Skip to Content

Amadeus IT Earnings: Solid Revenue and EBITDA Growth Support Static Outlook

Consumer Cyclical Sector artwork

Narrow-moat Amadeus AMS reported solid third-quarter results and reiterated its 2023 sales and EBITDA guidance. Our fair value estimate for the company is EUR 62 per share. We view shares as appropriately valued after its 5% move in reaction to results.

Third-quarter and year-to-date revenue were up 15% and 23%, respectively. Importantly, third-quarter and year-to-date total bookings were up 13%, and 16%, respectively, driven by 75% growth in the Asia-Pacific region for the first three quarters of 2023. Compared with 2019′s level, third-quarter total bookings were at 72.7%, an improvement from 70.3% last quarter. This was better than narrow-moat peer Sabre’s total quarterly bookings that reached 63.4% of 2019′s level versus 63.7% in their prior quarter. While the gap is largely explained by Sabre and narrow-moat Expedia not renewing their contract in late 2021 (a low-margin business for the Sabre), the relative sequential improvement for Amadeus is noteworthy, although we think a portion could be tied to geographical mix.

Amadeus’ third-quarter EBITDA margin was up 230 basis points to 39.3% (year to date at 39%, up 310 basis points), driven by lower labor cost growth and leveraging of fixed costs. Management maintained its 2023 revenue and EBITDA guidance for 20%-22.5% growth and EBITDA margin expansion, respectively. This compares with our 2023 forecast for 21% sales growth and EBITDA margins of 39.8%, up from 36.6% in 2022. Looking out to 2024, we model for 9% and 12% revenue and EBITDA growth, respectively. We will continue to monitor economic growth and industry dynamics.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

More in Stocks

About the Author

Dan Wasiolek

Senior Equity Analyst
More from Author

Dan Wasiolek is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers gaming, lodging, and online travel.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering U.S. mid- and large-cap strategies for Driehaus Capital Management.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

Sponsor Center