Global Business Travel Group, Inc.

Good morning and welcome to the American Express Global Business Travel fourth quarter and full year 2023 earnings conference call. As a reminder, please note today's call is being recorded. I'll now turn the call over to the Director of Investor Relations, Jennifer Thorrington. Please go ahead.

Hello and good morning, everyone. Thank you for joining us for our fourth quarter and full year 2023 earnings conference call. This morning, we issued an earnings press release, which is available on sec.gov and our website at investors.amexglobalbusinesstravel.com. A slide presentation, which accompanies today's prepared remarks, is also available on the Amex GBT Investor Relations webpage. We would like to advise you that our comments contain certain forward-looking statements that represent our beliefs or expectations about future events, including industry and macroeconomic trends cost savings, and acquisition synergies, among others. All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call. More information on these and other risks and uncertainties is contained in our earnings release issued this morning and our other SEC filings. Throughout today's call, we will also be presenting certain non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted operating expenses, free cash flow, and net debt. All references during today's call to such non-GAAP financial measures have been adjusted to exclude certain items. Definitions of these terms in the most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the supplemented materials of this presentation and in the earnings release. Participating with me today are Paul Abbott, our Chief Executive Officer, and Karen Williams, our Chief Financial Officer. Also joining for the Q&A session today is Eric Bach, our Chief Legal Officer and Head of Global M&A. With that, I will now turn the call over to Paul.

Paul? Thank you, Jennifer. Welcome to everyone, and thank you for joining our fourth quarter and full year 2023 earnings calls. We once again delivered outstanding financial results driven by continued share gains and our focus on margin expansion. In the fourth quarter, we generated revenue of 549 million and adjusted EBITDA of 80 million, which nearly doubled year over year. Our strong full year results finished above the guidance we issued at the start of the year with revenue up 24% year over year and adjusted EBITDA up nearly four times year over year to a total of $380 million. Strong demand for our leading software and services resulted in continued share gains. We reported a record new wins value of $3.5 billion in 2023. This includes a record $2.2 billion of SME new wins. demonstrating continued progress with this large profitable customer segment. Our focus on driving operating leverage is clearly evidenced in our 2023 financial results. For the full year, adjusted operating expenses increased just 9% compared to 24% revenue growth. And we drove significant adjusted EBITDA margin expansion of 11 percentage points year over year. Finally, our evolution to positive free cash flow is an important milestone for the company that provides us with additional opportunities to invest in our growth and drive shareholder returns. We are rapidly deleveraging, resulting in reduced interest expense and a two-notch credit rating upgrade from S&P Global. In 2023, we continue to execute our strategy and deliver outstanding financial results. Our strong momentum is clearly evidenced by our key operational and financial metrics. Starting with transaction growth, full year 23 transactions were up 19%, driven by increased demand for business travel and our share gains. TTV grew by 23%. driven by the strong transaction growth and an increased mix of international bookings. Revenue was up 24% to reach $2.29 billion for the full year, driven by strong growth in transactions, TTV, and increased demand for our products and professional services. Finally, our focus on margin expansion and driving strong operating leverage resulted in adjusted EBITDA growth of 269%, to 380 million. So looking at our trends in more detail, we saw relatively faster growth from SME customers, supporting our increased focus on this attractive customer segment. Full year 23 SME transactions were up 20%. Global multinational transactions were up 17%. Domestic transactions were up 13%, while international growth was even stronger at 21%. Growth in hotel transactions were up 20%, which outpaced the 16% growth in air transactions. This reflects industry trends as well as our intentional focus on increasing our volume of hotel bookings as we continue to strengthen our hotel content and display, providing customers with more value and more choice. Finally, here on a regional basis, transaction growth was 16% in the Americas, 20% in EMEA. Asia Pacific growth was significantly higher at 29% as we saw the benefit from a delayed recovery in this region. And so Amex GBT continues to grow and to gain share. Our revenue performance versus our major business services and travel peers is very favorable. This is driven by two factors. First, our strong new wins performance And second, the increased demand for business travel, meetings, and events from our diverse and premium customer base. So turning to the commercial highlights. We continue to gain share and reported record total new wins of 3.5 billion in 2023. Importantly, our customer retention rate was 96%, one percentage point higher than the previous year. Our biggest growth opportunity remains in the SME customer segment, which represents approximately $950 billion of travel spend. We are already a leader in managed travel in this segment, but 70% of this opportunity is not currently in a managed travel program. As our progress clearly demonstrates, more and more SME customers are recognizing the value of our leading software and services and a professionally managed travel program. As a result, SME new wins for 2023 totaled 2.2 billion, a record for our business that is up $100 million year over year. Of this, approximately 30% has come from previously unmanaged customers who are looking for the service, savings, and control that our solutions provide. This is five percentage points higher than our mix of unmanaged new wins in 2022. Moving on to our product and technology highlights. Developing our own software platforms, Agencia and Neo, enables us to improve the end-to-end customer experience and to leverage automation, machine learning, and AI to drive cost savings. We exited 23 with 78% of our transactions coming through digital channels. Over 60% of the digital bookings now come through our own software platforms, NEO and Agencia. In fact, in 2023, we had 40% transaction growth on NEO and 24% transaction growth on Agencia. We firmly believe that companies like ours than to create significant value through automation and AI. As a leading software and services company for both travel and expense, we have the opportunity and we have the expertise to increase automation, improve the customer experience, and reduce cost. And to further accelerate our progress, we recently announced the creation of a new AI initiative and dedicated team focused on increasing productivity through the adoption of next generation AI. The focus is in four areas across our organization, customer service, finance, engineering, and the broader workplace. This new team will play an important role delivering cost savings and improving the customer experience. And finally here yesterday, we announced an important new integration with American Express to help SME businesses control their indirect spend, manage their expenses, and book travel. We are seamlessly integrating American Express's virtual cards into our NEO One spend management platform. We're combining procurement, expense management, online travel, and payments, into a single software solution. And by combining these typically disconnected processes, we are delivering unique control and savings to businesses. And we're also extending our software and services beyond travel to include procurement, expense management, and payment. We are excited about this opportunity to bring the value of NEO One to more businesses through our partnership with American Express, a global leader in small business payments. And now I'd like to hand it over to Karen to discuss the financial results in more detail before we move on to our 2024 outlook.