Sabre (SABR) 31 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to the Sabre Third Quarter 2024 Earnings Conference Call. My name is Ricca, and I will 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, Investor Relations and Treasurer, Brian Evans. Please go ahead, sir.

Thank you, and good morning, everyone. Quarter Call. Third Sabre's to XXXX Earnings Welcome This is investors.sabre.com. available issued an release, which earnings press on morning, we our website at slide the today's during accompanies page. presentation, is A available also prepared this Investor Sabre remarks on Relations web call which call our commercial of available be about events, beliefs morning. We or today's later contain forward-looking results of on strategic growth growth our including of you expectations that others. A among comments strategies, our website our guidance statements arrangements and volumes, this financial cash transformation, effects will and replay our the advise that flow free and represent future technology share targets, distribution liquidity, and and uncertainties and issued this forward-looking in September conference on including XX, actual XXXX. may release today's cause differ uncertainties our XX-Q information earnings our statements ended and All our and the results these on is Form made involve for call. More statements contained risks that filings, SEC materially risks morning to from the quarter Throughout also today's measures. be non-GAAP financial call, presenting certain we will adjusted call to free adjusted and flow References cash during margin EBITDA been EBITDA, certain adjusted have items. exclude today's to Randolfi, and most website documents GAAP Kurt. directly reconciliations release and non-GAAP after posted prepared are to Ekert, remarks. With the Mike The Wilson, EVP available turn me earnings the will on Q&A measures measures our are: for call and Officer; over with and at Chief CEO; Scott Solutions, in and that, Financial available President investors.sabre.com. Participating of for be Hospitality the I'll Kurt comparable other President

significant financial flow. our are positive in achievements that thank highlight cash commercial, delivered the we quarter. the and free I'm Hello, increase today's revenue to Brian. operational in share presentation. priorities. a Earlier third significant and adjusted third that everyone, growth, today, strategic joining team and for results the reported you, we Thank and financial making continued EBITDA, expansion delivered steady you year-on-year Sabre pleased margin We quarter toward progress key

a on than commitment technology the by of double XXXX their management of focus strong more to the members transformation. and for to to track customers. on strategies, our adjusted team cost XXXX, their innovation tied commend from our world dedication I supported and execution cost to continued growth the are We to around objectives our EBITDA savings realization our

to Turning Slide X.

You see and topics of an will this overview can morning. the I that cover Mike

business growth First, quarter our highlights, performance. have including we an financial on I of I will Then will our the strategies. progress review our overview provide that third made

updated Slide take third across will metrics Mike through our X. quarter turn guidance. Please third discuss delivered you Finally, solid Sabre to growth. driven solutions growth results in Revenue expansion by acceleration XXXX our hospitality improvement quarter. Distribution and growth the financial booking rate financial bookings, hotel fees distribution average of and high an continued bookings, in an the key single-digit in increase was Air in

Our led the increase a XX% in top adjusted line year. to combined with performance, compared quarter to last effective same cost EBITDA management,

X. to Slide Turning

growth, strategic are growth. positive quarter, drive cash on and flow, to toward innovation cost our we reduce significant reminder, priorities, while key of sustainable a enhance which, progress resources repositioning generate propositions the During deliver to each value free base our and as our made

achievements today's presentation. discuss throughout these many will We of

of third and bookings this Distribution growth. distribution bookings, quarter, delivered continued hotel from average X. and share. in Roughly in Air Turning half Sabre's and to balance grew expansion Slide solid than by year-on-year, greater fees outperforming Distribution financial steady the Air Travel expansion progress from came share growth air of Solutions the the by industry. both higher market X% driven booking

an corporate commercial wins, bookings. by in fueled continued growth air Specifically, travel and in this group the acceleration bookings improvement of in was Asia growth implementation

the by are as momentum Distribution we to year-on-year driven our to we forward, bookings growth building primarily our continue growth making we expect enter progress X. Slide on initiatives. On Air Looking XXXX,

This shows share we bookings. throughout Air of we've seventh Distribution our XXXX, have our As year-on-year on grown has that consistently consecutive expanded basis. quarter share chart a emphasized for the

positive in seeing leading Air corporate and the in we quarter. trends volumes hold in between a business, where particularly Distribution travel, corporate grew X% the are position. We X% Sabre's

commercial share will have commercial are talk wins Distribution to wins and that and our We Air shortly about driving strong yet results, be further specific implemented. these pipeline that from expect contract achieve industry we to gains

growth a a continued revenue overall year-on-year in higher increased deployments, revenue representing Solutions improvement, CRS customer within to expected revenue million, business highest history. to to base. mix driven Slide Turning favorable adjusted continue to quarters our segment in a the our XX% The transactions Strong EBITDA million, customer in quarterly by the momentum with building the X% to X. in and improvement $XX was growth contributed Hospitality come. $XX increase to

year track. we $XX remains growth, achieve Our XXXX full on and expect both and in in adjusted XX. turn Prospectively, million $XX of target and to Hyatt EBITDA to implementation nearly our double-digit XXXX. Please we expect nearly million transaction revenue Slide

fare the variety and open, orders slide personalized modernize graphic overview growth During offers made, provides am our SabreMosaic. Please modular turn AI-powered on over left PSS seat with designed aggressively we extend XX. strategies, continued flexible, this to starting ancillary time include suites. X an options. and invest The to systems. pleased platform QX, the additional to modernize service This the of SabreMosaic have I to is progress share third-party and SabreMosaic travel of and technology to designed replace in traditional we product intelligent and beyond with to a you is and of class retailing that enabling and Slide wide

has and to the XX. overwhelmingly is available technology offer Sabre its this ecosystem. On positive. advanced the means been airline to from airlines the PSS customer to solutions and industry platform non-Sabre each believe in is We and gives that that Slide experts most airline order PSS-agnostic which platforms, SabreMosaic work production to approach, the needs. with architected choose Our ability Feedback global both fit

capabilities commercial full early the into of adopt SabreMosaic its to and will this stack. innovators, are partnerships. for technology has We platform one Australia, our airline Virgin SabreMosaic's translating retailing selected global leading digital industry's modernize already enthusiasm

Riyadh newest Arabia's selected to capabilities. On carrier, flight XX. retailing to optimization offer Additionally, Slide and technology has its Saudi SabreMosaic power Air,

Turning to other our growth strategies.

multisource build carrier continue seamlessly traditional We EDIFACT out offers algorithms which NDC, to content low-cost platform, our workflow intelligent and integration. efficient and with

from a We coming with in XXX with the an content rollout production connecting approximately in adopter are now early quarters. program, LCCs agencies XX expected to new broader over

NDC in have GDS. we currently airlines integrations XX the Additionally, with live

gains. a include World commercial the referred relationships mentioned industry and I last of one a Travel, Expansion, leading Distribution agreement recently We expanded with also regional NDC we to Delta, earlier, and We Inc., recently announced American content. On agency with wins TAP achieved as additional to quarter. share Air Portugal WestJet North TMC we

SabreMosaic, achieve to XXXX, are we points largest strong are ahead year-on-year. implementing to sign the by well These a year. we business deliver business in leading positioned support as addition agency Argentina. and OTA belief Serbia, renewals Hospitality an summary, Conferma increased forward earlier, believe growth. I since continue to with will growth we and very meaningful long-term momentum relative we our of least gains driving new hotel there signed performance Retailing, third year-on-year, strong gaining payments we approximately an strong that our where stand Air our quarter corporate card progress previously basis the significant of provider. to and implemented mentioned XXX as wins, sustainable pipeline. above the foundation these announced building growth foreseeable are virtual significant IT Accordingly, up the adoption business, our have annually on basis the for we doubled travel its We now opportunity in IT with share CRS Solutions, important in hand establishing growth walk financial in outlook. in we the and through and the strategies call our the Solutions and end XX%, believe long-term wins beginning and contract Sabre and we drive of rich to at deployments a the continued experienced you future. Hotel will annualized growth business. on percentage NDC digital Furlong-Fox, SynXis distribution. In to revenue bookings air focused rate hotel agency Mike growth. Within We X% a and agreement strong in remain in bookings are including payments for and are Priceline, realized Last, X is points attachment In with to wins, distribution over has

number to XX. Slide morning, Kurt, a the achieved in important We and third Thanks, financial of quarter. objectives Please everyone. turn good

we table, you XX. our see to and year-on-year, the across we on some revenue our our small internal turn priority third flow, generated financial drive EBITDA Based million of top strong fourth these the We and can the growth our expectations. of growth. Please improving a results our see, capital various and believe focus roughly line these early year-on-year attributable The results investment management metrics. with margins revenue line million updated quarter carrying we which bottom supporting indicators, is that as our versus expectations. guide and generated cost resulted achieved higher delivered $XXX Adjusted growth is As And in in our which these solid that and $XX the see in financial delivered strategies, guidance. are bottom reflected while will and factors between line Slide can free positive strategic actual key sheet. are to on the $XXX in in revenue sustainable structure revenue into deleveraging X meaningfully strong key was flow-through as difference improvement higher quarter to We in line. cash million you we solid we year-on-year differences streams balance across

to $XXX million million, revenue $XX quarter $XXX million last totaled was compared XXXX. QX X% in increase Turning $XX versus or $XXX X% increase Total million, million an year. of or Distribution Slide a to a revenue XX. third

in increased demigrations. $X.XX an $XXX Distribution achieve to $X for decline and adjusted revenue XXXX. accelerating and X CRS our average or nearly million from the in full total of year-on-year unit prior EBITDA $XXX XXXX to in as growth third revenue year. meaningful the adjusted improvement million year, in versus third the Solutions to of quarters. IT $XX a of the of Our was in prior in million from was million our X% in Air the million million $XX $XX as discipline $XX And growth we strongest compared $XX QX Solutions acceleration transaction booking our disclosed million, million prior believe quarterly X% on drive $X versus was the adjusted years. $XXX previously QX in third segment quarter, to Hospitality expect and represented And year-on-year. earlier, quarter in fee demonstrated XXXX. by in helped million from bookings this Solutions Kurt we compared QX margin are quarter This to target the improvement cost track revenue QX $X bookings year rate million. EBITDA quarter, represents mentioned transformation distribution a XXXX. Sabre's quarter. EBITDA EBITDA revenue costs X% $XXX our in our Lower driven primarily strong were totaled XXXX technology million year. increase QX million QX XXXX XX% quarter EBITDA adjusted a Adjusted XX% $XX in versus XXXX in the Notably, This this Hospitality million up

and balance quarter free $X the cash $XXX we a in with Lastly, generated flow ended cash of of million. million

to Turning XX. Slide

the expect of revenue approximately Regarding and $XXX $XXX fourth EBITDA we million adjusted million. guidance approximately of for quarter,

generate year expect quarter full and be XXXX. the cash to in positive to the than $XX flow free of expect greater We fourth million for

quarter typically in Distribution As a generation fourth the quarter cash capital. for Air the but to is due working quarter favorable reminder, bookings, free the for strongest flow lightest seasonality

$X.XX expect approximately now full approximately EBITDA of and adjusted billion the million. we XXXX, $XXX For year revenue of

in than free our drivers As EBITDA important number in than targets we have $XXX strong flow. greater greater and adjusted track a to we our we cash XXXX, of of $XXX XXXX on achieve million and believe momentum exit in million business are

XX. prudent Slide believe free and potential has value. we coupled drive the potential believe with over increases the driven increase to term. value anticipated Turning create in target investments significant continue X to and pursuing we expect are enterprise our making the our shareholder We growth The we the flow. in EBITDA management cost will improvement have earnings to We are path to long-term long has adjusted cash meaningful strategies,

further larger debt, equity enhancing As questions. shareholder enterprise we a expected open comprise cash flow utilizing proportion over pay proportion and prioritize time that, debt free a to operator, smaller we our down line value. And of value, please will believe for the with

of first Josh comes from Instructions] Morgan Stanley. line the Baer of question [Operator Our

the sort I'm mean, looking get dig revenue of And want differences maybe I Solutions versus small more what there. last talking revenue after to to growth guess about hoping for I several the in I the little to at, guidance Great. color then IT mean, like growing lines. miss down quarter. across and I a

even last down, that quarter, still wondering, flat, boarded segment but like like boarded was Just passengers had grew. though passengers you

there So maybe we IT Solutions with can revenue start overall dynamics. and

of Thanks the differences anything call out specifically of I'd I It aggregation discernible expectations. question. what very no trend some versus Yes. versus terms our What there's or internal for really small revenue the say really in $XXX to would an notable our was differences. call

a fell on $XX our expectations bookings Distribution short bookings XXX,XXX base. by For of example, million our internal Air

$XX And that, sum differences that's And million. there's million so million the $XX I'd of of like ] difference. [ an that's aggregation, small $X.X to say,

Solutions, talked generally line Now with Solutions about with in in quarters, regards to IT we've IT we prior expected. was where

range necessarily We year, it to quarters, to with prior we're in-period and repeat in year-over-year, attributable where talked that's was didn't as $XXX million year. year last landing. million to carriers this that this with some regard expected there be, associated the And demigrated roughly revenue PBs about in $XXX not to about we've

with I we specifically. Now a as IT of forward, to would look things airline couple that say regards

million we impact this range the we've that -- quarterly the As stage getting business. would basis. as we've demigrations, is $XXX million I now believe say happen. past baseline that demigrated a $XXX talked to are we what things We about, on in will is stabilized at But the think of X

with last PB see But the as noted, of that come the the start growth far as we've Mosaic. it several wins goes thing through. over commercial we've IT, quarters. And You'll airline significant goes to had is, other to benefit as

on You suite that. working and order saw us with Virgin full offer Australia announced the

You see side. Riyadh on the offer

$XXX what And we're expect I that the look is, start at forward, XXXX, meaningfully point, stream. to you it going say to to to million during inflect at $XXX see and in million so up the revenue few in as I'd quarters more But start next range. some probably growth

Great. helpful. That is to cash the ask just flow. other topic about wanted then I And is free

same, I up CapEx is considerably year-over-year. EBITDA about You have the think.

delta getting working trajectory of free seen could so the we've in about quarter of you the EBITDA the and talk And like the the pieces full hoping Just gives some and big this QX? confidence basically that moving far capital the year positive mark in what and for to between year, this cash flow? you

Yes.

is would cash seasonally just I First, QX typically free our strongest flow. highlight

we're of in EBITDA, see the with our our we what so terms And capital that trends is QX and working seeing. aligned

high degree So it a us does of give confidence.

working off year, replayed Now from year, if onetime capital about you, last you last I'd had balance initiatives remind the back calls benefit go you our million $XXX generated and the sheet. from we earnings

are we lapping that. now So

And same don't that benefit get you year. this so

as differences I forward, we are for XXXX, breakeven. and into we the XXXX, say we said, So move like big would go I to expect year-over-year. But those be

million greater than expect next year. target in year, next very, on much of $XXX we very And generate We to feel than the greater year. $XX track QX with of million our this

of from the question comes next of Kelly & Company. Oppenheimer line Jed Our

Distribution slight Should you year? into the are, Air year we the environment into that where going reacceleration hit you going your And where next in talk overall 'XX. remarks is to stand next can just said travel segment expect in we into then guidance? like about prepared that think order a You building that momentum in we

NDC. -- booking would what the Air Jed. bookings, commercial progress Yes. With had hasn't largest wins. to quarter I to you few on win we thanks, first, regards InterparkTriple, Distribution been with new agencies France. And Travel, World significant significant announced the Spain Distribution of agency a last announce We've one over Sabre another remind that last in is months, regard domestic heard announced. and Air you've

the point most We of that Air are to yet agreements. is Distribution benefit bookings. have in do my of recently on not So all those that agreed our

you're we going our say, bookings. to Air into XXXX very, into very confident acceleration that see very what with say feel I'm see XXXX, to as in what not agreements save But that, going move going too call. and I is I would benefit confident, go of I'm to So would and gains you're this those that from the for much on going we we've share meaningful reached, to Distribution that a February.

Jed, strong there's Demand, supply We're small some respect obviously with and business, are our obviously, globally. seeing pretty downward a leisure And meaningful not both mixed Yes. corporate all not news impacting the in meaningfully sort macroeconomic pressure. air. been geographies. real That's of any environment, very to just constraints across on There remains impact.

then looks new that the a Are And of might bit XX.X% wins? volume about kind talk it. just Can Got they high little Are distribution just it, about, put cost new it, of with you like is margins? revenue gross we dynamic? call look as more a at if pressure just revenue? wins, of the follow-up, it on they where these of

Jed. Yes. Thanks for that,

would mentioned, over gross time or would I in around would likely not revenue say range. our move you forward, seen around cost our that would new give and margin that remain Air revenue, of at Distribution is not largely around the I What XX% largely bookings look remain we as of we've results. or the are yet would I cost at likely expect take, XX%. say and XX% gross yet wins in What As look I margin

I there's of and faster get we quarters, to of had thresholds you paid time time different hit. If X revenue. at lumpy growing quarter-by-quarter, at types the than cost revenue different incentives because that that look prior get from look if Now gets it

And say -- what revenue roughly we of if would an of I you would this move you over look period so still expect But I think as is have at foreshadow, cost extended if XX% to term. a time. have over I the to around I us of to were forward longer

next question America. from Cheng of line Bank of the comes Victor Our of

think and give revenue to-date, performance reason Can it with Turkish as a to economic lower a color if well may. that? us maybe you on is A QX couple, then guide you I bookings how to and seems any rationale the that, of regards a and follow-ups. bit -- I growth there some be around specific of And down unfavorable to terms And there Frontier is loss. with more to I some have QX the

With relatively to far, booking what Thank consistent are reported Victor. so nothing QX we substantially QX, we're I different. say respect trends are what for Yes. that you, trends and seeing would with

Turkish. look we And Turkish we obviously terms beneficial content on As as and have reach content Turkish currently. of you therefore, at agreement not the with we generally, did mutually indicated, don't

As business. we lengths travel we they consider terms ecosystem, compete said et our their us the for were new cetera, that agreement that a to to have to both great NDC the reach discussion for Traditional unwilling to meet previously, of with disappointed fairly We're content. in went and Turkish to needs would allow agencies,

this immense in home Turkish brings parties value And that I Turkish have reach brings carrier we ecosystem. That so, challenges a the agreement would with future. And mention we the we of that the in near integrated to market. smaller hope relatively travel the a and ecosystem. all to that with is depth said, we content believe breadth that fully regret the to

bring, about competitive feel, we value of we So we good very the is feel But tremendous. our the overall. position distribution

you booking NDC or bit if now to on growing, bring is going Obviously, or last you if be volume we forward? we kind GDS confident I about 'XX implications maybe maybe question pricing previously. realistic With going guess, maybe million kind $XXX to at talked per $XXX booking, closer on to growth, a of Should that I forward? And And had they're impact you last with revenue $XXX -- look some million I of from 'XX. goal? gains and guess expect regards depending we're over Any than and you mix is kind that the outlook. experiencing or talk bridge share that year, revenue clear. in EBITDA of about slower But the seems but per normalized -- a bridge, still still that million in Very it have. will a

booking So yes, the with I'll average fee, on start that.

at if And look I there. you for a forward you quarter, if would back couple move to in quarter look your expect there's things at So the over average tick of -- just fee fourth booking fourth you $X. the sequentially,

And there's less fixed. small First, generate distribution bookings quarter. that's you somewhat revenue a the fourth portion seasonally, and of in actually

bit seasonally. helps obviously that So create a trend an of little upward

to The bookings lot second be is fees. seasonal tend have you thing a impact, is, fewer group lower to have which tends a that Asia also booking

that booking So would fee as $X. to expect average I QX, look I the would comfortably over be

be As that I booking on range. in to I'd our look would much getting $X beyond I expect XXXX too into that fee say average forward without detail that,

our being -- initiatives with and as $XXX regard to February broke as of I you with XXXX strategic XXXX, cost other for cost to our million generate we efficiency, would highlighted Now remind would well from from $XXX from of million call, our growth strategies. out we tech bridge XXXX around outlook, And earnings transformation XXXX. partly that our our on we said,

would are and highlight X part has included our that's of that that growth we've million of I've initiatives $XXX EBITDA and for that As million in we outlined. feel strategic I have that Kurt the growth million confident cash on strategies than XXXX, on we articulated, flow. at adjusted greater look $XXX $XXX greater very free as track that commercial articulated, wins of than we're we

our articulated, million that to adjusted about air favorable? moderate also flat $XX bookings assumption we've to prove is worth our separate Now be that would from initiatives, to Should highlight growth. industry growth As baseline EBITDA. point I each for more is

stage, very better think $XXX at there's I our we're goal. on this potential than track say much million. $XXX But would we million do toward certainly to So

now [Operator for Mr. like session. would the back Ekert turn I question-and-answer remarks. Instructions] it to This over Kurt closing concludes to

very operator. much, you Thank

all, of behalf making. we're a First silence of on happy night. last game with Seriously, I'd tough progress have like my Yankees, York New we're of moment the a to

on continuing to indicated, look forward Mike we track you talk this. to future for the of to feel in quarters strategic we As and very transformation much Sabre, about

So thank Happy you, and Halloween.

you for today's program. concludes Thank your conference. participation This in the

may You disconnect. now