American Express Global Business Travel has "raised and narrowed" its performance expectations for this year with better-than-expected results in the second quarter, although the effect of its upcoming completion of its acquisition of CWT is not yet factored into those expectations.
The second quarter kicked off with "heightened macro uncertainty" in April, with a 2 percent year-over-year decline in total transactions for the month, Amex GBT CEO Paul Abbott said in an earnings call on Tuesday. That turned around in May and June, with total transactions up 2 percent year over year for the two combined months. Total transaction value for the quarter increased 2 percent year over year—and up 3 percent on a workday-adjusted basis—to $7.9 billion, which Abbott said was driven both by the transaction growth and "modestly" higher average airfares and hotel room rates.
Among global multinational clients, transactions were down 1 percent year over year in April and up 3 percent year over year in May and June. For small and midsized clients, transactions declined 4 percent year over year in April and increased 2 percent year over year in May and June, Abbott said.
Amex GBT is seeing "green shoots" indicating that the demand improvement is continuing into July, and its most recent survey of its top 100 customers gave the same indication.
"Macro uncertainty seems to be moderating, with customers less concerned or increasingly neutral on the impact of tariffs," Abbott said. "We are seeing little by way of tangible customer actions taken in terms of travel policy restrictions."
The exposure to tariffs, however, is a factor in recovery rates. Same-store transactions were down across all of Amex GBT's major verticals in April and improved across all verticals in May and June. Transactions were up year over year for three verticals in those two months: information technology (up 5 percent), pharma and healthcare (up 4 percent) and business, professional and financial services (up 2 percent).
Transactions remained down in other verticals—those more exposed to tariffs—for May and June, most sharply in the automative industry, where they were down 9 percent year over year for the two months. That was an improvement from a 21 percent decline in April, however. Consumer goods and retail transactions declined 6 percent year over year in May and June, an improvement from a 7 percent decline in April, and transactions from mining, oil, energy and utility clients declined 4 percent year over year in May and June, compared with a 5 percent decline in April.
Amex GBT reported total customer wins valuing $3.2 billion in the second quarter, $2.2 billion of which were SME customers, and the company reported a 95 percent customer retention rate for the quarter.
With the demand improvement within the second quarter, Amex GBT has raised its growth expectations for the full year compared with what it had projected in the first quarter. It now projects revenue growth in the range of 2 percent of 4 percent for the year, up 3 percentage points from its previous midpoint, and the company projects EBITDA growth of between 6 percent and 13 percent year over year for 2025, in the range of $505 million to $540 million—a narrower range than the $480 million to $540 million EBITDA growth it projected when reporting first-quarter earnings.
That guidance does not include the impact of the CWT acquisition, which now is expected to close in the third quarter after the U.S. Department of Justice last week dropped its antitrust suit against the $540 million deal. Amex GBT CFO Karen Williams said guidance issued with third-quarter earnings would factor in the CWT acquisition.
Amex GBT executives received relatively few questions about the acquisition during the earnings call, and Abbott said he was unable to provide detailed financial information about CWT until after the merger closes. He did reiterate the $155 million in "identified net synergies" that Amex GBT expects from the merger, though the company has not indicated how that will affect human resources. Abbott did say that the company expects to "deliver those over a three-year period" and "see 30 percent of those synergies in the first 12 months."
Amex GBT reported $631 million in revenue in the second quarter, up 1 percent year over year. The company reported a net income of $15 million for the quarter, down from $27 million in the second quarter of 2024.
RELATED: Amex GBT Q1 results