American Express earnings show Gen Z spending lift and AI push

American Express earnings released Friday showed card spending rose 9% on a foreign-exchange-adjusted basis in the second quarter, helped by faster growth from younger U.S. consumers. The company also raised its full-year revenue growth outlook to 10%, from a prior range of 9% to 10%, while its shares fell 5% in early Friday trading after revenue growth missed Wall Street expectations.

According to the company’s earnings presentation, travel and entertainment spending increased 10%, goods and services spending rose 9%, and U.S. consumer spending climbed 11%. American Express said that was its fastest U.S. consumer growth since early 2018, excluding periods distorted by the pandemic.

Spending gains were spread across several categories. Retail spending rose 13%, restaurant spending increased 10%, airlines were up 10%, and American Express travel bookings advanced 22%, according to the presentation. Commercial spending, which had been growing more slowly, accelerated to 5%.

How is American Express using Gen Z spending?

American Express said millennials and Generation Z remained its fastest-growing U.S. consumer groups and together represented the largest share of U.S. consumer spending on its cards. Gen Z spending rose 40% from a year earlier, compared with 14% for millennials, 10% for Generation X and 5% for baby boomers and older customers.

The two younger cohorts accounted for 38% of U.S. consumer billed business and 65% of new global consumer accounts, according to the company. Chief Financial Officer Christophe Le Caillec said on the earnings call that younger customers often begin with lower income, but the company expects their relationship with American Express to expand over time.

Chief Executive Stephen Squeri told analysts that the spending increase reflected stronger use of Amex products, not only customer additions. He said restaurant spending was up 10%, while spending through Resy restaurants was growing at about twice that rate.

Dining has become a larger strategic focus for the company. American Express said restaurant spending is its biggest travel and entertainment category, and it is building services around that activity through Resy, Tock and its proposed acquisition of TheFork, which would add 50,000 restaurants across 11 European countries.

Squeri said the dining platforms allow American Express to create smaller closed loops within its wider payments network by linking cardholders and merchants more directly. A closed-loop payments model gives the network information from both the cardholder and merchant sides of a transaction, which can support rewards, offers, fraud controls and merchant services.

That data position is central to the company’s view of agentic commerce, a term used for transactions in which AI agents help initiate or complete shopping activity. Squeri said AI-driven commerce raises questions about fraud, customer intent and AI hallucinations, and argued that Amex can compare what a customer sought with what a merchant provided.

He cautioned that agentic commerce remains at an early stage, saying the market is “sort of in the preseason.” Squeri also said the company is now funding technology work tied to agentic commerce that was not part of its original 2026 spending plans.

American Express is also investing in commercial payments. The company said commercial billed business rose 5%, with U.S. small and midsized businesses and large or global corporations growing at the same pace. Commercial travel and entertainment spending increased 8%, while goods and services spending rose 4%.

The company has begun testing a new expense management platform with middle-market customers, an area where management acknowledged pressure from financial technology providers. American Express reported 10% revenue growth for the quarter, supported by the increase in spending.

This story draws on original reporting from PYMNTS.