Hello And good morning, and welcome to the Sabre Corporation's Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Didi, and I will be your operator. As a reminder, please note today's call is being recorded. I will now turn the call over to the Senior Vice President, Investor Relations and Treasurer, Brian Evans. Please go ahead, sir.

Good morning, and welcome to our fourth quarter and full year 2024 earnings call. This morning, we issued an earnings press release, which is available on our website, at investors.sabre.com. A slide presentation, which accompanies today's prepared remarks, is also available during this call, on the Sabre Investor Relations webpage. A replay of today's call will be available on our website later this morning. We advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including the effects of growth strategies, transactions and bookings growth, results of our technology transformation, commercial and strategic arrangements, and our financial guidance and targets, free cash flow, and liquidity among others. All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call. More information on these risks and uncertainties is contained in our earnings release issued this morning and our SEC filings, including our Form 10-Ks for the year ended December 31, 2024. Throughout today's call, we will also be presenting certain non-GAAP financial measures. References during today's call to adjusted EBITDA, adjusted EBITDA margin, and free cash flow have been adjusted to exclude certain items. The most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on our website at investors.sabre.com. Participating with me are Kurt Ekert, President and CEO, and Mike Randolfi, Chief Financial Officer. Scott Wilson, EVP and President of Hospitality Solutions, will be available for Q&A after the prepared remarks. With that, I turn the call over to Kurt.

Thanks, Brian. Hello, everyone, and thank you for joining us today to discuss our fourth quarter and full year 2024 results. Our performance this quarter and our expectations for 2025 highlight the continued progress we are making executing against our strategy and strengthening our balance sheet. Turning to slide four, you can see an overview of the topics that Mike and I will cover this morning. First, I will review our 2024 business highlights, including our financial performance. Then I will provide an overview of the progress we have made on our growth strategies, how these focused investments address the evolving global travel industry, and how they are reshaping Sabre Corporation's growth trajectory. Next, Mike will take you through our fourth quarter and full year 2024 financial results, and discuss our 2025 guidance. Please turn to slide six. Sabre Corporation had a successful year in 2024. Our team delivered on our strategic technology transformation objectives, including significant product and platform enhancements, positioning us for meaningful growth from commercial wins. Steady revenue growth combined with effective cost management resulted in 550 basis points of margin expansion and a 53% year-on-year increase in adjusted EBITDA, which totaled $517 million for the year, above our initial guidance of greater than $500 million provided last February. I commend our team members around the world for their hard work and dedication towards positioning Sabre Corporation for accelerated growth in 2025 and beyond. Turning to slide seven. Travel Solutions achieved solid financial results in 2024, due to higher average distribution booking fees, from a richer customer mix, double-digit year-on-year growth in hotel distribution bookings, and contributions from new air distribution business. Notably, our exit rate for GDS industry share was up one percentage point versus the prior year. Looking forward, we expect our year-on-year distribution bookings…

Thanks, Kurt, and good morning, everyone. The Sabre Corporation team delivered strong financial results in 2024. We generated year-on-year revenue growth, invested strategically to support innovation, and effectively managed cost, all of which resulted in higher margins and strong flow-through to the bottom line. Adjusted EBITDA increased by more than 50% in 2024 to $517 million, above our initial guidance of greater than $500 million provided last February. On the strength of this financial performance, we achieved our free cash flow objective for the year, improved our capital structure, and made significant advancements on each of our long-term strategic priorities. Turning to slide eighteen, total fourth-quarter revenue increased 4% versus last year to $715 million. Distribution revenue totaled $500 million, a 5% increase compared to $476 million in Q4 2023. Total distribution bookings were 81 million in the quarter, a 4% increase compared to 78 million in Q4 2023. Our average booking fee was $6.17 in the fourth quarter, up 1% year-on-year. IT solutions revenue was roughly flat year-on-year in the fourth quarter and totaled $145 million. Hospitality Solutions Q4 2024 revenue increased 8% to $81 million, primarily driven by an 8% increase in CRS transactions. Segment adjusted EBITDA in the fourth quarter was $9 million, an improvement of $4 million versus the prior year. Sabre Corporation's adjusted EBITDA of $115 million in Q4 2024 versus $96 million in Q4 2023 represented a $20 million improvement year-on-year. Strong cost discipline helped drive our adjusted EBITDA margin from 14% in Q4 2023 to 16% in the fourth quarter of 2024. Moving to our full-year financial performance. We achieved our revenue, adjusted EBITDA, and free cash flow objectives for 2024. We delivered revenue of $3.03 billion, up 4%, and adjusted EBITDA of $517 million, up 53%. Additionally, hospitality solutions delivered $38 million…

As mentioned earlier, in November 2024, we opportunistically extended $1.6 billion in debt maturities to the fourth quarter of 2029, significantly improving Sabre Corporation's debt maturity profile. Our next large maturity will not come due until June 2027. As a result of the refinancing activities during 2024 and the financial improvements achieved, we are well-positioned to repay our 2025 debt maturities with cash on hand as they come due. Turning to slide twenty-five. In closing, our strategic focus remains unchanged: to generate free cash flow and delever the balance sheet through sustainable growth and innovation. We believe our accomplishments in 2024 have reshaped Sabre Corporation's growth trajectory and positioned us well to deliver shareholder value in 2025 and beyond. And with that, operator, please open the line for questions.

Thank you. As a reminder, to ask a question, please press star one one on your telephone keypad. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. And our first question comes from Josh Baer of Morgan Stanley. Your line is open.

Great. Thank you for the question. I was hoping you could walk me through the process of implementing new agency just as far as the commercial win. I am wondering how that ramp looks, comes online, over time. Can you talk through any risk to that and just a little more insight into the process of onboarding that?

Josh, thank you. This is Kurt. So we have a tremendous amount of historical knowledge and experience in implementing new business, whether it is with an existing client or whether it is with a new client that we have won. There is not a single one-size-fits-all. Typically, for example, with an online travel agent, there may be specific functionalities that you have to develop that they may have had with somebody else or they may have uniquely geographically. Once you develop those, it is a fairly seamless and I would say easier integration with an OTA. And then it is up to them on their side in terms of how quickly that ramps. By comparison with brick-and-mortar leisure agencies or TMCs, given that they typically run either single automating meaning single GDS or multi-automated but they run multi-automated typically by geography. So they may run in one call center or one geography, one vendor, and then somewhere else another one. And so there is a significant change effort that is required by the brick-and-mortar or TMC agency on their side because the GDS approximates an operating system in many ways for them. So while there are things that we have to do on our side to drive the implementation, oftentimes, the timeline is predicated on the actions of the customer or the prospect. In terms of the projections that we have given today and the ramp that we have given today, we have great confidence that we will achieve those outcomes because we are well underway with many of those large opportunities. We are in sync and in concert both commercially and technically with those customers, and we have a team that specializes in doing this. So we have the experience to do it. There is a lot of work that has to happen execution-wise by us and by our clients. But we are well underway towards achieving those objectives.

Thank you. Very helpful. And then I was just hoping you could unpack the incremental $100 million in cost efficiencies a bit further. Is that sort of realizing the completion and end of the tech transfer bucket? Thank you.

Yes. Thanks for the question, Josh. So, yes, the $100 million, if you recall when we had provided a walk last year from 2023 to 2025, indicated there were two big things we were undertaking. We had a cost efficiency program as well as tech transformation, which was all our cost savings in total, $250 million. $150 million of that was realized in 2024. The remaining $100 million, which is tech transformation, all of which the actions have already been taken and completed as we exit 2024, are savings from the original tech transformation initiative we undertook starting around 2019, 2020. And we have achieved the objectives. And so that is what you are seeing in the P&L this year.

Okay. Thank you.

Thank you. Our next question comes from Alex Irving of Bernstein. Your line is open.

Hi. Good morning, gentlemen. A question for me, please. Are your expectations for revenue for passenger boarded evolution this year? I know the big step up sequentially from Q3 beyond normal seasonality. Any color on what is driving that reason? How do you see that in 2025?

Yeah. Thanks, Alex. First, we do not really manage the revenue per passenger boarded. I mean, there are a couple of, you know, there are two different constructs there. Part of the revenue in airline IT is based on passenger boarded. Other portions, roughly half the revenue, is driven by something other than passengers boarded. What I would say is as we look to the airline IT solutions revenue line, and we look throughout the year, I would expect in the first half of the year, Air IT revenue to be down slightly year over year. That is because we had some revenue in 2024, associated with carriers that had previously demigrated prior to 2024. But there was a small tail of that revenue in the first half. That is completed in the first half, and then when we get to the second half, we start to see more of the benefits of higher PPEs from existing carriers. And then we are also expecting to see some additional revenue from our Sabre Mosaic. So we would expect IT revenue to be down slightly on a year-over-year basis in the first half. Then we would expect it to resume growth in the second half, and we would expect it to demonstrate growth for the year overall.

Excellent. Thank you.

Thank you. Our next question comes from Jed Kelly of Oppenheimer. Your line is open.

Hey. Great. Thanks for taking my questions, and nice job reiterating on the guidance. First question, you know, we have seen some capital come into some of these newer types of travel agents that are leaning heavily into NDC. Can you talk about just how you think that impacts Sabre Corporation? And then, you know, I was late to joining the call, but can you sort of talk about just what is implied in your full-year outlook, you know, the corporate side versus leisure? Thank you.

Jed, this is Kurt. Thank you for the questions. First of all, on the capital infusion coming into the sector, I think that speaks to the attractiveness of the sector generally, especially corporate travel. You are speaking about the likes of Navan, TravelPerk, and SpotNana. We generally have relationships with most or all of these companies. And we believe with our multisource content platform, that we actually provide the best connectivity for them to all sorts of content, NDC, LCC, and traditional end effect. Do not forget that the algorithmic capabilities we put in terms of parsing that shopping is very fundamental in the corporate space because the relevance of shop returns is critical. So, you know, we applaud the capital coming in and whether it is a more traditional or a new entrant player, we intend to do business robustly with all of them.

Yeah. With regard to as we look at, quote, travel expectations and kind of our overall base assumption. First, I would just highlight, Jed, our baseline assumption is flat to nominal industry growth. Which is, as you know, has been our assumption for quite a while at this stage. Now with that being said, you know, when you look at the overall backdrop, it is actually fairly constructive and positive. There are still expectations for increases, meaningful increases in business travel spend. And when you look at airline capacity increases, there is still some meaningful growth internationally, particularly as yields domestically have softened. So with that being said, you know, there is reason to believe that we could be better than our industry assumption of flat to nominal, but that is our assumption. What I would highlight is quite frankly, we are focused on that, which we can control. As you can see, we won significant business this year. And we expect to have significant ramp-up in volume based on what we have won and based on what we control.

Thank you.

Our next question comes from Victor Cheng of Bank of America. Your line is open.

Hi. Good morning. Thanks for taking my questions. Couple, if I may. I guess, first of all, thinking about being, you know, like, well, the air bookings growth and how it ramps up throughout the year, it almost implies a substantially higher growth in Q4 and to some maybe the growth going into 2026 is quite material as well. Is that how we think about it? And then on the win, on this close win, how do we how should we think about the impact to revenue per booking? Is it higher or a little bit lower? How does it affect the mix?

Victor, let me take the first, and then we will try to do the second as well. So on air bookings growth, you are right. You will see a significant ramp through the year. As we implement and realize the wins that we have had, that implies strong momentum into Q4 and then into 2026, that is clearly an expectation that you should have.

Yep. You know, and with regard to as we think about, like, booking fee and impact, you know, as we talked about in the prepared remarks, you know, first, as we look at the EBITDA improvement coming up in this year, we expect it to be driven to the largest degree by gross profit dollar growth from the double-digit booking distribution growth that we are seeing. Now with that being said, I would highlight is some of these volumes are coming with a slightly lower margin and slightly lower booking fee. So, you know, we ended the year for 2024 at $5.98. I would expect that the average booking fee in 2025 would be slightly below that, so I would expect the trends overall to be lower. I would expect gross margin to be slightly lower, but I would also expect that we are going to generate substantial gross profit dollars and that is what is going to drive the lion's share of our EBITDA growth this year.

Yeah. And just to add on to Mike's point, with respect to the undisclosed North American customer, given that booking fees in North America tend to be slightly lower than the balance of the world, and there is significant volume associated with this win that will have a slightly dilutive effect on the average.

Okay. Yeah. Very clear. Thank you. And then I think this quarter, you did not mention about share gains. I do not know whether you have some color on whether how, you know, how you perform relative to the market in Q4 specifically, and also, on the mix of NDC bookings as well, given your, like, between nine airlines now, any updates on you know, whether you are seeing NDC volumes ramping on your end?

Yeah, Victor. In Q4 2024, as indicated, we exited the year up about one percentage point year on year. We are winning that pretty broadly against the competition. With NDC specifically, NDC remains a low single-digit component of our overall distribution bookings total. We do expect from that very low basis to see significant or exponential growth in 2025 and beyond. We think the solution we have provided in terms of content connectivity coupled with the leading functionality for TMCs, for brick-and-mortar, and for OTAs will make us the NDC provider of choice over the long term.

And the only other thing I would just remind you is we have double-digit bookings growth this year. I think that highlights our competitiveness in the marketplace.

Eric, say and maybe if I can squeeze in one last one. The wins that you mentioned and especially the undisclosed ones, generally speaking, is it a win versus other GDS peers, or is it gonna, you know, is it more reintermediation? How should we think about the trend going forward as well? On kind of, you know, reintermediation or maybe winning more on the OCC t fun. Obviously, yes, guided for 2025, but, you know, the portion of that. But maybe if we think about medium time as well, what are the potential there?

Yeah. Thanks, Victor. In 2025 specifically, the vast majority of the growth you are gonna see is the realization of new wins as we articulated. Now a portion of that an increasing portion of the pie will be for NDC and for long-tail LCC content that we did not traditionally have. As you go out beyond 2025, we expect NDC and especially the LCC long tail to become more meaningful contributors to our growth. So we felt very good about what that mix is gonna be over time.

Got it. Perfect. Thank you.

Thank you. Our next question comes from Dan Wasiolek of Morningstar. Your line is open.

Hey, great. Good morning, guys. Thanks for taking the question. So just with your kind of communication that gross margins in 2025 might be slightly lower, just as a result of signing all this new business. Is that a result, like you have talked about, of just kind of the mix of that new business, or is there has there been some kind of change in the competitive environment with incentives? Thank you.

Yeah. First, you know, thanks for the question. First, let me also just highlight when you look at our trajectory, one, we expect to generate significant gross profit dollars. Albeit at a slightly lower margin. Second, if you look at 2024, we increased our EBITDA margin by over 500 basis points. And if you do the math between 2024 and 2025, we expect significant EBITDA margin accretion. What I would say is, you know, I do not see we have not seen any significant change in the competitive environment. It has been a highly competitive environment, and we work to compete effectively. It really has more to do with the mix of types of transactions that are being added in terms of bookings. It is a higher mix of NDC, a higher mix of LCC content. And so with that, some of that does have a lower average booking fee. And slightly lower margin. But again, very accretive from a gross profit dollar perspective.

Okay. Perfect. Congrats on the quarter.

Thank you. Our next question comes from Deepak Mathivanan of Cantor Fitzgerald. Your line is open.

Hey, guys. This is Jack on for Deepak. Just a high-level one for me. You talked a little bit about AI in your prepared remarks. Can you discuss where you see the most opportunity from running AI across your business kind of going forward and 2025 and maybe even beyond? Thanks.

Yeah. Thanks, Jack. Near term, the two biggest opportunities are in the efficiency or the productivity of our customer service operations and then number two is on developer productivity and throughput. Meaning for the thousands of developers we have enabling them to put out code at a faster pace. Are things that we are stepping into and realizing within this calendar year. Longer term, there is a transformative opportunity really for how consumers shop for and engage with travel through e-commerce. And so right now, we are, for example, embedding Google's Gemini AI code within our revenue optimization products that we deliver for airlines, for example. You will see us begin to promulgate that fully into the Sabre Mosaic stack as well as into our distribution footprint, and so we think that is going to, one, help make our competitors or, excuse me, our customers more competitive. And then two, help Sabre Corporation turn that into revenue over time. But near term, again, more on the first two, medium to long term more on the latter.

Got it. Thanks.

Thank you. Our next question comes from Wei Peng of Mizuho. Your line is open.

Oh, thank you, guys. This is Wei calling for James. First of all, congrats on the solid results. Most of my questions have been answered. Just want to double-check since you guys called out. Right? Higher will be like, half of the incremental transactions for the house in 2025. I was wondering if that happens to carry a little bit different margin profile versus the rest of the transaction as well. Thank you.

Wayne, thanks for the question. I just for clarity, I believe what you asked is the margin profile for Hyatt different than the other HS customers? We do not break out the details of individual customer contracts. Hyatt will be, as Mike indicated, roughly half of the overall CRS transaction growth that we expect to see in HS this year. And it, like, the balance of business we are bringing on is accretive to HS. And we would expect if you look at hospitality solutions, if you look at EBITDA, you will see continued EBITDA margin expansion overall year on year.

Great. Thank you.

Thank you. I am showing no further questions at this time. I would like to turn it back to Kurt Ekert for closing remarks.

Alright. Well, thank you. I could not be prouder of the team at Sabre Corporation. And look forward as we go into the future in sharing additional progress on how Sabre Corporation is performing. I do appreciate your support and interest. Thank you.

This concludes today's conference call. Thank you for participating and you may now disconnect.