Global Business Travel Group, Inc. (NYSE:GBTG) Q3 2025 Earnings Call Transcript

Global Business Travel Group, Inc. (NYSE:GBTG) Q3 2025 Earnings Call Transcript November 10, 2025

Global Business Travel Group, Inc. misses on earnings expectations. Reported EPS is $-0.07 EPS, expectations were $0.1202.

Operator: Good morning, and welcome to the American Express Global Business Travel Third Quarter 2025 Earnings Conference Call. [Operator Instructions]. Please note today’s call is being recorded. I’ll now turn the call over to Vice President of Investor Relations, Jennifer Thorington. Please go ahead.

Jennifer Thorington: Hello, and good morning, everyone. Thank you for joining us for our third quarter 2025 earnings conference call. This morning, we issued an earnings press release, which is available on sec.gov and our website at investors.amexglobalbusinesstravel.com. A slide presentation, which accompanies today’s prepared remarks is also available on the Amex GBT Investor Relations web page. We would like to advise you that our comments contain certain forward-looking statements that represent our beliefs or expectations about future events, including industry and macroeconomic trends, cost savings and acquisition synergies, among others. 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 adjusted gross profit, adjusted gross profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted operating expenses, free cash flow and net debt. All references during today’s call to such 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 materials of this presentation and in the earnings release. Participating with me today are Paul Abbott, our Chief Executive Officer; and Karen Williams, our Chief Financial Officer.

Also joining for the Q&A session today is Eric Bock, our Chief Legal Officer and Global Head of M&A. With that, I will now turn the call over to Paul. Paul?

Paul Abbott: Thank you, Jennifer. Welcome to everyone, and thank you for joining our third quarter 2025 earnings call. In the third quarter, we delivered outstanding results. Here are the highlights. Total transaction value or TTV grew 23%. Revenue growth accelerated to 13%. Adjusted gross profit margin was 60%. Adjusted EBITDA grew 9%. We generated $38 million of free cash flow, and we continued to win share with $3.2 billion in total new wins value over the last 12 months. Finally, year-to-date through November 6, our strong performance has enabled us to return $54 million to shareholders through share buybacks. These results reflect 2 things. First, continued strong execution within our core business, which performed in line with our expectations and is tracking in line with the midpoint of our previous full year guidance.

Second, incremental growth from the acquisition of CWT, which closed on September 2. This is an important milestone for growth and value creation. As Karen will discuss in more detail, we are raising our full year 2025 guidance. This reflects the acquisition of CWT, and we are reaffirming the midpoint of our previous guidance range for our core business. Importantly, we also have the confidence to provide preliminary expectations for 2026. Before we get into the quarterly details, I want to explain why this is such an important moment for our business with multiple levers for growth and value creation in place. We continue to demonstrate the strong execution in our core business. Proof points include our very high customer retention rate, significant new wins value, disciplined operating leverage and strong cash generation.

We are consistently delivering on our commitments. We have made bold moves to transform Amex GBT into a software-driven leader in travel and expense. We’ve now reached an exciting moment with several significant milestones achieved that we expect will accelerate growth and margin expansion. First, we closed the acquisition of CWT, a global business travel and meeting solutions company. This transaction immediately grows our top line substantially, and we are already executing on the $155 million synergy target to create significant shareholder value. Second, we recently announced a long-term strategic alliance with SAP Concur to strengthen our value proposition, accelerate growth and develop a larger expense revenue stream. Third, we expect to launch a next-gen Egencia Travel and Expense solution in Q1 2026, including full integration into SAP Concur Expense and a new AI-powered booking experience.

Fourth, we have an enormous runway in the SME space with even stronger products and distribution to continue to win share. And finally, we are driving AI to further accelerate the digital transformation of our business. Putting it all together, we have a significant long-term opportunity for consistent double-digit adjusted EBITDA growth and margin expansion, and we look forward to sharing more at our March 2026 Investor Day. Turning to CWT. We are delighted to welcome CWT customers and employees to Amex GBT. This transaction grows revenues by approximately 30%, grows our SME business by approximately 20% and brings in new industry verticals to Amex GBT. This is a highly accretive transaction. We expect to deliver approximately $155 million in net cost synergies over the next 3 years, and we have a proven track record of achieving synergy targets.

Our experienced integration team has made good progress in the first 60 days, and we expect to achieve $55 million of synergies in 2025 and 2026. Importantly, this transaction diversifies our shareholder base. CWT shareholders, which are primarily investment funds, now own approximately 10% of the combined company, and our leverage stays within the target range of 1.5x to 2.5x. Turning to our new long-term strategic alliance with SAP. Let me first describe how significant this alliance is, and then I will share 2 new ways that our customers and suppliers will benefit. SAP is the world’s largest provider of enterprise application software. To put some numbers on it, 98 out of the 100 largest companies in the world are SAP customers and approximately 80% of SAP’s customers are SMEs. SAP Concur is the world’s largest travel and expense software solution with over 104 million users.

By joining forces, we will deliver a step change in our travel and our expense capabilities. First of all, we are co-developing a new solution called Complete, a new flagship solution for travel and expense that will offer an AI-powered user experience. Complete features include richer content, a booking experience that will feel like shopping on your favorite website, one app for everything end-to-end and a seamless customer support from industry leaders. We launched last week to the first customers, so the impact is already starting now. Second, we are integrating SAP Concur Expense with Egencia. This is exciting because it will provide our Egencia customers a seamless travel and expense experience. And additionally, the strategic alliance creates the opportunity to accelerate our growth by marketing a new flagship solution to the large SAP customer base.

In Q1 2026, we plan to launch a next-gen Egencia Travel & Expense solution. It will feature SAP Concur expense integration, new Agentic AI search capabilities and a redefined customer experience. Egencia is our all-in-one travel and expense platform that continues to compete very effectively against other software solutions. Egencia is already operating at scale with approximately $8 billion of TTV in the last 12 months, over 90% online transactions and approximately 7,000 corporate customers, all supported by world-class service from American Express GBT. Furthermore, it has gross margins that are higher than our average and very importantly, it is profitable and generating cash. We have an unrivaled value proposition for SMEs. savings, control and service.

This strong value proposition drives profitable growth in the over $800 billion SME segment and an estimated $625 billion of the global SME opportunity is unmanaged, representing a long runway for future growth. Over the last 12 months, excluding CWT, our SME new wins totaled $2.2 billion. With the enhancements that we’re making to our products and our sales strategy, we think we can further accelerate new wins and capture more share with SME customers. Our overall total new wins value also remained strong at $3.2 billion with an impressive customer retention rate of 95% over the last 12 months, excluding CWT. Finally, when it comes to AI, we are a clear beneficiary. AI is delivering results, increasing revenue, conversion and productivity.

Let me give you some examples. The Egencia AI experience is solving customers’ needs faster and delivering savings. Egencia Chat powered by AI is driving a 23% reduction in the need for human intervention in chats. Our AI-powered hotel dynamic rate cap delivers average savings of approximately $60 per booking for Egencia customers. And AI is increasing hotel attachment rates, which provides increased revenue opportunity with 85% of booked hotels chosen from the top 10 AI-driven display. We’re also driving AI to deliver cost savings and margin expansion. We’ve previously spoken about the significant opportunity with travel counselor productivity. Excluding CWT, over 40% of our calls are now assisted by AI, driving efficiency gains. And we’ve seen a 40% quarter-over-quarter increase in daily users of our internal AI productivity tool called AI Assist.

This results in a 60% adjusted gross profit margin in the third quarter with significant runway for continued margin expansion. And we continue to increase the share of digital transactions, which now totals 82% with over 60% on our proprietary software platforms. Now let’s turn back to the third quarter and the financial highlights. Last quarter, we talked about green shoots that gave us confidence in an improved corporate travel demand environment, and that is exactly what we saw. TTV, which reflects both volume and price, grew 23% to reach $9.5 billion, driven by CWT and 9% growth in the core business. The core growth was driven primarily by higher average ticket prices and hotel room rates in addition to transaction growth and a favorable FX impact.

Transaction growth was up 19%, driven by the 1-month contribution from CWT post close and 4% growth in the core business. Within the 4%, same-store sales were up 2% and our net new wins drove 2 percentage points of growth. Revenue was up 13% to reach $674 million. Excluding CWT, revenue growth of 3% was in line with our expectations and largely in line with transaction growth, which drives the majority of our revenue model. Finally, adjusted EBITDA grew 9% to reach $128 million. Excluding CWT, underlying adjusted EBITDA growth was 5%, which was in line with expectations and outpaced revenue growth as a result of our continued focus on driving margin expansion and operating leverage. Going forward, Amex GBT and CWT are one business. But we wanted to give you the breakout between our core business and the impact of CWT this quarter to help you understand the underlying performance.

And now I’d like to hand it over to Karen to discuss the financial results and the updated outlook in more detail.

Karen Williams: Thank you, Paul, and hello, everyone. Before we get into the specifics for the quarter, I want to reflect on the progress we have made in Q3. I am incredibly pleased with our continued momentum in driving the business forward. We delivered financial results for the core business that were in line with expectations. We closed on CWT and are already making outstanding progress on the integration. And we executed on our share repurchases to deploy capital in a disciplined, value-accretive manner. We continue to deliver on our commitments. So let’s turn to our financial performance in more detail. Revenue reached $674 million, up 13% year-over-year. Travel revenue increased 10% due to the acquisition of CWT, underlying transaction and TTV growth and favorable foreign exchange impact.

Product and professional services revenue increased 23% from the acquisition of CWT as well as strong growth from dedicated client revenues and consulting. Excluding CWT, transaction growth of 4% was in line with our expectations. TTV growth of 9% had an additional 3 percentage points benefit from higher average ticket prices and 2 percentage point benefit from FX. As a reminder, transactional growth drives 50% of our revenue and TTV drives 30%. The core revenue growth of 3%, was very much in line with our expectations for the quarter. Now it’s important to note that our core business revenue guidance of 5% at the midpoint for the second half, which we’re reiterating today, assumed lower growth in Q3 versus Q4 due to phasing. If you look specifically at our revenue yield, it declined 40 basis points year-over-year, driven by the prior year baseline, hence, why I would encourage you to look at H2 rather than the quarter in isolation.

And from a year-to-date perspective, revenue yield is trending in line with our full year guidance, which is down less than 20 basis points, excluding CWT due to the intentional continued shift to digital transactions and the fixed components of our revenue. So moving to expenses. We continue to drive strong momentum with our focus on driving efficiency and increasing productivity. We are introducing adjusted gross profit margin as a key metric this quarter, which we believe helps measure the success of our automation and AI initiatives and makes us much more comparable to other software-led companies. Adjusted gross profit margin was 60% in the quarter, down modestly due to the impact of CWT, but up 70 basis points for the core business. Importantly, we believe there is a runway for this to go up significantly over time.

Adjusted operating expenses were up 14% year-over-year, largely reflecting incremental costs driven by the acquisition of CWT. Excluding CWT, adjusted operating expenses were up 3% in the quarter. And on a constant currency basis, adjusted operating expenses grew slower than revenue for the core business, reflecting our continued focus on driving productivity and efficiency gains. And as a reminder, we expect to drive $110 million of cost reductions in 2025, partially offset by the $50 million in investments we are making to drive growth, and I am pleased to say we are on track with both of these. Putting it together, adjusted EBITDA grew 9% to $128 million. Our adjusted EBITDA margin was 19%, down 70 basis points year-over-year due to the impact of the CWT acquisition.

Although the combination with CWT’s lower-margin business will temporarily step down our margins on a blended basis, 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. Excluding CWT, our adjusted EBITDA margin was up 40 basis points. And again, I encourage you to look at core business margin expansion of 120 basis points year-to-date instead of the quarter in isolation due to phasing. As Paul mentioned, we wanted to provide this financial detail on the core business versus CWT impact to be helpful. However, going forward, we will be operating reporting as one business. We generated $38 million of free cash flow in the quarter, which declined year-over-year, largely due to the impact of CWT.

Free cash flow generation for the core business, excluding CWT, was $54 million, down modestly year-over-year due to investing in the business. Finally, I am incredibly proud of the strength of our balance sheet, our leverage ratio or net debt divided by last 12 months adjusted EBITDA is 1.9x, up slightly from last quarter, given our funding of the cash portion of the CWT acquisition, but still below the midpoint of our target leverage range of 1.5x to 2.5x. With such a strong balance sheet, we are in a position to continue executing on our capital allocation priorities, including additional opportunistic M&A while returning cash to shareholders through share repurchases. Year-to-date through November 6, we have repurchased $54 million of shares.

Our share buyback reflects our confidence in the underlying strength of the business and our commitment to driving long-term shareholder value. Now taking a closer look at CWT, this is an incredible synergy story. We have a clear path to a bottom line synergy opportunity of $155 million, entirely driven by what we can control, which is costs. We have significant savings by consolidating the cost base of CWT and Amex GBT, including a large opportunity with AI and automation. This is a highly accretive transaction with a 3.5x multiple on synergies alone. We have previously shared we expect to achieve approximately 35% of our total $155 million synergy target in year 1. While I’m pleased to share we are tracking in line with the expectations we have previously shared.

We expect to deliver $55 million in synergies across 2025 and 2026, split between $5 million and $50 million, respectively. These actions primarily include workforce reductions, real estate consolidation and vendor savings. We have a clear and established playbook for M&A. I will now share 2 examples of that track record of highly accretive acquisitions and significant value creation. With HRG in 2018, we added approximately 24% incremental revenue with approximately $80 million in synergies. And with Egencia, in 2021, we added approximately 24% incremental revenue with approximately $110 million in synergies. This proven track record gives us confidence in our ability to deliver the identified synergies from CWT. Now moving to guidance. We are very pleased to raise and narrow our full year 2025 guidance to reflect the acquisition of CWT, which closed on September 2, 2025.

There are no changes to our expectations for the core business. We are confident in the midpoint of our previous guidance. We are now guiding to full year 2025 revenue of $2.705 billion to $2.725 billion, which reflects approximately 12% year-over-year growth and adjusted EBITDA of $523 million to $533 million. Versus our previous guidance midpoint, this is $227 million increase in revenue with a $5 million increase in adjusted EBITDA, all driven by the CWT overlay. CWT assumptions for Q4 included an impact on our government business from the current U.S. government shutdown and a continuation of current trends for domestic travel. Please note that CWT is not currently baked into consensus or any sell-side analyst estimates. So this is all extremely exciting top line growth that is not currently reflected in any of the numbers out there and therefore, entirely incremental.

Looking at free cash flow, we now expect to generate free cash flow of $90 million to $110 million. At the midpoint, the $50 million change in free cash flow guidance is driven by the cash impact of CWT. Excluding the cash impact of CWT and approximately $60 million in onetime M&A-related cash costs, we would expect to generate approximately $210 million in underlying free cash flow for the core business. And so turning to next year, we also want to share our preliminary expectations for full year 2026 to help you set up your models now that we have closed the CWT acquisition. We have made bold moves to transform Amex GBT into a software-driven leader in travel and expense. We have now reached an exciting moment with several significant milestones achieved that we expect will accelerate growth.

We expect to continue to demonstrate strong execution in our business with significant new wins, disciplined operating leverage, delivering on the CWT synergies, introducing our new flagship complete T&E product with SAP, rolling out our industry-leading next-gen Egencia T&E solution and continuing to drive productivity and efficiency across the enterprise whilst investing in the business. Our guidance philosophy continues to be based on the trends that we have seen. Our preliminary expectations for full year 2026 is 19% to 21% revenue growth and adjusted EBITDA of $615 million to $645 million, which represents growth of 16% to 22% year-over-year. And as usual, our official full year 2026 guidance will be provided on our next earnings call in early March.

I want to end on why we are so excited about our future and the long-term outlook for the company. We have reached a critical moment with the CWT acquisition and the additional levers for long-term growth and value creation. We have a clear path to consistent double-digit adjusted EBITDA growth, margin expansion and free cash flow conversion, which we will use to drive continued shareholder value. We look forward to providing more detail on the opportunity we see ahead at our Investor Day in March. So we can move into Q&A. Paul and I are joined by Eric Bock, who is our Chief Legal Officer and Global Head of M&A. Operator, please go ahead and open the line.

Q&A Session

Operator: [Operator Instructions]. First question comes from Lee Horowitz with Deutsche Bank.

Lee Horowitz: Two if I could. Maybe as it relates to your 2026 outlook, I wonder what you’re hearing from your customers in terms of their expectations on what the big beautiful bill could mean for corporate spending broadly and how that perhaps informs your preliminary outlook? And then maybe one on the new SAP Concur relationship strikes is quite interesting. I wonder how you’re thinking these tools may serve to help unlock the unmanaged segment in SME more greatly so that we could see that part of your business continue to come online and take share there.

Paul Abbott: Well, thanks, Lee. Thanks for the questions. First of all, in terms of the outlook for 2026, the most recent survey that we did, showed either the same or moderate improvements in terms of the travel budgets for 2026. So I would say we’re cautiously optimistic about a slight uptick in organic growth in 2026. We’re also seeing a noticeable increase in the number of Meetings and Events. I know I’ve mentioned before, Lee, that that’s an area of our business where we get a longer-term view given the booking patterns for Meetings and Events. And in the last quarter, we’ve actually seen a double-digit increase in the number of forward bookings for Meetings and Events into 2026. So again, that’s an encouraging sign as well.

So we’ll provide more details on the ’26 outlook when we give formal guidance in February. But I would say that we are cautiously optimistic about a moderate improvement in organic growth in 2026. Yes, on the SAP Concur partnership, I think I mentioned in my prepared remarks that 80% of the SAP customer base are actually SME customers and we have over 100 million users. And so with this new flagship solution that we are co-developing with SAP Concur, we will have the ability to market that solution into the SAP customer base, which obviously, as I said, a very, very large established SME customer base. So we do think that, that’s going to really help us to accelerate SME growth. And then secondly, Egencia has been our primary product for bringing customers in within the SME segment and also more specifically the unmanaged segment and the ability to integrate now Egencia into Concur Expense, so that it becomes a seamless all-in-one travel and expense solution for those 100 million users is also a significant step forward in terms of our value proposition in that segment.

So both those developments should help us to accelerate our SME new wins in 2026 and beyond.

Operator: We now turn to Duane Pfennigwerth with Evercose ISI.

Duane Pfennigwerth: You touched on it with your comments just now. But can you comment maybe just on where we are in the underlying macro for business travel? We were having a pretty vigorous recovery in the U.S. off of the tariff shocks into the government shutdown. Now it appears the clouds are maybe parting on that front. How would you characterize business travel demand trends now versus maybe the lows of this year back in April or May, and I’m not sure if you agree with that as a trough period.

Paul Abbott: Yes. I think we said last quarter that we were expecting to see an improvement in demand into Q3, and that’s frankly exactly what we saw. And you see that in the numbers that we’ve just shared. If you look at our sort of guide for Q4, we’re also expecting to see some improvement in the organic growth rate into Q4. So I think what we signaled last quarter in terms of an improvement in the demand environment is exactly what we have seen.

Duane Pfennigwerth: Okay. Great. And then on CWT, obviously, you’re acquiring customers, a deeper presence in some industries and a significant synergy opportunity. But I wonder if you could just remind us, is there anything on the technology front or on the software front where you feel like they may have had a relative advantage?

Paul Abbott: I think there are some areas of the business, particularly in the hotel space and also some of the traveler care, travel counselor tools that we are looking at that we think are interesting and that may help us to create more value for customers and also help us to improve productivity in our servicing teams. But when you look at the software solutions, obviously, the main software solutions that we will be going to market with, will be the Egencia solution, which, of course, now will have full integration into SAP Concur Expense, the Neo suite of solutions and of course, now the flagship product that we are developing with SAP Concur, which is complete, which again will be an integrated travel and expense solution. So those will remain the 3 core software solutions in addition to, of course, third-party software that we integrate with as well.

Duane Pfennigwerth: And then just on Concur, I’ll sneak one more in. Sorry about that. Just on Concur, obviously, you’ve worked with Concur for some time. Can you just maybe highlight what is different now about this partnership?

Paul Abbott: Yes, sure. So I think what’s different about this is that we are now actually co-developing a new flagship solution that will lead the industry for travel and expense. We have teams that are working together to fully integrate the solutions. And that is going to mean improved content for customers. It’s going to mean improved savings for customers, and it’s without question, going to be an improved experience. We’re bringing the expertise of both teams together in travel and expense to create a more integrated experience for the user. That experience will be AI-powered. It will be more integrated across travel and expense. There will be one app essentially for everything. And there will be an improved [ UX and improved ] retailing experience for both travel and expense.

So those are the key changes that customers can expect going forward on the Complete product. And then, of course, what’s also new is Egencia will have that integration into Concur Expense. Our Egencia customers really likes the user experience on Egencia, the content, the AI-powered experience. But some customers that are operating in that SAP environment want full integration into SAP Concur Expense, and that’s what we’re going to give them going forward.

Operator: We now turn to James Goodall with Rothschild and Co-Redburn.

James Goodall: So firstly, just coming back to the SAP Complete and Egencia T&E solutions. What are the key metrics or milestones that you’ll be watching and hoping to achieve as these products roll out to the market?

Paul Abbott: I am sorry, would you repeat the question? I think we lost you at the beginning.

James Goodall: Sorry, sorry. So just coming back to the SAP Complete and Egencia T&E solution. What are the key metrics or milestones that you guys are going to be watching and hoping to achieve as these products roll out to the market?

Paul Abbott: Yes. I think what we’re expecting, frankly, from the new strategic alliance with SAP is to accelerate our growth. And we’re going to have a flagship product that gives us competitive advantage. And therefore, we’re expecting that to accelerate the growth of our business. We’re obviously going to be cross-selling both the Complete product and the Egencia product into the SAP customer base. So again, we’ll be looking for increased growth. We’ll also be looking for improved customer retention because we’re going to be able to deliver customers with a better experience. We’re also going to be bringing more content to customers and more savings. So looking at the savings that we’re delivering to customers as well, will be an important metric to track.

And then, of course, it tracks very much to the overall digitization of the business and continuing to increase the share of digital transactions, which we referenced in the presentation is now at 82%. And obviously, we expect that metric to continue to grow. And that ultimately feeds into improved gross margin and overall margin expansion for the business. So those are the key metrics that you should expect us to track and report.

James Goodall: Great. And then just secondly, just thinking about the synergy number of $155 million. I mean that number hasn’t now changed for 2 years, I guess, since you first almost 2 years since you outlined the acquisition. But now that you’ve got a bit more under the numbers with CWT, I mean, do you see any potential for incremental synergies to be unlocked, whether that’s incremental cost savings or revenue synergies as well?

Paul Abbott: Well, I think what we’ve been able to do really post close is to obviously pressure test that synergy number in more detail. And when you own and operate the business, you have the ability to do that. And so we now have just a very high confidence level of delivering that $155 million of synergies. That, just as a reminder, is 100% cost synergies. So that is a net cost synergy number. There, of course, can be opportunities to increase revenues, and we’re certainly looking to cross-sell our products and services into the CWT customer base, but we have not baked any of those revenue synergies into our business case or our outlook. But we absolutely have a very high confidence level on $155 million of synergies. And as Karen mentioned in her remarks, $55 million of that, we already have been able to identify an action. And of course, $100 million in additions still ahead of us.

Operator: [Operator Instructions]. We now turn to Stephen Ju with UBS.

Stephen Ju: So on the Egencia TTV disclosure, I think, trailing 12 months of about $8 billion, has this segment more or less recovered back to the pre-pandemic levels? And I think secondarily, at the same time, the $8 billion of TTV is on potentially an addressable market of $800 billion plus. I mean that’s just 1% of the market. So availability of online and software solutions for travel is something that’s probably not lost on anybody. So I mean, between Egencia and competitors, we’re probably still at less than 10% penetration. So what do you think the unlock here is to get the SMBs onboarded and using Egencia?

Paul Abbott: Yes. Thanks, Stephen. Good question. And it’s worth remembering that Egencia is a very important part of our SME segment, but our SME segment is approximately 50% of our overall SME volume. So our SME volumes are also on other solutions outside of Egencia. But your point is absolutely correct. There is a significant runway for growth in the SME segment. The investments that we’re making in Egencia to evolve that product into a travel and expense solution will obviously, I think, be an opportunity for us to accelerate growth in the SME segment. If you look at the partnership that we just announced with SAP Concur, that gives us the ability to sell our solutions into that SAP customer base that I mentioned earlier. So we expect both of those developments to help us accelerate growth. But look, your point is absolutely valid. There is a huge opportunity to grow in what is still a very, very large and very fragmented segment.

Stephen Ju: Okay. And secondarily, I get that there’s probably a relatively higher failure rate among SMEs, but has Egencia and indeed your entire portfolio now, has there been any signs that you’ve been able to hold on to some of these SMEs as they grow and continue to become bigger companies?

Paul Abbott: Yes, absolutely. You’re right, there is more churn in the SME customer base. Our retention is around 94% in SME versus global multinational is around 98%, which obviously brings us to our average, which has been tracking around 95%, 96%. So you’re always going to have more churn within the SME customer base. But our retention rates are very high. And I think what we did see at the back end of last year and the beginning of this year is we did see some softening in the organic performance, the same-store sales in SME. And I think it’s been well documented that, that’s driven primarily by macroeconomic conditions. And I’m pleased to say that we have seen a steady improvement in that organic performance as we’ve gone through 2025.

So again, we’re cautiously optimistic about Q4 and into 2026, continuing to see an improvement in the organic performance, but also the investments we’re making in our sales and marketing channels, plus the investments we’re making in Complete and the investments in Egencia set us up to accelerate our growth in the SME segment.

Operator: We now turn to Toni Kaplan with Morgan Stanley.

Toni Kaplan: And thanks for your comments on the AI stuff in the prepared remarks. We’ve been seeing some new platforms in the space. And we’re wondering where do you see the place for sort of those platforms in the market versus — and I know that you have AI embedded in yours as well. But do you expect that the AI platforms will be more sort of targeted in the SME part of the market? And what type of customer would benefit from using a platform that is like essentially AI forward versus Egencia, for example?

Paul Abbott: Well, I think what’s really exciting about where we are now on AI and our digitization program is that we’re seeing real results, both in terms of revenue performance and cost performance, and I referenced some of those results in my prepared remarks. We’re seeing an impact to revenue and conversion through the AI-enabled features that we have in Egencia. We’re also seeing cost reduction from the AI solutions that we’re implementing across our servicing channels. And so I think AI is very much a tailwind for us in both improving revenue and conversion, improving the customer experience and also taking cost out of the business. And as I said, I think we are starting to see results and real P&L impact on both fronts.

In terms of how the broader competitive environment is going to evolve, we are already developing our own Agentic AI capabilities and also working with third-party Agentic solutions, and what we’re seeing is that Agentic AI is definitely going to start to become an important channel. But it’s going to be one of, I think, many channels that customers use, and they’re going to want Agentic AI to be integrated into whether it’s chat, whether it’s voice and all of the other channels that those customers use to interact with us. And it’s going to be important for all of those channels to make sure that they are connected up to the same marketplace and the same content, the same traveler data and traveler preferences, the same company data and company policy data.

And what we’re finding is that the fact that we essentially orchestrate all of that end-to-end, and we are the ones that actually hold and manage all of that data that it’s actually our technology stack and data that is incredibly important in order to actually make that Agentic experience work, whether it’s our Agentic AI experience or third-party Agentic AI. So I think you’re going to see it grow as a channel. I think you’re going to see many different versions of Agentic AI that are powering that channel. But I think you’re going to see that effectively all integrate into the technology stack and data that we have, so that customers have a fully integrated and entirely consistent experience across all channels.

Toni Kaplan: Great. And just thinking about — you shared preliminary expectations for 2026. The adjusted EBITDA growth there, are you embedding cost savings from AI in that number? And could you actually do better than that? It’s a nice number, but can you do better than that if you are able to find even more AI efficiencies next year?

Karen Williams: So thanks for the question, Toni. We’ve given the preliminary expectations based upon what we see today. And there is margin improvement along with obviously then the synergies embedded in them that we’ve mentioned from a CWT perspective. So it is based upon everything that we feel confident about at this point.

Operator: This concludes our Q&A. I’ll now hand back to Paul Abbott for any final remarks.

Paul Abbott: Well, look, thank you very much to everyone. Before closing, I do want to thank our team for their tremendous commitment to our customers and the strong results that they have delivered throughout this year and including the third quarter. Thank you to all of you for joining us today and your continued interest in American Express Global Business Travel. Thank you, everyone.

Operator: Ladies and gentlemen, today’s call has now concluded. We’d like to thank you for your participation. You may now disconnect your lines.