Sabre Q4 Earnings Call Highlights

Sabre (NASDAQ:SABR) executives emphasized improving operating momentum exiting 2025, progress on deleveraging, and a strategic push to position the company as “AI-native” during the company’s full-year and fourth-quarter 2025 earnings call.

President and CEO Kurt Ekert said 2025 was “a challenging and dynamic year” impacted by exogenous events, but the company “met or exceeded” fourth-quarter guidance and ended the year with “positive momentum.” Ekert pointed to continued distribution share gains, expansion of a multi-source content platform, growth in hotel distribution and payments, and improving performance in airline technology as key catalysts for growth.

Management pushes back on AI disintermediation concerns

Ekert directly addressed investor concerns that AI tools could bypass Sabre’s marketplace through direct supplier connections, saying the company “strongly disagree[s]” with that view. He argued AI systems need the “foundational transaction layer” Sabre provides to shop, price, book, and service travel, and that the shift toward agentic AI could make Sabre “more essential, not less.”

Garry Wiseman, promoted to President, Product and Engineering, said Sabre’s role is underpinned by scale and proprietary capabilities, including over 50 petabytes of curated travel data, processing 14,000 transactions per second, and 11 billion shopping signals per month. Wiseman also cited what he described as decades of proprietary travel servicing workflows, fare rules, policies, and compliance logic across more than 200 countries.

Wiseman said Sabre launched “the first agentic APIs and MCP server for travel” about six months ago and described them as “purpose-built for LLM consumption at enterprise scale.” He said the company believes conversational commerce will be a major channel shift and compared agentic travel’s potential to the emergence of online travel agencies decades earlier.

Partnerships highlighted as AI strategy takes shape

Sabre highlighted several recent partnerships and customer deployments tied to agentic AI and conversational travel experiences:

• PayPal and Mindtrip: A planned conversational interface that combines discovery, planning, booking, payments, and servicing. Management said the product launch is targeted for the second quarter of 2026.
• BizTrip: An AI-native travel management company using Sabre’s travel marketplace and agentic APIs to support corporate travel workflows such as complex bookings, itinerary management, and policy automation.
• Virgin Australia: The first airline deploying Sabre’s Concierge IQ solution, which management said can handle layered questions and support tasks such as rebooking, miles redemption, and refunds. Sabre also said it is exposing this functionality through a ChatGPT plugin for Virgin Australia and that the plugin solution is available for other travel supply partners.

In the Q&A, management said its AI infrastructure is built on Google’s Vertex and Gemini capabilities, and Ekert said the company is in conversations with “effectively all the meaningful large players out there.”

Fourth-quarter results and 2025 performance

CFO Mike Randolfi said fourth-quarter results were solid and broadly in line with expectations shared on the third-quarter call, though partially offset by impacts related to a U.S. government shutdown during the quarter.

In the fourth quarter, total revenue rose 3% year-over-year. Distribution revenue increased by $27 million, up 5%, driven primarily by higher air and hotel distribution bookings, favorable rate impacts, and higher other revenue. Air distribution bookings grew 4% year-over-year, below prior guidance of 6% to 8%. Randolfi said the shutdown’s impacts were broader than expected due to lower inbound U.S. traffic and an increase in flight cancellations.

Fourth-quarter IT solutions revenue was $140 million, within the range of expectations. Gross margin was 58%; Randolfi attributed the year-over-year decline primarily to revenue mix and foreign exchange impacts from a weaker U.S. dollar.

Fourth-quarter 2025 normalized adjusted EBITDA was $119 million, up 10% year-over-year, and normalized adjusted EBITDA margin expanded 107 basis points to 18%. Pro forma free cash flow was $116 million, up $45 million year-over-year, and included a negative $19 million impact from disbursements related to refinancing fees and interest paid earlier than expected.

For the full year, Sabre reported revenue of $2.8 billion, up 1% year-over-year, and gross margin of 57.2%. Full-year normalized adjusted EBITDA was $536 million, up 10% year-over-year, with margin expanding 166 basis points to 19%. Pro forma free cash flow was $57 million.

Ekert highlighted operating metrics across the business, including total distribution bookings up 1% year-over-year, passengers boarded up 2% in airline technology, and hotel distribution bookings up 5% to 42 million. He said gross hotel booking value transacted through the platform now exceeds $20 billion annually.

Deleveraging progress, leadership changes, and 2026 outlook

Management said it paid down more than $1 billion of debt during 2025 using cash and proceeds from the sale of the Hospitality Solutions business, which was sold on July 3, 2025. The company said pro forma net leverage declined by approximately 25% versus year-end 2024. Sabre ended the year with $910 million in cash, including $98 million of restricted cash earmarked for debt repayments in the first quarter of 2026. Executives also noted that after two refinancings in 2025, the company has no large maturities until 2029 and more than 90% of debt matures in 2029 or later.

Ekert also announced executive leadership changes effective the following day, including Wiseman’s promotion and an expanded remit that includes innovation and agentic AI. Sean Williams was named Chief Operating Officer to lead revenue and commercial operations, Andy Finkelstein became Chief Commercial Officer of Travel Marketplace, and Dave Medrano was promoted to Chief People Officer. Ekert said Senior Vice President of Finance Roshan Mendis will transition to a senior advisor role before departing in May.

For 2026, Sabre guided to mid-single-digit volume growth and mid-single-digit revenue growth, driven by continued share gains, growth in NDC bookings, and a recently launched low-cost carrier (LCC) solution. Randolfi said IT solutions revenue is expected to grow mid-single digits, with quarterly revenue in the $140 million to $150 million range and growth weighted to the back half of the year. Pro forma gross margin is expected to be 56% to 57%, reflecting mix and FX pressure as NDC and LCC volumes scale.

Sabre expects pro forma adjusted EBITDA of approximately $585 million in 2026. The company said it plans to keep pro forma adjusted technology expense and pro forma adjusted SG&A “relatively flat” over the next two to three years through an “inflation offset program,” while maintaining operational delivery and research and development. Randolfi said restructuring costs tied to the program are expected to total about $65 million, after a $51 million restructuring charge recorded in the fourth quarter of 2025, and management expects around $60 million of cash outflows related to the program in 2026.

Randolfi said 2026 free cash flow is expected to be negative $70 million, driven primarily by restructuring cash costs; excluding restructuring, free cash flow would be near breakeven. He also noted cash interest in 2026 is expected to be about $470 million, up approximately $140 million year-over-year, primarily because Sabre no longer benefits from a prior paid-in-kind instrument that had allowed it to defer cash interest through May 2025.

For the first quarter, management guided to mid-single-digit volume and revenue growth and pro forma adjusted EBITDA of approximately $130 million, with gross margin expected at the low end of the annual range due to mix and FX impacts.

Looking beyond 2026, management said it currently expects mid-single-digit revenue growth in 2027, sustained adjusted EBITDA growth, and positive free cash flow in 2027.

About Sabre (NASDAQ:SABR)

Sabre Corporation is a leading travel technology company that provides software, data, mobile and distribution solutions to the global travel industry. Through its Sabre travel marketplace, the company operates one of the world’s principal global distribution systems (GDS), connecting travel buyers and suppliers across airlines, hotels, car rental companies and other travel providers. Sabre’s suite of products includes reservation and ticketing systems for travel agencies, comprehensive airline operations and passenger services solutions, as well as hospitality property management and central reservation systems for hotels.

Established in 1960 as a joint venture between American Airlines and IBM, Sabre introduced one of the first computerized airline reservation systems, pioneering the automation of ticketing and inventory control.