Global Business Travel Group, Inc.

As a reminder, please note today's call is being recorded. I will now turn the call over to the Vice President of Investor Relations, Jennifer Thorington. Please go ahead.

Hello and good morning, everyone. Thank you for joining us for our second quarter 2024 earnings conference call. This morning we issued an earnings press release, which is available on SEC.gov and our website at .mxglobalbusinesstravel.com. A slide presentation which accompanies today's prepared remarks is also available on the MXGBT Investor Relations webpage. We would like to advise you that our comments contain certain forward-looking statements that represent our release 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 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 supplemental materials of this presentation and in the earnings release. Participating with me today are Paul Abbott, our Chief Executive Officer, Karen Williams, our Chief Financial Officer, and David Thompson, our Chief Information Technology Officer. Also joining for the Q&A session today is Eric Fock, 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 second quarter 2024 earnings call. In the second quarter, we delivered strong adjusted EBITDA growth, significant margin expansion and accelerated free cash flow. These strong bottom line results were in line with our expectations and put us on track to deliver against our full year guidance. Our focus on controlling costs and driving operating leverage is clearly evidenced in our Q2 results. Adjusted operating expenses increased just 2% compared to 6% revenue growth. And we drove significant adjusted EBITDA margin expansion of 240 basis points year over year and adjusted EBITDA growth of 20%. Our progress to positive and accelerating free cash flow remains an important focus for the company, providing us with additional opportunities to invest in our growth and drive shareholder returns. And a strong second quarter gives us the confidence to raise our free cash flow guidance for the full year. Last quarter, we mentioned an opportunity to refinance our debt, which we have now successfully completed in July. We've significantly lowered our interest costs, extended our debt maturities and upsized our revolver and we continue to deleverage our balance sheet. Increased demand for our software and services resulted in continued share gains on a strong foundation. We have sustained our pace of new wins and importantly further increased our customer retention rate. Starting with revenue growth, revenue was up 6% to reach $625 million for the quarter, driven by growth in transactions, TTV and increased demand for our products and professional services. Transactions were up 4%. We saw a slowdown in the second quarter driven primarily by slower same store sales and the impact of the Olympics in France. We expect France will bounce back in the fall, excluding France, transactions were up 5% in the quarter. TTV grew just ahead of transactions by 5%, driven primarily from the transaction growth as well as higher average ticket prices and higher average hotel room rates. Again excluding France, TTV grew by 6% in the quarter. Finally here our focus on margin expansion and operating leverage resulted in adjusted EBITDA growth of 20% to $127 million with strong margin expansion of 240 basis points. In the second quarter we continue to see stronger relative performance with our global multinational customers. As a reminder, we divide our customer base into two general categories, global multinational or GMN and small and medium enterprises or SME. We generally use annual TTV to divide customers into these categories, although this measure can vary by country and by customer need. We do not have products or services that are offered solely to one size of customer. We tend to find that customers of all sizes may prefer different solutions. Some larger customers may prefer a simpler approach, while some smaller customers may prefer a more bespoke, high touch global solution. Back to the quarter, global multinational transactions were up 7% with double digit growth in the financial services and pharma industries. We saw very solid growth across our top five industry verticals, which account for over 60% of our total global multinational transactions. It is important to point out that we did see global multinational same store sales growth returning to more normalized levels as we cycle over the technology ramp up we saw in 2023. We have built the most valuable B2B marketplace in travel with the most comprehensive and the most competitive content in the industry. Our strong combination of technology and people delivering the best experiences proven at scale continues to resonate with customers. Our very high customer retention rate with global multinational, which reached 98% over the last 12 months, demonstrates the value that we bring to this important customer segment. GMN TTV growth in the quarter was also strong, up 9% driven by the transaction growth and 2% benefit from higher average ticket prices. Our most recent customer survey is encouraging as we look out over the balance of the year. It shows that our top 100 GMN customers now expect travel spend to be up approximately 10% year over year for the full year 2024. And this is an increase of 2% points versus the previous survey in Q1. Driven by improvements in expectations within professional services, mining, and the oil and gas industries. The stronger performance within GMN customers highlights the strength of our diversified model as SME growth was relatively muted in the quarter. On a transaction basis, GMN growth was 7% versus SME at 1%. As we described last quarter, SME customers have tightened spending controls in the face of sustained higher interest costs and higher inflation. As we also discussed on the call in Q1, this is a broader trend for SME businesses beyond travel spend, given the more challenging macro environment. We are confident that as the macro economic conditions improve, so will SME growth. And this outlook is supported by our most recent customer survey, which showed 82% of top 120 SME customers expect travel spend to grow or remain flat in the second half of this year. Meanwhile, our new wins performance in SME continues to be strong. As you've heard from our peers in the travel industry, we are seeing a negative impact on business travel in France related to the Olympics. Transactions in France were very strong in the first quarter, but rapidly decelerated and ended the second quarter down 4%. France is actually our second largest country by transaction volume. So it resulted in a negative impact of one percentage point to year over year total transaction and TTV growth in Q2. The impact to our revenue growth is smaller. Clearly, we believe this is a temporary impact and we expect to see a return to growth in France from September onwards. Finally here, growth in our air transactions versus hotel and domestic versus international was consistent in the second quarter. So, turning to the commercial highlights. We continue to gain share with total new wins value of 3.3 billion over the last 12 months. Importantly, the share gains are on an even stronger foundation of increasingly impressive customer attention, which is up to 97% at the enterprise level over the last 12 months. Our biggest growth opportunity remains with SME customers, 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 new wins progress demonstrates, more and more SME customers are recognizing the value of our software and our services and our professionally managed travel program. As a result, SME new wins over the last 12 months totaled $2 billion. In the second quarter, 79% of our transactions came through digital channels. Over 60% of those digital bookings came through on our own software platforms, Neo and Agencia. Which we continue to believe is an area of significant competitive differentiation for us. The collaboration between American Express and our Amex GBT Neo One spend management platform is progressing well, with pleasing results from Amex GBT's most recent digital marketing lead campaign targeting the very large opportunity in the SME segment. Amex GBT's Neo One customers acquired digitally is on track to grow 2x year over year in 2024. We continue to invest in NDC and our marketplace to make sure we offer the most comprehensive, the most competitive content in the industry, and to help our partners retail to our premium customers in the most effective way. We're now working with 20 airlines on NDC. And because we own our software solutions in Neo and Agencia, we are very well positioned to lead the changes that are required. We also continue to make business travel more sustainable. Our new agreement with Shell Aviation reinforces our commitment to sustainable aviation fuel. Avelia is one of the world's first blockchain powered book and claim platforms for SAF. We already have more than 30 corporations and airlines participating in the Avelia program, including customers like Bank of America and Google. Also during the second quarter, we published our annual ESG report that highlighted our commitment and our progress in sustainability, governance, and developing the workforce of the future. We continue to successfully work with non-governmental organizations to provide safe travel for vulnerable refugees and get rapid response emergency relief workers to disaster zones. Our inclusion groups continue to thrive. We are growing the number of minority-owned businesses in our supplier portfolio, and we are working with customers to make business travel more accessible for all. I also want to take a moment to thank my colleagues for the clear thinking and swift action that helped mitigate the impact of the recent crowd strike incident. We have received countless notes from customers thanking our service team for their outstanding support, helping travelers through the disruption to get where they needed to be. And finally, as you saw last week, we provided an update on the CWT acquisition, which is now expected to close in the first quarter of 2025. We continue to work collaboratively with the CMA, which intends to continue its review of the transaction in a phase two investigation, as well as with the Department of Justice in the U.S. We believe that a comprehensive analysis will clearly show the transaction will create more choice for customers, more efficient distribution for suppliers, while maintaining a highly competitive environment for business travel services. We continue to expect to receive full approval of the transaction. Before turning the call over to Karen to discuss our results and outlook in more detail, I'm very pleased to introduce David Thompson, our CIO. We have previously discussed the potential of the investments that we're making in automation and AI to drive further productivity gains and expansion. And I'm pleased to say we are making good progress as initiatives now move from the pilot phase to implementation. And as I promised on a previous earnings call, David is here to speak more about our progress with RPA, machine learning, and AI to create better experiences for our customers and to improve productivity. David, over to you.

Thanks, Paul. And hello, everyone. As previously shared on our Q4 earnings call, MXGBT launched our AI program focused on driving innovation through new and existing artificial intelligence technologies. We are already delivering operational efficiencies through safe, secure, and scaled AI capabilities. Through our AI initiatives, we are adopting next generation AI technologies focused across four key objectives. First, increase service efficiencies. Second, increase engineering velocity. Third, streamline our financial processes. And fourth, enabling our workforce. These four areas account for approximately 70% of our total adjusted operating expenses, representing a huge opportunity to continue driving productivity improvements. And as Karen will elaborate on, automation and AI initiatives are a component of the 100 million in total savings opportunities we expect to deliver this year. Our strategy is broader than generative AI. We are taking advantage of multiple capabilities, including natural language processing, large language models, third-party SaaS solutions, and our own proprietary machine learning capabilities to accomplish these objectives. And so, let me share some of these thoughts and progress to date. Dealing with a massive amount of data is a common challenge for organizations. The effort required to exploit that data is very complex and labor intensive. MXGBT is looking to harness the power of AI to gain insights from our two largest communication channels to understand why clients are contacting us, which in turn allows us to direct them to the most efficient channel to meet their needs. To garner these insights, we are utilizing our own internally deployed large language models, which sits behind MXGBT firewalls and is not available to the public internet. By supplementing our own LLM with MXGBT proprietary data and third-party SaaS technologies, we identify customer intent and analyze demand to provide optimized routing and develop future self-service opportunities. We have also focused on increasing our engineering velocity through partnering with third-party SaaS provider GitHub. With their development co-pilot, we have measured a 20% productivity increase in test case creation, code documentation, and new user story development. Finally, two proof of concepts have been approved for expansion. Our intelligent virtual assistant or IVA and our servicing conversational co-pilot. Data collected at the start of a process is exponentially more valuable than data collected throughout a business process. The IVA is intended to provide customer identification, intent, and authentication to start automating processes prior to connecting to a travel counselor. Our conversational co-pilot will be enabled to provide quick access to customer and client information without the need for material investment in structured data stores. The expected outcome of both initiatives is the reduction of manual effort for our servicing team. They will spend less time copying and pasting and more time servicing the customer. That means a better customer experience and lower operating costs. I look forward to continuing to update you on our progress and future calls. And now I'd like to hand it over to Karen to discuss the bill. Karen?

Thank you, David, and hello, everyone. I've previously talked about my three key priorities when it comes to managing our financial performance. Accelerating cash flow generation, driving operating leverage and continued margin expansion, and importantly, creating capacity to invest and drive long-term sustained growth both organically and through strategic M&A. And again, in the second quarter, I am really happy with the progress we have made in all three areas. The significant margin expansion and accelerating free cash flow we reported in the second quarter, a testament to this, in addition to the momentum we are seeing in our investment spend. So now let's turn to our financial performance in more detail. We delivered strong results that in line with our expectations from an adjusted EBITDA perspective. Revenue reached $625 million, up 6% year over year. Revenue yield, which we define as revenue divided by TTV, was 8% flat year over year in the quarter. As we turn to total operating expenses, which are a key area of focus for us, I am incredibly pleased with the momentum we are seeing across the enterprise when it comes to increasing productivity. Importantly, we are delivering cost savings that not only drive our margin expansion, but also drive growth by investing in technology and content, including our software platforms and AI. As a reminder, in 2024, we expect to invest an incremental $40 million with a 70-30 split between OPEC and CAPEX. Together, the net impact of these resulted in adjusted operating expense growth of just 2% year over year versus revenue growth of 6%. And critically, this strong operating leverage translated into 240 basis points of adjusted EBITDA margin expansion. Adjusted EBITDA grew 20% to $127 million. I am very happy with the continued momentum and acceleration when it comes to cash flow generation. In the quarter, we achieved free cash flow generation of 49 million, up 148% year over year. This was driven by our working capital actions, which I have discussed previously on our calls. Finally, our leverage ratio on net debt divided by last 12 months adjusted EBITDA is two times as of June 30, 2024. This represents a very significant step down from the 3.5 times in June 2023. As Paul mentioned, we executed a successful debt refinancing in July that significantly lowers our interest costs. This is another pivotal moment for the company. Our refinancing lowers our interest rate margin by approximately 180 basis points, with the new term loan facility priced at SOFA plus 3%. In total, over the past eight months, we have significantly reduced our interest costs. When we consider this recent refinancing and the previously achieved savings from our lowered leverage, our estimated annualized run rate cash interest savings are approximately 40 million, or put it another way, represents a 30% reduction. The debt refinancing further strengthens our financial position by extending our debt maturities to 2031. We also upsized our revolver capacity to be at a more appropriate level from 50 million to 360 million. While we have no plans to draw on the revolver, this increases our liquidity and financial flexibility. And importantly, there are no longer covenants around minimum cash, which previously stood at 200 million. Our total debt level remains unchanged. We've already reached the middle of our target leverage ratio of 1.5 times to 2.5 times, and we continue to deleverage. And as a reminder, there is no expected incremental financing required to fund the pending CWT acquisition. I think it's important to note that our refinancing was significantly oversubscribed, and we saw high demand over twice our target, which speaks to the confidence in GBT and the momentum we continue to drive in terms of our performance. The participating lender group includes 94 debt investors and broadens our investor base while bringing in high quality blue chip anchor investors. I am incredibly happy with this outcome. Now, I'd like to turn our attention to the balance of year. We have previously shared our powerful financial model with all of you and how it positions us for industry leading returns. First, we expect business travel demand from our premium customer base to grow above GDP. Second, we expect to continue to grow ahead of the market by driving share gains with our differentiated value proposition. Third is margin expansion. We are laser focused on a disciplined cost structure and continued margin growth. Our operating leverage is forecasted to drive 18 to 32% adjusted EBITDA growth in 2024. Fourth, we are incredibly focused on optimizing our capital deployment. Our positive and accelerating free cash flow can fund important incremental growth opportunities. And finally, we have shared before how M&A presents an opportunity to further accelerate the strong performance you've already seen in our business, including significant value creation from the pending CWT acquisition. And so, let's turn to the full year 2024 guidance. Please note our guidance does not incorporate the impact of CWT, which we now expect to close in the first quarter of 2025. Our H1 results were strong and keep us on track to achieve our 2024 targets. We are hitting the mark on what we can control and delivering solid revenue growth, significant cost savings, strong adjusted EBITDA growth, and margin expansion. We are reiterating our guidance for full year revenue of 2.43 to 2.5 billion. And our full year adjusted EBITDA guidance range of 450 to 500 million, representing a growth of 18 to 32%. We remain focused on driving continued operating leverage. This includes 100 million of cost savings from the carryover actions taken in 2023, plus new cost initiatives and productivity improvements this year, including the progress David described on automation and AI. Executing these savings enables us to deliver strong margin expansion of 150 to 350 basis points, while making significant investments in future growth, particularly in driving our sales and marketing engine, our software platforms, and AI. The strong margin performance we've already seen in H1 and expectations for continued margin expansion in H2 reinforce our confidence in achieving the midpoint of our adjusted EBITDA guidance range, despite a softer macro environment. And finally, I am delighted to raise our guidance for free cash flow and now expect to generate more than 130 million in 2024, a 30 million increase. This means we are now targeting free cash flow conversion of just under 30% of adjusted EBITDA. This significant step up is primarily driven by the continued benefit from the agency of working capital initiatives, as well as lower interest expense from our recent refinancing. I will now provide more detail with regards to the second half and how I think about Q3 and Q4 seasonality. In light of the softer macro environment, we now expect revenue growth of 6% to 7% year over year in H2, with an acceleration due to the phasing of new wins and as we bounce back from one-time factors like the Olympics in France. Combined with H1 performance, that means we expect to be between the lower and midpoint end range of guidance for the full year. We expect revenue yield to decline by approximately 10 basis points due to the non-TTD driven components of revenue and continued shift to digital transactions in line with our strategy. We expect this trend to also carry over into 2025. In the second half of this year, we expect adjusted operating expense growth of just 2% to 3% versus revenue growth of 6% to 7%. From a seasonality perspective, we expect Q3 and Q4 revenue growth to be similar. Revenue yield is expected to be higher in Q4, given phasing consistent with prior years. Expenses are expected to step down sequentially in Q3 and Q4 on an absolute basis. And so I want to end with a reminder of our capital allocation policy, which is focused on cash generation, deleveraging, growth investments and shareholder returns. The priority order for our capital allocation policy is, first, accelerating cash generation with a longer term free cash flow target of 45 to 50% of adjusted EBITDA. Second, although we're right in the middle of our 1.5 to 2.5 times net debt to adjusted EBITDA target continuing to deleverage. Third, as we continue to see cash flow acceleration and naturally deleverage, it gives us optionality to invest in technology and organic growth. Fourth, we intend to continue to pursue creative, highly synergistic opportunities. And finally, we will focus on returning cash to shareholders. So to wrap things up, our second quarter performance was solid with strong bottom line performance. With our continued focus on share gains, productivity, margin expansion, investing for long term growth and cash flow acceleration, we are clearly delivering on these and remain confident in our full year 2024 guidance. We can now move into Q&A. Paul, David and I are joined by Eric Bock, who is our chief legal officer and global head of M&A. Operator, please go ahead and open the line.

Absolutely. If you would like to ask a question, please press star followed by one on your question. Again, to ask a question, press star one. As a reminder, if you are using a speaker phone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question goes to the line of Lee Horowitz with Deutsche Bank. Your line is open.

Great answer to the question. Can you just maybe expand on the macro environment and your expectations for the rest of the year? We have obviously seen something slow down. You guys are pointing towards acceleration. Can you just give a little bit more detail on some of the spend pressures you are seeing in the SMA or any more color that you are seeing in this hyper volatile macro environment at the moment?

Yeah, sure, Lee. Thanks for the question. I would say it is a continuation of the things we discussed in Q1. We have seen a slow down in same store sales, particularly in the SME segment. On global multinational, I would say it is more a stabilization. We are starting to grow over the ramp up that we saw last year, particularly from the tech sector that was pretty steep ramp up in the second quarter of last year. I would say the outlook for global multinational is actually pretty stable. SME, same store sales have softened again a couple of points in that second quarter. But that is a trend we discussed in the last quarter. It is also a trend that has been discussed on quite a lot of earnings calls across various industries. I think we are seeing a tightening of spending from smaller to mid-sized companies that are generally more exposed to interest expense and lending costs. But as it relates to the balance of the year, we are expecting to see a moderate acceleration in SME because of the net new wins that we have already signed. As those start to get implemented in the second half of the year. There is also a point of benefit in the work days in the second half of the year. Those two things combined are going to us a very moderate acceleration in the second half of the year. I think as Karen said in her comments there, we are sort of guiding to around -7% growth in the second half of the year. We are seeing one to two points of acceleration. But really based on frankly things that we can control, which is the implementation of the new business that we have in the pipeline. We are not assuming any improvement in the macro environment. We are assuming that the kind of underlying trends continue for the second half.

Thanks. And then maybe one on NDC. We often feel questions from investors regarding your economics in the NDC world. Can you maybe elaborate a bit more on how you expect to keep your economics within the business travel ecosystem sort of stable as NDC content proliferates?

Yes, sure. I mean there is no change to our economics whether a transaction comes to Edifact or NDC. They are simply different technical standards. NDC provides our business partners, airlines in particular the opportunity to retail their products and services in a more flexible and a more personalized way. And so you should really just think of Edifact versus NDC as being two different technical standards. One being more modern that gives suppliers more flexibility. But it has no impact to our underlying economics or our contractual relationships with those business partners. We actually think over time now that we are starting to build NDC volumes and I think we'll start to see more introduction of ancillary services and personalized offers. We think over time that could actually create additional revenue opportunity for us because we don't participate really in the revenue stream from ancillary services today. And that's something that could build over time. So the real takeaway is no difference to our economics today but some opportunity potentially in the future.

Hopeful. Thank you.

Thank you, Lee. Our next question goes to the line of Duane Sennigworth with Evercore ISI. Your line is now open.

Hey, thank you. I thought the France stats were interesting and pretty aligned with what the French are doing. How much was business travel down in France in 2Q? And how do you see that kind of comparing with the rest of Europe? And then I guess what, we're a week or so away from the other side of that. How do you see kind of forward bookings for France in particular recovering?

Yeah, thanks, Duane. We did see an impact and that impact was a little earlier, frankly, we anticipated. Companies actually did start to pull back on travel into and out of Paris earlier than we anticipated. We actually had a really strong Q1 in France. I think we were up 13% in the first quarter. We actually ended the second quarter minus four. So it was actually a pretty significant swing. But that strong performance in Q1 as well actually gives us confidence that we're going to see that rebound, I think, once we get into September. And frankly, it is really all about September. July and August are slower months for business travel, particularly in Europe and particularly in France. And so if you look at our second quarter, 40% of our sales in the excuse me, our third quarter, 40% of our third quarter sales come in September. So really the question is more about what are we going to see kind of post-Labor Day in terms of September demand and do we see that recovery in France? And we believe we will. We believe we'll be back to solid levels of growth in France from September onwards.

Thanks for that. That makes sense. And I wonder if you'd be willing to just touch on what transpired with American this quarter on the travel supplier side. They called out a new agreement with you. Obviously, they had a big push around NDC, but claimed that the execution of that was unhelpful to a lot of travel management partners and travel management companies. So I guess if you're willing, what role did you play historically at American? How did that role change in their aggressive push to NDC, which they are now unwinding? And does this new agreement get you back to where you were or are you doing kind of new and different things with them?

Yeah, I think we certainly welcome the changes that American have announced. They've already put their content back into all of the available channels. And I think importantly, they've said publicly and Robert said this on several occasions, that they kind of recognize the importance of the travel management channel and they recognize the importance of the relationship with AMEX GBT. And also they have been clear they recognize the importance of working collaboratively with customers and with distributors to drive the changes that they would like to see in terms of the introduction of modern retailing and NDC. And frankly, we very much welcome that position from American. I think certainly I've said on many times in public forums that the best way to drive change in our industry is to make sure that we work collectively to drive that change and that critically that the customer is at the center of that change and that whatever we're trying to do, we have to make sure we bring customers with us and that we're delivering more value to customers. And I think that's certainly what you've heard from me on many occasions. And I think that's you're hearing from Robert as well. So yeah, Tony, we welcome that change in position from American.

Okay, thanks for the thoughts.

Thank you, Duann. Our next question goes to the line of Tony Kaplan with Morgan Stanley. Your line is now open.

Hi guys, this is Hilary Lee on for Tony. I was just wondering if we could possibly go into the CWT acquisition, like, you know, any details I could provide of why it was pushed into Q1 of 2025?

Yeah, so maybe I'll ask Eric to come in here. As you know, Eric is our chief legal officer and also runs M&A. So Eric, maybe you'd like to share your thoughts here.

Sure. Hi, Hilary. How are you? Yeah, primarily the reason we switched into Q1 is because of the CMA phase two, which we announced and Paul commented on during the main call. That process lasts approximately 24 weeks. So that would, you know, push our original H2 this year into Q1 next year. So that's primarily why we pushed it into Q1.

Got it. And it wasn't any particular regulatory issue, just pretty much the process itself.

Well, you know, the CMA did publish a decision on when they moved to a phase two. And they, you know, the bar is relatively low when you go from a phase one to a phase two. And they were, you know, focused on a competitive environment, which we believe we will be able to show is continues to be intense with lots of competitors, post transaction. So we believe the facts will play out in our favor and are very confident that we will close this in the first quarter.

Got it. Thanks. And just as a follow up, a different subject, but, you know, just wondering what kind of trends you saw through the end of Q2 into July and August. I know they're typically slower months for you, like you had said earlier, but just wondering if you've seen anything and, you know, regarding the crowd strike issue, like how much, if any effect did it have on the business? Like did you guys get a lot more customer service calls or a lot more cancellations on your end? Just wondering if you could provide any detail there. Thanks.

Sure. Yeah. I mean, the trends into July, as you quite rightly said, Hillary, July, August tend to be softer months for us. I would say, you know, the trends into July are consistent with the guidance that Karen gave for, you know, H2 earlier. Obviously we factored those trends into the guidance for the second half of the year. In terms of the impact of crowd strike, you know, I have to say that our teams responded to the situation very quickly and very well. We picked up on some issues as our business opened up in, you know, in APAC. It was clear that some issues were coming from the crowd strike software upgrade, we work extensively with crowd strike. And so we were able to go into the, you know, firewall and stop that upgrade update, you know, in other parts of the world, including critically the US. And so, you know, I'm very pleased to say we actually managed to to work through the issues very successfully and we were operational throughout. And of course, that was extremely important because there was a significant amount of disruption to the airline industry and to our customers. And of course, when there's disruption, that's when our customers, frankly, you know, need us the most. So we certainly saw increased call volume. We obviously saw increased changes, cancellations. We utilized our proactive travel care solution extensively, which reaches out to customers to advise them of cancellations and changes and proactively supports them to make sure they get where they need to go. And so it was an incredibly busy period. We had a lot of people working, you know, over time through the weekend to ensure that we're there for our customers. But the bottom line is we've managed through the process, you know, very, very well. Both our technology teams and our servicing teams were absolutely outstanding. And we have had so many notes from customers thanking us for our support through that period. So, you know, I think, you know, we managed through it very successfully in terms of the impact of the business. I don't expect that to have a material impact. You know, yes, there was some disruption over, you know, two or three day period. But I don't think when we come to the end of the quarter that we're going to see that as a significant impact.

Got it. Great. Thanks for the answers and color. Congrats again on the quarter.

Thank you.

Thank you. There are currently no other questions registered at this time. So as a reminder, it is star one on your telephone keypad to ask a question. There are no questions waiting at this time. So I'll pass the conference back over to you, for closing remarks.

Okay, well, in closing, just thank you very much to our team across the world for their dedication to our customers, the strong results they've delivered in the first half of this year. We are very confident that 2024 is going to be another year of share gains, strong growth and profitability, and free cash flow and continued margin expansion. Thank you to all of you for joining us today and your continued interest in the company. Thank you.

Goodbye. That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.