Sabre’s second quarter was marked by operational headwinds, with the company missing analyst expectations for both revenue and non-GAAP earnings as outlined in its latest results. Management cited persistent softness in air distribution bookings, especially within corporate, government, and military travel segments, as a key factor. CEO Kurt Ekert described the performance as “below expectations,” attributing the shortfall to a combination of industry-wide GDS (Global Distribution System) weakness and Sabre’s higher exposure to underperforming markets. Ekert noted, “The operating environment remains challenging and is pressuring air distribution bookings.”
Is now the time to buy SABR? Find out in our full research report (it’s free).
Sabre (SABR) Q2 CY2025 Highlights:
- Revenue: $687.1 million vs analyst estimates of $738.7 million (1.1% year-on-year decline, 7% miss)
- Adjusted EPS: -$0.02 vs analyst estimates of $0 ($0.02 miss)
- Adjusted EBITDA: $118 million vs analyst estimates of $138.9 million (17.2% margin, 15.1% miss)
- Revenue Guidance for Q3 CY2025 is $708.6 million at the midpoint, below analyst estimates of $780.5 million
- EBITDA guidance for the full year is $550 million at the midpoint, below analyst estimates of $637.5 million
- Operating Margin: 13%, up from 7% in the same quarter last year
- Total Bookings: 90.3 million, in line with the same quarter last year
- Market Capitalization: $777.2 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sabre’s Q2 Earnings Call
- Joshua Phillip Baer (Morgan Stanley) questioned the shift in guidance philosophy and why earlier optimism faded. CEO Kurt Ekert explained that unexpected incremental industry weakness in June and July led to a revised outlook, with current guidance reflecting a more cautious view.
- Jed Kelly (Oppenheimer & Company) asked about the impact of new travel management company entrants and cost efficiencies from AI. Ekert pointed to growth opportunities with new entrants, while CFO Michael Randolfi cited $400 million in annual run-rate expense reductions from technology transformation.
- Jack Halpert (Cantor Fitzgerald) inquired about progress with NDC agreements and the causes behind the LCC solution delay. Ekert attributed the delay to execution challenges on Sabre’s side, while affirming the company’s strong position in NDC content.
- Alexander Irving (Bernstein) pressed on the claim that industry headwinds are transitory and sought clarity on 2026 recovery prospects. Ekert maintained that the challenges are mix-driven and not structural, expecting improvement with industry stabilization.
- Victor Cheng (Bank of America) sought clarity on NDC adoption rates and Sabre’s revenue per booking trend. Ekert explained that NDC adoption remains low single digits, especially in corporate segments, while Randolfi expects average booking fees to remain stable year-on-year.
Catalysts in Upcoming Quarters
In the quarters ahead, our analysts will closely monitor (1) the timeline and market adoption of Sabre’s delayed multi-source low-cost carrier solution, (2) signs of stabilization or recovery in corporate, government, and military travel segments, and (3) the company’s ability to maintain cost discipline and deliver incremental margin improvement. Progress on these fronts will help determine whether Sabre’s transformation efforts can offset ongoing industry headwinds.
Sabre currently trades at $1.96, down from $3.01 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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