Q1 2023 Global Business Travel Group Inc Earnings Call
Thank you for your patience.
Today's conference call will be starting in a few minutes time.
[music].
Good morning, and welcome to the American Express Global business travel, that's cool Cat 2023 earnings Conference call.
As a reminder, please note today's call is being recorded.
I will now turn the call over to the Vice President of Investor Relations.
So please go ahead sir.
Hello, and good morning, everyone. Thank you for joining us for our first quarter earnings Conference call. This morning, we issued an earnings press release, which is available.
Our website investors globally.
Global business travel Dot com.
My presentation, which accompanies today's prepared remarks is also available on <unk> Investor Relations webpage.
We would like to advise you that our comments forward.
Forward looking statements that represent our beliefs or expectations of future events, including the duration.
Industry trends cost savings.
Among other.
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 expense and free cash flow and net debt all references during today's call such as non-GAAP financial measures have been adjusted to exclude certain items.
Throughout today's call. We will also be presenting certain non-GAAP financial measures such as EBITDA adjusted EBITDA adjusted EBITDA margin adjusted operating expense and free cash flow and net debt all references during today's call such as non-GAAP financial measures have been adjusted to exclude certain items.
Definitions of these terms and the most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the supplemental material of this presentation and in the earnings release.
Participating with me on the call today are Paul Abbott, our Chief Executive Officer, Mark <unk>, Our Chief Financial Officer, and Karen Williams, Our Deputy Chief Financial Officer also joining for the Q&A session. Today is Eric Bob Our Chief Legal officer head of global M&A with that I'll now turn the call over to Paul.
Oh.
Well, thank you Barry and welcome to everyone and thank you for joining our first quarter earnings call.
Before I begin I'd like to extend a sincere. Thank you to my team zero, our Chief Financial Officer.
Strong leadership and significant contribution to our business.
Mentioned on our previous quarter's call. This is actually my team last earnings call with us.
As she steps down from the CFO role at the end of June to join alcohol as group CFO .
Karen Williams, who has been working very closely with Martinez the last year and she joined Amex GBT as Deputy CFO last may is going to take over as CFO effective July 1st and of course, Karen is here with us on the call today, just as a reminder, Karen <unk>.
And us from IHG.
He also worked at IBM and American Express, where she held several senior finance leadership roles in.
Very confident that we're going to have a smooth and successful transition.
Yeah.
So I'm going to kick things off by reviewing the quarterly highlights before turning it over to Marty who will take us through the financials.
Aaron will then go through our outlook and our guidance for 2023.
So we reported a strong start to 2023 in the first quarter driven by continued growth in business travel significantly wins continued momentum in the SMB segment and significant margin expansion.
Our first quarter revenue and adjusted EBITDA were both ahead of guidance and showed strong year over year growth revenue totaled $578 million up 65% year over year.
Q1, adjusted EBITDA totaled $99 million nearly reaching our adjusted EBITDA total for all of 2022, and we delivered an adjusted EBITDA margin of 17%.
And with these strong first quarter results, we remain very confident in delivering our full year guidance.
Our results also demonstrate continued momentum with SME customers.
In the SME customer segment, we benefit from offering a choice of market leading solutions.
GBT at Genocea intervention.
In a very large and unconsolidated customer segment, a segment with the fastest growth and the highest margins in the industry.
SME transactions grew 61% year over year, reaching 88% for 2019 levels.
Our last 12 months SME new wins value.
<unk>, two 2 billion of annual TTP.
Based on the current recovery levels within this approximately 30%.
Although SME new wins value over the last 12 months is now from the unmanaged category.
So both our last 12 months SME wins value in total.
The share coming from unmanaged customers increased versus the fourth quarter of 2022.
Total transactions grew 61% year over year to reach 76% of 2019 levels clearly ahead of the broader travel management industry.
On a workday adjusted basis.
Total transaction recovery was actually 74%.
Now unlike previous quarters, the first quarter of 2023 had one and a half additional work days versus 2019.
Which benefited Q1 2023 reported recovery by about two points.
Our significant new wins position us well for continued strong growth ahead, and clearly demonstrate that we continue to deliver on the significant organic growth opportunity. We have ahead of us.
Last 12 months total new wins value was $3 4 billion and finally, our customer retention rate over the last 12 months remained very stable at 95%.
So overall, we delivered strong revenue and adjusted EBITDA.
Continued growth in business travel combined with share gains SME momentum and proven operating leverage gives us confidence as we look ahead to the balance of 2023 and beyond.
So on slide seven let's take a closer look at our strong year over year growth as I mentioned Q1 transactions increased 61% to reach 76% of 2019 or <unk> 74 on a workday adjusted basis.
About 74% transaction recovery represented two point sequential increase in transaction recovery versus the fourth quarter of 'twenty, two which is consistent with what we have guided in previous discussions.
<unk> increased 88% year over year in the first quarter and benefited from really strong international growth year over year.
Finally revenues grew 65% year over year in the quarter to reach 83% in 2019 levels.
So the next phase is going to look at the growth trends in more detail youll see by customer segment. He had global multinational transaction growth was level with SME customer transaction growth in the quarter.
With both up 61% year over year.
International growth as I, just mentioned very strong in the quarter international transactions up 81% year over year.
We have said in previous calls the travel restrictions around the world are lifted strong growth follows and we're clearly seeing that in our results, particularly in our international recovery.
Both in hotel transactions outpaced EBITDA by two percentage points up 62% and 60% respectively.
And as mentioned previously we are making very good progress increasing the ratio of hotel to air bookings.
We've achieved this by continuing to improve the hotel content and the displays in our proprietary software platforms, both the Genocea amnio.
We're seeing particular strength in the SME segment and important to note that Genocea hotel transactions were 111% of 2019 levels in the first quarter.
On a regional basis, you can see that Asia Pacific was the clear standout with 114% year over year growth in the quarter driven by the relaxation and removal of travel restrictions in China, and Hong Kong and Singapore.
EMEA transactions increased 63%.
We estimate that industrial action took place across France, Spain, Belgium, Germany had approximately a one percentage point negative impact.
On the global transaction recovery in March.
Finally, the Americas was up 52%.
So, let's now turn to.
Our commercial highlights for the quarter.
We delivered strong new wins and continued to progress our product and our technology leadership.
We are the clear leader in a one two trillion dollar industry with a significant runway for growth. We continue to gain share with $3 4 billion of total new wins value over the last 12 months supported of course by very strong customer retention of 95%.
Our biggest growth opportunity of course remains in the F&B segment. This represents a total opportunity of 950 billion and travel spend.
Within the SME customer segment, we are the number one player in managed travel, but only 30% of that $950 billion opportunity is actually managed today.
Providing a significant growth opportunity in the managed and even more so in the manage segment.
And you can see we're making good progress we signed $2 2 billion of SME, new wins value over the last 12 months of this approximately 30% of the value of that $2 2 billion.
And 55% of the customers often companies. These travel programs were previously unmanaged, which I think really demonstrates that we continue to gain traction and we are converting the unmanaged customer travel opportunity into managed travel spend.
Also supporting our technology leadership, we recently announced customer pilots and Rollouts with bookings of air France, KLM NBC content across our proprietary software platforms and Egencia.
This new NBC content will be enabled through Amadeus in a way that fully meets the needs of our corporate clients.
And it's an important milestone because we have set a standard here that can be used by the managed travel industry to ensure a successful and scalable launch of NBC content in a way that fully meets the needs of corporate customers.
We continue to advance our technology to help our customers to reach their sustainability goals.
This quarter and Egencia for example, the moment, but travelers searches for rail content. They will now see carbon emission details across all available routes to help travelers make more sustainable choices.
Travelers and arranges can now effortlessly salt locate and book hotels with environmental certifications.
And we also added additional carbon emission data into neo our proprietary online travel and expense platform.
Through our new partnership that we have with the leading climate Tech company chips.
We reported record transactions on the neo travel and expense software platform in the first quarter.
76%.
Of all of our transactions now come through digital channels.
And we continue to increase the share of this volume coming through our own proprietary software solutions, both neo and again see it.
Increasing the number of transactions.
On our own software platforms is really important because.
It improves the customer experience and it increases productivity and margins in our business.
And I'm very pleased to say that Q1 was the highest quarter of all time in terms of neo transaction volume.
So on slide 10, when we were on the path towards becoming a public company, we shared our strategic priorities nearly one year since going public later this month.
I am very pleased to say that we are clearly delivering on these commitments and creating strong momentum for the future.
First of all business travel momentum. Indeed continues Q1 year over year revenue growth was 65% transaction growth, 61% strong start to the year that gives us confidence that we're on track to achieve our full year guidance.
Secondly.
Our new sales pipeline strong new wins continued share gains position us for continued strong growth in the future on new ones value reached $3 4 billion over the last 12 months based on the current recovery levels.
Third we said our focus on winning in the SME segments would accelerate growth in our results clearly show strong progress in this area Q.
Q1, SME transaction recovery reached 88%.
We reported SMA new win value of $2 2 billion over the last 12 months up from $2 1 billion in the fourth quarter.
And we also announced accelerated new wins coming from the unmanaged segments.
$660 million of new wins from the unmanaged segments, 30% of the new wins.
And that $660 million of new wins from the Unmanaged segment is 25% higher than.
And it was in the fourth quarter.
Both we are delivering on the agenda. The synergies we're on track to deliver approximately $60 million of Egencia synergies in the full year 2023 based on actions. We've already completed so far we've achieved approximately 80% of the expected synergies from Egencia at speed full recovery.
Level.
Fifth our business model is clearly delivering the operating leverage we committed to last quarter. We said, we added costs to support incremental volumes heading into Q1.
In the first quarter of this year, we actually reported over 100% adjusted EBITDA pull through versus Q4.
Meaning sequentially versus Q4, we delivered incremental adjusted EBITDA actually exceeded incremental revenue.
And finally all of these results combined to deliver significant margin expansion in the first quarter, we reported a 17% adjusted EBITDA margin with.
With volume growth.
We're online adoption and structural changes, creating operating efficiencies.
So to sum up our first quarter performance I think it provides yet another proof point of our continued strategic commercial and financial progress.
So that completes my review of the Q1 highlights I would like to hand, it over to Marty who will discuss the financial results in more detail morphine.
Thank you Paul and Hello, everyone.
Heard from Paul we continue to deliver on our strategic and financial priorities and we started 2023 with a strong first quarter.
Our total transaction value or <unk> increased 88% a year.
Over here in the first quarter to reach $7 4 billion.
And well above our 61% growth in transaction volume.
Driven by the 81% growth in international volume in the quarter.
Revenue increased.
5% to $578 million driven by stronger than expected supplier result.
Revenue was $8 million above the top end of our first quarter guidance, driven by a $10 million favorable carryover in supply revenue.
Our yield which is measured revenue over acute kidney reached seven 8%.
In Q1, and this is in line with our expectation for the full year and the second quarter.
And it follows a different seasonality one in 2019, we are now seeing a timely reporting of realized supplier component when we can recognize revenue earlier.
Compared to 2019.
No.
Revenue seasonality better aligned with our volume seasonality.
When comparing our year over year results do remember that the first quarter of 2022 yield was favorably impact favorably impacted by a higher component of fixed product and professional services revenue over a depressed volume through to clients.
Travel revenue increase.
Two quick ones.
In line with <unk> growth.
Product and professional services revenue increased 19%.
Primarily due to increased management can you and growth in meeting and events revenue, which isn't bonds funds.
Yeah.
Adjusted operating expenses increased 27% in the quarter, which compares.
Favorably to the 65% increase in revenue and highlight the operating leverage in the model.
I think that could volume towards 26% higher in Q1.
Q4, but our expenses were flat as compared to Q4, as we ramped up our comp base last quarter in advance of the expected incremental first quarter volume.
As a result, we delivered $19 million of adjusted EBITDA in the first quarter, which is an improvement of $127 million year over year.
Our adjusted EBITDA margin was 17%.
Which is up 25 percentage points year over year.
And this demonstrates the strong operating leverage as well as execution of cost savings and <unk>.
As we announced in January we have moved to a global customer segment operating model, which is centered around our global multinational and SME customers.
Better position us for.
Tolerating growth drive increased.
Increased efficiencies and deliver unrivaled value to our customers.
Associated with that.
We booked 23 million restructuring charge in the first quarter.
First of all start delivering benefits from second quarter onwards, with an acceleration in the second half.
Our European restructuring actions.
Let's now turn to cash flow.
As expected cash usage increased in the first quarter of 2023.
Total of 109 Logan JV.
And by continued recovery.
Our volume and working capital seasonality as well as the timing of annual employee.
Our AR and AP balances are correlated to volume driving the working capital build in the first quarter.
Hi.
<unk>, which follows business travel demand is stronger in the first quarter and lowest in the fourth quarter.
Thank you and the first quarter was up 26% sequentially versus the fourth quarter of 2022.
Both combined with the payment of our annual <unk> resulted in an increase of $101 million in working capital in the first quarter.
And for more insights into our cash flow seasonality I would like to point you to the supplemental materials section of this presentation.
Where we have included slide outlining our historical T TV.
Revenue adjusted EBITDA and working capital seasonality.
And while I will not be using slides on our call today, they are intending to be a resource.
To help with your modeling.
As of March 31st we have an unrestricted cash balance of $320 million and total available liquidity of $370 million.
And our net debt.
Is $1.035 billion.
To accelerate cash flow generation and the balance of year, we have launched a working capital optimization program that we expect will drive material benefit.
Over the next 12 months.
As a matter of fact looking at the balance of year, we expect to approach free cash flow breakeven in the second quarter and to generate positive free cash flow in the third and fourth quarter.
And before I hand, it off to Paul I want to welcome carried into her new role as CFO effective first of July .
I'm very grateful for the past six years.
Pvp and confident that after successfully navigating through a global pandemic.
And taking the company public.
We're well positioned for strong growth ahead.
I have worked side by side with caring for nearly a year and I am confident we will have a smooth and successful transition.
And I will now turn it back to Paul <unk> to review our outlook for full year 2023 and share our second quarter guidance.
Thank you Marty.
Before I hand, it to Karen to go through our outlook and guidance for the balance of the year I just wanted to share.
Some data points here that I think demonstrate several tailwind that set us up for strong continued growth in the year ahead.
Including continued business travel recovery.
Improved airline capacity.
Our significant share gains and the increasing meetings and events demand.
What you see here on the page is <unk> business travel outlook poll that we've shared with you in the past. This was published at the end of April Youll see domestic and international bookings of 72, and 63% to 2019 levels respectively.
Approximately 68% combined.
This is up from 62% that we shared with you in the January survey so <unk>.
Six point improvement in the <unk> outlook.
Between January and April .
So it's clear that industry momentum continues and you can also see that we're clearly outpacing the industry without Q1 transaction recovery of 76% driven by our share gains.
We've talked in the past how distributed teams and hybrid work model are creating a new type of business travel meetings and events demand with workforce is increasingly distributed the predicted increase in meetings and events is certainly gaining traction.
A small meetings division is the fastest growing area of our meetings and events team and we're seeing growing demand for our services as companies increase their investment in these types of meetings.
Drilling down on our meetings and events pipeline.
Recovery in the number of meetings and events projects.
In the first half of this year is trending at about 85% of 2019 levels.
And therefore outpacing the broader corporate travel recovery.
The spend for the first half of this year has already reached over 100% of 19 levels.
Driven by an increase in larger events and.
An increase in international destinations and of course price inflation.
So overall, we believe that these data points from industry experts and from customers support our expectations for continued growth in the balance of 2023 and beyond.
So I'm now going to hand, it over to Karen to go through our 2023 guidance in more detail carrying over to you.
Thank you Paul.
Before we jump into the details let me give you the headlines.
Our reaffirming our full year guidance.
We expect to deliver strong revenue right.
Significant year over year.
<unk> expenses, and importantly to return positive free cash flow in the back half of the year.
So let's take a closer look at the figures and review the key drivers for our 2023 guidance.
We continue to expect revenues of between <unk>, One 7 billion and $2 2 billion, which represents 17% to 22% revenue right.
As Marty said, our revenue seasonality is now better aligned with volume seasonality, which we have reflected in our implied revenue guidance to eight schwab and H two.
We expect revenue yield full year to be in line with Q1 at seven 8%.
On the cost side.
Expect single digit growth in operating expenses as we increase operational efficiency.
Realized cost synergies and achieve benefits from the reorganization, which we announced in January .
We expect savings to accelerate in the second half of the year driving a reduction in expenses compared to the first half projection of $950 million.
Our productivity gains and high operating leverage is still expected to deliver nine to 11.
Adjusted EBITDA margin expansion with a margin of 15 77.
We acknowledge that if current trends continue we may reach the upper end of our revenue guidance.
At the same time.
Our expense exit rate is in line with our previous expectations. We may have some delayed execution of our European restructuring plan, which could impact the phasing of our cost reduction.
Additionally, we have several attractive opportunities for incremental product and technology investments, which we've made to date.
To take advantage of in the balance of year.
And frankly, whilst we recognize Q1 was a strong quarter. We are just one quarter into the year. Therefore.
Therefore, we reaffirm our full year, adjusted EBITDA guidance of $330 million to $370 million.
As previously mentioned, we anticipate reaching positive free cash flow during the year, which is an important milestone.
We expect to approach breakeven free cash flow in the second quarter of 2023.
To generate positive free cash flow in Q3 and Q4.
We are confident in our ability to play with it given the seasonality of our working capital which is outlined in the supplementary materials of this presentation.
And the working capital optimization plan, we have recently.
Initiated specifically in relation to adjust as.
As we continue to integrate them into our business.
Finally, we continue to.
Exit 2023, with a leverage ratio in line with our long term target leverage target of two times to three times.
So now, let's turn to guidance and key drivers for the second quarter of 2023.
We expect to deliver revenue of between $555 million and $575 million representing.
14% to 18%.
This is built on our expectations for low double digit.
Great and revenue largely in line with the first quarter.
We expect operating expenses to start trending down sequentially in the second quarter net of salary inflation.
This is driven by the changes we announced in January relating to a reorganization, which will create operational efficiencies.
And as a result of our continued focus on cost.
This results and expectations for $85 million to $100 million and adjusted EBITDA with an adjusted EBITA margin of 15% to 17%.
Representing year over year, adjusted EBITDA margin expansion of five to seven percentage points.
Finally, as previously mentioned Q2 will be a pivotal turning point as we expect to approach breakeven free cash flow moving to positive free cash flow in the back half of the year.
In summary, we.
We delivered strong first quarter revenue and adjusted EBITDA.
Business travel recovery continues and we are delivering on share gain and SME momentum.
We continue to execute on the synergy and cost savings to drive operating leverage.
We are well positioned to deliver strong second quarter and significant revenue growth and margin expansion in 2023.
So we have delivered on what we said we would do and are confident in continued momentum ahead.
I look forward to stepping into the CFO role on July the fat and getting to know all of you in the months.
And yes go ahead.
So we can now move.
Q&A, Paul <unk>, and I'm joined by Eric Foss, who is our chief legal officer Global head of M&A and compliance corporate Secretary.
Operator, Please go ahead and open the line.
Thank you.
If he would like to ask a question. Please press Star then one more kind of thing keypad.
If you change your mind any time, please press star two.
And as a reminder, that is star followed by one to ask any questions.
The first question, we have comes from Stephen Ju with credit Suisse.
Okay. Thank you so much so Paul.
The transaction recovery overall stands at 76% for you guys.
Don't know if you have the regional data happy, but can you talk about where the Asia Pacific recovery may be that that region is still seems to be.
Growing the highest year over year.
Amongst your I guess the regional comparisons thank you.
Stephen Hi, yes, thanks for the question.
I don't have the regional recovery rates in front of me on maybe Martine if you got those handy there.
So Asia.
Was transaction recovery for eight o'clock was 87 Christina.
<unk>.
We reported two one of them.
Hey, Jeff said by a couple of points.
Okay.
Okay.
Thank you.
Saving appropriately.
So as we go through the presentation.
Trying to focus more on the year over year.
Performance going forward.
And start to move away from recovery rates versus.
2019.
Theres, obviously 2019 is.
Four years ago now.
We run into sometimes some.
Reporting challenges with quarter over quarter analysis. So.
You will see us focus more on the.
Year over year growth rates and quarter over quarter growth rates going forward.
Understood. Thank you.
Yes, because the higher APAC protection recovery is a little bit odds versus what I was thinking given that that region is growing.
At the highest rate for you right now so.
But I guess the good news here is that some of your other Portage Reis larger regions are still.
Lagging the recovery so there's still a lot more white space.
Is that a correct characterization.
Yes, with remembering though that the Asia Pacific region for US we don't consolidate.
Domestic China volumes, because it's a joint venture market.
And so when you look at all.
Asia Pacific results.
They are primarily driven by the.
<unk> in Australia, and India, that's been actually pretty.
Very strong and actually has been ahead of the curve in terms of the other markets in Asia.
What we're seeing more recently is the recovery of international volumes to and from China, but those recovery rates actually will register in the.
The point of origin. So that trip is booked from the U S or its booked from Europe than that trip from the U S to China Europe to China is registered and where it is ticketed Toby registered in in Europe .
Or in the U S.
Thank you.
We now have Lee Horowitz from Deutsche Bank.
Yeah.
Okay.
Great. Thanks, so much can you maybe help us understand.
Full year revenue guidance.
I guess, given the <unk> Q2, how long do by revenue growth.
Second half of the year.
Which one do you prefer.
For next year.
And I understand sort of the macro assumption underpinning.
Yeah.
Why we shouldn't we should be expecting revenue growth to slow down so materially in the second half and then when Paul Okay.
Yes sure.
I think.
As Karen mentioned in her comments.
We acknowledge that if the current trends continue with likely to reach the upper end of the revenue guidance.
<unk>.
I think.
We guided in previous calls that we are expecting to see a couple of points recovery per quarter sequentially.
I think we made that statement in Q3 and we saw.
Couple of points recovery in Q4, we also made that statement in Q4, and we've seen essentially a couple of points recovery. When you workday adjusted in Q1, we've gone from 72 to 74.
So we are continuing to model out two points of recovery per quarter.
In the balance of the year.
And that's it.
If that recovery level.
Lays out then yes wed likely to be at the upper end of the revenue guidance.
Karen also said, though is that we do have.
Potentially some delays in the restructuring in Europe .
And which one protect our exit rate from an operating expense standpoint.
And we also have attractive investments that we may or may not choose to trigger in the balance of the year.
So.
That's why we feel that actually the the current range for revenues and adjusted EBITDA.
Still appropriate whilst acknowledging that the current trend would take us to the higher higher end on the revenue side.
Great helpful. Thank you and then maybe.
I can go to the conference call in Seattle Downtown Shanghai, China.
Okay.
Talk a bit about how you see this cutting edge technology is impacting their business operations and how you're thinking about putting investments to work in.
The medium term in order to harness the power and recycled.
Yes, it's a great question, we see as a tremendous.
Tremendous opportunity.
Yes.
Look at what we actually do in Genocea in EMEA.
We are consistently.
Yes.
Data to automate.
Transactions that were previously.
Through the voice channel through travel counselors.
And that sort of percentage of online adoption as we call. It has been steadily increasing year over year and it's now 76%.
But we still have a big opportunity to take more demand out of the voice channel and when we do that.
It increases.
Our margins and in many cases creates a better self service experience for customers.
So it's a muscle that we've got well developed in the company and work.
AI and the developments in the.
Advances in AI are doing is frankly, just making the speed and scale of those changes look even more exciting and so we do have a team.
That are focused on.
Using generative AI models and big data to see what can we do to automate.
Our processes more effectively.
And yes, definitely see that as a significant opportunity for us not just in the months, but years ahead.
Helpful. Thank you.
Thank you.
We now have claims pending.
Evercore ISI.
Hey, Thank you.
Could you just talk a little bit about the drivers of upside in the March quarter relative to your initial guidance, which which regions or segments kind of surprised you and then.
I Wonder if you could speak broadly to performance by months.
What did our March exit rate on recovery look like relative to January .
Yes, sure maybe montagnier, but.
Just come in and give you a perspective on the drivers of <unk>.
With Q Q1 performance.
Sure so.
So we actually.
Hey, Matt.
We had $10 million favorable carryover.
Sure.
And the earnings presentation.
Just goes onto it actually came in at the high end of guidance and this is really driven by.
Better volume growth.
Across our regions and there's not really one particular region that stands out.
So it's just one of them.
Or the high end of the game.
The guidance was.
Progressive recovery.
Sure.
Through the quarter.
On a month by month basis.
We do see a similar pattern.
What we saw in.
In the summer holiday and.
And the year end Christmas holiday, which we tend to have a.
A bit of a dip around the holiday period, and then followed by a strong recovery following the holiday period, we're seeing that around as well.
Thank you Hugh you led into my that was a good segue for my follow up was just going to be around seasonality.
You mentioned remote work and maybe some structural changes in the underlying seasonality, but maybe you could just expand on that one.
As you look back on kind of the second half of last year and the early part of this year.
Where do you see periods of maybe exaggerated strength.
And maybe periods of exaggerate exaggerated weakness relative.
Relative to say 2019 baseline based on different behavior.
Yes, maybe.
Coming home expand on the comment Martine made we have now seen.
Really across three holiday periods. So.
The run up to December holidays.
Also in August summer holidays, and then over the Easter period.
We have sort of seen an extended impact over the holiday period, and we've seen more of a trough in more of a peak.
And we do think that.
That is probably the new normal now having seen it across three holiday periods. We do think that people are perhaps taking extended holidays and maybe working from a holiday destination for a period of time, but then what we see is we see.
Not much.
Stronger bounce back, which we saw.
In January .
We saw that in September post labor day.
And as Marty mentioned in the run up to Easter, we saw a little bit more of a dip than were expecting but we saw really strong recovery post Easter.
So I think that's the one.
Key trends.
I think it is something that we are looking at is the new normal now.
Okay. Thank you.
Yeah.
Thank you.
Hi, Toni Kaplan with Morgan Stanley .
Hi, This is hilary leave on for Tony.
Just wanted to ask about the adjusted EBITDA flow through like obviously, you guys talked about.
Quarter over quarter, it was well over 100%.
Year over year, it looks like it was down to around 56% just wondering how we should kind of think about it going forward.
Any cadence you guys can provide would be helpful.
Two of my team would you like to take that one.
Sure.
So.
If I can.
Going forward I think what we've always shared with you and I can do is make cycle folks.
So we can have a longer term basis.
Thank you.
PTC five territory that being said foxwoods real useful.
Or if you wish and we were.
Going very quickly through the recovery of our business travel.
As that recovery starts normalizing.
On the growth.
So it's normalizing looking at the overall margin of the business will be a mortgage pool.
Hi.
Going going forward, you'll see a lot more stability in the.
Biogen is margin expansion quarter over quarter than you would in.
And cultural.
So from that point.
Quarter to quarter over quarter that being said to answer your question more specifically on the first quarter.
Oh.
First quarter of last year, you may recall that in the first quarter of 2022 volume our volume base, which has been obviously very depressed with with only quad and we had not in the volume very quickly.
And it would be.
One of the first quarter and we did not.
While the cost of equity.
Thank you Heidi.
Other staffing in the first quarter, which is why you have a lower fall through as compared to the first quarter and you have exactly the reverse when you compare to the fourth quarter.
Costs in the fourth quarter. So you have an excellent fall through Q1 over Q4.
Great. Thank you and just wondering if we could touch on SME is a little bit.
Would you be able to give kind of a split in terms of number of transaction of CTV and revenue between.
And then in the Smes.
For the quarter.
We don't provide that level of.
Detailed by by quarter.
I think you have.
Previously guided our SME business.
Is over 50%.
Both our revenues and.
The highest share of our profits, but we don't.
<unk> provides the details by segment by quarter.
Alright. Thanks.
The new wins information of course, which we which we did.
Thank you.
As a reminder, if you'd like to ask any further questions. Please tell them why don't you kind of come to that.
I can confirm we have had no further questions so I'd like to hand.
Yeah.
Cool.
20 final remarks.
Great well once again, thank you very much for joining I would like to extend.
Thank you to all of our team across Amex GBT for their dedication to our customers and the strong results that they delivered in the quarter.
We are very confident in our position and our outlook for continued success in 2023. Thank you for joining and your continued interest in the company.
Thank you for joining our conference and that does conclude today's call.
You may now disconnect your lines and please enjoy divestiture.
[music].