Amex GBT's Q1 2025 Earnings Preview: Can Momentum in Business Travel Hold?

American Express Global Business Travel (Amex GBT) is set to report its first-quarter 2025 financial results on May 6, 2025, against a backdrop of strong recovery in the corporate travel sector. The subsidiary of American Express (AX) has already delivered robust results in 2024, with revenue growth, margin expansion, and customer retention metrics that suggest a company primed to capitalize on post-pandemic demand. Investors will now scrutinize whether these trends continue, especially as Amex GBT faces macroeconomic headwinds and competitive pressures in a still-fragile global economy.

The Road to Recovery: Q4 2024 Performance

Amex GBT’s fourth-quarter 2024 results marked a significant milestone. Revenue of $591 million, up 8% year-over-year, was driven by growth in Total Transaction Value (TTV) and its Product & Professional Services segment, which includes ancillary offerings like travel risk management and sustainability tools. More impressively, Adjusted EBITDA surged 39% to $110 million, with margins jumping to 19%—a 420 basis point (bps) improvement from the prior year. This margin expansion underscores the company’s focus on operational efficiency, including cost-saving measures that offset modest increases in adjusted operating expenses (+3% year-over-year).

The full-year 2024 results were equally compelling. Revenue grew 6% to $2.423 billion, while Adjusted EBITDA rose 26% to $478 million, with margins hitting 20%—a 310 bps gain. These figures exceeded guidance, fueled by strong customer retention (97% overall, 99% in large enterprises) and a record $2.8 billion in Total New Wins Value. The latter included $2.2 billion from Small and Medium-sized Enterprises (SMEs), a segment Amex GBT has prioritized through targeted sales efforts and technology-driven solutions.

2025 Guidance: Balancing Growth and Caution

Amex GBT’s 2025 guidance projects 5%-7% revenue growth (constant currency), with Adjusted EBITDA expected to rise 11%-17% to $530-$560 million. This assumes margin expansion of 150 bps at the midpoint, a more conservative target than 2024’s 420 bps surge but still indicative of ongoing operational discipline. The company also aims to generate Free Cash Flow exceeding $160 million, though M&A-related costs could temper results.

The confidence in these targets stems from several factors:
1. Business Travel Recovery: Corporate travel volumes remain below pre-pandemic levels, but Amex GBT’s position as a leading provider of managed travel programs positions it to capture share as demand rebounds.
2. Technological Edge: Investments in AI-driven analytics and content tools (highlighted in Q4’s adjusted operating expenses) aim to enhance client retention and upselling opportunities.
3. Balance Sheet Strength: Net debt fell to $848 million in Q4 2024, and a $300 million share buyback authorization signals financial flexibility.

Risks Ahead: Macro Pressures and Integration Challenges

Despite the optimism, risks loom large. A potential recession in 2025 could dampen business travel budgets, especially for SMEs, which now account for a larger share of Amex GBT’s wins. Currency fluctuations, particularly against the euro and pound, could also squeeze margins, as 60% of its revenue comes from outside the U.S.

Additionally, the amended CWT merger agreement—postponed until 2025—adds uncertainty. While the deal could create a global travel powerhouse, integration costs and regulatory hurdles could weigh on near-term results.

Q1 2025: A Litmus Test for Sustained Growth

Investors will focus on two key metrics in the upcoming report:
1. Revenue Growth: Does the 5%-7% annual target hold, or has softness in corporate budgets emerged?
2. Margin Resilience: Can Amex GBT sustain its margin expansion amid rising expenses and potential inflation?

A strong Q1 showing would reinforce the company’s narrative of disciplined execution and scalability. For instance, if Adjusted EBITDA margins hit the midpoint of their 2025 target (150 bps expansion), it would validate management’s ability to control costs even as it invests in technology and M&A.

Conclusion: A Story of Discipline and Resilience

Amex GBT’s trajectory in 2024 was nothing short of impressive. Its 20% Adjusted EBITDA margin, 99% retention in enterprise clients, and record wins in the SME segment all point to a company that has mastered both cost control and growth. The Q1 results will test whether this momentum can weather macroeconomic headwinds.

With $165 million in Free Cash Flow in 2024—surpassing its $100 million target—and a deleveraged balance sheet, Amex GBT is positioned to navigate challenges while investing in future growth. If it achieves even half of its 2025 margin expansion goal, the stock could outperform peers in the travel tech space. Investors should watch closely for signs of margin retention in Q1, as this will be the clearest indicator of whether Amex GBT’s recovery story is truly sustainable.

The road ahead is fraught with uncertainty, but the data from 2024 suggests Amex GBT has the tools to navigate it. On May 6, markets will get their first glimpse of whether that confidence is well-placed.