• Revenue Growth: 13% increase for the full year 2024.
• EBITDA Growth: 13% increase for the full year 2024.
• Operating Income Growth: 18% increase for the full year 2024.
• Adjusted Profit Growth: 20% increase for the full year 2024.
• Free Cash Flow: EUR 1.3 billion, a 16% increase versus prior year.
• Leverage: 0.9 times EBITDA.
• Air Distribution Revenue Growth: 11% for the full year 2024; 14% in Q4 year-on-year.
• Bookings Growth: 9% year-on-year in Q4.
• Air IT Solutions Revenue Growth: 16% for the full year 2024.
• Hospitality and Other Solutions Revenue Growth: 12% for the full year 2024.
• EBITDA Margin: 38% for the full year 2024.
• CapEx: EUR 173 million increase, 28.9% growth, 12.5% of revenue.
• 2025 Revenue Outlook: EUR 6.69 billion to EUR 6.94 billion, 9% to 13% growth.
• 2025 EBITDA Outlook: EUR 2.49 billion to EUR 2.61 billion, 7% to 12% growth.
• 2025 Free Cash Flow Outlook: EUR 1.27 billion to EUR 1.35 billion.

• Warning! GuruFocus has detected 2 Warning Sign with AMADF.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amadeus IT Group SA (AMADF) reported a strong financial performance for 2024, with revenues growing by 13% and adjusted profit increasing by 20%.
• The company achieved significant growth in its Air IT Solutions segment, with a 16% revenue increase, driven by air traffic growth and new customer implementations.
• Amadeus IT Group SA (AMADF) is advancing its cloud transformation, with 60% of applications now activated in the public cloud, aiming for completion by early 2026.
• The company is leveraging AI and machine learning to enhance user experience and optimize operations, integrating GenAI into its platform.
• Amadeus IT Group SA (AMADF) announced a EUR1.3 billion share buyback program to be executed over the next 12 months, reflecting confidence in its financial position.

Negative Points

• The company faces challenges in the gradual adoption of NDC (New Distribution Capability) content, with only 31 out of 70 agreements implemented, impacting the pace of growth.
• Amadeus IT Group SA (AMADF) anticipates slower global traffic growth in 2025 compared to 2024, which may affect booking volumes.
• The ongoing cloud transformation incurs non-recurring costs, impacting fixed cost growth in 2025.
• The hospitality and other solutions segment's revenue growth is expected to be closer to the lower end of the 15% to 18% CAGR guidance due to slower-than-expected payments growth.
• The company expects free cash flow in the first quarter of 2025 to be lower than the previous year due to higher capital expenditure and increased cash taxes.

Q & A Highlights

Q: Can you share details on the momentum of the Order Management System (OMS) and how it affects revenue per passenger boarded? Also, how likely is it that major airlines will outsource their OMS? A: Decius Valmorbida, President - Travel Unit: We are making significant progress with Tier 1 airlines adopting our system, which is positively impacting revenue. We expect growth in both passenger numbers and average revenue per passenger as new modules are added. Regarding outsourcing, airlines face tech trends requiring investment in cloud and AI, which may lead them to outsource non-critical modules. We are optimistic about this opportunity.

Q: What underpins the strong booking growth in air distribution, and how do NDC agreements impact this growth? A: Luis Maroto, CEO: Our guidance considers both booking growth and NDC evolution. We expect normalization in traffic volumes and have factored in both booking and booking fee growth. The cloud transition will slow fixed cost growth, and we expect cost savings from this transition.

Q: Can you update us on the re-intermediation of GDS bookings and the pricing of Nevio compared to other systems? A: Decius Valmorbida, President - Travel Unit: Nevio offers a broader scope than PSS, allowing us to increase average fees by expanding the scope. Re-intermediation is an upside opportunity, but not part of our guidance. We see positive momentum with new content, and we are in discussions about re-intermediation.

Q: How is the adoption of NDC evolving, and have you lost any significant travel agents in 2024? A: Decius Valmorbida, President - Travel Unit: NDC adoption is gradually evolving, with 31 out of 70 agreements implemented. We expect gradual adoption over the next couple of years. We have not lost any significant travel agents and are making progress in North America and Asia Pacific.

Q: What are the key drivers for revenue per booking growth in 2025, and how is the payments business expected to perform? A: Luis Maroto, CEO: We expect booking fee growth in 2025 due to ongoing negotiations and positive mix effects. Decius Valmorbida, President - Travel Unit: Payments will expand geographically in Asia Pacific and the Americas, and we are making progress on self-issuing in Europe. We expect payments to provide good news in 2025.

Q: How does FX impact hospitality growth, and what are the assumptions for 2025? A: Luis Maroto, CEO: FX impact was neutral in 2024, with a slight positive in Q4. The 2025 guidance range is not related to FX but to the speed of payments growth and potential risks in hospitality migrations like Marriott.

Q: What is the contribution of FX and M&A to 2025 revenue growth, and should we expect more bolt-on M&A? A: Luis Maroto, CEO: FX and M&A have minimal impact on 2025 revenue growth. We continuously look for value-adding acquisitions, but they are not part of our current figures.

Q: Is the CAGR guidance for distribution conservative, and will it be revisited? A: Luis Maroto, CEO: We provided a three-year guidance, and while we had a strong first year, we are not revising the guidance yet. We will assess the need to revisit it based on traffic and booking evolution.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.