Travel technology company Sabre (NASDAQ: SABR) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 10.4% year on year to $687.1 million. On the other hand, the company expects next quarter’s revenue to be around $783.8 million, close to analysts’ estimates. Its non-GAAP loss of $0.02 per share was $0.02 below analysts’ consensus estimates.
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Sabre (SABR) Q2 CY2025 Highlights:
- Revenue: $687.1 million vs analyst estimates of $738.7 million (10.4% year-on-year decline, 7% miss)
- Adjusted EPS: -$0.02 vs analyst estimates of $0 ($0.02 miss)
- Adjusted EBITDA: $118.3 million vs analyst estimates of $138.9 million (17.2% margin, 14.9% miss)
- Revenue Guidance for Q3 CY2025 is $783.8 million at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $550 million at the midpoint, below analyst estimates of $637.5 million
- Operating Margin: 13%, up from 7.9% in the same quarter last year
- Free Cash Flow was -$240.2 million, down from $8.01 million in the same quarter last year
- Total Bookings: 90.3 million, in line with the same quarter last year
- Market Capitalization: $1.16 billion
Company Overview
Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Sabre’s sales grew at a weak 2% compounded annual growth rate over the last five years. This was below our standards and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Sabre’s annualized revenue growth of 3% over the last two years is above its five-year trend, but we were still disappointed by the results. 
We can better understand the company’s revenue dynamics by analyzing its number of total bookings, which reached 90.3 million in the latest quarter. Over the last two years, Sabre’s total bookings averaged 2.7% year-on-year growth. Because this number aligns with its revenue growth during the same period, we can see the company’s monetization was fairly consistent. 
This quarter, Sabre missed Wall Street’s estimates and reported a rather uninspiring 10.4% year-on-year revenue decline, generating $687.1 million of revenue. Company management is currently guiding for a 2.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 6.9% over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.
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Operating Margin
Sabre’s operating margin has been trending up over the last 12 months and averaged 9.6% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports mediocre profitability for a consumer discretionary business.
In Q2, Sabre generated an operating margin profit margin of 13%, up 5 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Although Sabre’s full-year earnings are still negative, it reduced its losses and improved its EPS by 34.3% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.
In Q2, Sabre reported adjusted EPS at negative $0.02, up from negative $0.05 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Sabre’s full-year EPS of negative $0.14 will reach break even.
Key Takeaways from Sabre’s Q2 Results
We struggled to find many positives in these results. Its number of total bookings missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 38.2% to $1.86 immediately after reporting.
Sabre underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
