Transactions at Amex GBT grew 5 percent year over year in the third quarter, which Abbott said came from a combination of increased business travel demand and share gains. For the travel management company's global multinational customers, transactions were up 8 percent year over year, while SME transactions increased by a more "muted" 2 percent, Abbott said.
Abbott noted that 2 percent increase was higher than the previous quarter's increase of 1 percent, and he indicated further improvement could be on the horizon.
"Hopefully, that is a stabilization of the decline in the growth rate we've seen over the last few quarters," Abbott said in an earnings call on Tuesday. "It's very well-reported that small and midsized business have certainly been feeling the pressure of higher prices and much higher interest rates. Now that we're seeing the interest rates gradually move down in the Eurozone, the U.K. and the U.S. … we think that will improve confidence with small-to-midsized businesses as we go into 2025."
Amex GBT also is counting on growth in the segment from client wins. Over the past 12 months, the TMC reported $3 billion in client wins in terms of transaction value, and more than two-thirds of that came from the SME segment. Abbott said the company has been investing to grow the segment, including in its sales and marketing channels.
"It's not all about the macro conditions," Abbott said. "We obviously have to focus on things we can control, and that's making sure we're driving greater productivity and greater results from all of our SME sales and marketing channels."
Among global multinational clients, the pharmaceutical and healthcare industry had the highest transaction growth in the third quarter, up 19 percent year over year. Clients in the automotive industry as well as the and financial services and insurance industry each increased transactions by 13 percent. Abbott said that "almost all top industry verticals" saw "very solid growth," and technology growth, up 5 percent year over year, "returned to more normalized levels as same-store cycled over the technology ramp-up we saw in the third quarter of 2023."
The most recent survey of Amex GBT's 100 largest customers showed they expected fourth-quarter travel spending to be up 5 percent year over year, Abbott added.
On a regional basis, the Asia-Pacific region had the highest transaction growth in the third quarter, up 11 percent year over year. Transactions in the Americas were up 6 percent year over year, and they were up by a smaller 2 percent in Europe, the Middle East and Africa, which Abbott said stemmed from curtailed business travel demand during the Olympics in Paris.
Amex GBT's total transaction value in the third quarter grew 9 percent year over year to $7.8 billion, which Abbott said stemmed from both demand growth and higher air and hotel rates. The company's total revenue grew 5 percent year over year to $597 million, with travel revenue up 5 percent year over year and product and professional services revenue up 2 percent.
The company reported a net loss of $128 million for the quarter, which it attributed to "unfavorable fair value movements on earnout derivative liabilities, loss on early extinguishment of debt related to debt refinancing and a higher provision for income taxes."
Abbott added that Amex GBT continues to expect its acquisition of CWT will close in the first quarter of 2025 as it works through regulatory requirements and challenge
Tags: Paul Abbott, Amex GBT
