Global Business Travel Group, Inc. ((GBTG)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Global Business Travel Group, Inc. painted a picture of robust financial health, marked by record-breaking adjusted EBITDA and revenue figures. The company demonstrated significant free cash flow growth and maintained high customer retention rates. However, the call also highlighted some challenges, including a slight decline in new business wins, muted growth in the SME sector, and uncertainties surrounding the CWT acquisition due to regulatory hurdles.
Record Year for Adjusted EBITDA and Revenue
Global Business Travel Group, Inc. reported a stellar year with adjusted EBITDA exceeding the midpoint of the original guidance range, marking a 26% year-over-year increase. The company achieved a revenue milestone of $2.42 billion, driven by a 6% uptick from solid growth in transactions and TTB.
Strong Free Cash Flow Growth
The company saw its free cash flow more than triple in 2024, ending significantly above the original guidance. The conversion ratio improved dramatically to 35% from 13% in the previous year, showcasing efficient cash management.
High Customer Retention
In 2024, Global Business Travel Group, Inc. achieved a record 99% customer retention rate for GMN, reflecting strong customer loyalty and satisfaction.
Significant Margin Expansion
The adjusted EBITDA margin expanded by over 300 basis points, reaching 20% for the year, indicating improved operational efficiency and profitability.
Successful Capital Allocation
The company successfully lowered its leverage ratio below two times and completed a $300 million buyback authorization, demonstrating prudent capital management.
Positive Outlook for 2025
Looking ahead, the company expects another year of double-digit earnings growth, with new wins totaling $2.8 billion in 2024, of which $2.2 billion is attributed to SMEs.
Slight Downtick in New Business Wins
Despite the overall positive performance, there was a slight downtick in the total estimated value of new wins signed during 2024, totaling $2.8 billion, which was slightly lower than the trailing twelve-month figure shared last quarter.
Muting SME Customer Growth
SME transaction growth has been muted at 2%, reflecting tightened spending controls due to higher prices and slower macroeconomic growth.
Currency Exchange Headwinds
The company anticipates a 2% headwind for revenue in 2025 due to foreign exchange impacts, which will lower the underlying constant currency growth from 5-7% to 3-5% on a reported basis.
Uncertainty in CWT Acquisition
The US Department of Justice is challenging the merger with CWT, creating uncertainty about the timing and outcome of the acquisition, which poses a potential risk to future strategic plans.
Forward-Looking Guidance
For 2025, Global Business Travel Group, Inc. anticipates continued double-digit earnings growth, driven by technology-enabled productivity gains and a scalable cost base. The company provided guidance for constant currency revenue growth of 5-7% and adjusted EBITDA between $530 million and $560 million, representing an 11-17% increase over 2024.
In conclusion, Global Business Travel Group, Inc.’s earnings call reflected a strong financial performance with record-breaking metrics and a positive outlook for 2025. Despite some challenges, the company remains optimistic about its growth trajectory, supported by strategic initiatives and robust customer retention.