SABR Q2 2021 Earnings

Call Details

• Call Title: Sabre Corporation Q2 2021 Earnings Call
• Date: August 3, 2021 at 1:00 PM UTC
• Management Team:
  • Kevin Crissey (Vice President of Investor Relations)
  • Sean Menke (Chief Executive Officer)
  • Doug Barnett (Chief Financial Officer)
  • Dave Shirk (President of Travel Solutions)
  • Scott Wilson (President of Hospitality Solutions)

Call Summary

Financial Performance

• Total revenue was $420 million in Q2 2021 compared to $83 million in Q2 2020.
• Distribution revenue totaled $218 million in Q2 2021 compared to negative $48 million in Q2 2020.
• IT Solutions revenue totaled $155 million in Q2 2021 compared to $104 million in Q2 2020.
• Hospitality Solutions revenue totaled $51 million in Q2 2021 compared to $29 million in Q2 2020.
• Passengers boarded totaled 104 million in Q2 2021, which was down 43% versus Q2 2019.
• Net air bookings were down 65% in April, 62% in May, 49% in June, and down 59% in Q2 2021 versus 2019.
• EBITDA improved versus prior year and exceeded the expectations provided in the recently filed Form 8-K, but EBITDA was still negative for the quarter.
• Free cash flow was negative $152 million in Q2 2021 versus negative $204 million in Q1 2021, and the company ended the quarter with a cash balance of $1.1 billion.

Guidance

• Third-quarter revenue is expected to be primarily a function of travel volumes and bookings mix rather than a single company-specific driver.
• Variable components of the cost structure, including incentives, are expected to move in line with volumes across the recovery.
• Technology and selling, general and administrative costs are expected to increase sequentially in Q3 due to a lower capitalization rate, higher hosting costs from increased volumes, investments in business systems, and labor inflation.
• The upfront revenue recognition benefit from early implementations helped Q2 results but the company does not expect a similar benefit in Q3.
• There is no change to prior commentary that cash-flow break-even is expected in the 56% to 60% of pre-pandemic levels range.
• Annual interest expense is expected to remain unchanged at $260 million following the July refinancing.