Sabre (SABR) Q1 2025 earnings summary

Executive summary

• Announced definitive agreement to sell Hospitality Solutions to TPG for $1.1 billion, with $960 million net proceeds primarily used to pay down debt and improve leverage profile; closing expected by end of Q3 2025.

• Q1 2025 revenue was $777 million, down 0.8%-1% year-over-year, with net income of $35.5 million compared to a net loss of $71.5 million in Q1 2024.

• Adjusted EBITDA rose 5% year-over-year to $150 million, with margin up to 19.3%.

• Strategic focus on deleveraging, free cash flow generation, and innovation in Open Marketplace, Intelligent Retailing & Commerce, and technology transformation.

• Continued commercial momentum in air distribution, signing new agency and airline agreements.

Financial highlights

• Q1 2025 revenue: $777 million (down 0.8%-1% YoY); net income: $35.5 million (vs. $71.5 million loss YoY); adjusted net loss: $0.7 million.

• Adjusted EBITDA: $150 million, up 5% YoY; Adjusted EBITDA margin: 19.3%, up 1.1 pts.

• Free cash flow: $(98) million, reflecting typical Q1 seasonality.

• Cash and equivalents at quarter end: $651.1 million to $672 million.

• Effective tax rate: 265% benefit, driven by valuation allowance changes and loss utilization.

Outlook and guidance

• FY 2025 pro forma guidance: double-digit air and hotel B2B distribution bookings growth, high single-digit revenue growth, pro forma Adjusted EBITDA over $630 million, and positive Free Cash Flow above $200 million.

• Q2 2025 pro forma guidance: low single-digit revenue growth, Adjusted EBITDA around $140 million, and positive Free Cash Flow.

• Pro forma net leverage expected to improve from ~6.3x to ~5.4x post-transaction, with a long-term target of 2.5x–3.5x.

• Sequential acceleration in air distribution bookings growth anticipated, with high teens in Q3 and above 20% in Q4.

• IT Solutions revenue growth anticipated in Q3 2025 as impact from prior carrier de-migrations anniversaries.