Global Business Travel (GBTG) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Overview Executive Summary & Highlights Amex GBT exceeded Q2 2025 expectations, raising full-year guidance, expanding margins, and maintaining strong customer retention - Financial results exceeded expectations, leading to raised and narrowed full-year 2025 guidance[1][2] - Adjusted EBITDA margin expanded by 70 basis points year-over-year to 21%, reflecting efficiency and growth investment[2][3] - CWT acquisition expected to close in Q3 2025 after DOJ litigation dismissal[2][3] - Customer retention rate remained high at 95% (LTM), with $3.2 billion in LTM Total New Wins Value[3] Q2 2025 Financial Performance Q2 2025 saw revenue grow 1% to $631 million, Adjusted EBITDA increase 4% to $133 million, and net debt reduce to $780 million, despite a 48% decline in net income Key Financial Metrics Key Q2 2025 metrics include 2% TTV growth to $7.9 billion, 1% revenue increase to $631 million, and 4% Adjusted EBITDA growth to $133 million, despite declines in operating and net income Q2 2025 Financial Summary (vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Transaction Value (TTV) | $7,891M | $7,724M | +2% | | Revenue | $631M | $625M | +1% | | Operating income | $34M | $42M | -21% | | Net income | $15M | $27M | -48% | | Adjusted EBITDA | $133M | $127M | +4% | | Adjusted EBITDA Margin | 21% | 20% | +70 bps | | Free Cash Flow | $27M | $49M | -45% | Detailed Financial Analysis Revenue growth was driven by Product and Professional Services, while net income declined 48% due to various factors; Adjusted EBITDA grew 4%, and Free Cash Flow decreased 45%, with net debt improving to 1.6x leverage - Revenue increased 1% to $631 million, primarily from 4% growth in Product and Professional Services Revenue and favorable FX[5] - Net income decreased 48% to $15 million, due to lower operating income, unfavorable FX, and higher taxes, partially offset by earnout derivative movements[8] - Free Cash Flow decreased 45% to $27 million, impacted by prior-year one-time working capital benefits and increased capital expenditures[10] - Net Debt decreased to $780 million, improving the leverage ratio to 1.6x from 1.8x since year-end 2024[11] Full-Year 2025 Guidance Amex GBT raised and narrowed its full-year 2025 guidance, projecting 2-4% revenue growth, 6-13% Adjusted EBITDA growth, and $140-160 million Free Cash Flow, excluding CWT acquisition impact - The updated full-year 2025 guidance excludes the CWT acquisition's financial impact, with closure expected in Q3 2025[12] Full-Year 2025 Guidance | Metric | Low | Midpoint | High | | :--- | :--- | :--- | :--- | | Revenue | $2.460B (+2% YoY) | $2.488B (+3% YoY) | $2.515B (+4% YoY) | | Adjusted EBITDA | $505M (+6% YoY) | $523M (+9% YoY) | $540M (+13% YoY) | | Adjusted EBITDA Margin | 20.5% (+80bps YoY) | 21.0% (+130bps YoY) | 21.5% (+180bps YoY) | | Free Cash Flow | $140M | $150M | $160M | Consolidated Financial Statements This section presents the unaudited consolidated financial statements for the period ended June 30, 2025, including Statement of Operations, Balance Sheet, and Cash Flows, prepared under GAAP Consolidated Statements of Operations Q2 2025 Statement of Operations reports $631 million revenue, $34 million operating income, and $15 million net income, or $0.03 diluted EPS Q2 2025 Statement of Operations Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $631 | $625 | | Total operating expenses | $597 | $583 | | Operating income | $34 | $42 | | Net income | $15 | $27 | | Diluted EPS | $0.03 | $0.06 | Consolidated Balance Sheets As of June 30, 2025, the balance sheet shows total assets of $3.87 billion, total liabilities of $2.66 billion, and total shareholders' equity of $1.21 billion Balance Sheet Highlights (as of June 30, 2025) | Category | Amount (in millions) | | :--- | :--- | | Assets | | | Cash and cash equivalents | $601 | | Total current assets | $1,517 | | Goodwill | $1,250 | | Total Assets | $3,871 | | Liabilities & Equity | | | Total current liabilities | $915 | | Long-term debt, net | $1,362 | | Total Liabilities | $2,664 | | Total Shareholders' Equity | $1,207 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities was $110 million, resulting in a net increase in cash of $57 million Six Months Ended June 30, 2025 Cash Flow Summary (in millions) | Cash Flow Category | Amount | | :--- | :--- | | Net cash from operating activities | $110 | | Net cash used in investing activities | $(30) | | Net cash used in financing activities | $(48) | | Effect of exchange rate changes | $25 | | Net increase in cash | $57 | Non-GAAP Financial Measures and Reconciliations This section defines and reconciles non-GAAP financial measures like Adjusted EBITDA, Free Cash Flow, and Net Debt, explaining their utility as supplemental metrics for investors Explanation of Non-GAAP Measures Non-GAAP measures like Adjusted EBITDA and Free Cash Flow are used to compare performance by excluding non-core items, with specific definitions provided - Management utilizes non-GAAP financial measures for evaluating operations, forecasting results, and allocating capital investments[33] - Adjusted EBITDA excludes non-core costs including restructuring, M&A, non-cash equity compensation, and earnout liability fair value movements[35] - Free Cash Flow is defined as net cash from operating activities less capital expenditures, serving as a key liquidity measure[42][43] Tabular Reconciliations This section provides detailed tabular reconciliations for key non-GAAP metrics, including Net Income to Adjusted EBITDA and Net Cash from Operating Activities to Free Cash Flow Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in millions) | Description | Amount | | :--- | :--- | | Net income | $15 | | Interest, Taxes, D&A | $85 | | EBITDA | $100 | | Restructuring, M&A, and other adjustments | $33 | | Adjusted EBITDA | $133 | Reconciliation of Net Cash from Operating Activities to Free Cash Flow (Q2 2025, in millions) | Description | Amount | | :--- | :--- | | Net cash from operating activities | $57 | | Less: Purchase of property and equipment | $(30) | | Free Cash Flow | $27 | Other Information This section provides supplementary information, including a glossary of terms, a forward-looking statements disclaimer, and a legal disclaimer regarding American Express Glossary of Terms This glossary defines key operational and financial terms like Total Transaction Value (TTV) and Yield for investor clarity - Total Transaction Value (TTV) is the total price paid by travelers for bookings, net of cancellations and refunds[29] - Yield is a performance metric calculated as total revenue divided by Total Transaction Value (TTV)[31] Forward-Looking Statements & Disclaimer This section includes forward-looking statements and a disclaimer outlining risks and uncertainties, such as geopolitical conflicts and the CWT acquisition, and clarifies the relationship with American Express - The report includes forward-looking statements on financial position, strategy, and guidance, subject to significant risks and uncertainties[56] - Key risks encompass geopolitical conflicts, macroeconomic conditions, CWT acquisition integration, and shifts in global travel demand[57][58] - A disclaimer clarifies American Express is not responsible for statements made by Global Business Travel Group, Inc. in this release[59]