Core Insights - The company is transitioning from a legacy GDS-focused model to an AI-native technology leader, leveraging its extensive data as a foundational transaction layer for AI agents [1] - Performance in 2025 showed double-digit normalized adjusted EBITDA growth and positive pro forma free cash flow despite operational challenges [1] - The company de-risked its balance sheet by paying off over $1 billion in debt, with over 90% of debt now maturing in 2029 or later [1] Growth Drivers - Growth in the travel marketplace was fueled by distribution share gains, the launch of a new low-cost carrier solution, and the expansion of a multi-source content platform [1] - Sabre Payments emerged as a high-growth segment, with gross spend increasing over 35% year-on-year due to demand for automated risk and fraud management solutions [1] Leadership and Strategy - Management made executive leadership changes to align with the new 'Agentic AI' strategy, promoting Gary Wiseman to lead innovation and AI efforts [1] - Air distribution bookings showed strong momentum, achieving 7% growth in December 2025, supported by recovery across all regions and corporate travel [1]

Financial Data and Key Metrics Changes - In 2025, normalized adjusted EBITDA increased by 10% year-on-year, with the normalized adjusted EBITDA margin expanding by 166 basis points to 19% [25][9] - Total revenue for 2025 was $2.8 billion, up 1% year-on-year, driven primarily by growth in distribution revenue [25][22] - Pro forma free cash flow for the fourth quarter was $116 million, a year-on-year increase of $45 million [24][9] - The company ended the year with a strong cash balance of $910 million, which includes $98 million in restricted cash for debt repayments in the first quarter of 2026 [10][25] 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 to 42 million, with gross hotel booking value exceeding $20 billion annually [13][12] - 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 - The company recorded double-digit year-on-year growth in normalized adjusted EBITDA and generated positive pro forma free cash flow [9] - NDC (New Distribution Capability) represented approximately 4% of total air distribution bookings, with expectations for acceleration in 2026 [12][22] - 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 the travel ecosystem [6][7] - Recent executive leadership changes were announced to align talent and investments with the AI strategy [8] - The company aims to leverage its extensive travel data and proprietary logic to become essential in an AI-first world [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 in 2025 [5] - The outlook for 2026 includes expectations for mid-single-digit revenue growth and continued improvements in operational efficiency [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, reducing pro forma net leverage by approximately 25% compared to year-end 2024 [9][26] - The company has no large debt maturities until 2029, with over 90% of its debt maturing in 2029 or later [10][26] 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 [40][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 compared to direct connects, making it a valuable partner for AI companies [49][50] Question: Can you elaborate on the inflation offset program? - The program aims to keep key cost items flat while driving efficiency, with a focus on leveraging geographical advantages and embedding AI into the workforce [56][57]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue grew by 3% year-on-year, consistent with guidance of low single-digit growth [22] - Full year 2025 revenue reached $2.8 billion, up 1% year-on-year, driven primarily by growth in distribution revenue [25] - Normalized adjusted EBITDA for Q4 2025 was $119 million, a 10% increase year-on-year, with the margin expanding by 107 basis points to 18% [24] - Full year normalized adjusted EBITDA was $536 million, also a 10% increase year-on-year, with the margin improving by 166 basis points to 19% [25] - Pro forma free cash flow for Q4 2025 was $116 million, a year-on-year increase of $45 million [24] Business Line Data and Key Metrics Changes - Air distribution bookings grew 4% year-on-year in Q4 2025, with a 7% growth in December [11][22] - Hotel distribution bookings increased 5% year-on-year to 42 million, with gross hotel booking value exceeding $20 billion annually [12] - Sabre Payments was one of the fastest-growing businesses, with gross spend increasing over 35% year-on-year [10] Market Data and Key Metrics Changes - NDC (New Distribution Capability) represented approximately 4% of total air distribution bookings by the end of 2025, with expectations for acceleration in 2026 [11] - The company noted broad-based growth in air distribution bookings across all regions, including corporate travel, which had previously been negative [70] 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 travel [5][6] - 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 [7] - The company aims to leverage its extensive travel data and technology to become essential in the evolving AI ecosystem [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for strong, sustained performance, driven by distribution share gains and growth in hotel distribution and payments [5] - The company anticipates mid-single-digit volume growth for both 2026 and 2027, with a focus on continued share gains and growth in NDC bookings [28][33] - Management acknowledged challenges from external factors but noted positive momentum exiting 2025 [5][22] Other Important Information - The company paid off over $1 billion in debt in 2025, reducing pro forma net leverage by approximately 25% compared to year-end 2024 [8][26] - A restructuring charge of $51 million was recorded in Q4 2025 as part of an inflation offset program, with expected cash outflows of around $60 million in 2026 [32][73] Q&A Session Summary Question: What still needs to be done on the AI front, and what upside opportunities might evolve from AI? - Management highlighted the importance of demonstrating an end-to-end experience in conversational commerce for travel, with partnerships aimed at enhancing itinerary planning and payment options [38][42] Question: Does the introduction of GenAI change the economic equation for direct connects? - Management explained that Sabre's scalable marketplace and ability to aggregate and normalize travel content provide a competitive advantage in managing direct connects [50][52] Question: Can you elaborate on the inflation offset program? - Management indicated that the program aims to keep technology and SG&A costs flat while leveraging geographical advantages and embedding AI for productivity [55][59] Question: How is corporate travel performing, and where is the strength coming from? - Management noted positive signs in corporate travel, with strength coming from both traditional players and new entrants [80] Question: Can you provide an update on capital allocation for 2026 and beyond? - Management stated that while debt paydown remains a priority, there is also a focus on investing in growth initiatives, particularly in agentic AI [62][66]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $715 million, reflecting a 3% year-on-year increase, consistent with guidance for low to mid-single-digit growth [16][17] - Normalized adjusted EBITDA for the quarter was $150 million, up 23% year-on-year, with the normalized adjusted EBITDA margin expanding by 340 basis points to 21% [18][9] - Pro forma free cash flow was $13 million, with an expectation of approximately $70 million for the full year 2025 [18][19] Business Line Data and Key Metrics Changes - Total distribution bookings grew by 3% year-on-year, with air distribution bookings increasing by more than 2% [7][8] - Hotel distribution bookings grew by 6% in the quarter, and the attachment rate to air bookings increased over 100 basis points year-on-year [8] - IT solutions revenue remained flat at $140 million year-on-year, as growth from passengers boarded was offset by a decrease in license fee revenue [17] Market Data and Key Metrics Changes - The company experienced softness in July air bookings, but saw improvement in September, which finished strong with a 7% year-on-year increase [7][8] - The GDS industry air distribution bookings declined approximately 1 percentage point year-on-year, impacting the company's air booking mix [8] - The company noted that U.S. military and government travel represented about 4% of global air distribution volumes, which is a minor component of current trading volumes [29] Company Strategy and Development Direction - The company aims to reduce net leverage by approximately 50% by year-end 2025 compared to year-end 2023, focusing on generating free cash flow and deleveraging the balance sheet [6][20] - Innovation is central to the company's strategy, with recent announcements including agentic APIs for travel and a continuous revenue optimizer within the Sabre Mosaic platform [6][10] - The company is transforming its platform into a modern, open travel marketplace, with 41 live NDC integrations enhancing its competitive position [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive air distribution bookings growth, despite challenges from the government shutdown impacting October bookings by approximately 3 percentage points [15][21] - The outlook for Q4 anticipates air distribution bookings growth of between 6% and 8%, with a full-year expectation of near the low end of the previously provided range of 0.5%-3.5% [21][22] - Management highlighted that leisure demand is positive year-on-year, while corporate demand remains mixed, with expectations for low single-digit passenger growth globally [38][39] Other Important Information - The company has made significant progress in its capital structure, paying off over $1 billion of debt this year, including approximately $825 million from the sale of the Hospitality Solutions business [19][20] - The payments business is scaling rapidly, processing over $20 billion in annual transactions, with quarterly gross spend growing over 40% year-on-year [11][10] Q&A Session Summary Question: Can you run through the updated FY25 guidance and explain the changes in EBITDA and free cash flow? - Management noted that the $20 million reduction in EBITDA is primarily due to a $10-$12 million impact from the government shutdown, along with lower margin from FX and product sales [23][24] Question: What is the impact of the government shutdown on travel? - The impact is mainly on travel by government employees and U.S. military, with a high concentration of this business affecting overall volumes [28][29] Question: What is the current NDC mix? - The NDC mix remains in the low single digits, between 2% and 3% of air distribution volumes, but is expected to grow rapidly [30] Question: How does the company expect to recover from the government shutdown? - Management anticipates a phased recovery back to normalcy, likely in the first quarter following the resolution of the shutdown [32] Question: Can you elaborate on the payments business strategy? - The payments business is scaling at a 40% top line rate, with significant growth opportunities identified, although specific revenue and margin details have not been disclosed yet [32]