American Express Global Business Travel Reports Strong Q3 2024 Financial Results, Raises 2024 Free Cash Flow Guidance and Announces $300 Million Share Buyback Authorization
American Express Global Business Travel (NYSE: GBTG) reported strong Q3 2024 results with Total Transaction Value (TTV) growing 9% to $7.8 billion and revenue increasing 5% to $597 million. The company achieved significant margin expansion with Adjusted EBITDA growing 23% to $118 million. Free Cash Flow generation was $59 million, leading to raised full-year guidance of approximately $160 million. The Board authorized a $300 million share buyback program, following an $55 million private share buyback completed in Q3. The company maintained a strong 97% customer retention rate and reported LTM Total New Wins Value of $3.0 billion.
American Express Global Business Travel (NYSE: GBTG) ha riportato risultati solidi per il terzo trimestre del 2024 con un valore totale delle transazioni (TTV) in crescita del 9% a 7,8 miliardi di dollari e entrate in aumento del 5% a 597 milioni di dollari. L'azienda ha ottenuto un'espansione significativa dei margini con EBITDA rettificato in crescita del 23% a 118 milioni di dollari. La generazione di flusso di cassa libero è stata di 59 milioni di dollari, portando a un'adeguamento della previsione annuale a circa 160 milioni di dollari. Il Consiglio ha autorizzato un programma di riacquisto di azioni da 300 milioni di dollari, dopo un riacquisto privato di azioni da 55 milioni di dollari completato nel terzo trimestre. L'azienda ha mantenuto un forte tasso di retention dei clienti del 97% e ha riportato un valore totale di nuovi successi negli ultimi dodici mesi di 3,0 miliardi di dollari.
American Express Global Business Travel (NYSE: GBTG) informó resultados sólidos para el tercer trimestre de 2024, con un Valor Total de Transacciones (TTV) en aumento del 9% a 7.8 mil millones de dólares y ingresos incrementándose un 5% a 597 millones de dólares. La compañía logró una expansión significativa de márgenes, con EBITDA ajustado creciendo un 23% a 118 millones de dólares. La generación de flujo de caja libre fue de 59 millones de dólares, lo que llevó a una revisión al alza de la guía para todo el año a aproximadamente 160 millones de dólares. La Junta autorizó un programa de recompra de acciones de 300 millones de dólares, tras completar una recompra privada de acciones de 55 millones de dólares en el tercer trimestre. La empresa mantuvo una fuerte tasa de retención de clientes del 97% y reportó un valor total de nuevos contratos en los últimos doce meses de 3.0 mil millones de dólares.
아메리칸 익스프레스 글로벌 비즈니스 여행 (NYSE: GBTG)은 2024년 3분기 강력한 결과를 보고했으며, 총 거래 가치 (TTV)가 9% 증가하여 78억 달러에 달하고 수익이 5% 증가해 5억 9700만 달러에 이르렀습니다. 회사는 조정된 EBITDA가 23% 증가하여 1억 1800만 달러에 도달하는 중요한 마진 확장을 달성했습니다. 자유 현금 흐름 생성은 5900만 달러였으며, 연간 가이던스를 약 1억 6000만 달러로 상향 조정했습니다. 이사회는 3억 달러의 자사주 매입 프로그램을 승인하였고, 3분기에 완료된 5500만 달러의 사적 자사주 매입 이후입니다. 회사는 강력한 97%의 고객 유지율을 유지했으며, 지난 12개월 동안의 총 신규 계약 가치는 30억 달러에 이르렀습니다.
American Express Global Business Travel (NYSE: GBTG) a annoncé des résultats solides pour le troisième trimestre 2024, avec un valeur totale des transactions (TTV) en hausse de 9 % à 7,8 milliards de dollars et des revenus augmentant de 5 % à 597 millions de dollars. La société a réalisé une expansion significative des marges avec un EBITDA ajusté en hausse de 23 % à 118 millions de dollars. La génération de flux de trésorerie libre s'est élevée à 59 millions de dollars, ce qui a conduit à une réévaluation de la prévision annuelle à environ 160 millions de dollars. Le conseil d'administration a autorisé un programme de rachat d'actions de 300 millions de dollars, suite à un rachat d'actions privées de 55 millions de dollars complété au 3ème trimestre. L'entreprise a maintenu un taux de fidélisation de la clientèle de 97% et a rapporté une valeur totale des nouvelles acquisitions sur les douze derniers mois de 3,0 milliards de dollars.
American Express Global Business Travel (NYSE: GBTG) hat starke Ergebnisse für das 3. Quartal 2024 gemeldet, mit einem Wachstum des Gesamttransaktionswerts (TTV) um 9% auf 7,8 Milliarden Dollar und einem Umsatzanstieg um 5% auf 597 Millionen Dollar. Das Unternehmen erzielte eine signifikante Margenexpansion mit einem Anstieg des angepassten EBITDA um 23% auf 118 Millionen Dollar. Der freie Cashflow betrug 59 Millionen Dollar, was zu einer angehobenen Prognose für das Gesamtjahr von etwa 160 Millionen Dollar führte. Der Vorstand genehmigte ein Rückkaufprogramm für Aktien im Wert von 300 Millionen Dollar, nachdem im 3. Quartal ein privates Rückkaufprogramm in Höhe von 55 Millionen Dollar abgeschlossen wurde. Das Unternehmen hielt eine starke Kundenbindungsrate von 97% aufrecht und berichtete einen Gesamtwert neuer Abschlüsse in den letzten zwölf Monaten von 3,0 Milliarden Dollar.
- TTV growth of 9% to $7.8 billion
- Revenue growth of 5% to $597 million
- Adjusted EBITDA growth of 23% to $118 million
- 300bps Adjusted EBITDA margin expansion to 20%
- Strong customer retention rate of 97%
- $300 million share buyback authorization
- Raised Free Cash Flow guidance to $160 million
- Reduced leverage ratio to 1.9x from 2.3x
- Net loss increased to $128 million from $8 million
- Operating cash flow decreased 37% to $85 million
- Free Cash Flow declined 45% to $59 million
- Total debt increased to $1,384 million from $1,362 million
Insights
The Q3 results showcase robust financial performance with notable metrics: TTV growth of
Key positives include strong customer retention at
The business travel sector's recovery continues to benefit GBTG, with their SME segment generating
Despite the positive revenue and EBITDA growth, investors should note the
Third Quarter 2024 Highlights
Continued to Deliver Strong Financial Results
-
TTV grew
9% year over year to$7.8 billion -
Revenue grew
5% year over year to$597 million -
Adjusted EBITDA grew
23% year over year to$118 million -
Strong Free Cash Flow generation of
$59 million $132 million
Significant Margin Expansion
-
Revenue grew
5% , while Adjusted Operating Expenses only increased1% . - Adjusted EBITDA margin expansion of 300bps year over year.
Continued Share Gains and Strong Customer Retention
-
LTM Total New Wins Value of
$3.0 billion $2.1 billion -
97% LTM customer retention rate.
Free Cash Flow Acceleration
-
Raised full-year 2024 Free Cash Flow Guidance to approximately
$160 million $130 million - Narrowed full-year 2024 revenue and Adjusted EBITDA guidance ranges.
Returning Cash to Shareholders
-
8 million shares repurchased in a private share buyback completed in Q3 2024 (approximately
$55 million -
Board of Directors authorized additional share buyback of up to
$300 million
Paul Abbott, Amex GBT’s Chief Executive Officer, stated: "We continue to execute on our strategy and deliver strong results with a focus on share gains, margin expansion and investing for growth. Our recent share buyback and larger scale authorization demonstrate our confidence in our long term strategy."
Karen Williams, Amex GBT's Chief Financial Officer, stated: "Our focus on productivity and margin expansion has enabled us to invest significantly in our people, products and services. This has resulted in accelerating Free Cash Flow generation and continued deleverage. We are now in the strong position of being able to fund the anticipated closing and integration of the CWT acquisition, executed our first share buyback and have a new, larger authorization in place to return cash to shareholders."
Third Quarter 2024 Financial Summary
(in millions, except percentages; unaudited) |
Three Months Ended |
YOY Inc / (Dec) |
||||
September 30, |
||||||
2024 |
2023 |
|||||
Total Transaction Value (TTV) |
$ |
7,752 |
$ |
7,123 |
|
|
Transaction Growth |
|
|
|
|
|
|
|
|
|
|
|||
Revenue |
$ |
597 |
$ |
571 |
|
|
Travel Revenue |
$ |
478 |
$ |
455 |
|
|
Product and Professional Services Revenue |
$ |
119 |
$ |
116 |
|
|
|
|
|
|
|||
Total operating expenses |
$ |
570 |
$ |
575 |
|
(1)% |
Adjusted Operating Expenses |
$ |
479 |
$ |
476 |
|
|
|
|
|
|
|||
Operating income (loss) |
$ |
27 |
$ |
(4) |
$ |
31 |
Net loss |
$ |
(128) |
$ |
(8) |
$ |
(120) |
Net loss margin |
|
(21)% |
|
(1)% |
|
NM |
EBITDA |
$ |
33 |
$ |
76 |
|
(58)% |
Adjusted EBITDA |
$ |
118 |
$ |
95 |
|
|
Adjusted EBITDA Margin |
|
|
|
|
300bps |
|
|
|
|
|
|||
Net cash from operating activities |
$ |
85 |
$ |
135 |
|
(37)% |
Free Cash Flow |
$ |
59 |
$ |
107 |
|
(45)% |
Net Debt |
$ |
860 |
$ |
927 |
|
|
Net Debt / LTM Adjusted EBITDA |
1.9x |
2.7x |
|
|||
NM = not meaningful
Third Quarter 2024 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue of
Total operating expenses of
Adjusted Operating Expenses of
Operating income of
Net loss was
Adjusted EBITDA of
Net cash from operating activities totaled
Free Cash Flow totaled
Net Debt: As of September 30, 2024, total debt, net of unamortized debt discount and debt issuance cost was
Raising Full-Year 2024 Free Cash Flow Guidance
|
Full-Year 2024 Guidance |
Year-over-Year Growth |
Revenue |
|
+ |
Adjusted EBITDA |
|
+ |
Adjusted EBITDA Margin |
|
+ 290bps – 310bps |
Free Cash Flow |
Approx.
(vs. prior guidance of > |
|
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 third 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 a leading software and services company for travel, expense, and meetings & events. We have built the most valuable marketplace in travel with the most comprehensive and competitive content. A choice of solutions brought to you through a strong combination of technology and people, delivering the best experiences, proven at scale. 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 September 30, |
||||||
(in $ millions, except share and per share data) |
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
$ |
597 |
|
|
$ |
571 |
|
Costs and expenses: |
|
|
|
|
||||
Cost of revenue (excluding depreciation and amortization shown separately below) |
|
|
237 |
|
|
|
238 |
|
Sales and marketing |
|
|
99 |
|
|
|
95 |
|
Technology and content |
|
|
112 |
|
|
|
103 |
|
General and administrative |
|
|
75 |
|
|
|
77 |
|
Restructuring and other exit charges |
|
|
4 |
|
|
|
12 |
|
Depreciation and amortization |
|
|
43 |
|
|
|
50 |
|
Total operating expenses |
|
|
570 |
|
|
|
575 |
|
Operating income (loss) |
|
|
27 |
|
|
|
(4 |
) |
Interest income |
|
|
2 |
|
|
|
— |
|
Interest expense |
|
|
(28 |
) |
|
|
(36 |
) |
Loss on early extinguishment of debt |
|
|
(38 |
) |
|
|
— |
|
Fair value movement on earnout derivative liabilities |
|
|
(22 |
) |
|
|
39 |
|
Other loss |
|
|
(15 |
) |
|
|
(9 |
) |
Loss before income taxes |
|
|
(74 |
) |
|
|
(10 |
) |
(Provision for) benefit from income taxes |
|
|
(54 |
) |
|
|
2 |
|
Net loss |
|
|
(128 |
) |
|
|
(8 |
) |
Less: net income (loss) attributable to non-controlling interests in subsidiaries |
|
|
1 |
|
|
|
(8 |
) |
Net loss attributable to the Company’s Class A common stockholders |
|
$ |
(129 |
) |
|
$ |
— |
|
Basic loss per share attributable to the Company’s Class A common stockholders |
|
$ |
(0.28 |
) |
|
$ |
— |
|
Weighted average number of shares outstanding - Basic |
|
|
462,291,043 |
|
|
|
419,154,778 |
|
Diluted loss per share attributable to the Company’s Class A common stockholders |
|
$ |
(0.28 |
) |
|
$ |
(0.02 |
) |
Weighted average number of shares outstanding - Diluted |
|
|
462,291,043 |
|
|
|
457,742,129 |
|
GLOBAL BUSINESS TRAVEL GROUP, INC. CONSOLIDATED BALANCE SHEETS |
||||||||
(in $ millions, except share and per share data) |
|
September 30, 2024 |
|
December 31, 2023 |
||||
|
|
(Unaudited) |
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
524 |
|
|
$ |
476 |
|
Accounts receivable (net of allowance for credit losses of |
|
|
691 |
|
|
|
726 |
|
Due from affiliates |
|
|
44 |
|
|
|
42 |
|
Prepaid expenses and other current assets |
|
|
135 |
|
|
|
116 |
|
Total current assets |
|
|
1,394 |
|
|
|
1,360 |
|
Property and equipment, net |
|
|
232 |
|
|
|
232 |
|
Equity method investments |
|
|
14 |
|
|
|
14 |
|
Goodwill |
|
|
1,236 |
|
|
|
1,212 |
|
Other intangible assets, net |
|
|
500 |
|
|
|
552 |
|
Operating lease right-of-use assets |
|
|
62 |
|
|
|
50 |
|
Deferred tax assets |
|
|
253 |
|
|
|
281 |
|
Other non-current assets |
|
|
61 |
|
|
|
50 |
|
Total assets |
|
$ |
3,752 |
|
|
$ |
3,751 |
|
Liabilities and shareholders’ equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
330 |
|
|
$ |
302 |
|
Due to affiliates |
|
|
28 |
|
|
|
39 |
|
Accrued expenses and other current liabilities |
|
|
504 |
|
|
|
466 |
|
Current portion of operating lease liabilities |
|
|
14 |
|
|
|
17 |
|
Current portion of long-term debt |
|
|
16 |
|
|
|
7 |
|
Total current liabilities |
|
|
892 |
|
|
|
831 |
|
Long-term debt, net of unamortized debt discount and debt issuance costs |
|
|
1,368 |
|
|
|
1,355 |
|
Deferred tax liabilities |
|
|
5 |
|
|
|
5 |
|
Pension liabilities |
|
|
176 |
|
|
|
183 |
|
Long-term operating lease liabilities |
|
|
67 |
|
|
|
55 |
|
Earnout derivative liabilities |
|
|
91 |
|
|
|
77 |
|
Other non-current liabilities |
|
|
47 |
|
|
|
33 |
|
Total liabilities |
|
|
2,646 |
|
|
|
2,539 |
|
Commitments and Contingencies |
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Class A common stock (par value |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
2,809 |
|
|
|
2,748 |
|
Accumulated deficit |
|
|
(1,559 |
) |
|
|
(1,437 |
) |
Accumulated other comprehensive loss |
|
|
(94 |
) |
|
|
(103 |
) |
Treasury shares, at cost (8,000,000 shares and nil shares as of September 30, 2024 and December 31, 2023, respectively) |
|
|
(55 |
) |
|
|
— |
|
Total equity of the Company’s shareholders |
|
|
1,101 |
|
|
|
1,208 |
|
Equity attributable to non-controlling interest in subsidiaries |
|
|
5 |
|
|
|
4 |
|
Total shareholders’ equity |
|
|
1,106 |
|
|
|
1,212 |
|
Total liabilities and shareholders’ equity |
|
$ |
3,752 |
|
|
$ |
3,751 |
|
GLOBAL BUSINESS TRAVEL GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
|
Nine months ended September 30, |
||||||
(in $ millions) |
|
|
2024 |
|
|
|
2023 |
|
Operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(120 |
) |
|
$ |
(90 |
) |
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
138 |
|
|
|
145 |
|
Deferred tax charge (benefit) |
|
|
29 |
|
|
|
(16 |
) |
Equity-based compensation |
|
|
58 |
|
|
|
60 |
|
Allowance for credit losses |
|
|
7 |
|
|
|
11 |
|
Loss on early extinguishment of debt |
|
|
38 |
|
|
|
— |
|
Fair value movement on earnout derivative liabilities |
|
|
14 |
|
|
|
(23 |
) |
Other |
|
|
14 |
|
|
|
16 |
|
Changes in working capital: |
|
|
|
|
||||
Accounts receivable |
|
|
24 |
|
|
|
(109 |
) |
Prepaid expenses and other current assets |
|
|
(26 |
) |
|
|
(26 |
) |
Due from affiliates |
|
|
(4 |
) |
|
|
(2 |
) |
Due to affiliates |
|
|
(11 |
) |
|
|
18 |
|
Accounts payable, accrued expenses and other current liabilities |
|
|
66 |
|
|
|
141 |
|
Defined benefit pension funding |
|
|
(20 |
) |
|
|
(21 |
) |
Net cash from operating activities |
|
|
207 |
|
|
|
104 |
|
Investing activities: |
|
|
|
|
||||
Purchase of property and equipment |
|
|
(75 |
) |
|
|
(87 |
) |
Other |
|
|
5 |
|
|
|
(6 |
) |
Net cash used in investing activities |
|
|
(70 |
) |
|
|
(93 |
) |
Financing activities: |
|
|
|
|
||||
Proceeds from senior secured term loans |
|
|
1,397 |
|
|
|
131 |
|
Repayment of senior secured term loans |
|
|
(1,372 |
) |
|
|
(2 |
) |
Purchase of treasury shares |
|
|
(55 |
) |
|
|
— |
|
Contributions for ESPP and proceeds from exercise of stock options |
|
|
27 |
|
|
|
7 |
|
Payment of taxes withheld on vesting of equity awards |
|
|
(22 |
) |
|
|
(14 |
) |
Repayment of other debt and finance lease obligations |
|
|
|
|
||||
Payment of debt financing costs |
|
|
(25 |
) |
|
|
(2 |
) |
Prepayment penalty and other costs related to early extinguishment of debt |
|
|
(26 |
) |
|
|
— |
|
Other |
|
|
(3 |
) |
|
|
1 |
|
Net cash (used in) from financing activities |
|
|
(79 |
) |
|
|
121 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
3 |
|
|
|
(3 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
|
61 |
|
|
|
129 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
489 |
|
|
|
316 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
550 |
|
|
$ |
445 |
|
Supplemental cash flow information: |
|
|
|
|
||||
Cash paid for income taxes, net |
|
$ |
13 |
|
|
$ |
1 |
|
Cash paid for interest (net of interest received) |
|
$ |
75 |
|
|
$ |
107 |
|
Non-cash additions for operating lease right-of-use assets |
|
$ |
26 |
|
|
$ |
10 |
|
Non-cash additions for finance lease |
|
$ |
5 |
|
|
$ |
3 |
|
Issuance of shares to settle liability |
|
$ |
— |
|
|
$ |
4 |
|
Glossary of Terms
Customer retention rate is calculated based on Total Transaction Value (TTV).
CWT refers to CWT Holdings, LLC.
GMN refers to Global & Multinational Enterprises and SME refers to Small and Medium-sized Enterprises. For organizational management purposes, Amex GBT divides the customer base into these two general categories, generally on the basis of annual TTV, although this measure can vary by country and by customer preference. Amex GBT offers all products and services to all sizes of customer, as customers of all sizes may prefer different solutions.
LTM refers to the last twelve months ended September 30, 2024.
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 nine months ended September 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 loss to EBITDA and Adjusted EBITDA:
|
|
Three months ended September 30, |
||||||
(in $ millions) |
|
|
2024 |
|
|
|
2023 |
|
Net loss |
|
$ |
(128 |
) |
|
$ |
(8 |
) |
Interest income |
|
|
(2 |
) |
|
|
— |
|
Interest expense |
|
|
28 |
|
|
|
36 |
|
Loss on early extinguishment of debt |
|
|
38 |
|
|
|
— |
|
Provision for (benefit from) income taxes |
|
|
54 |
|
|
|
(2 |
) |
Depreciation and amortization |
|
|
43 |
|
|
|
50 |
|
EBITDA |
|
|
33 |
|
|
|
76 |
|
Restructuring, exit and related charges (a) |
|
|
8 |
|
|
|
13 |
|
Integration costs (b) |
|
|
7 |
|
|
|
10 |
|
Mergers and acquisitions (c) |
|
|
12 |
|
|
|
1 |
|
Equity-based compensation and related employer taxes (d) |
|
|
22 |
|
|
|
19 |
|
Fair value movement on earnout derivative liabilities (e) |
|
|
22 |
|
|
|
(39 |
) |
Other adjustments, net (f) |
|
|
14 |
|
|
|
15 |
|
Adjusted EBITDA |
|
$ |
118 |
|
|
$ |
95 |
|
Net loss margin |
|
|
(21 |
)% |
|
|
(1 |
)% |
Adjusted EBITDA Margin |
|
|
20 |
% |
|
|
17 |
% |
Reconciliation of total operating expenses to Adjusted Operating Expenses:
|
|
Three months ended September 30, |
||||||
(in $ millions) |
|
|
2024 |
|
|
|
2023 |
|
Total operating expenses |
|
$ |
570 |
|
|
$ |
575 |
|
Adjustments: |
|
|
|
|
||||
Depreciation and amortization |
|
|
(43 |
) |
|
|
(50 |
) |
Restructuring, exit and related charges (a) |
|
|
(8 |
) |
|
|
(13 |
) |
Integration costs (b) |
|
|
(7 |
) |
|
|
(10 |
) |
Mergers and acquisitions (c) |
|
|
(12 |
) |
|
|
(1 |
) |
Equity-based compensation and related employer taxes (d) |
|
|
(22 |
) |
|
|
(19 |
) |
Other adjustments, net (f) |
|
|
1 |
|
|
|
(6 |
) |
Adjusted Operating Expenses |
|
$ |
479 |
|
|
$ |
476 |
|
(a) |
|
Includes (i) employee severance 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 September 30, |
||||||
($ in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
Net cash from operating activities |
|
$ |
85 |
|
|
$ |
135 |
|
Less: Purchase of property and equipment |
|
|
(26 |
) |
|
|
(28 |
) |
Free Cash Flow |
|
$ |
59 |
|
|
$ |
107 |
|
Reconciliation of Net Debt:
|
|
As of |
||||||||||
(in $ millions) |
|
September 30, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
||||||
Current portion of long-term debt |
|
$ |
16 |
|
|
$ |
7 |
|
|
$ |
6 |
|
Long-term debt, net of unamortized debt discount and debt issuance costs |
|
|
1,368 |
|
|
|
1,355 |
|
|
|
1,353 |
|
Total debt, net of unamortized debt discount and debt issuance costs |
|
|
1,384 |
|
|
|
1,362 |
|
|
|
1,359 |
|
Less: Cash and cash equivalents |
|
|
(524 |
) |
|
|
(476 |
) |
|
|
(432 |
) |
Net Debt |
|
$ |
860 |
|
|
$ |
886 |
|
|
$ |
927 |
|
|
|
|
|
|
|
|
||||||
LTM Adjusted EBITDA |
|
$ |
448 |
|
|
$ |
380 |
|
|
$ |
343 |
|
Net Debt / LTM Adjusted EBITDA |
|
|
1.9 |
x |
|
|
2.3 |
x |
|
|
2.7 |
x |
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 provided 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105904134/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.
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