All right, good afternoon, everyone. Thanks for joining. My name's Rob Wildhack. I cover consumer finance and the cards here at Autonomous. We are very excited to have Steve Squeri back with us today. Steve is the CEO and Chairman of American Express. Those are roles he's held since 2018. Steve's also a 40-year veteran of the company, so congratulations on that milestone, Steve. Thank you. Just a quick note. Thank you. Use this. We have a Pigeonhole for the Q&A, so you can submit your questions there directly. You can vote on questions that have already been submitted, and then we can get them up to Steve. Now we can get started. Steve, you highlighted in your annual letter this year that this is Amex's 175th anniversary, which is quite an achievement on its own. Many high-end brands, they come and they go, but American Express, over almost two centuries, has not wavered. Why is that? What is it about the Amex brand that's led to that staying power? Yeah, thanks for having Amex here today, and me in particular. Look, 175 years, not a lot of companies are around that long. I think you have to go back in our history. We started as a freight forwarding company. We were FedEx before FedEx was FedEx, basically, except we did it on horses. We moved through and got into financial services with money orders and travelers' checks and then in travel and so forth. If you look at the history, I think it's always been about customer-focused innovation. I think that's what's really been important. If you look at American Express, American Express has always been focused on not only what the current customer needs are, but what the future customer needs could be. There was a lot of foresight over the history of the company in terms of getting into the travel business when the railroads nationalized because that really killed our delivery business. You think about the decision that we made to get into the credit card business when we were basically dominating the travelers' check business. Thank God that decision was made because not a lot of people are using travelers' checks today. The company was very focused on not only dealing with the needs at that particular point in time, but also dealing with needs moving forward. If you look at sort of the last seven, eight years, as we have really looked to reinvent the company. I think we'll talk about this a little bit later. As we've changed our focus, right? We've changed our focus to become much more of a revenue-first company. We've changed our focus in terms of our product strategy, how we refresh products, and also from what—and we've expanded our TAM, right? I mean, we're really focused on Millennials and Gen Z. Not that we're not focused on the Gen Xers and the Boomers, but we've done that as well. I think those are the things over time that have really been the hallmark of the company. It is willing to adapt, adjust, and be flexible to meet customer needs. You hit on the refresh cycle, but another recent theme has been a demographic shift where Amex is now incredibly relevant with and valued by younger consumers, Millennial and Gen Z, as well as the older cohort. How have you been able to be so successful with such a variety of customers? I think that as we sat back and looked at it, and I remember when I first took over, a lot of the questions was, was American Express going to be able to have its staying power? Because our customer base was a little bit older, a little bit male-dominated. The reality was, if you looked at our products, our products spoke to many different people, but we just did not market them that way. When you think about the products and the services that we had, they were just as relevant for Millennials and Gen Zers as they were for Xers and for Boomers. If you go back to 2019, we probably had about 18% of our volume with Millennial and Gen Zers. I think in the last quarter, it was like 35%, growing at a 15% clip. The reality is, what we really did was just expand the aperture to value proposition. When you think about it, we were focused on bringing people into the franchise with a product, a cashback product that did not have any other value than cashback. When you look at today's consumer, when they are 18 to 41, 42 now, they are as value-conscious and as circumspect about the products and services that they use as anybody else. They really know how to use the products and engage with the products. That has really helped. The reality is, Millennials and Gen Zs love to travel. Our product was travel-focused. Yet we continue to add other services to that. When you look at the customers that we acquire now, especially on a global basis, 60% are Millennial and Gen Z. When you look at the Gold and Platinum Card in the U.S., that's a 75% is Millennial and Gen Z. It's not that we're not interested in Gen X and we're not that interested in Boomers, but the acquisition has really spoke. The interesting thing is, even as we have morphed the value proposition to speak a lot more to younger people, and I wouldn't say it's morphed as much as promoted it to younger people, our retention rates with our older cohorts have increased. The product does speak to a wider TAM at this particular point in time. A big part of all that, and maybe the foundation, is the closed-loop network that Amex has. I mean, talk to us about how the closed-loop network underpins all of this, and what does it allow you to do that drives all these benefits and advantages that you've highlighted so far? Yeah. I mean, the closed-loop network is really key, right? Fundamentally, what it means is we have the merchant relationship, and we have the cardholder relationship, and we're able to connect them. What does that do for you? What it does is it gives you more data. It gives you more information, not only from a credit and fraud perspective, which is why we're the best in the industry on that, but it also gives you more information from a marketing perspective. What I don't think people realize is that the way I like to think about the closed loop, the closed loop is like the Autobahn, okay? You put a go-cart on the Autobahn, it's a go-cart. You put a Mercedes or a BMW, an Audi, it'll open up and go. Our premium customer base is that Mercedes and that Audi and that BMW. That's what really powers the closed-loop network. What really powers the closed-loop network is the premium customer base. When you look at our customers, 55% of our U.S. card customers make over $200,000 a year. Those are customers that our merchants want to connect to. That's why they provide offers. Having the merchant and card member relationship is really nice. Having the merchant and card member relationship with premium customers at scale, that is the differentiator. When you look at trying to replicate that, the way you have to replicate that is not by putting go-carts on the—you got to put Audis and you got to put Mercedes and BMWs on that. That's what we tend to do, and that's what our merchants want to see. That is why we're able to get value from merchants who want to connect with these premium customers who are going to spend more money with them. The secret sauce is not just the closed-loop network or the premium customer base, but the intersection of the two. It absolutely is intersected too. Here's another interesting point. The other interesting point is we've tried to replicate that again with Resy. If you take Resy, Resy becomes a closed loop within the closed loop where we're connecting diners and we're connecting restaurateurs. The interesting part about Resy is we've launched it and continued to promote it as an open platform with a closed component. We have a closed loop which is federated and open, but then within it, we have a closed loop within that closed loop for our cardholders. What does that do? What that does is it wants more restaurants to come in, and it helps us to acquire more card members who get special offers from that restaurant. If you think about that closed loop within a closed loop, we think about travel and our travel business within a closed loop like that, that helps power the over-earnings power of the company. You've put out an aspirational target to grow revenue at 10%. The ingredients there being high single-digit billings growth, continued card fee growth, and lending that I believe grows slightly faster than billings. I mean, let's start with billings. How much more space is there to grow billings at an above-industry pace? Yeah, look, I think there is a lot more room. I mean, the great part about our business and the people that are in this business, this is a TAM that grows year after year in mid to high single digits, right? So that's really good. If you look at our U.S. consumer business, it's grown on a CAGR of 10.5% since 2019. And so we've outgrown the industry from that perspective. When you look at our penetration in that space, we only have about 5% of the accounts in the United States, and we have about 25% of the fee-paying accounts in the United States. I think there's room there. Internationally, in our top five markets, we probably only have no more than 6% market share. We're continuing, and we're growing billings at double digits, right? You look at it, and we're increasing coverage. Coverage continues to increase. We are really bullish that we can continue to grow billings. We will probably talk about SME at some point. The SME piece has been a little bit more flattish, and I think we will dive into that a little bit later. There, it is flattish at a higher percentage of billings than our competitors would have. I've got to zoom in a little bit while we're on the consumer. Any update you want to give us on the state of spending as you see it now and recently? Yeah, I think I'll give the same update that everybody else has been giving. I think I'm probably one of the last ones here. It's been consistent, right? It's really been consistent. What we've seen through May is what we saw through April and what we saw in March and in the first quarter. Goods and services, consistent. Airline, pretty consistent. We said that was down a little bit. I think lodging gets a little more challenged, but restaurants still very, very strong. If you look at the individual segments, international, SME, and U.S. consumer, pretty consistent to where they are. Unless something crazy happens in June, I think when we start talking about this in July, we're going to say the second quarter pretty much looked just like the first quarter did. FX adjusted and all that other kind of stuff. Leap year adjusted too, right? Right. Right, right. Okay. On card fees, you always emphasize pricing your products for value. We talked a little bit about the different demographics, but the different generations, they like and value different things. You have an Uber Eats reward on there. I use Uber Eats all the time. My dad certainly wouldn't. Is that something that gets harder as the demographic base diversifies and the annual fee keeps increasing? How do you make sure that each different demographic, who presumably likes a few different things, gets enough value out of the card? Yeah, it actually doesn't get that much harder. I think as we think about refreshing products, again, I'll go back to that Autobahn example, we have a lot of people coming to us that want to put value on the cards. It's really about us picking and choosing what we want to do. Just to pick on the Uber benefit, which is, does he take taxis? I know he apparently doesn't eat delivery, but you could use that. That is obviously Millennial and Gen Zs use that. Ironically, Gen Xers use it just as much as they do, and Boomers about half the time, right? That's just one benefit. If you look at our product set, when you look at the Platinum Card, it's pretty much targeted at people that travel, and you have value around that. You look at the Gold Card, and the Gold Card has really become the dining product, right, with the Global Dining Collection, the Dunkin' Donut benefit, which has been unbelievable as our Dunkin' Donuts spending has gone up almost 55%. A lot of donuts. Although it's hard to get a donut at Dunkin' Donuts. It's more coffee now, right, than donuts. Anyway, when you look at that, what we really try and do is continue to add so that people can pick and choose what's right for them. When you look at a product that's $695 and $350, whatever it might be, you want to make sure you're adding more and more value. If you decide you're going to raise it, you add even a lot more value than you're going to raise the fee. You have to make sure that because not everybody's going to use every single benefit. We know that going in. By having an array of benefits for people, what happens is people can pick and choose. Again, you're picking a Platinum Card because you travel. You're going to use Fine Hotels and Resorts, and that stuff, that does make a difference. I mean, you got like 1,500 Fine Hotels and Resorts, early check-in, late check-out, $100 credit, breakfast, so forth and so on. That is a really good value. You book twice with us, and you've paid for your Platinum Card fee. That's not even in sort of that implied value in terms of the credits and things like that. Yep, okay. The last ingredient to the 10% revenue growth is on the lending side. I mean, you've seemed eager to lean into lending for some time. A common point of pushback that we would hear from investors is that doing too much lending can get too risky or it could be multiple dilutive. I mean, to the people who say that, what are they overlooking? Don't say that. You shouldn't. None of them are in this room. No, okay. None of them in this room. Here's the way we look at it. We lend money to our cardholders because they want to borrow. I'd rather have our cardholders borrow from us than from our competitors. Because once you start borrowing from our competitors, then why not just take the card from our competitors as well? The other thing I'd say is most of our lending is done to existing customers, and our credit profile is pristine, right? I mean, it's beyond reproach at this particular point in time, and it's been that way for decades. If you dig into the numbers, you've got to look at a couple of things. Look at our billings growth versus our total loans and receivables growth since 2019. 59% billings growth, 47% loans and receivable growth. That means the ratio has gotten even better. If you dig into NII and look at it and you say, "Okay, half of the NII growth is margin." How do you get margin? If you look at our funding stack, 20% a number of years ago was funded through retail deposits. Now that's 65%. If you look at our pricing capability, it's even more sophisticated. Really, when you look at that NII growth, only half of it is really volume-related. The other half is margin-related. When I look at the margin-related piece of it, why wouldn't I take that money? I'm not going to apologize for that piece of it. I think the way to look at it is what has happened with delinquencies and so forth. The other thing, by putting Pay Over Time and Plan It and things like that on it, that is driving a little bit more of our loan growth and receivables. We feel really good about it. We do not do balance transfers. We do not get outside of our credit box. I think that is, you have really got to ask the second and third-order questions when you start to get into the lending part of our business. Years ago, we were sort of allergic to it. You wonder why you do not have these deeper relationships with your customers because they need to do it. The reality is Platinum Card holders will revolve and need that working capital for themselves from time to time. We are there to give them that. That is a really good credit decision for us. Your predecessor used to emphasize your best customer is your existing customer, right? Yeah, he was right, and he had a pretty good run. We are going to go with that. Stick with that, okay. We'll go with that. Okay. In your initial remarks there, you talked about innovation. A big part of the overall Amex value proposition is the differentiated membership model and the customer base, which has created the customer base. Tell us about some of the innovations on the membership services side that you've made and that you're excited about. I think, look, what we've done is as we look at just you look at Resy, you look at Tock, you look at those acquisitions. I talked a little bit about that before in terms of creating this closed loop within a closed loop. That's all a card member benefit. The constant investment in our travel business in terms of providing more value to our cardholders there, the lounge investments, which we've got the lounge wars now, right? We continue to do that. We did Centurion Lounge over at One Vanderbilt, which has been a huge success as we try and take that to another level. Experiences. When we do partnerships, we've done a big Formula One partnership. It's not about putting our names. I was with Zak Brown from McLaren, and he's trying to get me to sponsor the car. I said, "The only place you have left is the windshield." I do not think we really want to put Amex across the windshield. I mean, he'll put a decal anywhere, that guy. He's phenomenal. We do not do that. What we're doing is we're involved with Formula One not only to provide tickets, to provide special events, to provide special access, to provide driver access, to do the Formula One Academy, to do things like that that our card members get excited about and get involved in. As you think about sponsorships, US Open, things like that, that's how we do it. We work with our merchant partners to provide more and more value in this membership model. What we're doing is we're creating that flywheel. The more card members we have, the more merchants we're going to get, and the more merchants that want to get to those particular card members. It is a lot more of the same. That playbook works for us. I think the key thing is that the takeaway here is we're going to continue to invest in that model. Because if you do not invest, then our competitors will continue to catch up and in a lot of cases just replicate what we're doing. That is why it is really important for us to stay a couple of steps ahead. Yep. You mentioned the lounge wars and the competitors more broadly a little bit. It's a good segue to an audience question. I mean, how would you talk or how would you rate the competitive environment today, the core U.S. premium consumer segment? Yeah, I mean, look, it's been a war in that segment since Gordon Smith left American Express. Now he's retired in Florida, but when he first launched Sapphire. I've said this, and I've said this multiple times. I think it helped us up our game a little bit. It put a great focus on that premium segment. It's intense. It's intense. There are a lot of people out there that want these premium cards. We punch way above our weight. At the JPM Investor Conference, they've had a great run, but they've clearly said, "We're not number one in premium." Citi is, I think, regrouping. Capital One, I think, will be a little distracted at this point, but with VentureX, they've come at us as well. I'm sure Charlie will do some stuff at Wells Fargo. Our perspective is we're ready for all comers. That is why the refresh is so important for us, right? Because you want to stay on that cycle of constantly refreshing your products because you have to have new things to introduce to your consumers on an ongoing basis. Not only consumers, but small businesses as well. That is why we've really put a major focus on refreshes since I took over. On the earnings call in April, you mentioned that the consumer base is not really affected by swings in the stock market or declines in consumer sentiment. Yeah, I can understand why that's true historically. Does that relationship change at all with the growth with Millennials and Gen Z just because they do not have the home equity or the savings built up? Are they a little more sensitive there? Yeah. I'll get to the last part of that. The ironic part of that, as we do our research, is when you compare Gen Xers of yesteryear to the Millennials of today, the Millennials of today have more savings than the Gen Xers did at that exact same time, right? I don't think that holds. I think that, look, consumer sentiment was in the toilet, but yet they're just complaining as they go spend. That's what we're seeing. Watch what they do, not what they say. Exactly right. They're just complaining as they go spend, and that's fine. They're just approaching a lot of disgruntled retailers and restaurateurs, but in a disgruntled way. I think that's okay. The reality is the stock market has never affected our customer base. What affects our customer base is unemployment, especially white-collar unemployment. We saw lots of unemployment during COVID, but that was more service unemployment, hotels, restaurants, things like that. That really wasn't our customer base by and large. That's what we do watch out for. The other thing I'll remind people is that in stress times, our card members act a lot differently than other cardholders, right? What happens is when our cardholders get stressed, they spend a little bit less. If they get really stressed, and a lot of them have multiple cards, they will pay us first. We put that fact up there when we did our investor conference back last April. I think the thing that we really watch is we really watch unemployment for this. The stock market up and down, I mean, just look at what's happened with the stock market. As I said to somebody the other day, if you were Rip Van Winkle and went to sleep the day before the election and woke up now, you'd say, "I guess nothing happened." Meanwhile, it's been like Mr. Toad's wild ride from a stock market perspective, right? I don't think people are running their lives like that. Got it, okay. Let's switch over to the U.S. commercial business. What does it take to see an acceleration in spend growth there? The second question would be, given your share of small business spend today, I mean, how much more opportunity is there to gain share versus this being a business that just grows with the market from here? Yeah. I think, look, when we look at small business, and we'll ultimately probably provide a lot more color on this going forward, I think SMB is too large to look at. I think you have to look at the small business, and we'll define that by whatever revenue segment we want to, and the middle market segment. I would say the small business segment is growing. It's vibrant. We're acquiring new customers on an ongoing basis. I think when you start to get into the middle market segment, you have an organic issue. You still have an organic growth issue. Part of that is right-sizing transactions for the right product. During COVID, everything went on the credit card. Once people started spending again, everything went on the credit card. Coming out of COVID, that behavior did not change. As I said this to my team, the reality is at American Express, we do not pay Google with the Amex card. Yet a lot of middle market companies were. That is probably not the right use of the card when you are thinking about big advertising spend. I would not mind it being the right use of the card, but probably not what the card was designed for, right? We are seeing a little bit of that. You are also seeing a little bit of middle market companies acting a little bit more like large market companies in terms of really much more focused on expense management than on growth. The other big difference is the middle market companies tend not to put their goods for resale on the card where small businesses do. Having said all that, you've got about a 3% growth in the overall commercial business and almost 8% revenue growth, 7.5%. Because what happens is we have so many small businesses, you've got the fees and you've got the lending. The corporate business is relatively flat at this point. Any of you that work for any company of any size, nobody is telling you, unfortunately, to go out and spend more money on your corporate card. That's not a memo I'm writing, okay? It's probably not a memo that is coming out in your own businesses. I wish it was, but it's not. We're not leading like that. That's what's happening with corporate. That's why the corporate card business kind of stays a little bit flat, kind of moves with inflation. Is there any specific catalyst that would reignite that sort of middle market organic growth, or is it just a matter of time and getting comfortable with sort of economic policy? No, I think it has to reset a little bit still. I think we have to do a better job. I think we can do a better job in making more B2B transactions viable on the product. Viability meaning from both the customer, the card member side, and the merchant side. There is a point there where maybe the right pricing decisions drive some more volume there. That is something that we'll ultimately look at to put more volume on. Competitively in U.S. commercial, you recently bought Center to build out the expense management capabilities. Tell us more about the strategy behind that acquisition and how you're thinking about the offering on an overall basis and a holistic basis for the commercial segment more broadly. Yeah. I mean, we've been partnering with expense management providers for a long time. It became clear that we probably needed our own solution. Maybe it should have been clearer a little bit earlier, but we are where we are. I think when you look at Ramp and you look at Brex, they've had this integrated product. We tried to partner with other providers, Concur and some others. It just became apparent that we needed our own. That will be targeted. It will become ultimately part of the Blueprint platform, which also will have on it Amex Pay. It has got our checking account. It has got access to your card account. It has got a cash flow analysis. It has got working capital. We will integrate travel into that. Think about that as a platform going forward for small and mid-sized businesses. I think ultimately Center, out of the gate, as a standalone product, will be targeted much more at the middle market company, which is really focused a lot more on expense management and will integrate our corporate card into that. That's it. I mean, the reality is it's a decision for us to buy versus build. It's not our bailiwick. It's building expense management software. We saw Center. We thought Center had a good tech stack. We bought it. That closed in April. Right. That's right. They're in-house. They're in-house. They're in-house. Okay. Let's switch over to International. That's an area where billings have been growing quite nicely in the teens. What's the driver behind that? How long do you think that's sustainable? I think that has a long, long, long tail. International was the fastest growing part of our business pre-pandemic. During the pandemic, it was the one that was hit. It took the longest to come back because it took a long time for a lot of countries to open. When you start to look at International, we're pretty much in 15 markets, which represent about 60% of the revenue of the card revenue that's out there. When you look at the top five markets that we're in, we don't have more than 6% market share. When you look at Canada, Mexico, the U.K., Australia, and Japan, there's a lot of opportunity for growth. Premium products play really well internationally. As we continue to increase coverage, where we now have over 80% coverage in 12 markets, we've taken a very specific city approach where we've identified approximately 50 cities where we want to get to that 80% coverage number. We've made a lot of progress against that. I think as coverage continues to increase and as we continue to push the product out in the marketplace, I think it's a big, big growth opportunity for us. Not a lot of lending internationally for us. You may see a little bit more of that. Right now, we're focused on not only small business, which is growing at the same rate as our consumer businesses internationally. That's a real nascent business over there. There's nobody that's out there that's dominating that business. I think there's a lot of opportunity for growth internationally. Is there less lending internationally? Is that a structural thing? International consumers don't demand? They don't. I mean, if you go market to market, it's very, very different. You go to Germany, I mean, everything is debit. You go to different markets. In some markets, you have thin credit files, and you just don't want to get involved in it. Consumer debt is a real U.S. phenomenon, right? It's not necessarily an international phenomenon as much. We have some lending in the Canadian business, U.K. business, and so forth. You go to Japan, it's not a big lending market, right? Yep. Okay. Let's move over to VCE and marketing expenses too. I'll start with the first one. VCE is a metric that, as a percentage of revenue, it's increased quite a bit since pre-pandemic time. I know that as you add value to the card, VCE should increase too. Is there a limit to where that line makes sense as a percentage of revenue relative to sort of the low 40%? Similar question, but why is 42%-43% sort of the right level or the optimal level? I think the first thing that's really important is VCE is not something we strive for as an output. It's a result of the actions that we take. We don't set a goal and work our way back. Sometimes it's 42, sometimes it's 41, sometimes it's 43. It has to be taken into context of the entire expense base that we have, right? Because when you have higher VCE, you sometimes don't need to spend as much in marketing. You'll get more revenue out of your cardholders. You get better credit quality. You get more efficiency in your acquisition. A lot of times when you relaunch a product and it has potentially more VCE, and the relative scale of how much VCE is in a product goes anywhere from 25% to 60%, depending upon if it is a cash back product or a co-brand product, then you got proprietary products in there as well. You have to look at that in the context of your entire expense base of how you want to allocate your money. The more value you put in a product, maybe the less rewards you need to offer from an incentive perspective to acquire a cardholder, right? It just makes a lot of sense, which is why you'll see a lot of times when we relaunch a product, the VCE works a lot harder for us than it works on a normal basis. I don't know what the right level of number is, but I think what you have to just focus on for us is that our ultimate goal is to deliver mid-teens EPS growth. It's all a combination of the marketing dollars, the OpEx, the tech spend, and so forth. Okay. On the marketing side, you've often highlighted that as an area you can flex lower in the event of a downturn. I mean, I'd imagine there's a certain level of marketing spend that you need to sustain this longer-term growth algorithm. How do you think about balancing those two? Versus the $6+ billion you've been calling for for marketing for this year, where's the bottom line in terms of what's necessary to sustain the growth trajectory? Yeah. This gets a little bit back to the VCE question because it works in concert. Here's what I will say. I'm not going to flex that marketing line to make an EPS number. It's just not how I run the company, right? When we talk about that flexibility, we talk about that flexibility in terms of if we need to potentially invest in other areas. If we need to invest in technology or we need to invest a little bit more in OpEx, we can flex that, charge the business with more efficiency. The interesting thing is when times get a little uncertain or a little tougher, you do not have as much line of sight into acquiring good cardholders or upgrading existing cardholders. It becomes a self-regulating line to a large extent. What happens is if you're not meeting the ROI threshold, we're not going to spend the marketing dollars. I wouldn't think of it as a slush fund. That's not the way we want you to think about it. I would think about it as a number that we have out there that is driving that growth, that we do have the opportunity to flex up or flex down depending upon the line of sight that we see into it. If you look at, I guess it was last year, we flexed the thing all the way up. We talked about at the beginning of the year that we were going to add more to marketing. Our plan at the beginning of the year was to take the certified gain, for example, put that into marketing. We wound up dropping that entire certified gain to the bottom line, shared that with our shareholders, did more share buybacks. We were able to just, by the overall business, bring that up. That was not the planned number necessarily at the beginning of the year. We had line of sight into great cardholders, and that's what we did. That number is going to vary. It could go a little bit up. It could go a little bit down. You're not going to see it drop a couple of billion dollars. It did during COVID because you did not have line of sight in there. As you get bigger and bigger, you need to invest more to continue to bring those cardholders in. Think of that investment in terms of VCE and marketing, not just one or the other. To your point on the ROI with respect to marketing, I'd imagine you have far more marketing opportunities that meet the ROI threshold today than you could fund with a reasonable marketing budget. Is that fair? Yeah. I mean, I think that is absolutely fair. I mean, we have, look, we have a responsibility to our shareholders to deliver earnings and to delivering earnings growth. We set our ROIs at a level that we feel comfortable to do that. The way I've described this is we have teams of people that look at initiatives. They come to the marketing council with those initiatives. It's sort of like Shark Tank, right? I mean, they come in, "Here's my initiative. And will you fund it?" Maybe yes, maybe no. It all depends on how the other ideas are. If the ROIs are really, really high for the other ideas, we're going to fund those. You may look at it and say, "Hey, there's some good ROIs that we're leaving on the table." On the other hand, we may make the decision and say, "That's just completely idiotic to leave that." We'll just communicate that to our shareholders. You may miss, again, you may miss from a short-term perspective what the EPS is. We're not running this company from a short-term perspective. I think if you look over the last seven years, the returns that we've been able to deliver, the capital we've been able to return to our shareholders, the way that we have decided to run it is the right way. Just going back to COVID, I mean, look, we could have lost as we were going through COVID, it looked like we were going to lose money. My decision was to invest more. Because my view was, if we lose $5 or we lose $6, who gives a shit? Doesn't really matter. We're losing money, right? The reality was, as long as your capital position, your liquidity position is right, why not invest in your cardholders? We did that. We didn't lose any money. We wound up making money. We didn't make as much as we had planned to make. It kept the fuel in the tank so that when we came out of COVID, we came out like a rocket ship as opposed to limping out. I think that was the right decision for us. The turbo on the Mercedes, on the Autobahn. That's exactly. You're getting the whole concept now, right? If there's any takeaway. At 3:00, you got it locked in. All right. On the other operating expense lines, I mean, you've been able to generate healthy leverage there. I guess the question would be, how do you ensure that you're both driving operating leverage and making the necessary sort of back-end technology investment? As a corollary to that, what are some of those maybe behind-the-scenes technology investments that you're kind of excited about? I think the key thing is over the last six, seven years, we've gone from like a $35 billion revenue company to almost a $70 billion revenue company. When you do that, your variable revenues that have come in do not require the same amount of OpEx or technology and what have you. Scale has its benefits. Having said that, probably we've invested 40% more in technology than we did just in 2021, right? We've continued to invest. The reality is that what is exciting, again, these are important investments for us. One of the things that we've decided to do is really we're replatforming all of our back-end systems. That may not excite a lot of you in the room, but it really drives our technology people wild. They love this, right? You're replatforming systems that are 30 and 40, and sometimes 30 and 40 years old or have gone through multiple iterations, and now you've decided to replatform them. We've made the decision to invest hundreds of millions of dollars to do that. Why do you do that? It makes it a lot more nimble. It makes it more API ready. It makes it able to integrate in and invest in with other fintechs and other providers and to really take advantage of our global scale. Look, a lot of people talk about AI, and we've invested in AI. The key point is we have invested in AI since 2010. When you look at our underwriting decisions, every time you swipe that card, that's a machine learning decision that's out there. Every credit fraud, underwriting decision, authorization that we do is all AI. It continues to learn. That's how we set the no preset spending limits and so forth. We're excited about what we can do from a customer-facing perspective going forward. We're excited about integrating in all of those acquisitions that we've made from a small business perspective into a platform that faces our SMEs. We got Tock, and we've got Tock, and we've got Resy, which we need to put together. We got Rooam, which is another acquisition that we did, which allows Tock and Resy to connect to systems like Toast and Shift4 to be able to bring information back so you get much more of a customer management system for the restaurateur. Awesome. Okay. A few minutes left. I'll go to a couple of audience questions. You touched on Capital One Discover a little bit, but the question specifically here is, do you think this combo helps overall industry economics, and/or will the potential extra margin be returned to card members for rewards, retention, those kinds of things? That would be a good question for Rich. Look, I think it's a really good acquisition for Capital One. I think it gives them a debit network, which I think is really important. I think that's the crown jewel here. I think it gives them more scale. I mean, they'll become the premium low FICO lender, if you could put those words together. They'll have tremendous scale. They do it better than anybody else because they do it better than anybody else. In terms of the Discover network itself, we will see. I would not consider the current Discover Network the Autobahn. No disrespect, but it's not known for premium customers. I think the tough part of that decision is, do you take high interchange transactions off the Visa and Mastercard Network and put them on the Discover Network at a much lower discount rate? That's a real tough call because you'd have to believe that you're going to get more value out of that. I just think you're going to see, my view is you will see them keep a lot of the volume on Visa, Mastercard, and keep some of the volume on Discover. I think the debit network will be a big win for them in a consolidation of all that stuff. Yep. Okay. Another audience question here. You talked about deposit growth, but online banks broadly have not taken off in the U.S. the way we might have expected several years ago. I mean, why do you think that is? What's the gating factor there? I mean, what do you think is unique and behind Amex's success there? I mean, we're not going to scare anybody with our online deposits at this point. I don't think Jamie or Jane or anybody like Brian is really worried about Amex at this point. For us, it's enough to help us fund our business. I mean, we're really not a transaction. We're not a transaction-taking bank. I think online banks haven't taken off because your regular bank can do everything you need to do online for you, right? I mean, you have a brick-and-mortar bank. I don't know when's the last time anybody was in a brick-and-mortar bank here. I went this weekend. How was it? Not great. Not great. Okay. You could do pretty much the exact same things you do in that brick-and-mortar bank, other than maybe do a big wire with your app that you have either from JPMorgan or Citi or so forth. I think it's really hard. I think the banks have done a really good job of digitizing their existing value proposition. I think that's why I don't think pure online banks have taken over. For us, it's really about we're leaning in on our brand, our trust, and our security. People for years have liked putting their money with American Express. It happened with traveler's checks, right? If you think about a traveler's check, people gave us their money. We gave them a piece of paper, and we'd say, "We'll make you good on that," right? That's what we leaned into. We did that right after the financial crisis. It's really high-yield savings, right? What we decided to do is for small business and for consumer, if you want to have a transaction bank with us, you got it. We'll have that offering for you. It's not something that we're necessarily leaning into for the future growth of the company. Okay. We can wrap it up. I have one last question, Steve. As a longtime veteran of the company, what are the main takeaways and the investment case that you want this audience to leave here with today? Hope we cleared up the NII stuff. That's what I'm hoping, loud and clear. I hope we cleared that up. No, I think, look, we're in a great, I think anybody in the card business is in a great industry, right? I mean, you want to be in an industry where the TAM is growing. I think that's terrific. For us, not only are we in a great industry where the TAM is growing, but we're in those segments that have growth opportunities. The premium segment is growing a lot faster than the rest of the industry, and we are punching above our weight. We talked about international and the huge opportunity that we have for growth in international. I talked about the closed loop. Our business model, which is the closed loop with a premium consumer and a premium small business customer, is really important. It helps drive our revenue. Look at our revenue mix, 75-25. You do not see that from a card company. We have the best credit quality in the industry. We started out by talking about 175 years of innovation. We continue to innovate, and we will continue to innovate. Our key is continuing to stay above, to stay ahead of our competition, and to respond to those forces in the marketplace. If you like a 30% ROE and you like us to return 80% of our capital to shareholders, you may want to think about us. Awesome. This has been great, Steve. Thank you so much. My pleasure. Thank you very much. Thanks for coming.