Q1 2024 Earnings Report
2 May 2024
Forward-looking statements
Forward-looking Statements
Certain statements herein are forward-looking statements about trends, future events, uncertainties and our plans and expectations of what may happen in the future. Any statements that are not historical or current facts are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as "expect," "guidance," "outlook," "target," "momentum," "well-positioned," "becoming," "continue," "trend," "on track," "on schedule," "plan," "recurring," "trajectory," "pipeline," "opportunity," "potential," "progress," "benefit," "goal," "believe", "confident," "anticipate," "indicate," "position," "optimistic," "will," "forecast," "strategy," "estimate," "project," "may," "should," "would," "intend," or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Sabre's actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. The potential risks and uncertainties include, among others, dependency on transaction volumes in the global travel industry, particularly air travel transaction volumes, including from airlines' insolvency, suspension of service or aircraft groundings, the ability to achieve our cost savings and efficiency goals and the effects of these goals, the timing, implementation and effects of our technology transformation and other strategic initiatives, the completion and effects of travel platforms, exposure to pricing pressure in the Travel Solutions business, changes affecting travel supplier customers, maintenance of the integrity of our systems and infrastructure and the effect of any security incidents, our ability to recruit, train and retain employees, including our key executive officers and technical employees, competition in the travel distribution industry and solutions industry, failure to adapt to technological advancements, implementation of software solutions, implementation and effects of new, amended or renewed agreements and strategic partnerships, dependence on establishing, maintaining and renewing contracts with customers and other counterparties and collecting amounts due to us under these agreements, dependence on relationships with travel buyers, our collection, processing, storage, use and transmission of personal data and risks associated with PCI compliance, the effects of cost savings initiatives, the effects of new legislation or regulations or the failure to comply with regulations or other legal requirements, use of third-party distributor partners, the financial and business results and effects of acquisitions and divestitures of businesses or business operations, reliance on the value of our brands, reliance on third parties to provide information technology services and the effects of these services, the effects of any litigation, regulatory reviews and investigations, adverse global and regional economic and political conditions, risks related to global conflicts, risks arising from global operations, risks related to our significant amount of indebtedness, including increases in interest rates and our ability to refinance our debt, and tax-related matters.
More information about potential risks and uncertainties that could affect our business and results of operations is included in the "Risk Factors" and "Forward-Looking Statements" sections in our Quarterly Report on Form 10-Q filed with the SEC on May 2, 2024, in our Annual Report on Form 10-K filed with the SEC on February 15, 2024 and in our other filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.
Non-GAAP Financial Measures
This presentation includes unaudited non-GAAP financial measures, including Adjusted Operating Income (Loss), Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Loss from continuing operations per share
("Adjusted EPS"), Free Cash Flow, and the ratios based on these financial measures. In addition, we provide certain forward guidance and targets with respect to Adjusted EBITDA and Free Cash Flow. We are unable to provide this forward guidance and targets on a GAAP basis without unreasonable effort; however, see "Business Outlook and Financial Guidance" in the appendix for additional information including estimates of certain components of the non-GAAP adjustments contained in the guidance.
We present non-GAAP measures when our management believes that the additional information provides useful information about our operating performance. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. See "Non-GAAP Financial Measures" in the appendix for an explanation of the non-GAAP measures and "Tabular Reconciliations for Non-GAAP Measures" in the appendix for a reconciliation of the non-GAAP financial measures to the comparable GAAP measures.
Industry Data/Certain Definitions
This presentation and accompanying comments contain industry data, forecasts and other information that we obtained from industry publications and surveys, public filings and internal company sources, and there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position, bookings share and market estimates are based on independent industry publications, government publications, third-party forecasts and management's estimates and assumptions about our markets and our internal research. We have not independently verified this third-party information nor have we ascertained the underlying economic assumptions relied upon in those sources, and we cannot assure you of the accuracy or completeness of this information.
Rounding
Due to rounding, the numbers presented throughout this presentation may not add up precisely to the totals provided.
©2024 Sabre GLBL Inc. All rights reserved. | 2 |
Today's presenters
Kurt Ekert | Mike Randolfi |
President & CEO | EVP & CFO |
©2024 Sabre GLBL Inc. All rights reserved. | 3 |
Agenda
01 Q124 highlights and review
02 Growth strategies update
03 Review of Q124 financial results
04 Overview of recent debt refinancings
05 Guidance update
©2024 Sabre GLBL Inc. All rights reserved.
Strong revenue and AEBITDA growth in Q1 2024
Revenue | |
+$40M | |
(+5%) | |
$743M | $783M |
Q1 2023 | Q1 2024 |
Adj. EBITDA
+$84M | |
(+145%) | |
$142M | |
$58M | |
2020 | |
Q1 2023 | Q1 2024 |
Adj. EBITDA margin
+10.4pts | |
18.2% | |
7.8% | |
Q1 2023 | Q1 2024 |
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. See slide 2 and the appendix for a discussion of non-GAAP financial measures, including reconciliations to the most closely correlated GAAP measure.
©2024 Sabre GLBL Inc. All rights reserved. | 5 |
Q1 2024 Highlights: Delivering on our priorities
STRATEGIC PRIORITIES | RECENT ACHIEVEMENTS | ||
GENERATE POSITIVE FREE | • | Exceeded Q1 revenue and AEBITDA guide; on track to deliver positive FCF in '24 | |
CASH FLOW / DE-LEVER THE | • | Refinanced ~$300M of debt to better align maturities with expected FCF generation | |
BALANCE SHEET | • | Plan to repay remaining 2025 maturities using cash on balance sheet | |
DELIVER SUSTAINABLE | • Strong pipeline of commercial deals | ||
• | Gained distribution industry share in Q1 | ||
GROWTH | |||
• | Hyatt implementation on schedule and expected to go live in Q2 | ||
DRIVE INNOVATION / | • | Announced Sabre Red LaunchpadTM for travel agency customers | |
ENHANCE VALUE | • | R&D investments focused on distribution expansion, air and hotel next-gen | |
PROPOSITION | retailing, multi-source content platform, and payments | ||
REDUCE COST BASE / | • AEBITDA margin increased 10 ppts | ||
• | Tech transformation - operational and savings goals on track | ||
REPOSITION RESOURCES | |||
TOWARD GROWTH | • | Fully exited private data centers, achieved key tech transformation milestones |
©2024 Sabre GLBL Inc. All rights reserved. | 6 |
Travel Solutions Q1 2024 financial highlights
TOTAL REVENUE | ADJUSTED EBITDA | AIR DISTRIBUTION |
INDUSTRY SHARE | ||
$714M | $188M | 34.6% |
Growth of 5% YoY | Growth of 64% YoY | Growth of 0.6pts YoY |
TOTAL DISTRIBUTION | AIR DISTRIBUTION | LGS BOOKINGS |
BOOKINGS | BOOKINGS | (Lodging, Ground, and Sea) |
98M | 1% | 8% |
Growth of 2% YoY | YoY | YoY |
AVERAGE BOOKING FEE | PASSENGERS BOARDED | |
$5.81 | 168M | |
Growth of 7% YoY | Growth of 2% YoY |
Adjusted EBITDA is a non-GAAP measure. See slide 2 and the appendix for a discussion of non-GAAP financial measures, including reconciliations to the most closely | |
correlated GAAP measure. | 7 |
Faster air distribution industry bookings growth vs. broader industry
Five consecutive quarters of air industry booking YoY share gains
Share of Air Distribution Industry Bookings
+0.6pts | |
34.6% | |
34.0% | |
Q1 2023 | Q1 2024 |
+1.4pts | |
34.6% | |
33.2% | |
Q4 2023 | Q1 2024 |
- 5th consecutive quarter of YoY share gains
- 1.4pts of sequential share gain in Q1'24 vs. Q4'23 as corporate travel rebounded
- Expect continued momentum from recent commercial wins
Source: Sabre Market Intelligence
©2024 Sabre GLBL Inc. All rights reserved. | 8 |
Hospitality Solutions Q1 2024 financial highlights
TOTAL REVENUE | ADJUSTED EBITDA |
$79M | $8M |
Growth of 7% YoY | ~$11M Improvement YoY |
RECURRING REVENUE* | CENTRAL RESERVATION |
SYSTEM TRANSACTIONS | |
81% | 29M |
As a % of total revenue | Growth of 5% YoY |
Hyatt implementation on track for completion in 2025
- Three months ended March 31, 2024. Recurring revenue is defined as all revenue associated with products/services that are governed by multi-year agreements and otherwise do not have a finite/discreet service period or deliverable.
Adjusted EBITDA is a non-GAAP measure. See slide 2 and the appendix for a discussion of non-GAAP financial measures, including reconciliations to the most closely | 9 |
correlated GAAP measure. | |
Technology transformation remains on track
Q1 2024 Accomplishments | Unit Costs Continue to Decline* |
- On track to achieve 2024 operational milestones and cost savings
- Introduced generative AI tools for ~800 of our software engineers to increase speed and quality
- Completed Tulsa cloud migration
Unit cost of compute down
~55% since 2019
2019 | 2020 | 2021 | 2022 | 2023 | Q1'24 |
*Average monthly cost per server
On track to achieve $150M+ technology cost reduction in 2025 vs. 2023
©2024 Sabre GLBL Inc. All rights reserved. | 10 |
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Sabre Corporation published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 12:58:24 UTC.