: We'll begin today with Steve Squeri, Chairman and CEO, who will start with some remarks about the company's progress and results, and that Christophe Caillec Chief Financial Officer will provide a more detailed review of our financial performance.

Kartik Ramachandran: After that, we'll move to a Q&A session on the results with both Steve and Christophe.

Speaker Change: 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.

Stephen Squeri: With that, let me turn it over to Steve. Good morning, and thanks for joining us for our third quarter earnings call. We had another strong quarter that reflects the steady earnings power of our business model and our continued investments for growth. Our earnings per share on a third quarter with $3.49 and our revenues were $16.6 billion, of 8% over last year, marking our 10th consecutive quarter of record revenues. Based on our performance to date and the strong earnings we're generating, we are raising our full-year EPS guidance to between $13.75 and $14.50, up from $13.30 to $13.80.

Steve Squeri: Good morning, and thanks for joining us for our third quarter earnings call. We had another strong quarter that reflects the steady earnings power of our business model and our continued investments for growth.

Steve Squeri: earnings per share in a third quarter with $3.49 and revenues were $16.6 billion of 8% over last year, marking our 10th consecutive quarter of record revenues.

Steve Squeri: Based on our performance to date and the strong earnings would generate, we are raising our full year EPS guidance between $13.75 and $14.5 up from $13.30 to $13.80.

Stephen Squeri: And we continue to expect full-year revenue growth that is within the guidance range we've provided at the beginning of the year at around 9%.

Steve Squeri: And we continue to expect full-year revenue growth that is within the guidance range we've provided at the beginning of the year at around 9%.

Stephen Squeri: So, good about our performance to date and the ongoing strength of our business and our main confident in our long-term growth prospects. A key reason for my confidence is the sustainability of our product refresh strategy and the growth that is generating across our portfolio. We've already achieved our plan of refreshing 40 products globally this year, and we expect to do several more by year end. As we do so, we're adding value to our offerings by embedding new benefits and services that reflect the financial and lifestyle needs of our existing premium card members and attract new ones.

Steve Squeri: I feel good about our performance to date and the ongoing strength of our business and I remain confident in our long-term growth prospects.

Steve Squeri: A key reason for my confidence is sustainability of our product refresh strategy, and the growth is generating across our portfolio.

Steve Squeri: We've already achieved our plan of refreshing 40 products globally this year, and we expected to do several more by year-end. As we do so, we're adding value to our offerings by embedding new benefits and services that reflect the financial and lifestyle needs of our existing premium card members and attract new ones.

Stephen Squeri: A great example of this is the US Consumer Gold Card. We talk a lot about the Platinum Card and with big reason, but the Gold Card is also a critically important product in our portfolio.

Steve Squeri: A great example of this is the U.S. consumer gold card. We talk a lot about the platinum card and with the degrees. But the gold card is also a critically important product in our portfolio.

Steve Squeri: Gold is a very popular product with total U.S. consumer gold acquisitions currently running at about 30% higher than platinum. It's our number one premium product from millennial and gen Z consumers. With 80% of U.S. gold cards we acquire coming from this cohort.

Steve Squeri: and designing the refresh goal card which we launched in the third quarter. We know that millennials and Gen Z's are especially interested in dining.

Steve Squeri: In fact,

Steve Squeri: These young record members transact almost two times more in dining and make up a higher percentage of users on our Resi restaurant booking platform. Then other generations in our card member base.

Steve Squeri: With that in mind, we enhanced the already rich dining benefits that come with gold card membership. And as we've done with other refreshes, the value of the additional benefits is greatest in the annual fee increase.

Steve Squeri: While it's very early days with seeing strong new account acquisitions and continued high retention levels among existing U.S. gold card members, indicating that our customers see that real value and enhancements we've made.

Steve Squeri: This is a pattern we see when we refresh our products. We had value that resonates with premium customers, and we price for that enhanced value, which results in strong acquisition and retention numbers that drive spending and consistently strong growth in subscription-like fee revenues.

Steve Squeri: The Gold Card is just one example of how dining is playing increasingly integral role in our membership model.

Steve Squeri: Dining is an important category across our premium customer base.

Steve Squeri: In fact, spending on restaurants continues to be one of our fastest-growing, teeny categories in our US consumer business, increasing 7% in Q3, versus last year and growing at nearly twice the industry rate overall since 2019.

Steve Squeri: and with total restaurant and food service spend estimated at 1 trillion in the US, dining represents significant opportunity for us to further differentiate MX membership.

Steve Squeri: This is why we're investing in building out our dining capabilities, first for the acquisition of Resene 2019, and more recently with the editions of Talk and Rome, both of which are closed since we announced them in Q2.

Steve Squeri: We've made significant progress to date. We've successfully scaled resesence, acquiring a company with over 50 million registered users, and in the last 12 months alone, the platform has seated over 350 million diners.

Steve Squeri: We're also embedding resident benefits in several of our value propositions, including the US Gold Court I just mentioned, as well as our US Consumer Platinum Court, and the refresh premium Delta Sky Miles Co-Gran Cords, we announced in February.

Steve Squeri: In addition to the many benefits for card members, Razzi strengthens our membership model and other important ways. It connects our restaurant merchants with high-spending premium customers, while also providing them with state-of-the-art technology platform that helps improve their businesses.

Steve Squeri: Furthermore, Razzi's large user base gives us access to a pool of potential prospects that will enjoy dining, but do not yet have an American Express Court.

Steve Squeri: Our newest acquisitions will expand on the benefits we offer consumers and merchants, driving value for both.

Steve Squeri: Cock Extends Are Dining For Friends With Millions of Additional Users and Thousands More Bookable That Then Use, Including Wineries, Hotels, and Certain Events in Edition 2, in Edition 2 restaurants.

Steve Squeri: With Rome, hospitality merchants can have access to sophisticated integration capabilities across various restaurant management platforms and the ability to enhance live events and stay in the experiences.

Steve Squeri: While the competition is spears in a dining space, we believe our business model advantages, including our premium customer base, the strong merger relationship we have with restaurants, and other hospitality providers, and our membership model, position us well to continue our growth in a important category.

Steve Squeri: As we demonstrate it, the investments we continue to make in our value propositions as reflected in our product refresh strategy and in our capabilities as seen in the example of dining are fueling our momentum. And these are just a couple of examples of why I had remained confident that our long-term growth aspirations are the right ones.

Speaker Change: Thank you and I'll turn it over to Christophe for more detailed look at our performance in the tour.

Christophe Caillec: Thank you, Stephen, good morning everyone. Before going into the details of our third quarter results, I'd like to take a few minutes to step back and highlight the key takeaways from our year-to-date performance.

Christophe Caillec: First, our better model is performing really well. We had another solid quarter of earnings generation with EPS of $3.49. Even as we continue to invest significantly in marketing and technology.

Christophe Caillec: The Spend Environment has been stable over the course of the year, and Revenue Group is in line with our expectations with a year to date FX-adjusted growth of 10%.

Christophe Caillec: We continue to have many more customers to the franchise.

Christophe Caillec: Transaction engagement is deepening and we benefit from our diverse set of customer types, revenue streams and geographies.

Speaker Change: In addition, as Steve discussed, I would focus on continuously refreshing products, is resulting in a maxilleration in our carcassies revenue, which grew by 18% of the squadron.

Speaker Change: And I will focus on premium products, continues to be the foundation of our very strong credit performance.

Speaker Change: We continue to match our workspace with discipline.

Speaker Change: You today, excluding the game from a certified operating expenses of grown very modestly, as we fully leverage the scale and the digitization of our operations.

Speaker Change: This business model is yielding very strong earnings, which is enabling us to increase investments to grow the franchise and also to return excess capital to our shareholders.

Speaker Change: Compared to last year, we reduced the number of shares outstanding by 24 million.

Speaker Change: Turning now to our Q3 spent performance on slide 3.

Speaker Change: Bill Business Group, 6% on an FX-adjusted Basel, continuing the trend of stable volume growth that we've been seeing over the past several quarters.

Speaker Change: and why teeny growth rates are now more in line with what we're seeing on good-and-service suspending. The picture hasn't changed very much since last quarter.

Speaker Change: Our customers continued to deepen the engagement with their Mercury Express car as the number of transactions was up 9% in Q3. This is a function of growth in the number of customers and merchants as well as growth in the number of transactions per customer.

Speaker Change: For instance, transactions per customer are up around 30% from five years ago.

Speaker Change: As you look at the spent trends by segment over the next few slides, I want to highlight a few key points to take away.

Stephen Joseph Squeri: Spender Cross, our S1 U.S. Consumer base continued to be very stable with strong growth from Millennial and Gen Z customers, up 12%. Notably, we continued to see very strong loyalty with this younger cohort, with new customer retention higher than that of older generations. Within commercial services, Spenderoth was up modestly and consistent with where we've seen over the past few quarters. Our fastest growing segmented game disorder is international card services, with Spenderoth of 13%. The breadth of this continued performance is a specialty worth noting. Every one of our five top markets, growing double digits, with all out of the five in mid to high teams. For example, Japan is up 17%, and Mexico's 15% on an FX-adjusted basis.

Speaker Change: Spend across our ASLU-US consumer base continued to be very stable with strong growth from millenial and gen Z customers, up to 12%.

Speaker Change: Notably, we continue to see very strong loyalty with this younger cohort with new customer retention higher than that of older generations.

Speaker Change: Within commercial services, Spengroath was up modestly and consistent with where we've seen over the past few quarters.

Speaker Change: Our fastest growing segment of game disorder is international cut services. We spend growth of 13%.

Speaker Change: The breadth of this continued performance is a specialty worth noting.

Speaker Change: Every one of our [inaudible] in double digits with four out of the five in mid to high teams. For example, Japan is up 17% and Mexico's 15% on the FX-adjusted Basel.

Stephen Joseph Squeri: We also see strong engagement from Millennial and Gen Z customers in international. With the age cohort growing 23%, FX-adjusted and Q3.

Speaker Change: We also see strong engagement from Millennial and Gen Z customers in International, with the age cohort growing 23% FX-adjusted, confused from it.

Stephen Squeri: Let me now turn to lending and credit performance on slides seven through nine. Total loans and card member receivable growth was strong at 10% year over year, and continued to moderate as expected. Long growth was 15% of the score, consistent with you two. Our enhanced lending capabilities, such as spade over time, continue to be the largest contributor to our loan growth. In addition, over 70% of revolving loan growth continues to be driven by tenure customers. Looking ahead, we continue to see a long run wave for growth as we spend our share of land with our premium commembers.

Speaker Change: Let me now turn to lending and credit performance on Flight 7 through 9.

Speaker Change: Total loans and cardboard receivables growth was strong at 10% of your continued to moderate as expected.

Speaker Change: Rome growth was 15% of the score, consistent with YouTube. Our enhancement capability, such as spade over time, continued to be the largest contributor to our lone growth. In addition, over 70% of revolving lone growth continues to be driven by tenure customers.

Speaker Change: Looking ahead, we continue to see a long run wave for growth as we expand our share of land with our premium families.

Stephen Joseph Squeri: While revolving rates have largely built back since the pandemic, we expect to see continued upward momentum all the time as we meet more of our customers' borrowings on our premium products and grow our charts and co-brand portfolios. I will focus on growing lending through our premium customer base, also continues to pay off in the strength of our credit performance. Getting with the rates, we mean very low and in line with our prior quarters, especially taking into account the seasonal downtake we're so into tune. And a ride operates declined to 1.9% of the score. Looking forward, I still expect a modest upward buyers to these rates as we continue to require new customers at elevated levels and increase our share of lending from existing customers.

Speaker Change: While we've all raised a largely built-back since the pandemic, we expect to see continued upward momentum all the time as we meet more of our customers' boreings on our training products and grow our charts and co-brand portfolios.

Speaker Change: I will focus on growing lending through our premium customer base, also continues to be off in the strength of our critical performance.

Speaker Change: Denning with the rates we mean very low, and in line with our prior quarters, especially taking into account the seasonal downtake with so-and-future.

Speaker Change: and a ride of rates declined to 1.9% of the scores.

Speaker Change: Looking forward, I still expect the modest upward buyers to these rates as we continue to acquire new customers at elevated levels and increase our share of the lending from existing customers.

Stephen Joseph Squeri: This quarter, we had about 1.4 billion of provision expense. This includes a reserve bill of 264 million, which was predominantly driven by loan growth, but low and volume growth. The reserve rate was 2.9%, consistent with recent quarters. Taking a step back, this best-in-class credit metrics are a reflection of our strategy. Our product value propositions create a powerful, positive selection effect, which carries through to better credit performance. Our risk management strategies and capabilities widen the margin of safety and ensure profitable growth.

Speaker Change: This quarter, we had about 1.4 billion of provisioned expense. This includes a reserve bill of 264 million, which was predominantly to revive by loan growth, but loan volume growth.

Speaker Change: The Reserve Rate was 2.9% consistent with recent quarters.

Speaker Change: Taking a step back, this best-in-class credit metrics are a reflection of our strategy. Our product value proposition is created powerful, positive selection effect, which carries through the better credit performance.

Speaker Change: Our risk management strategies and capabilities widen the margin of safety and ensure profitable growth.

Stephen Squeri: Focusing next on revenues starting on slide 10. As I noted earlier, we grew total revenues net of interest by 8%. Discount revenue, our largest revenue line, grew 4% versus last year and is driven by the spent transit discussed earlier. Net car fees increased 18% on an FX-adjusted basis, accelerating 2. sequentially, driven in part by the product refreshments. And we continued to see strong demand for our products as we bring new customers into the franchise. With new cars required of 3.3 million in the quarter. I was strong acquisition and retention levels along with our ongoing cycle of refreshing products, continuing to drive sustainable growth in car fee revenue.

Speaker Change: For cuisine next on revenues starting with like 10. As I noted earlier, we grew total revenues net of interest by 8%.

Speaker Change: Discam revenue, I would largest revenue line grew 4% versus last year and is driven by the spent trains I discussed earlier.

Speaker Change: Netcarsies increased 18% on an FX-adjusted Basel, accelerating 2.6, driven in part by the product refreshers.

Speaker Change: and we continue to see strong demand for our products as we bring new customers into the franchise. With new cars required of 3.3 million in the quarter.

Speaker Change: I was strong acquisition and retention levels, along with our ongoing cycle of refreshing products, continue to drive sustainable growth in Kartik Revenue. This strong growth represents a real proof point of the success of our strategy and the continued engagement of our customers.

Stephen Joseph Squeri: This strong growth represents a real proof point of the success of our strategy and the continued engagement of our customers.

Stephen Squeri: Turning to our lending economies on slide 14, net interest grew 17%; net interest income grew 17% on an FX-adjusted basis and continues to moderate, as we previously communicated. Growth in this line is driven by increases in revolving load balances and net yield versus the prior year.

Speaker Change: Turning to our lending economy from flight 14, net interest 17% led interest income grew 17% on an epic adjusted basis and continues to moderate as we previously communicated.

Speaker Change: Groves in this line is driven by increases in revolving low imbalances and net yield versus the prior year.

Stephen Squeri: I'll turn now to our expense performance in Slide 15. I would VCE to revenue ratio remain stable at 41% this quarter. With variable customer engagement expenses up, 10% versus last year. Looking at some of the components of VCE rewards expense this quarter, 10% out-basing spend growth. We are continuously evolving the MR value for position to increase the ease of redemption for our customers and also to maintain the economies of the program. In the short term, those changes to either very small increase in the ultimate rate of redemption, but over time we are confident in the economy, with minimal impact to the VCE ratio.

Speaker Change: I'll turn now to our expense performance in flight 15. I will be seeing to revenue ratio remains stable that 41% this quarter, with variable customer engagement expenses up, 10% versus last year.

Speaker Change: Looking at some of the components of DCE, rewards expense this quarter, 10% out-basing spend-growth. We are continuously evolving the MR value for position to increase the ease of redemption for our common members, and also to maintain the economics of the program.

Speaker Change: In the short term, those changes drive a very small increase in the ultimate rate of redemption, but all the time we are confident in the economics with minimal impact to the DC ratio.

Stephen Squeri: We can continue to invest in our car member benefits to deliver superior experiences for our customers. For example, this year, we've added over three entry new hotels to the hotel collection program, one of the benefits on the goal card. We see that year-to-date bookings on the program are six times higher than five years ago. Marketing expense was $1.5 billion, in line with our run rates so far this year, as we continue to invest at elevated levels versus last year. As I mentioned last quarter, we expect that we're through your marketing spend 420.4 to be around $6 billion as we lean into the attractive growth of the activities available to us.

Speaker Change: And we continue to invest in our car member benefits to deliver superior experiences for our customers. For example, this year, we've added over three entry new hotels to the O'Cow Collection program, one of the benefits on the Gold Card.

Speaker Change: and we see that year-to-date bookings on the program are six times higher than five years ago.

Speaker Change: Marketing expense was $1.5 billion in line with our run rate so far this year, as we continue to invest at elevated levels versus last year.

Speaker Change: As I mentioned last quarter, we've spiked out with three-year marketing spend 420.24 to be around $6 billion as we lean into the attractive growth of the activities available to us.

Stephen Joseph Squeri: Lastly, operating expenses of about 3.8 billion were up 5% versus last year. There is some seasonality to operating expense levels, and we expect to see a slide-up deck in Q4 consistent with prior year's trend. On a food year basis, we continue to expect operating expenses to remain fairly flat year over year, adjusting for the assertive game. Taking the step back, total expenses year-to-date are up about 5% relative to 10% growth in effects that just did revenue.

Speaker Change: Lastly, operating expenses of about 3.8 billion were up 5% versus last year. There is some seasonality to upgrade the expense levels and we expect to see a slide up deck in Q4 consistent with prior years trend.

Speaker Change: On a food year basis, we continue to expect offering expenses to remain fairly flat year-over-year, adjusting for the SRFI game.

Speaker Change: Taking the step back, total expenses year-to-date are about 5% relative to 10% growth in FX-adjusted revenue. This is a reflection of our ability to invest at elevated levels and drive strong expense leverage.

Stephen Joseph Squeri: This is a reflection of our ability to invest at elevated levels and drive strong expense levels.

Stephen Joseph Squeri: Let me now move to capital on slide 16. Our CET-1 ratio was 10.7%, well within our 10 to 11% range, and we return 2.4 billion dollars in capital to our shareholders. This is the highest return included; this capital return included 1.9 billion of share purchases, the highest level in the past two years, and 0.5 billion in dividends. Also, we continue to have a very robust and diverse funding stack at our disposal. Our high yield savings balances grew by 19% year over year this quarter, notably over 75% of balances come from existing car members, though less than 10% of our U.S.

Speaker Change: Let me now move to capital on slide 16. Our CET-1 ratio was 10.7% well within our 10-11% range, and we return 2.4 billion dollars in capital to our shoulders.

Speaker Change: This is the highest return, including, sorry, this capital return included $1.9 billion of shared purchases, the highest level in the past two years, and $0.5 billion in dividends.

Speaker Change: Also, we continue to have a very robust and diverse funding stack at our disposal. Our high yield savings balances grew by 19% year over year this quarter.

Speaker Change: Notably, over 75% of balances come from existing car members, though less than 10% of our U.S. consumer customers are the high yield savings account with us.

Stephen Joseph Squeri: consumer customers are the high yield savings account with us.

Stephen Squeri: This brings me to our 2024 guidance. For the familiar, we expect revenue growth of around 9% within the revenue guidance range we provided at the beginning of the year. We are also raising our U.S. guidance to 13.75 to 14.05 reflecting golden momentum and the earnings power of our business. This represents 23 to 25% year-over-year growth. It is higher than we expected at the start of the year, and above our long-term aspiration of meetings growth.

Speaker Change: This brings me to our 2020s four guidance.

Speaker Change: For the future, we expect revenue growth around 9% within the revenue guidance range we provided at the beginning of the year.

Speaker Change: We are also raising our food year EPS guidance to 13.75 to 14.05, reflecting golden momentum and the early power of our business.

Speaker Change: This represents 23 to 25% year over your growth. It is higher than we expected at the start of the year, and above our long-term aspiration of meetings growth. With that, I will now turn the call back over to Kartik and we will take your questions.

Kartik Ramachandran: With that, we now turn the call back over to Cardiff, and we will take your questions. Thank you, Christel. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just one question.

Kartik Ramachandran: Thank you, Christos. Before we open up the lines for Q&A, I will ask those in the queue to please limit yourself to just one question.

Kartik Ramachandran: Thank you for your cooperation, and with that, the operator will now open up the lines for questions.

Kartik Ramachandran: Thank you for your cooperation and with that, the operator will now open up the line for questions. Operator?

Operator: Operator? Ladies and gentlemen, if you wish to ask questions, please press star, then one on your touchtone phone. You'll hear a tone indicating that you've been placed in Q. You may remove yourself from the queue at any time by pressing star, then two.

Speaker Change: Ladies and gentlemen, if you wish to ask questions, please press star, then one on your touch tone phone. You'll hear a tone indicating that you've been placed in queue. You may remove yourself from the queue at any time by pressing star, then two.

Operator: If you're using a speaker phone, please pick up the hints at before pressing the numbers.

Speaker Change: If you are using a speaker from please pick up the handset before pressing the numbers.

Sanjay Harkishin Sakhrani: When moment, please, for the first question. Our first question is coming from Sanjay Sakrani of KBW. Please go ahead.

Speaker Change: When will it please for the first question?

Speaker Change: Our first question is coming from Sanjay Sakroni of KBW. Please go ahead.

Sanjay Sakhrani: Thank you.

Sanjay Harkishin Sakhrani: Good morning. I appreciate the solid results in what clearly is the software spending backdrop. I'm just thinking about the updated guidance, and as we think about that 10% plus revenue expectation in the future, is that possible in the current spending backdrop?

Sanjay Sakroni: Thank you, good morning. I appreciate the solid results in what clearly is a softer spending backdrop.

Sanjay Sakroni: You know, I guess I'm just thinking about the updated guidance and as we think about that 10% plus revenue expectations.

Sanjay Sakroni: in the future. I mean, is that possible in the current spending backdrop? You know, next year, as I think about it and I will be slower, Kartik's obviously should be stronger, but this bill business have to accelerate to get double digits or is there another way? Thanks.

Sanjay Sakhrani: Next year, as I think about it, I will be slower. Card fees obviously should be stronger, but does bill business have to accelerate to get double digits, or is there another way?

Sanjay Harkishin Sakhrani: Thanks.

Stephen Squeri: Thanks, Ajay. I think that bill business definitely has to accelerate to get to our aspirational goal of 10% revenue growth. When you think about the three legs of the stool that we have to grow our revenues, I think we absolutely have the right balance. The balance of spending NI and card fees. Card fees continue to grow at accelerated rates. It's 25 straight quarters now of double-digit. We had 18% this quarter. NI continues to chug along, but I don't think anybody wants to see us really accelerate too much from there, and I think that as we...

Speaker Change: Thanks, Nigel. I think that the bill business definitely has to accelerate to get to our aspirational goal of 10%.

Speaker Change: Revenue growth, you know, when you think about...

Speaker Change: The three legs of the stool that we have to grow our revenues, I think we absolutely have the right balance, you know, the balance of...

Speaker Change: Spending NII and Kartifese, and Kartifese continued to grow at accelerated rates, it's 25, you know, straight quarters now of double digit, we had 18% this quarter, NII, you know, continues to chug along, but I don't think anybody wants to see us really accelerate too much from there, and I think that as we...

Stephen Squeri: As we think about our overall aspiration, that aspiration was set in a more robust environment.

Speaker Change: As we think about our overall aspiration, that aspiration was set.

Stephen Squeri: And so for us to hit that 10%, we would need to have an acceleration in building, certainly an acceleration from 6%. Having said that, and I said this about a year ago at the Goldman Sachs Conference, we have driven the scale of this business at this point to such a place that even with a softer, or be consistently, you know, been consistently soft for the last, you know, pretty much for the last year, if you go back, our buildings overall for pretty much the last year, other than the second quarter when we had the extra day, had been about 6% overall.

Speaker Change: in a more robust environment, and so for us to hit that 10%, we would need to have an acceleration in building, certainly an acceleration from 6%, having said that, and I said this about a year ago with the Goldman Sachs Conference.

Speaker Change: We have driven the scale of this business at this point to such a place that...

Speaker Change: Even with a softer, or be it consistently, you know, it's been consistently soft for the last.

Speaker Change: You know, pretty much for the last year, if you go back, our billings overall, for pretty much the last year, other than the second quarter when we had the extra day, it had been about 6% overall, but yet, we are able to deliver on our mid-TNGPS group, and I think that's...

Stephen Squeri: But yet, we are able to deliver on our mid teams, EPS growth, and I think that's what our focus is really on.

Stephen Joseph Squeri: And so, as you know, the economy gets stronger when that is, I don't know, but I think it's absolutely the right aspiration for us as a company to strive for 10% revenue growth, but we will need an acceleration in influence.

Speaker Change: That's what our focus is really on. And so, as the economy gets stronger, when that is, I don't know. But I think it's absolutely the right aspiration for us as a company to strive for 10% revenue growth, but we will need an acceleration in the influence.

Ryan Matthew Nash: Thank you. The next question is coming from Ryan Nash, of course. In fact, please go ahead.

Speaker Change: Thank you, the next question is coming from my and Nash of Golden Sacks, please go ahead.

Ryan Nash: Good morning, guys, and Steve, thank you for the branding of our conference on the prior month. So maybe just to follow up on Sanjay's question, we think about the three legs of the stool. If we, if we don't see an acceleration in building growth, can maybe just talk about the drivers of EPS growth into 2025, and you can continue to sustain the mid-teens growth, even in the face of a challenging, or of a slower than aspirational revenue growth environment. Thank you. Yeah, I mean, just look at, look at this year. You know, as I just said, we've had buildings growth of pretty much 6% for almost a year now.

Speaker Change: So, maybe just to follow up on...

Speaker Change: Sanjay's question. We think about the three likes to the stool.

Speaker Change: If we don't see an acceleration in buildings growth, can maybe just talk about the drivers of EPS growth into 2025. Can you continue to sustain the mid-teens growth, even in the face of a challenging, or of a slower than aspirational revenue growth environment? Thank you.

Speaker Change: Look at this year. As I just said, we've had Billings growth of pretty much 6% for almost a year now.

Stephen Squeri: And so I'll just go back to my comments that I just made to Sanjay. I think at the level of, you know, that 6% overall buildings growth, and, you know, we continue to acquire acquired cards, and we continue to, you know, upgrade card members, and we continue to grow, you know, and I, you know, where, where we are. Yeah, I think EPS, EPS growth in the range in our mid teams range is absolutely, you know, something that should be expected from us. The other thing that I would say is that, you know, while we are not, if you look, if you look at this year, you know, we've acquired 3.4 million cards in the first quarter, and 3.3 million cards in the second quarter, and 3.3 million cards in the third quarter.

Speaker Change: and so I'll just go back to my comments that I just made to Sanjay. I think that...

Speaker Change: At the level of, you know, that 6% overall.

Speaker Change: Billings grows and you know we continue to acquire.

Speaker Change: acquired cards and we continue to upgrade card members and we continue to grow, you know, NII, you know, where we are.

Speaker Change: I think EPS growth in the range in our midteens range is absolutely something that should be expected from us. The other thing that I would say is that...

Speaker Change: You know, while we are not, if you look at this year, you know, we've acquired 3.4 million cards in the first quarter and 3.3 million cards in the second quarter and 3.3 million cards in the third quarter.

Stephen Squeri: And, you know, that's all about really the future for us. And, you know, as the economy gets stronger, these are, these are cohorts, and most of these people that we're acquiring are, you know, millennials and Gen Z's. These are cohorts that will continue to grow with us. That will see an uptick in organic spending over time. That will wind up being upgraded from, you know, a grain to a gold, a gold to a platinum, and so forth. And so, you know, once again, I think that we're really laying the foundation with the investments that we're making for strong growth going forward.

Speaker Change: and that's all about really the future for us. And as the economy gets stronger, these are cohorts and most of these people that we're acquiring are Millennials and Gen Zs. These are cohorts that will continue to grow with us.

Speaker Change: that we'll see an uptick in organic spending over time.

Speaker Change: That will wind up being upgraded from, you know, green to gold, gold to platinum and so forth. And so, you know, once again, I think that we're really laying the foundation with the investments that we're making for strong growth going forward.

Christophe Caillec: Maybe I will adjust that one point.

Speaker Change: Maybe I will adjust that one point.

Speaker Change: This year indeed is a good reference, right? And we're going to grow EPS north of the meetings, even when you control for the SRV-5 game. And that's after increasing the marketing investments year over year by as much as $800 million, right? And so that...

Speaker Change: speaks about the power of generating meat-teens-eep-es-groove.

Speaker Change: Thank you to the next question. It's coming from Craig Moore of FT Partners. Please go ahead.

Speaker Change: Yeah, good morning, thanks.

Craig Moore: I want to ask about business development spend, came in well below.

Craig Moore: What contentious was expecting and I was curious what is happening there, whether it was a short-term phenomenon or something more long-term and just second was there any impact from weather in the guide for the rest of the year.

Speaker Change: Let me answer the second question and Christophe will answer the first one. Now, there was no impact at all from weather in the guided all.

Speaker Change: And under business or partner payments, line and business development.

Speaker Change: Here, a lot of those expenses.

Speaker Change: and Tori Bout.

Christophe Caillec: you know, popular agreement that we have with customers and co-brand partners in terms of sharing.

Christophe Caillec: the economics of the core branch.

Speaker Change: Thank you, the next question is coming from Rick Shane of JP Morgan, please go ahead.

Speaker Change: Thanks for taking that question this morning. Look, is we moving to the fourth quarter, the setup is that earnings will be way above the initial guidance, and even above the second quarter increase, and revenues are gravitating towards the low end of your range.

Speaker Change: That suggests credit and operating leverage are better than you expected.

Speaker Change: You've talked about the ramp in marketing the incremental $800 million.

Speaker Change: Historically, when earnings are the...

Speaker Change: The earnings set up is this strong. You really pull forward investments, planting seeds for long-term revenue growth. I'm curious this year why you're letting so much fall with the bottom line. Are you starting as you ramp up that 800 million incremental? Are you starting to see the marginal return on those investments diminishing away that it's no longer attractive?

Speaker Change: I don't think we're seeing the marginal return, I think it's a matter of ramping up to the level that we are.

Speaker Change: How much we are, how much we are spending on a relative basis.

Speaker Change: At $1.5, you know, almost $1.5, $1.6 billion in marketing, you know, we're stepping up that marketing almost $800 million, we've also stepped up technology span, we've invested.

Speaker Change: We're investing more control management as we move from a category 4 bank to a category 3 bank.

Speaker Change: and so we're not walking away from any investments in...

Speaker Change: But we're also not doing, we're not lowering our standards in any way, either. So, now I think that we've ramped up our investments all year long. It is just really hard to just jam a bunch more investment into next year. Having said that, you know, we expect.

Speaker Change: That we will grow our investment levels from here as we move into 2025. I would not expect a pullback in marketing because as we start to look at next year, we're looking for more efficiencies, obviously, in our marketing spend. But additionally, we're looking to invest.

Speaker Change: You know, more in marketing as you move into next year and more in technology and so forth. So, you know, when you think about the business from a quarter to quarter basis, yeah, it's easy to have that, you know, the assumption that you have. When you think about the business on a continuum, you have to layer in your investments over time. So, it's not as easy just the full sort of investments in from the first quarter of next year into the fourth quarter of this year. [inaudible]

Speaker Change: years ago, we could do that because our investment levels were probably half of where they are today. And so as you get to that level that we are today, it is easier to go on a continuum the way we're going, as opposed to let's pull it forward. So we feel good about the investment opportunities over the medium to long range and we'll continue to invest in the business. We'll continue to invest in the business and we'll continue to invest in the business.

Speaker Change: Thank you, the next question is coming from Erica Najiri and if you'd be as, please go ahead.

Speaker Change: Hi, good morning, sub!

Erica Najiri: When you look at this supplement, it does seem like spend on a per-member basis has been a little bit flatter than overall spend grows 2% versus 6% and clearly that's a result of your success in adding so many new customers. If we don't get to rebound and spend grows next year and obviously everyone's trying to figure out whether we're going to have the soft landing or not the soft landing. How much runway do you feel you have to continue to add new customers to keep the spend grows at the current level? And maybe it's a compound question to that maybe give us some color on you know where we are on the product refresh cycle.

Speaker Change: Yeah, so let me answer the second part and go to the first I think on a product refresh cycle, you know we've already surpassed we're at our 40 that we had committed to at the beginning at the beginning of the year and there will be some more refreshes that will be done over the rest of over the rest of this year and we will continue refreshing, you know on next year. I'll let Christophe comment a little bit, but I'll just give you a couple a couple of other other points as you relate to your first question.

Speaker Change: We still see line of sight as we move into next year to acquire more card holders.

Speaker Change: I think when you look at the overall spending, you know, organic spending in our customer base is not as robust as it was in a more robust environment. And that's...

Speaker Change: That's what our card holders do, what our card holders will do is pull back slightly if they lose any confidence.

Speaker Change: C&E, sort of signs of their own stress, but they will continue to pay their bills, and that's why our credit numbers are so good. I think when you look at the organic piece of this, you see this especially within our small business. Our small business has been hit from a macro perspective, I think just like a lot of other companies, small business, in that the organic spend, or the same store sales spend, that is occurring on the card in small businesses, it is certainly not as robust as it was coming out of the pandemic. In fact, it is negative because when you look at our small business, our acquisition is good, and our retention is really good.

Speaker Change: It is that organic spin that's down, so that organic spin leads to a slight depression in a spent record number.

Speaker Change: and so to add up to the other part of your question.

Speaker Change: You know, the metric you're looking at is an average, is a global average.

Speaker Change: So that as a, you know, customers in Australia and Japan as well in the US. So it's hard to read a lot of insights out of that metric. So to give you a bit more color on how to think about those new color members that are joining the franchise.

Speaker Change: We do see that...

Speaker Change: They are more engaged than their past advantages, if you want. When we look at the number of transaction per new cod member, that number is turning up. And in my prepared remarks, I cited the metric of 30% more transaction per new cod member now than five years ago.

Speaker Change: and we see that, right? And this is a function of...this is a function of...

Speaker Change: Better coverage, not only in the US, but also outside of the US. And we stick to the premiumness of our, you know, acquisition. Not only we grew the number of card members, as you pointed out, but we are maintaining the fact that about 60% of them are coming up on our fee-paying products. So, they are very engaged. And so each vintage, if you want, is definitely showing progress. And what's... impacting this average are the things that Steve talked about, and that the tenured card members, and what we call the organic spend that is a little bit more challenged.

Speaker Change: Thank you, the next question is coming from Don Fandetti, a full Fargo, please go ahead.

Speaker Change: Steve, you know the general consensus.

Don Fandetti: Pretty much among everyone is the affluent US consumers in good shape. I just wanted to get your sense if you're seeing it in your data-booking.

Don Fandetti: in a race concerned around the sustainability of that. You've got an election coming up and things of that nature.

Steve Squeri: Now, I mean, look, you know, it's been around a long time. I mean, obviously we didn't have cards under 74 years ago, but you know, we've been around for lots of different elections, lots of different configurations of the house, the Senate, and so forth.

Steve Squeri: You know, our customer base is very different than our competitor's customer base and it's really resilient and pretty stable. I think that...

Steve Squeri: They're continuing to spend, albeit at not levels that we saw coming out of the pandemic, but the US consumer just to pick the US consumer has been really stable. It's been just about 6% for the last few quarters. And if you look at the international consumer and a lot of people forget, we do have the international side of our business. International consumer business has been growing 13% for the last four quarters as well. So we're not seeing anything that would indicate that spending would go down. And we're not seeing anything that would indicate our credit metrics are getting.

Speaker Change: and wor in fact so right off goes tosequentially sequentially down and so you know we feel we feel good about you know the consider we would like to see more organic expense and i think you know to to go back to the beginning when when san j open this up with that question i think and uptick in organic spend will help us reach our overall aspiration of ten percent but that's that's why our aspiration of ten percent is in fact in aspiration and i think still the right aspiration for this company because we do expect organic to come back organic will not stay at this level forever when that comes back i don't know but regardless

Speaker Change: i

Speaker Change: Thank you, the next question is coming from Jeff Adelson, if Morgan Stanley, please go ahead.

Jeff Adelson: Hey, good morning. Thanks for taking my question. I guess just if we look at the approximately 9% revenue growth of the year as you sit there only 18 days in the quarter, does that suggest that you're maybe looking for a little bit of revenue growth re-acceleration in the fourth quarter here? Or how are you thinking about that 9% for the year? Could it maybe slip a little bit below that? And when we look at the discount revenue growth, it did go under the bill business growth a little bit at this quarter. I think the implied discount rate did drop a little bit. Is there any noise in there or is there something we should be aware of there?

Christophe Caillec: So I'll take the second part of the question first in terms of how to think about the discount revenue versus the bill business. Steve just mentioned, international is growing out of faster clip than the US, and as you probably know, if discount rate in international is lower than the US. So that creates a little bit of a disconnect between the growth you see in discount revenue and on-bill business globally.

Speaker Change: So I'll take the second part of your question first in terms of how to think about the discount revenue versus the bill business.

Speaker Change: As Steve just mentioned, international is growing out of faster clip than the US. And as you probably know, the discount rate in international is lower than the US. So that creates a little bit of a disconnect between the growth you see in discount revenue and on bill business globally.

Christophe Le Caillec: As far as the first part of your question in terms of how to think about revenue growth and how to think about Q4. The best way, you know, the key word that we've been using this morning is stability, which is the ability in terms of billings, in terms of the trends and knowing flexion points. So, you know, as you said, we are only like a few weeks into Q4, but my projection for Q4 is to be a continuation of a lot of these trends. So, you know, two, three is a good proxy for what to expect about Q4, and that's why we, you know, we got it towards 9% revenue growth.

Speaker Change: As far as the first part of Euclacian, in terms of how to think about Revenue Gruelton, how to think about Q4.

Speaker Change: The key word that we've been using this morning is stability, which is the ability in terms of buildings in terms of the trends and no inflection points. So, as you said, we are all these like a few weeks into Q4, but my...

Speaker Change: Projection for Q4 is to be a continuation of a lot of these trends.

Speaker Change: You know, two, three is a good proxy for what to expect about Q4 and that's why we, you know, we got in towards 9% revenue growth.

Christophe Caillec: I want to point out, though, that, you know, the EPS, you know, in terms of, you know, food year performance is also a way north of what we got it towards at the beginning of the year, even when you are just for, for certified. So, we're generating a lot of earnings even with being there, you know, a 9% revenue growth, which still, you know, when I listen to peers, you know, compare us really well to most of our peers.

Cristopher Kennedy: Thank you. The next question is coming from Chris Kennedy of William Blair. Please go ahead. Good morning. Thanks for taking the question.

Speaker Change: Thank you. The next question is coming from Chris Kennedy of William Blair. Please go ahead.

Cristopher Kennedy: Steve, you mentioned how customers generally move from green cards to gold cards to platinum cards.

Chris Kennedy: Good morning. Thanks for taking the question. Steve, you mentioned how customers generally move from green cards to gold cards to platinum cards. Is there any way to think about the lifetime value or average spend by category? Thank you.

Stephen Squeri: Is there any way to think about the lifetime value or average spend by category? Thank you. I think, you know, when you, when you start to, to move up the food chain, you move up because you're going to, for example, you're moving from, if you're, if you're a millennial, for example, you're on a gold card. You're probably not traveling as much, but you're dining out a lot, and, you know, you may be just starting with the franchise. As you start to move along, you might have a little bit more discretionary income. You're traveling more; you're taking advantage of lounges; you're taking advantage of, find hotels and resorts and hotels, and so you will see higher spending on platinum cards than you will on.

Chris Kennedy: Um...

Speaker Change: I think you know when you start to move up.

Speaker Change: The food chain, you move up because...

Speaker Change: You're going to, for example, you're moving from, if you're a millennial, for example, you're on a gold card.

Speaker Change: You're probably not traveling as much, but you're dining out a lot, and you know, you might be just starting with the franchise. As you start to move along, you might have a little bit more discretionary income, you're traveling more, you're taking advantage of lounges, you're taking advantage of fine hotels and resorts and hotels, and so you will see higher spending on platinum cards than you will on gold cards and on green cards, because if you're going to pay a higher fee for a product, you're going to engage in that product more, you're going to use that product [inaudible]

Stephen Squeri: They're on gold cards than on green cards, because if you're going to pay a higher fee for product, you're going to engage in that product. More, you're going to use that product for what the benefits of those of that product, in fact, is. So, and when you think about it, the gold, the platinum card, while it's, it's morphing into much more of a lifestyle card overall, still has heavy travel benefits to it. And to really take full advantage of that, you want to be traveling in, and I think it's cost money, and hotels cost money, and so forth.

Speaker Change: for what the benefits of that product, in fact, is. So, and when you think about it, the platinum card, while it's it's morphing into much more of a lifestyle card overall, still has heavy travel benefits to it. And to really take full advantage of that, you want to be traveling and airline tickets cost money and hotels cost money and so forth. So, I think as as people do move move along to continuum, you do have a higher life, you do have a higher lifetime value depending upon when you enter the franchise, right? So, if you enter the franchise at a gold card level and ultimately upgrade to a platinum, yes, you will have a higher lifetime value overall to us.

Stephen Squeri: So, I think, as people do move along to continuum, you do have a higher life. You do have a higher lifetime value, depending upon when you enter the franchise, right? So, if you enter the franchise at a gold card level and ultimately upgrade to a platinum, yes, you will have a higher lifetime value overall to us. If you enter as a Gen X or Boomer into the platinum franchise, which we still acquire, you know, Gen X is in Boomer. Obviously, you probably have a lower lifetime value, and you would, as a millennial, who went in as a gold card member.

Speaker Change: If you enter as a Gen X or Boomer into the Platinum franchise, which we still acquire, you know, Gen X is in Boomer's, obviously you probably have a lower lifetime value than you would as a millennial who went it in as a gold card member. So it all depends on the entry point, putting in general, as they move up, we get more value out of them.

Saul Martinez: So, it all depends on the entry point, but in general, as they move up, we get more value out of it. Thank you.

Saul Martinez: The next question is coming from Saul Martinez of HSBC. Please go ahead.

Speaker Change: Thank you, the next question is coming from Soul Martina's of HSBC. Please go ahead.

Saul Martinez: Hey, good morning. I wanted to ask about how to think about that interesting come dynamics as we head into 2025 and just, you know, what the building blocks are. You know, Steve, I think you mentioned that you don't want to accelerate too much from here. But if you could just give us, you know, some of the building blocks in terms of how to think about NII in this rate environment, your liability sensitive, deposit dynamics, revolve rates, balances, stuff like that, you could just kind of help us think through, you know, how to think about the evolution as we head out.

Soul Martina's: Hey, good morning. I wanted to ask about how to think about that interesting dynamics as we head in the 2025 and just, you know, what the building blocks.

Soul Martina's: Steve, I think you mentioned that you don't want to accelerate too much from here, but if you could just give us some of the building blocks in terms of how to think about NII in this rate environment, your liability sensitive, deposit dynamics, revolve rates, balances, stuff like that. If you could just kind of help us think through how to think about the evolution as we head out into 2025. Thank you very much.

Christophe Caillec: So, you know, into 2025. So the first thing maybe is to remind ourselves that we are slightly liability sensitive, but only very slightly. And the impact of either fake funds, rates, cuts on our NII is actually quite small. And we regularly update this sensitivity in our 10-Q, and you'll see later this afternoon we updated those numbers as well. They're really small. And so maybe we can put this one out of the equation. The rest is a volume rate balance.

Steve Squeri: So the first thing may be to remind ourselves that we are slightly, liabilities sensitive but only very slightly and the impact of...

Speaker Change: Peter, FX-adjusted, Ray.

Speaker Change: Cutts,

Speaker Change: on our NI is actually quite small, and we regularly have date.

Speaker Change: This sensitivity in our tank queue and you'll see later this afternoon we have did it this number as well. They're really small. And so maybe we can put this one out of the equation.

Christophe Caillec: So, from a volume standpoint, we have said that you should expect the volume, the AR, especially the revolving balances, to moderate in terms of growth. And the dynamic, I mean, we're all familiar with that. During the pandemic, people pay back their balances and have been rebuilding slowly their balances. And the revolve rates that we see now are starting to stabilize and moderate. So I think we are, you know, this, this I would say this normalization is for the most part behind us. And so you expect now the growth rate to very much moderate.

Speaker Change: The rest is a volume rate balance, so from a volume standpoint, we have said that you should expect the volume, the AR, especially the revolving balances.

Speaker Change: to moderate in terms of growth. And the dynamic, I mean, we're all familiar with it, right? During the pandemic people pay back their balances and have been rebuilding slowly their balances. And the revolve race that we've seen now are starting to stabilize and moderate. So I think we are, you know, this, this, I would say this normalization is for the most part is behind us. [inaudible]

Speaker Change: and so you expect now the Grohl III to very much moderate and from a yield standpoint.

Christophe Caillec: And from a yield standpoint, there are two things here. Right. The first one is we are; we keep shifting the funding of those balances towards high yield savings accounts, which is the lowest funding cost for us. And so this creates a positive impact or positive effect on the yield. And on the interesting come, we keep working in terms of, you know, making sure we have the rise price points. We constantly compare our price as well against our peers, and we make sure that we are, you know, well positioned there. And so we should expect the yield to benefit from, from, from this dynamic.

Speaker Change: There are two things here, right? The first one is, we keep shifting the funding of those balances towards high yield savings accounts.

Speaker Change: which is the lowest funding cost for us.

Speaker Change: and so this creates a positive impact or positive effect on the yield. And on the interesting come we keep working in terms of making sure we have the rise price points, we constantly compare our price as well against our peers, and we make sure that we are well positioned there. And so we should expect the yield to benefit from this dynamic. But the way to think about it is moderation in terms of volume, we're going to maintain the strong yield that you see now and very, very limited impact from any change in the rate environment.

Christophe Le Caillec: But the way to think about it is moderation in terms of, in terms of volume. We're going to maintain the strong yield that you see now and very, very limited impact from any change in the rate environment, from a rate fit for enrichment. Industry.

Speaker Change: Thank you, the next question is coming from Kerri Ma of Barclays, please go ahead.

Kerri Ma: Hi, thank you, good morning. So your card acquisitions continue to run at a pretty healthy level and your net card fee growth this quarter has already exceeded the exit rate of last year. I guess are you running ahead of your expectations for some of these product refreshes in terms of adoption?

Kerri Ma: for engagement in general.

Speaker Change: Now, I think it's what we've really expected from an adoption and engagement.

Speaker Change: Perspective, you know, as I said they'll be a few more.

Speaker Change: Product Refreshes, this is where we pretty much expected the overall growth rate to be, a little bit obviously higher than when we entered the year because that's what happens, right? People.

Speaker Change: People get attracted, I think, you know, get attracted to the Prague, I think.

Speaker Change: You know, one of the things that...

Speaker Change: We've said this before, but I think it's worth repeating.

Speaker Change: when you refresh the product.

Speaker Change: What it does it creates more demand in the marketplace and it helps your marketing dollars work even harder for you. And so when you look at how...

Speaker Change: How that category of Revenue grows.

Speaker Change: Early on, those categories are from new card holders. Remember, we amortize that over a 12-month period, and not everybody gets repriced all at once. So, it does build in for us a ramping up effect of that overall category. So, not only is it important to upgrade these products because it enables you to attract new card holders, but it enables you to continue to engage with your existing card holders. Obviously, that overall subscription-like and SaaS-like revenues that cards these subscriptions are, and we are over $2 billion in this particular quarter. So, we continue, you know,

Speaker Change: to focus on that because, you know, we know our feet, our feet paying card members are most engaged card holders that we have because we want them to use the benefits and services.

Speaker Change: Thank you. The next question is coming from Mark DeVries of Deutsche Bank. Please go ahead.

Mark Devries: Yeah, thank you. I have a related question to the impact of studies and on your business. If you looked at what the impact is from studies and the effort to stimulate the economy on your build business growth.

Speaker Change: So, this is a good point. So, at this point in time, the reduction is too small, is too early to see any impact in terms of the spent patterns. And we looked into it, but there's like nothing visible as you would expect, probably too small. But the expectation is that your consumer and small business confidence is going to improve as a result of the rate environment being more supportive. Because as we said this morning, right.

Speaker Change: We see no evidence of stress in terms of credit. We see demand in terms of our premium products. We see very strong renewal rates even when conmemors are moving to a higher price point. So there's definitely capacity to spend and to spend more. And my expectation is that the accumulation of cuts will provide some support for the consumers. The consumers will business confidence and that will provide some support to to billing and in order to go back to the first question we address this morning, especially to that organic growth that would benefit from that.

Speaker Change: Thank you. Our final question will come from the here-bottie. A thank you to America. Please go ahead.

Speaker Change: Hi, good morning and thank you for being my pleasure.

Speaker Change: Why did he turn to T&E's pen for a second? In just a two-part question on that, the first is just our airline's pen. I think it accelerated this quarter. We just talked about the drivers, there was a corporate consumer, both, what you saw there. And then just on restaurant's penning.

Speaker Change: I think it's this a little bit discord, but just going back to the opening remarks. You reference just the investments you're making in that category between Rezy and Talk.

Speaker Change: and just adding those benefits to various cars. Do you expect?

Speaker Change: Lestron, spending a category to become a bigger part of your business and growl. Like, you should be expect acceleration in that spending from here.

Speaker Change: So let me talk about restaurant spending. So when you look at before we...

Speaker Change: made our 4A into sort of the restaurant reservation business here with Reggie.

Speaker Change: Restaurant spending was not our biggest teen ecategory.

Speaker Change: Our biggest T&E category, and still our fastest growing T&E category right now is restaurants. And our expectations are that we will continue.

Speaker Change: to gain Squeri in that restaurant space. If you look at it, we've just over the last five years, we've grown twice.

Speaker Change: What the industry growth rate has been from the rest of our perspective, yeah, this is a little bit of a diesel.

Speaker Change: This quarter, but I guess 8-8-7, but I'm not really all that concerned about that, and I think.

Speaker Change: with our talk acquisition and so forth. I think we will continue to punch you above our weight from a restaurant perspective. I'll just give you a high level on.

Speaker Change: On airline, I don't think there's really a lot of change, whether it's from a corporate perspective or a consumer perspective from airline. I mean, you went from five to six. I mean, that's not.

Speaker Change: In some cases, it can just be a little rounding up or a little rounding down in order to quarter. But, you know, everyone is still strong, and as we said, we saw international.

Speaker Change: International Bookings.

Speaker Change: I mean, I didn't say this, but we saw international bookings.

Speaker Change: in the third quarter from our travel business.

Speaker Change: actually be at the highest levels since before the pandemic. So our card members are still looking to travel. They're looking at, you know, when you're traveling internationally, you tend to spend a little bit more than when you're traveling domestically.

Speaker Change: So I don't think there's much to read into the airline piece of it or the restaurant piece other than restaurant is still a very very strong category for us but the one point, the one point up at a one point down I wouldn't make too much about for this particular quarter but I think that from a restaurant perspective, you know we've obviously are doubling down on on restaurant not only from the perspective of what we've done with the talk in a Rome acquisition but just look at the gold card refresh which is a heavy, heavy dining product and you know it's targeted at a cohort millennial in Gen Z that spends more in dining than any other cohort that that we have so we're pretty bullish on on the restaurant industry

Kartik Ramachandran: With that, we'll bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions.

Speaker Change: Crack.

Speaker Change: With that, we'll bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IRT will be available for any follow-up questions. Operator, back to you.

Operator: Operator, back to you. Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access the digital replay of the call at 877-667-1960, or 201-612-7415, Access Code 1374-9052, after 1 p.m. ET on October 18th through October 25th.

Speaker Change: Ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir.americanexpress.com shortly after the call. You can also access the digital replay of the call at 877-660-6853 or 201-612-741-5, Access Code 1374-9052. After 1 p.m. ET on October 18th, October 25th, that will conclude our conference call for today. Thank you for your participation. You may now disconnect.

Operator: That will conclude our conference call for today. Thank you for your participation.

Operator: You may now disconnect.