Global Business Travel Corporation
NYSE:
GBTG
) fell 10% on Tuesday after trimming its full-year earnings forecast because of macroeconomic challenges. The travel-management company also said it planned to cut costs by $110 million this year, revising its earlier target of $95 million.
In the initial quarter, revenue increased by 2% year-over-year to reach $621 million, falling short of Wall Street analysts’ mean projection of $652.6 million. The company, operating under the names Amex GBT (GBTB), reported an adjusted growth rate of 4% when accounting for variations in exchange rates and working days.
Operating income surged to $55 million from $16 million a year earlier, while net income flipped to a $75 million profit, or $0.16 a share, from a loss of $19 million, or $0.04 a share, a year earlier. The consensus forecast was $0.09 a share.
The firm reported that their adjusted earnings before interest, taxes, depreciation, and amortization rose by 15%, reaching $141 million, with an expansion of the adjusted EBITDA margin by 260 basis points to hit 23%.
The free cash flow saw an enhancement of 9%, reaching $26 million, bolstered by higher operating earnings and prudent management of financial resources. The adjusted operational expenditures dropped by 1% compared to the previous year, showcasing efforts to cut costs along with enhanced efficiency, even as continuous investments were made in technological advancements and service developments.
Customer retention
Amex GBT (
NYSE:
GBTG
) reported a trailing 12-month customer retention rate of 96% and total new business wins valued at $3.2 billion, including $2.3 billion from small and midsize enterprises. The company also reduced its net debt to $832 million, bringing its leverage ratio down to 1.7 times.
Additionally, Amex GBT (
NYSE:
GBTG
) modified the conditions of its proposed acquisition of travel management company CWT, reducing the stock consideration from roughly 72 million to 50 million shares — a step intended to boost shareholder value.
The proposed agreement, which the Department of Justice has taken legal action to prevent, would involve Amex GBT.
GBTG
) fifth purchase of another travel management firm since 2018.
Cautious outlook
Due to increasing economic uncertainties, the firm updated its financial projections for the year 2025. They anticipate revenues falling within the $2.38 billion to $2.48 billion bracket, with projected adjusted EBITDA ranging from $480 million to $540 million. This represents a 6% decrease at the mid-point compared to their earlier EBITDA forecasts.
“Clearly, there’s increased economic uncertainty leading to reduced visibility for the entire fiscal year,” CEO Paul Abbott stated in an analyst conference call. “In response to this slower growth scenario, our strategy remains firmly centered on areas within our control: capturing market share, boosting margins, generating cash flow, and enhancing returns for shareholders.”
When queried about whether he observed clients opting for less expensive lodging options, Abbott mentioned that high-end and international transactions have been more resilient compared to domestic ones, noting that luxury hotels are experiencing growth above the typical rate.
For the second quarter, Amex GBT retained its position as
GBTG
The project forecasts revenues of $615 million to $635 million and adjusted EBITDA between $125 million and $135 million. The firm expects to sustain EBITDA margins within the 20.3% to 21.3% range.
Amex GBT stated that they remain committed to implementing cost-cutting measures amounting to $110 million for the year, all while still investing in expansion efforts. Even with economic difficulties ahead, the firm anticipates ongoing enhancement of profit margins along with a solid financial position bolstered by a $300 million stock buyback initiative.
Further Details on the Global Business Travel Organization
- Global Business Travel Group, Inc. Q1 2025 – Financial Outcomes – Earnings Call Slides
- Global Business Travel Group, Inc. (GBTG) First Quarter 2025 Earnings Call Transcripts
- Global Business Travel Group Q4: Reasonably Priced with Strong Prospects for the Future
- GBTG sets $110M in cost savings goals for 2025 despite steady demand conditions.
- American Express Global Business Travel modifies merger deal with CWT, proposes increased stock price
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