Global Business Travel Group, Inc. Q2 FY2024 earnings call

• Strong adjusted EBITDA growth, 240 basis points margin expansion, and accelerated free cash flow.
• Successfully refinanced debt, lowering interest costs, extending maturities, and upsizing revolver.
• Increased demand for software and services led to share gains and high customer retention (98% for GMN over 12 months).
• Progress with AI initiatives, moving from pilot phase to implementation to drive productivity gains.
• ESG initiatives highlighted, including sustainable aviation fuel efforts and work with NGOs.
• Update on CWT acquisition, expected to close in Q1 2025, with ongoing regulatory reviews.

Revenue for the second quarter was $625 million, up 6%. Adjusted EBITDA was $127 million, up 20%. Global multinational (GMN) transactions were up 7% with double-digit growth in financial services and pharma industries; GMN TTV grew 9%. SME transaction growth was relatively muted at 1%. GMN accounted for stronger growth, while SME faced tighter spending controls due to macroeconomic conditions.

• Raised free cash flow guidance for 2024 to over $130 million, a $30 million increase.
• Reiterated full year revenue guidance of $2.43 billion to $2.5 billion and adjusted EBITDA guidance of $450 million to $500 million.
• Expect operating leverage to drive 18% to 32% adjusted EBITDA growth in 2024.
• CWT acquisition now expected to close in Q1 2025.

• Macro-economic risks affecting SME spending due to higher interest costs and inflation.
• Temporary impact of France Olympics on business travel, though expected to rebound in September.
• Regulatory risks related to the CWT acquisition, including ongoing Phase 2 review by CMA.
• Potential impacts from incidents like the CrowdStrike incident, though managed successfully with minimal material impact.

Q: Expand on the state of the macro environment and expectations for the rest of the year, especially in SME.

A: Continuation of same store sales slowdown in SME, but expected moderate acceleration in second half due to net new wins and workday benefits. Global multinationals are more stable.

Q: Elaborate on NDC economics and how it keeps economics stable.

A: NDC is a technical standard with no impact on underlying economics; provides suppliers flexibility, with potential for additional revenue from ancillary services in future.

Q: Details on France business travel impact and recovery.

A: France had strong Q1 but ended Q2 down 4%, expected to rebound in September as post-Labor Day demand increases.

Q: Details on CWT acquisition push to Q1 2025 and regulatory aspects.

A: Pushed to Q1 2025 due to CMA Phase 2 review (approx 24 weeks), confident of full approval as transaction will create choice and efficiency.

Q: Trends in July/August and impact of CrowdStrike incident.

A: July/August are slower months, CrowdStrike incident managed successfully with quick response, minimal material impact on business.