Q1 2024 Sabre Corp Earnings Call
Gerald: Good morning, and welcome to the Sabre First Quarter 2024 earnings conference call. My name is Gerald, 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 of Investor Relations and Treasurer, Brian Evans. Please go ahead, sir.
Good morning, and welcome to the Sabre first quarter 2024 earnings Conference call. My name is Gerald 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 of Investor Relations and Treasurer, Brian Evans. Please go ahead Sir.
Brian Evans: Thank you and good morning everyone. Welcome to Sabre's first quarter 2024 earnings call. This morning we issued an earnings press release which is available on our website at investors.sabre.com. The 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.
Brian Evans: Thank you and good morning, everyone welcome to say versus first quarter 2024 earnings call. This morning, we issued an earnings press release, which is available on our website at investors Sabre Dot com.
Slide presentation, which accompanies today's prepared remarks is also available during this call on the Sabre Investor Relations Web page a replay of today's call will be available on our website later this morning.
Brian Evans: We advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including the effects of cost efficiencies and growth strategies, distribution volumes, benefits from our technology transformation, commercial and strategic arrangements, 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-Q for the quarter ended March 31, 2024.
Brian Evans: We advise you that our comments contain forward looking statements that represent our beliefs or expectations about future events, including the effects of cost efficiencies and growth strategies distribution volumes benefits from our technology transformation commercial and strategic arrangements, our financial guidance and targets free cash.
Brian Evans: Cash flow and liquidity among others all forward looking statements and involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call.
Brian Evans: More information on these risks and uncertainties is contained in our earnings release issued this morning, and our SEC filings, including our Form 10-Q for the quarter ended March 31 2024.
Brian Evans: 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, Adjusted EPS, and Free Cash Flow have been adjusted to exclude certain items. The most directly and 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.
Brian Evans: Throughout today's call, we will also be presenting certain non-GAAP financial measures.
Brian Evans: Francis during today's call to adjusted EBITDA, adjusted EBITDA margin adjusted EPS and free cash flow have been adjusted to exclude certain items. The most directly and comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on our website at <unk>.
Brian Evans: <unk> Dot sabre dot com.
Brian Evans: Participating with me are Curt Hecker, President and CEO, and Mike <unk>, Chief Financial Officer, Scott Wilson, EVP, and President of hospitality solutions will be available for Q&A. After the prepared remarks with that I will turn the call over to Kurt.
Kurt: Thanks, Brian.
Kurt J. Ekert: And hello everyone, we appreciate your interest in Sabre, and thank you for joining today's session. I'm pleased to discuss our first quarter, the success of which was a direct result of our team members' focus, unrelenting execution of our plan, and commitment to our customers. Earlier today, we reported Q1 financial results that exceeded our previous guidance and included solid revenue growth, a substantial increase in adjusted EBITDA, and Significant Margin Expansion, which has been a continuing trend.
Kurt: And Hello, everyone. We appreciate your interest in Sabre and thank you for joining today's session.
Kurt: I am pleased to discuss our first quarter, the successive which was a direct result of our team members focus.
Kurt: Unrelenting execution of our plan and commitment to our customers.
Kurt: Earlier today, we reported Q1 financial results that exceeded our previous guidance and included solid revenue growth.
Kurt: A substantial increase in adjusted EBITDA.
Kurt: And significant margin expansion, which has been a continuing trend.
Kurt J. Ekert: We achieved commercial wins that drove additional distribution industry share gains, delivered next-generation products to meet our customers' needs, and advanced our technology transformation to increase our speed and efficiency, all with a lower cost base. This progress leads us to increase our revenue and adjusted EBITDA guidance for full year 2024. Let me share the agenda for today's call. On slide four, you can see an overview of the topics that Mike and I will cover.
Kurt: We achieved commercial wins that drove additional distribution industry share gains.
Kurt: Delivering next generation products to meet our customers' needs.
Kurt: And advanced our technology transformation to increase our speed and efficiency.
Kurt: All with a lower cost base.
Kurt: This progress leads us to increase our revenue and adjusted EBITDA guidance for full year 2024.
Kurt J. Ekert: First, I will review our Q1 Business Highlights and Accomplishments. Next, I'll provide a brief update on our technology transformation and highlight some of the recent product and commercial wins that our global team has achieved. Finally, before heading off to my desk, I'll close with a snapshot of our growth strategies and the positive momentum they are driving. Mike will then take you through the financial results for the first quarter and provide an update to our 2024 guidance.
Speaker Change: Let me share the agenda for today's call.
Speaker Change: On slide four you can see an overview of the topics that Mike and I will cover.
Speaker Change: First I will review, our Q1 business highlights and accomplishments.
Speaker Change: Next I'll provide a brief update on our technology transformation and highlight some of the recent product and commercial winds at our global team has achieved.
Speaker Change: Finally, before handing off to Mike <unk>.
Mike: I'll close with a snapshot of our growth strategies and our positive momentum they are driving.
Mike: Mike will then take you through the financial results for the first quarter and to provide an update to our 2020 for guidance.
Kurt J. Ekert: Before I move on, my team and I extend enthusiastic congratulations to Gail Mandel on her election as Sabre's new board chairperson. Yale's vast operating experience and depth of travel industry knowledge have proven invaluable. Sabre since she joined the board in April 2020. We also extend deep gratitude to Sean Menke for his leadership as CEO and board chairperson during an unprecedented time in Sabre's history, and we wish him well. Now, let's turn to slide five.
Speaker Change: Before I move on my team and I extend enthusiastic congratulations to Gary Mandel.
Speaker Change: On her election as <unk> New Board chair.
Speaker Change: <unk> vast operating experience and depth of travel industry knowledge have proven invaluable.
Speaker Change: To say ever since he joined the board in April 2020.
Speaker Change: We also extend deep gratitude to Sean <unk> for his leadership as CEO and board chair during an unprecedented time in <unk> history.
Speaker Change: And we wish him well.
Speaker Change: Now, let's turn to slide five.
Kurt J. Ekert: We achieved solid revenue growth driven by traction in our growth strategies and a higher average booking fee, combined with our cost structure improvement, to more than double Sabre's adjusted EBITDA margin versus the first quarter of 2023. These achievements drove better than expected performance at Justin Ibbitt Dock to be well above our guidance for the quarter. Now to slide six.
Speaker Change: We achieved solid revenue growth driven by traction in our growth strategies.
Speaker Change: And a higher average booking fee combined.
Speaker Change: Combined with our cost structure improvements.
Speaker Change: To more than double saver is adjusted EBITDA margin.
Speaker Change: Versus the first quarter of 2023.
Speaker Change: These achievements drove better than expected adjusted EBITDA.
Speaker Change: To be well above our guidance for the quarter.
Speaker Change: On to slide six.
Kurt J. Ekert: As a reminder, we have four key strategic priorities that drive our long-term growth and form the foundation of our resource allocation and decision-making. First, generating positive free cash flow and de-levering the balance sheet remain important financial objectives. The significant improvement in our adjusted EBITDA in the first quarter keeps us on track to generate positive free cash flow in 2024. We also took important steps during the first quarter to further align our debt maturities over the next few years with our projected free cash flow expectation. We now plan to repay the remaining 2025 maturities, using cash from our balance sheet, as our second priority.
Speaker Change: As a reminder, we have four key strategic priorities that drive our long term growth and form the foundation of our resource allocation and decision making.
Speaker Change: First generating positive free cash flow and Delevering the balance sheet remain important financial objectives.
Speaker Change: The significant improvement in our adjusted EBITDA in the first quarter keeps us on track to generate positive free cash flow in 2024.
Speaker Change: We also took important steps during the first quarter to further align our debt maturities over the next few years.
Speaker Change: With our projected free cash flow expectations.
Speaker Change: We now plan to repay the remaining 2025 maturities.
Speaker Change: Cash from our balance sheet.
Speaker Change: On our second priority.
Kurt J. Ekert: Achieving Sustainable Long-Term Growth. We continue to grow our share of air distribution industry bookings in the first quarter, which I will touch on in greater detail in a moment. Training to Hospitality Solutions.
Speaker Change: <unk> sustainable long term growth.
Speaker Change: We continue to grow our share of air distribution industry bookings in the first quarter.
Speaker Change: Which I will touch on in greater detail in a moment.
Speaker Change: Turning to hospitality solutions.
Kurt J. Ekert: Our team delivered strong financial results in the first quarter and is executing on the interim milestones we have established with Hyatt to bring them on to our Cinexus CRS platform. Implementation is expected to begin this quarter within just 12 months of our contract announcement. Our third strategic priority is to drive innovation and enhance our value proposition. We recently announced the development of the Sabre Red launch pad alongside our launch partner, Internova Travel Group.
Speaker Change: Our team delivered strong financial results in the first quarter.
Speaker Change: And is executing on the interim milestones we have established with Hyatt.
Speaker Change: To bring them onto our <unk> Crs platform.
Speaker Change: Implementation is expected to begin this quarter within 12 months of our contract announcements.
Speaker Change: Our third strategic priority is to drive innovation and enhance our value proposition.
Speaker Change: We recently announced the development of Sabre Red Launchpad, alongside our launch partner in turnover travel group.
Kurt J. Ekert: This new booking solution supports NBC, low-cost carrier, and traditional Edifact content options while giving agencies more choice and flexibility in how they manage their workforce. Additionally, we continue to invest resources focused on each of our six growth strategies, which are designed to provide intelligent retailing and next-gen distribution technology. I will provide proof points on how we are delivering results from these in just a moment. Last, our team once again delivered on our technology transformation goals. And we expect to achieve our operational and cost-savings objective by year-end 2024. Turning to slide seven.
Speaker Change: This new booking solution supports NBC.
Speaker Change: Low cost carrier and traditional <unk> content options.
Speaker Change: While giving agencies more choice and flexibility in how they manage their workforces.
Speaker Change: Additionally, we continue to invest resources focused on each of our six growth strategies.
Speaker Change: That are designed to provide intelligent retailing and nextgen distribution technology.
Speaker Change: I will provide proof points on how we are delivering results from these in just a moment.
Speaker Change: Last our team once again delivered on our technology transformation goals.
Speaker Change: And we expect to achieve our operational and cost savings objectives.
Speaker Change: By year end 2024.
Speaker Change: Turning to slide seven.
Kurt J. Ekert: Travel Solutions delivered a solid first quarter that helped drive financial results above our previous Q1 guidance. Distribution Industry Share Expansion, strong growth in our lodging, ground, and sea business, and continued improvement in the average fee from a richer booking mix helped drive a $74 million, or 64%-year-on-year increase in Travel Solutions adjusted EBITDA. On to slide eight, as we highlighted throughout 2023.
Speaker Change: Travel solutions delivered a solid first quarter that helped drive financial results above our previous Q1 guidance.
Speaker Change: Distribution industry share expansion.
Speaker Change: Strong growth in our lodging ground and <unk> business.
Speaker Change: And continued improvement in the average fee from a Richard booking mix.
Speaker Change: Helped drive a $74 million or <unk>, 64%.
Speaker Change: Year on year increase in travel solutions adjusted EBITDA.
Speaker Change: Onto slide eight.
Speaker Change: As we highlighted throughout 2023.
Kurt J. Ekert: Sabre is growing its share of distribution industry bookings. As you can see, our share in Q124 expanded for the fifth consecutive quarter on a year-on-year basis. In addition, our share in Q1'24 also increased on a sequential basis from Q4'23 as corporate travel improved in the quarter, especially relative to the trends we experienced late last year. Turning to slide 9.
Speaker Change: Sabre is growing its share of distribution industry bookings.
Speaker Change: As you can see our share in Q1 'twenty four expanded.
Speaker Change: Expanded for the fifth consecutive quarter on a year on year basis.
Speaker Change: In addition, our share in Q1 24.
Speaker Change: Also increased on a sequential basis from Q4 dollars 23, as corporate travel improved in the quarter, especially relative to the trends we experienced late last year.
Speaker Change: Turning to slide nine.
Kurt J. Ekert: We are proud of the consistently strong results our Hospitality Solutions team delivered in the first quarter. Total revenue is up 7% year-over-year on solid growth in CRS transactions during the quarter. In addition, adjusted EBITDA margins grew approximately 10%, and overall adjusted EBITDA increased by $11 million versus Q1'23.
Speaker Change: We are proud of the consistently strong results our hospitality solutions team delivered in the first quarter.
Speaker Change: Total revenue was up 7% year over year on.
Speaker Change: On solid growth in Crs transactions during the quarter.
Speaker Change: In addition, adjusted EBITDA margins grew approximately 10%.
Speaker Change: And overall adjusted EBITDA increased by $11 million versus Q1 'twenty three.
Kurt J. Ekert: As we mentioned last quarter, the SAS operating model inherent in our hospitality solutions business generates high recurring revenue. We believe consistent revenue growth of 81% recurring revenue, a steady margin expansion trend, and a strong value proposition for a growing customer base of hotel operators seeking enhanced IT capabilities support an improving value trajectory for this. Please turn to slide 10.
Speaker Change: As we mentioned last quarter, the SaaS operating model inherent in our hospitality solutions business.
Speaker Change: <unk> high recurring revenue.
Speaker Change: We believe consistent revenue growth.
Speaker Change: 81% recurring revenue.
Speaker Change: Steady margin expansion trend.
Speaker Change: And a strong value proposition for our growing customer base of hotel operators seeking enhanced capabilities.
Speaker Change: Support and improving value trajectory for this business.
Speaker Change: Please turn to slide 10.
Kurt J. Ekert: Our technology transformation remains on course to achieve our cost savings targets and technology goals by year-end 2024. Further, we continue to expect an overall technology cost reduction of greater than $150 million in 2025 versus $20 million in 2023 from these efforts. As the chart indicates, our migration to Google Cloud continues to drive improved efficiency in our business. In the first quarter, our unit cost of compute again declined by nearly 20 percent from the first quarter of 2023 and was down approximately 55% versus 2019. To enhance productivity, we introduced generative AI tools to approximately 800 of our software engineers during the first quarter.
Speaker Change: Our technology transformation remains on course to achieve our cost savings targets and technology goals by year end 2024.
Speaker Change: Further we continue to expect an overall technology cost reduction.
Speaker Change: Greater than $150 million in 2025.
Speaker Change: <unk> 2023 from these efforts.
Speaker Change: As the chart indicates our migration to Google Cloud <unk>.
Speaker Change: Continues to drive improved efficiency in our business.
Speaker Change: In the first quarter, our unit cost of compute.
Speaker Change: <unk> declined by nearly 20%.
Speaker Change: From the first quarter 2023.
Speaker Change: And was down approximately 55% versus 2019.
Speaker Change: To enhance productivity.
Speaker Change: We introduced generative AI tools to approximately 800 of our software engineers during the first quarter.
Kurt J. Ekert: We expect this initiative to further accelerate our product development throughput and speed innovation. Overall, we believe our partnership with Google and our commitment to investing in innovation will continue to deliver modern technology solutions that meet the changing needs of our customers. Please turn to slide 11.
Speaker Change: We expect this initiative to further accelerate our product development throughput.
Speaker Change: And speed innovation.
Speaker Change: Overall, we believe our partnership with Google at our commitment to investing in innovation will continue to deliver modern technology solutions that meet the changing needs of our customers.
Speaker Change: Please turn to slide 11.
Kurt J. Ekert: Once again, our sales and commercial teams delivered a number of significant business wins during Q1 that highlight how Sabre's intelligent retailing and modern distribution solution consistently help our customers solve the complexity of today's travel marketplace. Here are some examples. In distribution, our expanded relationship with Air India continues to support booking growth and industry share gains. In addition, we signed important renewals with both Southwest Airlines and Alaska Airlines. Two carriers posting above-market rates of growth in their overall distribution book on the New Distribution Capability, or NDC.
Speaker Change: Once again, our sales and commercial team has delivered a number of significant business wins.
Speaker Change: During Q1 that highlight how sabres intelligent retailing and modern distribution solutions.
Speaker Change: System, we help our customers solve the complexity of today's travel marketplace.
Speaker Change: Following are some examples.
Speaker Change: In distribution, our expanded relationship with Air India.
Speaker Change: Continues to support bookings growth and industry share gains.
Speaker Change: In addition, we signed important renewals with both southwest Airlines.
Speaker Change: And Alaska Airlines, two carriers posting above market rates of growth and overall distribution bookings.
Speaker Change: On new distribution capability or and DC.
Kurt J. Ekert: We continue to accelerate investments to offer more robust functionality to a growing number of carrier and agency partners. Recently, SAP Concur integrated Sabre's Offer and Order APIs, making Sabre the first GDS provider to power NDC for SAP Concur and the corporate travelers that it serves. TMCs and corporations using Concur Travel are now able to shop, book, fulfill, and service NDC content via the Sabre GDS. Additionally, earlier this week... We announce that Serco, a leader in online travel booking and expense management based in New Zealand, has launched Sabre's MDC content in its online travel platform, making Sabre the first GDS to provide NDC content via Circo and its platform that serves the business travel market.
Speaker Change: We continue to accelerate investments to offer more robust functionality to a growing number of carrier and agency partners.
Speaker Change: Recently, SAP concur integrated <unk> offer an order Apis.
Speaker Change: Making <unk> the first GDS provider to power at DC for SAP concur and corporate travelers that it serves.
Speaker Change: Tmc's incorporations using concur travel are now able to shop.
Speaker Change: <unk> fulfill in service NBC content via the Sabre GDS.
Speaker Change: Additionally earlier this week.
Speaker Change: We announced that Serco, a leader in online travel booking and expense management based in New Zealand.
Speaker Change: As launch Sabres NBC content in its online travel platform.
Speaker Change: Making shaver the first GDS to provide NBC content via circle and as platform that serves the business travel market.
Kurt J. Ekert: In airline IT, our team recently secured an agreement with Aegean Airlines, which operates on a competitor's PSS, for our intelligent retailing product, Dynamic Availability. This important new partnership is testament that our modular next-gen solutions are platform agnostic, and are gaining traction with customers regardless of a carrier's PSS. Also in airline IT, Air Serbia recently reaffirmed its partnership with Sabre by signing a multi-year early renewal for SaberSonic and announced that it will also adopt Sabre's pricing and revenue optimization suite to better manage its inventory and network.
Speaker Change: And <unk>.
Speaker Change: Our team recently secured an agreement with Aegean Airlines.
Speaker Change: Which operates on a competitors PSS for our intelligent retailing product dynamic availability.
Speaker Change: This important new partnership.
Speaker Change: Is testament that our modular next Gen solutions our platform agnostic.
Speaker Change: And are gaining traction with customers regardless of a carrier's PSS.
Speaker Change: Also within airline.
Speaker Change: Air Serbia recently reaffirmed its partnership with Sabre.
Speaker Change: By signing a multi year early renewal for supersonic.
Speaker Change: <unk> announced that it will also adopt shapers pricing and revenue optimization suite to.
Speaker Change: To better manage inventory and network.
Kurt J. Ekert: Additionally, just last month, Latam Airlines Group announced that it will adopt Sabre AirPrice IQ, our cloud-native intelligent retailing solution designed to personalize travel offers and maximize customer revenue, utilizing real-time data, revenue management strategies, and artificial intelligence models.
Speaker Change: Additionally, just last month Latam Airlines group.
Speaker Change: So that it will adopt sabre air price IQ, our cloud native intelligent retailing solution.
Speaker Change: Designed to personalized travel offers and maximize customer revenue.
Speaker Change: <unk> real time data.
Speaker Change: Revenue management strategies and artificial intelligence models.
Kurt J. Ekert: On the agency front, we signed a new multi-year agreement and converted Duluth Travel, a leader in U.S. government travel, to Sabre. In addition, we recently announced a technology initiative with Interpark Triple, the leading online travel agency in South Korea, where we will apply our cutting-edge travel AI technology to provide users with enhanced travel content and a more personalized experience. We also signed important deals with eTraveli Group, one of the five largest agencies globally by distribution booking, and also with W2M, one of the largest agencies based in Spain. In summary, I commend our team for achieving a number of commercial wins during the first quarter with both new and existing customers. Now on to slide 12.
Speaker Change: On the agency front, we signed a new multi year agreement.
Speaker Change: And converted Duluth travel a leader in the U S government travel to sabre.
Speaker Change: In addition, we recently announced a technology initiative with enterprise Triple.
Speaker Change: The leading online travel agency in South Korea, where.
Speaker Change: Where we will apply our cutting edge travel AI technology.
Speaker Change: To provide users with enhanced travel content and more personalized experiences.
Speaker Change: We also signed important deals with E <unk> group.
Speaker Change: One of the five largest agencies globally by distribution bookings and also with W. Two app one of the largest agencies based in Spain.
Speaker Change: In summary, I commend our team for.
Speaker Change: For achieving a number of commercial wins during the first quarter with both new and existing customers.
Speaker Change: Onto slide 12.
Kurt J. Ekert: I am pleased to report that during the first quarter, we made meaningful progress on each of our growth strategies, which are designed to deliver modern distribution and retailing technology to meet the evolving needs of the market. Our multi-source platform has expanded to include low-cost carrier content from 20 new airline partners. Sabre's platform offers LCC-integrated NDC and ed effect content in one place, coupled with our proprietary functionality, APIs, and business logic that we believe are best in class.
Speaker Change: I am pleased to report that during the first quarter.
Speaker Change: We made meaningful progress on each of our growth strategies, which are designed to deliver modern distribution and retailing technology to meet the evolving needs of the marketplace.
Speaker Change: Our multi source platform has expanded to include low cost carrier content from 'twenty, new airline partners.
Speaker Change: <unk> platform offers LCC integrated MDC and edit that content in one place.
Speaker Change: Coupled with our proprietary functionality.
Speaker Change: And business logic that we believe are best in class.
Kurt J. Ekert: Our powerful platform enables carriers to dynamically sell through intermediaries, while importantly, providing buyers the choice, Transparency, Speed, Efficiency, and Seamless User Experience across all channels that best meets their needs for distribution expansion, as I mentioned earlier. We again realize solid share gains in air distribution in the first quarter as buyers with complex IT demand continue to select Sabre as their preferred technology partner. We believe our compelling distribution offering, especially our multisource platform, recent wins with global carriers such as Air India, as well as signed but not yet announced or implemented business, and a rich pipeline of new business position us well for continued distribution share expansion. Hotel distribution experienced strong growth in the first quarter, with hotel bookings, the largest contributor to our lodging gravity business, up 11% year over year, and the hotel attachment rate to air bookings up 2.5 points.
Speaker Change: Our powerful platform enables carriers to dynamically sale through intermediaries, while importantly, providing buyers that choice.
Speaker Change: Transparency speed efficiency and seamless user experience.
Speaker Change: Across all channels that best meets their needs.
Speaker Change: On distribution expansion as I mentioned earlier.
Speaker Change: We again realized solid share gains in air distribution in.
Speaker Change: In the first quarter as buyers with complex demands continue.
Speaker Change: Continue to select sabre as their preferred technology partner.
Speaker Change: We believe our compelling distribution offering, especially our multi source platform recent wins with global carriers, such as air India as.
Speaker Change: As well as signed but not yet announced or implemented business.
Speaker Change: And a rich pipeline of new business position us well for continued distribution share expansion.
Speaker Change: Hotel distribution experienced strong growth in the first quarter with hotel bookings the largest contributor to our lodging rapid assay business up 11.
Speaker Change: <unk> percent year over year.
Speaker Change: In hotel attachment rate to air bookings up two five points.
Kurt J. Ekert: We believe our content services logic platform, which integrates numerous disparate content sources, provides intelligent and relevant shopping responses, and is consumable through our APIs and across myriad channels, will drive meaningful growth as it brings our customers a leading accommodation offering. In payments, we are excited about the growth opportunity for this business and believe our leading products position us well to unlock substantial returns over the long term. During the first quarter, we signed more than 80 new customer agreements, and our virtual card deployments jumped 31% year over year.
Speaker Change: We believe our content services lodging platform, which integrates numerous disparate content sources provides intelligent and relevant shopping responses.
Speaker Change: And as consumable through our Apis and across many channels.
Speaker Change: We will drive meaningful growth as it brings our customers a leading accommodation offering.
Speaker Change: In payments, we are excited about the growth opportunity of this business and believe our leading products position us well to unlock substantial returns over the long term.
Speaker Change: During the first quarter.
Speaker Change: We signed more than 80, new customer agreements and our virtual card deployments jumped 31% year over year.
Kurt J. Ekert: Sabre made significant strides in delivering next-generation airline IT products and solutions in the first quarter, in addition to dynamic availability and AirPrice IQ commercial wins. We are excited about the progress on our offer order technology and expect to make significant product and commercial announcements on this suite of solutions in the coming months. We continue to see strong momentum in hospitality solutions. As I mentioned previously, implementation work with Hyatt to provide our Cenexus Central Reservation System technology is moving at pace, with implementation expected to begin this quarter.
Speaker Change: <unk> made significant strides in delivering next generation <unk> products and solutions in the first quarter in.
Speaker Change: In addition to dynamic availability.
Speaker Change: And are price on key commercial wins.
Speaker Change: We are excited about the progress on our offer order technology.
Speaker Change: And expect to make significant product and commercial announcements.
Speaker Change: On this suite of solutions in the coming months.
Speaker Change: Last.
Speaker Change: We continue to see strong momentum in hospitality solutions as.
Speaker Change: As I mentioned previously.
Speaker Change: Implementation work with Hyatt to provide our <unk> Central reservation system technology is moving at pace.
Speaker Change: With implementation expected to begin this quarter.
Kurt J. Ekert: We also announced an important multi-year renewal with Wyndham yesterday that highlights the successful migration of more than 5,000 Wyndham hotels to our Synexis property health platform, nearly one year ahead of schedule. In addition, the number of properties to adopt our next generation Synexis Retail and Solutions platform has expanded by 33% year-to-date. These achievements are just a few of the reasons why we continue to expect hospitality solutions to deliver double-digit revenue growth and substantial margin improvement for 2024. In summary, we believe that our focus on these strategies will drive sustainable growth over the long term. I will now hand the call over to Mike to walk you through our financial performance and forward outlook.
Speaker Change: We also announced an important multi year renewal with Wyndham yesterday that highlights the successful migration of more than 5000, Wyndham hotels to our <unk> property how platform nearly one year ahead of schedule.
Speaker Change: In addition, the number of properties to adopt our next generation <unk> retailing solution.
Speaker Change: Has expanded by 33% year to date.
Speaker Change: These achievements are just a few of the reasons why we continue to expect hospitality solutions to deliver double digit revenue growth and.
Speaker Change: And substantial margin improvement for 2024.
Speaker Change: In summary, we believe that our focus on these strategies will drive sustainable growth over the long term.
Speaker Change: I will now hand, the call over to Mike to walk you through our financial performance and forward outlook.
Michael O. Randolfi: Thanks Kurt, and good morning everyone. Please turn to slide 13. The first quarter was a strong quarter for Sabre. We see the guidance in each of our key metrics as our continued focus on efficiency combined with solid revenue growth to drive significant margin expansion. Our technology transformation and commitment to containing expenses drove our cost structure meaningfully lower. Importantly, our improved cost base and greater efficiency enhance our ability to fund the research and product development initiatives that are critical to delivering on our long-term strategic priorities.
Mike: Thanks, Kurt and good morning, everyone. Please turn to slide 13.
Mike: The first quarter was a strong quarter for sabre.
Mike: See the guidance in each of our key metrics as our continued focus on efficiency combined with solid revenue growth to drive significant margin expansion.
Mike: Our technology transformation and commitment to containing expenses drove our cost structure meaningfully lower.
Mike: Importantly, our improved cost base and greater efficiency enhances our ability to fund the research and product development initiatives that are critical to delivering on our long term strategic priorities.
Michael O. Randolfi: In addition to the strong operating performance outlined here on the slide, our team also delivered several significant debt refinancing transactions earlier this year that extended approximately $300 million of debt maturity. These transactions provide additional balance sheet flexibility and better align projected future free cash flow generation with our upcoming maturity timeline. We expect to achieve positive, quarterly free cash flow moving forward in 2024 and for the full year, and plan to repay the remaining 2025 maturities with cash from our balance sheet. Please turn to slide 14.
Mike: In addition to the strong operating performance outlined here on the slide our team also delivered several significant debt refinancing transactions earlier this year that extended approximately $300 million of debt maturities.
Mike: These transactions provide additional balance sheet flexibility and better align projected future free cash flow generation with our upcoming maturity timeline.
Speaker Change: We expect to achieve positive <unk>.
Speaker Change: <unk> free cash flow moving forward in 2024 and for the full year and plan to repay the remaining 2025 maturities with cash from our balance sheet.
Speaker Change: Please turn to slide 14.
Michael O. Randolfi: As you can see from this table, we exceeded our guidance for revenue, adjusted EBITDA, and free cash flow in the first quarter. With regard to outperformance on revenue, as compared to our prior Q1 guide, about one-third is driven by a higher average booking fee than expected, and about two-thirds is driven by a higher total distribution book. Revenue strength and continued cost efficiencies drove strong flow-through to the bottom line, enabling our $27 million Adjusted EBITDA. Turning to slide 15.
Speaker Change: As you can see from this table, we exceeded our guidance for revenue adjusted EBITDA and free cash flow in the first quarter.
Speaker Change: With regards to outperformance on revenue as compared to our prior Q1 guide.
Speaker Change: One third is driven by a higher average booking fee than expected and about two thirds is driven by higher total distribution bookings.
Speaker Change: Revenue strength and continued cost efficiencies drove strong flow through to the bottom line, enabling our $27 million adjusted EBITDA beat.
Speaker Change: Turning to slide 15.
Michael O. Randolfi: Total Q1 revenue was $783 million, an increase of $40 million or 5% versus last year. Distribution revenue totaled $572 million, a $46 million or 9% increase compared to $526 million. Q1 2023. Our total distribution bookings were $98 million in the quarter, a 2% increase compared to $97 million in Q1. Our average booking fee was $5.81 in the first quarter, up 7% from Q1 2023, as we realized an increase in corporate travel volumes, resulting in higher bookings. IT Solutions revenue totaled $141 million in the quarter. This was a $10 million decline versus revenue of $152 million in the prior year, driven by previously disclosed demigration.
Speaker Change: Total Q1 revenue was $783 million, an increase of $40 million or 5% versus last year.
Speaker Change: Distribution revenue totaled $572 million, a $46 million or 9% increase compared to $526 million in Q1 2023.
Speaker Change: Our total distribution bookings were $98 million in the quarter, a 2% increase compared to $97 million in Q1 2023.
Speaker Change: Our average booking fee was $5 81 in the first quarter up 7% from Q1 2023, as we realized an increase in corporate travel volumes, resulting in higher booking fees.
Speaker Change: It solutions revenue totaled $141 million in the quarter.
Speaker Change: This was a $10 million decline versus revenue of $152 million.
Speaker Change: In the prior year driven by previously disclosed the migrations.
Michael O. Randolfi: Hospitality Solutions' Q1 2024 revenue totaled $79 million, a $5 million or 7% improvement versus revenue of $74 million in Q1 2023. Adjusted EBITDA in the first quarter was $8 million, an improvement of $11 million versus Q1 2023. This represents the strongest first quarter adjusted EBITDA in six years. With a strong pipeline of new property growth, including additions from our Hyatt implementation, we are on track for double-digit revenue growth in 2024 with double-digit margins.
Speaker Change: Hospitality solutions Q1, 2024 revenue totaled $79 million.
Speaker Change: A $5 million or 7% improvement versus revenue of $74 million in.
Speaker Change: In Q1 2023.
Speaker Change: Adjusted EBITDA in the first quarter was $8 million an.
Speaker Change: An improvement of $11 million versus Q1 2023.
Speaker Change: This represents the strongest first quarter adjusted EBITDA in six years.
Speaker Change: With the strong pipeline of new property growth, including additions from our Hyatt implementation. We are on track for double digit revenue growth in 2024 with double digit margins.
Michael O. Randolfi: Sabre's adjusted revenue of $142 million in Q1 2024 versus $58 million in Q1 2023 represented an $84 million improvement year over year. As I mentioned earlier, the cost actions we implemented last year reduced our adjusted SG&A and technology expenses by 16% on a year-over-year basis in the first quarter and helped drive our adjusted EBITDA margin from about 8% in Q1 2023 to over 18% in the first quarter of this year. Free cash flow is negative $96 million, driven primarily by the typical seasonal working capital trend. We ended the first quarter with a cash balance of $650 million. Turn it to slide 16.
Speaker Change: <unk> adjusted EBITDA of $142 million in Q1 2024.
Speaker Change: <unk> was $58 million in Q1, 2023 represented an $84 million improvement year over year.
Speaker Change: As I mentioned earlier the cost actions, we implemented last year reduced our adjusted SG&A and technology expenses by 16% on a year over year basis in the first quarter and helped drive our adjusted EBITDA margin from about 8% in Q1 2023 to one.
Speaker Change: 18% in the first quarter of this year.
Speaker Change: Free cash flow was negative $96 million, driven primarily by typical seasonal working capital trends.
Speaker Change: We ended the first quarter with a cash balance of $650 million.
Speaker Change: Turning to slide 16.
Michael O. Randolfi: We completed a number of refinancing transactions during the first quarter to strengthen our balance sheet as we continue to focus on our long-term strategic and financial priorities. These refinancings reduced our 2025 debt maturities by over $300 million, increased our liquidity by over $70 million, and better aligned our maturities with projected free cash flow that we expect to generate in the coming years. As you can see in the slide, our next significant maturity will not come due until June 2027, providing a significant runway as we expect our business to continue to gain momentum and our financial performance to continue to improve.
Speaker Change: We completed a number of refinancing transactions during the first quarter to strengthen our balance sheet as we continue to focus on our long term strategic and financial priorities.
Speaker Change: These refinancings reduced our 2025 debt maturities by over $300 million.
Speaker Change: <unk> increased our liquidity by over $70 million and better aligned our maturities with projected free cash flow that we expect to generate in the coming years.
Speaker Change: As you can see on the slide our next significant maturity will not come due until June 2027, providing a significant runway as we expect our business to continue to gain momentum and our financial performance to continue to improve.
Michael O. Randolfi: As a result of these recent transactions, we now plan to repay our remaining 2025 debt maturities with cash from our balance sheet. Turning to slide 17. Regarding guidance for the second quarter of 2024, we expect revenue of approximately $750 million, a net income of approximately $115 million, and positive free cash flow. As a reminder, with regard to typical seasonal sequential trends, second quarter air distribution bookings are typically lower by high single digits versus the first quarter.
Speaker Change: As a result of these recent transactions, we now plan to repay our remaining 2025 debt maturities with cash from our balance sheet.
Speaker Change: Turning to slide 17.
Speaker Change: Regarding guidance for the second quarter of 2024, we expect revenue of approximately $750 million.
Speaker Change: Adjusted EBITDA of approximately $115 million and positive free cash flow.
Speaker Change: As a reminder, with regard to typical seasonal sequential trends.
Speaker Change: Second quarter Air distribution bookings are typically lower by high single digits versus the first quarter.
Operator: For the full year 2024, we expect revenue of approximately $3,040,000,000 and adjusted EBITDA of approximately $520,000,000. As you can see in this updated outlook, we continue to expect strong operating leverage from our technology transformation and heightened focus on cost containment. In addition, in 2024, we expect to generate positive free cash flow in the second, third, and fourth quarters and for the full year. With respect to refinancings and changes in the forward interest rate curve, we now expect cash interest to be approximately $375 million.
Speaker Change: For the full year 2024, we expect revenue of approximately $3 billion $40 million and adjusted EBITDA of approximately $520 million.
Speaker Change: As you can see in this updated outlook, we continue to expect strong operating leverage from our technology transformation and heightened focus on cost containment.
Speaker Change: In addition in 2024, we expect to generate positive free cash flow in the second third and fourth quarters and for the full year.
Speaker Change: With respect to refinancings and changes in the forward interest rate curve, we now expect cash interest to be approximately $375 million.
Operator: As we look at the pace of capital expenditures through April, we now expect to spend approximately $85 million. Furthermore, we believe we are on track to achieve our 2025 targets of greater than $700 million in adjusted EBITDA and greater than $200 million in free cash flow that we outlined during our Q4 earnings call in February. In conclusion, our team members delivered strong first-quarter financial results and achieved a number of important operational and commercial accomplishments to support our strategic priorities, which are to generate free cash flow and de-lever the balance sheet, deliver sustainable growth, drive innovation, and reduce our cost structure. We firmly believe that the outlook we have communicated today will enable us to accomplish those objectives. And with that, Operator, please open the line for questions. Thank you.
Speaker Change: As we look at the pace of capital expenditures through April we now expect to spend approximately $85 million this year.
Speaker Change: Furthermore, we believe we are on track to achieve our 2025 targets of greater than $700 million, and adjusted EBITDA and greater than $200 million and free cash flow that we outlined during our Q4 earnings call in February.
Speaker Change: In conclusion, our team members delivered strong first quarter financial results and achieved a number of important operational and commercial accomplishments to support our strategic priorities, which are to generate free cash flow and delever the balance sheet deliver sustainable growth.
Speaker Change: Drive innovation and to reduce our cost structure, we firmly believe that the outlook. We have communicated today will enable us to accomplish those objectives and with that operator. Please open the line for questions.
Speaker Change: Okay.
Speaker Change: Thank you.
Operator: At this time, we will now conduct the question and answer session. As a reminder, to ask a question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jed Kelly from Oppenheimer. The floor is yours. Hey, great, okay.
Speaker Change: At this time, we will now conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Kurt J. Ekert: Jed, thank you. This is Kurt.
Speaker Change: Our first question comes from the line of Jed Kelly from Oppenheimer. The floor is yours.
Speaker Change: Hey.
Jed Kelly: Great. Thanks.
Jed Kelly: Thanks for taking my questions just two if I may one are you seeing.
Jed Kelly: Sort of the GDS share stabilizing to a level, where you kind of give us get a better sense on how to right size your cost structure and then I appreciate the commentary around some of the Sabre Sonic wins can you just talk about the outlook for the airline solutions business. Thank you.
Kurt J. Ekert: Good morning. First of all, when you look at the GDS industry, what we saw in the first quarter was GDS market growth basically very strong for corporate, a bit offset by leisure, as I've talked about in the prior quarter. And more specifically, what we saw was the TMC of corporate business was up 1.9% for the GDS sector on a volume basis. For Sabre, that number was between four and a half and five.
Jed Kelly: Okay. Thank you this is Kurt good morning.
Jed Kelly: First of all when you look at the GDS industry.
Kurt: What we saw in the first quarter.
Kurt: Was GDS market growth basically very strong with corporate a bit offset by leisure as I've talked about in the prior quarter and more specifically what we saw.
Kurt: Is the TMC, a corporate business was up one 9% for the GDS sector on a volume basis for Sabre that number was between four 5%, 5%. So we're seeing sequential share gains specifically there.
Kurt J. Ekert: So we're seeing sequential share gains specifically there. For the industry, the sector overall, that is somewhat offset by the trends on the leisure side that I discussed last quarter. We do believe that with
Kurt: For the industry or the sector overall that is somewhat offset by the trends on the leisure side that I discussed last quarter.
Kurt: We do believe that with <unk>.
Kurt J. Ekert: Technology transformation taking hold to the full effect of those benefits coming next year. And then the actions that we took last year on our cost structure generally, and just the focus on cost that we have overall that our cost structure is the right cost structure for the business today with the right investment profile for what we need to do going forward. A few points.
Kurt: Technology transformation, taking hold to the full effect of those benefits coming next year.
Kurt: And then the actions that we took last year on our cost structure generally.
Kurt: And just the focus on cost that we have overall that our cost structure is the right cost structure for the business today with the right investment profile for what we need to do going forward when.
Kurt: When you look at airline solutions specifically.
Kurt J. Ekert: One is that business has stabilized. The revenue you saw in the first quarter of this year is roughly the revenue that you should expect to see for future quarters through the balance of 2024. We're winning very well with our retail intelligence set of solutions, and as I mentioned in our prepared remarks, we will, in the coming months, discuss in robust fashion what we're doing from both a product and a customer standpoint on offer and order, and the market seems to be very encouraged by what we have built, which is a modular cloud-based future solution. So we're actually very optimistic about the long-term future of the airline solutions business. Thank you.
Kurt: A few points one is that.
Kurt: That business has stabilized the revenue you saw in the first quarter of this year is roughly the revenue that you should expect to see for future quarters through the balance of 2024.
Kurt: We're winning very well with our retail intelligence set of solutions.
Kurt: And as I mentioned in our prepared remarks.
Kurt: We will in the coming months.
Kurt: Discuss in robust fashion, what we're doing from both a product and a customer standpoint on offer in order.
Kurt: And the market seems to be very encouraged by what we have built.
Kurt: Which is a modular cloud based futures future solution. So we're actually very optimistic for the long term future of the airline solutions business.
Speaker Change: Thank you.
Operator: Thank you for that question. One moment, please, as we prepare the queue. Our next question comes from James Lee of Mizzou. The floor is yours.
Speaker Change: Thank you for that question one moment, please the repair of the queue.
Speaker Change: Our next question.
Speaker Change: It comes from James Lee <unk> the floor is yours.
Operator: Great, thanks for taking my questions and congrats on a good quarter here. My question is on average booking fee growth for your travel solution business. That metric has been doing pretty well over the last few quarters. Maybe you can talk about the put and take of that metric? Which region are you seeing strength in?
James Goodall: Great. Thanks for taking my questions and congrats on the good quarter here my.
James Goodall: My question is on average booking fee growth for your travel solution business that metric has been doing really well over the last few quarters. Maybe you can talk about the puts and takes of that.
Kurt J. Ekert: And can you talk about maybe the durability of that growth rate going forward? And the second question is more about AI investment. Obviously, you guys touched upon a little bit on the main points of the prior commentary. Can you talk about some of the new use cases that are enhancing your product? Maybe help us understand, like, which frontier models you're building your applications on and help us also understand how you're managing inferencing costs, which often are a headwind for a lot of enterprises out there. Thank you.
James Goodall: That metric, which region are you seeing strength and can you talk about maybe the durability of that growth rate going forward.
James Goodall: And second question is more about AI investment, obviously, you guys touched upon a little bit on the bank on the prior commentary can you talk about some of the new use cases that enhancing your product may be help us understand like which frontier models, you're building new applications on and help US also understand how you're managing inferencing.
James Goodall: Cause which often headwind to a lot of enterprises out there. Thank you.
Michael O. Randolfi: Yeah, I'll start off, and I'll take the average booking fee question. You know, as you look at the average booking fee, we've seen over the last several quarters a favorable mix in terms of types of travel and the mix of airlines that have just been very favorable to us. And that continued in the first quarter of this year. And specifically, what we saw where we saw strength was that we saw significant strength out of the Asia-Pacific region.
Speaker Change: So I'll start off and I'll take the average booking fee question as you look at the average booking fee we've seen over the last several quarters of favorable mix in terms of types of travel.
James Goodall: And the mix of airlines.
James Goodall: That have just been very favorable to us and that continued in the first quarter of this year and specifically what we saw where we saw strength as we saw a significant strength out of the Asia Pacific region, and unlike the fourth quarter, which is primarily group bookings it was strength, but it wasn't necessarily in the pharma group bookings it was actually.
Michael O. Randolfi: And unlike the fourth quarter, which is primarily group bookings, there was strength, but it wasn't necessarily in the form of group bookings. It was actually higher average booking fee strength out of the Asia-Pacific region. Secondly, what also goes into our average booking fee is the benefit of land, the land, the lodging ground, and the sea. And as you see, we've got significant strength there. And the average booking fee there is slightly above average.
James Goodall: Higher average booking fee strength out of the Asia Pacific region.
James Goodall: <unk> will also goes into our average booking fee is.
James Goodall: The benefit of land the land the lodging ground and sea.
James Goodall: And as you see we've had significant strength there.
James Goodall: And the average booking fee there is slightly above average so that was also accretive to our average booking fee as we look forward and.
Michael O. Randolfi: So that was also accretive to our average booking fee. You know, as we look forward, and we look at the average booking fee that we produced in the first quarter, I would say we would expect to generally be in a similar range as we move through this year. Thanks, and on the AI front.
James Goodall: And we look at the average booking fee that we.
James Goodall: Produced in the first quarter I would say, we would expect to generally be in a similar range.
James Goodall: As we move through this year.
Kurt J. Ekert: Thanks, and on the AI front, so for the last several years, we've been partnered with Google. We have embedded Google's AI and ML capabilities into a host of our supplier-facing, meaning airline and hotel, and your solutions, such as Retail Intelligence, and those have resonated very well. When you think about the horizon of... sort of next-gen AI.
Speaker Change: Thanks, and on the AI front so for the last several years, we've been partnered with Google, We have embedded google's AI and ml capabilities into a host of our supplier facing many airlines and hoteliers solutions, such as retail intelligence and those have resonated very well when you think about the horizon.
James Goodall: <unk>.
James Goodall: Sort of Nexgen AI.
Kurt J. Ekert: We're looking at three primary applications. One is with respect to our product development process. Our engineers now are using both a Google and a Microsoft solution that effectively enables them to produce new code at a much better rate or much faster rate than they did historically. So we look at this as faster innovation in terms of the opportunity. Number two is in terms of how we service our clients. We have a very large infrastructure to do that.
James Goodall: We're looking at three primary applications, one is with respect to our product development throughput.
James Goodall: Our engineers now, we're using both Google and Microsoft solution.
James Goodall: <unk> enables them to produce.
James Goodall: New code a much better rate are much faster rate the data historically, so we look at this as fast renovation in terms of the opportunity.
James Goodall: Number two is in terms of how we service our clients we have a very large infrastructure to do that there is the opportunity to automate a lot of which was manual traditionally to improve both user experience and productivity.
Kurt J. Ekert: There is the opportunity to automate a lot, of which was traditionally manual, to improve both user experience and productivity. And then, last and probably most importantly, as we look at generative AI, embedding generative AI, we have one of the leading and largest data sets in the world, and AI is only as good as the quality of the data that informs the AI and the learning. So as we embed that in our agency-facing tools, airline-facing, and hotel-facing tools, we think there is an opportunity to differentiate from the pack. Thank you all so much.
James Goodall: And then last and probably most importantly, as we look at generative AI embedding generative AI, we have one of the leading and largest datasets in the world.
James Goodall: And AI is only as good as the quantum of data that informs the AI in a learning so as we embed that in our agency patient tools airline facing hotel facing we think there is an opportunity to differentiate from the pack.
Speaker Change: Thanks, so much.
Operator: Thank you for your question. One moment as I prepare the queue. Our next question comes from the line of Brett Knobloch from Cantor Fitzgerald. The floor is yours.
Speaker Change: Thank you for your question one moment as I prepare the queue.
Operator: Thank you. Thank you guys for taking my question.
Speaker Change: Our next question.
Speaker Change: Comes from the line of Brett Knoblauch from Cantor Fitzgerald, the floor is yours.
Michael O. Randolfi: Maybe just on how you see industry growth playing out for the rest of the year. I guess what's implied in your guidance in terms of the billable bookings and the price, or the average booking fee? I guess you just said you expect average booking fees to stay steady throughout the year. But if we look at the fourth quarter, that would imply, you know, a decline of four or five percent year over year. I know it's a bit far away, but can you give any color on the mix between bookings and booking fee?
Brett Knoblauch: Thank you. Thank you guys for taking my question.
Brett Knoblauch: Just on how you see industry growth playing out for the rest of the year.
Brett Knoblauch: I guess, what's implied in your guidance in terms of the build of the bookings and the price I guess or on the average booking fee. I guess, you said you expect average booking fees data throughout the year, but if we look at the fourth quarter that would imply.
Speaker Change: Decline of four 5% year over year.
Speaker Change: It's a bit far away, but just any any color on the mix between bookings and booking fee.
Michael O. Randolfi: Sure, I'll start. This is Mike, and thanks for the question, Brett. You know, as we think about, you know, air distribution bookings or bookings just in general, our baseline assumption is flat to nominal growth in terms of the guidance we gave with the $520 million of EBITDA. Now, what I would say is we continue to be optimistic. There are a lot of dynamics that are supportive of distribution bookings coming in higher than that.
Speaker Change: Sure I'll start.
Speaker Change: This is Mike and thanks for the question Brian.
Speaker Change: As we think about.
Mike: Air distribution bookings our bookings just in general.
Mike: Our baseline assumption is flat too.
Speaker Change: Nominal growth in terms of the guidance, we gave with the $520 million of EBITDA.
Speaker Change: I'd say as we continue to be optimistic there is a lot of dynamics that are supportive of.
Speaker Change: Book distribution bookings coming in higher than that.
Michael O. Randolfi: We've seen IATA projections that indicate that basically passenger traffic and volumes would be up, you know, the mid to high single digits, and international travel would be better than that. Similarly, from airlines, even though they've tempered back capacity, most of that tempered of capacity is still positive, and that's in North America, but internationally, they're adding a lot of capacity. And then we've seen favorable corporate booking trends. So our baseline assumption is flat to nominal growth in air distribution bookings, but that's just a baseline assumption.
Speaker Change: Seen IATA projections that indicate.
Speaker Change: That basically passenger traffic and volumes will be up mid to high single mid single digits and international travel would be better than that similarly from airlines, even though they've tempered back capacity most of that temporary capacity is still positive and thats in North America, but internationally there, adding a lot of capacity and then we've seen favorable corporate.
Speaker Change: Booking trends so our baseline assumption is flat to nominal growth on air distribution bookings, but that's a baseline assumption we think there's really good reason.
Michael O. Randolfi: We think there's really good reason to be positive there. On the booking fee, as we articulated, we expect that to be roughly in the range we've been in, call it $5.80, as we move to subsequent quarters.
Speaker Change: To be positive there on the booking fee as we articulated we expect that to be roughly in the range. We've been in call. It $5 80.
Speaker Change: As we move to the subsequent quarters, Yes, let me just add very quickly on.
Kurt J. Ekert: Yeah, let me just add very quickly on when you look at distribution booking, the corporate piece. We do believe that a lot of the airlines are reporting very strong year-on-year growth in corporate-derived revenue. We have not seen airlines break that out on a volume versus rate basis, but we believe that it's largely yield-driven from an airline perspective, as the traditional differential in corporate versus leisure yields is returning to the marketplace. We see very strong trends, as I indicated, with corporate travel, and that is accruing to the GDS sector and Sabre specifically.
Speaker Change: When you look at distribution bookings the corporate piece, we do believe that a lot of the airlines that are reporting very strong year on year growth in corporate derived revenue.
Speaker Change: We have not seen airlines break that out on a volume versus rate basis, but we believe that as largely yield driven from an airline perspective as the traditional differential in corporate versus leisure yields is returning to the marketplace.
Speaker Change: We see very strong trends as I indicated with corporate travel and that accruing to the GDS sector and sabre specifically.
Kurt J. Ekert: And some of the dynamics we spoke about last quarter with OTA specifically, from a lapping perspective, are the most challenging in the first and second quarters of this year. The year-on-year comparison should be a little bit easier for us in the second half of 2024.
Speaker Change: And some of the dynamics, we spoke about last quarter with <unk> specifically from.
Speaker Change: From a lapping perspective are the most challenging in the first and second quarter of this year the year on year compare should be a little bit easier for us in the second half of 2024.
Kurt J. Ekert: I don't know, that's very helpful. And then just on corporate, I know you guys got a little scared at the end of the year, and then it bounced back at the beginning of the year and was very strong in January. Just curious, as you know, we're now a month into the second quarter. How are you thinking about corporate? Is it still back with a vengeance?
Speaker Change: Got it no. That's very helpful. And then just on corporate I know you guys got a little scared at the end of the year and then it bounce back in the beginning of the year and was very strong in January.
Speaker Change: Just curious as you know were now a month into the second quarter. How are you thinking about corporate is it still back with a vengeance.
Kurt J. Ekert: Yeah, we're seeing in the second quarter that the trends that we saw in the first quarter continue at relatively the same pace.
Speaker Change: Yes, we are seeing in the second quarter, we're seeing the trends that we saw in the first quarter.
Kurt J. Ekert: Relatively at the same pace.
Operator: Perfect. Thank you guys. I really appreciate it. Thank you for the question.
Speaker Change: Perfect. Thank you guys really appreciate it.
Operator: Thank you for the question. One moment, please. Our next question comes from the line of Dan Wasiolek from Morningstar. The floor is yours.
Speaker Change: Thank you for the question one moment please.
Speaker Change: Okay.
Dan Wasiolek: Our next question comes from the line of Dan Wednesday.
Dan Wasiolek: At this time the floor is yours.
Operator: Good morning, guys. Thanks for taking my questions and congrats on a nice quarter here. The commentary on, you know, your technology revitalization and transformation and what you've been seeing with that has been very helpful. Just kind of wondering, with your offering currently, how would you say versus, you know, before going on this transformation, how the win rate and renewal levels kind of progressed relative to where they were maybe before you started the transformation, how you kind of see your product offering versus the competition. And then the second question would just be about the technology expense. How should we think about that for 24 and 25? Is it fair to use the Q1 runway for that? Thank you.
Dan Wasiolek: Hey, good morning, guys. Thanks for taking my questions and congrats on a nice quarter here just.
Dan Wasiolek: The commentary on your.
Dan Wasiolek: <unk> revitalization and transformation and what you've been seeing with that very helpful. Just kind of wondering.
Dan Wasiolek: With your offering currently how would you say versus before going on this transformation.
Dan Wasiolek: How is the win rate and renewal levels kind of progressed relative to where they were maybe before you started the transformation. How you kind of see your product offering versus the competition and then the second question would just be on the technology expense.
Dan Wasiolek: How should we think about that for 'twenty four 'twenty five is it fair to use the Q1 run rate for that thank you Evan.
Michael O. Randolfi: I'll start out on the expense side, and then Kurt will take it from there. This is Mike.
Kurt J. Ekert: Yes, I'll start out on the expense side, and then Curt will take it from there. This is Mike. So a couple of things. If you go back on technology expense you go back to what we had articulated.
Mike: In February we had highlighted that in our build from 2023 to 2025, we would have about $250 million of cost efficiency benefit of that cost efficiency benefit about $90 million of that was attributable to actions. We took in 2023 and about $160 million of that.
Michael O. Randolfi: So a couple things. If you go back to the technology expense, you go back to what we had articulated in February; we highlighted that in our bill from 2023 to 2025, we would have about $250 million of cost efficiency benefits. Of that cost efficiency benefit, about $90 million of that was attributable to actions we took in 2023, and about $160 million of that was attributable to our tech transformation. Of the $160 million of tech transformation benefit, about $45 million that we would expect to be in this year, and then a little bit over $100 million incrementally between 2024 and 2025.
Mike: Was attributable to our tech transformation.
Michael O. Randolfi: The $160 million of tech transformation benefit.
Mike: About $45 million that we would expect to be in this year.
Dan Wasiolek: And then a little bit over $100 million.
Dan Wasiolek: Incrementally between 'twenty between 2024, and 2025 as you think of the cadence of expenses and how it flows through our P&L.
Michael O. Randolfi: As you think of the cadence of expenses and how it flows through our P&L, there's some benefit you're seeing in the first quarter, but what I would say is of the $45 million benefit that we expect to see in the P&L this year, it is definitely backward loaded because we're slowly working down the bubble costs. We're continuing to optimize the cloud environment, and we will continue to have more and more compute capacity in the cloud environment as the year progresses. So the way to think about it is that we expect $45 million this year. That's somewhat backward loaded, not entirely, and then we'll have at least another $100 million incrementally over that between 2024 and 2025.
Dan Wasiolek: There is some benefit youre seeing in the first quarter, but what I would say is of the $45 million benefit that we expect to see in the P&L. This year. It is definitely backward loaded.
Dan Wasiolek: We're slowly working down the bubble costs, we're continuing to optimize the cloud environment.
Kurt J. Ekert: And then we continue to have more and more compute capacity.
Kurt J. Ekert: In the cloud environment as the year progresses, so the way to think about it is that we.
We expect $45 million this year, that's somewhat backward loaded not entirely.
Dan Wasiolek: And then we will have at least another $100 million incrementally over that between 2024 and 25.
Kurt J. Ekert: Thanks. Let me take the first question, and neither Mike nor I were here before 2022. So I don't have the great benefit of hindsight, but if you look at what we have today and what we're gonna have going forward, we have a cloud-built, modularized set of technology, which is fundamentally different than the monolithic mainframe of the past. Any thoughts that this is a dinosaur technology business are historical artifacts. This is a modern platform business.
Speaker Change: Yeah. Thanks, Let me take the first question.
Speaker Change: And neither Mike nor I would hear before 2022.
Kurt J. Ekert: So I don't have great benefit of hindsight, but if.
Speaker Change: If you look at what we have today and we're going to have going forward.
Kurt J. Ekert: We have a cloud built modularized set of technology, which is fundamentally different than the monolithic mainframe of the past.
Speaker Change: So.
Kurt J. Ekert: Any any thoughts that this is a dinosaur technology business are.
Mike Randolfi: <unk> historical artifacts. This is a modern platform business.
Kurt J. Ekert: If you look across the different businesses in distribution, first of all, some of the things that we've been able to build that we believe are best in class are the multi-source air content platform, our hotel content services lodging platform, and our booking solutions, such as Sabre Red. In airline IT, when you look at everything we've built that's really gaining traction in the marketplace, that is, our offer order modularized cloud-based platform, and our retail intelligence tools, those are fully cloud-based.
Kurt J. Ekert: If you look across the different businesses and distribution first of all some of the things that we've been able to build that we believe are best in class or the multi source air content platform.
Kurt J. Ekert: Our hotel content services lodging platform.
Speaker Change: Bookings solutions, such as Sabre red in.
Kurt J. Ekert: In airline it.
Kurt J. Ekert: When you look at everything we've built it's really gaining traction in the marketplace that is our offer order modularized pod based platform our retail intelligence tools those are fully cloud based and.
Kurt J. Ekert: And in our hospitality solutions business, our Crs or Pms, and our <unk> retail and capabilities are fully cloud based so what I can say today is when you look across the businesses we have.
Kurt J. Ekert: And in our Hospitality Solutions business, our CRS, our PMS, and our Cynicsys retailing capabilities are fully cloud-based. So, what I can say today is, when you look across the businesses we have, We've been able to move at a very different pace in terms of innovation, in terms of the implementation of new solutions with clients, and we believe we're being chosen as a best and breed technology partner by agencies and corporations, by airlines, by hoteliers, and so the moves that Sabre has made that we're continuing to complete are very important in terms of our competitive position.
Kurt J. Ekert: <unk>.
We've been able to move in a very different pace in terms of innovation in terms of the implementation of new solutions with clients.
Kurt J. Ekert: And we believe we are being chosen as a best in breed technology partner by agencies and corporations by airlines by Hoteliers and so the moves that <unk> made that we're continuing to complete are very important in terms of our competitive position.
Kurt J. Ekert: Okay.
Operator: Okay, great, very helpful, thank you.
Speaker Change: Okay, great very helpful. Thank you.
Operator: Thank you for that question. One moment, please, as I prepare the queue. Our next question comes from Alex Irving of Bernstein. The floor is yours.
Speaker Change: Thank you for that question.
Alexander Irving: One moment, please as I compare the Q.
Operator: Our next question comes from Alex Irving Burnsville, a floor is yours.
Operator: Hi, good morning, gentlemen. I hope all's well with you. Two from me, please.
Alexander Irving: Hi, Good morning, gentlemen, Google as well with you two for me. Please first is it going to liquids and corporate travel. So you've seen a couple of the U S network Airlines discussing about a 14% increase in managed corporate travel year on year corporate.
Kurt J. Ekert: First, is it going to allow bookings for corporate travel? So you've seen a couple of U.S. network airlines discussing about a 14% increase in managed corporate travel year-on-year. These are your corporate bookings were up 4% to 5%, if I have that right. They mentioned the yield differential, but I'd expect that wasn't going to explain the whole gap. Would I be right to conclude the rest would be channel shifts to MDC aggregators and airline agent direct connections?
Kurt J. Ekert: Corporate bookings were up 45% I hope that rate and you mentioned the yield differential unexpected hoping you can explain the whole gap will be lights conclude the rest would be channel shifts to NBC aggregator as an airline agents.
Kurt J. Ekert: And if not, we would extend that gap, please. And then second, just as we think about the cadence of booking fees going forward, could you please tell me what share of your air booking news comes from airlines with which you currently have full content agreements? Thank you. Yeah, thank you.
Speaker Change: And if not we would extend that please and then secondly, if we think about the cadence going forward could you. Please tell me what share of your bookings comes from all lines with which currently.
Kurt J. Ekert: Content agreements. Thank you.
Kurt J. Ekert: Yeah, thank you. On corporate travel, first of all, we don't know what when the airlines are citing 14%, for example, year-on-year improvement in corporate travel, and I think that was cited by Delta. United, for example. We don't believe that they broke that out in terms of volume versus rate. We believe a very significant, perhaps majority portion of that is rate. With managed corporate travel, as I indicated, the GDS sector is up 1.9%.
Speaker Change: Yes. Thank you on corporate travel first of all.
Kurt J. Ekert: We don't know what when the airlines are signing 14% for example year on year improvement in corporate and I think that was cited by Delta and <unk>.
Kurt J. Ekert: United For example.
Kurt J. Ekert: We don't believe that they broke that out in terms of volume versus rate. We believe a very significant perhaps majority portion of that is rate.
Kurt J. Ekert: With managed corporate travel as I indicated the GDS sector was up one 9% we were up four 8% in the quarter on a unit basis, we believe substantially all of the growth in corporate travel is accruing to the GDS sector and a very significant portion to sabre.
Kurt J. Ekert: We were up 4.8% in the quarter on a unit basis. We believe substantially all of the growth in corporate travel is due to the GDS sector and a very significant portion to Sabre. We do not believe there's any evidence of disintermediation or channel shift occurring with managed corporate travel. The second question, in terms of full content agreements, we have full content agreements with well over 100 carriers in the world, and that would account for, call it, 90 plus percent of our air distribution book. Thank you. Very clear.
Kurt J. Ekert: Do not believe there's any evidence in addition remediation.
Kurt J. Ekert: Our channel shift occurring with managed corporate travel.
Kurt J. Ekert: The.
Kurt J. Ekert: The second question in terms of full content agreements, we have full content agreements with well over 100 carriers in the world and that would account for a call. It 90 plus percent of our air distribution bookings.
Speaker Change: Thank you.
Operator: Thank you for that question. One moment, please. Our next question comes from the line of Victor Cheng of Bank of America. The floor is yours.
Speaker Change: Thank you for that question one moment please.
Operator: Our next question comes from the line of Victor King of Bank of America. The floor is yours.
Operator: Morning, thanks for taking my question. I guess first on tech transformation, obviously I've talked a bit about it just now, but if I look at the slides from a couple quarters ago, the tech transformation of $150 million is based on 80% recovery. And I believe at that point in time, it was said that every 20% recovery equates to maybe $40 or $50 million of additional savings. And so assuming we're roughly at 60%, that would imply closer to 200 million savings.
Victor Cheng: Good morning, Thanks for taking my question.
Operator: Two if I may I guess first of all on Tech transformation, obviously, I've talked a bit about it just now.
Operator: Looking at the slides a couple of quarters ago. The tech transformation of $150 million is based on 80% recovery.
Operator: And I believe at that point in time. It was said that every 20% recovery.
Operator: So maybe 40 or $50 million of additional savings.
Operator: And so assuming were kept Lafayette, 60% that would expect closer to 200 million savings is that the right way to think about it.
Operator: Is that the right way to think about it? And then, on this tech transformation as well, are there any assumptions about inflation both on salaries and Google Cloud cost inflation baked in as well? And then, I have a follow-up.
Operator: And then on this tech transformation as well.
Operator: Are there any assumptions on inflation, both on salaries and and Google cloud cost inflation baked in as well and then I have a follow up.
Michael O. Randolfi: Yeah, so on tax transformation, as you indicated, we originally expected about $150 million. But we do expect it to be a little more than that. And that's partly because of a lower recovery level. So we do think it's, you know, call it $160 plus million of benefit that hits our P&L. That's what we articulated in our most recent guide. And, you know, with regard to what it assumes in terms of salaries and inflation, obviously, today, wage rates, particularly in technology, are substantially higher than what they were pre-pandemic. And that's reflected in the $160 million benefit that we called out in February. That's a component of the $250 million cost of services. I would also...
Speaker Change: Yes, so on <unk> transformation as you indicated we originally expected about 100.
Michael O. Randolfi: $50 million, we do expect it to be a little more than that and that's partly because.
Michael O. Randolfi: That's partly.
Michael O. Randolfi: Lower recovery levels. So we do think it's call it 160 plus.
Michael O. Randolfi: $1 million of benefit that hits, our P&L, that's what we articulated in our most recent guide.
Michael O. Randolfi: <unk> and.
Michael O. Randolfi: With regard to.
Michael O. Randolfi: What it assumes in terms of salaries and inflation, obviously today wage rates, particularly in technology are substantially higher.
Michael O. Randolfi: Then what they were pre pandemic.
Michael O. Randolfi: And thats reflected in the $160 million benefit that we called out in February Thats, a component of the $250 million of our cost efficiency.
Michael O. Randolfi: I would also note that our relationship with Google is a long-term contract, with the commercials fixed for a long period of time.
Michael O. Randolfi: Also note that our <unk>.
Michael O. Randolfi: Our relationship with Google is a long term contract.
Michael O. Randolfi: With the commercials fixed for a long period of time.
Michael O. Randolfi: And maybe just one follow-up question is how do we think about the minimum liquidity for the company? I know, obviously, you are paying down 25% of your debt in cash. But generally speaking, for Sabre, what's the minimum liquidity required?
Speaker Change: Understood and maybe just one follow up is how do we think about.
Michael O. Randolfi: The minimum liquidity for the company I know, obviously, you are paying down 25% debt and cash.
Michael O. Randolfi: But generally speaking for sabre, what's the minimum liquidity required.
Michael O. Randolfi: Yeah, so, you know, if you look at pre-pandemic, we had operated Sabre with in terms of actual cash three to four hundred million dollars. Now, we had more liquidity than that because we had a revolver at the time.
Speaker Change: Yes. So if you look at pre pandemic, we had operated sabre.
Michael O. Randolfi: With in terms of actual cash $3 million to $400 million.
Michael O. Randolfi: Now we had more liquidity than that because we had a revolver at the time so for the most part at this stage our desire is to maintain a higher liquidity balance.
Michael O. Randolfi: So for the most part, you know, at this stage, our desire is to maintain a higher liquidity balance, out of prudence, as we do. The things to think about is that we ended this quarter with six hundred million, six hundred fifty million dollars of cash. We expect to be free cash flow positive in Q2, Q3, and Q4 for the full year combined. So if you simply do the math with what we consumed in cash in Q1, we're going to add at least $100 million of cash in the remaining three quarters.
Michael O. Randolfi: Out of Prudence as we the things to think about it as we ended this quarter with $600 million $650 million of cash we expect to be free cash flow positive in Q2, Q3 Q4 for the full year combined so if you simply do the math with what we consumed cash in Q1, we're going to add at least $100 million of cash.
Michael O. Randolfi: And the remaining three quarters. So we'll end the year with a cash balance.
Michael O. Randolfi: So we'll end the year with a cash balance, you know, call it, of approximately $750 million. And we think that well positions us to cover maturities on our balance sheet in 2025, especially taking into account that we expect to generate greater than $200 million of free cash flow in 2025.
Michael O. Randolfi: A lot of approximately $750 million, and we think that well positions us to cover maturities off our balance sheet.
Michael O. Randolfi: In 2025, especially taking into account that we expect to generate greater than $200 million of free cash flow in 2025.
Michael O. Randolfi: Okay.
Operator: Very clear. Thank you.
Speaker Change: Very clear thank you.
Operator: Thank you for that question. One moment, please. And as a reminder, if you would like to ask a question, please press star 11 on your telephone. Our next question comes from the line of Josh Baer of Morgan Stanley. The floor is yours.
Speaker Change: Thank you for that question one moment please.
Operator: And as a reminder, if you would like to ask a question. Please press star one on your telephone.
Operator: Our next question comes from the line of Josh Baer of Morgan Stanley the floor is yours.
Joshua Phillip Baer: However, nine restaurant for Josh Thanks for taking my questions.
Joshua Phillip Baer: Can you dig a little more into the hospitality business with respect to your traction with enterprise and our Pms.
Joshua Phillip Baer: As a progress update on this front and can you give any comments on the recent announcement around Wyndham and Hyatt.
Scott Albert Wilson: Yeah, we actually have Scott Wilson online, and Scott, I'll ask you to answer that.
Operator: Yes, we actually have Scott Wilson online and Scott I'll ask you to answer that.
Scott Albert Wilson: Great, thanks. And great to hear from you, Josh. Yeah, a couple of things that we're pretty excited about. Let's take a look. We actually have closed two enterprise deals in the last three years, in the Louvre and Hyatt. And as we mentioned in the prepared remarks, we've actually started the implementation and migration of their properties onto the Synexis CR platform in 12 months, and our expectation is that we will continue to execute it on the timeline we've set with them over the course of this year and into next. So a lot of really positive momentum on that front.
Scott Albert Wilson: Great. Thanks, and good to hear from you Josh a couple of things that we're pretty excited about this reflect we actually have closed two enterprise deals in the last three years and move and Hyatt and as we mentioned in the prepared remarks.
Scott Albert Wilson: We've actually started the implementation and migration of their properties onto the <unk> platform in 12 months and our expectation is that we will continue to execute in the timeline, we set with them over the course of this year and into next so a lot of really positive momentum on that front and we believe that Hyatt is going.
Scott Albert Wilson: Excellent partner with us for quite some time on.
Kurt J. Ekert: And we believe that Hyatt is going to be an excellent partner with us for quite some time. On the Wyndham renewal front, keep in mind, we have a two-part deal with them. We actually have a CR deal and a PMS deal. Yesterday's announcement was about the renewal of our PMS product. This is a product that was really built with Wyndham and their hotel type in mind. It's an incredibly strong cloud-native product that supports select service and limited service properties, and we believe that this is just one of a number of successes we continue to have in the PMS space.
Scott Albert Wilson: On the Wyndham renewal front.
Scott Albert Wilson: Keep in mind, we have a two part deal with them, we actually have a CR deal and the Pms deal yesterday's announcement was about the renewal of rpms product.
Kurt J. Ekert: This is a product that was really built with.
Kurt J. Ekert: Wyndham in their hotel type in mind to incredibly strong cloud native product that supports select service and limited service properties and we believe that this is.
Kurt J. Ekert: Just one of a number of successes we continue to have in the Tms space.
Kurt J. Ekert: We do actually have a very robust pipeline on the PMS side, and we look forward to announcing additional deals this year with Cenex's property management. So, a lot of good news on that front. We think the enterprise is a place that we can continue to do well and win. You know, these are not frequent occurrences, but as hoteliers go through strategic assessments of their technology needs, we are very confident that we will be participating in and winning more than our fair share of enterprise opportunities going forward. Yeah, and let me chime in there.
Kurt J. Ekert: You actually have a very robust pipeline on the Pms side, and we look forward to announcing additional deals this year.
Kurt J. Ekert: With <unk> property management.
Speaker Change: So lot of good news on that front, we think the enterprise is a place that we can continue to show well and win these are.
Speaker Change: Not frequent occurrences, but as hoteliers go through strategic assessment of their technology needs.
Kurt J. Ekert: We are very confident that we will be participating in and winning more than our fair share of enterprise opportunities going forward.
Michael O. Randolfi: Yeah, and let me chime in there. I would just say the team is knocking it out of the park here. You know, if you think about the first quarter last year, this was a business that burned $2.8 million in EBITDA. We had an $11 million year over year improvement and generated $8 million in EBITDA this year. If you look at our forward-looking commentary and what we articulated about the proportion of our growth strategies attributable to hospitality solutions, we expect, year on year, in 2024, to generate approximately $30 million more in EBITDA this year than last year, which would put us at approximately $40 million in EBITDA.
Speaker Change: Yeah, and let me let me chime in there I would just say the team is knocking it out of the park here.
Michael O. Randolfi: If you think about the first quarter last year. This was a business that burned $2 $8 million EBITDA, we had an $11 million year over year improvement and generated $8 million of EBITDA. This year. If you look at our forward looking commentary on what we articulated about the proportion of our growth strategies.
Michael O. Randolfi: <unk> to hospitality solutions, we expect year on year in 2024 to generate.
Michael O. Randolfi: Proximately $30 million more in EBITDA this year than last year, which would put us at approximately $40 million. EBITDA also if you look at the forward looking guidance and commentary we provided in February about half of our strategic growth initiatives between 2023, and 2025 are attributable to hospitality solutions that would bring our.
Michael O. Randolfi: Also, if you look at the forward-looking guidance and commentary we provided in February, about half of our strategic growth initiatives between 2023 and 2025 are attributable to hospitality solutions. That would bring our expected EBITDA to about $70 million in 2025. We think we're firmly on the path to double-digit revenue growth with double-digit margins in that business, and the team's just doing an awesome job.
Michael O. Randolfi: I expected EBITDA to about $70 million in 2025, we think we're firmly on the path to double digit revenue growth with double digit margins in that business and the team's just doing an awesome job.
Speaker Change: Very helpful color. Thank you very much.
Operator: Thank you for that question. One moment, please. Our next question comes from the line of Victor Cheng of Bank of America. The floor is yours.
Speaker Change: Thank you for that question one moment please.
Victor Cheng: Our next question comes from the line of Victor King of Bank of America. The floor is yours.
Operator: And just one quick follow-up question on any updates on NDC volumes. I know last time we talked about it, it's still minimal for Sabre, but as Delta starts moving to NDC, and American and United both ramping up their NDC efforts, where are we in terms of NDC volumes and what is the expectation for NDC volumes for the full year, please?
Victor Cheng: Thank you and just one quick follow up question.
Operator: On any updates on NBC volumes I know last time, we talked about it still minimal for sabre.
Operator: As Delta start moving to MDC, and American and United both ramping up their <unk> well.
Operator: Where are we in terms of MDC volumes and cut the expectation on NBC volumes for the full year. Please.
Kurt J. Ekert: Yeah, for the GDS sector, and this includes Sabre, we still see NDC volumes at only about 1% of total air distribution volumes. We do believe that number will grow substantially through 2024 and in the future, Victor, based on the dynamics that you talked about. We think we're very well positioned in terms of content connectivity and all the business logic and functionality we've built for buyers. However, there is work that buyers, such as TMCs, need to do from a downstream perspective on their end beyond what we or any other intermediary technology provider do.
Speaker Change: Yes for the for the GDS sector and this includes sabre.
Kurt J. Ekert: We still see NBC volumes and only about 1% of total air distribution volumes. We do believe that number will grow substantially through 2024 and in the future Victor based on the dynamics that you talked about we think we're very well positioned.
Kurt J. Ekert: In terms of both content connectivity.
Kurt J. Ekert: All the business logic and functionality, we built for buyers.
Kurt J. Ekert: There is work that buyers such as Tmc's need to do from a downstream perspective on Darien beyond what we or any other.
Kurt J. Ekert: Intermediary technology provider do but there is a certainly a big focus on that from all of those buyers. So we think that number will grow substantially, albeit off a low base.
Kurt J. Ekert: But there is certainly a big focus on that from all of those buyers, so we think that number will grow substantially, albeit off a low base. Yeah, and the one thing I would add to that, Victor, is we're talking about our 2024 forward-looking commentary.
Michael O. Randolfi: And the one thing I would add, Victor, is that we're talking about our 2024 forward-looking commentary and our 2025 forward-looking commentary. It does assume a significant uptake in NDC, and that's incorporated in any of the commentary that we're providing.
Kurt J. Ekert: One thing I would add on there is as we're talking about our 2024 forward looking commentary on our 2025 forward looking commentary it does assume a significant uptake in MDC and Thats incorporated in any of the commentary that we're providing.
Speaker Change: Got it thank you.
Michael O. Randolfi: Thank you for your question.
Kurt J. Ekert: I am showing no further questions at this time. I would now like to turn it back to Mr. Ekert. For closing remarks, the floor is yours.
Speaker Change: I am showing no further questions at this time I would now like to turn it back to Mr. <unk>.
Kurt J. Ekert: For closing remarks, the floor is yours.
Operator: Thank you again for joining us today. We deeply appreciate your interest in Sabre and look forward to speaking with you all again very soon.
Ekert: Thank you again for joining us today, we deeply appreciate your interest in Sabre and look forward to speaking with all of you again very soon.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: That concludes today's call.
Operator: Thank you for participating in today's conference. This does conclude the program you may now disconnect.
Operator: [music].
Operator: Okay.
Operator: Yes.
Operator: [music].
Operator: Hum.
Operator: Yes.
Operator: Okay.
Operator: [music].
Operator: Yes.
Operator: [music].
Operator: Sure.
Operator: [music].
Operator: Okay.