Travelport Worldwide (TVPT) announced first-quarter 2017 results on Tuesday morning, highlighting broad-based growth led by strength in the Asia-Pacific region, as well as the continued momentum of its eNett commercial payments business.
Let's fasten our seat belts, then, to get a better look at how Travelport kicked off the new year, as well as what investors should expect in the quarters ahead.
IMAGE SOURCE: GETTY IMAGES.
Travelport results: The raw numbers
| Metric |
Q1 2017 |
Q1 2016 |
Year-Over-Year Growth |
|---|---|---|---|
|
Revenue |
$650.8 million |
$609.3 million |
6.8% |
|
GAAP net income |
$55.9 million |
$17.2 million |
225% |
|
GAAP earnings (loss) per diluted share |
$0.45 |
$0.13 |
246.2% |
Data source: Travelport.
What happened with Travelport this quarter
- On an adjusted (non-GAAP) basis -- which excludes items like stock-based compensation and restructuring costs -- Travelport's net income increased 26.3% year over year to $64.4 million, or $0.51 per diluted share.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 9% year over year to $169 million.
- Travel commerce platform revenue increased 7.5% year over year to $622.1 million, including 6.9% growth in Air revenue to $474.5 million, and 9.3% growth in Beyond Air revenue to $147.6 million.
- Within Beyond Air, eNett revenue climbed 22% to $41 million, driven by both new customer wins and higher payment volume settled with existing customers.
- Technology services declined 5.5% year over year to $28.7 million, due to lower development revenue and fewer hosting activities.
- Revenue by geography included:
- 18% growth in Asia-Pacific revenue to $151 million
- 14% growth in the Middle East and Africa to $83.6 million
- 4% growth Europe to $202.4 million
- 3% growth in Latin America and Canada to $28.8 million
- 1% growth in the United States to $156.3 million
- Subsequent to the end of the quarter, completed the divestment of Travelport's 51% stake in India-based IGT Solutions.
- Generated free cash flow of $71 million, up from $3.7 million in the same year-ago period.
- Travelport held steady its quarterly cash dividend of $0.075 per share.
What management had to say
Travelport CEO Gordon Wilson stated:
We have started 2017 well with a particularly strong performance in Asia Pacific, the world's fastest growing and largest travel region, where we grew our air market share and saw our highest level of quarterly revenue growth for over five years. I am delighted that our leadership positions in airline content and merchandising, hospitality, mobile commerce and commercial payments are translating into greater revenue from existing customers, as well as new business wins across multiple geographies.
Looking forward
Travelport also reiterated its full-year guidance for 2017 revenue of $2.425 billion to $2.475 billion. At the same time, the company now expects to to be at the high end of its previous guidance ranges for 2017 adjusted EBITDA of $585 million to $595 million, adjusted net income of $165 million to $175 million (or $1.29 to $1.37 per share), and free cash flow of $165 million to $185 million.
In short, while Travelport's results weren't exactly jaw-dropping, this was a good quarter with broad-based strength that leaves the company ahead of its original goals for the year -- and all as it continues to invest in its most promising strategic growth opportunities. With that in mind, I think Travelport shareholders should be more than happy with where the company stands today.
