Financial Data and Key Metrics Changes - Revenue reached $597 million, up 5% year-over-year, driven by solid growth in transactions and TTV [13][35] - Adjusted EBITDA grew 23% to $118 million, with an adjusted EBITDA margin of 20%, expanding by 300 basis points year-over-year [14][40] - Free cash flow generation was $59 million, exceeding expectations, driven by working capital optimization and lower CapEx spend [41][51] Business Line Data and Key Metrics Changes - Transaction growth was up 5%, with TTV growing by 9% to nearly $8 billion, driven by increased demand for business travel [12][13] - Global multinational customer transactions increased by 8%, while SME transaction growth was muted at 2% [14][15] - Hotel transactions grew by 6%, outpacing the 4% growth in air transactions, reflecting a focus on increasing hotel bookings [15][16] Market Data and Key Metrics Changes - Transaction growth was 6% in the Americas and 11% in Asia-Pacific, while EMEA growth was softer at 2% due to the Olympics in France [16] - The top 100 customers expect travel spend to increase by approximately 5% in the fourth quarter [21] - The company maintained a high customer retention rate of 98% for global multinational customers [18] Company Strategy and Development Direction - The company is focused on capital allocation, reducing debt interest, and strengthening the balance sheet while investing in growth and productivity [10][34] - Continued share gains with total new wins valued at $3 billion over the last 12 months, particularly in the SME segment [22][24] - The company aims to enhance its digital channels, with 80% of transactions now through digital platforms, and is investing in AI for operational efficiencies [25][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and strategy, anticipating continued growth and share gains in 2024 [44][84] - The macroeconomic environment is expected to improve, which could positively impact SME growth rates [63][75] - The company is optimistic about the CWT acquisition, expecting to close in the first quarter of 2025 [33][54] Other Important Information - The company executed its first share buyback, repurchasing 8 million shares for approximately $55 million, and announced a new share buyback authorization of up to $300 million [11][55] - The company achieved significant interest savings through debt refinancing, with expected run-rate cash interest savings of approximately $50 million [42][52] Q&A Session Summary Question: Free cash flow generation and its drivers - Management highlighted that cost savings and working capital efficiencies will contribute to free cash flow expansion [58][60] Question: SME growth activity and industry verticals - Management noted that SME growth rates have stabilized, with expectations for improvement as macro conditions become more favorable [62][64] Question: Spread between TTV growth and revenue growth - Management explained that the spread is influenced by customer mix and international pricing dynamics [66][67] Question: Drivers of improved free cash flow - Management indicated that lower interest expenses from refinancing are the primary driver of improved free cash flow [68][70] Question: Timing of transactions and business travel consumption - Management confirmed that Q3 transactions closely relate to travel activity within the same quarter [72] Question: Future SME growth and macroeconomic conditions - Management acknowledged that macroeconomic conditions will influence SME growth, but emphasized internal initiatives to drive productivity [76][77] Question: Leveraging generative AI for cost savings - Management discussed the potential for significant margin expansion through automation and AI, although quantifying specific savings remains challenging [79][80]

Core Insights - Global Business Travel Group, Inc. reported a quarterly loss of $0.22 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.08, marking an earnings surprise of -175% [1] - The company generated revenues of $597 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.43%, but showing an increase from $571 million year-over-year [2] - The stock has increased by approximately 19.1% since the beginning of the year, slightly underperforming the S&P 500's gain of 19.8% [3] Earnings Outlook - The earnings outlook for Global Business Travel Group, Inc. is uncertain, with current consensus EPS estimates at -$0.03 for the upcoming quarter and -$0.08 for the current fiscal year, with revenues expected to be $587.81 million and $2.43 billion respectively [7] - The estimate revisions trend is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expectations of outperforming the market in the near future [6] Industry Context - The Transportation - Services industry, to which Global Business Travel Group, Inc. belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact the stock's performance [5]

Financial Performance - Total Transaction Value (TTV) for Q3 2024 increased by $629 million, or 9%, to $7,752 million compared to Q3 2023[134] - TTV for the nine months ended September 30, 2024, rose by $1,687 million, or 8%, reaching $23,581 million compared to the same period in 2023[134] - Revenue for Q3 2024 was $597 million, a 5% increase from $571 million in Q3 2023[130] - Operating income for Q3 2024 was $27 million, compared to a loss of $4 million in Q3 2023, marking a significant improvement[130] - Net loss for Q3 2024 was $128 million, compared to a net loss of $8 million in Q3 2023, reflecting a $120 million increase in losses[130] - Adjusted EBITDA for Q3 2024 was $118 million, up 23% from $95 million in Q3 2023[130] - Adjusted EBITDA margin improved to 20% in Q3 2024, compared to 17% in Q3 2023, an increase of 300 basis points[130] - Free Cash Flow for Q3 2024 was $59 million, a decrease of 45% from $107 million in Q3 2023[130] - Total revenue for the three months ended September 30, 2024, increased by $26 million, or 5%, to $597 million, driven by a 5% increase in Transaction Growth[153] - Travel revenue rose by $23 million, or 5%, primarily due to a 5% increase in Transaction Growth and a 9% increase in TTV[154] Transaction Growth - Transaction Growth for both Q3 2024 and the nine months ended September 30, 2024, was 5% year-over-year, driven by increased demand for business travel[136] Expenses and Costs - Cost of revenue (excluding depreciation and amortization) decreased marginally by $1 million to $237 million, despite increases in traveler care costs and vendor rates[155] - Sales and marketing expenses increased by $4 million, or 5%, to $99 million, attributed to higher employee costs and growth plans[156] - Adjusted operating expenses for the three months ended September 30, 2024, were $479 million, compared to $476 million for the same period in 2023[149] - Cost of revenue (excluding depreciation and amortization) increased by $6 million, or 1%, due to additional traveler care costs and merit increases in salaries and benefits[169] - For the nine months ended September 30, 2024, technology and content costs increased by $25 million, or 8%, primarily due to growth plans and additional employee headcount[171] - General and administrative expenses increased by $6 million, or 3%, primarily due to $36 million related to mergers and acquisitions costs for the potential acquisition of CWT[172] Cash Flow and Debt - As of September 30, 2024, cash and cash equivalent balances were $524 million, an increase from $476 million as of December 31, 2023[181] - Free Cash Flow for the nine months ended September 30, 2024, was $132 million, compared to $17 million for the same period in 2023[181] - Net cash from operating activities increased by $103 million to $207 million for the nine months ended September 30, 2024, compared to $104 million for the same period in 2023[186] - Cash used in investing activities decreased by $23 million, primarily due to a $12 million decrease in property and equipment purchases and $10 million from loan proceeds received[187] - Net cash used in financing activities was $79 million, influenced by $1,372 million repayment of term loans and $1,397 million proceeds from new borrowings[188] - Free Cash Flow improved by $115 million to $132 million, driven by a $103 million increase in operating cash flows and a $12 million decrease in capital expenditures[193] - Net Debt decreased by $26 million to $860 million as of September 30, 2024, due to a $48 million increase in cash and cash equivalents, offset by a $22 million increase in total debt[196] - The company amended its senior secured credit facility on July 26, 2024, borrowing $1,400 million to refinance existing debt[197] Acquisition and Investments - The company announced a potential acquisition of CWT valued at approximately $570 million, expected to close in Q1 2025[125] Compliance and Internal Controls - The company identified a material weakness in internal control over financial reporting related to the Egencia business acquired on November 1, 2021[215] - Management believes that consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles despite the identified weaknesses[214] - Remediation efforts are ongoing to address the material weakness, focusing on integrating key applications and processes of the Egencia business into the company's legacy control environment[216] - The integration of Egencia's key applications and processes has been completed and is now subject to internal control procedures and testing[216] - There were no changes to internal control over financial reporting that materially affected the company's controls during the reporting period, except for ongoing remediation efforts[217] - Management does not expect that disclosure controls and procedures will prevent or detect all errors and fraud due to inherent limitations[218] Litigation - The company is involved in litigation that arises in the ordinary course of business but does not believe any pending litigation will materially affect its financial condition[220]

Financial Performance - Total Transaction Value (TTV) increased by 9% year over year to $7.8 billion[2] - Revenue grew by 5% year over year to $597 million, with Travel Revenue also increasing by 5% to $478 million[6][7] - Adjusted EBITDA rose by 23% year over year to $118 million, resulting in an Adjusted EBITDA margin expansion of 300 basis points to 20%[2][10] - The company reported a net loss of $128 million for Q3 2024, compared to a net loss of $8 million in the same period last year[9] - Net loss for the nine months ended September 30, 2024, was $120 million, compared to a net loss of $90 million for the same period in 2023[22] - Adjusted EBITDA for the same period was $118 million, reflecting an increase from $95 million year-over-year, with an Adjusted EBITDA margin of 20% compared to 17% in the prior year[42] Cash Flow and Guidance - Free Cash Flow for Q3 2024 was $59 million, a decrease of 45% compared to the previous year[11] - The company raised its full-year 2024 Free Cash Flow guidance to approximately $160 million, up from previous guidance of over $130 million[3][13] - Free Cash Flow for the three months ended September 30, 2024, was $59 million, down from $107 million in the same period of 2023[44] - Free Cash Flow guidance for the year ending December 31, 2024, is projected to exceed $260-280 million, after accounting for approximately $105-115 million in capital expenditures[48] - The company highlighted the importance of Free Cash Flow as a measure of liquidity, indicating its ability to generate cash to meet liquidity demands[38] Debt and Equity - Net Debt decreased to $860 million, with a leverage ratio of 1.9x as of September 30, 2024, down from 2.7x a year earlier[12] - As of September 30, 2024, the company's Net Debt stood at $860 million, a decrease from $927 million a year earlier, with a Net Debt to LTM Adjusted EBITDA ratio of 1.9x[44] - The company’s accumulated deficit increased to $(1,559) million as of September 30, 2024, from $(1,437) million at December 31, 2023[21] - The company’s total shareholders' equity decreased to $1,106 million as of September 30, 2024, from $1,212 million at December 31, 2023, a decline of 8.8%[21] Operating Expenses - Total operating expenses decreased by 1% year over year to $570 million, driven by lower restructuring costs and productivity improvements[8] - Total operating expenses for the three months ended September 30, 2024, were $570 million, slightly down from $575 million in the same period of 2023[43] - The company anticipates restructuring costs of approximately $15-20 million and integration expenses related to mergers and acquisitions of about $65-70 million for the full year 2024[47] Customer Metrics - The company achieved a 97% customer retention rate over the last twelve months[3] Assets and Liabilities - Total current assets increased to $1,394 million as of September 30, 2024, compared to $1,360 million at December 31, 2023, reflecting a growth of 2.5%[21] - Total liabilities increased to $2,646 million as of September 30, 2024, from $2,539 million at December 31, 2023, marking a rise of 4.2%[21] - Cash and cash equivalents at the end of the period were $550 million, compared to $445 million at the end of September 30, 2023, indicating a year-over-year increase of 23.6%[22] Share Repurchase - The company repurchased 8 million shares for approximately $55 million in Q3 2024 and announced an additional share buyback authorization of up to $300 million[4] Loans and Financing - The company raised $1,397 million from senior secured term loans during the nine months ended September 30, 2024, compared to $131 million in the same period of 2023[22] Future Expectations - The company expects full-year 2024 Adjusted EBITDA to include approximately $115 million in interest expense and $60-75 million in income taxes[47] - The guidance does not include the impact of the CWT acquisition, expected to close in Q1 2025[46]

Global Business Travel Group, Inc. (GBTG) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is trac ...

Company Performance - Global Business Travel Group, Inc. (GBTG) has a year-to-date return of approximately 21.9%, significantly outperforming the average return of 2.5% for the Transportation sector [2][3] - GBTG currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook [2][3] - Over the past 90 days, the Zacks Consensus Estimate for GBTG's full-year earnings has increased by 28.2%, reflecting improved analyst sentiment [2] Industry Comparison - GBTG belongs to the Transportation - Services industry, which has seen a decline of about 6.6% year-to-date, indicating that GBTG is performing better than its industry peers [3] - In contrast, International Consolidated Airlines Group SA (ICAGY), another notable stock in the Transportation sector, has returned 41.5% year-to-date and belongs to the Transportation - Airline industry, which has increased by 33.2% [2][3] - The Transportation group is currently ranked 8 within the Zacks Sector Rank, which includes 16 different groups [1]

Financial Data and Key Metrics Changes - Revenue increased by 6% year-over-year, reaching $625 million, driven by transaction growth and increased demand for products and services [6][22] - Adjusted EBITDA grew by 20% to $127 million, with a margin expansion of 240 basis points year-over-year [5][24] - Free cash flow generation was $49 million, up 148% year-over-year, reflecting strong working capital actions [24][30] - The leverage ratio on net debt divided by last 12 months adjusted EBITDA improved to 2 times as of June 30, 2024, down from 3.5 times in June 2023 [24][26] Business Line Data and Key Metrics Changes - Global multinational transactions increased by 7%, with double-digit growth in financial services and pharma industries [8][10] - Small and medium enterprises (SME) transactions grew by only 1%, indicating tighter spending controls in this segment [10][12] - Total new wins value reached $3.3 billion over the last 12 months, with strong customer retention at 98% for global multinational customers [11][9] Market Data and Key Metrics Changes - Transactions in France decreased by 4% in Q2, impacting overall transaction growth, but a recovery is expected in the fall [11][42] - Excluding France, transactions grew by 5%, and total transaction value (TTV) increased by 6% [6][11] - The top 100 global multinational customers expect travel spend to increase by approximately 10% year-over-year for 2024, up from previous expectations [9][10] Company Strategy and Development Direction - The company is focused on controlling costs, driving operating leverage, and investing in growth opportunities, including technology and AI [4][22] - The strategy includes a strong emphasis on digital channels, with 79% of transactions processed digitally [12] - The company aims to enhance its competitive position through the integration of AI and automation technologies [17][19] Management's Comments on Operating Environment and Future Outlook - Management noted a stabilization in global multinational sales, while SME sales have softened due to macroeconomic pressures [34][35] - The outlook for the second half of the year anticipates moderate acceleration in SME growth due to new wins and improved workdays [36] - The company expects revenue growth of 6% to 7% in H2, with adjusted EBITDA growth forecasted between 18% to 32% for the full year [27][30] Other Important Information - The company successfully refinanced its debt, significantly lowering interest costs and extending maturities to 2031 [25][26] - The pending acquisition of CWT is now expected to close in Q1 2025 due to regulatory review processes [15][50] - The company published its annual ESG report, highlighting commitments to sustainability and social responsibility initiatives [14] Q&A Session Summary Question: Can you expand on the state of the macro environment and expectations for the rest of the year? - Management noted a slowdown in SME same-store sales but a stabilization in global multinational sales, expecting moderate acceleration in the second half due to new wins [34][35][36] Question: How do you expect to keep your economics stable as NDC content proliferates? - Management clarified that there is no change to the underlying economics with the introduction of NDC, viewing it as a more flexible technical standard that could create future revenue opportunities [37][38] Question: How much was business travel down in France in Q2, and how do you see recovery? - Business travel in France was down 4% in Q2, but management expects a rebound starting in September [41][42] Question: Can you provide details on the CWT acquisition timeline? - The acquisition was pushed to Q1 2025 primarily due to the CMA Phase 2 review process, which lasts approximately 24 weeks [48][50] Question: What trends have you seen through the end of Q2 into July and August? - Management indicated that July and August are typically slower months, but trends are consistent with guidance for H2, and the impact of the CrowdStrike incident was managed effectively [51][53]

| --- | --- | --- | --- | --- | --- | --- | |----------------|-----------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | Amex GBT Q2 2024 Earnings Report | | | | | | | August 6, 2024 | | | | | | | GBT Travel Services UK Limited (GBT UK) and its authorized sublicensees (including Ovation Travel Group and Egencia) use certain trademarks and service marks of American Express Company or its subsidiaries (American Express) in the "American Express Global Busi ...

Global Business Travel Group, Inc. (GBTG) came out with quarterly earnings of $0.07 per share, beating the Zacks Consensus Estimate of a loss of $0.04 per share. This compares to loss of $0.23 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 275%. A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced break-even earnings, delivering a surprise of -100%. Over the last f ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________________________________________________ FORM 10-Q _______________________________________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PER ...