What Management Said

Read the full Q3 2025 transcript ↗

This morning, we issued an earnings press release, which is available on our website at investors.sabre.com. More information on these risks and uncertainties is contained in our earnings release issued this morning and our SEC filings, including our Form 10-Q for the quarter ended September 30, 2025. References during today's call to adjusted EBITDA, adjusted EBITDA margin, normalized adjusted EBITDA, and normalized adjusted EBITDA margin have been adjusted to exclude certain items. The most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on our website at investors.sabre.com.

We have removed the impact of the $227 million payment in kind interest that was recorded in conjunction with the refinancing activity in the second quarter of 2025 from pro forma free cash flow. Earlier today, we reported third quarter results and provided an updated outlook for the remainder of the year. We delivered positive air distribution bookings growth in the third quarter, driven primarily by strong performance in September. Our outlook for the remainder of the year, we remain confident in our ability to continue to drive air distribution bookings growth going forward.

We have strengthened our balance sheet by growing adjusted EBITDA, generating free cash flow, extending debt maturities, and proactively using cash to reduce debt. This quarter, we announced two industry firsts: agentic APIs for travel, enabling a new era of AI-driven retailing, and continuous revenue optimizer, an offering within our modular AI-native Sabre Mosaic platform. Further, our payments business continues to see strong customer demand and is growing at a very healthy rate. New agency wins and renewals, first-mover product launches, and continued innovation increase our confidence that we are well-positioned competitively.

What went well
  • Third-quarter revenue grew 3% year-on-year to $715 million and normalized adjusted EBITDA rose 23% to $150 million, expanding margin over 300 basis points to 21%.
  • Air distribution bookings returned to positive growth (up more than 2%), driven by a strong September that finished up 7% year-on-year as newly converted business from Sabre's growth strategies contributed 10 percentage points of air bookings growth.
  • The balance sheet strengthened materially: Sabre paid off over $1 billion of debt in 2025, including roughly $825 million repaid in the quarter from Hospitality Solutions sale proceeds, and reaffirmed it expects to cut net leverage by about 50% by year-end 2025 versus 2023.
  • Sabre extended its AI and product leadership, launching the industry's first agentic APIs and MCP server for travel and the Continuous Revenue Optimizer, reaching 41 live NDC integrations, and growing the payments business over 40% year-on-year with more than $20 billion in annualized volume; it also announced an expanded WorldTravel partnership.
What went wrong
  • Pro forma free cash flow of $13 million came in below expectations, with the shortfall driven roughly one-third by lower receipts (July/August air bookings were about flat and virtually all growth landed in September, after the ~30-day booking-to-receipt lag) and two-thirds by higher disbursements pulled forward from Q4 2025 and 2026.
  • Normalized gross margin declined about 130 basis points year-on-year due to lower-than-expected revenue from certain higher-margin products and continued FX pressure from a weaker U.S. dollar, and management expected that pressure to persist into Q4.
  • The U.S. government shutdown hit October air distribution bookings by roughly 3 percentage points, prompting Sabre to cut its Q4 air bookings growth guidance to 6%-8% (midpoint 7%) from a prior 6%-14% (midpoint 10%) and to embed a $10-$12 million Q4 EBITDA impact.
  • Air booking growth also faced transitory headwinds from a roughly 1-point year-on-year decline in overall GDS industry air bookings and an unfavorable mix tied to Sabre's higher exposure to U.S. government, military and corporate business.

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Q3 2025 call
Reported 2025-11-05 · figures from the Sabre Corp Q3 2025 earnings call.

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