AMERICAN EXPRESS CO

BUSINESS INTRODUCTION

We are a global payments and premium lifestyle brand powered by technology with four reportable operating segments: U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). Corporate functions and certain other businesses and operations are included in Corporate & Other.

Our range of products and services includes:

•Credit and charge cards and complementary products and services, including travel, dining, lifestyle and expense management products and services

•Banking and other payment and financing products and services, including deposits and non-card lending

•Merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services

•Network services

The following types of revenue are generated from our various products and services:

•Discount revenue, our largest revenue source, primarily represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express. The amount of fees charged for accepting our cards as payment, or merchant discount, varies with, among other factors, the industry in which the merchant conducts business, the merchant’s overall American Express-related transaction volume, the method of payment, the settlement terms with the merchant, the method of submission of transactions and, in certain instances, the geographic scope for the card acceptance agreement between the merchant and us (e.g., local or global) and the transaction amount. In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for card-not-present transactions or for transactions using cards issued outside the United States at merchants located in the United States;

•Interest income, principally represents interest earned on outstanding loan balances;

•Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account; and

•Service fees and other revenue, primarily represent revenues related to network partnership agreements (comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners), fees earned on alternative payment solutions facilitated by American Express, foreign currency-related fees charged to Card Members, loyalty coalition, merchant and other service fees, Card Member delinquency fees, travel commissions and fees, and income (losses) from our investments in which we have significant influence.

Refer to the “Glossary of Selected Terminology” below for the definitions of certain key terms and related information appearing within this Form 10-K and “Critical Accounting Estimates” below for a discussion of certain of our accounting policies requiring significant management assumptions and judgments.

NON-GAAP MEASURES

We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included within this report constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies.

Beginning in the third quarter of 2025, we ceased reporting Net interest yield on average Card Member loans, a non-GAAP measure that was computed by dividing adjusted net interest income by average Card Member loans, and began reporting (together with prior period comparative information) Net interest yield on average Total loans and Card Member receivables, a GAAP measure that represents net interest income divided by average Card Member loans, Card Members loans held for sale (HFS), Other loans and Card Member receivables. We believe that this new net interest yield metric reflects the evolution of our products over time, such as the expansion of lending features on our charge card portfolio. See Table 1 for more information.

TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE

(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared). FX-adjusted Total revenues net of interest expense and Total loans and Card Member receivables are non-GAAP measures. We believe the presentation of information on a foreign currency adjusted basis is helpful to investors by making it easier to compare our performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.

(b)Represents net income, less (i) earnings allocated to participating share awards of $74 million, $76 million and $64 million for the years ended December 31, 2025, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $58 million for each of the years ended December 31, 2025, 2024 and 2023. Refer to Note 15 and Note 20 to the “Consolidated Financial Statements” for further details on preferred shares and earnings per common share (EPS), respectively.

(c)Total loans reflects Card Member loans and Other loans.

(d)Represents net interest income divided by average Card Member loans, Card Member loans HFS, Other loans and Card Member receivables.

(e)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.

(f)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.

(g)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 11 for 90+ days past billing metrics for corporate receivables.

(h)Return on average equity (ROE) is calculated by dividing (i) net income by (ii) average shareholders’ equity.

BUSINESS PERFORMANCE

Our strong results for the year reflect the earnings power of our business model, driven by our premium, high credit-quality customer base and the greater scale and operating leverage we have achieved over the last several years, as well as the impact of strategic investments that strengthen our Membership Model and drive growth. We continued to see momentum across the business, with stable growth across Card Member spending and loans and strong growth in card fees, along with excellent credit performance. We launched our refreshed U.S. Consumer and Business Platinum Cards at the end of the third quarter and have seen strong customer demand and engagement. The continued global expansion of our merchant network contributed to our growth, as we added millions of new merchant locations globally in 2025 and continued to increase coverage across our top international countries. Net income for the year was $10.8 billion, or $15.38 per share, compared with net income of $10.1 billion, or $14.01 per share, a year ago, which included a $0.66 per share gain from the sale of Accertify Inc. (Accertify).

Billed business grew 8 percent year-over-year (7 percent on an FX-adjusted basis), reflecting broad-based growth across geographies and across both Goods & Services (G&S) and Travel & Entertainment (T&E) categories.1 G&S spend, which accounts for over 70 percent of our total billed business, continued to be driven by robust retail spending, and T&E spend benefited from sustained strength in restaurants, our largest T&E category. U.S. Consumer Services billed business grew 8 percent, with continued momentum in spending by Millennial and Gen-Z Card Members, our fastest-growing cohorts, as our products continue to resonate with these younger customers. Commercial Services billed business grew 3 percent, reflecting continued modest growth from U.S. small and mid-sized enterprise (SME) Card Members. International Card Services billed business grew 14 percent, driven by continued strong growth in spend across geographies and customer types outside the United States. Overall transaction growth of 9 percent for the year reflects continued strong engagement from our customers.

Total revenues net of interest expense increased 10 percent (9 percent on an FX-adjusted basis).1 Growth in billed business drove a 6 percent increase in Discount revenue, our largest revenue line. Net card fees increased 18 percent, reflecting high levels of new card acquisitions on fee-paying products, strong Card Member retention and our ongoing cycle of product refreshes. Net interest income grew 12 percent, primarily reflecting growth in balances and net yield expansion.

Total loans and Card Member receivables increased 8 percent, in line with growth in billed business. Credit performance was strong and stable throughout the year. Net write-off and delinquency rates remained best-in-class, supported by our premium customer base, our strong focus on risk management and disciplined growth strategy.

Card Member rewards, Card Member services and Business development expenses, which are generally driven by volumes and usage, collectively grew faster than revenues as a result of enhancements to our value propositions to drive Card Member engagement and acquisition and the mix shift towards premium products. Marketing expense increased 4 percent year-over-year as we continued to invest to acquire high-spending, high credit-quality customers. Operating expense grew at a slower pace than revenue even as we continued to invest in enterprise risk management capabilities and technology to support business growth. We remain focused on driving marketing and operating expense efficiencies over time.

During the year, we maintained our CET1 capital ratio within our target range of 10 to 11 percent and returned $7.6 billion of capital to our shareholders in the form of share repurchases and common stock dividends. We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. We plan to increase the regular quarterly dividend on common shares outstanding by approximately 16 percent beginning with the first quarter 2026 dividend declaration. Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet.

The resiliency of our differentiated business model and the strength and stability of our performance give us confidence to navigate evolving competition and a range of economic environments. While we recognize the uncertainty of the geopolitical and regulatory landscape, we continue to manage the company for the long term, focusing on backing our customers and colleagues, exercising disciplined expense management and strategically investing in our business.

See “Supervision and Regulation” under “Business” for information on legislative and regulatory changes that could have a material adverse effect on our results of operations and financial condition and “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for information on potential impacts of macroeconomic, geopolitical and competitive conditions and certain litigation and regulatory matters on our business.

1 The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared). FX-adjusted revenues is a non-GAAP measure. We believe the presentation of information on a foreign currency adjusted basis is helpful to investors by making it easier to compare our performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.