Sabre Corporation Q2 FY2026 earnings call

Overall Growth & Performance

• Sabre's bookings growth has outpaced the broader travel industry by approximately 600 basis points since late 2025, with Q2 2026 air distribution bookings trends exceeding expectations driven by a June recovery that continued into July.
• The company delivered double-digit year-over-year growth in normalized adjusted EBITDA for the fourth consecutive quarter, with Q2 2026 normalized adjusted EBITDA reaching $151 million (a 19% year-over-year increase) and margin expanding 272 basis points to 21.2%.

Agentic AI & Platform Innovation

• Management identifies agentic AI as a transformative emerging travel distribution channel, and Sabre is positioned as a leading infrastructure provider with an open platform that enables AI agents to shop, book, and service travel autonomously, securely, and at scale.
• The company doubled its count of active pilot and production partners for agentic APIs and its model context protocol (MCP) server from 30 to 60 in Q2 2026, and recently deployed the MCP server with a global enterprise loyalty and travel service company.
• A recent Silicon Valley hackathon drew over 400 participating developers who submitted 100+ projects built on Sabre's agentic tools, demonstrating strong developer ecosystem growth and platform flexibility.

Strategic Wins & Partnerships

• A notable African carrier selected Sabre as its new technology platform provider, migrating core passenger services to Sabre and adopting Sabre Mosaic NDC IT capabilities, with implementation expected to complete by the end of 2026. Prior recent wins include Hawaiian Airlines and Laos Airlines.
• Sabre extended its AR securitization facility with existing lenders through September 2029, leaving the company with no debt maturities until 2029 after prior refinancing activities.
• NDC adoption continues to grow steadily, with management expecting further acceleration during 2026.

Total company Q2 2026 revenue was $712 million, a 4% year-over-year increase.

1. Air Distribution: Bookings grew 1% year-over-year, with overall revenue growing 4% year-over-year, beating guidance of flat to nominal growth. Corporate bookings represent ~45% of total marketplace bookings, which offset softness in leisure demand. The segment was negatively impacted by 300 to 400 basis points from the Middle East conflict and higher fuel prices, with the most acute impact felt in EMEA and Asia Pacific, while North and South America delivered positive bookings growth throughout the quarter.
2. Airline Technology: Q2 2026 revenue was $135 million, in line with management expectations, with quarterly fluctuation driven by variable timing of license fees and performance deliverables. Management expects revenue of $140 million to $150 million per quarter in Q3 and Q4 2026, and full-year 2026 year-over-year growth for the segment.
3. Lodging (Hotel): Hotel-related revenue grew 11% year-over-year in Q2 2026, accelerating from prior periods. Growth was driven by higher hotel attach rates (which improved to ~35%) and expanding media revenue.
4. Payment Suite: Gross payment spend exceeded $6 billion in Q2 2026, up more than 30% year-over-year, hitting an annualized run rate of over $25 billion.

• Full-year 2026 revenue growth and air distribution bookings growth guidance is reaffirmed, while pro forma adjusted EBITDA guidance is increased to approximately $600 million (from prior guidance).
• Full-year 2026 free cash flow guidance is improved to approximately negative $65 million, up from the prior negative $70 million guidance; the full-year negative free cash flow is almost entirely driven by ~$60 million in restructuring costs, with adjusted free cash flow expected near break-even excluding these costs.
• Third quarter 2026: Air distribution bookings and revenue are expected to grow in the flat to low single-digit range year-over-year, with normalized adjusted EBITDA expected to be approximately $155 million. Gross margin is expected to come in at the higher end of the 56% to 57% range.
• Fourth quarter 2026: Air distribution bookings and revenue are expected to grow at a low to mid single-digit pace year-over-year, with normalized adjusted EBITDA expected to be approximately $125 million. Gross margin is also expected to come in at the higher end of the 56% to 57% range.
• Adjusted technology expense is expected to be higher in the second half of 2026 compared to the first half, driven by a shift in investment timing and additional spending on AI, Sabre Mosaic, and lodging product development. Adjusted SG&A expense is expected to be roughly flat sequentially compared to the first half.
• Aggregate free cash flow for the second half of 2026 is expected to be approximately $80 million, primarily generated in the fourth quarter.

• Ongoing Middle East conflict and sustained high fuel prices continue to pressure global travel demand, particularly in the EMEA and Asia Pacific regions, and have driven airline fare increases that suppress booking volumes.
• Management retains ongoing anti-competitive concerns regarding rival Amadeus, which they claim leverages its dominant position in passenger service systems (PSS) to exclude alternative providers in the emerging offer, order, settlement, and delivery (OOSD) market via data access restrictions, limited API interoperability, unfair high integration costs, and prolonged integration delays, harming both airlines and end travelers.
• The timing of mass consumer adoption of agentic AI in travel remains uncertain, as large AI platform providers are currently prioritizing enterprise and retail e-commerce use cases over travel commerce.
• NDC adoption creates modest headwinds to per-unit revenue and margins globally, with more material degradation seen in the European market where existing booking fees are nearly double those in other regions.

Q: Analist asks for explanation of year-over-year airline technology revenue weakness, whether Amadeus's alleged anti-competitive behavior contributed, and for Sabre's perspective on large AI labs' entry into agentic travel checkout and search. / A: Airline technology Q2 revenue of $135 million was exactly in line with expectations, with the year-over-year drop driven by normal quarterly fluctuation from variable timing of license fees and performance deliverables, not anti-competitive behavior. Prior concerns about Amadeus anti-competitiveness in the OOSD market remain: Amadeus restricts airline data access, interoperability API access, charges excessive integration costs, and delays integrations to lock airlines into its full vertically integrated stack, while Sabre's open modular approach lets airlines modernize without lock-in. For agentic AI, large AI players are currently focused on enterprise rather than consumer travel, and will likely prioritize retail e-commerce before travel. When they do enter consumer travel, large platforms want to keep consumers captive on their own end-to-end platforms, while Sabre is positioned as the critical open infrastructure layer for all agentic AI travel, with 60 active partners already on its tools.

Q: Analyst asks what is driving Sabre's Q2 bookings outperformance relative to peers, what segment mix assumptions underpin the second half guidance, and asks for comment on a large 2027 airline tech win Amadeus announced, including whether it was a former Sabre customer. / A: Sabre has outperformed peers by ~600 basis points since late 2025 due to ongoing share gains, growth with its low-cost carrier platform, and expanding NDC volumes. Corporate travel is outperforming leisure currently, and Sabre's 45% corporate bookings share (vs. 25-30% industry average) has been a major boost to results. Guidance assumes the negative impact from Middle East conflict and high fuel prices will persist but gradually dissipate through the end of the year, with modest broader macro improvement. Sabre does not comment on individual competitor customer agreements, notes its own airline technology business is growing, has strong interest in its Sabre Mosaic platform, and expects to announce another major new win in the coming months.

Q: Analyst asks for an update on current NDC volumes, and the impact of NDC on Sabre's unit economics. / A: NDC currently represents ~5% of Sabre's global distribution volumes, and is growing steadily from both existing client adoption and re-intermediation of NDC volumes that were previously distributed direct. Outside of Europe, NDC has only a slight dilutive impact on revenue and margins. In Europe, where NDC creates more material dilution due to higher prevailing booking fees, NDC only represents ~16% of Sabre's global point-of-sale bookings, so Sabre has less exposure than competitors. This dilution is more than offset by strong growth in higher-margin hotel, media, and payment revenue, leaving overall per-unit revenue performance on track.