Sabre’s Earnings Calls Clash on Middle East Impact Timeline and Airline Tech Growth Outlook

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $712 million, an increase of 4% year-on-year
• Gross Margin: 57.1%, at the high end of the 56%-57% range

Guidance:

• Full-year pro forma adjusted EBITDA guidance increased to approximately $600 million.
• Full-year free cash flow guidance improved to approximately negative $65 million.
• Airline Technology revenue expected to be $140-$150 million per quarter in Q3 and Q4, with year-over-year growth expected for 2026.
• Adjusted technology expense expected to be higher in the second half due to a shift in timing.
• CapEx outlook increased by $10 million.
• Third quarter air distribution bookings and revenue expected to grow flat to low single digits year-over-year.
• Fourth quarter air distribution bookings and revenue expected to grow at a low to mid-single-digit pace year-over-year.
• Third quarter normalized adjusted EBITDA expected to be approximately $155 million; fourth quarter expected to be approximately $125 million.
• Expect to generate approximately $80 million of free cash flow in the second half, primarily in Q4.

Business Commentary:

Revenue and Bookings Growth:

• Sabre reported revenue of $712 million for Q2 2026, a 4% increase year-on-year, exceeding expectations.
• Air distribution bookings grew 1% year-on-year, driven by corporate volumes and resilience in the Marketplace, despite softness in leisure demand.

Adjusted EBITDA and Free Cash Flow:

• Normalized adjusted EBITDA grew 19% year-on-year to $151 million, with an adjusted EBITDA margin expansion of 272 basis points to 21.2%.
• The company generated positive free cash flow of $10 million, with an improved outlook for full-year free cash flow due to favorable trends and timing of technology investments.

Outperformance vs. Industry Peers:

• Sabre's bookings growth outpaced the broader industry by approximately 600 basis points, attributed to share takeaways, growth with low-cost carriers, and expansion in NDC.
• The resilience in corporate travel, which constitutes nearly half of Sabre's Marketplace bookings, provided a significant advantage over industry averages.

AI and Technology Investments:

• Sabre is positioned as a leader in the agentic AI travel channel, with doubled active pilot and production partners to 60, and strong developer engagement in Silicon Valley.
• The company is investing in AI initiatives, including the Model Context Protocol server, to enhance its platform's capabilities for autonomous, secure, and scalable travel commerce.

Airline Technology and NDC Growth:

• Airline Technology revenue was $135 million, in line with expectations, with a focus on growth through new customer wins and the Sabre Mosaic platform.
• NDC continues to grow, now representing about 5% of distribution volumes, driven by adoption and re-intermediation, with steady year-on-year growth.

Sentiment Analysis:

Overall Tone: Positive

• Management stated 'we delivered results ahead of our expectations and generated positive free cash flow' and 'we are increasing our full year 2026 guidance for both pro forma adjusted EBITDA and free cash flow.' The tone was confident with statements like 'we are encouraged by the continued momentum' and 'we believe Sabre is positioned to be a winner.'

Q&A:

• Question from Jack Halpert (Cantor Fitzgerald): Can you explain more about Airline Technology revenue being down year-over-year and any potential anti-competitive behavior by Amadeus? Also, what are you hearing from partners about leading AI labs pursuing agentic travel checkout?
  Response: Airline Tech revenue was in line with expectations; variability is normal. Concerns about Amadeus's anti-competitive behavior remain, centered on restricting airline choice. On AI, large labs are focusing on enterprise and consumer commerce first; agentic AI will be a major distribution channel, and Sabre is leading with its open platform and developer engagement.

• Question from Victor Chang (Bank of America): Can you elaborate on the outperformance in Q2 bookings versus peers and the mix of leisure vs. corporate? Also, comment on Amadeus's reported $40 million Air IT win in 2027.
  Response: Outperformance of ~600 bps vs. peers is due to share takeaways, growth with low-cost carriers, and NDC adoption; corporate resilience (45% of Sabre's volumes vs. 25-30% industry) is a key driver. Forward guide assumes a 400 bps impact from Middle East conflict/fuel, persisting but dissipating. On Amadeus's win, Sabre's Airline Technology business is a growth driver with strong interest and recent wins, but details of customer agreements are not commented on.

Contradiction Point 1

Timeline for Middle East Conflict Impact on Bookings

Contradiction on when the impact of the Middle East conflict on bookings will subside.

Victor Chang (Bank of America) - Victor Chang (Bank of America)

2026Q2: Expects a 400 bps impact from the Middle East conflict and fuel prices to persist but dissipate through the year... - [Kurt Ekert](CEO)

Can you elaborate on the outperformance in Q2 bookings vs. peers and the mix of leisure vs. corporate, as well as comment on Amadeus's reported $40M Air IT win expected in 2027 and whether it's an existing customer? - Jack Halper (Cantor Fitzgerald)

2026Q1: The expectation is for hostilities to cease by the end of Q2, with fuel impacts gradually unwinding through the year. - [Kurt Eckert](CEO)

Contradiction Point 2

Airline Technology Revenue Growth Trajectory

Contradiction on the expected growth rate for Airline Technology revenue.

Jack Halpert (Cantor Fitzgerald) - Jack Halpert (Cantor Fitzgerald)

2026Q2: The fluctuation is due to timing...; the business is expected to be $140-150M per quarter in Q3/Q4 with full-year growth. - [Mike Randolfi](CFO)

Can you explain the year-over-year decline in airline tech revenue and provide insights from partners on the potential for leading AI labs to pursue agentic travel checkout? - Dan Wasaliak (Morningstar)

2026Q1: The pipeline is rich for both Marketplace and Airline Technology... A key challenge is penetrating the Amadeus Altéa PSS base... - [Kurt Eckert](CEO)

Contradiction Point 3

Expected Timeline and Scale of AI/Conversational Commerce Impact

Contradiction on when a new AI-driven distribution channel will materialize and its competitive impact.

What are the key factors driving the company's recent performance? - Jack Halpert (Cantor Fitzgerald)

2026Q2: Agentic AI will become a material distribution channel. Large AI labs are currently focusing on enterprise and retail e-commerce, then may expand to travel. - [Kurt Ekert](CEO)

Can you explain the year-over-year decline in airline tech revenue and share insights from partners on the potential for leading AI labs to pursue agentic travel checkout? - Dan Wasiolek (Morningstar Inc.)

2025Q4: The next stage is demonstrating end-to-end conversational commerce in travel... A partnership with MindTrip and PayPal aims to launch such an experience in Q2 2026. - [Garry Wiseman](CTO)

Contradiction Point 4

Dilutive Impact of NDC on Unit Economics

Contradiction on whether NDC adoption is dilutive and its regional impact.

Victor Chang (Bank of America) - Victor Chang (Bank of America)

2026Q2: On unit economics, NDC is slightly dilutive in non-Europe markets and more dilutive in Europe (where booking fees are nearly double). - [Kurt Ekert](CEO)

How are NDC volumes progressing and affecting unit economics despite strong revenue per booking growth? - Hin Fung Cheng (BofA Securities)

2025Q4: NDC adoption is broad-based across OTAs and TMCs, varies by region and carrier. - [Kurt Ekert](CEO)

Contradiction Point 5

Impact of U.S. Government Shutdown on Bookings

The shutdown's effect on bookings is downgraded from a material risk to a minor, de minimis factor.

Victor Chang (Bank of America) - Victor Chang (Bank of America)

2026Q2: The shutdown is expected to negatively impact Q4 bookings, with a full recovery anticipated in Q1 2026. - [Kurt Ekert](CEO)

Can you elaborate on the outperformance in Q2 bookings versus peers, the leisure versus corporate mix, and comment on Amadeus's reported $40M Air IT win expected in 2027 and whether it's an existing customer? - Carla (for Victor Cheng, Bank of America)

2025Q3: The impact is **not material** in terms of overall industry volumes at this point... The **shutdown is expected to negatively impact Q4 bookings**, with a full recovery anticipated in Q1 2026. - [Kurt Ekert](CEO)