Executive Summary

Q3 revenue of $715.2M grew 3% YoY; Normalized Adjusted EBITDA rose 23% to $150.0M with margin expanding ~340 bps to 21%; revenue was in line with guidance and Street, while Adjusted EPS of $(0.01) missed S&P Global consensus of $0.06, driven by gross margin pressure and mix . Revenue est vs. actual: $715.3M* vs $715.2M; EPS est vs. actual: $0.06* vs $(0.01)*. Values retrieved from S&P Global.
Guidance tightened: FY25 Pro Forma Adjusted EBITDA now ~$530M (from prior ~$550M midpoint scenarios) and Pro Forma FCF ~+$70M (from prior ~$120M midpoint) on government shutdown impact and lower high-margin product mix/FX; year-end cash raised to ~+$800M (>+$750M prior) .
Bookings accelerated in September (+7% YoY), Distribution revenue +4% YoY, while IT Solutions was flat; average booking fee improved to $6.05 (from $5.94) .
Strategic updates: 41 live NDC integrations; first-mover “agentic AI” APIs (MCP server) and payments scaling (>40% YoY quarterly gross spend), positioning SABR for 2026 mid-single digit bookings growth as LCC solution launches in 1Q26 .

What Went Well and What Went Wrong

What Went Well
- Normalized Adjusted EBITDA +23% YoY to $150.0M; margin +340 bps to 21%, helped by cost discipline and technology cost reductions .
- Commercial momentum: Distribution revenue +4% YoY to $575.3M; bookings +3% YoY to 95.1M; average booking fee up to $6.05; hotel distribution bookings +6% YoY with higher attachment .
- Strategic differentiation: 41 live NDC integrations and agentic AI APIs; payments business gross spend >40% YoY with ~100k hotels targeted by year-end (Conferma) . CEO: “We were first in the industry to announce agentic APIs for travel...enable a new era of AI-driven retailing” .
What Went Wrong
- EPS miss vs. consensus: Adjusted EPS $(0.01)* vs $0.06*; gross margin down ~130 bps YoY on weaker USD FX and lower-than-expected high-margin product sales . Values retrieved from S&P Global.
- Government shutdown reduced Q4 bookings outlook midpoint by ~3 ppt and impacts ~$10–$12M to Q4 Adjusted EBITDA; also caused Q3/Q4 receipts timing headwinds for FCF .
- FY25 Pro Forma FCF cut to ~$70M (from $100–$120M scenario midpoint prior) given working capital disbursement timing and shutdown effects; Q3 Pro Forma FCF of $13M was below plan .

Financial Results

Quarterly trend (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$776.6	$687.1	$715.2
GAAP Diluted EPS	$0.09	$(0.65)	$1.98
Adjusted EPS	$0.00 (rounded)	$(0.02)	$(0.01)
Operating Income ($M)	$103.4	$89.1	$93.6
Operating Margin	13.3%	13.0%	13.1%
Adjusted EBITDA ($M)	$149.6	$118.3	$140.6
Normalized Adj. EBITDA ($M)	n/a	$127.2	$150.0
Free Cash Flow ($M)	$(98.5)	$(240.2)	$13.4
Cash & Equivalents ($M, end-period)	$651.1	$426.1	$661.7

YoY snapshot (Q3 2025 vs Q3 2024)

Metric	Q3 2024	Q3 2025
Revenue ($M)	$691.3	$715.2
Operating Income ($M)	$57.8	$93.6
Operating Margin	8.4%	13.1%
Net income (loss) to common ($M)	$(62.8)	$848.7 (incl. gain on sale)
Adjusted EBITDA ($M)	$112.3	$140.6
Normalized Adj. EBITDA ($M)	$121.5	$150.0
Free Cash Flow ($M)	$5.1	$13.4

Estimates comparison and near-term Street

Metric	Q3 2025 Consensus	Q3 2025 Actual	Q4 2025 Consensus
Revenue ($M)	$715.3*	$715.2	$655.5*
Primary EPS	$0.0625*	$(0.01)*	$(0.02)*
EBITDA ($M)	$144.2*	Adj. EBITDA $140.6	$114.7*

Notes: Asterisks denote values retrieved from S&P Global. EBITDA consensus may not be directly comparable to company Adjusted EBITDA.

Segment revenue ($M)

Segment	Q1 2025	Q2 2025	Q3 2025
Distribution	$569.1	$545.8	$575.3
IT Solutions	$133.0	$141.4	$139.9

Key KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Total Bookings (M)	96.356	90.298	95.135
Avg Booking Fee ($)	5.91	6.04	6.05
Passengers Boarded (M)	165.826	171.353	182.212

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Air Distribution Volumes (YoY)	Q4 2025	6–14% (mid 10% assumed in prior context)	6–8%	Lower (midpoint −3 ppt)
Revenue	Q4 2025	n/a	Low single-digit YoY growth	—
Pro Forma Adjusted EBITDA ($M)	Q4 2025	n/a	~110	—
Pro Forma Free Cash Flow ($M)	Q4 2025	n/a	~130	—
Air Distribution Volumes (YoY)	FY 2025	Scenarios: 0.5%, 2.0%, 3.5%	Positive YoY; near low end of prior range	Lower within prior range
Revenue	FY 2025	Flat to low-single digit (scenario dep.)	Flat YoY	Lower end
Pro Forma Adjusted EBITDA ($M)	FY 2025	~$530 / ~$550 / ~$570 (scenarios)	~530 (+9% YoY)	Lower vs prior mid ($550)
Pro Forma Free Cash Flow ($M)	FY 2025	~$100 / ~$120 / ~$140 (scenarios)	~70	Lower
Ending Cash Balance ($M)	FY 2025	>750	~800	Higher

Drivers cited: government shutdown (~$10–$12M Q4 EBITDA impact), weaker USD FX on margin, lower high-margin product sales, and working capital timing (receipts lag and early disbursements) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives	38 live NDC; SabreMosaic Offer Mgmt signings; cloud migration savings	41 live NDC; agentic AI APIs (MCP “universal translator”); payments scaling; LCC solution slated 1Q26	Accelerating innovation
Bookings/industry mix	Q1: reaffirmed double-digit dist. bookings for FY; Q2: weaker-than-anticipated bookings; scenario guide	Q3 bookings +3% YoY; Sept +7%; mix headwinds (gov’t/military, corporate, regional)	Improving exit rate; mix headwinds persist
Payments	Not broken out; growth referenced	>40% YoY gross spend growth; digital wallets/virtual cards; ~100k hotels by YE	Strong growth vector
Macro/government	n/a	Government shutdown reduces Q4 bookings ~3 ppt; primary impact on U.S. gov’t/military travel (~4% of volumes in 2024)	Transitory headwind
Margin drivers	Q1/Q2: lower tech costs from cloud migrations	Gross margin −130 bps YoY on FX and lower high-margin product sales; expect pressure into Q4	Near-term pressure

Management Commentary

CEO: “We delivered positive growth in quarterly air distribution bookings... year-on-year growth in both revenue and Adjusted EBITDA… we repaid approximately $825 million of debt, and we were first in the industry to announce agentic APIs for travel.”
CEO on outlook: “We are optimistic that... launch of our LCC solution in early 2026 positions Sabre for mid-single-digit air bookings growth in 2026.”
CFO on margin/FX: “Gross margin decreased 130 bps… due primarily to… lower than expected revenue from certain higher margin product sales and continued FX impacts of a weaker U.S. dollar.”
CFO on FCF shortfall: “Pro forma free cash flow of $13M was below expectations… roughly one-third due to lower receipts… two-thirds due to higher disbursements… some payments pulled forward into September.”
CFO on shutdown: “Q4 adjusted EBITDA guidance incorporates a $10–$12M impact from the government shutdown.”

Q&A Highlights

Guidance bridge: FY25 EBITDA lowered to ~$530M mainly from $10–$12M shutdown impact and continued FX/product-mix margin pressure; FY25 Pro Forma FCF cut to ~$70M due to receipts timing and pulled-forward disbursements .
Shutdown mechanics: Impact is largely U.S. government/military travel; limited broader industry impact so far; ~4% of 2024 global air distribution volumes were gov’t/military .
NDC and mix: NDC volumes remain low-single digits (2–3%) of air distribution but growing; 41 live NDC integrations position SABR for scaling .
Payments: Among fastest-growing businesses, >40% YoY quarterly gross spend; details not broken out yet, but strategic focus remains high .
2026 bookings growth: Mid-single digit expected on flattish GDS market, share gains from conversions, and LCC solution ramp .

Estimates Context

Q3 vs S&P Global consensus: Revenue $715.3M* vs $715.2M actual (inline); Primary EPS $0.0625* vs $(0.01)* (miss). Values retrieved from S&P Global.
Q4 Street snapshot: Revenue ~$655.5M*; Primary EPS $(0.02); EBITDA ~$114.7M vs company guide for Pro Forma Adjusted EBITDA ~$110M (definitions differ). Values retrieved from S&P Global.
Implications: Street likely to cut FY25 FCF and trim EBITDA to the low end of prior scenario range, while maintaining revenue broadly stable given bookings commentary and September acceleration .

Key Takeaways for Investors

Execution solid but optics noisy: revenue inline, strong EBITDA margin expansion, yet Adjusted EPS miss and FCF guide cut on timing/shutdown/FX mix .
Guidance credibility: FY25 PFA EBITDA ~~$530M now anchors expectations; watch Q4 delivery (~~$110M PFA EBITDA, ~$130M PFA FCF) against shutdown sensitivity .
Mix and FX are the swing factors near term; product mix recovery and USD stabilization would support margin normalization, a Q4–Q1 watch item .
Strategic optionality rising: agentic AI APIs + growing payments + LCC platform launch in 1Q26 underpin 2026 mid-single digit bookings growth view .
Balance sheet trending better: >$1B debt repaid YTD including ~$825M in Q3; YE cash ~$800M expected; maturities pushed out (60% 2029+) .
Trading setup: Print was “in line” on revenue and EBITDA vs guidance but reset on FCF/EBITDA trajectory may cap near-term upside; catalysts include Q4 bookings recovery post-shutdown and evidence of AI/payments monetization .

Additional relevant press releases (Q3 timeframe)

Sabre announces first-mover agentic AI APIs and proprietary MCP server enabling AI-powered shopping/booking/servicing; integrated in SabreMosaic .
Sabre challenges “direct connect” misconceptions; survey and fare analysis indicate marketplaces deliver equal or lower fares in >90% of searches (41% cheaper than direct) .

Footnote: Asterisks denote values retrieved from S&P Global.

Sabre Corp (SABR)·Q3 2025 Earnings Summary