Paul Abbott; Chief Executive Officer, Director; Global Business Travel Group Inc
Karen Williams; Chief Financial Officer; Global Business Travel Group Inc
Eric Bock; Chief Legal Officer, Corporate Secretary and Global Head of Mergers and Acquisitions; Global Business Travel Group Inc
Operator
Good morning and welcome to the American Express Global Business Travel fourth quarter and full year 2024 earnings conference call. As a reminder, please note today's call is being recorded. I will now turn over the call to the Vice President of Finance, George Anderson Brown. Please go ahead.
Hello and good morning, everyone. Thank you for joining us for our fourth quarter 2024 earnings conference call. This morning, we issued earnings press release which is available on SEC.gov and on our website at investors.amexglobalbusinesstravel.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 forward-looking statements that represent our beliefs or expectations about future events, including industry and macroeconomic trends, cost savings, acquisitions, and acquisition synergies amongst others. All forward-looking statements involve risks and uncertainties that may cause actual results that differ materially from the statements made on today's conference call.
More information on these and other risks and uncertainty is contained in our earnings release issued this morning and our other SEC filings. Throughout today's call, we will also be presenting certain non-gap 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. Definition of these terms and the most directly comparable GAAP measures and reconciliations for non-gap measures are available in the supplementary materials of this presentation and in the earnings release.
Participating on the call 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 Global Head of M&A. With that, I will now turn the call over to Paul.
Paul Abbott
Thank you, George. Welcome everyone and thank you for joining our fourth quarter 2024 earnings call. We executed a strong quarter to finish 2024, delivering on our financial targets and setting up continued attractive earnings growth in 2025.
Our goal every year is to deliver earnings growth well ahead of revenue growth driven by technology enabled productivity gains and a scalable cost base, all while generating strong free cash flow and investing in our future growth.
And that's exactly what we did in 2024. This was a record year for adjusted EBITDA and revenue for the company. Adjusted EBITDA exceeded the midpoint of our original guidance range, up 26% year over year. 2024 highlights our powerful financial model with impressive growth on the bottom line as we drove adoption of our software solutions and automated our processes. Adjusted our margin expansion was over 300 basis points, reaching 20%.
Investments in our software and services are delivering top line growth as we continue to win new customers and importantly maintain very high customer attention. 2024 was a record year for GMN customer attention at an impressive 99%.
We also reached important milestones strengthening our balance sheet, accelerating free cash flow, investing in growth, and returning cash to shareholders. We more than tripled free cash flow in 2024, ending well above our original guidance for the year. We have lowered our leverage ratio below 2 times, and we continue to lower our interest costs with a repricing completed after the fourth quarter closed.
Our increasing flexibility with capital allocation allowed us to make our first share repurchase in a private transaction in the third quarter followed by a $300 million buyback authorization.
I'm pleased to say we are starting off 2025 with good momentum to achieve another year of double-digit earnings growth, and our strategy and investments provide us with a long runway to continue this level of attractive growth. And I really want to take a moment here to thank all of our colleagues across Amex GBT for their exceptional commitment to serving our customers and the strong results that they have delivered.
In 2024, we continued to execute on our strategy and deliver outstanding financial results. The momentum is evident in our financial metrics. Starting with transaction growth for the year 2024, transaction volumes were up 5%, driven by increased demand for business travel and share gains.
TTV increased 8%, driven by transaction growth plus increases in average ticket price and hotel rates. Revenues increased 6% to reach $2.42 billion, driven by solid growth in transactions and CTV in addition to demand for our products and our professional services.
Our focus on cost control and operating leverage drove strong adjusted EBITDA margin expansion with an increase of 310 basis points for the full year. This all translates into impressive, adjusted EBITDA growth of 39% for the fourth quarter, to end the year with $478 million, an increase of 26%.
Drilling down into full year transaction trends in more detail. As a reminder here, for organizational purposes, we divide our customer base into two general categories global, multinational, and small and medium enterprises.
We generally use expected annual TTV to divide customers into these two categories, although this measure can vary by country and by customer need, and we do not have. Products or services that are offered solely to one size.
As you can see, growth was stronger this year with global multinational customers, an 8% increase compared to 2% for SME customers. SME transaction growth has been muted but stable for several quarters, reflecting tightened spending controls driven by higher prices and lower macroeconomic growth.
This is a trend that we can clearly see with SME businesses beyond travel. Air transaction growth was 4% in 2024, including 4% for domestic, 3% for regional and international, factoring in higher ticket prices, our total TTV growth for air was 8%.
Growth in hotel transactions was 6%. This reflects our efforts to increase hotel bookings by strengthening our content and providing customers with more hotel value and choice. And finally, on a regional basis, transaction growth was up 5% in the Americas, 2% in EMEA, and 12% in APEC.
Now let's turn to the commercial highlights. By offering customers more value and more choice, we continue to win new business and gain share. The total estimated value of our new winds signed during 2024 is $2.8 billion. This is down slightly versus the trailing 12 month number that we shared last quarter, as we did see some global multinational prospects delay decisions into 2025.
The majority of our new wins continue to come from SME customers, and new SME wins increased to 2.2 billion for the trailing 12 months. SME also remains our biggest growth opportunity with $950 billion of total travel spend and 70% of that currently unmanaged. 25% of our SME new wins in 2024 were previously unmanaged customers, reflecting increased demand for the savings, service, and control of a managed travel program with MHGBT.
We are also off to a good start in Q1 and the overall sales pipeline remains strong. Customer attention was an impressive 97% of TTV for 2024 and 99% for global multinational. Our commercial success is underpinned by the value of the GBT marketplace for customers and suppliers. Delivering the most comprehensive content and the most competitive prices for customers and the most valuable distribution platform for suppliers.
And we continue to enable NDC content at scale with our airline partners. We recently announced an enhanced agreement to expand the availability of NDC fares with Lufthansa. We are now working with more than 20 airlines in our NDC program, with NDC content available to more than 15,000 customers, and we have processed almost 1 million NDC tickets.
Our development capacity in NDC now allows us to deploy a new airline or a new country connection every 2 weeks. We continue to be recognized as a leader in software solutions and for making business travel more sustainable.
Amex GBT Egencia was recognized as a leader with 19 badges in the G2 2024 awards, and we recently launched emissions-based carbon pricing to enable companies to influence traveler decisions and to generate investment funds for low carbon solutions like sustainable aviation fuel.
We are embracing AI and automation to improve the customer experience and improve productivity. In 2024 we have continued to invest in our proprietary AI architecture. A secure, privately hosted platform to scale AI initiatives with the appropriate data privacy and governance.
We launched new generative AI use cases in finance, product engineering, and servicing, including large language model, chat functionality for Amex GBT Egencia in 18 countries. Before I hand it off to Karen, I want to comment on the status of the CWT acquisition.
We have now cleared a significant milestone towards approval of the transaction with the UK's Competition and Markets Authority having now provisionally concluded that it has not identified any competition concerns with GBT's proposed acquisition of CWT.
The CMA's final decision is required to be made by March 9. Although we are disappointed by the US Department of Justice's decision to challenge the merger, the CMA's findings reinforce the company's belief that the DOJ's lawsuit is fundamentally flawed.
And we expect to prove that in court if required. As we've previously stated, if approved, this transaction will accelerate investment and innovation in business travel. It will create more choice and more value for customers and suppliers, and more opportunities for CWT employees.
In the meantime, we remain laser focused on executing our strategy and delivering another year of strong results in 2025. And now I'll hand it off to Karen to discuss our results in more detail.
Karen Williams
Thank you, Paul, and hello, everyone. Before I get into the numbers, I want to repeat my three key priorities when it comes to managing our financial performance.
Accelerating cash flow generation, driving operating leverage and continued margin expansion, and creating capacity to invest and drive long-term sustained growth, both organically and through strategic M&A.
Once again in the fourth quarter, I am happy to report continued momentum and progress in all three of these areas. We are delivering on what we can control. So now let's turn to our financial performance in more detail.
Revenue reached $591 million in the fourth quarter, up 8% year over year, which was in line with our expectations. Revenue yield, which we define as revenue divided by TTV was 8.6% in line with the expectations we shared last quarter.
This was down 15 basis points year-over-year, but consistent with prior quarters driven by our shift to online and the fixed component of our revenue. But still importantly, our seasonally highest quarter for this metric.
And as a reminder, our revenue model is driven by 50% transaction volume, 30% TTV, and 20% product and professional services revenue. So the meaningful air and hotel pricing increases, driving a majority of the TTV growth flows through to only 30% of our revenue, therefore lowering the yield metrics.
So turning to expenses, in 2024, we achieved our target of more than $100 million in cost savings, which enabled us to realize attractive margin expansion while also freeing up resources to reinvest in future growth.
Our disciplined focused on cost control and productivity enhancements constrained the increase in our adjusted operating expenses to just 3% in the fourth quarter, driving significant leverage compared to revenue growth of 8%.
Fourth quarter at Just to Leave It Dark was also within our guidance range at $110 million up 39% year over year with an impressive margin expansion of 420 basis points. We generated $33 million in free cash flow in the fourth quarter, which was above our guidance.
And so the continued momentum in our performance and the strong fourth quarter results led to four-year revenue of $2.42 billion up 6% year over year, and adjusted EBITDA of $478 million up 26% year over year. Not only was this an all-time high for GBT as a company, but full year also adjust to leave it there was above the midpoint guidance for the year.
And our continued focus throughout the year on expenses and productivity drove operating leverage up. An impressive 310 basis points margin improvement as operating expense growth was just 2% compared to revenue growth of 6%.
We generated $165 million in free cash flow, up 235%. This was more than 3 times our free cash flow in 2023, reflecting cost savings and the Agencia Working Capital Initiative. This was well above our original guidance floor for the year of $100 million.
Our leverage ratio or net debt divided by the last 12 months of just leave it are now stands at 1.8 times at the close of 2024. This represents a step down from 2.3 times a year ago and nearly 9 times two years ago. So turning to cash flow and capital allocation, we laid out these priorities last year, and I am incredibly proud of our accomplishments and once again, we are delivering on what we can control.
I am particularly happy with the momentum in our free cash flow, which turned positive as planned in 2023 and then nearly tripled in 2024. As previously mentioned, we generated $165 million in free cash flow.
This represents a conversion ratio of approximately 35% of our just a bit data versus our original target of 25% and compared to 13% in 2023. So our second priority is the leveraging and maintaining a strong balance sheet.
Our leverage ratio now stands at 1.8 times at the close of 2024. This is tracking towards the lower end of our targeted leverage range of 1.5 times to 2.5 times, giving a significant balance sheet flexibility. As Paul mentioned, we refinanced the entirety of our debt again after the quarter closed.
This refinancing lowers our interest rate margin by 50 basis points with the new term loan facility priced at SOFR+ 2.5%. It's important to note that our refinancing was once again oversubscribed, which speaks to the confidence in GBT and the momentum we continue to drive in terms of our performance. I am incredibly happy with this outcome.
So combining this with the previous refinancing in July plus savings tied to our lowered leverage ratio, we have significantly reduced our run rate net interest costs by a total of $60 million which is nearly 40% lower than our interest cost in 2023 on about the same level of debt.
And so third, our higher cash flow and lower leverage has provided us with optionality to reinvest in our business, including our people, software platforms, SME sales and marketing engine, and AI in order to drive organic growth, productivity, and marginal expansion. We invested an incremental $35 million in 2024.
Fourth, with respect to M&A, the strength of our balance sheet and level of liquidity within the business creates the flexibility for us to pursue M&A. The industry remains highly fragmented, so we see plenty of M&A opportunity ahead.
And lastly, our strong cash flow puts us in a position to have flexibility to return cash to shareholders after our other priorities are met. We made our first buyback in the third quarter, repurchasing 8 million shares in a private transaction for $55 million.
Additionally, we have the full $300 million worth of buybacks available under the new board authorization, which expires in 3 years. We clearly executed on our capital allocation priorities in 2024, and they will continue to guide us this year.
Now I will hand that to Paul to set the stage for our 2025 outlook.
Paul Abbott
Thank you, Karen. Looking ahead to 2025, the demand outlook remains solid. We see muted but stable GDP growth, which remains below historical norms, and we also see a strengthening US dollar. A survey of our TOP100 customers indicates 80% expect their travel spend to be flat or up in 2025. And 66% of respondents said their budgets for meetings and events are increasing in 2025.
And other third-party surveys paint a similar picture of solid business travel growth which supports our 2025 outlook. As I said earlier, our goal every year is to deliver earnings growth well ahead of revenue growth driven by technology enabled productivity gains and a scalable cost base.
All while generating strong free cash flow and investing in our future. We are starting the year with strong commercial momentum. New wins in 2024 were 2.8 billion, of which 2.2 billion is from SME.
Our retention rate was 97% overall, including 99% in global multinational. We are accelerating our investments in software and services, and our digital transformation enables us to advance our automation and AI initiatives. Putting it all together, we have a powerful financial model that can deliver consistent, hyper efficient growth.
This model drove our strong results in 2024 and is also the foundation for our 2025 outlook. We expect the business travel industry to continue to grow at or above GDP as it historically has. And we expect to continue to grow faster than the industry with our net new wins and share gains driven by our differentiated value proposition.
The third driver is our relentless focus on cost control and margin expansion. We continue to invest in automation and AI to boost the scalability of our cost base and drive productivity while also improving the customer experience.
In 2025 we expect to leverage mid single digit constant currency revenue growth and deliver double digit adjusted Ear growth. On top of this earnings growth, our acceleration in free cash flow this year creates incremental opportunities to boost shareholder returns through investing in future growth, accretive M&A, and buying back shares.
As we scale our business, we can scale efficiently, growing our margins and our investment capacity. We are consistently expanding margins whilst also investing more in our products and our services to create more value for customers.
This year we expect to achieve gross cost savings of $95 million from process improvement, expanding shared services, and location optimization, and of course, supported by our AI and automation initiatives. $95 million in savings represents over 300 basis points in potential margin improvement if we decided to drop it all to the bottom line.
But it also gives us the capacity to make investments that create more value for customers and drive longer term growth. We are reinvesting $65 million of the savings this year on top of our prior investment run rate. While the remainder drives approximately 150 basis points of adjusted EBITDA margin expansion at the midpoint of our 2025 guidance.
Broadly speaking, these investments will be made across three areas. Firstly, improving the customer experience, including expanding chat with automation, enhancing the UX for Agencia, NIO and mobile, and rolling out carbon pricing.
Second is delivering more value for customers and suppliers from our marketplace, investing in more content from more sources, expanding NDC content, improving rail content, and integrating our content platform into more third party solutions.
And finally, driving growth, investing in increasing demand generation, scaling our sales channels and driving sales efficiency. As you can see, we are making investments to drive revenue growth and improve productivity.
But the power of our model is that many of our investments achieve both of these objectives. For example, expanding the content in our marketplace. Improving the digital experience, leveraging AI. All of these investments increase the number of transactions on our software solutions. They also create a better customer experience, and they reduce our operating costs. A very powerful combination. And now I'll hand it back to Karen to walk through our 2025 guidance.
Karen Williams
Thank you, Paul. Our strong financial algorithm allows us to generate double digit profit growth with solid single digit revenue growth while accelerating free cash flow conversion.
Our guidance prudently takes into account the continued environment of muted but stable growth, and we are not making any assumptions about potential broad macroeconomic impacts from tariffs or other policy speculation. We will adjust the environment as necessary and execute on what is within our control just as we did in 2024.
Our revenue outlook in 2025 calls for constant currency growth of 5% to 7%, consistent with what we experienced in 2024 and again reflecting steady industry growth above GDP plus our continued share gains. We expect a 15basis points to 20 basis points revenue yield decline, which again, consistent with the trend we saw through 2024. Given the recurring elements of our revenue and the continued shift to digital transactions.
We remain focused on driving continued operating leverage. We expect continued productivity gains and our scalable technology to continue to drive marginal expansion, while also increasing our investment level in future growth.
As a result, we expect limited adjusted operating expense growth of just 3% to 4% on a constant currency basis. Our 2025 adjusted EBITDA guidance is $530 to $560 million an impressive increase of 11 to 17% over 2024.
This continued strong double digit growth demonstrates the power of our financial models to leverage high returns in a stable growth industry environment. And this represents margin expansion of 120basis to 190 basis points on a constant currency basis.
We expect to continue to drive underlying momentum in cash generation in 2025, driven by the strong adjusted EBITDA growth plus lower net interest expense. Underlying free cash flow is expected to be approximately $210 million.
However, I do want to flag some one-time costs in 2025 which are non-recurring in nature and associated specifically with M&A. And so factoring this in on a reported basis, we expect to hold free cash flow relatively flat this year versus 2024.
On currency exchange rates, the headline to take away is that FX does not affect our adjusted EIA. We have a natural hedge because the currencies of our revenues and expenses are approximately matched. Even though the recent rise in the US dollar and any future fluctuations in exchange rates may impact our reported revenue numbers, there will be an offset on expenses and therefore the adjusted it data impact will be neutral.
We also have hedges that neutralize the impact of rate changes on cash held in euros on our balance sheets.
And so based on exchange rates, as at the end of January 2025, FX would be a 2% headwind for revenue this year, which would lower underlying 5% to 7% constant currency growth to 3 to 5% on a reported basis, and this is factored in to our revenue guidance range of $2.5billion to $2.55 billion.
Our adjusted our guidance range is $530 million to $560 million and does not change between constant currency and latest FX rates. More detail of our revenue and adjusted operating expenses is included within the appendix.
As we look forward to closing the first quarter, we expect our revenue and earnings profile across the quarters in 2025 to be consistent with the 2024 phasing. Now it's important to note that from a growth perspective, there will be a 1% point impact on revenue from 1 less working day in the quarter, and on a reported basis, assuming current FX rates, we expect a 2% point impact from the strong dollar.
But as previously discussed, adjusted EBITDA will not be impacted given the natural hedges we have between revenue and expense. On a reported basis in the first quarter, we expect revenue growth of approximately 3%.
6% on a constant currency and workday adjusted basis and approximately 25% of full year 2025 adjusted EBITDA. We expect free cash flow seasonality to have greater weighting to H2, with the first quarter broadly in line for an absolute dollar perspective with cash generation from the first quarter of 2024. And so as I've already highlighted, we expect to continue to drive underlying momentum in cash generation in 2025.
We are controlling what we can control, and on an underlying basis, free cash flow is expected to be approximately $210 million. But with the specific one-time M&A expenses in 2025 on a reported basis, we expect free cash flow relatively flat to 2024 and to be in excess of $160 million.
The lime free cash flow generation continues, and we are confident in the future path to approximately 50% free cash flow conversion over the medium term. We will continue to execute on our capital allocation priorities in 2025 to maximize our long-term growth and optimize shareholder returns.
We expect to continue to drive underlying momentum in cash generation in 2025. We continue to maintain a strong balance sheet and expect a leverage ratio without M&A at the low end of our 1.5times to 2.5 times target range and have benefited from the refinancing actions we've taken where we expect net interest expense of approximately $80million to $85 million.
We're also able to increase our investment in technology and organic growth. Our guidance includes incremental investments of $65 million as Paul mentioned. The strength of our balance sheet and level of liquidity within the business creates the flexibility for us to pursue M&A. And our strong cash flow puts us in a position to have flexibility to return cash to shareholders after our other priorities are met.
Before closing, I would like to add to the comments that Paul made on the status of the CWT acquisition. We have cleared a significant milestone towards the confirmation of the transaction with the UK's Competition and Markets Authority.
And so it's important to understand that we have capital allocation capacity and flexibility in any scenario. Because the CWT acquisition finances primarily stock, we expect to remain within our target leverage range following the transaction close.
So in closing, We successfully delivered on our financial targets and priorities in 2024. And we are looking forward to another strong year in 2025 of significant margin expansion. Double digit earnings growth, and underlying free cash flow acceleration.
Now we can 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 up the line.
Operator
Thank you. (Operator Instructions) First question comes from Tony Kaplan with Morgan Stanley. Your line is open, please go ahead.
Hi, good morning. This is Yehuda Silverman on the line for Tony Kaplan. So can you expand on the slight downtick in new business when What were some of the reasons that companies pushed that some of their wins out their business out to 2025 and when can we expect to see that in terms of cadence for the year?
Paul Abbott
Yeah, I wouldn't read too much into that. As you can see, the majority of our wins come from SME customers, and we actually saw a slight uptick in SME wins in the quarter. The nature of the sort of very large customer wins is that, one win in a particular quarter can make a difference up or down, and you've seen that in previous quarters.
So I'm not really pointing to a spend here, I would expect some of those decisions that are pushed into Q1 to. Enable us to have a faster start to '25.
Thank you. And just a follow up, so you've mentioned that you've seen some of the smaller midsize businesses feeling the pressure of higher interest rates that sort of continued.
There's been a couple of recent hotter than expected economic prints, especially on the consumer side. Have you seen any recent sentiments or budget changes into the new year, particularly in the small midsize business?
Paul Abbott
Well, I think if you go back to sort of Q4 of 2023, we did see a sort of reduction in the growth rates, Q4 and then Q1, Q2. So for the last couple of quarters we've seen stable growth in SME, and we are expecting that to improve moderately as we go through 2025.
So you know I think we are expecting that growth rate to go from being sort of fairly stable at the moment to a slight improvement as you go through the second half of 2025. But I still think that the trends that we're seeing from SME customers is consistent, your average.
US domestic airfare is over 20% more expensive than it was two years ago, and obviously that combined with other pressures in terms of interest costs and inflation across the supply chain for small to mid-size businesses definitely creates some dampening of demand.
And as I said in my remarks, it's a trend that we see, beyond travel. If you look at the payments data and the procurement data across a range of spend categories, it's a consistent trend that you see.
Thank you.
Operator
We now turn to Dwayne Pfeningwerth with Evercore ISI. Your line is open, please go ahead.
Hey, good morning. This is Jake Gunning on for Dwayne. Understand the uncertainty, but do you have an expected closing quarter for CWT, and then you alluded to capital allocation priorities, but while you wait for that transaction to close and build free cash this year, would you look to hold on to that, accelerate the buyback, or even maybe complete other tuck.
Paul Abbott
Acquisitions? Yeah, Eric will take the first part of that, and then Karen will take the second part.
Eric Bock
Right, thanks for the question. The trial is scheduled to start September 8. So you're looking at, third or fourth quarter closing at this point due to more likely the fourth quarter, if it goes to trial. There are a number of other different scenarios, but I think for planning purposes assume a trial on September 8, and the trial lasts two to three weeks, and a judge will render a decision thereafter which probably gets you into the October time.
Karen Williams
And from in terms of the second part of your question in terms of capital allocation, we've laid out those priorities and as you think about it, we're really happy with the momentum that we have created and that the underlying performance that continues and our priority is around investing in organic growth and so we have an incremental $65 million this year.
Additionally, we will look at other M&A opportunities as they come up and from a share buyback perspective, again, we will look at the timing of that as the situation is right. So we certainly have opportunities ahead of us and continue to look at that in terms of what is optimal from a return perspective.
Okay, thank you, and then not sure how relevant government travel is to your business, but have you disclosed that maybe as a percentage of total transactions in the past and are there any notable trends you're seeing in that segment?
Paul Abbott
It's not a large part of our business, and no, we don't disclose it. So I can't really provide any specific insights, and if your question is more related, I would imagine to the US government travel trends, we don't have any material exposure to US government travel.
It was okay, thank you.
Operator
My next question comes from Lee Horowitz with Deutsche Bank. Your line is open, please go ahead.
Great, thanks. Maybe just one on the CWT deal. The CMA news is obviously a positive and presumably should help the case in the US but are there sort of any President cases that you may be able to point us to where you had this kind of dynamic where sort of the UK or Europe was positive on a deal.
The US was trying to block a deal, but ultimately you have a company is able to leverage a decision out of the CMA to strengthen the case in the US and then maybe just general business travel, business growth enthusiasm coming out of the US election.
There's been a lot said about US businesses being more enthusiastic about overall growth as you look at '25 and '26, given some perceived policy changes from the new administration. Have you seen that show up in, any of your surveys as it relates to expectations for business travel and how that may be factored or not factored into the guide for 2025?
Eric Bock
So thanks for your first question, no specific press on the dynamic we're in I can point to. Obviously it is a positive factor in the in the facts of the case. We have a regulatory body that has provisionally found that on a global basis there is a lot of credible competitors in the space today. So certainly it is positive and indicative of what our belief in the marketplace is, so. That is good, should ultimately in the in the totality of things be helpful to us.
So we'll continue to press our case where we can and we'll continue to have dialogue with the DOJ before and during this whole process before we get to trial on September 8th, and we still are very, we're confident that we are on the right side of this argument.
Paul Abbott
And the second part of your question, we did see an increase in the growth rates after the US election. In fact, our growth rates in November and December were 2% points higher than they were for the full quarter. So we did see that that dynamic that you referenced in your question.
In terms of how that's translating to sort of forward-looking trends. I think it was certainly encouraging to see that uptick in November and December, but of course, there is still a fair amount of uncertainty in terms of the geopolitical environment, and I think businesses in order to plan longer term stability is very important. And so I think you know in a number of areas there is still a higher degree of uncertainty. And so I think that that, balances some of the optimism that also exists.
And I think your question is how does that feed into our '25 outlooks. We're essentially assuming a sort of continuation of the current conditions that the GDP growth in all regions actually is below historical norms, and we have assumed that the current levels of GDP growth in really all three regions, continue at their current levels and that the industry grows at or slightly above those growth rates.
And that on top of that, we have obviously our share gains and that's what gets us to the constant currency, range that that Karen share earlier. So hopefully that's helpful.
Operator
Thank you both. We now turn to Peter Christiansen with City. Your line is open, please go ahead.
Good morning. Thanks for the question. Great results, solid outlook here. First question, I guess for Eric on the CWT situation. It sounds, it's a little peculiar I guess this time because the challenge was issued under the previous administration.
Just wondering if there's any dynamics that you could speak to now and then also is Was the original complaint was that using the similar facts that I think the CMA was originally using in their initial contestation?
Eric Bock
Yes, hi, thanks for the question. Yes, the arguments are very similar. The, arguments that for the lessing competition on both regulatory fronts are very similar.
So we know now we have the CMA and its finding and we'll continue to work with the DOJ, as I mentioned. Yes, with the change of administration, I mean that our case was brought and literally the final days of the Biden administration. We do have the Trump administration is now in place.
They may have a different point of view on this. We don't know, we can't speculate, but we'll continue to talk to. To the US government about this case and move forward as appropriate.
That that's helpful. And then Karen, as we think about the free cash flow guide, I understand that you're provisioning a bit for M&A, is that primarily, potential legal costs associated with the case and would that be the primary reason for the flat year over year free cash flow or is there another component perhaps CapEx?
Karen Williams
No, I mean, yeah, there are puts and takes as you look year over year you think about lower interest expense, obviously higher profit, but then investing in CapEx, but you know.
Underlying we're seeing, $210 million, a 39% cash conversion which is up, but we've called out specifically that M&A component and it's exactly as you spell it out. It's, it is in relation to that and it's very one time in nature, so we just want to be transparent, quite H1stly.
That that that is helpful. I I'm going to TRY to sneak 11 last one in.
Paul Abbott
So if I can just add 11 to that, just that that is, there are a range of different scenarios, frankly, that could play out and that that number is our best estimate at this point in time.
Thank you, Paul. I was just going to sneak one last one in on SME, just curious, if you're seeing any of the dynamics in terms of retention, or demand on the SME side, are you seeing any, I don't know, underlying, green shoots there just curious on some of, the underlying trends that that you might be seeing there.
Thank you.
Paul Abbott
I mean, look, we did see, a kind of a point, kick up in the SME growth rates in November and December, obviously, as I mentioned before, we're expecting sort of moderate improvement as we go through 2025. I don't know if I'd go as far as to say it's green shoots at this point, I think we have to see a few more months of data.
Come through, but I'm optimistic that as we go through 2025 we'll see the impact of our new winds start to have a greater impact on the overall growth rates. Retention is very stable on SMEs, so it really is the orgaic growth rate that was really 2points or 3 points lower than we anticipated at the beginning of 2024. New winds are on track, retentions on track. So, as I said, we are optimistic that we'll see some gradual improvement as we go through '25.
That that's super helpful. Great execution, guys. Good core. Thank you.
Paul Abbott
Thank you.
Operator
And our final question comes from Steven Chuu with UBS. Your line is open, please go ahead.
Hi, good morning. This is Vanessa on for Steven. So, Paul, just looking at your new win value, from SME, those have been picking up and, they're accounting for a greater portion of your aggregate new win. So I just wanted to ask about the pace at which that is showing up in, transaction value, just given their travel budget are probably more volatile than, the larger companies. Thank you.
Paul Abbott
Yeah, look, it's encouraging to see the new winds, are steadily improving, and it is becoming a larger share of our overall new wins and we're seeing, I think, 25% of those SME new wins, coming from unmanaged customers, which just as a reminder, that's by far the biggest opportunity for us. SMEs are $950 billion opportunity and the largest share of that is still customers that don't have a professionally managed travel program.
So we like those trends. But yes, I think the key thing for us is to make sure that we're translating those wins, into growth and that we're implementing those wins faster and as I said, we are optimistic that we're going to see some impact from that as we go through the balance of 2025.
Operator
This concludes our Q&A on a hand back to Paul Abbott, the CEO, for any final remarks.
Paul Abbott
Well, yes, in closing, I just want to thank all of our teams around the world for their hard work and dedication in 24 and providing industry leading service and experiences to our customers. It's really enabled us to deliver the strong financial results that we shared with you today.
We are confident that the momentum that we've driven in 2024 is going to continue into 2025 and result in another year of share gains, of continued margin expansion, strong free cash flow. And capital allocation that also drives shareholder returns. So thank you very much for joining us today and your continued interest in American Express global business travel. Thank you everyone.
Operator
Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.
