Global Business Travel (US:GBTG)2025-11-10 12:08Financial Performance - Total Transaction Value (TTV) for the three months ended September 30, 2025, was $9,523 million, representing a 23% increase from $7,752 million in the same period of 2024[164] - Revenue for the three months ended September 30, 2025, was $674 million, a 13% increase compared to $597 million in the same period of 2024[164] - Net loss for the three months ended September 30, 2025, was $(62) million, improving by 52% from a net loss of $(128) million in the same period of 2024[164] - Adjusted EBITDA for the three months ended September 30, 2025, was $128 million, a 9% increase from $118 million in the same period of 2024[164] - Gross profit for the three months ended September 30, 2025, was $388 million, reflecting a 12% increase from $347 million in the same period of 2024[164] - The company reported a gross profit margin of 58% for both the three months ended September 30, 2025, and 2024[164] - Free cash flow for the three months ended September 30, 2025, was $38 million, a decrease of 33% from $59 million in the same period of 2024[164] - Total revenue for the nine months ended September 30, 2025, increased by $94 million, or 5%, driven by both Travel Revenue and Product and Professional Services Revenue[201] Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $662 million, a 16% increase from $570 million in the same period of 2024[164] - Adjusted Operating Expenses for the three months ended September 30, 2025, were $548 million, compared to $479 million in the same period of 2024[186] - Sales and marketing expenses increased by $9 million, or 8%, mainly due to $6 million from the CWT acquisition and $3 million related to higher employee headcount[191] - Technology and content costs rose by $18 million, or 15%, primarily due to $10 million from the CWT acquisition and $6 million to support growth plans[192] - General and administrative expenses increased marginally by $1 million, with $8 million from the CWT acquisition offset by $5 million in cost savings initiatives[193] - General and administrative expenses decreased by $28 million, or 12%, primarily due to a $16 million decrease in head office costs and other corporate expenses[207] Acquisition Impact - The acquisition of CWT was completed on September 2, 2025, which is expected to impact revenue, operating expenses, and integration costs[152] - For the three months ended September 30, 2025, total transaction value (TTV) increased by $1,771 million, or 23%, reaching $9,523 million compared to the same period in 2024, with CWT contributing 14% of this growth[167] - Transaction Growth was 19% for the three months ended September 30, 2025, with CWT contributing 15% of this growth, driven by increased demand for business travel and share gains[170] - Total revenue for the three months ended September 30, 2025, increased by $77 million, or 13%, to $674 million, primarily due to a $57 million contribution from the CWT acquisition and a $20 million increase from Transaction Growth[186] - Travel Revenue increased by $50 million or 10%, driven by $42 million from the CWT acquisition and $8 million from Transaction Growth and TTV increase[188] - Product and professional services revenue rose by $27 million, or 23%, due to $15 million from the CWT acquisition and an $8 million increase in other professional services revenue[189] - Restructuring charges amounted to $29 million, primarily related to actions following the CWT acquisition[195] Debt and Cash Flow - Net debt as of September 30, 2025, was $962 million, an increase from $848 million as of December 31, 2024[164] - Cash and cash equivalents decreased to $427 million as of September 30, 2025, from $536 million as of December 31, 2024[214] - Net cash from operating activities was $181 million for the nine months ended September 30, 2025, down from $207 million in 2024[217] - Free Cash Flow decreased by $41 million to $91 million for the nine months ended September 30, 2025, due to a decrease in net cash from operating activities and increased cash outflows for property and equipment[227] - Net Debt increased by $114 million to $962 million as of September 30, 2025, compared to $848 million as of December 31, 2024[229] - The company repurchased 4 million shares for $34 million under the share repurchase program, with $266 million remaining available for future repurchases[236] Financial Instruments and Risk Management - The company manages interest rate risk through derivative financial instruments and has established policies to mitigate foreign currency exchange rate risks[246] - There were no material changes in market risks or mitigating strategies during the nine months ended September 30, 2025[248] - The company does not engage in speculative activities in the derivatives markets to manage market risks[246] - In January 2025, the company terminated interest rate swap contracts, receiving $31 million in cash, and entered into new contracts with fixed rates of 4.2075% for $400 million and 4.209% for $500 million notional contracts[249] - During the nine months ended September 30, 2025, the company realized $27 million from foreign currency forward contracts that acted as economic hedges[250] Accounting Estimates - Estimates related to the fair value of contingent consideration and intangible assets are critical accounting estimates that may change with new information[247] - The company uses the purchase method of accounting for business combinations, requiring fair value recording of acquired assets and assumed liabilities at the acquisition date[241] - For the CWT acquisition, the fair value of customer relationships was estimated using the multi-period excess earnings method, considering forecasted revenues and expected customer attrition rates[242] - The fair value of software and trade names was determined using the relief from royalty method, applying a royalty rate to projected income[243] - The fair value of the equity-method investee in the CWT acquisition was determined using the guideline public company method, comparing it to similar publicly traded companies[244] Tax and Other Financial Matters - Income tax expense for the nine months ended September 30, 2025, was $66 million, with an effective tax rate of 73%, higher than the U.S. federal statutory corporate income tax rate of 21%[213] - The fair value movement of derivative liabilities related to earnout shares resulted in a credit of $80 million for the nine months ended September 30, 2025, compared to a charge of $14 million in the same period of 2024[211] - Other loss, net, increased by $15 million primarily due to unfavorable foreign exchange movements for the nine months ended September 30, 2025[212] - Interest expense decreased by $4 million or 13%, due to lower fixed rate margins from refinancing and repricing of term loans[197] - The amendment to the A&R Credit Agreement in February 2025 is expected to reduce annual cash interest payments by $7 million[230]