SABR Q4 2022 Earnings

Call Details

• Call Title: Sabre Corporation Q4 2022 Earnings Call
• Date: 2023-02-15 14:00:00 UTC
• Management Team:
  • Sean Menke (Chair of the Board and Chief Executive Officer)
  • Kurt Ekert (President)
  • Mike Randolfi (Chief Financial Officer)
  • Brad Erickson (Senior Director of Investor Relations)

Call Summary

Financial Performance

• Total Q4 revenue was $631M, an increase of $130M or 26% versus Q4 2021.
• Full-year 2022 revenue recovered to $2.5B and the company returned to positive adjusted EBITDA for the year.
• Distribution revenue in Q4 was $417M, up 46% versus $286M in Q4 2021, and distribution bookings totaled $76M, up 32% versus $58M in Q4 2021.
• Average booking fee in Q4 was $5.49 versus $4.96 in Q4 2021 and $5.38 in the prior quarter.
• IT Solutions revenue in Q4 was $157M versus $165M in Q4 2021, while passengers boarded were 168M, up 30% versus 129M in Q4 2021.
• Hospitality solutions revenue in Q4 was $65M versus $54M in Q4 2021, with CRS transactions of 27M, 16% above Q4 2021.
• Adjusted EBITDA for Q4 was $1M versus negative $26M in Q4 2021, and Q4 free cash flow was $22M.
• The quarter included higher variable hosting costs and increased labor and professional services tied to the technology transformation.

Guidance

• First quarter 2023 revenue is expected to be approximately $725M and adjusted EBITDA approximately $50M.
• Q1 2023 free cash flow is expected to be negative $80M to $90M, driven by seasonality and approximately $60M of 2022 incentive compensation payments.
• Full-year 2023 revenue guidance is $2.8B to $3.0B and adjusted EBITDA guidance is $300M to $320M.
• The company expects to be free cash flow positive on an annual basis in 2023 and thereafter.
• IT Solutions revenue in 2023 faces an approximate $100M headwind, the vast majority due to the impact of Russian law and the Air Center disposition impact is incorporated in guidance.
• Hospitality solutions revenue is expected to exceed 2019 levels in 2023.
• Capital spending for 2023 is expected to be $50M to $60M, and annual net cash interest expense is approximately $390M with a 25 bps rate move changing expense by about $3M.