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Sabre(SABR) - 2022 Q4 - Earnings Call Transcript
SabreSabre(US:SABR)2023-02-15 20:12

Financial Data and Key Metrics Changes - The company reported total revenue of $2.5 billion for 2022, marking a recovery and a return to positive adjusted EBITDA [26] - Free cash flow was $22 million in Q4 2022, benefiting from strong working capital inflows [46] - The average booking fee increased to $5.49 in Q4 2022, up from $4.96 in Q4 2021, indicating a favorable mix towards more profitable regions and travel types [54] Business Line Data and Key Metrics Changes - Distribution revenue totaled $417 million in Q4 2022, a 46% increase compared to $286 million in Q4 2021 [44] - IT Solutions revenue was $157 million in Q4 2022, a decline from $165 million in the same quarter last year, impacted by the loss of revenue from the Russian market [54] - Hospitality Solutions revenue improved to $65 million in Q4 2022, up from $54 million in Q4 2021, with central reservation system transactions totaling 27 million, a 16% increase year-over-year [55] Market Data and Key Metrics Changes - The company experienced a 90% recovery in passengers boarded in Q4 2022 compared to the same period in 2019 [9] - Distribution bookings recovery in Q4 was 59% versus the same period in 2019, with a 65% revenue recovery due to higher booking rates achieved [7][30] - Year-to-date air distribution bookings improved to 62% compared to the same period in 2019 as of early February 2023 [33] Company Strategy and Development Direction - The company is focused on a technology transformation, migrating to Google Cloud, which is expected to enhance scalability and reduce costs [3][35] - Partnerships with travel management leaders like BCD and AMEX GBT are expected to drive meaningful volume growth [27] - The company aims to achieve positive free cash flow in 2023 while managing costs effectively to support long-term strategic opportunities [23][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the travel recovery based on historical booking trends and improvements in corporate travel [5] - The company anticipates a $100 million headwind in IT Solutions revenue due to changes in Russian law affecting their operations [45] - Management remains confident in the long-term recovery of the travel industry, despite short-term fluctuations [60] Other Important Information - The company processed over one billion total transactions in 2022, highlighting its central role in the global travel recovery [41] - The company expects revenue for 2023 to be between $2.8 billion and $3 billion, with adjusted EBITDA between $300 million and $320 million [58] - Capital expenditures for 2023 are projected to be between $50 million and $60 million [70] Q&A Session Summary Question: What impacted the recovery in November and December? - Management indicated that the interruption was primarily in corporate travel and Asia Pacific travel due to various factors [78] Question: Can you provide more context on IT Solutions revenue? - Management clarified that the decline was largely due to the loss of revenue from the Russian market and the sale of the Air Center business [85][87] Question: What are the expectations for bookings recovery? - Management stated that the guidance assumes a steady incremental recovery from the current levels, with a focus on addressing airline capacity constraints [93] Question: How should we think about the revenue per booking trend going forward? - Management believes there is room for inflation-related uplift and positive mix opportunities as the Asia Pacific region reopens [100]