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Global Business Travel Group, Inc. (GBTG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $621M (+2% YoY), Adjusted EBITDA $141M (+15% YoY), and Adjusted EBITDA margin expanded 260 bps to 23%, with Free Cash Flow $26M (+9% YoY) .
  • Against S&P Global consensus, revenue missed ($621M vs $633.5M*), while EPS beat (Primary EPS $0.1257* vs $0.0896*); company-reported diluted EPS was $0.16 .
  • Management cut FY2025 guidance midpoints: revenue to $2.43B (from $2.50–$2.55B), Adjusted EBITDA to $510M (from $530–$560M), and FCF to $140M (from >$160M), citing softer organic transaction growth and macro uncertainty .
  • Key catalysts: margin expansion and cost actions (+$110M in 2025), amended CWT merger terms reducing stock consideration (~72M to ~50M shares), credit upgrades, and a $300M buyback authorization .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and profitability: Adjusted EBITDA +15% YoY to $141M; margin +260 bps to 23% as adjusted operating expenses fell 1% YoY .
    • CEO: “We delivered on our commitments, with strong profit growth, margin expansion and cash generation” .
  • Share gains and retention: LTM Total New Wins Value accelerated to $3.2B ($2.3B SME), retention 96% LTM .
    • CEO: “We continue to gain share… maintained a very high level of customer retention” .
  • Balance sheet and capital allocation: Net Debt/LTM Adjusted EBITDA down to 1.7x; two rating upgrades; $300M buyback in place .
    • CFO: “We received 2 credit rating upgrades… strong position to return cash to shareholders” .

What Went Wrong

  • Guidance cut: FY2025 midpoints reduced ~4% for revenue and ~6% for Adjusted EBITDA on softer organic transactions (flat total transaction growth assumed) .
  • Revenue yield pressure: Yield down 8 bps YoY to 7.4% on mix shift to digital (positive for margin, negative for yield) and recurring revenue elements; Q1 has seasonal lower yield .
  • SME softness: SME transaction growth +2% vs +6% in GMN; SMEs tightened spending amid higher rates and inflation, dampening demand trajectory .

Financial Results

Quarterly Trend (prior two quarters and current)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$597 $591 $621
Operating Income ($USD Millions)$27 $30 $55
Net Income (Loss) ($USD Millions)$(128) $(14) $75
Adjusted Operating Expenses ($USD Millions)$479 $484 $480
Adjusted EBITDA ($USD Millions)$118 $110 $141
Adjusted EBITDA Margin (%)20% 19% 23%
Free Cash Flow ($USD Millions)$59 $33 $26

YoY Comparison (Q1)

MetricQ1 2024Q1 2025YoY Change
Total Transaction Value (TTV) ($USD Millions)$8,105 $8,349 +3%
Transaction Growth (%)6% 3% -300 bps
Revenue ($USD Millions)$610 $621 +2%
Adjusted Operating Expenses ($USD Millions)$487 $480 -1%
Adjusted EBITDA ($USD Millions)$123 $141 +15%
Adjusted EBITDA Margin (%)20% 23% +260 bps
Free Cash Flow ($USD Millions)$24 $26 +9%

Segment Breakdown

Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
Travel Revenue$478 $456 $499
Product & Professional Services$119 $135 $122

KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
Cash & Cash Equivalents ($USD Millions)$524 $536 $552
Net Debt ($USD Millions)$860 $848 $832
Net Debt / LTM Adjusted EBITDA (x)1.9x 1.8x 1.7x

Consensus vs Actual (S&P Global) – Q1 2025

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$633.5*$621 Miss
Primary EPS ($)$0.0896*$0.1257*Beat
Note: Values with asterisks retrieved from S&P Global; company-reported diluted EPS was $0.16 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$2.50B–$2.55B $2.38B–$2.48B Lowered
Adjusted EBITDAFY 2025$530M–$560M $480M–$540M Lowered
Adjusted EBITDA MarginFY 202521%–22% 20.2%–21.8% Lowered range midpoint
Free Cash FlowFY 2025>$160M $120M–$160M Lowered
RevenueQ2 2025N/A$615M–$635M New
Adjusted EBITDAQ2 2025N/A$125M–$135M New

Management assumptions include flat total transaction growth (−2% organic offset by +2 pts from new wins), increased cost actions to ~$110M, continued investment, and neutral FX .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/automation & productivityMeasurable progress across service, engineering, finance; 80% digital transactions; Neo growth +18% Margin expansion via cost savings; repricing reduces interest; continued investment 81% digital transactions; traveler care productivity +7%; incremental $50M investment; cost actions lifted to ~$110M Strengthening
Macro/tariffsOlympics impacted EMEA; SME muted; stabilization hoped with lower rates Muted but stable GDP; survey: 80% expect flat/up travel; post-election uptick Flat transaction growth; 6% of top 100 GMN added budget controls post tariffs; weaker but stable environment Stability with caution
Product mix (Hotel vs Air)Hotel transactions +6% vs air +4% Yield seasonality; 8.6% yield in Q4 Hotel transactions +5% vs air +2%; premium mix holding; 1% price increases Hotel outpaces air
Regional trendsAmericas +6%, APAC +11%, EMEA +2% Americas +5%, EMEA +2%, APAC +12% (FY 2024) Transactions: Americas +3%, EMEA +4%, APAC +7%; U.S. relatively slower vs Europe/domestic drag APAC strongest
Regulatory/legal (CWT)Expect Q1 2025 close; CMA progress CMA provisional clearance; DOJ challenge; timeline noted Amended merger reducing shares; DOJ trial set Sep 8; discovery through early June; potential close by end of 2025 Active litigation, terms improved
Meetings & EventsNoted as growth area 66% budgets increasing in 2025 survey Forward indicator: +2% meetings volume, +8% spend for 2025; cancellations in line Positive signal

Management Commentary

  • CEO: “We continue to deliver really strong results in the first quarter with 15% growth in adjusted EBITDA, 260 basis points of margin expansion and a 9% increase in free cash flow…remain laser-focused on…share gains, margin expansion, cash generation” .
  • CFO: “Adjusted operating expenses were down 1% year-over-year…Adjusted EBITDA margin grew an impressive 260 basis points…we received 2 credit rating upgrades” .
  • Strategy on investments: “We plan to invest an incremental $50 million this year…incorporates CapEx productivity saves…updated OpEx phasing” .
  • CWT transaction: “Amended merger agreement…reduction in shares from ~72M to ~50M…trial September 8; aiming to close by end of 2025” .

Q&A Highlights

  • No meaningful trade-down: Premium international routes and premium hotel occupancy outpaced domestic; average ticket price and ADR up ~1% .
  • SME dynamics: New wins rising; organic SME growth slower but sequential improvement; retention steady; macro pressure on SMEs persists .
  • Macro stabilization: Growth patterns varied by sector; most customers in “wait-and-see” mode; modest policy/budget changes (~6% of top 100 GMN added controls) .
  • Regional cadence: U.S. slower vs Europe due to domestic mix; trends stable when normalizing Easter; APAC strongest .
  • CWT process: DOJ trial timeline (Sept 8); potential close by year-end 2025; amended terms reduce share issuance .

Estimates Context

  • Q1 2025 vs consensus (S&P Global): Revenue missed ($621M actual vs $633.5M*), EPS beat ($0.1257* Primary EPS vs $0.0896*). Company reported diluted EPS of $0.16, reflecting definitional differences vs “Primary EPS” .
  • Implications: Street likely nudges FY revenue and EBITDA lower in line with updated company guidance; EPS revisions could be mixed given operating leverage and margin expansion.
    Note: Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion and cost control remain powerful: Adjusted EBITDA growth outpaced revenue (+15% vs +2% YoY) with 260 bps margin gain; expect continued expansion via AI, automation, and cost actions (~$110M) .
  • Guidance reset reflects macro caution, not structural weakness: FY2025 midpoints lowered but preserve margin expansion (up to 130–200 bps) and cash generation ($120–$160M FCF) .
  • Mix shift to digital supports profitability: 81% digital transactions, higher-margin channels; yield pressure (−8 bps) is acceptable trade-off for margins .
  • CWT optionality and capital returns: Amended terms improve dilution; DOJ timeline set; $300M buyback authorization provides downside support .
  • Watch SME reacceleration and regional trends: APAC strength, U.S. domestic softness; SME growth likely to improve with easing rates and new wins ramp .
  • Near-term trading lens: EPS beat vs miss on revenue; focus on Q2 delivery (revenue $615–$635M; Adj. EBITDA $125–$135M) amid flat transactions; any signs of faster organic growth could trigger upward revisions .
  • Medium-term thesis: Scalable model with persistent margin expansion, deleveraging (1.7x ND/LTM EBITDA), and FCF conversion runway; accretive M&A and buybacks enhance equity value .

Source Documents and Press Releases

  • Q1 2025 8-K Item 2.02 earnings release with full financials and guidance .
  • Q1 2025 earnings call transcript (prepared remarks and Q&A) .
  • Q4 2024 8-K and call transcript (prior quarter baseline and initial FY2025 outlook) .
  • Q3 2024 8-K and call transcript (second prior quarter) .
  • Q1 2025 press release (Business Wire) with identical financials and guidance –.
  • Earnings date announcement press release (Business Wire) .

S&P Global consensus values were used for estimate comparisons (marked with asterisks).