Global Business Travel (NYSE:GBTG) Misses Q1 Revenue Estimates

Jabin Bastian /
2024/05/07 8:04 am EDT

B2B travel services company Global Business Travel (NYSE:GBTG) fell short of analysts' expectations in Q1 CY2024, with revenue up 5.5% year on year to $610 million. On the other hand, the company's outlook for the full year was close to analysts' estimates with revenue guided to $2.47 billion at the midpoint. It made a GAAP loss of $0.04 per share, improving from its loss of $0.06 per share in the same quarter last year.

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Global Business Travel (GBTG) Q1 CY2024 Highlights:

  • Revenue: $610 million vs analyst estimates of $624.3 million (2.3% miss)
  • EPS: -$0.04 vs analyst estimates of $0.02 (-$0.06 miss)
  • The company reconfirmed its revenue guidance for the full year of $2.47 billion at the midpoint
  • Gross Margin (GAAP): 96.1%, up from 58.3% in the same quarter last year
  • Free Cash Flow of $24 million, down 25% from the previous quarter
  • Market Capitalization: $2.94 billion

Paul Abbott, Amex GBT’s Chief Executive Officer, stated: “In the first quarter, we delivered strong financial results with share gains, significant margin expansion and meaningful Adjusted EBITDA growth to reach the highest first quarter Adjusted EBITDA in our company's history. This puts us well on track to deliver against our full-year guidance. Our recently announced agreement to acquire CWT accelerates our ability to deliver long-term growth and value creation for shareholders. "

Holding close ties to American Express, Global Business Travel (NYSE:GBTG) is a comprehensive travel and expense management services provider to corporations worldwide.

Spend Management Software

The adoption of financial technology software is propelled by an ongoing drive to reduce costs. The combination of rising transaction volumes and global supply chain complexity is driving demand for cloud-based spend management platforms able to integrate the two.

Sales Growth

As you can see below, Global Business Travel's revenue growth has been incredible over the last three years, growing from $126 million in Q1 2021 to $610 million this quarter.

Global Business Travel Total Revenue

Global Business Travel's quarterly revenue was only up 5.5% year on year, which might disappoint some shareholders. However, its revenue increased $61 million quarter on quarter, a strong improvement from the $22 million decrease in Q4 CY2023. This is a sign of acceleration of growth and very nice to see indeed.

Looking ahead, analysts covering the company were expecting sales to grow 7.3% over the next 12 months before the earnings results announcement.

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Cash Is King

If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Global Business Travel's free cash flow came in at $24 million in Q1, turning positive over the last year.

Global Business Travel Free Cash Flow

Global Business Travel has generated $182 million in free cash flow over the last 12 months, or 7.8% of revenue. This FCF margin enables it to reinvest in its business without depending on the capital markets.

Key Takeaways from Global Business Travel's Q1 Results

We struggled to find many strong positives in these results. Its revenue unfortunately missed analysts' expectations and its full-year revenue guidance slightly missed Wall Street's estimates. Overall, the results could have been better. The stock is flat after reporting and currently trades at $6.23 per share.

So should you invest in Global Business Travel right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.