American Express (NYSE: AXP) reported higher revenue and profit for the second quarter, driven by increased cardholder spending.

The credit card company's net revenue, excluding interest expense, rose 10% year-over-year to $19.64 billion.

Key Highlights

Benefiting from growth in cardholder spending, American Express posted a net profit of $3.11 billion for the second quarter, up from $2.89 billion in the same period last year.

For the quarter ending June 30, the company reported net income of $3.11 billion, or $4.53 per share, compared to $2.89 billion, or $4.08 per share, in the year-ago period. Analysts surveyed by FactSet had expected earnings per share of $4.40, making this a beat. Net revenue, excluding interest expense, increased 10% to $19.64 billion, while analysts had forecast revenue of $19.7 billion.

The core driver of revenue growth was a 9% increase in cardholder spending, marking the highest growth rate in three years. Credit card fee income rose in line with higher spending volumes, and net interest income also increased as cardholder balances grew.

Chief Executive Officer Stephen Squeri stated, "Overall business momentum in the first half of the year exceeded our initial expectations."

American Express plans to reinvest the additional earnings from this period into various growth initiatives, focusing on its annual-fee credit card ecosystem, which offers a range of exclusive benefits. In the second quarter, the company announced plans to acquire TheFork, a European restaurant booking platform, to expand its dining-related perks.

The Platinum Card, one of the company's highest-fee and most feature-rich cards, is currently the fastest-growing product in the U.S. personal consumer segment.

Updated Full-Year Guidance

American Express raised its full-year revenue growth forecast, now expecting revenue to increase by 10%, up from its previous guidance range of 9% to 10%. The company maintained its full-year earnings per share outlook at $17.30 to $17.90.