Sabre's Q3 Earnings Miss, Revenues Grow on Higher Bookings and Rates

Sabre Corporation SABR reported mixed results for the third quarter of 2025, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. SABR reported an adjusted loss of 1 cent per share for the third quarter, which compared unfavorably with the Zacks Consensus Estimate of earnings of 4 cents. However, the quarterly loss narrowed from the year-ago quarter’s loss of 5 cents.

Sabre reported revenues of $715.2 million for the quarter ended Sept. 30, 2025, which beat the Zacks Consensus Estimate $708.8 million. The figure rose 3.5% year over year on higher air and hotel bookings, as well as increased rates. Earlier, management projected third-quarter revenues to grow in the low-to-mid single-digit percentage range.

Sabre’s Q3 in Detail

Distribution revenues increased 4% to $575 million, primarily driven by an increase in air and hotel distribution bookings, a favorable travel supplier mix and rate impacts. Our model estimate for Distribution’s revenues was pegged at $570.7 million, which indicated 3.6% year-over-year growth.

IT Solutions’ revenues were $140 million, flat on a year-over-year basis. Our model estimate for IT Solutions’ revenues was pegged at $137 million.

Sabre reported normalized adjusted EBITDA of $150 million, which improved from the year-ago quarter’s $121 million. It also matched the top-end of management’s previous guidance of $140-150 million. The normalized adjusted EBITDA margin improved 350 basis points year over year to 19.7% in the third quarter of 2025.

Sabre’s Balance Sheet and Cash Flow

Sabre exited the September-end quarter with cash, cash equivalents and restricted cash of $447 million compared with the previous quarter’s $682.8 million.

During the third quarter, the company generated operating cash flow and free cash flow of $33.7 million and $13.4 million, respectively. During the first nine months of 2025, cash used in operating activities amounted to $248.2 million, and negative free cash flow was $307.6 million.

Sabre Updates Guidance for Q4 & FY25

For 2025, Sabre now expects its pro-forma revenues (which excludes the recently divested Hospitality Solutions business) to be flat year over year, down from the earlier prediction of a low single-digit percentage increase.

Pro-forma adjusted EBITDA is now projected to be approximately $530 million, instead of the previous forecasted range of $530-$570 million. The company now expects to generate pro-forma free cash flow of approximately $70 million, down from $100-$140 million anticipated earlier.

Additionally, Sabre initiated guidance for the fourth quarter. SABR anticipates pro-forma revenue growth in the low single-digit percentage range. It expects pro-forma adjusted EBITDA to be around $110 million. The company forecasts to generate free cash flow of around $130 million.

Sabre’s Zacks Rank & Stocks to Consider

Currently, SABR carries a Zacks Rank #4 (Sell).

Reddit Inc. RDDT, DocuSign DOCU and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Reddit, DocuSign and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Reddit’s full-year 2025 earnings is pegged at $2.35 per share, revised upward by 25% over the past seven days and suggests a year-over-year increase of 170.6%. Reddit shares have soared 20.1% year to date.

The Zacks Consensus Estimate for DocuSign’s fiscal 2026 earnings has moved upward by 5 cents over the past 60 days to $3.69 per share, calling for an increase of 3.9% year over year. DocuSign shares have plunged 21.1% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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