Amadeus (OTC) ((AMADY)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Amadeus Earnings Call Reflects Positive Sentiment Amid Challenges
The recent earnings call for Amadeus (OTC) conveyed a generally positive sentiment, highlighting steady revenue and profit growth, strategic investments, and successful partnerships. However, the company faces challenges in hospitality growth and passenger boarded metrics, alongside a decline in free cash flow.
Steady Revenue and Profit Growth
Amadeus reported an 8% growth in revenue at constant currency and a 12% increase in profit for the first half of 2025. This performance is noteworthy given the challenging macroeconomic conditions, showcasing the company’s resilience and effective strategies.
Significant Investment in R&D
The company made a substantial investment of approximately EUR 700 million, or 20% of its group revenue, in research and development. This investment aims to support future revenue generation and drive technological advancements, positioning Amadeus for continued growth.
Major Cloud Transformation
Amadeus has successfully completed 90% of its applications activation in the public cloud. This transformation enhances the company’s flexibility, scalability, and potential for innovation, marking a significant milestone in its technological evolution.
Strategic Partnerships and Expansions
The earnings call highlighted a new strategic partnership with Google, in addition to existing collaborations with Microsoft. These partnerships are set to enhance AI-driven innovations and support Amadeus’s multi-cloud strategy, expanding its technological capabilities.
New Contracts and Renewals
In the first half of 2025, Amadeus signed 29 new contracts or renewals of distribution agreements with airlines. This development underscores the company’s strong market position and its ability to maintain and grow its client base.
Strong Performance in Air Distribution
The Air Distribution segment saw a revenue growth of 7.5% at constant currency. This growth was driven by positive pricing impacts and successful customer renewals, reflecting the segment’s robust performance.
Hospitality Growth Slowed
The Hospitality segment experienced slower growth of 7.5% at constant currency. This slowdown was primarily due to a reduction in media spend by customers, particularly in North America, posing a challenge for future growth.
Passenger Boarded Growth Impacted
Growth in passengers boarded was limited to 4.6%, influenced by geopolitical situations, moderation in travel demand, and aircraft incidents. These factors have impacted the company’s ability to capitalize on potential growth opportunities.
Free Cash Flow Decline
Amadeus reported a 12% decline in free cash flow compared to the previous year. This decrease was attributed to increases in capital expenditure and working capital outflow, highlighting a financial area that requires attention.
Forward-Looking Guidance
During the earnings call, CEO Luis Maroto emphasized steady and profitable growth despite a challenging environment. The company expects 2025 revenue growth at the lower end of the guided range, with EBITDA and EBIT projected to grow faster than revenue. Amadeus continues to focus on strategic partnerships and technological advancements to drive future growth.
In conclusion, Amadeus’s earnings call reflects a positive outlook with steady growth and strategic advancements. While challenges in hospitality growth and passenger metrics exist, the company’s investments in R&D and cloud transformation, along with strategic partnerships, position it well for future success.