Sabre Stock Plunges 36% on Q2 Loss and Revenue Decline

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]