American Express Global Business Travel saw its revenue jump by 22 per cent year-on-year in the second quarter of 2023 following the “normalisation” in travel volumes and “excellent” growth in the SME segment.

The company announced on Thursday (10 August) that revenue rose by 22 per cent to $592 million in Q2 of 2023, compared with $486 million in the same quarter of 2022.

Amex GBT said that transactions rose by 12 per cent year-on-year, while total transaction value (TTV) increased 13 per cent to $7.34 billion in Q2. Net cash provided by operating activities totalled $46 million and Free Cash Flow exceeded projections to reach $19 million, which chief financial officer Karen Williams described as a “pivotal moment” in the company’s post-pandemic recovery.

The TMC, which has been increasingly targeting the SME business travel market, added that transactions through these smaller and mid-sized organisations also increased by 15 per cent year-on-year. 

Over the past 12 months, Amex GBT has won $2.3 billion in annual business from SMEs. As seen in the company’s Q1 report, approximately 30 per cent of new SME client wins were from organisations whose travel had previously been “unmanaged”.

Paul Abbott, Amex GBT’s CEO, said: “We reported strong second quarter 2023 results, including the highest quarterly revenue in our company’s history and strong Adjusted EBITDA growth…. Specifically, we delivered strong SME growth, including yet more traction in the unmanaged segment, and record SME new wins.”

Abbott added the pipeline for SME business “looks really strong” and that the unmanaged segment remains “an area of focus” for the TMC.

“The value proposition is helping to increase our win rate [among SMEs] given the broader set of offers we have for the market,” he said during an earnings call on Thursday.

The TMC’s Neo and Egencia online booking tools saw 20 per cent transaction growth in the second quarter, and the company also enhanced its Slack integration with the addition of live agent chat services. 

Despite Amex GBT president Drew Crawley labelling NDC as a “distraction” at the Business Travel Show Europe in June, the company’s NDC pilots with American Airlines, Air France-KLM and Lufthansa were listed as a highlight in its Q2 report, with Abbott adding that some 1,500 companies now access NDC content via the company.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 126 per cent year-on-year to $106 million. The TMC posted a net loss of $55 million (with a net loss margin of 9 per cent) as operating expenses increased 17 per cent compared to the same period last year.

However, Williams stressed that operating costs are expected to trend down in the second half of the year following the company’s major restructure in January.

Following a “fantastic” second quarter result the TMC has raised its full-year outlook to a range of between $2.25 billion and $2.28 billion (previously a range of $2.17 billion to $2.22 billion), which represents a year-on-year increase of between 22 per cent and 23 per cent. 

Abbott said Amex GBT’s customers also expect continued “solid” year-on-year growth in travel spend for the latter half of the year. Based on an August survey of the TMC’s top 100 customers, 84 per cent expect H2 travel spend to remain the same as or increase on 2022 levels, with the highest growth expected across the industrial and insurance sectors, as well as in communications and financial services.

Commenting on the impact of inflationary pressure, Abbott said the average ticket price in Q2 was two points higher than Q1, while hotel average daily rates (ADR) were 3 per cent higher compared to the previous quarter. However, he expects to see some “levelling off” of prices in the second half of the year.