Amadeus Earnings: Travel Demand Endures Into 2025 as the Company’s Cloud Migration Continues

Narrow-moat Amadeus reported strong fourth-quarter results across all segments, with total revenue growth of 14% versus our 11% estimate. The company’s distribution business (46% of revenue) sales increased 14%, ahead of our 9% forecast, aided by both volume growth accelerating to 9% from 4% and revenue per booking improving to EUR 6.42 from EUR 6.17 sequentially. We believe this implies its network advantage remains intact, as the industry gradually transitions to the New Distribution Capability protocol, which offers the opportunity for Amadeus and its airline suppliers to generate incremental ancillary sales on Global Distribution System networks. Amadeus’ air IT solutions segment (37%) is also performing well, stoked by cloud and artificial intelligence innovation. Indeed, this business reported revenue growth of 15% compared with our 13% estimate, with revenue per passenger boarded of EUR 1.05 versus our EUR 1.02 estimate, as the company upsells more solutions to its clientele. Finally, hospitality (17%) revenue grew 13% versus our 11% estimate, helped by new customer wins like from no-moat MGM.