Good morning and welcome to the American Express Global Business Travel Third Quarter 2022 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, Barry Sievert. Please go ahead, sir.

Hello, and good morning everyone. Thank you for joining us for our third quarter earnings conference call. This morning we issued an earnings press release, which is available on the SEC 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 forward-looking statements that represent our beliefs or expectations about future events, including the duration and effects of COVID-19, industry 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, our registration statement on Form S-1 originally filed on September 9, 2022, the related prospectus filed on October 3, 2022 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 Expenses and 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 on the call today are Paul Abbott, our Chief Executive Officer, and Martine Gerow, our Chief Financial Officer. Also joining for the Q&A session today is Eric Bock, our Chief Legal Officer and head of global M&A. With that, I will now turn the call over to Paul. Paul?

Thank you, Barry. Welcome and thank you for joining us for our third quarter earnings call. I’d like to kick off by reviewing the third quarter highlights before turning it over to Martine to take us through the financials. We reported strong third quarter revenue and earnings. Revenue totaled $488 million, up 147% over Q3 2021. Revenue recovery for the third quarter reached 72% of 2019 levels, up 7 percentage points from the second quarter. Our Adjusted EBITDA was $41 million, with a fall-through on year-over-year revenue growth of 67% of pro forma 2021 levels. These strong financial results are driven by the continued recovery in business travel, share gains and our increasing momentum in the SME segment. Transaction recovery reached 71% of pro forma 2019 levels in the third quarter, up two points versus 69% in the second quarter. As expected, travel demand strengthened meaningfully in September. Post-Labor Day demand drove a 43% increase in transaction volume from July to September to reach the strongest volumes we have seen throughout the recovery. The momentum continued in October with transaction recovery at 76% of 2019 levels. The continued business travel recovery, our share gains and strong momentum in the SME segment give us confidence to reiterate our full-year revenue guidance of $1.8 billion to $1.85 billion and full-year Adjusted EBITDA guidance of $90 million to $100 million. Amex GBT has a significant runway for growth, and our new wins momentum shows that we are delivering on this growth opportunity. New Wins Value over the past twelve months totaled $4.1 billion, representing 11% of our 2019 TTV. We also continue to accelerate our SME wins. In the SME space, we benefit from offering a choice of market leading solutions - Amex GBT, Egencia and Ovation in a very large, unconsolidated segment…

Thank you, Paul. And hello, everyone. As you heard from Paul, we continue to make strong progress against our strategic and commercial priorities. And our financial performance was also strong in the third quarter, with sequential improvements on four key metrics, transaction recovery improved by 2 points, revenue recovery improved by 7 points, adjusted EBITDA fall-through improved by 4 points, and we reduced our cash usage by 36% as compared to Q2 2022. Let me now turn to our third quarter results on a reported basis. Year-over-year, Transaction Growth was 207% in the third quarter. Total Transaction Value increased 270% to a total of approximately $6.6 billion. Average transaction value increased 21%, largely driven by the strong recovery in international bookings. Our third quarter revenue increased 147%, to a total of $488 million. Travel Revenue was up 224% in the third quarter, above transaction growth, and Product and Professional Services Revenue increased 29%. Within Product and Professional Services, Meetings and Events revenue drove over half of the growth, as demand for internal and external meetings and events continued to rebound strongly. As shared on previous calls, growth in management fees was more limited as compared to 2021, because this revenue component was relatively protected from the reduction in demand from COVID-19. Adjusted Operating Expenses increased 64% in the third quarter, which compares favorably to a 147% increase in revenue. As a result, we delivered $41 million of positive Adjusted EBITDA for the third quarter, an improvement of $116 million year-over-year. And Free Cash Flow improved $5 million to a total of negative $112 million. This was driven by the reduction in operating loss, which was largely offset by cash utilized to build back working capital to support the 35 point increase in transaction recovery between third quarter 2021 and third…

Thanks Martine. Looking beyond the end of this year, we are currently working through our 2023 planning process. And while we aren’t ready to establish 2023 guidance at this point, I wanted to provide some insight into how we’re thinking about 2023. We obviously recognize that the macroeconomic outlook for 2023 has become more challenging over the last few months, but it is frankly difficult to predict the impact this may have on business travel demand in 2023. As we have shared before, business travel demand has grown at or above GDP for decades, so it is logical to assume some impact if GDP continues to slow or decline. However, we are in unique circumstances and there are several strong tailwinds for 2023.First of all, the business travel recovery continues, and our customer outlook remains strong. A survey of our top 125 customers in October reported that 95% expect their 2023 business travel spend to increase or stay flat to 2022. Also, an October survey conducted by Morgan Stanley of 100 global travel buyers predicted travel budgets for 2023 to be approximately 98% recovered versus 2019, and that was up from 94% in their midyear survey. Positively, nearly half of the respondents in that survey expect 2023 budgets to increase versus 2019. Second, distributed teams and the hybrid work model are creating new business travel demand as companies bring their people together for training, motivation and collaboration. And we already see this in our current Meetings & Events results, as well as our customers’ Meetings & Events forecasts for 2023. Third, we do expect airline capacity to improve throughout 2023. And this incremental supply will support increased demand. And fourth, we expect to continue to gain share, including momentum in the SME segment and continued momentum converting unmanaged travel spend…

Thank you. I wanted to follow up on the 4Q EBITDA guidance. It looks like at the midpoint, the guidance is below 3Q. And just wanted to understand if it was due to seasonality or what factors might be driving that just because it seems like you're optimistic on continued recovery in this quarter, as you just mentioned, the EBITDA fall-through was very good. So just wanted to understand why the moderation in 4Q EBITDA? Thanks.

Toni. Thank you for the question. So it's really seasonality in the fourth quarter has some of our two lowest months we see in November and December. And if you look at the fall-through that is implicit in that guidance, the fall for the fourth quarter is actually 70%. So same profitability trends, but a much lower revenue base because it's the fourth quarter.

Terrific. And I wanted to also ask if you could help us with some of the puts and takes about free cash flow for 2023. I know, Martine, you mentioned in the prepared remarks, you expect it to be positive and helped by working capital. Just I guess what's embedded with regard to interest expense headwinds, tax, some of the items that are below the line? Thanks.

Sure. So we expect our working - we think our cash flow to turn positive at some point in time during 2023. We're still working through our 2023 planning, so determining exactly when that will take place. We're still working through that. And you should have in mind that there is seasonality in our cash flow as well. With respect to interest rates, given the structure of our debt, interest rates is likely to be in the 10% range, if you assume LIBOR 4.5% next year, given that part of our 60% of our debt is actually swapped, that's probably equates to $120 million of interest for next year.

Terrific. Thanks so much. Appreciate it.

Thank you. The next question comes from the line of Lee Horowitz of Deutsche Bank. Please proceed.

Thanks for taking the question. This is Sharrie Sawn [ph] n in place of Lee Horowitz. And thanks for the additional color that you provided on the overall macro environment. It strikes us that your 2023 outlook, obviously incorporates some of the macro concerns that we're seeing across the economy. And with this in mind, how do you think about managing your headcount relative to the fairly benign recovery that you're expecting next year? And relatedly, how do you think about investments to the extent if macro environment proves to be a little bit more challenging than what you're currently expecting? Thanks.

I think the way that we look at that is, obviously, we're still operating in an environment where there's a fair amount of uncertainty. So we have to make sure we've got flexibility in the model. And I think we've demonstrated that we have that flexibility in the past. As Martine mentioned and I mentioned in my prepared remarks, the important element for us is to make sure that we're delivering the right level of fall-through. We can't predict with absolute precision exactly what the revenue recovery is going to be in '23. What we can make sure is that whatever that revenue recovery is that we are -- that the business model is converting that revenue into the appropriate level of margin and profitability. So we will manage our expenses to ensure that we deliver the fall-through that we need. That's essentially how we look at it.

That's very helpful. And also just another question related to another point that you made about distributed teams being tailwind [ph] to your business moving forward. Just curious if there is any way that you can help us better understand the size of the tailwind through these kind of new hybrid working environment has been to date and sort of how you expect this - like what kind of incremental benefits that we're going to see from this going forward?

Yes. Look, it's a great question. I don't know how to put a finite dollar number on it. But what I can say is that our Meetings and Events Group, we have a division that focuses specifically on meetings for under 50 people. And that is already above 2019 levels. And in a recent survey that we did with our customers on 2023 M&E forecast, we're also seeing projections for 2023 above 2019. So we definitely have data points that I think prove that the trend is real. But being able to size it and honestly isolate exactly what share of the recovery that represents is very challenging.

Got it. That’s very helpful. Thank you.

Thank you. The next question comes from Steve Ju of Credit Suisse. Please proceed.

Thank you. So just briefly on the SMB segment. So why do we think the recovery for the SMBs are at - I think you said that it's 80% versus 2019 is so far ahead of the rest of the industry overall at 71%. And does this mean that the recovery for, say, your larger clients are still lagging the overall industry. So I guess there's more sort of white space ahead for the recovery. And I guess what is the strategy to convince the SMEs who may be using perhaps one of the OTAs to book something that they really need to use your products? Because in order for you to serve as a replacement, it has to be materially better than what they are used to using? Thanks.

Sure. Yes. Well, I think there are a number of factors as to why the SME segment is outperforming global multinational. I think the SME segment has actually for many years, been a faster-growing segment. Secondly, we are gaining share in that segment. So that's a factor. Third, we are seeing this conversion from unmanaged to managed travel, which is a factor. And I think finally, small to midsized companies have frankly been quicker to get back to a kind of operating model post-COVID than some larger companies that have been a bit slower to return to office and just slower and more cautious in terms of returning to travel. So those are, I think, the main reasons as to why the SME segment is outperforming. But that's a trend we expect to continue. That's why really through 2019 and 2020, we placed a series of bets on the SME segment, expanding our own sales force with the purchase of agency innovation to make sure that we have essentially the market-leading solutions for SME customers and different sub-segments of the SME customer base. Now in terms of why a customer would move from an OTA or from an airline direct to proper managed travel program, I think there are several key reasons. First of all, savings, access to our preferred extras content delivers significant savings. First of all, you're getting access to a marketplace that has the most comprehensive and the most competitive content in the industry. You're not going to a single supplier site, you're getting the most comprehensive, most competitive content in the industry. On average, our SME customers book our own negotiated content or unique rates 40% of the time. So they're getting significant savings. Secondly, they're getting far superior service. I don't know if you've tried to contact an OTA, if your flights canceled or you're facing some disruption, it's a pretty transactional experience. We offer high-quality 24/7 support, mobile desktop voice integrated around the world. So you're getting significant savings you're getting significantly improved service. And also, you're getting reporting and benchmarking and analytics that help the company manage the spend, you're getting full transparency of your spend across the entire company, which you're not going to get if your employees are all out there doing their own thing on various supplier or OTA websites. So those are the three key reasons. And honestly, they're very, very compelling. You get better savings, you get better service and you get full transparency and management of your company spend.

Thank you.

Thank you. The next question comes from the line of Duane Pfennigwerth of Evercore ISI. Please proceed.

Thank you. I wanted to ask you about the intermediate term shape of corporate recovery. So not theoretical 2023 but things you can actually see in your bookings. We've seen a nice sequential pickup since the summer here into September and into October. Do you think we plateau at these levels until early next year with new budget cycles? Or are there geographies where you expect sequential improvement here into 4Q?

Yes. Well, I think in this environment is always difficult looking ahead and making accurate predictions. But I do think - I'd refer you back to the tailwinds that I mentioned earlier. I mean I was doing that in the context of 2023, but I think they're all relevant in the context of Q4 as well. I mean more specifically, in the fourth quarter, if you look at October, I think travel restrictions on the 1st of October are removed in Canada. I think we saw travel restrictions and quarantine removed in Singapore and Hong Kong. We've also seen Japan open up very recently. And so the impact of those markets and routes opening up, we've not really seen in the third quarter, you're going to see some benefit from that, I think, in the fourth quarter. So, so far, we are not seeing kind of an impact of the macroeconomic conditions in the recovery numbers. As I said before, the recovery has strengthened in September. It strengthened again in October. Now what I can't say is if macroeconomic conditions were different, we would be at 80 or 82. That's obviously speculation. But what we continue to see is signs of good solid recovery through September and October. And I think we have still some tailwinds that should carry us through the fourth quarter and into 2023.

That makes sense. Thank you. And then just for my follow-up on staffing, are you finding it easier to hire where are you on staffing relative to optimal maybe at this point in time versus, say, the second quarter? Are you catching up?

Yes. We have absolutely the number of target headcount that we were expecting at this point in time. We have done a lot of hiring in order to staff up for the peak, which was really September, October. So we are now focused on training and improving the productivity of the people that we have brought into the organization. But broadly speaking, we have the headcount that we need to carry us through the next period. So yes, I mean we've been able to hire the number of people that we acquired.

Thank you very much.

Thank you. There are currently no additional questions registered at this time. [Operator Instructions] There are currently no additional questions registered at this time. So I will pass the conference back over to the management team for closing remarks. Barry Sievert Well, finally, thank you very much to all of you for joining us today. And in closing, I would like to extend thanks to our team across Amex-GBT for their dedication to our customers and the strong results that they've delivered. Thank you, all of you for joining us. We look forward to continuing to update you in the future.

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.