B2B travel services company Global Business Travel (NYSE: GBTG) met Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $631 million. The company’s full-year revenue guidance of $2.49 billion at the midpoint came in 1.8% above analysts’ estimates. Its GAAP profit of $0.03 per share was in line with analysts’ consensus estimates.
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Global Business Travel (GBTG) Q2 CY2025 Highlights:
- Revenue: $631 million vs analyst estimates of $628.8 million (flat year on year, in line)
- EPS (GAAP): $0.03 vs analyst estimates of $0.03 (in line)
- Adjusted EBITDA: $133 million vs analyst estimates of $132.8 million (21.1% margin, in line)
- The company lifted its revenue guidance for the full year to $2.49 billion at the midpoint from $2.43 billion, a 2.4% increase
- EBITDA guidance for the full year is $522.5 million at the midpoint, above analyst estimates of $513.9 million
- Operating Margin: 5.4%, down from 6.7% in the same quarter last year
- Free Cash Flow Margin: 4.3%, similar to the previous quarter
- Transaction Value: 7.89 billion, up 167 million year on year
- Market Capitalization: $2.99 billion
Paul Abbott, Amex GBT’s Chief Executive Officer, stated: "In the second quarter, we again delivered on our commitments. We delivered quarterly results ahead of expectations, raised our full-year guidance, reached a significant milestone on CWT and can now accelerate share repurchases to underscore our confidence in the business. We look forward to welcoming CWT customers and employees to Amex GBT in the third quarter and are incredibly excited about the growth prospects for the combined company."
Company Overview
Holding close ties to American Express, Global Business Travel (NYSE: GBTG) is a comprehensive travel and expense management services provider to corporations worldwide.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Global Business Travel’s sales grew at a decent 22.7% compounded annual growth rate over the last three years. Its growth was slightly above the average software company and shows its offerings resonate with customers.
This quarter, Global Business Travel’s $631 million of revenue was flat year on year and in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and suggests its products and services will face some demand challenges.
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Cash Is King
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Global Business Travel has shown mediocre cash profitability over the last year, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 5.9%, subpar for a software business.
Global Business Travel’s free cash flow clocked in at $27 million in Q2, equivalent to a 4.3% margin. The company’s cash profitability regressed as it was 3.6 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.
Key Takeaways from Global Business Travel’s Q2 Results
It was great to see Global Business Travel raise its full-year revenue and EBITDA guidance. Overall, this print had some key positives. The stock traded up 5.1% to $6.55 immediately after reporting.
Global Business Travel may have had a good quarter, but does that mean you should invest 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.
