Business Overview
Sabre Corporation (SABR) is a leading global travel technology company that is transforming the industry through its innovative solutions and strategic collaborations. With a rich history spanning over four decades, Sabre has consistently demonstrated its ability to adapt and thrive in an ever-evolving travel landscape.
Sabre Corporation was formed in December 2006 when it acquired Sabre Holdings Corporation. Sabre Holdings is the sole direct subsidiary of Sabre Corporation, and Sabre GLBL Inc. is the principal operating subsidiary and sole direct subsidiary of Sabre Holdings. Sabre GLBL and its direct or indirect subsidiaries conduct all of Sabre's businesses. The company's roots trace back to 1960 when it was founded as the computer reservations system for American Airlines, developing the first computerized reservation system for the travel industry. Throughout the 1970s and 1980s, Sabre expanded its global reach, establishing operations in Europe and Asia Pacific.
In the 1990s and 2000s, Sabre strategically diversified its business beyond its core global distribution system (GDS), investing in software solutions for airlines, hotels, and other travel providers. This expansion included significant acquisitions such as GetThere, an online corporate booking tool, in 2000, and Hospitality Solutions, a leading property management system, in 2007. These strategic moves have allowed Sabre to build a comprehensive suite of solutions spanning two core business segments: Travel Solutions and Hospitality Solutions.
Sabre's journey has not been without challenges. In 2011, the company faced an antitrust lawsuit filed by US Airways, alleging violations of the Sherman Act. After a lengthy legal battle, in 2022 the court found in favor of US Airways on its monopolization claim, though the damages awarded were minimal. Additionally, Sabre has had to navigate significant shifts in the travel industry, such as the rise of direct booking by airlines and the impacts of events like the COVID-19 pandemic, which severely disrupted global travel.
Despite these obstacles, Sabre has maintained its position as a dominant player in the travel technology space. The company's focus on innovation and delivering value to its customers has been central to its long-term success. Sabre has continued to invest in modernizing its technology platforms and expanding its portfolio of solutions for airlines, hotels, travel agencies, and other industry participants.
Financial Performance
In fiscal year 2024, Sabre reported revenue of $3.03 billion, reflecting a 4% year-over-year increase. While the company faced some headwinds during the COVID-19 pandemic, it has demonstrated its resilience and adaptability, rapidly implementing cost-saving measures and leveraging its technological capabilities to drive growth.
For the most recent quarter, Sabre reported revenue of $714,724,000, representing a 4% year-over-year increase. This growth was primarily driven by higher global air, hotel, and other travel bookings. However, the company reported a net loss of $74,698,000 for the quarter, primarily due to higher interest expenses and losses on extinguishment of debt. Despite the net loss, Sabre's operating cash flow and free cash flow both improved to $82,744,000, primarily due to higher revenue and better cost management.
Innovation and Strategic Partnerships
One of Sabre's key strengths lies in its ability to continuously innovate and respond to the evolving needs of its customers. In 2024, the company achieved a significant milestone by completing the migration of over 99% of its compute capacity to the cloud, a process that has yielded cost savings of more than $150 million compared to 2019 and 2023 levels. This strategic shift has laid the foundation for Sabre to develop and deploy advanced, cloud-native solutions that leverage the power of artificial intelligence (AI) and data analytics.
Sabre's commitment to innovation is evident in its strategic partnerships. In 2025, the company announced a multi-year agreement with Coforge, a premier global digital services and solutions provider, to accelerate the development and delivery of AI-enabled solutions. This collaboration is expected to strengthen Sabre's product roadmap and enable the company to provide its customers with even more sophisticated travel technology.
Additionally, Sabre has forged partnerships with leading technology giants, such as Google, to leverage their AI capabilities and enhance the personalization and optimization of its offerings. The integration of these advanced technologies into Sabre's solutions is expected to drive significant improvements in areas like customer service, developer productivity, and revenue optimization for travel suppliers.
Business Segments
Sabre operates through two main business segments: Travel Solutions and Hospitality Solutions.
The Travel Solutions segment serves as Sabre's global business-to-business travel marketplace, offering a comprehensive portfolio of software technology products and solutions for airlines. Revenue in this segment is primarily generated through transaction-based fees for bookings on Sabre's global distribution system (GDS) and recurring usage-based fees for Software-as-a-Service (SaaS) and hosted systems. Key offerings include reservation systems, commercial and operations products, professional services, and agency solutions.
In the third quarter of 2024, Travel Solutions revenue increased 3% year-over-year to $691.30 million. This growth was driven by a 5% increase in transaction-based distribution revenue, partially offset by a 5% decrease in IT solutions revenue. The increase in distribution revenue was attributable to a 4% rise in direct billable bookings to 93 million and favorable rate impacts from travel supplier mix. For the first nine months of 2024, Travel Solutions revenue grew 4% to $2.10 billion.
The Hospitality Solutions segment provides an extensive suite of leading software solutions for hoteliers. This segment generates revenue primarily through recurring usage-based fees for SaaS and hosted systems, as well as upfront fees and professional services fees. The SynXis Software and Services platform is a key offering, powering hotel reservations, distribution, and other hospitality management functions.
In the third quarter of 2024, Hospitality Solutions revenue increased 7% year-over-year to $84 million. This growth was driven by a 6% increase in SynXis Software and Services revenue due to a favorable mix within Sabre's customer base and a 2% rise in transaction volumes to 35 million, driven by new customer deployments. For the first nine months of 2024, Hospitality Solutions revenue grew 7% to $246.05 million.
Financials
Turning to Sabre's financial performance, the company has demonstrated its ability to generate strong cash flow and maintain a healthy balance sheet. In 2024, Sabre reported negative free cash flow of $14 million, which included $19 million in debt modification costs related to its debt refinancing activities. Excluding these one-time costs, the company generated positive free cash flow for the year.
For the full fiscal year 2024, Sabre reported revenue of $3,030 million, with a net loss of $203.72 million. Operating cash flow for the year was negative $12.15 million. The company's financial performance reflects the ongoing recovery in the travel industry and the impact of Sabre's strategic initiatives to drive growth and improve operational efficiency.
Liquidity
Sabre's liquidity position remains robust, with a cash balance of $668.76 million as of the end of the most recent quarter. The company has also made significant progress in strengthening its capital structure, extending $1.6 billion in debt maturities to 2029 and aligning its debt obligations with its projected free cash flow generation.
The company has an available credit line of $400 million under its AR Facility. Additionally, Sabre has a $235 million Securitization Facility, with $87.3 million outstanding under the AR Facility and $120 million outstanding under the FILO Facility. The company's current ratio and quick ratio both stand at 1.02, indicating a stable short-term liquidity position.
It's worth noting that Sabre's debt-to-equity ratio is currently negative at -3.673306432 due to negative equity. This situation highlights the importance of the company's ongoing efforts to improve its financial position and generate positive earnings.
Outlook and Future Growth
Looking ahead, Sabre's management has provided a positive outlook for 2025, guiding for high single-digit revenue growth and adjusted EBITDA of greater than $700 million. This growth is expected to be driven by the successful implementation of new commercial agreements, continued momentum in its Hospitality Solutions segment, and the benefits of Sabre's technology transformation initiatives.
For the first quarter of 2025, Sabre expects flat to low single-digit year-over-year revenue growth, with adjusted EBITDA of greater than $150 million. For the full year 2025, the company anticipates free cash flow of greater than $200 million, capital expenditure of approximately $85 million, and cash interest expense of about $375 million.
The majority of the expected double-digit growth in air distribution bookings and hospitality solutions CRS transactions in 2025 will come from already signed commercial wins that are being implemented over the course of the year. Notably, the Hyatt implementation is expected to account for roughly half of the CRS transactions growth in hospitality solutions. Sabre expects to see a steady acceleration in both air distribution bookings and hospitality CRS transactions throughout 2025.
Furthermore, Sabre believes that the momentum within their growth strategies, such as the open marketplace and intelligent retailing solutions, will drive significant contributions and top-line revenue growth in 2025.
Risks and Challenges
However, the company is not without its risks. Sabre operates in a highly competitive industry, facing challenges from both traditional and emerging players. The company's success is also closely tied to the overall health of the travel industry, which can be susceptible to macroeconomic conditions, geopolitical tensions, and unexpected events like the COVID-19 pandemic.
Additionally, Sabre's reliance on a few large customers, particularly in its Travel Solutions segment, exposes it to concentration risk. The loss of a significant customer or a decline in their business could have a material impact on Sabre's financial performance.
Conclusion
Despite these risks, Sabre's strategic focus on innovation, the strength of its partnerships, and its proven ability to adapt to industry changes position the company well for long-term growth. As the travel industry continues to evolve, Sabre's commitment to delivering cutting-edge technology solutions and enhancing the travel experience for its customers will be crucial in maintaining its competitive edge.
In conclusion, Sabre Corporation is a technology leader in the global travel industry, leveraging its extensive experience, innovative mindset, and strategic collaborations to drive transformation and deliver value to its stakeholders. With a strong financial foundation and a clear vision for the future, Sabre is well-equipped to navigate the dynamic travel landscape and capitalize on the opportunities that lie ahead.