SABR Q4 2020 Earnings

Call Details

• Call Title: Sabre Corporation Q4 2020 Earnings Call
• Date: February 16, 2021 at 2:00 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

• Revenue was down 67% year-over-year to $314M in Q4 2020 versus $941M in Q4 2019.
• Distribution revenue declined 79% year-over-year to $131M in the quarter.
• IT solutions revenue declined 40% year-over-year in Q4 2020.
• Hospitality solutions revenue declined 42% year-over-year with CRS transactions down 40% in the quarter.
• Passengers boarded were down 58% in Q4 2020 versus the prior year period.
• Free cash flow was negative $200M in the quarter and monthly free cash flow was negative $62M excluding severance-related cash flows.
• Company ended the year with a cash balance of $1.5B and stated it has no significant near-term uses of cash.
• Non-GAAP references: all references to EBITDA on the call were clarified to be operating loss as the comparable non-GAAP measure.

Guidance

• Company did not provide formal numeric 2021 revenue guidance and instead provided directional operational milestones and timing assumptions.
• Q1 2021 was flagged as the lowest pre-cash flow quarter due to timing of large working capital items and severance, with sequential cash burn improvement expected through 2021.
• There is approximately $20M of remaining severance expected to be paid in 2021.
• Free cash flow neutral revenue threshold was updated from prior 60%–70% of 2019 levels to a new range of roughly 56%–67% of 2019 levels based on the revised cost structure.
• The company expects most of the incremental $100M in operating cost savings tied to the Google Cloud and DXC renegotiation to be realized in 2024, with some savings earlier.
• Operational product timing guidance includes migrating at least 15% of mid-range workloads to Google Cloud in 2021 and placing Travel Solutions Air Shopping and Hospitality CRS into Google Cloud production during 2021.