Sabre (SABR -37.83%), a global technology provider for the travel industry, released its earnings for the second quarter on August 7, 2025. The standout story for this period was mixed operational momentum, including strong gains in operating income and operating margin, but accompanied by lower-than-expected revenue and air distribution volumes. Reported revenue was $687 million (GAAP), missing GAAP revenue estimates by $28.2 million, or 3.9%, and non-GAAP earnings per share (EPS) was $(0.02), which missed analyst expectations by $0.0125 (non-GAAP). Despite some execution progress, notably on cost controls and debt reduction, the company’s results highlighted ongoing volume and cash flow pressures as it transitions through key business changes this year.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.02) | $(0.01) | $(0.06) | 66.7 % |
| Revenue (GAAP) | $687 million | $715.37 million | $695 million | (−1.2 %) |
| Operating Income | $89 million | $49 million | 81.6% | |
| Adjusted EBITDA (Non-GAAP) | $118 million | $110 million | 7.3% | |
| Free Cash Flow (Non-GAAP) | $(240 million) | $7 million | NM |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Sabre and Current Focus
Sabre (SABR -37.83%) provides the technology backbone for the travel industry, including software and distribution services for airlines, hotels, agencies, and other travel companies. Its core operations span two areas: Travel Solutions, which largely focuses on the distribution of airline, hotel, car, and rail content through a global distribution system (GDS); and IT Solutions, which offer mission-critical software tools for travel providers to manage airline operations, bookings, pricing, and more.
Sabre’s recent efforts have revolved around technology modernization, shifting core systems to cloud infrastructure, and embedding artificial intelligence for better efficiency and faster product development. Key success factors for the company include driving growth in transaction volumes, controlling technology costs, deepening relationships with large travel agencies and airlines, and maintaining operational reliability in a competitive landscape. The sale of its Hospitality Solutions business marked a strategic move to streamline operations and strengthen the balance sheet.
Second Quarter Highlights and Notable Developments
The quarter saw some notable contrasts between operational execution and topline results. Sabre's revenue (GAAP), at $687 million, came in below the $715.37 million consensus estimate and declined 1% from the same period last year. The disappointment was mainly due to a shortfall in airline distribution volume, with total bookings slipped 1% year over year to 90.3 million, while Air bookings also dipped to 75.5 million.
Despite the revenue decline, the company showed progress in profitability metrics. Operating income (GAAP) surged to $89 million—an increase of nearly 83% from last year—thanks in part to lower technology costs achieved through aggressive cloud migration and ongoing cost management. Adjusted EBITDA, a key non-GAAP measure of profit before depreciation and other costs, rose 7% to $118 million.
Sabre continued to push forward on its technology agenda. Migration to the cloud and a multi-year agreement with IT partner Coforge are intended to accelerate delivery of next-generation solutions. The company also maintained momentum in commercial wins, signing new agency agreements and expanding its presence in hotel B2B distribution. SabreMosaic, the modular airline IT platform, gained further adoption, and digital payments services continued to grow.
The quarter was also marked by major portfolio and balance sheet changes. Sabre completed the sale of its Hospitality Solutions business in July 2025, which is not reflected in the period’s cash but contributed over $1 billion in proceeds, which were used to repay debt and extend maturities out to 2030. However, Free cash flow (GAAP) was deeply negative at $(240 million), mainly due to a $227 million payment-in-kind interest charge linked to debt refinancing. Excluding these charges, pro forma free cash flow was nearly breakeven.
Business Lines, Products, and Financial Drivers
The company’s performance is anchored to two main business lines. The Distribution business delivers air, hotel, and car booking inventory to travel agencies and saw revenue drop to $545.8 million (GAAP), reflecting the ongoing challenge of declining air volumes and a modest dip in average booking fee. Hotel and ground bookings held flat, suggesting sustained demand outside the air segment. IT Solutions, which sell software tools and passenger management systems, generated $141.4 million in GAAP revenue, sliding 2% year over year due to previous carrier exits. Passengers boarded increased slightly to 171.353 million, indicating ongoing demand for airline operations solutions.
Sabre’s product portfolio includes the SabreMosaic airline-management platform, which lets airlines modernize retailing strategies and integrate new sales channels. Its B2B hotel distribution business acts as a channel between hotel providers and buyers, complementing the company’s core travel marketplace. Investments in cloud-based architectures and AI tools, including enhancements through a strategic partnership with Google, are central to the company’s ongoing drive for innovation and efficiency. These product efforts are crucial to winning contracts with large agency groups and positioning for long-term growth.
Cost control was a major theme, with management citing a year-over-year 6 percentage-point improvement in operating margin as “disciplined cost management and lower technology costs attributable to our cloud migration actions” took effect. Average booking fee totaled $6.04, a slight decrease from $6.05 in the second quarter of 2024.
Management stressed continued vigilance due to dependencies on transaction volumes, exposure to changing industry dynamics, and ongoing efforts to safeguard its technology infrastructure worldwide.
Looking Ahead: Guidance and Key Watchpoints
For the coming period, management updated its outlook to reflect the pro forma impact of selling the Hospitality Solutions business and the resulting debt paydown. For Q3 2025, it forecasts pro forma Adjusted EBITDA of approximately $140 million, representing mid- to high-teens year-over-year growth, and pro forma free cash flow between $40 million and $50 million. Guidance now targets pro forma adjusted EBITDA between $530 million and $570 million and pro forma free cash flow of $100 million to $140 million, with an end-of-year cash balance above $750 million.
The updated full-year forecast now banks heavily on new business deals translating into volume growth during the second half of the year. Achieving these targets will rely on successful onboarding and ramp-up of recently won agency contracts, as well as improvements in the overall travel-booking environment. There is no declared dividend at this time. SABR does not currently pay a dividend.
Investors and stakeholders should pay close attention to execution in ramping up client wins, the speed at which volume growth materializes, and ongoing progress in cost containment. With the current guidance dependent on robust booking trends materializing, further market softness or implementation delays could affect future results.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
