Core Insights - Sabre Corporation has entered into a new agreement with Travelin.Ai, a next-generation corporate booking platform [1] - The agreement allows Travelin.Ai to access the SabreMosaic Travel Marketplace, which includes traditional airfares, NDC offers, low-cost carrier content, lodging options, and Sabre's Lodging AI capabilities [1] Company Summary - Sabre Corporation is a leading global travel technology company [1] - The partnership with Travelin.Ai enhances Sabre's offerings in the corporate travel sector [1] Industry Summary - The agreement signifies a trend towards integrating advanced technology in corporate travel booking platforms [1] - Access to a diverse range of travel options and AI capabilities may improve efficiency and user experience in the travel industry [1]

Core Insights - Sabre Corporation has renewed a long-term partnership with oneworld, enhancing its PRISM platform's role in corporate travel data and analytics [1][3] - PRISM is utilized by over 30 airlines and alliances, processing over 13 million tickets monthly from more than 4,500 sources across 160+ countries [2] - The renewal signifies Sabre's commitment to providing insight-driven travel technology solutions and positions the company for further expansion within the oneworld network [3] Company Overview - Sabre Corporation is a leading technology provider in the travel industry, headquartered in Southlake, Texas, serving customers in over 160 countries [4] - The company focuses on harnessing speed, scale, and insights to empower airlines, hoteliers, and agencies in retailing, distributing, and fulfilling travel [4] Partnership Details - The partnership with oneworld involves 14 major airlines, enhancing the travel experience for frequent flyers through various benefits [5] - PRISM's capabilities include over 350 reports, automated peer analysis, and a patented decision science framework, enabling airlines to optimize their corporate sales programs [2][3]

Core Viewpoint - The turnaround story for Sabre (NASDAQ: SABR) is perceived to be running out of time, leading to a downgrade of the stock [1]. Group 1 - Sabre's stock was downgraded due to concerns about its turnaround potential [1]. - The article suggests that the company may face challenges in achieving its turnaround goals [1]. Group 2 - The author has a background as a hedge fund analyst and has conducted extensive research in Latin American markets [2]. - The focus is on identifying high-quality compounders and growth stocks at reasonable prices in both the US and developed markets [2].

Core Insights - Sabre Corporation (SABR) shares fell nearly 35.7% following weaker-than-expected Q2 2025 results, missing all prior management guidance [1][9] - The company reported an adjusted loss of 2 cents per share, compared to a Zacks Consensus Estimate of break-even earnings, although the loss narrowed from 6 cents in the previous year [1][2] Financial Performance - Sabre's Q2 2025 revenues were $687.2 million, missing the Zacks Consensus Estimate of $705.3 million and reflecting a 1% year-over-year decline [2][9] - Distribution revenues decreased by 1% to $546 million, impacted by lower air bookings and a slight decrease in average booking fees, partially offset by increased hotel distribution bookings [3] - IT Solutions revenues were $141 million, down 2% year-over-year, attributed to customer demigrations, though offset by increased license fee revenues [4] - Normalized adjusted EBITDA was $127.2 million, improving from $120 million year-over-year but falling short of the previous guidance of approximately $140 million [5] Cash Flow and Balance Sheet - As of the end of June, Sabre had cash, cash equivalents, and restricted cash totaling $447 million, down from $672 million in the previous quarter [6] - Cash used in operating activities during Q2 amounted to $218 million, resulting in negative free cash flow of $240 million [6] Updated Guidance - For FY25, Sabre now expects pro-forma revenues to grow in the low single-digit percentage range, a reduction from earlier expectations of double-digit growth [7] - Pro-forma adjusted EBITDA is now forecasted between $530 million and $570 million, down from approximately $630 million previously [8] - The company anticipates generating pro-forma free cash flow in the range of $100-$140 million, a decrease from earlier forecasts of over $200 million [8] Q3 Outlook - Sabre has initiated guidance for Q3, expecting pro-forma revenue growth in the low-to-mid single-digit percentage range and pro-forma adjusted EBITDA between $140 million and $150 million [10]

Core Insights - Sabre reported revenue of $687.15 million for the quarter ended June 2025, reflecting a 10.4% decline year-over-year and a surprise of -2.58% compared to the Zacks Consensus Estimate of $705.31 million [1] - The company's EPS was -$0.02, an improvement from -$0.05 in the same quarter last year, with no EPS surprise against the consensus estimate of $0 [1] Financial Performance Metrics - Travel Solutions - Air Bookings were 75.53 million, below the average estimate of 79.36 million [4] - Total Bookings in Travel Solutions reached 90.3 million, compared to the estimated 94.61 million [4] - Passengers Boarded in Travel Solutions totaled 171.35 million, slightly below the estimate of 173.95 million [4] - Lodging, Ground and Sea Bookings were 14.76 million, compared to the average estimate of 15.25 million [4] - Distribution Revenue in Travel Solutions was $545.77 million, below the estimate of $567.37 million, marking a year-over-year change of -0.9% [4] - Overall Revenue for Travel Solutions was $687.15 million, compared to the estimated $708.09 million, reflecting a year-over-year change of -1.1% [4] - IT Solutions Revenue within Travel Solutions was $141.38 million, slightly above the estimate of $140.72 million, with a year-over-year change of -2.1% [4] Stock Performance - Sabre's shares have returned -6.3% over the past month, contrasting with the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported revenue of $687 million, a decrease of 1% year on year [19] - Normalized adjusted EBITDA increased by 6% year on year, with a normalized adjusted EBITDA margin improvement of approximately 120 basis points to around 19% [21] - Total debt was reduced by over $1 billion, or nearly 20%, and the company expects to reduce year-end 2025 net leverage by approximately 50% compared to year-end 2023 [7][25] Business Line Data and Key Metrics Changes - Air distribution bookings declined by 1% year on year, with growth strategies contributing eight points of growth offset by a nine-point decline in the base business [8][9] - Hotel distribution bookings grew by 2% in the quarter, with the attachment rate to air bookings improving by 100 basis points to 34% [10] - In IT Solutions, passengers boarded increased by 1% year on year, contributing to normalized adjusted EBITDA growth of 6% [11] Market Data and Key Metrics Changes - The operating environment remains challenging, particularly affecting air distribution bookings, which fell short of expectations [8] - The GDS industry experienced a decline in corporate bookings relative to leisure, impacting overall GDS volumes [9] - The company has a higher exposure to corporate and government travel, which has underperformed compared to leisure travel [41][62] Company Strategy and Development Direction - The company is focused on generating free cash flow and deleveraging the balance sheet while driving sustainable growth through innovative technology solutions [5][18] - The transformation into a modern, open travel marketplace is underway, with significant progress in multi-source content and NDC connections [12][55] - The company anticipates a six-month delay in launching a new multi-source low-cost carrier solution due to execution delays [16][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the incremental industry weakness observed in June and July, leading to a revised outlook for air distribution bookings growth [14][15] - The company expects the GDS industry trends to stabilize over time, despite current challenges [14] - Management remains optimistic about the long-term growth potential, citing strong demand for new business initiatives [18][60] Other Important Information - The company closed the sale of its Hospitality Solutions business on July 3, 2025, with proceeds primarily used to pay down debt [22][25] - Pro forma free cash flow was reported as negative $2 million for the quarter, with cash on the balance sheet exceeding $600 million post-sale [22][25] Q&A Session Summary Question: Why was the prior guidance so optimistic given the consistent headwinds? - Management noted that while growth strategies remained constant, market conditions changed, leading to a more cautious outlook [34][35] Question: Is the middle scenario of guidance considered the base case? - Management indicated that they have not provided a weighting on the scenarios but believe the current trading environment aligns more with the middle scenario [36][37] Question: What factors are causing the decline in GDS bookings? - Management highlighted that corporate travel impacts GDS bookings more significantly than leisure travel, and current market conditions are temporary rather than structural [40][41] Question: What is the strategy for NDC agreements and growth? - The company has 38 live NDC connections and is focused on integrating various content types to enhance its offerings [54][67] Question: How does the company expect to manage operating costs moving forward? - Management emphasized strong cost discipline and anticipated reductions in technology expenses due to ongoing transformation initiatives [47][49]

Financial Performance - Q2 2025 revenue was $687 million, a decrease of 1% year-over-year[17, 33] - Normalized Adjusted EBITDA increased by 6% year-over-year to $127 million[19, 34] - Hotel B2B Distribution saw a 4% year-over-year growth in Gross Booking Value (GBV), reaching approximately $5 billion in Q2 2025[22] - Digital Payments platform processed approximately $5 billion in gross spend during Q2 2025, representing a 44% year-over-year increase[22] Bookings and Passengers - Total distribution bookings reached 90 million, down 1% year-over-year[17] - Air distribution bookings totaled 76 million, a decrease of 1% year-over-year[17, 18] - Hotel distribution bookings increased by 2% year-over-year[17, 19] - Passengers boarded increased by 1% year-over-year, reaching 171 million[17] Debt and Cash Flow - The company paid down over $1 billion of debt year-to-date, reducing gross debt to approximately $43 billion and net debt to approximately $37 billion[16] - The company expects to reduce year-end 2025 pro forma net leverage by approximately 50% from year-end 2023[16, 44] - Pro forma free cash flow was negative $2 million for Q2 2025[34] - The company expects approximately $100 million to $140 million in pro forma free cash flow for full year 2025[36] Outlook - The company anticipates air distribution bookings growth in the second half of 2025 to be between +4% and +10%[25]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Net loss for Q2 2025 significantly increased to $256.4 million due to discontinued operations and debt extinguishment losses, with total assets decreasing and stockholders' deficit widening [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue slightly decreased to $687.1 million, but operating income improved, though a significant loss on debt extinguishment led to a $256.4 million net loss Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Revenue** | $687,149 | $695,050 | | **Operating income** | $89,134 | $48,722 | | **Loss from continuing operations** | ($201,018) | ($69,731) | | **(Loss) income from discontinued operations** | ($55,514) | $246 | | **Net loss** | ($256,532) | ($69,485) | | **Net loss per common share** | ($0.65) | ($0.18) | Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Revenue** | $1,389,275 | $1,408,683 | | **Operating income** | $180,529 | $137,917 | | **Loss from continuing operations** | ($204,395) | ($136,821) | | **Loss from discontinued operations** | ($16,588) | ($3,769) | | **Net loss** | ($220,983) | ($140,590) | | **Net loss per common share** | ($0.57) | ($0.37) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $4.42 billion by June 30, 2025, primarily due to reduced cash, while total stockholders' deficit widened to $1.80 billion Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $426,118 | $724,479 | | **Total current assets** | $952,558 | $1,163,218 | | **Total assets** | $4,419,145 | $4,634,929 | | **Long-term debt** | $4,997,092 | $4,834,776 | | **Total liabilities** | $6,223,459 | $6,226,700 | | **Total stockholders' deficit** | ($1,804,310) | ($1,604,699) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operating activities significantly increased to $281.8 million in H1 2025, primarily due to interest payments, leading to a $298.4 million decrease in total cash Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Cash used in operating activities** | ($281,841) | ($29,856) | | **Cash used in investing activities** | ($30,083) | ($45,850) | | **Cash provided by financing activities** | $34,500 | $54,124 | | **Decrease in cash, cash equivalents and restricted cash** | ($298,375) | ($35,592) | - A key driver for the increased cash used in operations was a **$199.9 million payment of previously paid-in-kind interest** in H1 2025, which did not occur in H1 2024[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Hospitality Solutions sale, now a single segment, with H1 2025 revenue of $1.11 billion from Distribution and $274.4 million from IT Solutions, and $5.04 billion total debt after refinancing - The company sold its Hospitality Solutions business, which is now presented as discontinued operations. As a result, Sabre now manages and reports its business in a single reportable segment[22](index=22&type=chunk)[23](index=23&type=chunk) Disaggregated Revenues (Six Months Ended June 30) | Category | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Distribution | $1,114,881 | $1,122,852 | | IT Solutions | $274,394 | $285,831 | | **Total Sabre Revenue** | **$1,389,275** | **$1,408,683** | - On July 3, 2025, the company closed the sale of its Hospitality Solutions business for estimated net cash proceeds of **$960 million to $980 million**. A gain on the sale is expected to be recognized in Q3 2025[36](index=36&type=chunk) - Total outstanding debt was **$5.04 billion** as of June 30, 2025. In June 2025, the company issued **$1.325 billion in new notes** and repaid **$1.225 billion of existing debt**, resulting in an **$85 million loss on extinguishment of debt**[53](index=53&type=chunk)[64](index=64&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Hospitality Solutions sale, Q2 2025 revenue decrease, improved operating income due to cost cuts, and projected full-year 2025 pro forma free cash flow of $100-$140 million [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2025 revenue decreased 1% to $687.1 million, but operating income significantly increased to $89.1 million due to cost reductions, despite a large debt extinguishment loss - **Q2 2025 vs Q2 2024:** - Revenue decreased by **$8 million (1%)** due to lower transaction volumes and IT solutions de-migrations[147](index=147&type=chunk) - Technology costs fell by **$27 million (13%)** due to cost reduction plans and cloud migration savings[149](index=149&type=chunk) - SG&A expenses decreased by **$25 million (16%)** from lower tax litigation reserves and cost savings[151](index=151&type=chunk) - Operating income increased by **$40.4 million (83%)**[152](index=152&type=chunk) - **H1 2025 vs H1 2024:** - Revenue decreased by **$19 million (1%)**[158](index=158&type=chunk) - Technology costs fell by **$53 million (13%)**[159](index=159&type=chunk) - SG&A expenses decreased by **$25 million (9%)**[161](index=161&type=chunk) - Operating income increased by **$42.6 million (31%)**[161](index=161&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA increased to $118.3 million in Q2 2025, while H1 2025 Free Cash Flow showed a $321.0 million usage, primarily due to debt refinancing interest payments Non-GAAP Reconciliation Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Loss from continuing operations** | ($7,821) | ($22,224) | ($5,037) | ($27,484) | | **Adjusted EBITDA** | $118,255 | $110,335 | $249,075 | $236,619 | | **Free Cash Flow** | N/A | N/A | ($320,991) | ($75,406) | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents were $426.1 million, with liquidity deemed sufficient due to the Hospitality Solutions sale proceeds used for debt repayment, and projected full-year 2025 pro forma free cash flow of $100-$140 million - Cash and cash equivalents were **$426.1 million** at June 30, 2025, down from **$724.5 million** at December 31, 2024[166](index=166&type=chunk) - The company projects full-year 2025 pro forma free cash flow to range from **$100 million to $140 million**, adjusted for the Hospitality Solutions sale and a **$227 million payment-in-kind interest payment**[170](index=170&type=chunk) - Following the Hospitality Solutions sale on July 3, 2025, the company used net proceeds to repay a total of **$798 million** across its 2021, 2022, and 2024 Term Loans, and **$23 million** of its Securitization Facility[117](index=117&type=chunk)[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rates, foreign exchange, credit, and inflation, managed with derivatives, with no material changes since December 31, 2024 - Primary market risks include interest rates, foreign exchange rates, credit risk, and inflation[197](index=197&type=chunk) - The company uses derivative instruments to mitigate interest rate risk on its floating-rate borrowings[197](index=197&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[198](index=198&type=chunk) - No material changes to internal control over financial reporting occurred during the most recent fiscal quarter[199](index=199&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, with material cases detailed in Note 13 of the consolidated financial statements - The company is involved in various routine legal proceedings. For details on material cases, refer to Note 13, which discusses ongoing income and service tax litigation in India[201](index=201&type=chunk)[109](index=109&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Key risks include dependence on travel volumes, intense competition, significant indebtedness of $5.0 billion, IT system vulnerabilities, and potential costs from a Q3 2023 cybersecurity incident - The business is highly dependent on global travel transaction volumes and susceptible to disruptions from economic downturns, health crises, and political events[203](index=203&type=chunk)[204](index=204&type=chunk) - The company faces significant competition, requiring substantial and ongoing investment in technology and innovation, such as New Distribution Capability and AI, to remain competitive[206](index=206&type=chunk)[208](index=208&type=chunk) - A significant level of indebtedness (**$5.0 billion** as of June 30, 2025) poses risks, including increased vulnerability to economic conditions and the need to divert cash flow to service debt[264](index=264&type=chunk) - The company is exposed to security incidents and cyberattacks. A Q3 2023 incident where an unauthorized actor extracted company data has led to a class-action lawsuit and could result in significant future costs[248](index=248&type=chunk)[250](index=250&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The $500 million share repurchase program remains suspended, with no repurchases in H1 2025 and $287 million still authorized - The company's share repurchase program remains suspended[284](index=284&type=chunk) - No shares were repurchased in the six months ended June 30, 2025. Approximately **$287 million** remains authorized under the program[284](index=284&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025[285](index=285&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q, including agreements, CEO/CFO certifications, and XBRL data files - Exhibits filed include forms of executive compensation agreements, debt indentures, and certifications required by the Sarbanes-Oxley Act[286](index=286&type=chunk)

Core Insights - Sabre Corporation announced its financial results for the second quarter of 2025, which are available on its Investor Relations webpage and the SEC's website [1] - A live webcast for the first quarter 2025 earnings conference call is scheduled, where management will discuss financial results and future outlook [2] - Sabre is a leading technology company in the travel industry, providing solutions for airlines, hoteliers, and agencies globally [3] Company Overview - Sabre Corporation is headquartered in Southlake, Texas, and operates in over 160 countries, focusing on technology solutions for the travel sector [3] - The company aims to address complex challenges in travel by leveraging speed, scale, and insights [3] Investor Communication - Important investor information is routinely posted on Sabre's Investor Relations section, LinkedIn, and X account, ensuring compliance with disclosure obligations [4]

Sabre Q2 2025 Earnings Release [Performance Overview](index=1&type=section&id=Performance%20Overview) Sabre's second quarter of 2025 was marked by significant strategic actions, including the $1.1 billion sale of its Hospitality Solutions business to reduce leverage, while achieving a strong 6 percentage point year-over-year improvement in operating margin despite weaker air distribution bookings Key Highlights Q2 2025 Financial Highlights | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Revenue | $687 million | -1% | | Operating Income | $89 million | +$40 million | | Operating Margin | 13% | +6 p.p. | | Net Loss Attributable to Common Stockholders | $256 million | Increased from $70M loss | | Adjusted EBITDA | $118 million | +7% | | Normalized Adjusted EBITDA | $127 million | +6% | - Closed the sale of its Hospitality Solutions business for **$1.1 billion** in July 2025[2](index=2&type=chunk) - Repaid over **$1 billion** of debt, including **~$825 million** from the Hospitality Solutions sale proceeds, and refinanced **$1.325 billion** of debt to extend maturities to 2030[2](index=2&type=chunk) - Signed new agency agreements, including with Christopherson Business Travel, demonstrating continued commercial momentum in air distribution[2](index=2&type=chunk) Management Commentary - CEO Kurt Ekert acknowledged that Q2 results were impacted by weaker-than-anticipated air distribution bookings, which offset gains from growth strategies, leading to an updated full-year outlook[3](index=3&type=chunk) - Management stated the current volume pressure is considered **"transitory"** and reaffirmed its focus on two strategic priorities: reducing leverage and driving sustainable growth through innovation[3](index=3&type=chunk)[4](index=4&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Sabre's Q2 2025 revenue decreased 1% to $687 million, but operating income surged 83% to $89 million due to cost reductions, though net loss widened to $256 million primarily from debt extinguishment and higher taxes, resulting in negative $240 million Free Cash Flow Consolidated Financial Performance Q2 2025 vs Q2 2024 Financial Performance (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $687,149 | $695,050 | (1)% | | Operating Income | $89,134 | $48,722 | 83% | | Net loss attributable to common stockholders | $(256,364) | $(69,760) | (267)% | | Diluted net loss per share (EPS) | $(0.51) | $(0.18) | (183)% | | Adjusted EBITDA | $118,255 | $110,335 | 7% | - The increase in net loss was primarily driven by an **$85 million** loss on the extinguishment of debt from refinancing activities and an **$85 million** increase in the provision for income taxes from continuing operations[8](index=8&type=chunk) - The improvement in operating income was driven by lower labor costs from prior cost reduction plans, reduced technology expenses from cloud migrations, and a decrease in tax litigation reserves[6](index=6&type=chunk) Segment Performance Q2 2025 Segment Revenue | Segment | Q2 2025 Revenue | Change (YoY) | Reason for Change | | :--- | :--- | :--- | :--- | | Distribution | $546 million | -1% | Decrease in air distribution bookings, partly offset by higher hotel bookings | | IT Solutions | $141 million | -2% | Impact of previously disclosed de-migrated carriers, partly offset by higher license fees | - Total bookings, net of cancellations, were **90 million**, a **1% decrease** from Q2 2024[7](index=7&type=chunk) Cash Flow Analysis - Free Cash Flow was negative **$240 million** in Q2 2025, a significant decrease from positive **$7 million** in Q2 2024[10](index=10&type=chunk) - The negative Free Cash Flow includes a **$227 million** payment-in-kind interest payment recorded to cash flow from operations due to refinancing activity, with pro forma Free Cash Flow, excluding this, being negative **$2 million**[10](index=10&type=chunk) Q2 2025 Cash Flow Summary (vs Q2 2024, in millions) | Cash Flow Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(218) | $26 (provided by) | | Cash used in investing activities | $(23) | $(19) | | Cash provided by financing activities | $21 | $(24) (used in) | [Business and Financial Pro Forma Financial Outlook](index=5&type=section&id=Business%20and%20Financial%20Pro%20Forma%20Financial%20Outlook) Sabre provides a pro forma financial outlook for Q3 and full-year 2025, adjusting for the Hospitality Solutions sale, with guidance across three air distribution volume scenarios projecting full-year Pro Forma Adjusted EBITDA between $530 million and $570 million and Pro Forma Free Cash Flow between $100 million and $140 million Pro Forma Basis Explanation - The outlook is provided on a pro forma basis to give effect to the sale of the Hospitality Solutions business, which is now classified as a discontinued operation[13](index=13&type=chunk) - Pro forma adjustments remove costs previously allocated to Hospitality Solutions and exclude the impact of a **$227 million** payment-in-kind interest payment from pro forma Free Cash Flow to enhance comparability of the company's go-forward operations[13](index=13&type=chunk)[15](index=15&type=chunk) Q3 and Full-Year 2025 Scenarios Q3 2025 Pro Forma Financial Outlook Scenarios | Air Distribution Volume (YoY Growth) | 2% | 4% | 6% | | :--- | :--- | :--- | :--- | | Revenue Growth | Low single digit | Low single digit | Mid single digit | | Pro Forma Adjusted EBITDA (in millions) | ~$140 (+15% YoY) | ~$145 (+19% YoY) | ~$150 (+23% YoY) | | Pro Forma Free Cash Flow (in millions) | ~$40 | ~$45 | ~$50 | Full Year 2025 Pro Forma Financial Outlook Scenarios | Air Distribution Volume (YoY Growth) | 0.5% | 2% | 3.5% | | :--- | :--- | :--- | :--- | | Revenue Growth | Flat | Low single digit | Low single digit | | Pro Forma Adjusted EBITDA (in millions) | ~$530 (+9% YoY) | ~$550 (+13% YoY) | ~$570 (+18% YoY) | | Pro Forma Free Cash Flow (in millions) | ~$100 | ~$120 | ~$140 | - The company expects its end-of-year 2025 cash balance to be greater than **$750 million**[17](index=17&type=chunk) [Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Sabre Corporation's unaudited consolidated financial statements, including the Statement of Operations showing a $256.5 million net loss for Q2 2025, a Balance Sheet with $4.42 billion in total assets, and a Statement of Cash Flows detailing a $298.4 million net decrease in cash for the first six months of 2025 Consolidated Statements of Operations Statement of Operations Highlights - Three Months Ended June 30 (in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $687,149 | $695,050 | | Operating income | $89,134 | $48,722 | | Loss from continuing operations | $(201,018) | $(69,731) | | Loss from discontinued operations, net of tax | $(55,514) | $246 (income) | | Net loss | $(256,532) | $(69,485) | Consolidated Balance Sheets Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $426,118 | $724,479 | | Total current assets | $952,558 | $1,163,218 | | Total assets | $4,419,145 | $4,634,929 | | Long-term debt | $4,997,092 | $4,834,776 | | Total liabilities | $6,111,560 (calculated) | $6,226,598 (calculated) | | Total stockholders' deficit | $(1,804,310) | $(1,604,699) | Consolidated Statements of Cash Flows Cash Flow Highlights - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(281,841) | $(29,856) | | Cash used in investing activities | $(30,083) | $(45,850) | | Cash provided by financing activities | $34,500 | $54,124 | | Decrease in cash, cash equivalents and restricted cash | $(298,375) | $(35,592) | [Non-GAAP Financial Measures & Reconciliations](index=15&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles non-GAAP financial measures like Adjusted EBITDA, Adjusted Net Loss, and Free Cash Flow, which management uses to monitor core operations by excluding specific items, with Q2 2025 Adjusted EBITDA reconciled to $118.3 million Definitions of Non-GAAP Measures - Adjusted EBITDA is defined as loss from continuing operations adjusted for items including D&A, interest expense, stock-based compensation, and restructuring costs[42](index=42&type=chunk) - Normalized Adjusted EBITDA is Adjusted EBITDA further adjusted for estimated costs historically allocated to the sold Hospitality Solutions business[43](index=43&type=chunk) - Free Cash Flow is defined as cash used in operating activities less cash used for additions to property and equipment[45](index=45&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA Reconciliation to Adjusted EBITDA - Q2 2025 (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | Loss from continuing operations | $(201,018) | | Adjustments: | | | Depreciation and amortization | $25,482 | | Interest expense, net | $111,244 | | Loss on extinguishment of debt | $85,182 | | Stock-based compensation | $11,290 | | Provision for income taxes | $91,262 | | Other adjustments | $(5,187) | | **Adjusted EBITDA** | **$118,255** | Reconciliation of Free Cash Flow Free Cash Flow Reconciliation - Q2 2025 (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | Cash used in operating activities | $(217,881) | | Additions to property and equipment | $(22,279) | | **Free Cash Flow** | **$(240,160)** |