Sabre Corporation

Good morning and welcome to the Sabres full year and fourth quarter 2025 earnings conference call. My name is Livia and I'll be your operator. As a reminder, please note today's call is being recorded. I will now turn the call over to the Senior Vice President of Finance, Roshan Zinus. Please go ahead, sir.

Good morning and welcome to our full year and fourth quarter 2025 earnings call. This morning, we issued an earnings press release, which is available on our website at investors.saber.com. A slide presentation, which accompanies today's prepared remarks, is also available during this call on the Saber Investor Relations webpage. A replay of today's call will be available on our website later this morning. We advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including results of our growth strategies. our AI offerings and AI-related developments in the industry, transactions and bookings growth, commercial and strategic arrangements, our financial guidance, outlook and expectations, pro forma financial information, free cash flow, net leverage, and liquidity, among others. All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call. More information on these risks and uncertainties is contained in our earnings release issued this morning and our SEC filings, including our Form 10-K for the year ended December 31, 2025. Throughout today's call, we will also be presenting certain non-GAAP financial measures. References during today's call to adjusted EBITDA, adjusted EBITDA margin, normalized adjusted EBITDA, and normalized adjusted EBITDA margin have been adjusted to exclude certain items. The most directly comparable gap measures and reconciliations for non-gap measures are available in the earnings release and other documents posted on our website at investors.saber.com. Normalized amounts have been adjusted for estimated costs historically allocated to our hospitality solutions business, which was sold on July 3, 2025. We are also presenting certain financial information on a pro forma basis to give effect to the sale of the hospitality solutions business. And we have removed the impact of the $227 million payment in client interest that was recorded in conjunction with the refinancing activity in the second quarter of 2025 from Performa Free Cash Flow. Unless otherwise noted, results presented are based on continuing operations. Participating with me are Kurt Eckert, President and CEO, Mike Randolfi, CFO, and Gary Wiseman, President, Product and Engineering. With that, I will turn the call over to Kurt.

Thanks, Rishon. Hello, everyone, and thank you for joining us. 2025 was a challenging and dynamic year in which exogenous events impacted our operational results. Despite these challenges, we remained focused on execution and met or exceeded our financial guidance in the fourth quarter and ended the year with positive momentum. Moving forward, I believe we are well positioned for strong, sustained performance. Our growth outlook today is driven by several key catalysts. Continued distribution share gains, the expansion of our multi-source content platform, solid growth in both hotel distribution and our payments business, as well as improving performance in our airline technology business. As I've discussed previously, our industry is evolving rapidly. and Sabre is evolving with it. We are in the midst of a fundamental transition, moving Sabre from a GDS-focused company to an AI-native technology leader. Before reviewing 2025 performance, I have some thoughts on recent market sentiment around AI disintermediation risk, the concern that AI bots could bypass our marketplace and connect directly to suppliers. We strongly disagree. AI needs what Sabre has already built, vast, constantly evolving data, integrated content, and complex logic purpose-built to solve travel's uniquely challenging workflows. We provide the foundational transaction layer AI uses to shop, price, book, and service travel. We expect this shift makes us more essential, not less. we believe Agentech AI will reshape the technology landscape and we are positioning Sabre to lead in this next phase. As AI native companies enter the travel ecosystem, they need Sabre's strong foundation, which provides breadth of content, modern cloud native platform, and AI native APIs, which we believe positions us as the platform of choice. While we are in the early stages of sizing the AI opportunity, and have not included any of the potential significant upside in our forward outlook. We are taking deliberate actions to align our talent and investments with this strategy and position Sabre for long-term growth and value creation. As part of these actions, today we announced a series of executive leadership changes, effective tomorrow. Gary Wiseman is promoted to President, Product and Engineering, with his remit expanded to include leadership of innovation, and Agentic AI. Sean Williams is appointed Chief Operating Officer and will lead Sabre's revenue and commercial operations functions. Andy Finkelstein steps into the role of Chief Commercial Officer at Travel Marketplace, and Dave Medrano is promoted to Chief People Officer. Separately, Roshan Mendes, who has been a superb leader during his many years with Sabre, most recently as Chief Commercial Officer, has decided to pursue another opportunity Rishan will transition to senior advisor before departing the company in May. We deeply appreciate his contributions and wish him continued success. On today's call, I've invited Gary to share our progress on delivering agentic AI solutions to drive long-term growth and why that makes us a critical part of the evolving AI ecosystem. Now turning to slide four, For the year, we recorded double-digit year-on-year growth in normalized adjusted EBITDA and generated positive pro forma free cash flow. A key focus for us is further strengthening our balance sheet, and we made significant progress this year by paying off over $1 billion in debt, which, when combined with growth in pro forma adjusted EBITDA, reduced our pro forma net leverage by approximately 25% compared to year-end 2024. We continue to be proactive in managing our long-term capital structure. Through two successful refinances in 2025, we have no large maturities until 2029, and over 90% of our debt now matures in 2029 or later. We also ended the year with a strong cash balance of $910 million, which includes $98 million of restricted cash for debt repayments in the first quarter of 2026. While we have more work to do to reach our long-term leverage goals, these actions provide us with significant room to continue to invest and further grow our business. On the right side of the slide, our technology investments are driving positive, measurable results. AI has been a core systemic part of the Sabre technology stack for years, and we continue to lean into that advantage. In 2025, we see as the first mover position in our industry with our introduction of agentic APIs and a proprietary MCP server designed for the travel industry. These agentic solutions help AI agents better understand and operate within the complexity of travel content and workflows. We also launched several industry first AI solutions and partnerships, which Gary will touch on shortly. Sabre Payments was one of our fastest growing businesses in 2025. with gross spend on the platform increasing more than 35% year-on-year and producing strong revenue growth. Our travel marketplace continues to deliver multi-source travel content on an unprecedented scale and drove agency wins and expansions during the year. In the fourth quarter, air distribution bookings grew 4%, which included the direct and indirect impacts from the U.S. government shutdown. And we ended the year with air bookings growth of 7% in December. Finally, we extended our leadership position in NDC by adding 15 live integrations during the year, bringing our total to 42 and we are seeing adoption ramp. We exited 2025 with NDC representing approximately 4% of total air distribution bookings and we expect our rate of NDC bookings to accelerate throughout 2026. Moving to slide five and details on full year 2025 results. Overall results were positive across the board. Total distribution bookings grew 1% year on year, and full year air distribution bookings were also positive. Within airline technology, passengers boarded grew 2% year on year. Hotel distribution bookings increased 5% year on year to 42 million, and the attachment rate to air bookings increased over 130 basis points year on year. Gross hotel booking value transacted through the platform now exceeds $20 billion annually. These positive results drove full-year revenue growth and combined with ongoing expense management, normalized adjusted EBITDA grew 10%. Normalized adjusted EBITDA margin improved over 160 basis points to 19%. Moving to slide six. Our Cloud Native Technology Foundation is driving growth across our portfolio. Within airline technology, we are delivering a growing suite of modular, AI-driven solutions, ranging from new tools that optimize revenue in real time to a growing suite of GenAI chat and servicing capabilities. As airlines transition to modular, offer order-based systems, we believe Sabre is well-positioned to be the vendor of choice for their transformation. With our Sabre Mosaic airline technology gaining momentum, we expect to drive positive IT solutions revenue growth for 2026. Our travel marketplace provides a single connection to what we believe is the widest breadth of travel content in the industry. Air expansion is the combination of our distribution expansion and multi-source platform growth strategies. Despite a challenging 2025, we ended the year with strong momentum. Driven by continued share gains, growth in NDC bookings, and our new LCC solution, which is now fully launched, as well as continued growth from the Sabre Mosaic marketplace, we expect to see a meaningful year-on-year acceleration in AR bookings growth. Overall, we expect annual volume growth for both 2026 and 2027 to be in the mid-single digits. Importantly, now six weeks into the quarter, the strength we saw in December has continued and is broad-based across all regions and also within corporate travel. Lodging expansion continues to scale, delivering over $350 million in annual LGS revenue in 2025, and we expect continued solid revenue growth in 2026. Finally, we believe that payment suites our integrated FinTech hub is well positioned for sustained growth. It remains one of the fastest growing areas within Sabre with strong demand for our solutions that simplify operations, increase payment flexibility, and automate risk and fraud management. I'll now hand the call over to Gary who will discuss AI and Sabre's AI strategy in greater detail.