Washington, Jan 31 (NationPress) On Friday, investors challenged executives at American Express regarding the sluggish pace of net card additions, escalating growth expenses, and indications of a decline in the middle market. This scrutiny occurred despite the payments firm defending its strategy to target premium cardholders and its substantial investments.

The inquiries followed the company's announcement of record results for 2025 and its prediction of another year characterized by nearly double-digit growth. However, analysts during the fourth-quarter earnings call questioned whether this strategy was becoming increasingly costly to maintain.

According to UBS, the topic of "net cards acquired" was a significant concern among investors prior to the call, raising questions about whether the transition to fee-based premium offerings could hinder future growth.

On Friday, American Express shares dropped by 3.5 percent, with the overall stock down 3.1 percent year-to-date.

Chief Executive Stephen Squeri stated that card metrics are not the primary focus. "Our emphasis is less on card acquisition and more on revenue generation," he noted, emphasizing that the company is meeting its revenue and return objectives.

In its report for 2025, American Express revealed a 10 percent revenue increase to a record $72 billion and earnings per share of $15.38, a 15 percent rise excluding the Accertify gain. Squeri pointed out that card fee growth remains in double digits, with credit quality continuing to be robust.

Despite this, doubts lingered. Truist reported that investors are worried about "the escalating cost of growth," citing high expenditures on rewards, marketing, and benefits necessary to attract affluent clients.

Squeri dismissed claims of an overheated business model. "I don't perceive the cost of growth as excessively high at this time," he stated, mentioning that American Express sidesteps portfolios it deems "non-economical."

Chief Financial Officer Christophe Le Caillec remarked that the economic outlook is improving as the portfolio shifts towards more premium offerings. "The overall portfolio is gradually becoming more premium," he said, highlighting that annual card fee revenue has reached $10 billion and delinquency and write-off rates remain "best-in-class" and below 2019 figures.

American Express anticipates a revenue increase of 9 to 10 percent for 2026, with projected earnings per share of $17.30 to $17.90, and plans to elevate its quarterly dividend by 16 percent to $0.95. Squeri noted that this outlook reflects "the strength and stability of our premium customer base" and the flexibility of the business model.

Some analysts raised concerns regarding whether engagement with the revamped U.S. Platinum Card might diminish as the novelty wears off. Financial Technology Partners inquired whether increased spending in the fourth quarter was influenced by a "new car smell" effect.

Squeri responded that engagement levels have largely stabilized. "Not every Card Member utilizes every benefit," he acknowledged, adding that spending behaviors tend to normalize once customers determine how to use the product.

Questions also centered on commercial services. Keefe, Bruyette & Woods indicated that spending from small and medium enterprises "remains quite weak," particularly in the middle market.

Squeri recognized this disparity, stating, "Small business is performing exceptionally well," while noting a slowdown in the middle market. He pointed to increasing competition, labeling the sector as "highly competitive" as rivals grow through acquisitions and technology-driven offerings.

Regulatory risks were also raised. Morgan Stanley inquired about proposals to limit credit card interest rates to 10 percent. Squeri cautioned that such measures would have widespread repercussions. "A 10 percent cap on credit cards is not a viable solution," he argued, suggesting it would limit card access, reduce credit limits, and adversely affect small businesses.

Le Caillec assured that spending trends are solid as they approach 2026. "We continue to observe positive momentum in spending trends," he confirmed, noting that international billed business rose by 12 percent when adjusted for foreign exchange in the fourth quarter.

Technology investments also attracted attention. Squeri disclosed that the company allocates approximately $5 billion annually towards technology development, highlighting a new cloud-based data and analytics platform that has "already decreased the time for critical marketing and fraud processes by 90 percent," with full migration expected by 2027.