American Express Global Business Travel Reports Strong Q2 2024 Financial Results and Raises 2024 Free Cash Flow Guidance
American Express Global Business Travel (NYSE: GBTG) reported strong Q2 2024 financial results, with revenue growing 6% year-over-year to $625 million and Adjusted EBITDA increasing 20% to $127 million. The company demonstrated significant margin expansion and accelerated Free Cash Flow, generating $49 million, a 148% increase from the previous year. Amex GBT raised its full-year 2024 Free Cash Flow guidance to over $130 million, up from the previous $100 million target. The company also reported a solid foundation with a 97% LTM customer retention rate and continued market share gains. A recent debt refinancing has lowered interest costs and extended debt maturities to 2031, further strengthening the company's financial position.
American Express Global Business Travel (NYSE: GBTG) ha riportato risultati finanziari solidi per il secondo trimestre del 2024, con ricavi in crescita del 6% rispetto all'anno precedente, raggiungendo i 625 milioni di dollari, e un EBITDA rettificato aumentato del 20% a 127 milioni di dollari. L'azienda ha dimostrato una significativa espansione dei margini e un'accelerazione del Free Cash Flow, generando 49 milioni di dollari, un aumento del 148% rispetto all'anno precedente. Amex GBT ha aumentato le previsioni per il Free Cash Flow del 2024 a oltre 130 milioni di dollari, rispetto al target precedente di 100 milioni di dollari. L'azienda ha anche riportato una solida base con un tasso di retention dei clienti a 12 mesi del 97% e guadagni continui in termini di quota di mercato. Un recente rifinanziamento del debito ha ridotto i costi di interesse e prolungato le scadenze del debito fino al 2031, rafforzando ulteriormente la posizione finanziaria dell'azienda.
American Express Global Business Travel (NYSE: GBTG) informó sobre resultados financieros sólidos en el segundo trimestre de 2024, con ingresos que crecieron un 6% interanual, alcanzando los 625 millones de dólares, y un EBITDA ajustado que aumentó un 20% a 127 millones de dólares. La compañía demostró una expansión significativa del margen y un acelerado flujo de efectivo libre, generando 49 millones de dólares, un incremento del 148% respecto al año anterior. Amex GBT aumentó su previsión de flujo de efectivo libre para todo el año 2024 a más de 130 millones de dólares, en comparación con la meta anterior de 100 millones de dólares. Además, la empresa reportó una sólida base con una tasa de retención de clientes de 12 meses del 97% y ganancias continuas en participación de mercado. Un reciente refinanciamiento de deuda ha reducido los costos de interés y extendido los vencimientos de la deuda hasta 2031, reforzando aún más la posición financiera de la empresa.
미국 익스프레스 글로벌 비즈니스 여행(뉴욕 증권거래소: GBTG)은 2024년 2분기 강력한 재무 결과를 보고했습니다. 연간 6% 성장하여 6억 2500만 달러에 이르렀으며, 조정된 EBITDA는 20% 증가하여 1억 2700만 달러에 달했습니다. 회사는 마진 확장 및 자유 현금 흐름의 가속화를 보여주었으며, 4900만 달러를 생성하여 전년 대비 148% 증가했습니다. Amex GBT는 2024년 전체 자유 현금 흐름 가이던스를 1억 3000만 달러 이상으로 상향 조정했습니다, 이전의 1억 달러 목표에서 증가했습니다. 또한, 회사는 97%의 고객 유지율을 유지하며 지속적인 시장 점유율 증가를 보고했습니다. 최근의 채무 재조정은 이자 비용을 낮추고 채무 만기를 2031년까지 연장하였으며, 회사의 재무 상태를 더욱 강화하였습니다.
American Express Global Business Travel (NYSE: GBTG) a rapporté de solides résultats financiers pour le deuxième trimestre 2024, avec un chiffre d'affaires en hausse de 6 % par rapport à l'année précédente pour atteindre 625 millions de dollars, et un EBITDA ajusté en augmentation de 20 % à 127 millions de dollars. L'entreprise a montré une expansion significative des marges et un Free Cash Flow accéléré, générant 49 millions de dollars, soit une augmentation de 148 % par rapport à l'année dernière. Amex GBT a rehaussé ses prévisions de Free Cash Flow pour l'année 2024 à plus de 130 millions de dollars, contre une cible précédente de 100 millions de dollars. L'entreprise a également fait état d'une solide base avec un taux de fidélisation des clients de 97 % sur les 12 derniers mois et une poursuite des gains de part de marché. Un récent refinancement de la dette a réduit les coûts d'intérêt et prolongé les échéances de la dette jusqu'en 2031, renforçant ainsi la position financière de l'entreprise.
American Express Global Business Travel (NYSE: GBTG) hat starke Finanzresultate für das zweite Quartal 2024 veröffentlicht, wobei der Umsatz im Vergleich zum Vorjahr um 6% auf 625 Millionen US-Dollar gestiegen ist und das bereinigte EBITDA um 20% auf 127 Millionen US-Dollar zugenommen hat. Das Unternehmen hat eine signifikante Margenausweitung und beschleunigten Free Cash Flow demonstriert und 49 Millionen US-Dollar generiert, was einem Anstieg von 148% im Vergleich zum Vorjahr entspricht. Amex GBT hat seine Prognose für den Free Cash Flow für das gesamte Jahr 2024 auf über 130 Millionen US-Dollar angehoben, verglichen mit dem vorherigen Ziel von 100 Millionen US-Dollar. Das Unternehmen berichtete außerdem von einer soliden Basis mit einer Kundenbindungsrate von 97% über die letzten 12 Monate und einem kontinuierlichen Gewinn an Marktanteilen. Eine kürzliche Schuldenrefinanzierung hat die Zinskosten gesenkt und die Schuldenlaufzeiten bis 2031 verlängert, was die finanzielle Position des Unternehmens weiter stärkt.
- Revenue grew 6% year-over-year to $625 million
- Adjusted EBITDA increased 20% year-over-year to $127 million
- Free Cash Flow generation of $49 million, representing 148% growth year-over-year
- Raised full-year 2024 Free Cash Flow Guidance to >$130 million
- Lowered leverage ratio to 2.0x from 3.5x a year ago
- 97% LTM customer retention rate
- Total New Wins Value of $3.3 billion, including $2.0 billion from SME
- Transaction Growth slowed to 4% compared to 9% in the previous year
Insights
Amex GBT's Q2 2024 results demonstrate strong financial performance and improved profitability. The company reported
The company's focus on cost control is evident, with Adjusted Operating Expenses growing only
Notably, Amex GBT has raised its full-year 2024 Free Cash Flow guidance to
Amex GBT's market position appears strong, with a Total New Wins Value of
The company's high customer retention rate of
The
Amex GBT's strategic focus on technology and productivity improvements is evident in their financial results. The company mentions investments in technology and content, which are important for maintaining a competitive edge in the B2B travel and expense management sector.
Notably, the company highlights productivity improvements driven by artificial intelligence initiatives. This suggests Amex GBT is leveraging AI to enhance operational efficiency, potentially in areas such as customer service, booking processes, or data analysis. Such initiatives can lead to long-term cost savings and improved service quality.
The increase in Product and Professional Services Revenue, partly due to increased consulting services, indicates that Amex GBT is successfully monetizing its technological expertise. This diversification of revenue streams could provide more stability and growth opportunities in the future.
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 148% year over year.
Controlled Costs & Drove Operating Leverage
-
2% Adjusted Operating Expense growth versus6% 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 $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 $2.0 billion -
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 |
|
|
Transaction Growth |
|
|
|
|
|
|
|
|
|
|
|||
Revenue |
$ |
625 |
$ |
592 |
|
|
Travel Revenue |
$ |
506 |
$ |
479 |
|
|
Product and Professional Services Revenue |
$ |
119 |
$ |
113 |
|
|
|
|
|
|
|||
Total operating expenses |
$ |
583 |
$ |
590 |
|
(1)% |
Adjusted Operating Expenses |
$ |
498 |
$ |
486 |
|
|
|
|
|
|
|||
Net income (loss) |
$ |
27 |
$ |
(55) |
$ |
82 |
Net income (loss) margin |
|
|
|
(9)% |
1370bps |
|
EBITDA |
$ |
79 |
$ |
27 |
|
|
Adjusted EBITDA |
$ |
127 |
$ |
106 |
|
|
Adjusted EBITDA Margin |
|
|
|
|
240bps |
|
|
|
|
|
|||
Net cash from operating activities |
$ |
73 |
$ |
46 |
|
|
Free Cash Flow |
$ |
49 |
$ |
19 |
|
|
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
Total operating expenses of
Adjusted Operating Expenses of
Net income was
Adjusted EBITDA of
Net cash from operating activities totaled
Free Cash Flow totaled
Net Debt: As of June 30, 2024, total debt, net of unamortized debt discount and debt issuance cost was
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
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 |
|
+ |
Adjusted EBITDA |
|
+ |
Adjusted EBITDA Margin |
|
+ ~150bps – 350bps |
Free Cash Flow |
> |
|
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 |
|
|
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 |
|
|
— |
|
|
|
— |
|
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
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. Net Debt is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure is not a measurement of our indebtedness as determined under GAAP and should not be considered in isolation or as an alternative to assess our total debt or any other measures derived in accordance with GAAP or as an alternative to total debt. Management uses Net Debt to review our overall liquidity, financial flexibility, capital structure and leverage. Further, we believe that certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.
Tabular Reconciliations for Non-GAAP Measures
Reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:
|
|
Three months ended June 30, |
||||||
(in $ millions) |
|
2024 |
|
2023 |
||||
Net income (loss) |
|
$ |
27 |
|
|
$ |
(55 |
) |
Interest income |
|
|
(2 |
) |
|
|
— |
|
Interest expense |
|
|
32 |
|
|
|
35 |
|
(Benefit from) provision for income taxes |
|
|
(26 |
) |
|
|
(2 |
) |
Depreciation and amortization |
|
|
48 |
|
|
|
49 |
|
EBITDA |
|
|
79 |
|
|
|
27 |
|
Restructuring, exit and related (reversals) charges (a) |
|
|
(3 |
) |
|
|
13 |
|
Integration costs (b) |
|
|
7 |
|
|
|
10 |
|
Mergers and acquisitions (c) |
|
|
6 |
|
|
|
— |
|
Equity-based compensation and related employer taxes (d) |
|
|
20 |
|
|
|
22 |
|
Fair value movement on earnout derivative liabilities (e) |
|
|
10 |
|
|
|
19 |
|
Other adjustments, net (f) |
|
|
8 |
|
|
|
15 |
|
Adjusted EBITDA |
|
$ |
127 |
|
|
$ |
106 |
|
Net income (loss) margin |
|
|
4 |
% |
|
|
(9 |
)% |
Adjusted EBITDA Margin |
|
|
20 |
% |
|
|
18 |
% |
Reconciliation of total operating expenses to Adjusted Operating Expenses:
|
|
Three months ended June 30, |
||||||
(in $ millions) |
|
2024 |
|
2023 |
||||
Total operating expenses |
|
$ |
583 |
|
|
$ |
590 |
|
Adjustments: |
|
|
|
|
||||
Depreciation and amortization |
|
|
(48 |
) |
|
|
(49 |
) |
Restructuring, exit and related reversals (charges) (a) |
|
|
3 |
|
|
|
(13 |
) |
Integration costs (b) |
|
|
(7 |
) |
|
|
(10 |
) |
Mergers and acquisitions (c) |
|
|
(6 |
) |
|
|
— |
|
Equity-based compensation and related employer taxes (d) |
|
|
(20 |
) |
|
|
(22 |
) |
Other adjustments, net (f) |
|
|
(7 |
) |
|
|
(10 |
) |
Adjusted Operating Expenses |
|
$ |
498 |
|
|
$ |
486 |
|
a) |
Includes (i) employee severance (reversals)/costs of |
|
b) |
Represents expenses related to the integration of businesses acquired. |
|
c) |
Represents expenses related to business acquisitions, including potential business acquisitions, and includes pre-acquisition due diligence and related activities costs. |
|
d) |
Represents non-cash equity-based compensation expense and employer taxes paid related to equity incentive awards to certain employees. |
|
e) |
Represents fair value movements on earnout derivative liabilities during the periods. |
|
f) |
Adjusted Operating Expenses excludes (i) long-term incentive plan expense of |
Reconciliation of net cash from operating activities to Free Cash Flow:
|
|
Three months ended June 30, |
||||||
($ in millions) |
|
2024 |
|
2023 |
||||
|
|
|
|
|
||||
Net cash from operating activities |
|
$ |
73 |
|
|
$ |
46 |
|
Less: Purchase of property and equipment |
|
|
(24 |
) |
|
|
(27 |
) |
Free Cash Flow |
|
$ |
49 |
|
|
$ |
19 |
|
Reconciliation of Net Debt:
|
|
As of |
||||||||||
(in $ millions) |
|
June 30, 2024 |
|
December 31, 2023 |
|
June 30, 2023 |
||||||
Current portion of long-term debt |
|
$ |
7 |
|
|
$ |
7 |
|
|
$ |
6 |
|
Long-term debt, net of unamortized debt discount and debt issuance costs |
|
|
1,358 |
|
|
|
1,355 |
|
|
|
1,353 |
|
Total debt, net of unamortized debt discount and debt issuance costs |
|
|
1,365 |
|
|
|
1,362 |
|
|
|
1,359 |
|
Less: Cash and cash equivalents |
|
|
(515 |
) |
|
|
(476 |
) |
|
|
(335 |
) |
Net Debt |
|
$ |
850 |
|
|
$ |
886 |
|
|
$ |
1,024 |
|
|
|
|
|
|
|
|
||||||
LTM Adjusted EBITDA |
|
$ |
425 |
|
|
$ |
380 |
|
|
$ |
289 |
|
Net Debt / LTM Adjusted EBITDA |
|
2.0x |
|
2.3x |
|
3.5x |
||||||
Reconciliation of Full-Year 2024 Adjusted EBITDA and Free Cash Flow Guidance
The Company’s full-year 2024 guidance considers various material assumptions. Because the guidance is forward-looking and reflects numerous estimates and assumptions with respect to future industry performance under various scenarios as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the business of Amex GBT, all of which are difficult to predict and many of which are beyond the control of Amex GBT, actual results may differ materially from the guidance due to a number of factors, including the ultimate inaccuracy of any of the assumptions described above and the risks and other factors discussed in the section entitled “Forward-Looking Statements” below and the risk factors in the Company’s SEC filings.
The guidance below does not incorporate the impact of the CWT acquisition, which is expected to close in the first quarter of 2025.
Adjusted EBITDA guidance for the year ending December 31, 2024 consists of expected net loss for the year ending December 31, 2024, adjusted for: (i) interest expense of approximately
Free Cash Flow guidance for the year ending December 31, 2024 consists of expected net cash from operating activities of greater than
Forward-Looking Statements
This release contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our financial position, business strategy, the plans and objectives of management for future operations and full-year guidance. These statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this release are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors: (1) changes to projected financial information or our ability to achieve our anticipated growth rate and execute on industry opportunities; (2) our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors; (3) various conflicts of interest that could arise among us, affiliates and investors; (4) our success in retaining or recruiting, or changes required in, our officers, key employees or directors; (5) factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control; (6) the impact of geopolitical conflicts, including the war in
Disclaimer
An investment in Global Business Travel Group, Inc. is not an investment in American Express. American Express shall not be responsible in any manner whatsoever for, and in respect of, the statements herein, all of which are made solely by Global Business Travel Group, Inc.
_________________
1Leverage ratio is calculated as Net Debt / LTM Adjusted EBITDA and is different than leverage ratio defined in our amended and restated senior secured credit agreement.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240806574977/en/
Media:
Martin Ferguson
Vice President Global Communications and Public Affairs
martin.ferguson@amexgbt.com
Investors:
Jennifer Thorington
Vice President Investor Relations
investor@amexgbt.com
Source: Global Business Travel Group, Inc.
FAQ
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