Sabre stock plunges 36% on Q2 loss and revenue decline

Sabre Corporation shares dropped nearly 35.7% on Thursday after the company reported weaker-than-expected second-quarter 2025 results. The company missed every guidance management had provided previously.

Sabre reported an adjusted loss of 2 cents per share for the second quarter, which compared unfavorably with the Zacks Consensus Estimate of break-even earnings. However, the quarterly loss narrowed from the year-ago quarter’s loss of 6 cents.

SABR missed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 53.7%.

Sabre reported revenues of $687.2 million for the quarter ended June 30, 2025, which lagged the Zacks Consensus Estimate $705.3 million. The figure declined 1% year over year. Earlier, management projected second-quarter revenues to increase in the low-single-digit percentage range.

Sabre Corporation price, consensus and EPS surprise

Sabre Corporation price-consensus-eps-surprise-chart – Sabre Corporation Quote

Sabre’s Q2 in detail

Distribution revenues decreased 1% to $546 million. The Distribution segment registered a decline due to lower air bookings and a slight decrease in average booking fees. However, this was partly offset by an increase in hotel distribution bookings. Our model estimate for Distribution’s revenues was pegged at $573.2 million, which indicated 4.1% year-over-year growth.

IT Solutions’ revenues were $141 million, down 2% year over year. This decline was attributed to previously disclosed customer demigrations, partially offset by an increase in license fee revenues and volume growth. Our model estimate for IT Solutions’ revenues was pegged at $144.4 million.

Sabre reported normalized adjusted EBITDA of $127.2 million, which improved from the year-ago quarter’s $120 million. However, it fell short of management’s previous guidance of approximately $140 million. The normalized adjusted EBITDA margin improved 120 basis points year over year to 18.5% in the second quarter of 2025.

Sabre’s balance sheet and cash flow

Sabre exited the June-end quarter with cash, cash equivalents and restricted cash of $447 million compared with the previous quarter’s $672 million.

During the second quarter, cash used in operating activities amounted to $218 million, and negative free cash flow was $240 million.

Sabre updates guidance for FY25

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

Pro-forma adjusted EBITDA is now forecasted between $530 million and $570 million, significantly down from the previous forecast of approximately $630 million. The company now expects to generate pro-forma free cash flow in the range of $100-$140 million, down from more than $200 million anticipated earlier.

Additionally, Sabre initiated guidance for the third quarter. SABR anticipates pro-forma revenue growth in the low-to-mid single-digit percentage range. It anticipates pro-forma adjusted EBITDA in the $140-$150 million range. The company forecasts to generate free cash flow between $40 million and $50 million.

---

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Click to get this free report