American Express NYSE:AXP, a company that issues credit cards and other payment products, reported stronger second-quarter spending and earnings as demand from premium cardholders continued to support growth. Revenue increased 10%, while customer spending rose 9% on a currency-adjusted basis, marking its fastest growth rate in three years. Billed business, which includes transactions made through credit cards and other products issued by the company, climbed more than 9% to $455.8 billion, slightly above the $454.8 billion expected by analysts surveyed by Bloomberg. Adjusted earnings reached $4.53 per share, exceeding the $4.41 analyst estimate.

However, the stronger operating momentum was accompanied by a sharp increase in spending as American Express continued investing in customer acquisition, retention and card benefits. Second-quarter expenses rose 12% to $14.5 billion from $12.9 billion, reflecting higher customer-engagement costs, increased customer spending, the update of its U.S. Platinum card and greater use of cardholder benefits. Chief Financial Officer Christophe Le Caillec expects marketing expenses to increase by around 10% in the second half of 2026 compared with the same period last year, while full-year operating expenses are expected to grow at a mid-single-digit rate. The higher cost outlook appeared to weigh on investor sentiment, with American Express shares falling 5.7% by 9:54 a.m. in New York, their steepest intraday decline in almost five months.

American Express also raised its full-year revenue growth forecast to 10% from its previous range of 9% to 10%, suggesting management has become more confident in the company's momentum. Chief Executive Officer Steve Squeri said performance during the first six months of the year was stronger than expected and indicated that additional revenue would be invested in growth initiatives because of the opportunities management sees ahead. The company has been increasing marketing spending while updating several card products, and Squeri previously said American Express could benefit from the rise of artificial intelligence and its impact on commerce, comparing the transition with the emergence of e-commerce and mobile payments. Investors may now focus on whether sustained growth in customer spending, billed business and revenue can continue to offset the pressure from higher marketing and customer-engagement expenses.