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    SABR
    Earnings call· Jun 2026(Q2 FY26)

    Sabre Q2 FY26 earnings call SABR

    Aug 6, 2026 Source

    Executive summary

    Sabre Corporation Q2 FY26 — Strong EBITDA Growth and Raised Full-Year Outlook

    Sabre delivered a strong second quarter, outperforming expectations on revenue and normalized adjusted EBITDA, driven by growth strategies and resilient corporate travel demand. The company raised its full-year adjusted EBITDA and free cash flow guidance, while reaffirming revenue and bookings outlook. Investments in agentic AI and platform modernization are accelerating, positioning Sabre for future growth despite geopolitical and fuel price headwinds.

    Highlights

    5

    • Normalized adjusted EBITDA grew 19% year-on-year to $151 million, exceeding expectations.

    • Revenue grew 4% year-on-year to $712 million, surpassing expectations of flat to nominal growth.

    • Payment Suite gross spend exceeded $6 billion in Q2, up more than 30% year-on-year, now over $25 billion annualized.

    • Hotel related revenue growth accelerated to 11% year-on-year in Q2.

    • Free cash flow was positive $10 million for the second quarter, improving the full-year outlook.

    Concerns

    3

    • Air Distribution bookings growth was impacted by 300 to 400 basis points due to the Middle East conflict and higher fuel prices.

    • Airline Technology revenue was $135 million, broadly in line with expectations but reflecting quarter-to-quarter variability due to timing of license fees and deliverables.

    • Adjusted technology expense is expected to be higher in the second half of the year due to a shift in timing of investments.

    Guidance & targets

    16
    CategoryTargetConfidence
    Full-year 2026 Pro forma adjusted EBITDA
    approximately $600 million
    high materiality
    High
    Full-year 2026 Free cash flow
    approximately negative $65 million
    high materiality
    High
    Full-year 2026 Revenue
    reaffirmed
    high materiality
    High
    Full-year 2026 Air Distribution bookings growth
    reaffirmed
    high materiality
    High
    Q3 Air Distribution bookings growth
    flat to low single digits
    medium materiality
    Medium
    Q4 Air Distribution bookings growth
    low to mid-single-digit rate year-on-year
    medium materiality
    Medium
    Q3 Airline Technology revenue
    $140 million to $150 million
    medium materiality
    Medium
    Q4 Airline Technology revenue
    $140 million to $150 million
    medium materiality
    Medium
    Full-year 2026 Airline Technology revenue growth
    year-on-year revenue growth
    medium materiality
    Medium
    Q3 Gross margin
    towards the higher end of our 56% to 57% range
    medium materiality
    Medium
    Q4 Gross margin
    towards the higher end of our 56% to 57% range
    medium materiality
    Medium
    Full-year 2026 Adjusted technology expense
    low single-digit increase year-on-year
    medium materiality
    Medium
    Full-year 2026 Adjusted SG&A expense
    roughly flat in the second half of the year when compared to the first half of the year
    low materiality
    Medium
    Q3 Normalized adjusted EBITDA
    approximately $155 million
    high materiality
    Medium
    Q4 Normalized adjusted EBITDA
    approximately $125 million
    high materiality
    Medium
    H2 Free cash flow
    approximately $80 million
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Marketplace
    Revenue growth driven by increased distribution bookings and higher average booking fee, including growth from payments and media offerings.
    Distribution bookings increase: 1.5%Average booking fee increase: 4%
    		$577 million6%——
    Airline Technology
    Revenue was broadly in line with expectations, reflecting timing of certain items that create quarter-to-quarter variability. Half of revenue driven by PBs, other half by license fees and other performance deliverables.
    		$135 million———

    Operational metrics

    13
    Total Revenue
    $712 million4% year-on-year increase
    Q2 FY26

    Exceeded expectations of flat to nominal growth.

    Normalized adjusted EBITDA
    $151 million19% year-on-year increase
    Q2 FY26

    Exceeded expectations of approximately $130 million. Fourth consecutive quarter of double-digit year-on-year growth.

    Adjusted EBITDA margin
    21.2%expanded 272 basis points
    Q2 FY26

    Expansion driven by higher gross income from bookings mix and higher-margin payments and media products.

    Cash balance
    $697 million
    Q2 FY26 end

    Balance at the end of the quarter.

    Air Distribution bookings growth
    1%year-on-year
    Q2 FY26

    Came in ahead of outlook, driven by modest recovery in June. Outpacing broader industry by approximately 600 basis points since late 2025.

    Hotel related revenue growth
    11%year-on-year
    Q2 FY26

    Accelerated in Q2, driven by higher attach rate and continued growth in media revenue.

    Hotel attach rate
    35%
    Q2 FY26

    Improved, with expectation to drive higher conversion through platform enhancements.

    Payment Suite gross spend
    $6 billionup more than 30% year-on-year
    Q2 FY26

    Exceeded $6 billion in Q2, now over $25 billion on an annualized basis.

    NDC distribution volumes
    5%
    Q2 FY26

    Represents approximately 5% of distribution volumes and is growing steadily.

    Corporate volumes share of marketplace bookings
    45%
    Q2 FY26

    Represents nearly half of marketplace bookings, demonstrating continued steady performance and resilience.

    Active pilot and production partners for agentic AI
    60doubled from 30
    Q2 FY26

    Doubled the number of partners utilizing agentic APIs and MCP server due to strong demand.

    CapEx
    $10 millionincreased
    FY26

    Outlook for full year CapEx increased by $10 million.

    Cash interest payments
    $20 millionhigher versus Q2 FY26
    Q3 FY26

    Expected higher interest payments in Q3 due to May 2026 refinancing of exchangeable notes.

    Industry KPIs

    1
    MetricValueDetails
    Gross bookings value room nights$6 billionUSD

    Product announcements

    2
    ProductTypeDetails
    Model Context Protocol (MCP) serverlaunch
    Sabre Mosaic and CIT capabilitiesexpansion

    Deals & partnerships

    3
    Existing lendersExtension of AR securitization facilitythrough September 2029

    Signed an agreement to extend the AR securitization facility, resulting in no maturities until 2029.

    Notable African carrierSelection of Sabre as new technology platform provider

    The airline will modernize its operations with Sabre's platform, with implementation expected by year-end.

    Voca Bridge and Deep Learning AIHosted a Hackathon in Silicon Valley

    More than 400 developers participated and submitted over 100 projects built on Sabre's agentic KPIs and MCP server, demonstrating platform power and flexibility.

    Risks & headwinds

    3
    Impact of Middle East conflict and higher fuel prices on Air Distribution bookingsQ2 FY26, expected to persist but dissipate through H2 FY26

    300 to 400 basis points reduction in bookings growth

    Mitigation: Resilience of corporate volumes partially offsetting softness in leisure demand; expectation of modest macro improvement.

    Amadeus anti-competitive behavior in the OOSD marketOngoing

    Discussed not quantified

    Mitigation: Sabre's approach is centered on openness and modularity, enabling airlines to modernize without being locked into a single vertically integrated stack.

    Uncertain timing for agentic AI adoption by large tech playersNear-term

    Discussed not quantified

    Mitigation: Sabre is investing aggressively in AI, positioning itself as critical infrastructure for AI agents, and has significant engagement with developers and partners.

    What to watch in Q3 FY26

    5

    Q3 Air Distribution bookings growth

    Q3 FY26
    Current1% YoY (Q2 FY26)
    Targetflat to low single digits

    Why it matters

    This will indicate whether the recovery seen in June and July is sustained and if the impact from geopolitical events and fuel prices is dissipating as expected.

    We expect third quarter air distribution bookings growth of flat to low single digits.

    Q&A highlights

    4

    Can you elaborate on the Q2 airline tech revenue variability and whether Amadeus' anti-competitive actions are impacting it? Also, what are your thoughts on leading AI labs pursuing agentic travel strategies?

    Q2 airline tech revenue was in line with expectations, with variability due to timing of license fees and deliverables. Concerns about Amadeus' anti-competitive behavior, specifically regarding data access, API limitations, integration costs, and delays, persist. Sabre believes agentic AI will be a material distribution channel, and while large tech players are currently focused on enterprise, travel will follow e-commerce. Sabre is uniquely positioned as critical infrastructure for AI agents due to its open, multisource platform and active developer engagement.

    “With respect to Amadeus' behavior in the market, the concerns that we raised previously still exist. Specifically, we believe that Amadeus is leveraging a dominant position in passenger service system, or PSS, to exclude alternative providers in the separate emerging market for offer order settlement and delivery or OOSD.”

    asked by John Halpert · answered by Kurt Ekert

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 Performance Exceeds Expectations

    Sabre reported Q2 FY26 revenue of $712 million, a 4% year-on-year increase, surpassing expectations of flat to nominal growth. Normalized adjusted EBITDA reached $151 million, up 19% year-on-year, significantly exceeding the guidance of approximately $130 million. This outperformance was primarily driven by higher gross income from a better average booking fee and increased air distribution bookings, with the remainder attributed to the timing of📎 technology investments.

    02

    Air Distribution Bookings and Market Outperformance

    Air Distribution bookings grew 1% year-on-year in Q2, ahead of outlook, driven by a modest recovery in June that continued into July. Sabre has consistently outperformed the broader industry in bookings growth by approximately 600 basis points since late 2025. Corporate volumes, representing nearly 45% of marketplace bookings, showed steady performance and resilience, offsetting softness in leisure demand. The Middle East conflict and higher fuel prices impacted bookings by 300-400 basis points, particularly in EMEA and Asia Pacific.

    03

    Strategic Investments in AI and Platform Modernization

    Sabre is increasing investment in AI initiatives, positioning itself as a leader in the emerging agentic AI travel channel. The company deployed its Model Context Protocol (MCP) server with a global enterprise loyalty and travel service company and doubled its active pilot and production partners from 30 to 60 in Q2. A Hackathon with Voca Bridge and Deep Learning AI attracted over 400 developers, showcasing the platform's capabilities for AI-powered travel solutions.

    04

    Airline Technology Business Momentum

    The Airline Technology segment is emerging as a growth business, with revenue expected to be in the $140 million to $150 million range per quarter in Q3 and Q4, and year-on-year growth anticipated for FY26. Sabre announced a new win with a notable African carrier, which will migrate its core passenger services to the Sabre platform and adopt Sabre Mosaic and CIT capabilities, with implementation expected by year-end. This follows recent wins with Hawaiian and Louis Airlines, and another significant win is expected soon.

    05

    Financial Position and Capital Structure

    Sabre ended Q2 with a cash balance of $697 million. The company signed an agreement to extend its AR securitization facility through September 2029, ensuring no maturities until 2029. The full-year free cash flow outlook improved to approximately negative $65 million, with approximately $60 million of this attributed to restructuring costs. The company expects to generate approximately $80 million of free cash flow in the second half of the year, primarily in Q4.

    AI-generated summary of the company’s earnings call. Not investment advice.