Washington, Jan 31 (NationPress) On Friday, investors challenged American Express executives regarding declining net card additions, escalating growth expenses, and indications of softness in the middle market. This dialogue occurred despite the payments firm defending its strategy to attract premium cardholders through significant investments.

The inquiries followed the company's announcement of record-breaking results for 2025, coupled with forecasts of another year showcasing near-double-digit growth. However, analysts during the fourth-quarter earnings call scrutinized whether this strategy could become cost-prohibitive.

According to UBS, “net cards acquired” was a primary concern among investors prior to the call, questioning if the transition towards fee-paying premium products might hinder future progress.

On Friday, American Express shares dipped by 3.5 percent, leading to an overall decrease of 3.1 percent for the year.

Chief Executive Stephen Squeri asserted that measuring card counts is not the most effective indicator. “Our focus is not solely on card acquisition but rather on generating revenue,” he stated, emphasizing that the company is on track with its revenue and return targets.

For 2025, American Express reported a 10 percent rise in revenue, reaching a record $72 billion, alongside earnings per share of $15.38, which is a 15 percent increase when excluding the Accertify gain. Squeri noted that card fee growth remains in double digits and credit quality is robust.

Despite this, skepticism lingered. Truist highlighted investor concerns that the cost of growth may be becoming unsustainable, citing increased spending on rewards, marketing, and benefits required to attract affluent customers.

Squeri dismissed the notion that the business is overheating, stating, “I don’t view the cost to grow as excessive at this time,” and mentioned that American Express avoids portfolios perceived as “non-economical.”

Chief Financial Officer Christophe Le Caillec added that the economic landscape is improving as the portfolio evolves to become more premium. “The overall portfolio is gradually becoming more premium,” he explained, noting that annual card fee revenue has reached $10 billion and that delinquency and write-off rates remain “best-in-class,” below 2019 levels.

American Express anticipates a revenue growth of 9 percent to 10 percent for 2026, with earnings per share projected between $17.30 and $17.90. The company also plans to increase its quarterly dividend by 16 percent to $0.95, with Squeri stating that the outlook reflects “the strength and stability in our premium customer base” and flexibility in the business model.

Some analysts raised concerns about whether engagement with the revamped U.S. Platinum Card could decline as the initial excitement wears off. Financial Technology Partners inquired if fourth-quarter spending benefited from a “new car smell” effect.

Squeri mentioned that engagement has largely stabilized. “Not every Card Member utilizes every single benefit,” he noted, adding that spending patterns tend to normalize once customers determine their usage of the product.

Questions were also directed at commercial services. Keefe, Bruyette & Woods reported that small and medium enterprise spending “remains notably weak,” particularly in the middle market.

Squeri acknowledged this discrepancy, stating, “Small business is exceptionally strong,” while “the middle market is experiencing some slowdown.” He remarked on the increasing competition, describing the sector as “highly competitive” as rivals expand through acquisitions and software-driven offerings.

Regulatory risk was another critical topic. Morgan Stanley raised concerns regarding proposals to limit credit card interest rates to 10 percent. Squeri cautioned that such a measure would have far-reaching implications. “A 10 percent credit card cap is not the solution,” he argued, asserting that it would decrease card availability, shrink credit lines, and adversely impact small businesses.

Le Caillec stated that spending trends are solid as they approach 2026. “We continue to observe positive momentum in spending trends,” he noted, adding that international billed business grew by 12 percent on a foreign-exchange-adjusted basis in the fourth quarter.

Technology expenditure also garnered attention. Squeri mentioned the company invests around $5 billion annually in technology and emphasized a new cloud-based data and analytics platform, which is “already reducing the time for key marketing and fraud processes by 90 percent,” with full migration expected by 2027.