Global Business Travel Q1 2025 slides: EBITDA jumps 15% despite modest revenue growth

Global Business Travel Group Inc. (NYSE:GBTG) reported solid first-quarter 2025 results on May 6, with Adjusted EBITDA growing significantly faster than revenue, highlighting the company’s focus on operational efficiency. Despite the positive earnings report, the stock was trading down 2.32% to $6.73 in pre-market trading.

Quarterly Performance Highlights

Amex GBT delivered strong profitability growth in Q1 2025, with Adjusted EBITDA increasing 15% year-over-year to $141 million, while revenue grew more modestly at 4% on a constant currency, workday-adjusted basis (2% reported) to $621 million. The company achieved substantial margin expansion of 260 basis points, bringing the Adjusted EBITDA margin to 23%.

"Our goal every year is to deliver earnings growth well ahead of revenue growth," CEO Paul Abbott had stated during the previous quarter’s earnings call, a strategy that appears to be continuing successfully into 2025.

The company’s financial performance demonstrates its ability to drive profitability even in a challenging environment, with free cash flow growing 9% year-over-year to $26 million and adjusted operating expenses decreasing by 1%.

As shown in the following comprehensive overview of key metrics:

Transaction (JO:NTUJ) growth remained positive across all segments, with particularly strong performance in the Global Multinational (GMN) customer segment, which grew 6% compared to 2% for Small and Medium Enterprises (SME). Hotel bookings outpaced air bookings, growing 5% versus 2%, respectively, while the Asia-Pacific region led geographic growth at 7%.

The following chart illustrates the company’s financial growth metrics:

Digital Transformation & Operational Efficiency

A key driver of Amex GBT’s margin expansion is its ongoing digital transformation, with 81% of transactions now flowing through digital channels, representing a 5% year-over-year increase. This shift to digital has enabled the company to reduce adjusted operating expenses by 1% while continuing to invest in technology transformation, automation, and AI.

The company’s commercial performance remains strong, with a 96% customer retention rate and $3.2 billion in Last Twelve Months (LTM) Total (EPA:TTEF) New Wins Value, including $2.3 billion from the SME segment.

As illustrated in the following slide highlighting the company’s commercial successes:

The company’s operational improvements and digital investments have created a resilient business model that can navigate through market uncertainties:

Forward Guidance & Strategic Outlook

For Q2 2025, Amex GBT provided guidance reflecting current market conditions, with revenue expected to be flat year-over-year at $625 million (midpoint) and Adjusted EBITDA projected to grow 2% to $130 million. The company anticipates continued margin expansion of approximately 50 basis points.

The guidance assumes flat workday-adjusted total transaction growth, with modest organic transaction decline offset by new wins, and neutral foreign exchange impact.

As shown in the detailed Q2 2025 guidance table:

For the full fiscal year 2025, the company updated its guidance with revenue expected to be flat year-over-year at $2.43 billion (midpoint), while Adjusted EBITDA is projected to grow 7% to $510 million. Free cash flow is expected to reach $140 million at the midpoint.

The following slide details the updated FY 2025 guidance:

The company noted that its full-year outlook assumes flat total transaction growth, with a 2% organic decline offset by 2 percentage points from new wins. Cost actions are increasing to approximately $110 million as the company continues to focus on operational efficiency while maintaining investments in growth initiatives.

Capital Allocation & M&A Strategy

Amex GBT outlined its capital allocation priorities, highlighting its strong balance sheet with a leverage ratio of 1.7x and over $900 million in liquidity as of March 31, 2025. The company has received two credit rating upgrades, reflecting its improved financial position.

The company announced an amended agreement for its CWT acquisition that reduces the stock consideration, addressing a key concern that had been highlighted in previous quarters. The acquisition is still pending regulatory approval, with the company previously indicating a potential closing in Q4 2025.

Additionally, Amex GBT has a $300 million share buyback authorization in place, demonstrating confidence in its long-term prospects and commitment to returning value to shareholders.

The following detailed breakdown shows how the company expects to improve its underlying free cash flow in FY 2025:

"We are controlling what we can control," CFO Karen Williams had stated during the previous quarter’s earnings call, emphasizing the company’s proactive approach to managing external challenges. This philosophy appears to be continuing into 2025, with the company focusing on operational efficiency and margin expansion despite a challenging revenue environment.

While the market reaction to the Q1 results appears cautious, with the stock trading down in pre-market, Amex GBT’s ability to drive significant EBITDA growth and margin expansion in a flat revenue environment demonstrates the resilience of its business model and the effectiveness of its digital transformation strategy.

Full presentation:

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