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Wednesday, Nov. 5, 2025, at 9 a.m. ET CALL PARTICIPANTS President and Chief Executive Officer — Kurt EkertChief Financial Officer — Mike RandolfiVice President, Investor Relations — Rashaan Danous Need a quote from a Motley Fool analyst? Email [email protected] Mike Randolfi stated, "On a normalized basis, gross margin decreased by 130 basis points in Q3 2025 compared to the prior year. This decrease was primarily due to two factors. Lower than expected revenue from certain higher margin product sales, and continued FX impacts of a weaker U.S. Dollar." The updated full-year 2025 pro forma free cash flow forecast was reduced to $70 million, down from prior guidance of $100 million, with "that was due to receipts, two-thirds was due to disbursements," according to Mike Randolfi and clarified that some disbursements originally forecasted for 2025 and 2026 were paid in September.Kurt Ekert said, "the government shutdown impacted October air distribution bookings by approximately three percentage points," and Mike Randolfi confirmed a "three percentage point reduction in the midpoint of our guide is driven primarily by the impact of the government shutdown." Revenue -- $715 million in revenue for Q3 2025, representing 3% year-over-year growth in the third quarter, consistent with prior guidance of low- to mid-single-digit growth for the quarter.Normalized Adjusted EBITDA -- $150 million in normalized adjusted EBITDA for Q3 2025, up 23% year over year; Normalized adjusted EBITDA margin increased by over 300 basis points to 21% in the third quarterPro Forma Free Cash Flow -- $13 million in pro forma free cash flow in the third quarter, below management's expectations due to lower receipts and higher disbursements.Air Distribution Bookings Growth -- 2% year-over-year increase in the third quarter, with a 7% increase in September.Growth Strategies Contribution -- Added 10 percentage points to total air bookings growth in Q3 2025, rising from 2.5 million bookings in July to over 3 million in September 2025.GDS Industry Bookings -- Declined by approximately 1% year over year, cited as a headwind to overall results.Hotel Distribution Bookings -- Increased by 6% in the third quarter; hotel-to-air attachment rate improved by over 100 basis points year over year in Q3 2025.IT Solutions Revenue -- $140 million in IT solutions revenue for Q3 2025, IT solutions revenue was flat year over year. Passenger boarded volumes rose by 3% in Q3 2025.Payments Business -- Processed more than $20 billion in annual transactions in 2025NDC Integrations -- 41 live connections, with NDC volumes represented 2%-3% of air distribution as of Q3 2025.Debt Repayment -- Over $1 billion in debt repaid in 2025, including $825 million from the sale of Hospitality Solutions in Q3 2025; more than 60% of debt now matures in 2029 or later.Full-Year 2025 Forecasts -- Pro forma adjusted EBITDA is expected to be $530 million (9% annual growth) for full-year 2025; pro forma free cash flow of approximately $70 million, and year-end cash of about $800 million.Fourth Quarter Guidance -- Air distribution bookings growth projected at 6%-8% for the fourth quarter; pro forma adjusted EBITDA guidance of approximately $110 million for the fourth quarter, with $10 million–$12 million expected headwind from the government shutdown; pro forma free cash flow of approximately $130 million for the fourth quarter.Net Leverage Reduction -- Management anticipates year-end 2025 pro forma net leverage approximately 50% lower than year-end 2023.AI and Product Innovation -- Launched AgenTic APIs and the continuous revenue optimizer within the Sabre Mosaic platform; Google spotlighted Sabre’s AI advancements at global events.Low-Cost Carrier Platform -- expected to add significant incremental bookings over the long term.Full-Year Air Distribution Bookings Growth -- Now expected near the low end of the previous 0.5%-3.5% range for full-year 2025 air distribution bookings growth, due to the revised fourth quarter outlook. Sabre Corporation (SABR +0.00%) delivered financial results within prior guidance for revenue and normalized adjusted EBITDA, while gross margin (normalized, non-GAAP) contracted by 130 basis points in Q3 2025 due to product mix and currency impacts. emphasizing the role of advanced timing of disbursements and a downturn in receipts, with the government shutdown reducing fourth quarter air distribution bookings expectations by three percentage points. The company executed over $1 billion in debt repayment in 2025, primarily from the divestiture of its Hospitality Solutions business, and expects pro forma net leverage to be approximately 50% lower at year-end 2025 compared to year-end 2023. President and CEO Ekert stated, "We are leading the industry with 41 live NDC connections," positioning Sabre as a competitive technology provider amid rapid changes in airline distribution.Sabre's payments business processed more than $20 billion in annual transactions as of Q3 2025,NDC volumes remain between 2%-3% of all air distribution, and management expects further scaling as more agencies and carriers adopt these capabilities.Management anticipates launching a low-cost carrier platform in early 2026, integrating over 50 new carriers, and expects this to materially lift air distribution volumes over time.The development and launch of agentic AI solutions—including proprietary APIs and the Sabre Mosaic platform—were highlighted by global technology partner Google for their innovation. INDUSTRY GLOSSARY NDC (New Distribution Capability): A set of IATA standards enabling airlines to distribute richer, personalized content to travel agencies and intermediaries through standardized APIs, improving transparency and retailing capabilities.GDS (Global Distribution System): A centralized platform linking travel suppliers and travel agencies, allowing for real-time inventory, pricing, and bookings across multiple travel categories.Agentic API: Application programming interfaces designed for agent-like AI systems (agentic AI) to understand, initiate, or transact travel services automatically on behalf of users or enterprises.Sabre Mosaic: Sabre’s modular, AI-native platform providing revenue optimization, dynamic pricing, and next-generation travel marketplace capabilities using embedded artificial intelligence. Full Conference Call Transcript Rashaan Danous: Good morning, and welcome to our third quarter 2025 earnings call. This morning, we issued an earnings press release, which is available on our website at investors.sabre.com. A 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. We advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including results of our growth strategies, transactions, and bookings growth, commercial and strategic arrangements, the effects of the sale of our hospitality solutions business, and our financial guidance, outlook, and expectations, pro forma financial information, free cash flow, net leverage, 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 09/30/2025. 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, normalized adjusted EBITDA, and normalized adjusted EBITDA margin have been adjusted to exclude certain items. The most directly 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. Normalized amounts have been adjusted for estimated costs historically allocated to our Hospitality Solutions business, which was sold on 07/03/2025. We are also presenting certain financial information on a pro forma basis to give effect to the sale of the hospitality solutions business. And we have removed the impact of the $227 million payment in kind interest that was recorded in conjunction with the refinancing activity in 2025 from pro forma free cash flow. Unless otherwise noted, results presented are based on continuing operations. Participating with me are Kurt Ekert, president and CEO, and Mike Randolfi, CFO. With that, I will turn the call over to Kurt. Kurt Ekert: Thanks, Rashaan. Hello, everyone, and thank you for joining us. Earlier today, we reported third quarter results and provided an updated outlook for the remainder of the year. 2025 has been a dynamic year, and I'm encouraged by recent positive commentary from airlines, and believe the broader travel environment is stabilizing compared to what we saw earlier this year. Third quarter operational results met our expectations, as we focused on controlling what is within our control. I commend our team members for their continued progress against our strategic priorities. Generating free cash flow and delevering the balance sheet and driving sustainable growth through innovation. We delivered positive air distribution bookings growth in the third quarter, driven primarily by strong performance in September. Based on our progress around the implementation of new business, and our outlook for the remainder of the year, we remain confident in our ability to continue to drive air distribution bookings growth going forward. We have strengthened our balance sheet by growing adjusted EBITDA, generating free cash flow, extending debt maturities, and proactively using cash to reduce debt. We have made significant progress over the last two years on our strategy for delevering and we anticipate reducing our net leverage by approximately 50% by year-end 2025 compared to year-end 2023. While there is more work ahead to achieve our long-term leverage goal, we are proud of the progress we have made. Innovation is key to Sabre's strategy and we have been leveraging AI to transform travel. This quarter, we announced two industry firsts: AgenTic APIs for travel, enabling a new era of AI-driven retailing, and continuous revenue optimizer, an offering within our modular, AI-native Sabre Mosaic platform. Further, our payments business continues to see strong customer demand and is growing at a very healthy rate. We have extended our industry-leading position with 41 live NDC integrations. New agency wins and renewals, first mover product launches, and continued innovation increase our confidence that we are well-positioned competitively. Moving to slide five, I will provide some detail on our third quarter results. Overall operational and financial results were positive. Total distribution bookings grew 3% year on year and air distribution bookings increased more than 2%. Consistent with broader airline commentary, we experienced softness in July air bookings, and then saw improvement through the balance of the quarter. September finished strong, up 7% year on year. The acceleration in air bookings was primarily driven by contributions from newly converted business as a result of our growth strategies. In July, our distribution bookings from our growth strategies totaled 2.5 million and in September, that grew to over 3 million. For the third quarter, air bookings from our growth strategies contributed 10 percentage points to total air bookings growth. This growth was partially offset by two notable headwinds. First, GDS industry air distribution bookings declined approximately one percentage point year on year. Second, Sabre's air booking mix was a headwind in the third quarter. This reflected Sabre's higher exposure to US government and military, and corporate business as well as the impact of regional mix. We continue to believe these headwinds are transitory. And we are encouraged with the improved performance of certain regions as we move into the fourth quarter. Hotel distribution bookings growth increased 6% in the quarter and the attachment rate to air bookings increased over 100 basis points year on year. Within IT Solutions, passengers boarded grew 3% year on year. Solid operational execution resulted in third quarter revenue growth of 3%. Top line growth combined with ongoing expense management resulted in normalized adjusted EBITDA growth of 23%. Normalized adjusted EBITDA margin improved over 300 basis points to 21%. Moving to slide six. We are transforming our broader platform into a modern, open travel marketplace that seamlessly integrates and normalizes content and capabilities from a wide range of sources. In multisource content, Sabre continues to demonstrate industry leadership. We are leading the industry with 41 live NDC connections, providing seamless shopping, booking, and workflow integration. We are also on track to launch our new low-cost carrier solution in 2026. Our distribution expansion strategy is progressing well. In addition to adding new agencies, and significant conversion volumes, we recently announced that World Travel Inc. has expanded its strategic partnership with Sabre and is converting substantially all of their volumes onto the Sabre platform. This momentum further advances Sabre's position as a strategic technology partner to leading agencies around the world. Hotel B2B distribution gross booking value transacted through the platform continues an annualized turnover of over $20 billion, a 7% increase year on year. Our digital payments business also continues to scale rapidly and I will provide a deeper look into this business on the next slide. We are also making considerable advances related to AI which I will touch on shortly. Overall, we are making significant progress against our strategy, and transforming the business to capture long-term value in a dynamic, and evolving travel marketplace. Moving to slide seven. Sabre Payments is an integrated fintech hub. It is one of our fastest-growing businesses. Processing over $20 billion in annual transactions, and quarterly gross spend grew over 40% year on year. Payments provides travel-focused solutions that simplify operations, enable global payment flexibility, and automate risk and fraud management for our customers. The fintech hub is comprised of two key components: Sabre Direct Pay and Confirma. Sabre Direct Pay is our travel payment service that streamlines financial operations across the travel industry. Travel payments and automated chargeback management services run through a single integrated interface. This interface provides customers with greater efficiency, faster dispute resolution, and improved win rates. Confirma is a virtual card and payment platform providing issuers, corporate buyers, and suppliers with real-time control, enriched data, and automated reconciliation. This enables faster, safer, broader business payments. We are scaling this business quickly, and seeing strong growth in digital wallets and virtual cards. By the end of this year, we expect to have approximately 100,000 connected hotels. Confirma is developing new API integrations that we expect could accelerate additional virtual card deployments and further adoption. We believe strong ongoing customer demand positions our payments business for continued robust growth. On to slide eight. AI represents an incredible opportunity for the travel industry. And for Sabre provides a roadmap for future growth. We have leveraged our deep partnership with Google to embed AI within our platform in three ways. First, optimization AI, which delivers value today. Sabre IQ already powers live, AI-driven products, which generate measurable ROI for airlines, and agencies today. These include lodging cross-sell, which intelligently recommends hotels with air bookings, an email parser, which automates traveler requests and agent actions, and dynamic pricing, which optimizes fares, and ancillaries in real-time. Next, generative AI the current phase of acceleration. We have built digital assistants and chatbots to make travel planning and servicing more intuitive. As a trusted content provider, Sabre's GenAI solutions help ensure accurate, and contextual information across customer touchpoints. And finally, AgenTik AI and consumer LLMs. This is our innovation horizon. AgenTik AI anticipates traveler needs, and takes actions on their behalf. We believe this new conversational commerce will be how consumers search, shop, and experience travel servicing in the near future. That is why we have taken a first mover position with AgenTik ready APIs and a proprietary MCP server. These agentic solutions make the language of travel understandable to any AI agent. Google has spotlighted Sabre's latest AI innovations at its global events. Drawing strong industry acclaim. On to slide nine, Moving to our outlook for air distribution bookings for the fourth quarter and full year. The chart on the right shows reported quarterly air distribution bookings growth for the first three quarters of the year and our outlook for the fourth quarter. Our view for the fourth quarter is largely consistent with what we have said previously excluding the anticipated impacts from the government shutdown. We exited September with strength that carried into early October. However, the government shutdown impacted October air distribution bookings by approximately three percentage points. And we expect this impact to carry through the fourth quarter. As a result, we now anticipate fourth quarter year on year air distribution bookings growth of between 6-8%. The commentary around the broader travel industry is encouraging. And could signal a normalization of trends going forward. We continue to believe the challenges we have navigated during 2025 are largely transitory. And as volumes from our growth strategies accelerate through the end of the year, we are well-positioned for growth. Additionally, we are optimistic that our positive momentum as well as the launch of our LCC solution in early 2026 position Sabre for mid-single-digit air bookings growth in 2026. In summary, we are focused on controlling what we can control namely delevering the balance sheet, and driving sustainable growth through innovation. With continued execution, the development of our AI solutions, and opportunities in adjacent spaces such as payments and hotels, we believe Sabre is well-positioned for long-term growth. Thank you. And now over to Mike. Mike Randolfi: Thanks, Kurt, and good morning, everyone. Please turn to slide 11. For the third quarter, Sabre reported revenue of $715 million, up 3% year on year consistent with our guidance range of low to mid-single-digit growth. Distribution revenue grew $24 million driven primarily by an increase in air and hotel distribution bookings as well as an increase in product revenue. IT solutions revenue of $140 million was flat year on year as growth from passengers boarded was offset by a decrease in license fee revenue. We continue to expect fourth quarter IT solutions revenue to remain in a similar range of $140 million to $145 million. On a normalized basis, gross margin decreased 130 basis points in the third quarter versus the prior year. The decrease in gross margin is due primarily to two items. Lower than expected revenue from certain higher margin product sales, and continued FX impacts of a weaker U.S. Dollar where Sabre generates revenue in dollars but pays some agency incentives in local currencies. Looking forward, we expect these gross margin pressures to continue into the fourth quarter. Third quarter 2025 normalized adjusted EBITDA of $150 million increased 23% year on year with normalized adjusted EBITDA margin expanding by 340 basis points to 21%. Pro forma free cash flow was $13 million and we ended the quarter with $683 million of cash on the balance sheet. Moving to slide 12. As Kurt outlined, third quarter results were largely in line with the expectations we outlined on our second quarter earnings call. Revenue growth of 3% met our guidance for low to mid-single-digit year on year growth. Normalized adjusted EBITDA of $150 million was at the high end of our expectations. Pro forma free cash flow of $13 million was below our expectations. The variance was driven approximately one-third by lower receipts, and two-thirds by higher disbursements. Receipts were lower due to the cadence of the quarter. There is roughly a thirty-day lag between bookings and receipts. July and August air distribution bookings were relatively flat year on year, which was lower than our forecast, and virtually all bookings growth in the third quarter occurred in September. Which did not benefit third quarter receipts. Regarding higher disbursements, certain payments that were forecasted to be paid in 2025 and in 2026 were paid in September. Based on our updated working capital forecast, we now expect free cash flow for the full year 2025 to be approximately $70 million. Turning to slide 13. Over the past two years, we have made significant progress on our capital structure. Lowering overall debt, and extending our maturities. This year, we have paid off over $1 billion of debt. As part of that, in the third quarter, we repaid approximately $825 million of debt from the proceeds of the Hospitality Solutions sale. We have pushed out maturities as well with over 60% of our debt maturing in 2029 or later. With our current outlook, by the end of 2025, we expect our pro forma net leverage will be approximately 50% lower versus year-end 2023. We regularly look for opportunities to efficiently refinance our debt, and extend our maturities. As we look to 2026 cash interest, we expect 2026 to reflect our projected 2025 full-year interest expense of $441 million that is included in our GAAP to non-GAAP reconciliation. Plus the impact of any potential refinancings as well as any changes in the forward curve. On slide 14 and our outlook for the rest of this year, we anticipate fourth quarter air distribution bookings growth of between 6-8% with a midpoint of 7%. This compares to our prior fourth quarter guide of 6% to 14% with a midpoint of 10%. The three percentage point reduction in the midpoint of our guide is driven primarily by the impact of the government shutdown. We expect low single-digit fourth quarter year on year revenue growth and we expect pro forma adjusted EBITDA of approximately $110 million. Our fourth quarter adjusted EBITDA guidance incorporates a $10 million to $12 million impact from the government shutdown. We expect to generate pro forma free cash flow in the fourth quarter of approximately $130 million. As a reminder, the fourth quarter is typically our highest free cash flow quarter due to the seasonality of working capital. Our full-year outlook for air distribution bookings growth is positive, and is within the guidance range we shared on our second quarter call. With our updated outlook for the fourth quarter, we expect full-year air distribution bookings growth to be near the low end of our previously provided range of 0.5% to 3.5%. We expect full-year 2025 pro forma adjusted EBITDA to be approximately $530 million representing year on year growth of 9%. We have not made any changes to our assumptions for either CapEx or cash interest. We expect full-year 2025 pro forma free cash flow of approximately $70 million and to end the year with a strong cash position of approximately $800 million. In closing, we are making progress on our strategy to generate free cash flow, and delever the balance sheet and drive sustainable growth through innovation. We expect the anticipated acceleration of volumes in the fourth quarter will provide solid momentum into 2026. And with that, operator, please open the line for questions. Olivia: Thank you. Ladies and gentlemen, as a reminder, to ask a question, you will need to press 11 on your telephone. And wait for your name to be announced. To withdraw your question, simply press 11 again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Josh Baer with Morgan Stanley. Your line is now open. Josh Baer: Great. Thank you for the question. Was hoping we could just run through the updated FY '25 guidance again and help bridge from what it was last quarter to this quarter and really focus on EBITDA and free cash flow. I know you called out some of the headwinds from the government shutdown. But really just wondering why EBITDA is now $20 million lower from the midpoint and free cash flow $50 million. And I know you were talking through some of the receipts and disbursements. I would think some of that would sort of normalize or those September receipts come in Q4. And so why the bigger move in free cash flow versus EBITDA? Mike Randolfi: Yes. So I'll take that question. So if you go from the midpoint of our guide last time, that's $550 million to $530 million. The biggest component of that is gonna be the $10 to $12 million impact from the government shutdown. The other difference is as you look from Q3 to Q4, as we highlighted in our prepared remarks, we did have lower margin from FX and lower high margin product sales. We do expect that to continue into the fourth quarter. And so that's essentially your difference between your $550 and $530. If you recall, what correlated in terms of free cash flow $530 of EBITDA was $100 million of free cash flow last quarter. And as I articulated this quarter, there was a difference between our expectations of around $27 million. We expected to come in $40 million of free cash flow. Instead, we came in around $13 million. And to be clear, about a third of that was due to receipts, two-thirds was due to disbursements. On the receipts, the way to think about that is as we came through the third quarter, as we articulated, receipts are essentially determined by the prior couple of months in the quarter. And August in particular fell short. And we had a strong September which would bode well for receipts in October. However, we had a step down in bookings that wasn't in our original projection, of the government shutdown. So that gets offset in the fourth quarter. So you get into early next year, because we would expect this quarter to be back end loaded, we would expect to have slightly higher receipts than we would have otherwise. But it won't necessarily show up in the fourth quarter. On disbursements, essentially, there were elements there that were timing. So of the disbursements, the way I would think about it is there's a portion of our disbursements that were made in September that we either contemplated in forecasted for Q4 or early 2025. However, because of timing of work, because of timing of combination of invoices, commercial negotiations, disbursements were slightly different. For example, we had a $7.5 million disbursement in the September month, that we originally had forecasted, for 2026, and it was tied to an agency commercial agreement. But because of what was best for the commercial agreement overall, the payment was made in September. So you don't necessarily get that back this year. And that's what drives you from the $100 million to the $70 million. Josh Baer: Okay. That's really helpful. And just to clarify on the government shutdown impacts, maybe everyone else knows this, but is this because of like, staffing, airport, and safety? Is it actual government travel spend that's impacted or is it more related to the impacts to the consumer and the macro? When you quantify that? Kurt Ekert: Yeah. Thanks, Josh. To date, the impact is almost entirely travel by government employees and or US military. We have a high concentration of the US military and government as a component of our business. Just for clarity, for example, in 2024, US military government represented about 4% of our global air distribution volumes. That number is quite de minimis in terms of current trading volumes. To date, we've not seen a material impact in terms of the overall industry. But obviously, if you look at operating issues in airports with air traffic control, that is a risk going forward, but not something that's again, material to date. Josh Baer: Thank you. Olivia: Thank you. Our next question coming from the line of Victor Cheng with Bank of America. Your line is now open. Carla: Hi. This is Carla for Victor Cheng at Bank of America. Two questions from my side. The first one is, what's the mix of your air bookings that is tied to the US government travel? And how can we think about the impacts of bookings in Q4 if the shutdown continues? And second question, do you have any updates on your current NDC mix? Is it still in the low single digits? Thank you. Kurt Ekert: Yeah. You, Carla. For clarity, when you say what is the mix of US military government can you clarify what you're asking there? Carla: Yes. So just the mix of your air bookings that is tied to the U.S. Government and how can we kind of forecast our bookings estimates based on the shutdown? Kurt Ekert: Okay. We don't break out the details of our military government if you're asking domestic versus long haul, for example. Again, if you go back to last year, that was about 4% of our air trading volume. In the distribution business. Number is quite de minimis in terms of current trading. Right now. NDC remains a low single-digit number for us, that's between 2-3% of our air distribution volumes. It is growing at a rapid rate. Do expect it to scale as we go forward. And I will emphasize, we noted during our prepared remarks, we now have 41 live NDC connections. These are the same API connections that you would get if you were Direct Connect or any other provider. We have leading functionality that is facing buyers and travel agencies. We feel we are very well positioned in this two-sided market as NDC scales to be a grower. Carla: Thank you. Olivia: Thank you. Our next question coming from the line of Jack Halpert with Cantor Fitzgerald. Jack Halpert: Hey, guys. Thanks for taking my question. Just two quick ones please. So coming back to the government travel piece of this, I think you're pretty clear about the headwinds for 4Q. But I guess, historically, there's been government shutdowns and they kinda come to an end, like, do you typically see, like, an immediate payback in demand, or is there sort of a bit of a lag recovery? That's kind of the first one. And then second one, just quickly on payments. Obviously, growth there has been pretty solid the past couple quarters, and you had the slide about it in the deck. But can you talk a little bit more about the strategy here and how incremental you think this can be to your business going forward? Maybe talk about sort of the margin profile of the business as well. Thank you. Kurt Ekert: Thanks, Jack. On the government, we don't know obviously when the shutdown will be resolved. We imagine it will happen in the fourth quarter, but who knows? We anticipate being back to normalcy in the first quarter, but it will probably phase its way between here and there. With respect to payments, the payments business, again, which is comprised of Sabre Direct Pay, which is a set of product capabilities that we have both in our distribution and our IT business as well as our Confirma virtual payments business, that business is scaling at a 40% top line rate. Really, it's very compelling what we have there. We have not, at this point, broken out the revenue or the margin of that business. That may be something that we do prospectively. But we think the value opportunity and the scale opportunity there is tremendous versus our current position. Jack Halpert: Thank you. Olivia: Our next question coming from the line of Alex Irving with Bernstein. Your line is now open. Alex Irving: Thanks and good morning. Two for me, please. First, on AgenTik API. Could you please help us to understand how you intend to monetize this? Specifically, are airlines unable to do their own agentic API to do the same thing essentially for free? Who's going to pay you and for what specifically? Second, on booking growth for 2026, I think you mentioned earlier about being positioned for mid-single-digit bookings growth. What assumptions underpin that? If you could please break that down between, say, known new business migrations, specific headwinds lapping, and your expectations underlying industry growth? Thank you. Kurt Ekert: Thank you, Alex. Let me deal first with the booking growth for 2026. As we indicated, we expect mid-single-digit bookings growth in 2026. That assumes a flattish GDS or distribution marketplace. And then strong organic performance by Sabre with continued converted business as well as the implementation of our incremental low-cost carrier solution. With respect to AgenTik AI, it is very early. I think you're going to see, number one, AgenTik AI emerge as a new channel in and of itself. Maybe similar to the way online travel agents emerged starting about thirty years ago. And I think that will take share away from both intermediary and supplier direct channels. What we have developed in terms of our API solution is we think, the leading intermediary API solution for the marketplace. This can sit directly behind an API or AgenTik AI API agent, and or large tech platform. And it's also a fit for purpose that it can be used by our travel agency and our airline or hotel customers to help them power their AgenTik AI profile going forward. In terms of what is the commercial model, obviously, think the largest opportunity is for us to be an intermediary distribution player but there may be an IT element to this as well. That will become more apparent in the quarters as we go forward. Olivia: Thank you. And our next question coming from the line of Dan Wasiolek with Morningstar. Your line is now open. Dan Wasiolek: Hi, good morning. Thanks for taking my questions. So two, if I may. The first, your booking fee, looked like it was pretty strong and stable this quarter. At, you know, I think, around $6.06. Just wondering how we should think about that as we look into 2026. And then wondering if you could maybe provide some more detail in your you kind of talked about a stabilization in the overall industry and industry demand just the conversations maybe you're having with your partners and customers? To kind of, arrive at that. Thank you. Mike Randolfi: I'll take the booking fee. If you look at the strength in our booking fee, year over year, it was driven by significant non-transactional revenue. That's benefiting us. So it's not necessarily tied to a specific booking. And we can we expect that to continue to be additive over time. With regards to 2026 booking fee, at this stage, we're not gonna provide any other commentary beyond what was in our prepared remarks with 2026. But we'll give you a lot more context on that in the February call. Kurt Ekert: Thanks, Dan. With respect to industry demand, it's a bit of a mixed bag. What you're hearing and seeing from commentary from many different intermediaries and then supplier customers and this is underpinned by a lot of private conversations that we've had with our clientele is leisure demand is positive year on year, fairly robust. Corporate demand, what you're seeing is prices elevate or strong yield, and you've seen some improvement on a sequential basis in corporate demand but it is still negative year on year on a unit basis. And so a lot of the commentary you hear from suppliers is around yield accretion or yield improvement relative where we were six months. The volume environment has improved, but it's still when you look at the mix of corporate plus leisure, is mixed. It's not that positive. As we go forward, our expectation is typically what you see in this industry is GDP growth and airline volumes tend to approximate one another. If that is the assumption next year, you're in low single-digit passenger growth in The United States and globally. The question will be what the mix is, and we're going to learn our way into that. But again, our expectation for our volume assumptions next year in distribution are that the intermediary industry is relatively flat and that we're growing share against that metric. Dan Wasiolek: Thank you. Thank you. Olivia: Our next question coming from the line of James Goodall with Rothschild and Co. Your line is now open. James Goodall: Hi, everyone. Thanks for taking my question. So firstly, just coming back to Slide nine and focusing on the Q3 air booking growth of 2%. I think your original guide was 2% to 6% which was based on a negative nine-point impact from mix in industry and plus 13 from growth strategies. Just given that the industry improved to down one from down four through Q3, what caused Q3 to be at the bottom of the range despite the fact that industry got better through the quarter? Was it, you know, that plus 13 of new wins coming on more slowly? And then in terms of my second question, just coming to the low-cost carrier launch for next year. Can you give us a flavor of how many incremental bookings you're expecting that to drive on an annual basis? And how many LCCs you currently have signed up for in the pipes to be signed up? Thank you. Kurt Ekert: Yeah. Thank you, James. When you look at Q3 volumes, what we saw was that both July and August were relatively flat in terms of our intermediary bookings. September was actually up 7%. The very good news there is that when you look at the quarter, there was positive 10 points of volume performance tied to the implementation of new business that was converted this calendar year. And in fact, that number was 12% in September, so that continues to ramp and accelerate. Indicated that was 3 million bookings during the month. Why was that below the prior estimate? Despite the GDS improvement in the GDS number, it comes down to the mix of our business. Number one, is we are adversely impacted as compared to the industry by our exposure to both the U.S. Military and government. We have nearly a full share there. And two is a vast majority of corporate and TMC business globally goes through Sabre. And that was still down several percent year on year in the quarter. And then the impact of regional mix as well. With the launch of the low-cost carrier platform, there's two important components here. One is similar to, if you're familiar with TravelFusion, which is a non-GDS aggregate solution in the market, and there are a number of these kinds of solutions. We are launching is a new platform that integrates 50 plus new low-cost carriers, that is with a bit of a different technical and commercial model. We'll be in full production launch in the first quarter of next year. Separately, we've also signed up a significant number of new low-cost carriers that we did not have in our system previously, that are participating in more traditional means, either at a fact or Direct Connect versus this new low-cost carrier solution. Long term, we expect this could contribute multiple tens of millions of transactions to our business. It'll be a subset of that for next year as we ramp this up. We're not going to go into detail on this specific number. James Goodall: Understood. Thank you very much. Olivia: Thank you. And there are no further questions in the queue at this time. I will now turn the call back over to Mr. Ekert, CEO, for any closing remarks. Kurt Ekert: Thank you so much, everyone, for the continued interest. We look forward to sharing additional progress next quarter and in the years ahead. Thank you. Olivia: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. And you may now disconnect.
