Global Business Travel Group, Inc.

Good morning, and welcome to the American Express Global Business Travel Third Quarter 2024 Earnings Conference Call. As a reminder, please note today's call is being recorded. I will now turn the call over to Vice President of Investor Relations, Jennifer Thurrington. Please go ahead.

Hello, and good morning, everyone. Thank you for joining us for our Third Quarter 2024 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 and the most directly comparable GAAP measures and reconciliation 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, 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 third quarter 2024 earnings call. In the third quarter, we continued to drive strong momentum and deliver strong financial results. Our focus on controlling costs and driving operating leverage drove impressive adjusted EBITDA growth with significant margin expansion, giving us confidence to narrow the range and reiterate the midpoint of our full year adjusted EBITDA guidance. Increased demand for our software and services resulted in continued share gains We have sustained our pace of new wins and importantly maintained our very high customer retention rate. Continued free cash flow acceleration remains a very important focus for the company. Our strong third quarter results give us the confidence to raise our full year free cash flow guidance once again. We've previously talked about our capital allocation strategy, and I'm incredibly pleased with our progress on executing exactly what we said we would do. we have significantly reduced the interest we pay on our debt, continued to deleverage and strengthen the balance sheet. And we are in a strong position to continue investing in growth and productivity gains and finance the closing and integration of the CWT acquisition. This significant progress in our financial performance has brought us to an important milestone, returning cash to shareholders. During the quarter, As we previously announced, we executed our first share buyback. And today, I'm pleased to report our board of directors has approved a new, larger share buyback authorization. Turning to some of the highlights of the third quarter, we continue to execute on our strategy and deliver strong financial results with significant adjusted EBITDA growth. Starting with transaction growth, transactions were up 5% driven by increased demand for business travel and our share gains. TTV grew by 9% to reach nearly $8 billion, driven by transaction growth and higher average ticket prices and hotel room rates. This included a mixed benefit from higher international TTV and strong TTV growth in certain industry verticals like financial services and pharma. Revenue was up 5% to reach $597 million for the quarter, driven by solid growth in transactions, TTV, and increased demand for our products and our professional services. Finally here, our focus on margin expansion and operating leverage resulted in adjusted EBITDA growth of 23% to $118 million, with strong margin expansion of 300 basis points. Growth was strong with global multinational customers, up 8% in the quarter, and I'm going to provide more detail on this in the next slide. SME transaction growth remained muted at 2% growth, but improved modestly versus the 1% growth we reported last quarter. As we described last quarter, SME customers have tightened spending controls in the face of sustained higher prices and higher interest rates. This remains a broader trend, for SME businesses beyond travel. Growth in domestic air transactions was 4%. Regional and international growth combined was up three, with international specifically up 6%. Growth in hotel transactions was 6%, which outpaced the 4% 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 and provide customers with more hotel value and more choice. Finally, on a regional basis, transaction growth was 6% in the Americas, 11% in Asia Pacific. EMEA growth was softer at 2% impacted by the Olympics in France. As a reminder here, for organizational purposes, we divide our customer base into two general categories, global multinational and small and medium enterprises. We generally use expected 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. Looking specifically at global multinational customers, we maintained very high customer retention rate of 98% over the last 12 months, demonstrating the value that we bring to this important customer set. We continue to see stronger relative performance with our global multinational customers. Total GMN transactions were up by 8%, with double-digit growth in pharma, automotive, and financial services industries. We saw very solid growth across almost all of our top industry verticals. Technology growth returned to more normalized levels as the same-store sales cycled over the technology ramp-up we saw in the third quarter of 2023. TTV growth in the quarter was 9%, and outpaced transaction growth by 4 percentage points. GMN TTV growth was particularly strong, up 13%. And within the regional and international category, international air TTV was up 11%, Looking ahead, our most recent customer survey indicates that demand remains solid as we look over the balance of the year. It shows that our top 100 customers expect travel spend to be up approximately 5% in the fourth quarter. So turning here to the commercial highlights, we continue to gain share with total new wins value of $3 billion over the last 12 months. Importantly, these share gains are on a very strong foundation of impressive customer retention, which we've maintained at 97% 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. Our new wins clearly demonstrate that more and more SME customers are recognizing the benefit of a managed travel program, including significant savings to our preferred extras rates, more control over their travel spend, and of course, 24-7 customer service and duty of care. This value proposition is clearly resonating. Our SME new wins value totaled 2.1 billion over the last 12 months with 14% year-over-year growth in the number of unmanaged customer wins. In the third quarter, 80% now of our transactions came through digital channels, up three percentage points year-over-year. And 60% of our digital bookings came through on our own software platforms, NEO and Agencia. We believe owning, Our own software platforms is a significant competitive advantage because we can control and improve the user experience. Growth on our Neo platform was particularly strong, up 18% year over year. We continue to provide customers with more value and more choice in our marketplace through enhanced content. We are working with over 20 airlines on NDC to help our airline partners retail to our premium customers in the most effective way. The collaboration with American Express Card and our NEO One spend management platforms also progressing well. We have more than doubled our NEO One customer base year over year. We also continue to make business travel more sustainable. We are among the first in the business travel industry to achieve SBTI validation of our carbon emission reduction targets. We continue to invest in our products and services to provide customers with more value and more choice. New features this quarter include benchmarking dashboards in our peer travel insights tool. This uses key performance indicators for customers to compare their company's travel program against other peers in their industry. We also launched a new group travel solution on the Agencia platform. I'm pleased to say our product leadership has been recognized by G2, the largest and most trusted peer-to-peer review site that more than 60 million people and many Fortune 500 companies use to make software decisions. Amex GBT Agencia has proudly received 19 awards from G2 this fall, which are based on verified user reviews from travelers and travel managers. We're also focused on providing the very best traveler experience. In the third quarter, we updated the Agencia mobile app to deliver a more intuitive user experience. And we made improvements to the NEO checkout process and the Agencia trip management experience. As we mentioned last quarter, we are investing in automation and AI to deliver operational efficiencies across four areas. And these four areas represent 70% of our adjusted operating expenses. The four areas include increasing service efficiencies, increasing engineering velocity, streamlining our financial processes, and enabling our workforce. Let me provide a quick update on our progress on each of these four areas. First, we are piloting our proprietary email AI solution that saves travel counselors time by generating offers based on incoming customer email requests. Second, we have now expanded our use of the GitHub co-pilot and used it to accelerate the software development required to launch our new corporate website. Third, we have deployed automation for our credit card reconciliation process, reducing the average handling time by approximately 50%. And fourth, we've deployed AI to respond to our customers' program change requests faster. reducing these timelines by approximately 80%. So, as you can see, we're making measurable progress and continue to see AI as a huge opportunity to drive productivity improvements. Finally, regarding the CWT acquisition, we continue to work through the relevant regulatory approval processes and we continue to expect the transaction to close in the first quarter of 2025. And now I'd like to hand it over to Karen to discuss the financial results and 2024 outlook in more detail.