American Express Global Business Travel Reports Strong Fourth Quarter and Full-Year 2023 Financial Results; Introduces 2024 Outlook

by | Mar 5, 2024

NEW YORK–(BUSINESS WIRE)–American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex GBT” or the “Company”), a leading B2B software and services company for travel and expense, today announced financial results for the fourth quarter and full year ended December 31, 2023.


Fourth Quarter and Full-Year 2023 Highlights

  • Outstanding financial performance. Strong full-year performance above initial guidance with 24% revenue growth and 269% Adjusted EBITDA growth to $380 million. In Q4 2023, delivered $549 million of revenue and $80 million of Adjusted EBITDA, growing 83% or $37 million year-over-year.
  • Continued share gains. Total New Wins Value of $3.5 billion, including $2.2 billion in SME, and 96% customer retention rate for the full year.
  • Operating leverage. 24% revenue growth versus single-digit Adjusted Operating Expense growth for the full year. Operating leverage drove full-year Adjusted EBITDA margin expansion of 11ppt year-over-year.
  • Positive cash flow and rapid deleveraging. Positive full-year Free Cash Flow of $49 million and significant decline in leverage ratio to 2.3x[1], resulting in reduced interest expense and a two-notch credit rating upgrade from S&P Global.

Full-Year 2024 Outlook

  • Revenue outperformance. Guiding to 6-9% revenue growth driven by expected stable growth in business travel and Amex GBT’s continued share gains.
  • Operating leverage. Margin expansion, focus on productivity and leveraging automation and artificial intelligence (AI) expected to deliver 18%–32% Adjusted EBITDA growth to $450–$500 million.
  • Accelerating cash flow. Strong operational performance, reduction in interest, integration and restructuring costs and prudent working capital management. Opportunity to refinance debt and shift capital allocation to organic and inorganic opportunities.

Paul Abbott, Amex GBT’s Chief Executive Officer, stated: “In 2023, we delivered outstanding financial results, with revenue and Adjusted EBITDA finishing above the guidance issued at the start of the year. We expect our scalable model to generate 18% to 32% Adjusted EBITDA growth in 2024 as we settle into a more stable level of industry growth. We expect 2024 will be another year of share gains, strong growth in profits and cash flow and continued margin expansion.”

*A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of this release.

1Leverage ratio is calculated as Net Debt / LTM Adjusted EBITDA and is different than leverage ratio defined in our senior secured credit agreement.

Fourth Quarter & Full-Year 2023 Financial Summary

(in millions, except percentages; unaudited)

Three Months Ended

% Increase/

(Decrease)

Year Ended

% Increase/

(Decrease)

December 31,

December 31,

2023

2022

2023

2022

Total Transaction Value (TTV)

$

6,298

$

5,913

7 %

$

28,192

$

22,968

23 %

Transaction Growth

 

6 %

 

81 %

 

 

19 %

 

200 %

 

Revenue

$

549

$

527

4 %

$

2,290

$

1,851

24 %

 

 

 

 

 

 

 

Total operating expenses

$

546

$

565

(4) %

$

2,298

$

2,049

12 %

Adjusted Operating Expenses

$

469

$

484

(3) %

$

1,910

$

1,745

9 %

 

 

 

 

 

 

 

Net loss

$

(46)

$

(63)

27 %

$

(136)

$

(229)

41 %

Net loss margin

 

(8) %

 

(12) %

4ppt

 

(6) %

 

(12) %

6ppt

EBITDA

$

41

$

(8)

NM

$

189

$

(10)

NM

Adjusted EBITDA

$

80

$

43

83 %

$

380

$

103

269 %

Adjusted EBITDA Margin

 

15 %

 

8 %

6ppt

 

17 %

 

6 %

11ppt

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

58

$

(4)

NM

$

162

$

(394)

NM

Free Cash Flow

$

32

$

(25)

NM

$

49

$

(488)

NM

 

 

 

 

 

 

 

Net Debt

 

 

 

$

886

$

919

 

Net Debt / LTM Adjusted EBITDA

 

 

 

2.3x

8.9x

 

NM = Not Meaningful

Fourth Quarter 2023 Financial Highlights

(Changes compared to prior year period unless otherwise noted)

Revenue totaled $549 million, an increase of $22 million, or 4%, primarily due to growth in Total Transaction Value driven by continued growth in business travel and growth in Product & Professional Services revenue, partially offset by lower yield due to different phasing of supplier revenue in the prior year.

Total operating expenses totaled $546 million, a decrease of $19 million, or 4%, primarily due to general and administrative cost savings and lower employee incentive costs.

Adjusted Operating Expenses totaled $469 million, a decrease of $15 million, or 3%.

Net loss totaled $46 million, an improvement of $17 million, primarily due to the increase in operating income and favorable change in fair value of earnout derivative liabilities, partially offset by increased interest expense.

Adjusted EBITDA totaled $80 million, an increase of $37 million, or 83%. Revenue growth and operating leverage resulted in Adjusted EBITDA margin expansion to 15%, up 6ppt.

Net cash provided by operating activities totaled $58 million, an improvement of $62 million versus $4 million in net cash used by operating activities in the same period in 2022, primarily due to (i) decreased usage of working capital associated with the normalization in volume growth and the benefits from the Company’s working capital optimization program, particularly in relation to the integration of Egencia, and (ii) reduced net losses before considering non-cash charges, partially offset by (iii) higher cash interest.

Free Cash Flow totaled $32 million, an improvement of $57 million versus Free Cash Flow use of $25 million in the same period in 2022, due to the increase in net cash provided by operating activities, partially offset by increased use of cash for the purchase of property and equipment.

Full-Year 2023 Financial Highlights

(Changes compared to prior year period unless otherwise noted)

Revenue totaled $2,290 million, an increase of $439 million, or 24%, primarily due to growth in Total Transaction Value and growth in Product and Professional Services revenue. Revenue yield was stable at 8.1%.

Total operating expenses totaled $2,298 million, an increase of $249 million, or 12%, primarily due to higher cost of revenues to support Transaction Growth, increased investments in sales and marketing and technology and content, higher restructuring costs and increased depreciation and amortization. This was partially offset by cost savings driven by operational efficiencies and the Company’s recent internal reorganization.

Adjusted Operating Expenses totaled $1,910 million, an increase of $165 million, or 9%.

Net loss totaled $136 million, an improvement of $93 million, primarily due to the improvement in operating results, partially offset by increased interest expense and reduced benefit from income taxes.

Adjusted EBITDA totaled $380 million, an increase of $277 million, or 269%. Strong revenue growth and operating leverage resulted in Adjusted EBITDA margin expansion to 17%, up 11ppt.

Net cash provided by operating activities totaled $162 million, an improvement versus $394 million in net cash used by operating activities in 2022, primarily due to (i) decreased usage of working capital associated with the normalization in volume growth and the benefits from the Company’s working capital optimization program, particularly in relation to the integration of Egencia, and (ii) reduced net losses before considering non-cash charges, partially offset by (iii) higher cash interest and (iv) loss of benefit from cash received on termination of a derivative contract in 2022.

Free Cash Flow totaled $49 million, an improvement versus Free Cash Flow use of $488 million in 2022, due to the increase in net cash provided by operating activities, partially offset by increased use of cash for the purchase of property and equipment.

Net Debt: As of December 31, 2023, total debt, net of unamortized debt discount and debt issuance cost, was $1,362 million, compared to $1,222 million as of December 31, 2022. Net Debt was $886 million as of December 31, 2023, compared to $919 million as of December 31, 2022. The leverage ratio was 2.3x as of December 31, 2023. The cash balance at the end of 2023 was $476 million, compared to $303 million at the end of 2022.

Full-Year 2024 Guidance

 

Full-Year 2024 Guidance

Year-over-Year Growth

Revenue

$2.43B – $2.50B

+ 6% – 9%

Adjusted EBITDA

$450M – $500M

+ 18% – 32%

Adjusted EBITDA Margin

18% – 20%

+ ~ 150bps – 350bps

Free Cash Flow

> $100M

 

Karen Williams, Amex GBT’s Chief Financial Officer, stated: “Our 2024 guidance demonstrates the power of our financial model to leverage stable travel demand growth to above-industry revenue growth. It also leads to even stronger Adjusted EBITDA growth thanks to our focus on operating leverage and continued margin expansion. We anticipate a significant step-up in Free Cash Flow this year, driven by Adjusted EBITDA growth, a reduction in integration and restructuring costs and lower interest expense from our declining leverage and expected refinancing of our debt. As Free Cash Flow accelerates, we have a clear capital allocation strategy that supports organic and inorganic investments for long-term, sustained growth.”

Please refer to the section below titled “Reconciliation of Full-Year 2024 Adjusted EBITDA and Free Cash Flow Guidance” for a description of certain assumptions and risks associated with this guidance and reconciliation to GAAP measures.

Webcast Information

Amex GBT will host its fourth quarter and full-year 2023 investor conference call today at 9:00 a.m. E.T. The live webcast and accompanying slide presentation can be accessed on the Amex GBT Investor Relations website at investors.amexglobalbusinesstravel.com. A replay of the event will be available on the website for at least 90 days following the event.

Glossary of Terms

See the “Glossary of Terms” for the definitions of certain terms used within this press release.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under GAAP in this press release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses, Free Cash Flow and Net Debt. See “Non-GAAP Financial Measures” below for an explanation of these non-GAAP financial measures and “Tabular Reconciliations for Non-GAAP Financial Measures” below for reconciliations of the non-GAAP financial measures to the comparable GAAP measures.

About American Express Global Business Travel

American Express Global Business Travel is the world’s leading B2B travel platform, providing software and services to manage travel, expenses, and meetings & events for companies of all sizes. We have built the most valuable marketplace in B2B travel to deliver unrivalled choice, value and experiences. With travel professionals in more than 140 countries, our customers and travelers enjoy the powerful backing of American Express Global Business Travel.

Visit amexglobalbusinesstravel.com for more information about Amex GBT. Follow @amexgbt on X (formerly known as Twitter), LinkedIn and Instagram.

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Year ended

December 31,

(in $ millions, except share and per share data)

 

 

2023

 

 

2022

 

Revenue

 

$

2,290

 

  $

1,851

 

Costs and expenses:

 

 

 

 

Cost of revenue (excluding depreciation and amortization shown separately below)

 

 

958

 

 

832

 

Sales and marketing

 

 

393

 

 

337

 

Technology and content

 

 

405

 

 

388

 

General and administrative

 

 

306

 

 

313

 

Restructuring and other exit charges

 

 

42

 

 

(3

)

Depreciation and amortization

 

 

194

 

 

182

 

Total operating expenses

 

 

2,298

 

 

2,049

 

Operating loss

 

 

(8

)

 

(198

)

Interest income

 

 

1

 

 

 

 

Interest expense

 

 

(141

)

 

(98

)

Fair value movement on earnout and warrant derivative liabilities

 

 

13

 

 

8

 

Other (loss) income, net

 

 

(10

)

 

1

 

Loss before income taxes and share of losses from equity method investments

 

 

(145

)

 

(287

)

Benefit from income taxes

 

 

9

 

 

61

 

Share of losses from equity method investments

 

 

 

 

(3

)

Net loss

 

 

(136

)

 

(229

)

Less: net loss attributable to non-controlling interests in subsidiaries

 

 

(73

)

 

(204

)

Net loss attributable to the Company’s Class A common stockholders

 

$

(63

)

$

(25

)

Basic loss per share attributable to the Company’s Class A common stockholders

 

$

(0.25

)

$

(0.50

)

Weighted average number of shares outstanding – Basic

 

 

251,645,498

 

 

51,266,570

 

Diluted loss per share attributable to the Company’s Class A common stockholders

 

$

(0.30

)

$

 

(0.51)

 

Weighted average number of shares outstanding – Diluted

 

 

458,055,525

 

 

 

 

445,715,051

 

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

As of December 31,

(in $ millions except share and per share data)

 

2023

 

2022

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

476

 

 

$

303

 

Accounts receivable (net of allowance for credit losses of $12 and $23 as of December 31, 2023 and 2022, respectively)

 

 

726

 

 

 

765

 

Due from affiliates

 

 

42

 

 

 

36

 

Prepaid expenses and other current assets

 

 

116

 

 

 

130

 

Total current assets

 

 

1,360

 

 

 

1,234

 

Property and equipment, net

 

 

232

 

 

 

218

 

Equity method investments

 

 

14

 

 

 

14

 

Goodwill

 

 

1,212

 

 

 

1,188

 

Other intangible assets, net

 

 

552

 

 

 

636

 

Operating lease right-of-use assets

 

 

50

 

 

 

58

 

Deferred tax assets

 

 

281

 

 

 

333

 

Other non-current assets

 

 

50

 

 

 

47

 

Total assets

 

$

3,751

 

 

$

3,728

 

Liabilities and shareholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

302

 

 

$

253

 

Due to affiliates

 

 

39

 

 

 

48

 

Accrued expenses and other current liabilities

 

 

466

 

 

 

452

 

Current portion of operating lease liabilities

 

 

17

 

 

 

17

 

Current portion of long-term debt

 

 

7

 

 

 

3

 

Total current liabilities

 

 

831

 

 

 

773

 

Long-term debt, net of unamortized debt discount and debt issuance costs

 

 

1,355

 

 

 

1,219

 

Deferred tax liabilities

 

 

5

 

 

 

24

 

Pension liabilities

 

 

183

 

 

 

147

 

Long-term operating lease liabilities

 

 

55

 

 

 

61

 

Earnout derivative liabilities

 

 

77

 

 

 

90

 

Other non-current liabilities

 

 

33

 

 

 

43

 

Total liabilities

 

 

2,539

 

 

 

2,357

 

Commitments and Contingencies

 

 

 

 

Shareholders’ equity:

 

 

 

 

Class A common stock (par value $0.0001; 3,000,000,000 shares authorized; 467,092,817 shares and 67,753,543 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively)

 

 

 

 

 

 

Class B common stock (par value $0.0001; 3,000,000,000 shares authorized; nil shares and 394,448,481 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively)

 

 

 

 

 

 

Additional paid-in-capital

 

 

2,748

 

 

 

334

 

Accumulated deficit

 

 

(1,437

)

 

 

(175

)

Accumulated other comprehensive loss

 

 

(103

)

 

 

(7

)

Total equity of the Company’s shareholders

 

 

1,208

 

 

 

152

 

Equity attributable to non-controlling interest in subsidiaries

 

 

4

 

 

 

1,219

 

Total shareholders’ equity

 

 

1,212

 

 

 

1,371

 

Total liabilities and shareholders’ equity

 

$

3,751

 

 

$

3,728

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Year ended December 31,

(in $ millions)

 

2023

 

2022

Operating activities:

 

 

 

 

Net loss

 

$

(136

)

 

$

(229

)

Adjustments to reconcile net loss to net cash from (used in) operating activities:

 

 

 

 

Depreciation and amortization

 

 

194

 

 

 

182

 

Deferred tax benefit

 

 

(30

)

 

 

(65

)

Equity-based compensation

 

 

75

 

 

 

39

 

Allowance for credit losses

 

 

9

 

 

 

19

 

Fair value movements on earnout and warrants derivative liabilities

 

 

(13

)

 

 

(8

)

Other

 

 

17

 

 

 

22

 

Defined benefit pension funding

 

 

(29

)

 

 

(32

)

Proceeds from termination of interest rate swap derivative contract

 

 

 

 

 

23

 

Changes in working capital

 

 

 

 

Accounts receivable

 

 

49

 

 

 

(427

)

Prepaid expenses and other current assets

 

 

9

 

 

 

(29

)

Due from affiliates

 

 

(4

)

 

 

(18

)

Due to affiliates

 

 

(5

)

 

 

7

 

Accounts payable, accrued expenses and other current liabilities

 

 

26

 

 

 

122

 

Net cash from (used in) operating activities

 

 

162

 

 

 

(394

)

Investing activities:

 

 

 

 

Purchase of property and equipment

 

 

(113

)

 

 

(94

)

Other

 

 

(6

)

 

 

(1

)

Net cash used in investing activities

 

 

(119

)

 

 

(95

)

Financing activities:

 

 

 

 

Proceeds from reverse recapitalization, net

 

 

 

 

 

269

 

Redemption of preference shares

 

 

 

 

 

(168

)

Proceeds from senior secured term loans, net of debt discount

 

 

131

 

 

 

200

 

Repayment of senior secured term loans

 

 

(3

)

 

 

(3

)

Repayment of finance lease obligations

 

 

(2

)

 

 

(2

)

Payment of lender fees and issuance costs for senior secured term loans facilities

 

 

(2

)

 

 

 

Payment of deferred consideration

 

 

 

 

 

(4

)

Contributions for ESPP and proceeds from exercise of stock options

 

 

7

 

 

 

 

Payment of taxes withheld on vesting of equity awards

 

 

(14

)

 

 

 

Other

 

 

3

 

 

 

 

Net cash from financing activities

 

 

120

 

 

 

292

 

Effect of exchange rates changes on cash, cash equivalents and restricted cash

 

 

10

 

 

 

(12

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

173

 

 

 

(209

)

Cash, cash equivalents and restricted cash, beginning of year

 

 

316

 

 

 

525

 

Cash, cash equivalents and restricted cash, end of year

 

$

489

 

 

$

316

 

Supplemental cash flow information:

 

 

 

 

Cash refund for income taxes (net of payments)

 

$

2

 

 

$

(1

)

Cash paid for interest (net of interest received)

 

$

142

 

 

$

96

 

Non-cash additions for finance lease

 

$

4

 

 

$

 

Issuance of shares to settle liability

 

$

4

 

 

$

 

Glossary of Terms

B2B refers to business-to-business.

Customer retention rate is calculated based on Total Transaction Value (TTV).

LTM refers to the last twelve months.

SME refers to clients Amex GBT considers small-to-medium-sized enterprises (“SME”), which Amex GBT generally defines as having an expected annual spend on air travel of less than $20 million. This criterion can vary by country and client needs.

SME New Wins Value is calculated using expected annual average TTV from new SME client wins over the last twelve months.

Total New Wins Value is calculated using expected annual average TTV from all new client wins over the last twelve months.

Total Transaction Value or TTV refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppliers at point of sale, less cancellations and refunds.

Yield is calculated as total revenue divided by TTV for the same period.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. Our non-GAAP financial measures are provided in addition to, and should not be considered as an alternative to, other performance or liquidity measures derived in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and you should not consider them either in isolation or as a substitute for analyzing our results as reported under GAAP. In addition, because not all companies use identical calculations, the presentations of our non-GAAP financial measures may not be comparable to similarly titled measures of other companies and can differ significantly from company to company.

Management believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance or liquidity across periods. We use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. We use Free Cash Flow and Net Debt as liquidity measures and as indicators of our ability to generate cash to meet our liquidity needs and to assist our management in evaluating our financial flexibility, capital structure and leverage. These non-GAAP financial measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and/or to compare our performance and liquidity against that of other peer companies using similar measures.

We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.

We define Adjusted EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization and as further adjusted to exclude costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, fair value movements on earnout and warrant derivative liabilities, long-term incentive plan costs, certain corporate costs, foreign currency gains (losses), non-service components of net periodic pension benefit (costs) and gains (losses) on disposal of businesses.

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

We define Adjusted Operating Expenses as total operating expenses excluding depreciation and amortization and costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs and certain corporate costs.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are supplemental non-GAAP financial measures of operating performance that do not represent and should not be considered as alternatives to net income (loss) or total operating expenses, as determined under GAAP. In addition, these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the Company’s results or expenses as reported under GAAP. Some of these limitations are that these measures do not reflect:

  • changes in, or cash requirements for, our working capital needs or contractual commitments;
  • our interest expense, or the cash requirements to service interest or principal payments on our indebtedness;
  • our tax expense, or the cash requirements to pay our taxes;
  • recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
  • the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
  • restructuring, mergers and acquisition and integration costs, all of which are intrinsic of our acquisitive business model; and
  • impact on earnings or changes resulting from matters that are non-core to our underlying business, as we believe they are not indicative of our underlying operations.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as measures of liquidity or as measures determining discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business.

We use these measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations.

Contacts

Media:

Martin Ferguson

Vice President Global Communications and Public Affairs

martin.ferguson@amexgbt.com

Investors:

Jennifer Thorington

Director Investor Relations

investor@amexgbt.com

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