NEW YORK--(BUSINESS WIRE)--American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) ("Amex GBT" or the "Company"), a leading B2B software and services company for travel, expense, and meetings & events, today announced financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Highlights
Delivered Strong Financial Results
- Revenue grew 6% year over year to $625 million.
- Adjusted EBITDA grew 20% year over year to $127 million.
- Strong Free Cash Flow generation of $49 million, representing growth of 148% year over year.
Controlled Costs & Drove Operating Leverage
- 2% Adjusted Operating Expense growth versus 6% revenue growth.
- Operating leverage drove Adjusted EBITDA margin expansion of 240bps year over year.
Raised Free Cash Flow Guidance
- Raised full-year 2024 Free Cash Flow Guidance to >$130 million (up from >$100 million).
- Reiterated full-year 2024 revenue and Adjusted EBITDA guidance.
Lowered Interest Costs and Extended Debt Maturities
- Lowered leverage ratio to 2.0x from 2.2x in the first quarter and 3.5x a year ago1.
- July refinancing significantly lowers interest costs, extends maturities on all debt until 2031 and increases liquidity.
Continued Share Gains on a Strong Foundation
- LTM Total New Wins Value of $3.3 billion, including $2.0 billion from SME.
- 97% LTM customer retention rate.
Paul Abbott, Amex GBT's Chief Executive Officer, stated: "In the second quarter, we delivered strong Adjusted EBITDA growth, significant margin expansion and accelerated Free Cash Flow, and with our recent debt refinancing, we significantly lowered interest costs. We have a solid foundation with increasingly strong customer retention, and we continue to gain share while controlling costs. This puts us well on track to deliver against our full-year revenue and Adjusted EBITDA guidance and raise our full-year Free Cash Flow guidance."
Second Quarter 2024 Financial Summary
(in millions, except percentages; unaudited) | Three Months Ended | YOY | ||||
June 30, | ||||||
2024 | 2023 | |||||
Total Transaction Value (TTV) | $ | 7,724 | $ | 7,349 | 5% | |
Transaction Growth | 4% | 9% | ||||
Revenue | $ | 625 | $ | 592 | 6% | |
Travel Revenue | $ | 506 | $ | 479 | 6% | |
Product and Professional Services Revenue | $ | 119 | $ | 113 | 5% | |
Total operating expenses | $ | 583 | $ | 590 | (1)% | |
Adjusted Operating Expenses | $ | 498 | $ | 486 | 2% | |
Net income (loss) | $ | 27 | $ | (55) | $ | 82 |
Net income (loss) margin | 4% | (9)%1370bps | ||||
EBITDA | $ | 79 | $ | 27 | 188% | |
Adjusted EBITDA | $ | 127 | $ | 106 | 20% | |
Adjusted EBITDA Margin | 20% | 18%240bps | ||||
Net cash from operating activities | $ | 73 | $ | 46 | 57% | |
Free Cash Flow | $ | 49 | $ | 19 | 148% | |
Net Debt | $ | 850 | $ | 1,024 | ||
Net Debt / LTM Adjusted EBITDA | 2.0x | 3.5x | ||||
Second Quarter 2024 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue of $625 million increased $33 million, or 6%. Within this, Travel Revenue increased $27 million, or 6%, primarily due to 4% Transaction Growth and 5% TTV growth. Product and Professional Services Revenue increased $6 million, or 5%, primarily due to increased management fees and increased consulting and other professional services revenues. Revenue Yield of 8.1% was flat year over year.
Total operating expenses of $583 million decreased $7 million, or 1%. Continued investments in technology and content and increased cost of revenue to support Transaction Growth were offset by lower general & administrative and sales & marketing costs due to cost savings initiatives, including productivity improvements driven by artificial intelligence initiatives, in addition to decreased restructuring charges.
Adjusted Operating Expenses of $498 million increased $12 million, or 2%.
Net income was $27 million, an improvement of $82 million versus net loss of $55 million in the same period in 2023, primarily due to improvement in operating leverage from higher revenue, favorable fair value movements on earnout derivative liabilities, lower interest expense and benefit from income taxes.
Adjusted EBITDA of $127 million increased $21 million, or 20%. Revenue growth and operating leverage resulted in Adjusted EBITDA margin expansion of 240bps to 20%.
Net cash from operating activities totaled $73 million, an improvement of $27 million, or 57%, due to favorable net change in working capital, including benefit from the Egencia working capital optimization actions.
Free Cash Flow totaled $49 million, an improvement of $30 million, or 148%, due to the increase in net cash from operating activities and decreased use of cash for the purchase of property and equipment.
Net Debt: As of June 30, 2024, total debt, net of unamortized debt discount and debt issuance cost was $1,365 million, compared to $1,362 million as of December 31, 2023. Net Debt was $850 million as of June 30, 2024, compared to $886 million as of December 31, 2023. Leverage ratio was 2.0x as of June 30, 2024, down from 2.3x as of December 31, 2023. The cash balance was $515 million as of June 30, 2024, compared to $476 million as of December 31, 2023.
Raising Full-Year 2024 Free Cash Flow Guidance
Karen Williams, Amex GBT's Chief Financial Officer, stated: "In the second quarter, we continued to deliver strong Adjusted EBITDA growth with margin expansion and accelerated cash flow generation, all while investing to drive long-term, sustained growth. Our recent debt refinancing further strengthened our financial position, lowered interest costs, extending debt maturities to 2031 and increased liquidity with an upsized revolver. We remain confident that our focus on productivity and margin expansion will drive full-year Adjusted EBITDA growth between 18% and 32%, and expect Free Cash Flow generation in excess of $130 million in 2024."
The guidance below does not incorporate the impact of the previously announced CWT acquisition, which is expected to close in the first quarter of 2025.
Full-Year 2024 Guidance | Year-over-Year Growth | |
Revenue | $2.43B – $2.50B | + 6% – 9% |
Adjusted EBITDA | $450M – $500M | + 18% – 32% |
Adjusted EBITDA Margin | 18% – 20% | + ~150bps – 350bps |
Free Cash Flow | >$130M | |
Please refer to the section below titled "Reconciliation of Full-Year 2024 Adjusted EBITDA and Free Cash Flow Guidance" for a description of certain assumptions and risks associated with this guidance and reconciliation to GAAP.
Webcast Information
Amex GBT will host its second quarter 2024 investor conference call today at 9:00 a.m. E.T. The live webcast and accompanying slide presentation can be accessed on the Amex GBT Investor Relations website at investors.amexglobalbusinesstravel.com. A replay of the event will be available on the website for at least 90 days following the event.
Glossary of Terms
See the "Glossary of Terms" for the definitions of certain terms used within this press release.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under GAAP in this press release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses, Free Cash Flow and Net Debt. See "Non-GAAP Financial Measures" below for an explanation of these non-GAAP financial measures and "Tabular Reconciliations for Non-GAAP Financial Measures" below for reconciliations of the non-GAAP financial measures to the comparable GAAP measures.
About American Express Global Business Travel
American Express Global Business Travel (Amex GBT) is the world's leading B2B travel platform, providing software and services to manage travel, expenses, and meetings & events for companies of all sizes. We have built the most valuable marketplace in B2B travel to deliver unrivalled choice, value and experiences. With travel professionals and business partners in more than 140 countries, our solutions deliver savings, flexibility, and service from a brand you can trust – Amex GBT.
Visit amexglobalbusinesstravel.com for more information about Amex GBT. Follow @amexgbt on X (formerly known as Twitter), LinkedIn and Instagram.
GLOBAL BUSINESS TRAVEL GROUP, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
(in $ millions, except share and per share data) | 2024 | 2023 | ||||||
Revenue | $ | 625 | $ | 592 | ||||
Costs and expenses: | ||||||||
Cost of revenue (excluding depreciation and amortization shown separately below) | 247 | 243 | ||||||
Sales and marketing | 99 | 102 | ||||||
Technology and content | 112 | 103 | ||||||
General and administrative | 80 | 86 | ||||||
Restructuring and other exit (reversals) charges | (3) | 7 | ||||||
Depreciation and amortization | 48 | 49 | ||||||
Total operating expenses | 583 | 590 | ||||||
Operating income | 42 | 2 | ||||||
Interest income | 2 | — | ||||||
Interest expense | (32) | (35) | ||||||
Fair value movement on earnout derivative liabilities | (10) | (19) | ||||||
Other loss | (1) | (5) | ||||||
Income (loss) before income taxes | 1 | (57) | ||||||
Benefit from income taxes | 26 | 2 | ||||||
Net income (loss) | 27 | (55) | ||||||
Less: net income (loss) attributable to non-controlling interests in subsidiaries | 1 | (41) | ||||||
Net income (loss) attributable to the Company's Class A common stockholders | $ | 26 | $ | (14) | ||||
Basic income (loss) per share attributable to the Company's Class A common stockholders | $ | 0.06 | $ | (0.23) | ||||
Weighted average number of shares outstanding - Basic | 464,602,244 | 61,852,280 | ||||||
Diluted income (loss) per share attributable to the Company's Class A common stockholders | $ | 0.06 | $ | (0.23) | ||||
Weighted average number of shares outstanding - Diluted | 470,655,337 | 61,852,280 | ||||||
GLOBAL BUSINESS TRAVEL GROUP, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in $ millions, except share and per share data) | June 30, | December 31, | ||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 515 | $ | 476 | ||||
Accounts receivable (net of allowance for credit losses of $13 and $12 as of June 30, 2024 and December 31, 2023, respectively) | 712 | 726 | ||||||
Due from affiliates | 50 | 42 | ||||||
Prepaid expenses and other current assets | 171 | 116 | ||||||
Total current assets | 1,448 | 1,360 | ||||||
Property and equipment, net | 231 | 232 | ||||||
Equity method investments | 13 | 14 | ||||||
Goodwill | 1,207 | 1,212 | ||||||
Other intangible assets, net | 505 | 552 | ||||||
Operating lease right-of-use assets | 49 | 50 | ||||||
Deferred tax assets | 268 | 281 | ||||||
Other non-current assets | 61 | 50 | ||||||
Total assets | $ | 3,782 | $ | 3,751 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 333 | $ | 302 | ||||
Due to affiliates | 46 | 39 | ||||||
Accrued expenses and other current liabilities | 479 | 466 | ||||||
Current portion of operating lease liabilities | 14 | 17 | ||||||
Current portion of long-term debt | 7 | 7 | ||||||
Total current liabilities | 879 | 831 | ||||||
Long-term debt, net of unamortized debt discount and debt issuance costs | 1,358 | 1,355 | ||||||
Deferred tax liabilities | 5 | 5 | ||||||
Pension liabilities | 168 | 183 | ||||||
Long-term operating lease liabilities | 52 | 55 | ||||||
Earnout derivative liabilities | 69 | 77 | ||||||
Other non-current liabilities | 33 | 33 | ||||||
Total liabilities | 2,564 | 2,539 | ||||||
Commitments and Contingencies | ||||||||
Shareholders' equity: | ||||||||
Class A common stock (par value $0.0001; 3,000,000,000 shares authorized; 472,863,167 shares and 467,092,817 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively) | — | — | ||||||
Additional paid-in capital | 2,772 | 2,748 | ||||||
Accumulated deficit | (1,430) | (1,437) | ||||||
Accumulated other comprehensive loss | (128) | (103) | ||||||
Total equity of the Company's shareholders | 1,214 | 1,208 | ||||||
Equity attributable to non-controlling interest in subsidiaries | 4 | 4 | ||||||
Total shareholders' equity | 1,218 | 1,212 | ||||||
Total liabilities and shareholders' equity | $ | 3,782 | $ | 3,751 | ||||
GLOBAL BUSINESS TRAVEL GROUP, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Six months ended | ||||||||
(in $ millions) | 2024 | 2023 | ||||||
Operating activities: | ||||||||
Net income (loss) | $ | 8 | $ | (82) | ||||
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities: | ||||||||
Depreciation and amortization | 95 | 95 | ||||||
Deferred tax charge (benefit) | 12 | (13) | ||||||
Equity-based compensation | 38 | 41 | ||||||
Allowance for credit losses | 4 | 7 | ||||||
Fair value movement on earnout derivative liabilities | (8) | 16 | ||||||
Other | (5) | 5 | ||||||
Changes in working capital: | ||||||||
Accounts receivable | (10) | (193) | ||||||
Prepaid expenses and other current assets | (66) | (36) | ||||||
Due from affiliates | (10) | — | ||||||
Due to affiliates | 7 | 8 | ||||||
Accounts payable, accrued expenses and other current liabilities | 71 | 135 | ||||||
Defined benefit pension funding | (14) | (14) | ||||||
Net cash from (used in) operating activities | 122 | (31) | ||||||
Investing activities: | ||||||||
Purchase of property and equipment | (49) | (59) | ||||||
Other | 5 | (5) | ||||||
Net cash used in investing activities | (44) | (64) | ||||||
Financing activities: | ||||||||
Proceeds from senior secured term loans | — | 131 | ||||||
Repayment of senior secured term loans | (1) | (1) | ||||||
Contributions for ESPP and proceeds from exercise of stock options | 5 | 2 | ||||||
Payment of taxes withheld on vesting of equity awards | (19) | (8) | ||||||
Repayment of other debt and finance lease obligations | (1) | (2) | ||||||
Payment of debt financing costs | — | (2) | ||||||
Other | (1) | 3 | ||||||
Net cash (used in) from financing activities | (17) | 123 | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (9) | 4 | ||||||
Net increase in cash, cash equivalents and restricted cash | 52 | 32 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 489 | 316 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 541 | $ | 348 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes, net | $ | 1 | $ | — | ||||
Cash paid for interest (net of interest received) | $ | 65 | $ | 70 | ||||
Non-cash additions for operating lease right-of-use assets | $ | 7 | $ | 5 | ||||
Non-cash additions for finance lease | $ | 2 | $ | 3 | ||||
Issuance of shares to settle liability | $ | — | $ | 4 | ||||
Glossary of Terms
B2B refers to business-to-business.
Customer retention rate is calculated based on Total Transaction Value (TTV).
CWT refers to CWT Holdings, LLC.
LTM refers to the last twelve months ended June 30, 2024.
Revenue Yield is calculated as total revenue divided by Total Transaction Value (TTV) for the same period.
SME refers to clients Amex GBT considers small-to-medium-sized enterprises, which Amex GBT generally defines as having an expected annual TTV of less than $30 million. This criterion can vary by country and customer needs and Amex GBT does not have products or services that are offered solely to one size customer or another.
Total New Wins Value is calculated using expected annual average Total Transaction Value (TTV) over the contract term from all new client wins over the last twelve months.
Total Transaction Value or TTV refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppliers at point of sale, less cancellations and refunds.
Transaction Growth represents year-over-year increase or decrease as a percentage of the total transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking, and is calculated on a net basis to exclude cancellations, refunds and exchanges. To calculate year-over-year growth or decline, we compare the total number of transactions in the comparative previous period/ year to the total number of transactions in the current period/year in percentage terms. For the six months ended June 30, 2024, we have presented Transaction Growth on a net basis to exclude cancellations, refunds and exchanges as management believes this better aligns Transaction Growth with the way we measure TTV and earn revenue. Prior period Transaction Growth percentages have been recalculated and represented to conform to current period presentation.
Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. Our non-GAAP financial measures are provided in addition, and should not be considered as an alternative, to other performance or liquidity measures derived in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and you should not consider them either in isolation or as a substitute for analyzing our results as reported under GAAP. In addition, because not all companies use identical calculations, the presentations of our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
Management believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance or liquidity across periods. In addition, we use certain of these non-GAAP financial measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. We also use certain of our non-GAAP financial measures as indicators of our ability to generate cash to meet our liquidity needs and to assist our management in evaluating our financial flexibility, capital structure and leverage. These non-GAAP financial measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and/or to compare our performance and liquidity against that of other peer companies using similar measures.
We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.
We define Adjusted EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization and as further adjusted to exclude costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation and related employer taxes, long-term incentive plan costs, certain corporate costs, fair value movements on earnout derivative liabilities, foreign currency gains (losses), non-service components of net periodic pension benefit (costs) and gains (losses) on disposal of businesses.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.
We define Adjusted Operating Expenses as total operating expenses excluding depreciation and amortization and costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation and related employer taxes, long-term incentive plan costs and certain corporate costs.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are supplemental non-GAAP financial measures of operating performance that do not represent and should not be considered as alternatives to net income (loss) or total operating expenses, as determined under GAAP. In addition, these measures may not be comparable to similarly titled measures used by other companies.
These non-GAAP measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the Company's results or expenses as reported under GAAP. Some of these limitations are that these measures do not reflect:
- changes in, or cash requirements for, our working capital needs or contractual commitments;
- our interest expense, or the cash requirements to service interest or principal payments on our indebtedness;
- our tax expense, or the cash requirements to pay our taxes;
- recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
- the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
- restructuring, mergers and acquisition and integration costs, all of which are intrinsic of our acquisitive business model; and
- impact on earnings or changes resulting from matters that are non-core to our underlying business, as we believe they are not indicative of our underlying operations.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as a measure of liquidity or as a measure determining discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business.
We use these measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. These non-GAAP measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. We also believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are helpful supplemental measures to assist potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis.
We define Free Cash Flow as net cash from (used in) operating activities, less cash used for additions to property and equipment.
We believe Free Cash Flow is an important measure of our liquidity. This measure is a useful indicator of our ability to generate cash to meet our liquidity demands. We use this measure to conduct and evaluate our operating liquidity. We believe it typically presents an alternate measure of cash flow since purchases of property and equipment are a necessary component of our ongoing operations and it provides useful information regarding how cash provided by operating activities compares to the property and equipment investments required to maintain and grow our platform. We believe Free Cash Flow provides investors with an understanding of how assets are performing and measures management's effectiveness in managing cash.
Free Cash Flow is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure has limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent cash flow for discretionary expenditures. This measure should not be considered as a measure of liquidity or cash flow from operations as determined under GAAP. This measure is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of liquidity.
We define Net Debt as total debt outstanding consisting of the current and non-current portion of long-term debt, net of unamortized debt discount and unamortized debt issuance costs, minus cash and cash equivalents.
Contacts
Media:
Martin Ferguson
Vice President Global Communications and Public Affairs
martin.ferguson@amexgbt.com
Investors:
Jennifer Thorington
Vice President Investor Relations
investor@amexgbt.com
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