Victor Cheng

Victor Cheng asked for details on Sabre's distribution volume growth for 2026, including the sustainability of mid-single-digit growth in the second half and its relation to the multi-source low-cost carrier initiative. He also inquired about the drivers of NDC adoption, specifically if TMCs are getting on board and regional variations. Finally, he asked if the inflation offset program would continue into 2027 and its potential cash flow impact.

Answer

Kurt Ekert, President and CEO, reiterated expectations for mid-single-digit distribution volume growth for 2026 and 2027, driven by continued share gains, scaling NDC, and the fully in-production multi-source platform and low-cost carrier solution. He noted strong momentum from December 2025 (7% air distribution volume growth) continuing into early 2026, broad-based across regions and corporate travel. For NDC, Kurt stated adoption is broad-based across OTAs and TMCs, varying by carrier and region, with 42 live carriers and significant work done to normalize workflow differences. Mike Randolfi, CFO, clarified that the total restructuring for the inflation offset program is around $65 million, with the bulk of the $60 million cash flow impact occurring in 2026, and any 2027 cash flow impacts are expected to be de minimis.

Victor Cheng inquired about the drivers of Sabre's mid-single-digit distribution volume growth for 2026, including share gains, NDC adoption, and the multi-source low-cost carrier initiative, and asked about the expected cash flow impact of restructuring in 2027.

Answer

Kurt Ekert, President and CEO, attributed the expected growth to continued share gains, scaling NDC adoption (reaching 4% by year-end 2025), and the fully launched multi-source platform and new low-cost carrier solution. He noted broad-based NDC adoption by OTAs and TMCs, varying by carrier and region. Mike Randolfi, CFO, clarified that the total restructuring quantum is around $65 million, with the bulk of the $60 million cash flow impact occurring in 2026, and any 2027 impacts are expected to be de minimis.

Victor Cheng asked why Sabre's NDC volume mix appears lower than peers, sought to reconcile Sabre's view of a declining GDS industry with competitor reports, and inquired about the potential for stronger revenue per booking growth.

Answer

President & CEO Kurt Ekert explained the NDC mix difference is almost entirely due to a competitor re-intermediating large OTA direct-connect volumes, and that adoption is similar in the traditional agency space. EVP & CFO Mike Randolfi addressed pricing, stating he expects the average booking fee in H2 to be similar to the prior year's levels, with gross margins improving slightly to be nearly in line with H2 2024.

Victor Cheng inquired about the current macro environment's impact on sales cycles and regional performance, and also asked about the airline industry's shift to offer/order architecture and PROS' competitive positioning.

Answer

President & CEO Jeff Cotten stated that while the macro environment remains challenging, particularly internationally, it also creates demand for PROS' solutions from companies dealing with complexity like tariffs. Regarding airlines, he noted that most carriers are exploring a 'best-of-breed' approach for their next-gen platforms, creating a significant opportunity for PROS' differentiated offer management capabilities.