Sabre Corp. Q1 FY2026 earnings call

Good morning and welcome to Sabre's first quarter 2026 earnings conference call. Revenue grew 8% and normalized adjusted EBITDA grew 21% year-on-year. Achieved highest rate of air distribution bookings growth in over two years at 6%. Despite Middle East conflict and higher fuel prices, performed well. Marketplace delivers multi-source travel content at scale. AI is core to Sabre's technology stack. Payment suite and lodging expansion growing. NDC bookings expected to accelerate. Airline technology offers modular AI-driven solutions. Hotel-related revenue increased 10 percent to over $80 million in the quarter. Payment suite gross spend reached nearly $6 billion, up more than 40%, revenue grew over 25%.

Revenue grew 8% year-on-year. Normalized adjusted EBITDA increased 21% year-on-year to $169 million. Total marketplace bookings grew 5% year-on-year, air distribution bookings growth increased 6% year-on-year. Hotel distribution bookings increased by over 5% in the quarter to approximately 11 million. Payment suite revenue increased by over 25% year-on-year to $13 million. Passengers boarded in airline technology grew 3% year-on-year to $170 million. Lodging expansion recorded the 13th consecutive quarter of year-on-year revenue growth. NDC bookings exited 2025 at 4% of total bookings and are expected to accelerate in 2026.

Reaffirming full-year 2026 guidance for pro forma adjusted EBITDA and free cash flow. Expect second quarter air distribution bookings to be near flat, followed by phased improvement, returning to normalized environment by fourth quarter. Anticipate positive air distribution bookings growth for second half of 2026 but at slightly more modest pace than previously expected. Now expect full year 2026 air distribution bookings and revenue to grow in low to mid single digit range. Full-year free cash flow expectation remains approximately negative $70 million, driven almost entirely by restructuring costs. Second quarter revenue guidance is flat to nominal, gross margin expected at higher end of 56 - 57% range, pro forma adjusted EBITDA expected at approximately $130 million.

Impacts from conflict in the Middle East, including approximately 11% of Sabre's air distribution bookings originating in or transiting through the region, with March bookings declining by approximately 600 basis points. Higher fuel prices affecting Sabre and the broader travel industry, driving roughly negative 100 basis point impact in March. Geopolitical and macroeconomic environment being dynamic, with uncertainties around fuel supply and price dynamics, softening leisure travel demand, and potential impact of jet fuel supply shocks in Europe.

Q: Triangulate assumptions in air distribution bookings for full year and why growth isn't higher despite market share wins.

A: First quarter exceeded industry by 5 - 600 basis points. Short run strength in Americas offsetting lower distribution bookings due to Middle East conflict and higher fuel. Second quarter extrapolates March trends, underlying assumption geopolitical and macro environment smooth out in second quarter, third quarter increased bookings growth but more muted, fourth quarter closer to mid-single digits.

Q: Impact of jet fuel supply shocks in Europe, how adjusted for in guidance.

A: Watched airline commentary globally, capacity reductions from planned growth, factoring into guidance.

Q: Unit economics and scaling of MindTrap and PayPal partnership.

A: Haven't broken out commercials in detail, cost of revenue in marketplace business is about 1.5% of ticket or hotel booked value, agentic travel enables strong merchandising, live with search, booking, and full servicing within platform from day one.