- Card issuer American Express issued fewer than 3 million new cards during the third quarter, according to the company’s third-quarter earnings materials released Friday. Amex added 2.9 million new cards in Q3. That was the first time in seven quarters that metric fell below 3 million.
- The New York-based company’s marketing spending dipped 15% for the third quarter, to $1.2 billion. That’s also down from $1.4 billion in the second quarter of this year.
- Amex CEO Steve Squeri told analysts during the third-quarter earnings conference call that they should expect the company to spend more on marketing in Q4, noting Amex is “committed” to spending approximately $5.5 billion on marketing for the full year.
The full-year 2023 Amex marketing budget is about what it spent on marketing in 2022, according to Q4 2022 earnings materials.
“We’ll probably step that up next year,” Squeri told analysts.
An Amex spokesperson declined to comment on how much the company expects to spend on marketing next year. Squeri chalked up lower marketing spending and new card acquisition in the quarter to timing and the length of the quarter.
Squeri acknowledged the slight sequential drop in new card acquisitions for the quarter, but said the company is “not seeing anything at all that gives us pause, and we will continue to acquire those cards as long as those opportunities are out there.”
Amex views marketing and operating expenses “as a key source of leverage” going forward, CFO Christophe Le Caillec said Friday.
Squeri has previously highlighted the intensely competitive dynamic in the premium credit cards market, and Amex has doubled down on its pursuit of millennial and Gen Z customers in recent years. New card acquisition, rather than card fee increases, is the major driver of Amex’s fee-generated revenue, Squeri noted Friday.
Spending by Amex’s U.S. millennial and Gen Z customers rose 18% in the third quarter, compared to the year-earlier quarter. Those customers accounted for about 60% of Amex’s new customer account acquisitions globally.
Spending on the commercial side of Amex’s business was less robust, however. Spending by Amex’s U.S. small and medium-sized business customers grew just 2% in the quarter, while spending by its U.S. large and global corporation customers was flat.
Expenses in total for the quarter rose 7%, to $11 billion, according to a news release. Net income for the quarter climbed 30%, to $2.5 billion. Revenue net of interest expense jumped 13%, to $15.4 billion.