Core Insights - Sabre is positioning itself as an "AI-native" company, leveraging its extensive travel data and proprietary capabilities to enhance its marketplace and support agentic AI solutions [6][4][5] Company Developments - Virgin Australia is the first airline to implement Sabre's Concierge IQ solution, which can manage complex inquiries and tasks like rebooking and refunds, and is also available through a ChatGPT plugin for other travel partners [1] - BizTrip, an AI-native travel management company, is utilizing Sabre's travel marketplace and APIs to streamline corporate travel processes, with a conversational interface planned for launch in Q2 2026 [2] - Sabre's executives highlighted the launch of agentic APIs and a multi-channel platform designed for large language model (LLM) consumption, indicating a significant shift in travel commerce [3] Financial Performance - In Q4 2025, Sabre reported a 3% year-over-year increase in total revenue, with distribution revenue rising by $27 million (5%) due to higher bookings and favorable rates [8] - The company's normalized adjusted EBITDA for Q4 2025 was $119 million, reflecting a 10% year-over-year increase, with a margin expansion of 107 basis points to 18% [9] - For the full year, Sabre's revenue reached $2.8 billion, a 1% increase year-over-year, with normalized adjusted EBITDA of $536 million, also up 10% [10] Strategic Initiatives - Sabre has made significant progress in deleveraging, paying down over $1 billion in debt during 2025, resulting in a pro forma net leverage decline of approximately 25% [12] - The company anticipates mid-single-digit volume and revenue growth for 2026, driven by share gains and new solutions, with IT solutions revenue expected to grow in the same range [14] - Sabre's leadership changes include the promotion of Garry Wiseman to President of Product and Engineering, indicating a focus on innovation and AI [13] Future Outlook - For 2026, Sabre expects pro forma adjusted EBITDA of approximately $585 million, while maintaining flat technology and SG&A expenses through an inflation offset program [15] - The company projects negative free cash flow of $70 million for 2026, primarily due to restructuring costs, but anticipates near breakeven cash flow excluding these costs [16] - Management is optimistic about mid-single-digit revenue growth in 2027, with sustained adjusted EBITDA growth and positive free cash flow expected [17]

Financial Data and Key Metrics Changes - In 2025, normalized Adjusted EBITDA increased by 10% year-on-year, reaching $536 million, with the normalized Adjusted EBITDA margin expanding by 166 basis points to 19% [25][9] - Total revenue for 2025 was $2.8 billion, reflecting a 1% year-on-year growth, primarily driven by distribution revenue growth [22][25] - Pro forma free cash flow for the fourth quarter was $116 million, a year-on-year increase of $45 million [24] Business Line Data and Key Metrics Changes - Air distribution bookings grew by 4% year-on-year in the fourth quarter, with a total growth of 7% in December [12][22] - Hotel distribution bookings increased by 5% year-on-year, reaching 42 million, with gross hotel booking value exceeding $20 billion annually [13] - Sabre Payments was one of the fastest-growing businesses, with gross spend on the platform increasing by more than 35% year-on-year [11] Market Data and Key Metrics Changes - NDC (New Distribution Capability) adoption reached approximately 4% of total air distribution bookings, with 15 live integrations added during the year [12] - The company expects mid-single-digit volume growth for both 2026 and 2027, driven by continued share gains and growth in NDC bookings [28][32] Company Strategy and Development Direction - The company is transitioning from a GDS-focused model to an AI-native technology leader, emphasizing the importance of AI in enhancing travel workflows [6][7] - Recent executive leadership changes were announced to align with the new AI strategy, including the promotion of Garry Wiseman to President of Product and Engineering [8] - The company aims to leverage its extensive travel data and proprietary logic to become essential in the evolving AI ecosystem [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for strong, sustained performance, despite challenges faced in 2025 [5] - The outlook for 2026 includes expectations for mid-single-digit revenue growth, driven by share gains and the introduction of new solutions [28][32] - Management highlighted the importance of maintaining operational delivery and R&D while managing costs through an inflation offset program [56][57] Other Important Information - The company paid off over $1 billion in debt in 2025, significantly improving its capital structure and reducing pro forma net leverage by approximately 25% compared to year-end 2024 [9][26] - The company ended 2025 with a strong cash balance of $910 million, which includes $98 million in restricted cash for debt repayments [10][25] Q&A Session Summary Question: What still needs to be done on the AI front, and what upside opportunities from AI might evolve? - Management indicated that the next stage involves demonstrating the end-to-end experience of conversational commerce in travel, with partnerships like Mindtrip and PayPal enhancing the customer experience [36][41] Question: Does the introduction of GenAI change the economic equation for direct connects? - Management explained that Sabre's scalable marketplace allows for faster response times and better content management compared to direct connects, which can be costly for suppliers [47][50] Question: Can you elaborate on the inflation offset program? - The program aims to keep key cost items flat despite inflation, focusing on efficiency and productivity improvements through geographical leverage and AI integration [53][56] Question: How is corporate travel performing, and where is the strength coming from? - Corporate travel is showing positive signs across both traditional players and new entrants, indicating a healthier market environment compared to the previous year [80] Question: What is the outlook for free cash flow and discussions with debt holders? - Management expects to generate positive free cash flow in 2027, with a strong cash balance and no large maturities until 2029 [76][64]

Sabre (NasdaqGS:SABR) Q4 2025 Earnings call February 18, 2026 09:00 AM ET Speaker7Good morning, and welcome to Sabre's full year and fourth quarter 2025 earnings conference call. My name is Olivia, and I'll be your operator. As a reminder, please note today's call is being recorded. I will now turn the call over to the Senior Vice President of Finance, Roshan Mendis. Please go ahead, sir.Speaker8Good morning, and welcome to our full year and fourth quarter 2025 earnings call. This morning, we issued an earn ...