Sabre (SABR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 3% year-over-year to $765 million, driven by both Travel Solutions and Hospitality Solutions, with a 19% increase in Adjusted EBITDA, margin expansion, and positive free cash flow.

• Net loss attributable to common stockholders narrowed to $62.8 million from $211.8 million in Q3 2023, with operating income rising to $70.1 million.

• Strategic priorities include generating positive free cash flow, sustainable growth, innovation, and cost base reduction.

• Announced new commercial partnerships, including SabreMosaic launch with Virgin Australia and Riyadh Air, and agreements with World Travel Inc., Delta, WestJet, TAP Air Portugal, and Air Serbia.

• Cost reduction plan initiated in Q2 2023 is expected to reduce annual operating expenses by $200 million; $81 million in restructuring costs incurred to date.

Financial highlights

• Q3 2024 revenue was $765 million, up 3% year-over-year; distribution revenue grew 5% to $551 million, and Hospitality Solutions revenue reached $84 million, up 7% year-over-year.

• Adjusted EBITDA rose to $131 million from $110 million in Q3 2023, with margin expanding from 15% to 17%.

• Free cash flow was $8 million for the quarter; cash balance ended at $690 million.

• Net loss margin improved to (8.2)% from (28.6)% year-over-year; Adjusted EPS improved to $(0.04) from $(0.06).

• Gross margin for Q3 2024 was 57.8%, down from 60.3% in Q3 2023 due to higher incentive costs.

Outlook and guidance

• Q4 2024 guidance: revenue of ~$715 million, Adjusted EBITDA of ~$115 million, and >$80 million free cash flow.

• Full-year 2024 guidance: revenue of ~$3.03 billion, Adjusted EBITDA of ~$515 million, and positive free cash flow.

• 2025 targets: >$700 million Adjusted EBITDA and >$200 million free cash flow.

• Full-year net loss guidance of ~$269 million, with significant non-cash and interest expense adjustments.

• Company believes it has sufficient liquidity to meet obligations over the next twelve months, including $242 million of principal due at maturity.