• Adjusted EBITDA: Increased 53% year-on-year to $517 million, surpassing initial guidance of over $500 million.
• Revenue: Total revenue for 2024 was $3,030 million, up 4% year-on-year.
• Fourth Quarter Revenue: Increased 4% year-on-year to $715 million.
• Distribution Revenue: Fourth quarter distribution revenue was $500 million, a 5% increase from Q4 2023.
• Hospitality Solutions Revenue: Q4 2024 revenue increased 8% to $81 million, driven by an 8% increase in CRS transactions.
• Free Cash Flow: Negative $14 million for 2024, including $19 million in debt modification costs.
• Cash Balance: Ended 2024 with a cash balance of $746 million.
• Adjusted EBITDA Margin: Increased from 14% in Q4 2023 to 16% in Q4 2024.
• Air Distribution Bookings: Total distribution bookings were 81 million in Q4 2024, a 4% increase from Q4 2023.
• Average Booking Fee: $6.17 in Q4 2024, up 1% year-on-year.
• 2025 Guidance: High single-digit revenue growth, adjusted EBITDA of over $700 million, and free cash flow of over $200 million.
• Capital Expenditures: Expected to be approximately $85 million in 2025.
• Cash Interest Expense: Projected to be about $375 million in 2025.

• Warning! GuruFocus has detected 5 Warning Signs with SABR.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sabre Corp (NASDAQ:SABR) achieved a 53% year-on-year increase in adjusted EBITDA, totaling $517 million, surpassing their initial guidance.
• The company successfully completed its technology transformation objectives, migrating over 99% of compute capacity to the cloud, resulting in over $150 million in cost benefits.
• Sabre Corp (NASDAQ:SABR) reported double-digit growth in hotel distribution bookings and new air distribution business, contributing to solid financial results.
• The Hospitality Solutions team delivered strong results with total revenue reaching an all-time high, driven by increased CRS transactions and new customer deployments.
• The company expects double-digit growth in air distribution bookings, hotel distribution bookings, and hospitality solutions CRS transactions in 2025, driven by new commercial wins and strategic initiatives.

Negative Points

• Free cash flow for 2024 was negative $14 million, impacted by $19 million in debt modification costs.
• The average booking fee is expected to be slightly lower in 2025 due to geographic mix and growth in NDC and LCC volumes.
• Sabre Corp (NASDAQ:SABR) anticipates a slight year-over-year increase in SG&A expenses for 2025.
• The company expects air IT revenue to be down slightly year-over-year in the first half of 2025 due to the completion of revenue from previously demigrated carriers.
• Gross margins are expected to be slightly lower in 2025 due to the mix of new business, including lower-margin NDC and LCC content.

Q & A Highlights

Q: Can you walk me through the process of implementing new agency wins and any risks involved? A: Kurt Ekert, President and CEO, explained that Sabre has extensive experience in implementing new business, whether with existing or new clients. The process varies depending on the client type, such as online travel agents or brick-and-mortar agencies. The timeline often depends on the client's actions, but Sabre is confident in achieving projected outcomes due to their expertise and ongoing efforts.

Q: Can you unpack the incremental $100 million in cost efficiencies? A: Michael Randolfi, CFO, stated that the $100 million is part of a $250 million cost efficiency program, with $150 million realized in 2024. The remaining $100 million comes from the completion of their tech transformation, which began in 2019-2020, and these savings are reflected in the current year's P&L.

Q: What are your expectations for revenue per passenger boarded evolution this year? A: Michael Randolfi noted that Sabre doesn't manage to revenue per passenger boarded as revenue is driven by various factors. In the first half of the year, air IT revenue is expected to be slightly down due to previous carrier demigrations, but growth is anticipated in the second half with benefits from higher PBEs and SabreMosaic revenue.

Q: How does the capital infusion into new travel agents affect Sabre, and what's implied in your full-year outlook for corporate vs. leisure travel? A: Kurt Ekert mentioned that capital infusion highlights the sector's attractiveness, and Sabre has relationships with many new entrants. Their multi-source content platform provides excellent connectivity. Michael Randolfi added that their baseline assumption is flat to nominal industry growth, but they focus on controllable factors, expecting significant volume ramp-up from new business wins.

Q: How should we think about the impact of undisclosed wins on revenue per booking and growth into 2026? A: Kurt Ekert confirmed that strong momentum is expected into Q4 and 2026 due to new wins. Michael Randolfi noted that while some volumes come with slightly lower margins and booking fees, substantial gross profit dollar growth is anticipated, driving EBITDA growth. The undisclosed North American customer win will slightly dilute the average booking fee due to lower regional fees.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.