Business travel management company Global Business Travel Group (NYSE:GBTG) announced better-than-expected revenue in Q3 CY2025, with sales up 12.9% year on year to $674 million. Its non-GAAP profit of $0.07 per share was 43.5% below analysts’ consensus estimates.
Is now the time to buy GBTG? Find out in our full research report (it’s free for active Edge members).
American Express Global Business Travel (GBTG) Q3 CY2025 Highlights:
- Revenue: $674 million vs analyst estimates of $613 million (12.9% year-on-year growth, 10% beat)
- Adjusted EPS: $0.07 vs analyst expectations of $0.12 (43.5% miss)
- Adjusted Operating Income: $12 million vs analyst estimates of $79.41 million (1.8% margin, 84.9% miss)
- Operating Margin: 1.8%, down from 4.5% in the same quarter last year
- Transaction Value: 9.52 billion, up 1.77 billion year on year
- Market Capitalization: $4.00 billion
StockStory’s Take
American Express Global Business Travel’s third quarter was marked by strong top-line growth but significant margin pressure, with the market reacting negatively to the results. Management attributed the revenue acceleration to the recent acquisition of CWT and ongoing momentum in the core business, citing higher transaction volumes, increased average ticket prices, and robust customer retention. CEO Paul Abbott highlighted the importance of the CWT deal, describing it as an “important milestone for growth and value creation,” while also noting the integration’s immediate impact on both revenue and operating expenses. Despite the revenue gains, adjusted operating margins declined notably year-over-year, as incremental costs from CWT and ongoing investments weighed on profitability.
Looking forward, management’s guidance is centered on realizing cost synergies from the CWT integration and capitalizing on new product launches, particularly through a strategic alliance with SAP Concur. CEO Paul Abbott pointed to the upcoming launch of the Complete travel and expense solution and deeper penetration into the small and medium-sized enterprise (SME) market as key growth levers. The company expects artificial intelligence-driven efficiencies and cross-selling opportunities with SAP and Egencia to drive margin expansion. CFO Karen Williams emphasized that “we are confident in the path to return to and then far surpass prior levels, thanks to the significant synergies, additional efficiency potential and scalable revenue growth for the combined businesses.”
Key Insights from Management’s Remarks
Management highlighted CWT’s acquisition, the SAP partnership, and AI-driven process improvements as core drivers of revenue growth, but acknowledged that near-term margins were affected by integration costs and investments.
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CWT acquisition impact: The addition of CWT substantially increased revenue and transaction volumes, diversified the customer base, and expanded American Express Global Business Travel’s presence in key industry verticals. However, management acknowledged that CWT’s lower historical margins temporarily diluted company-wide profitability.
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SAP Concur alliance: The newly formed strategic partnership with SAP Concur aims to create a flagship travel and expense platform, leveraging SAP’s large SME customer base and integrating Egencia for a seamless user experience. The company believes this alliance will accelerate SME segment growth and enhance its value proposition.
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AI-driven efficiency gains: Management noted real-world benefits from artificial intelligence, including a 23% reduction in human intervention for customer chat support and significant productivity improvements for travel counselors. AI adoption is also driving cost savings and higher hotel attachment rates.
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Product and service integration: The upcoming launch of the Complete solution and next-generation Egencia Travel & Expense offering are designed to enhance customer experience and improve retention. These products will feature AI-powered search and deeper integration with SAP Concur.
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Strong customer retention: The company maintained a customer retention rate of 95% over the last 12 months, with particularly strong performance in SME and global multinational segments, supporting recurring revenue and providing a foundation for future growth.
Drivers of Future Performance
Management’s outlook is anchored by the integration of CWT, expected synergy realization, and new product rollouts, with an emphasis on AI-driven efficiencies and SME market expansion.
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Synergy realization and cost reduction: The company expects to deliver $155 million in cost synergies from the CWT deal over three years, mainly through workforce reductions, real estate consolidation, and vendor savings. These efficiencies, combined with scalable revenue, are anticipated to drive margin improvement and support adjusted EBITDA growth.
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SME segment growth: With the SAP Concur partnership and enhancements to Egencia, American Express Global Business Travel is targeting deeper penetration into the large, underserved SME segment. Management highlighted the opportunity to cross-sell solutions to SAP’s extensive SME customer base, which could accelerate new client wins and recurring revenue.
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AI and digital transformation: Increasing automation and digital transaction share—now at 82%—are expected to further reduce costs and improve the customer experience. AI-enabled tools are projected to enhance both revenue conversion and operational productivity, supporting long-term profitability.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace and impact of synergy realization from the CWT integration, (2) adoption and customer feedback for the new SAP Complete and next-gen Egencia solutions, and (3) continued progress in expanding the SME customer base through cross-selling and digital initiatives. Execution on AI-driven operational improvements and updates on margin recovery will also be closely monitored.
American Express Global Business Travel currently trades at $7.65, down from $7.96 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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