Global Business Travel Group, Inc. (NYSE:GBTG) Q1 2024 Earnings Call Transcript

Global Business Travel Group, Inc. (NYSE:GBTG) Q1 2024 Earnings Call Transcript May 7, 2024

Global Business Travel Group, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. And welcome to the American Express Global Business Travel First Quarter 2024 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, Jennifer Thorington. Please go ahead.

Jennifer Thorington: Hello. And good morning, everyone. Thank you for joining us for our first quarter 2024 earnings conference call. This morning, we issued an earnings press release, which is available on sec.gov and on our website at investors.mxglobalbusinesstravel.com. A slide presentation, which accompanies today’s prepared remarks is also available on the Amex GBT Investor Relations webpage. We would like to advise you that our comments contain certain forward-looking statements that represent our beliefs, our 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 in 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, 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 Head of Global M&A. With that, I will now turn the call over to Paul. Paul?

Paul Abbott: Thank you, Jennifer. And welcome to everyone and thank you for joining our first quarter 2024 earnings call. In the first quarter, we delivered strong financial results with continued share gains, significant margin expansion and 24% adjusted EBITDA growth to reach the highest first quarter adjusted EBITDA in our company’s history. Total transaction value of TTV grew 9% in the quarter and revenue grew 6%. Adjusting for fewer work days in the first quarter this year versus last year, growth would be 10% and 7%, respectively. These strong results were in line with our expectations and put us on track to deliver against our full year guidance. Increased demand for our leading software and services resulted in continued share gains.

See also 13 Best Reddit Stocks to Buy Now and 15 Fastest Growing Cities in California.

Q&A Session

We reported new wins value of $3.3 billion over the last 12 months. This includes $2 billion of SME new wins, demonstrating continued progress with this large profitable customer segment. Our focus on driving operating leverage is also clearly evidenced in our Q1 financial results. Adjusted operating expenses increased just 2% compared to 6% revenue growth, and we drove significant adjusted EBITDA margin expansion of 300 basis points year-over-year. Our progress to positive and accelerating free cash flow remains an important focus for the company, providing us additional opportunities to invest in our growth and drive shareholder returns. We generated positive free cash flow of $24 million in the quarter, an improvement of $133 million year-over-year, and we continue to lower our leverage ratio.

Importantly, in the first quarter, we announced that we have entered into an agreement to acquire CWT. The transaction value of approximately $570 million represents a highly attractive post-synergy multiple of 2.5x adjusted EBITDA, including approximately $155 million of identified annual run rate cost synergies. This accretive transaction is expected to close in the second half of this year and will accelerate our growth and create significant shareholder value. So our momentum continued in the quarter as we execute on our strategy and deliver strong financial results. Starting with transaction growth, transactions were up 6%, driven by increased demand for business travel and our share gains. Please note there was a negative workday timing impact of approximately one percentage point in the quarter, which will have an offsetting benefit over the balance of the year, largely in the second half of 2024.

So on a like-for-like basis, transactions were up 7% in the quarter. Please also note transaction growth, which was previously reported on a gross basis, is now reported on a net basis to exclude cancellations, refunds and exchanges. This better aligns transaction growth with the way that we measure and recognize TTV and revenue. TTV grew by 9%, driven primarily from transaction growth as well as higher average ticket prices and higher hotel room rates. On a workday adjusted basis, TTV was up 10%. Revenue was up 6% to reach $610 million for the quarter, driven by growth in transactions, TTV and increased demand for our products and professional services. On a workday adjusted basis, revenue was up 7%. Finally, our focus on margin expansion and operating leverage resulted in adjusted EBITDA growth of 24% to $123 million.

Solid transaction growth was driven by share gains and increased demand for business travel from our diverse and premium customer base. Looking at our trends in more detail, which we’ve worked day adjusted here, so you can see the true momentum. The absolute growth was in line with our expectations. However, the shape was different. We saw a relatively faster growth from global multinational customers compared to SME customers. Our first quarter global multinational transactions were up 11% and SME transactions up 5%. In global multinational, we’ve seen very positive same-store sales growth across several sectors, particularly technology up approximately 30% in the first quarter. We also saw double-digit growth in professional services, pharma, mining, energy and utilities.

Our most recent customer survey shows that our top 100 customers now expect travel spend to be up approximately 8% in the full year 2024. This is an improvement of four percentage points versus the previous survey, and it’s reflected in these strong Q1 trends. The percentage of clients expected to spend more on travel over the balance of this year has also increased by three percentage points. For SME, growth has slowed by three percentage points over the last two quarters, largely driven by slower same-store sales. We believe this is being driven by higher interest costs and sustained higher inflation, resulting in stronger controls on SME spending. This is a broader trend with U.S. SME customers that American Express also highlighted in their Q1 results.

Domestic and international air transactions, both up 5%, air TTV was up 11%, with very strong growth in U.S. air TTV of 14%. Growth in hotel transactions was 9%, which continued to outpace the 5% growth in air transactions. This reflects industry trends as well as our intentional focus on increasing our volume of hotel bookings as we continue to strengthen our hotel content and display and provide customers with more value and more choice. Finally, here on a regional basis, transaction growth was 7% in both the Americas and EMEA. Asia Pacific continues to lead the growth rates at 13%. So turning to the commercial highlights. We continue to gain share and reported total new wins of $3.3 billion over the last 12 months. Importantly, customer retention remains high at 96%.

Our biggest opportunity remains with SME customers, which represents approximately $950 billion of travel spend. We are already a leader in managed travel in this segment. But 70% of this opportunity is not currently in a managed travel program. As our progress clearly demonstrates more and more SME customers are recognizing the value of our leading software and services and a professionally managed travel program. As a result, SME new wins over the last 12 months totaled $2 billion. Moving on to our product and technology highlights. 79% of our transactions came through digital channels in the first quarter. Over 60% of the digital bookings now come through on our own software platforms, Neo and Egencia. In our Neo1 spend management platform, we saw 10% growth in customer count in the first quarter.

Our recently announced partnership with American Express to integrate virtual cards into Neo1 is also gaining traction. Customers are now issuing virtual cards within the Neo1 to cover additional spend use cases and they’re using virtual cards to set budgets at an individual level. And this brings better control over employee spend with purchasing, travel and expense data all in one place. Finally, of course, an important event in the first quarter was our announcement that we have entered into an agreement to acquire CWT. This agreement clearly shows that we are executing against the significant M&A opportunity in a large and fragmented industry and delivering on our priorities to drive growth, deliver cost synergies and shareholder value.

The acquisition of CWT will grow our revenues by 1/3 with the potential for significant earnings contribution over time. Our integration teams have now been established, and our proven track record gives us confidence that we can achieve the $155 million in annual run rate cost synergies that have already been identified. This results in a highly attractive post-synergy multiple of 2.5x adjusted EBITDA. We project the acquisition to be neutral to EPS in the first year and accretive thereafter, driving significant shareholder value. We continue to expect closing to occur in the second half of 2024, subject to customary closing conditions, including the receipt of certain regulatory approvals. And now I’d like to hand it over to Karen to discuss the financial results in more detail before moving to our 2024 outlook.

Karen Williams: Thank you, Paul, and hello, everyone. I’ve previously talked about my three key priorities when it comes to managing our financial performance, which are focused on accelerating cash flow generation, driving operating leverage and continued margin expansion and importantly, creating capacity to invest and drive long-term sustained growth, both organically and through strategic M&A. I’m really happy with the progress we have made in all three areas. Our solid revenue growth substantially higher earnings, significant margin expansion and positive free cash flow are testament to this. So now let’s turn to our financial performance in more detail. As you heard from Paul, revenue reached $610 million, up 6% year-over-year, largely driven by transaction growth.

This was in line with our expectations for the first quarter and reflects known factors including the calendar effect from workday timing. TTV grew 9% in the quarter, primarily driven by transaction volume and also reflecting increased average airline ticket prices and hotel room rates. Revenue yield, which we define as revenue divided by TTV, declined modestly in the quarter due to two factors. First, non-TTV driven components of the revenue base, as a reminder, our revenue model is driven 50% by transaction volume, 30% by TTV and 20% by product and professional services revenue, which is largely recurring, so only 30% of our revenue benefits from higher sales prices. Second, the continued shift to digital transactions is in line with our strategy and has a positive impact to adjusted EBITDA margin but lowers revenue yield.

These factors were anticipated and incorporated into our full year 2024 guidance that we provided last quarter. Turning to expenses, which are a key area of focus for us. Cost saving initiatives and productivity improvements helped offset the investments we are making in technology and content, including our software platforms and AI. This resulted in adjusted operating expense growth of just 2% year-over-year versus revenue growth of 6%. This strong operating leverage translated into 300 basis points of margin expansion and adjusted EBITDA growth of 24%. Adjusted EBITDA of $123 million and adjusted EBITDA margin of 20% are both records for the first quarter. Finally, we achieved free cash flow generation of $24 million, an increase of $133 million year-over-year.

Continuing the momentum this was also a milestone to reach positive free cash flow in the first quarter, which seasonally is our lowest quarter for cash flow generation. This was driven primarily by our working capital actions, which I have discussed on previous calls, as well as timing factors that will smooth out over the balance of year. Our leverage ratio or net debt divided by last 12 months adjusted EBITDA is 2.2 times as of March 31, 2024. This represents a very significant step down for us as a company. In March 2023 this stood at 4.5 times. And as you can see from the chart on this slide, the momentum is a critical proof point that demonstrates our discipline on the balance sheet and we are within our leveraged ratio target range of 1.5 to 2.5 times.

As mentioned during our full year earnings call, the reduction in our leverage ratio in Q1 drove 75 basis points of interest rate reduction on our outstanding term-loan. In total, since Q4 2023 we have triggered a reduction of 150 basis points, resulting in approximately $25 million of annual interest expense savings. And as our non-call option rolls off in July 2024, we will have the opportunity to refinance our debt and further reduce our interest expense. Now I’d like to turn our attention to the balance of year. On our last earnings call, we shared our powerful financial model with all of you and how it positions us for industry leading returns. First, we expect business travel demand from our premium customer base to grow above GDP, as it has done consistently for several decades prior to the pandemic.

Second, we expect to continue to grow ahead of the market by driving share gains with our differentiated value proposition. Third is margin expansion. We are laser focused on a disciplined cost structure and margin expansion. Our operating leverage is forecasted to drive 18% to 32% adjusted EBITDA growth in 2024. Fourth, capital deployment. We’ve talked about the pivotal moment we’ve reached in our business where our positive free cash flow can fund incremental growth opportunities. And finally, we have shared before how M&A presents an opportunity to further accelerate the strong performance you have already seen in our business. The pending acquisition of CWT is a powerful example of the incremental value we can create. And so let’s turn to full year 2024 guidance.

Please note our guidance does not incorporate the impact of CWT, which we expect to close in the second half of the year. We are reiterating our guidance for full year revenue of $2.43 billion to $2.5 billion, which represents growth of 6% to 9%. We expect same store sales to contribute 2 percentage points to 5 percentage points for full year revenue growth in 2024. On top of this, we expect net new wins to contribute approximately 4 percentage points of additional growth. We expect revenue growth to accelerate in the second half of this year due to the shape of our new wins rolling on and positive workday timing impact. We expect the shape of our revenue yield to be similar to last year with the lowest revenue yield in Q1 and the highest revenue yield in Q4.

And as discussed, we are very focused on driving operating leverage and margin expansion, which scales 6% to 9% revenue growth with 4% to 5% expense growth and drives significant adjusted EBITDA growth of 18% to 32% in our 2024 guidance through a range of $450 million to $500 million. This reflects expected margin expansion of 150 basis points to 350 basis points to reach a full year 2024 adjusted EBITDA margin of 18% to 20%. And so it’s important to note that this strong margin expansion is net of significant investments and future growth, particularly in driving our sales and marketing engine, our software platforms and AI. In 2024, we will benefit from the carryover of some of our cost transformation initiatives and will additionally realize incremental benefits from our continued focus on productivity across the enterprise.

We expect adjusted EBITDA in Q2 to be largely in line with Q1, and over the second half of this year we expect similar levels of adjusted EBITDA in Q3 compared to Q4. This seasonality is different than last year due to the timing of cost savings and continued momentum we are driving with regards to productivity and margin expansion. Finally, we are targeting free cash flow conversion of approximately 25% of adjusted EBITDA, this means we expect to generate in excess of $100 million of free cash flow in 2024, or more than double our 2023 free cash flow. This significant step up is driven by strong adjusted EBITDA growth. The reduction of integration and restructuring costs, lower interest expense as we deleverage, and the continued benefit from the Egencia working capital initiatives.

Note, we have seasonal movements in working capital in Q1, free cash flows that were different than last year. These timing factors will reverse and smooth out over the rest of the year, with the offset largely in Q3. As a reminder, our guidance does not include the impact of cash that will be used to fund the CWT acquisition and integration. I want to end with a reminder of our capital allocation policy, which is focused on growth, cash generation and reinvestment to drive shareholder returns. In addition to the CWT integration, our priorities are accelerating cash generation with a longer term free cash flow target of 45% to 50% of adjusted EBITDA, continuing to deleverage targeting a range of 1.5 times to 2.5 times net debt-to-adjusted EBITDA.

And as we continue to see cash flow acceleration and naturally deleverage, it gives us optionality to invest growth both organic and inorganic, and return cash to shareholders. So to wrap things up, our strong first quarter performance was in line with our expectations. With our continued focus on share gains, productivity, margin expansion, investing for long-term growth and cash flow acceleration, we remain confident in our full year 2024 guidance. So we can now 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.

Operator: Hello everyone, this is your operator session. Thank you, Jennifer. [Operator Instructions] We now have Peter Christiansen from Citi. Peter, your line is open now. Please go ahead.

Peter Christiansen: Thank you. Thank you. Good morning. Thanks for the question. Good job on some of the EBITDA margin efficiency showing through there. It’s good to see. I’m curious. I want to dig a little bit back into travel yield a little bit, and Karen that was helpful, your explanation there. I’m just curious if there was any incremental impact from GMN [ph] being a bit more higher share relatively versus SME. I’m wondering if there was any impact on travel yield with that. And then I have a follow-up.

Karen Williams:

,:

Peter Christiansen: That’s helpful. And then, Paul, I guess new wins still $3.3 billion, still very robust kind of number there. I guess, as we think about anticipation for the CWT acquisition to close, do you foresee new wins being a little bit under pressure temporarily ahead of that deal closing and subsequent integration, and just curious if you’ve also had any early feedback from potential clients on the acquisition? Thank you.

Paul Abbott: Yes. No, I think the pipeline for new wins is still really strong. If you look at the overall market we talked about scale of the opportunity, we’re in a $1.4 trillion industry and even after the CWT acquisition we’ll have $45 billion of that $1.4 trillion. And of course, SME is the biggest opportunity within that its $900 billion of TTV of which $300 billion sits with, if you like, professionally managed travel programs and $600 billion is in unmanaged. So we certainly see significant runway for growth and we expect to continue to gain share. If you look at the new wins for the last 12 months ending the first quarter, our win loss ratio is at $2.4. So for every dollar of business we lose, we win $2.4 of new business. So we’re consistently gaining share and we expect that to continue.

Peter Christiansen: Thank you. I appreciate that perspective. Thank you.

Operator: Thank you, Peter. Our next question is from Lee Horowitz from Deutsche Bank. Lee, your lines open now. You may continue.

Lee Horowitz: Great. Thanks for the question. Can you talk a bit more about the strength you’re seeing in Global Multinational now outpacing SME for the first time since the recovery? Maybe just a bit more on the sort of the underlying drivers of this evolving shape of your volume growth, and how you think about the sustainability of these factors moving forward? And then from regional perspective, obviously, APAC remains a big source of strength. Can you maybe just give us an update on how you’re thinking about the overall recovery in that region? How much more do you think is left to go relative to, say, other regions, and how you think about APAC sort of carrying sort of the overall volume growth moving forward? Thanks so much.

Paul Abbott: Yes, sure. So we’re really pleased to see the strength in Global Multinational. I think one of the advantages of our business is we have this diversified revenue model and diversified growth profile. We have just over 50% of revenues from SME, but just under from Global Multinational. Also, there’s a really good balance between customer and supplier revenues. And so I think that balance really, really helps. If you dig a little deeper into Global Multinational, I think what’s encouraging there is that we’re seeing strong growth across multiple sectors. Technology was certainly the standout in the quarter, and you’ve heard that, I think from some of the airlines that reported in the U.S. that was up 30% in the quarter, but we saw double-digit growth in professional services, pharma, also energy and utilities.

So pretty broad-based growth in terms of how that’s trending. The survey that I shared in the call just now, we go out every quarter to our Top 100 customers. So I think it’s a really good data point for Global Multinational outlook. And that most recent survey showed a strengthening of the overall spend projections for this year, up to 8%. And also the number of customers expecting an increase in travel volume in the balance of the year also was up another 3 points. So that would certainly indicate that I think that we’ll see pretty strong growth from that segment for the full year. If you’d asked me back in Q4, I would have actually thought our growth rates for Global Multinational and SME would have been closer together. And so Global Multinational is a little higher than I expected.

SME, a little lower than I expected and I think I mentioned some of the reasons for that on the call. I referenced the American Express data, because Amex is really the best data point we have for SME growth rates. Amex has $400 billion of payment volumes from U.S. SME businesses and relationships with nearly 4 million small businesses in the U.S. So it’s a really robust data point to look at the external market. And if you look at Amex’s results for Q1 – U.S. SME payment volume was up 1%. If you look at the same store sales for Q1, they were actually down 3% and that’s a spend number, so that includes price inflation. So transactions would have been lower than that. And I think what Amex is seeing on the payment side of what we’re seeing as well is that there is more impact from sustained higher inflation, sustained higher prices, and I do think that is leading to tighter spend controls with SME businesses.

In terms of the second part of your question about how do we expect that to evolve? I think that will be macro driven. I think as confidence improves, as macroeconomic conditions improve, access the inflation outlook becomes a little clearer. We do expect that to change and we certainly still see SME, medium- to long-term being the growth engine for the company. Sorry, there was a second part of your question on APAC. I think that it’s really not a recovery issue that you mentioned in your question. Just structurally, I think APAC is a region that will continue to grow faster. Now we’re seeing really strong growth out of our key markets in Asia and India in particular. And I think we certainly see that as a longer term trend and not really driven by any recovery factors at this stage.

Operator: Thank you. Thank you, Lee as well. [Operator Instructions] Our next question is from Duane Pfennigwerth from Evercore. Duane, your queue is open now. Please go ahead.

Duane Pfennigwerth: Hey, thank you. Can you just remind us how you define SME? What is the cutoff to be classified as SME and certainly appreciate it’s highly fragmented, but any particular industries you’re keeping an eye on, just wondering about kind of drivers there? And really do appreciate that the vast majority of this is unmanaged, and it’s a very large opportunity for you, but we are interested in kind of this incremental SME commentary?

Paul Abbott: Yes, sure. For our kind of SME definition, we actually have – the way we’re structured, we have a division that is dedicated to SME customers. And so, we essentially report looking at the customers that are in that part of our business. But broadly speaking, it’s customers that are spending a kind of, let’s say, $30 million on the less in travel. But the vast majority of those are much smaller. But there are some exceptions to that as we try to be needs driven rather than purely volume driven. But directionally, that’s a good guide. And it represents about $14 billion of our TTV. So that’s the definition question. In terms of industries, I think SME is so broad based that it’s really difficult to pick out a specific industry.

I think when you look at the SME performance, actually, is a mirror kind of what we see in global multinational, the results are stronger in the larger companies within SME, and they are kind of a little softer as you go down into the smaller companies. So I would say that’s the general trend that we’re seeing. The smaller of the business, perhaps the tighter controls that were all spending. And I think that does connect back to the comments I made earlier about lending costs and higher inflation and price inflation. And we have to keep in mind that if you look at domestic airline prices in the U.S., for example, our average ticket price for the first quarter was up, I mean 8% year-over-year, but it’s up 24% versus 20.2%. So there has been some pretty significant price inflation that I do think is contributing to some of those spending controls that you see in the SME segment.

Duane Pfennigwerth: That’s great. And then just a follow-up there. I think you said that your U.S. air transaction volume was up 14%. I don’t know if you have it handy, but how does that compare to hotel transaction growth for the same geography? And sorry to put you on the spot, but again, it’s just something we’re interested in. Do you have any insight into how trip length or trip duration may be changing as the close-in corporate starts to perk back up.

Paul Abbott: Yes. I think on the air, we were 10% up on a workday-adjusted basis globally. Air was 11% up globally. And the U.S. was the strongest region from an air perspective, actually at 14% growth. So very strong overall sales growth on air. I think it’s worth noticing that about 2/3 of that growth was price and yield related. So you’ve got about eight points of pricing and yield growth and about six points of transaction growth. So hopefully, that sort of additional color helps a little bit on the air side. U.S. hotel transactions, I think I know hotel sales were up 10%. So I think that’s probably in the U.S. So that’s probably the comparable number to the 14% because both of those include, if you like, pricing and yield impact.

So U.S. air up 14%, U.S. hotel sales up 10%, but you’ve seen a little less price inflation on hotel. If you look at U.S. average daily rates for hotel year-over-year, they’re up 4%, where, as I mentioned before, air is up 8% on domestic. And if you go back to 2022, as I mentioned before, domestic air is up 24% but hotels up 14%.

Duane Pfennigwerth: Thank you, Paul, for that detail. Appreciate it.

Paul Abbott: You’re welcome.

Operator: Thank you. Our next question is from Toni Kaplan from Morgan Stanley. Toni, your line is open now. You may continue.

Toni Kaplan: Thank you. I wanted to ask another follow-up on SME. I know you mentioned the slowdown is really driven by macro factors. Just wondering what are some of maybe the sales initiatives or strategies that you could deploy to maybe mitigate some of the macro factors, I’m sure that this has happened a number of times in the past. And so just wanting to understand if there’s anything that can help mitigate some of the macro slowdown.

Paul Abbott: Yes. Good question, Toni. Absolutely. I mean certainly, there are a number of levers that we can pull in an environment where organic is slower. The first is you make sure that your retention remains really, really strong. And unfortunately, that’s certainly been the case. Then we have been making investments in our SME sales organization, both in the sales and the marketing channels and increasing those investments in our sales and marketing channels, obviously, is an important lever for us to pull. And then there is what we call share of wallet from existing customers, making sure that we’re doubling down on growing those existing relationships and taking advantage of the expansion opportunities that we have with the existing base.

And then the final lever is, of course, always being very focused on profitability and making sure that we’re taking actions that improve the profitability of the segment. And I think Karen referenced before the work that we’ve been doing to improve working capital management across the business. A lot of that work has been focused in the SME segment, moving customers onto our preferred payment processes and payment options to improve working capital. And so there’s obviously an important profitability lever that needs to be a focus in addition to the growth levers that I just mentioned.

Toni Kaplan: Terrific. And I just wanted to ask about April. Any sort of divergence in trends that you saw in April versus the first quarter maybe not, but just wanted to see – I thought you did a really good job in talking about seasonality for the year. So maybe this is duplicative of that, but just wanted to see if there’s any improvement or the reverse in April versus 1Q? Thanks.

Paul Abbott: Yes. I think difficult to say at this point because March, as you know, Easter fell into March this year as opposed to April last year. So that creates a little bit of noise. And we also have some additional work workdays in April this year versus the adjustment we talked about for Q1. And so I think honestly it’s going to take a few more weeks to kind of work through that and see what the trends are. But as Karen said, our full year guidance is about 6% to 9% on revenues on a workday adjusted basis, we came in at 7% in the first quarter. Our guide to TTV was selling to 8% to 10% – 8% to 12%. We came in at 10% work be adjusted. So from our point of view, we’re sort of bang on track for where we want it to be in terms of our full year guidance. And we’ll obviously be able to update you on Q2 in more detail at a later date.

Toni Kaplan: Terrific. Thanks.

Paul Abbott: Well, in closing, thank you to everyone across our team for their dedication to our customers and the strong results they’ve delivered. We are very confident that 2024 will be another year of share gains, strong growth in profits, improved cash flow and continued margin expansion. So thank you very much for joining us today and your continued interest in American Express Global Business Travel. Thank you.

Operator: This concludes today’s call. Thank you for everyone.