Sabre Corporation
11/05/2025 | Press release | Distributed by Public on 11/05/2025 12:01
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including this "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, contains information that may constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of continuing operations, our prospects and strategies for future growth, the development and introduction of new products, expectations regarding cost reductions, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as "expects," "outlook," "intends," "will," "may," "believes," "pro forma," "plans," "predicts," "potential," "estimates," "intends," "should," "could," "anticipates," "likely," "commit," "guidance," "anticipate," "incremental," "provisional," "preliminary," "forecast," "continue," "strategy," "confidence," "objective," "project," or the negative of these terms or other comparable terminology. The forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and are subject to risks, uncertainties and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Certain of these risks, uncertainties and changes in circumstances are described in the "Risk Factors"section of this Quarterly Report on Form 10-Q and in the "Risk Factors" and "Forward-Looking Statements" sections included in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on February 20, 2025.
Overview
At Sabre, we make travel happen. We are a technology company that, after the classification of our Hospitality Solutions business as discontinued operations in the second quarter of 2025, manages and reports our business in one reportable segment that constitutes consolidated results, consisting of our global business-to-business travel marketplace for travel suppliers and travel buyers, including a broad portfolio of software technology productsand solutions for airlines.
A significant portion of our revenue is generated through transaction-based fees that we charge to our customers. We generate revenue from our distribution activities through transaction fees for bookings on our GDS, and from our IT solutions through recurring usage-based fees for the use of our SaaS and hosted systems, as well as upfront fees and professional services fees.
Recent Developments Affecting our Results of Operations
Sale of Hospitality Solutions Business
On April 27, 2025, we entered into a definitive purchase agreement with an affiliate of TPG (the "Buyer") pursuant to which the Buyer agreed to purchase our Hospitality Solutions business, an extensive suite of leading software solutions for hoteliers. On July 3, 2025, we closed the transaction (the "Hospitality Solutions Sale"), resulting in cash proceeds of $965 million, net, which was used primarily to repay our outstanding indebtedness. See "Liquidity and Capital Resources-Capital Resources." Cash proceeds are net of estimated taxes and fees, cash acquired by the Buyer and customary closing adjustments. The assets and liabilities associated with the Hospitality Solutions business are presented as discontinued operations on our consolidated balance sheets as of December 31, 2024, and the operating results of our Hospitality Solutions business are presented as discontinued operations on our consolidated statements of operations for all periods presented. The presentation of discontinued operations excludes general corporate overhead and other costs that do not meet the requirements to be presented as discontinued operations. In addition to the purchase agreement described above, we entered into transition services agreements ("TSA") with the Buyer, under which we will provide transition services following closing to help provide for an orderly transition and facilitate the ongoing operations of the Hospitality Solutions business following the close in return for compensation from the Buyer with respect to costs incurred. Additionally, at the time of sale, Hospitality Solutions entered into certain long-term agreements with us to continue to utilize our GDS for bookings which generates revenue for us. See Note 3. Discontinued Operations and Dispositions for further details. All amounts reference results from continuing operations unless otherwise indicated.
Travel Industry and Liquidity Outlook
The travel ecosystem has shifted over the past few years, resulting in the changing needs of our airline, hotel and agency customers, for which we have established strategic priorities with the goal of achieving sustainable long-term growth. Recent industry air distribution volume growth has generally leveled off, which may continue into the future and could impact our rate of growth. In addition, we expect that the U.S. government shutdown will negatively impact our air distribution volumes for the fourth quarter of 2025. Passengers boarded for IT solutions has been negatively impacted by de-migrations from carriers who de-
migrated prior to 2024; however, beginning in the third quarter of 2025, following the anniversary of the impact of these de-migrations on our revenue, revenue for IT solutions has leveled-off relative to prior year amounts with modest growth expected for the remainder of 2025.
We believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months; however, given the uncertain economic environment and the leveling off of industry air distribution volume growth, we are currently evaluating measures to enhance our financial position. See "-Recent Events Impacting Our Liquidity and Capital Resources" and "-Senior Secured Credit Facilities." During 2023, 2024 and 2025, we refinanced portions of our debt which resulted in higher interest rates than prior years, increasing our current and future interest expense. Currently approximately 13% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates. See "Risk Factors-We are exposed to interest rate fluctuations."
Factors Affecting our Results
In addition to the "-Recent Developments Affecting our Results of Operations" above, a discussion of trends that we believe are the most significant opportunities and challenges currently impacting our business and industry is included in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Factors Affecting our Results" in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. The discussion also includes management's assessment of the effects these trends have had and are expected to have on our results of continuing operations. This information is not an exhaustive list of all of the factors that could affect our results and should be read in conjunction with the factors referred to in the sections entitled "Risk Factors" and "Forward-Looking Statements" included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on February 20, 2025.
Components of Revenues and Expenses
Revenues
We generate revenue from distribution activities through direct billable bookings processed on our GDS, adjusted for estimated cancellations of those bookings. We also generate revenue from IT solutions activities from our product offerings including reservation systems for full-service and low-cost carriers, commercial and operations products, professional services, agency solutions and booking data. Additionally, we generate revenue through software licensing and maintenance fees. Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.
Cost of revenue, excluding technology costs
Cost of revenue, excluding technology costs, consists primarily of costs associated with the delivery and distribution of our products and services and includes employee-related costs for our delivery, customer operations and call center teams as well as allocated overhead such as facilities and other support costs. Cost of revenue, excluding technology costs, also includes incentive consideration expense representing payments or other consideration to travel agencies for reservations made on our GDS which accrue on a monthly basis, amortization of upfront incentive consideration representing upfront payments or other consideration provided to travel agencies for reservations made on our GDS which are capitalized and amortized over the expected life of the contract and costs such as stock-based compensation and restructuring charges (in applicable periods). Depreciation and amortization included in cost of revenue, excluding technology costs, is associated with capitalized implementation costs and intangible assets associated with contracts, supplier and distributor agreements acquired through acquisitions. The technology costs excluded from Cost of revenue, excluding technology costs, are presented separately below.
Technology Costs
Technology costs consist of expenses related to third-party providers and employee-related costs to operate technology operations including hosting, third-party software, and other costs associated with the maintenance and minor enhancement of our technology. Technology costs also include costs associated with our technology transformation efforts. Technology costs are less variable in nature and therefore may not correlate with related changes in revenue. Technology costs also include certain expenses such as stock-based compensation and restructuring charges (in applicable periods). Depreciation and amortization included in technology costs is associated with software developed for internal use that supports our products, assets supporting our technology platform, businesses and systems and intangible assets for technology purchased through acquisitions.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of professional service fees, certain settlement charges or reimbursements, costs to defend legal disputes, provision for expected credit losses, non-recoverable taxes, indirect taxes, other overhead costs, and personnel-related expenses, including stock-based compensation, for employees engaged in sales, sales support, account management and who administratively support the business in finance, legal, human resources, information technology and communications. Depreciation and amortization included in selling, general and administrative expenses is associated with property and equipment, acquired customer relationships, trademarks and brand names purchased through acquisitions or established through the take private transaction in 2007, which includes a remaining useful life of 12 years as of September 30, 2025 for trademarks and brand names.
Key Metrics
"Direct billable bookings" and "passengers boarded" are the primary metrics we utilize to measure operating performance. We generate distribution revenue for each direct billable booking, which includes bookings made through our GDS (e.g., Air, and Lodging, Ground and Sea ("LGS")) and through our equity method investments in cases where we are paid directly by the travel supplier. Air bookings are presented net of bookings cancelled within the period presented. We also recognize IT solutions revenue from recurring usage-based fees for passengers boarded. These key metrics allow management to analyze customer volume over time for each of our product lines to monitor industry trends and analyze performance. We believe that these key metrics are useful for investors and other third parties as indicators of our financial performance and industry trends. While these metrics are based on what we believe to be reasonable estimates of our transaction counts for the applicable period of measurement, there are inherent challenges associated with their measurement. In addition, we are continually seeking to improve our estimates of these metrics, and these estimates may change due to improvements or changes in our methodology.
The following table sets forth these key metrics for the periods indicated (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Direct Billable Bookings - Air | 80,542 | 78,648 | 2.4% | 238,514 | 240,043 | (0.6)% | |||||||||||||||||||||||||||||
| Direct Billable Bookings - LGS | 14,593 | 14,148 | 3.1% | 43,275 | 42,192 | 2.6% | |||||||||||||||||||||||||||||
| Distribution Total Direct Billable Bookings | 95,135 | 92,796 | 2.5% | 281,789 | 282,235 | (0.2)% | |||||||||||||||||||||||||||||
| IT Solutions Passengers Boarded | 182,212 | 177,272 | 2.8% | 519,391 | 514,104 | 1.0% | |||||||||||||||||||||||||||||
Definitions of Non-GAAP Financial Measures
We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this Quarterly Report on Form 10-Q, including Adjusted Net Loss from continuing operations ("Adjusted Net Loss"), Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures.
We define Adjusted Net Loss as net income (loss) attributable to common stockholders adjusted for (income) loss from discontinued operations, net of tax, net (loss) income attributable to noncontrolling interests, acquisition-related amortization, restructuring and other costs, loss on extinguishment of debt, other, net, disposition-related costs, litigation costs, net, indirect tax matters, stock-based compensation, and the tax impact of adjustments.
We define Adjusted EBITDA as income (loss) from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, restructuring and other costs, interest expense, net, other, net, loss on extinguishment of debt, disposition-related costs, litigation costs, net, indirect tax matters, stock-based compensation and the provision for income taxes.
We define Free Cash Flow as cash used in operating activities less cash used in additions to property and equipment.
We define Adjusted Net Loss from continuing operations per share as Adjusted Net Loss divided by diluted weighted-average common shares outstanding.
These non-GAAP financial measures are key metrics used by management and our board of directors to monitor our ongoing core operations because historical results have been significantly impacted by events that are unrelated to our core operations as a result of changes to our business and the regulatory environment. We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to service debt obligations, fund capital expenditures, fund our investments in technology transformation, and meet working capital requirements. We also believe that Adjusted Net Loss and Adjusted EBITDA assist investors in company-to-company and period-to-period comparisons by excluding differences caused by variations in capital structures (affecting interest expense), tax positions and the impact of depreciation and amortization expense. In addition, amounts derived from Adjusted EBITDA are a primary component of certain covenants under our senior secured credit facilities.
Adjusted Net Loss, Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures are not recognized terms under GAAP. These non-GAAP financial measures and ratios based on them are unaudited and have important limitations as analytical tools, and should not be viewed in isolation and do not purport to be alternatives to net income as indicators of operating performance or cash flows from operating activities as measures of liquidity. These non-GAAP financial measures and ratios based on them exclude some, but not all, items that affect net income or cash flows from operating activities and these measures may vary among companies. Our use of these measures has limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:
•these non-GAAP financial measures exclude certain recurring, non-cash charges such as stock-based compensation expense and amortization of acquired intangible assets;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;
•Adjusted EBITDA does not reflect amortization of capitalized implementation costs associated with our revenue contracts, which may require future working capital or cash needs in the future;
•Adjusted Net Loss and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
•Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
•Free Cash Flow removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness; and
•other companies, including companies in our industry, may calculate Adjusted Net Loss, Adjusted EBITDA or Free Cash Flow differently, which reduces their usefulness as comparative measures.
The following table sets forth the reconciliation of Net loss attributable to common stockholders to Adjusted Net Loss from continuing operations and Income (loss) from continuing operations to Adjusted EBITDA (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 848,744 | $ | (62,818) | $ | 627,716 | $ | (204,061) | |||||||||||||||
| (Income) loss from discontinued operations, net of tax | (800,313) | 715 | (783,725) | 4,484 | |||||||||||||||||||
|
Net (loss) income attributable to noncontrolling interests(1)
|
(266) | (315) | (221) | 338 | |||||||||||||||||||
| Income (loss) from continuing operations | 48,165 | (62,418) | (156,230) | (199,239) | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
|
Acquisition-related amortization(2a)
|
7,730 | 8,257 | 23,194 | 24,773 | |||||||||||||||||||
|
Restructuring and other costs(4)
|
3,815 | (648) | 3,815 | 9,791 | |||||||||||||||||||
| Loss on extinguishment of debt | - | - | 85,182 | 37,994 | |||||||||||||||||||
|
Other, net(3)
|
(6,929) | 327 | (6,432) | 863 | |||||||||||||||||||
|
Disposition-related costs(5)
|
720 | 1,713 | 1,240 | 2,576 | |||||||||||||||||||
|
Litigation costs, net(6)
|
- | 487 | - | 491 | |||||||||||||||||||
|
Indirect tax matters(7)
|
3,915 | 11,138 | (4,036) | 18,844 | |||||||||||||||||||
| Stock-based compensation | 11,170 | 13,256 | 34,772 | 36,620 | |||||||||||||||||||
|
Tax impact of adjustments(8)
|
(73,466) | 9,020 | 8,578 | 20,935 | |||||||||||||||||||
| Adjusted Net Loss from continuing operations | $ | (4,880) | $ | (18,868) | $ | (9,917) | $ | (46,352) | |||||||||||||||
| Adjusted Net Loss from continuing operations per share | $ | (0.01) | $ | (0.05) | $ | (0.03) | $ | (0.12) | |||||||||||||||
|
Adjusted diluted weighted-average common shares outstanding(9)
|
394,580 | 385,729 | 390,616 | 383,013 | |||||||||||||||||||
| Income (loss) from continuing operations | $ | 48,165 | $ | (62,418) | $ | (156,230) | $ | (199,239) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
|
Depreciation and amortization of property and equipment(2b)
|
16,484 | 16,772 | 46,099 | 48,713 | |||||||||||||||||||
|
Amortization of capitalized implementation costs(2c)
|
2,797 | 3,029 | 8,690 | 9,469 | |||||||||||||||||||
|
Acquisition-related amortization(2a)
|
7,730 | 8,257 | 23,194 | 24,773 | |||||||||||||||||||
|
Restructuring and other costs(4)
|
3,815 | (648) | 3,815 | 9,791 | |||||||||||||||||||
| Interest expense, net | 111,312 | 113,126 | 332,346 | 341,435 | |||||||||||||||||||
|
Other, net(3)
|
(6,929) | 327 | (6,432) | 863 | |||||||||||||||||||
| Loss on extinguishment of debt | - | - | 85,182 | 37,994 | |||||||||||||||||||
|
Disposition-related costs(5)
|
720 | 1,713 | 1,240 | 2,576 | |||||||||||||||||||
|
Litigation costs, net(6)
|
- | 487 | - | 491 | |||||||||||||||||||
|
Indirect tax matters(7)
|
3,915 | 11,138 | (4,036) | 18,844 | |||||||||||||||||||
| Stock-based compensation | 11,170 | 13,256 | 34,772 | 36,620 | |||||||||||||||||||
| Provision for income taxes | (58,546) | 7,236 | 21,068 | 16,564 | |||||||||||||||||||
| Adjusted EBITDA | $ | 140,633 | $ | 112,275 | $ | 389,708 | $ | 348,894 | |||||||||||||||
The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash used inoperating activities, the most directly comparable GAAP measure (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash used in operating activities | $ | (248,155) | $ | (5,463) | |||||||
| Cash used in investing activities | (50,352) | (10,307) | |||||||||
| Cash (used in) provided by financing activities | (804,408) | 46,049 | |||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash used in operating activities | $ | (248,155) | $ | (5,463) | |||||||
| Additions to property and equipment | (59,419) | (64,841) | |||||||||
| Free Cash Flow | $ | (307,574) | $ | (70,304) | |||||||
______________________________
(1) Net income (loss) attributable to noncontrolling interests represents an adjustment to include earnings allocated to noncontrolling interests held in (i) Sabre Travel Network Middle East of 40%, (ii) Sabre Seyahat Dagitim Sistemleri A.S. of 40%, (iii) Sabre Travel Network Lanka (Pte) Ltd of 40% through June 30, 2025, (iv) Sabre Bulgaria of 40%, and (v) FERMR Holdings Limited (the direct parent of Conferma Limited) of 19%.
(2) Depreciation and amortization expenses:
(a) Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date.
(b) Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs.
(c) Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
(3) Other, net includes $10 million of TSA income, net, in the current year period, a gain on the sale of assets of $5 million recognized in the current year period and a fair value loss from our investments in securities of $3 million recognized in the prior year period. In addition, all periods presented include non-operating gains and losses as well as foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.
(4) Restructuring and other costs primarily represents charges related to the Hospitality Solutions Sale in the current year period and adjustments to charges associated with the cost reduction plan we began implementing in the second quarter of 2023, in the prior year period.
(5) Disposition-related costs represent fees and expenses incurred associated with disposition-related activities.
(6) Litigation costs, net represent charges associated with antitrust litigation.
(7) Indirect tax matters represents charges associated with certain digital services taxes ("DST") related to historical periods, which may ultimately be settled in cash, and certain foreign non-income tax litigation matters. See detailed disclosures regarding these matters included in the Liquidity and Capital Resources and Risk Factors sections as well as Note 13. Contingencies, to our consolidated financial statements.
(8) The tax impact of adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) in which the adjustment was taxable or deductible, and the tax effect of items that relate to tax specific financial transactions, tax law changes, uncertain tax positions, valuation allowances and other items.
(9) The Adjusted diluted weighted-average common shares outstanding calculation excludes 1 million of dilutive stock options and restricted stock awards and approximately 33 million resulting common shares related to the Exchangeable Notes for the three months ended September 30, 2025, as their effect would be anti-dilutive given the net loss incurred in the period.
Results of Operations
The following table sets forth our consolidated statements of operations data for each of the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Amounts in thousands) | (Amounts in thousands) | ||||||||||||||||||||||
| Revenue | $ | 715,183 | $ | 691,300 | $ | 2,104,458 | $ | 2,099,983 | |||||||||||||||
| Cost of revenue, excluding technology costs | 313,074 | 294,656 | 914,899 | 880,706 | |||||||||||||||||||
| Technology costs | 168,009 | 189,417 | 515,810 | 590,051 | |||||||||||||||||||
| Selling, general and administrative | 140,475 | 149,386 | 399,595 | 433,468 | |||||||||||||||||||
| Operating income | 93,625 | 57,841 | 274,154 | 195,758 | |||||||||||||||||||
| Interest expense, net | (111,312) | (113,126) | (332,346) | (341,435) | |||||||||||||||||||
| Loss on extinguishment of debt | - | - | (85,182) | (37,994) | |||||||||||||||||||
| Equity method income | 377 | 430 | 1,780 | 1,859 | |||||||||||||||||||
| Other, net | 6,929 | (327) | 6,432 | (863) | |||||||||||||||||||
| Loss from continuing operations before income taxes | (10,381) | (55,182) | (135,162) | (182,675) | |||||||||||||||||||
| (Benefit) provision for income taxes | (58,546) | 7,236 | 21,068 | 16,564 | |||||||||||||||||||
| Income (loss) from continuing operations | $ | 48,165 | $ | (62,418) | $ | (156,230) | $ | (199,239) | |||||||||||||||
Three Months Ended September 30, 2025 and 2024
Revenue
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Revenue | $ | 715,183 | $ | 691,300 | $ | 23,883 | 3 | % | |||||||||||||||
Revenue increased $24 million, or 3%, for the three months ended September 30, 2025 compared to the same period in the prior year, primarily due to:
•a $24 million, or 4% increase in distribution revenue driven by a $16 million increase in transaction-based revenue primarily due to a 3% increase in direct billable bookings to 95 million and favorable travel supplier mix and rate impacts as well as an $8 million increase in product-based revenue; and
•a $2 million increase in IT solutions revenue as a result of volume growth, offset by a $2 million decrease in license fee revenue recognized in the prior year.
Cost of revenue, excluding technology costs
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Cost of revenue, excluding technology costs | $ | 313,074 | $ | 294,656 | $ | 18,418 | 6 | % | |||||||||||||||
Cost of revenue, excluding technology costs, increased $18 million, or 6% for the three months ended September 30, 2025 compared to the same period in the prior year primarily due to a $19 million increase in incentive consideration primarily due to an increase in rates, transaction mix and volume.
Technology Costs
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Technology costs | $ | 168,009 | $ | 189,417 | $ | (21,408) | (11) | % | |||||||||||||||
Technology costs decreased $21 million, or 11%, for the three months ended September 30, 2025 compared to the same period in the prior year driven by a $20 million decrease in labor and professional services primarily due to a reduction in variable-based compensation and the cost reduction plan we implemented in prior periods.
Selling, General and Administrative Expenses
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Selling, general and administrative | $ | 140,475 | $ | 149,386 | $ | (8,911) | (6) | % | |||||||||||||||
Selling, general and administrative expenses decreased $9 million, or 6%, for the three months ended September 30, 2025 compared to the same period in the prior year due to an $11 million decrease in indirect taxes and a $5 million decrease in labor and professional services primarily due to a reduction in variable-based compensation, partially offset by a $5 million increase in the provision for credit losses primarily due to the reversal of bad debt expense in the prior period and a $2 million increase in other ongoing business expenses.
Interest expense, net
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Interest expense, net | $ | 111,312 | $ | 113,126 | $ | (1,814) | 2 | % | |||||||||||||||
Interest expense decreased $2 million, or 2%, during the three months ended September 30, 2025 compared to the same period in the prior year primarily due to lower principal balances as a result of the payoff of debt at maturity and lower interest incurred in connection with our debt. See Note 7. Debt for further details. Interest expense, net from continuing operations excludes interest expense associated with the debt that was required to be repaid with the proceeds from the Hospitality Solutions Sale, in all periods presented.
Other, net
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Other, net | $ | (6,929) | $ | 327 | $ | (7,256) | 2,219 | % | |||||||||||||||
Other, net decreased $7 million for the three months ended September 30, 2025 compared to the same period in the prior year primarily due to $10 million of TSA income, net, associated with the Hospitality Solutions disposition and a $1 million decrease in realized and unrealized foreign currency exchange losses in the current period, partially offset by a fair value gain from our investments in securities of $2 million recognized in the prior year period and a $3 million change in other non-operating expense from prior year. See Note 9. Fair Value Measurements for further details regarding our investments in securities.
Provision for Income Taxes
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| (Benefit) provision for income taxes | $ | (58,546) | $ | 7,236 | $ | (65,782) | (909) | % | |||||||||||||||
For the three months ended September 30, 2025, we recognized $59 million of income tax benefit for continuing operations, compared to an income tax expense of $7 million for the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 represents the rate expected for the year applied to year to date earnings before tax and the impact of certain discrete items in the quarter. The effective tax rate is primarily impacted by changes in the valuation allowance, tax permanent differences and tax credits. Thedifference between our effective tax rates and the U.S. federal statutory income tax rate primarily results from the impact of changes in the valuation allowance, our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits.
Nine Months Ended September 30, 2025 and 2024
Revenue
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Revenue | $ | 2,104,458 | $ | 2,099,983 | $ | 4,475 | - | % | |||||||||||||||
Revenue increased $4 million for the nine months ended September 30, 2025 compared to the same period in the prior year, primarily due to:
•a $16 million, or 1%, increase in distribution revenue driven by a $22 million increase in product-based revenue, partially offset by a $6 million decrease in transaction-based revenue primarily due to a reduction in volume and unfavorable rate impacts; partially offset by
•a $12 million, or 3%, decrease in IT solutions revenue driven by a $15 million decrease due to the impact of de-migrations from carriers who de-migrated prior to 2024, partially offset by a $2 million increase in volume growth and a $1 million increase in license fee revenue.
Cost of revenue, excluding technology costs
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Cost of revenue, excluding technology costs | $ | 914,899 | $ | 880,706 | $ | 34,193 | 4 | % | |||||||||||||||
Cost of revenue, excluding technologycosts, increased $34 million, or 4%, for the nine months ended September 30, 2025 compared to the same period in the prior year, primarily due to a $35 millionincrease in incentive consideration due to an increase in rates and transaction mix.
Technology Costs
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Technology costs | $ | 515,810 | $ | 590,051 | $ | (74,241) | (13) | % | |||||||||||||||
Technology costs decreased $74 million, or 13%, for the nine months ended September 30, 2025 compared to the same period in the prior year due to a $55 million decrease in labor and professional services primarily due to the cost reduction plan we implemented in prior periods and a reduction in variable-based compensation, a $16 million decrease in hosting costs due to cost savings related to our cloud migrations, and a $3 million decrease in depreciation and amortization primarily due to the completion of amortization of certain capitalized internal use software.
Selling, General and Administrative Expenses
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Selling, general and administrative | $ | 399,595 | $ | 433,468 | $ | (33,873) | (8) | % | |||||||||||||||
Selling, general and administrative expenses decreased $34 million, or 8%, for the nine months ended September 30, 2025 compared to the same period in the prior year primarily due to a $12 million decrease in tax litigation reserves as a result of final settlement, a $10 million decrease in indirect taxes, a $7 million decrease primarily due to a sales tax refund in 2025 related to prior tax periods, a $6 million decrease due to savings related to our cloud migration, and a $1 million decrease in other ongoing business expenses. These decreases were partially offset by a $6 million increase in labor and professional services primarily to support our growth initiatives, partially offset by a reduction in variable-based compensation.
Interest expense, net
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Interest expense, net | $ | 332,346 | $ | 341,435 | $ | (9,089) | 3 | % | |||||||||||||||
Interest expense decreased $9 million, or 3%during the nine months ended September 30, 2025 compared to the same period in the prior year primarily due to lower principal balances as a result of the payoff of debt at maturity and lower interest incurred in connection with our debt. See Note 7. Debt for further details. Interest expense, net from continuing operations excludes interest expense associated with the debt that was required to be repaid with the proceeds from the Hospitality Solutions Sale, in all periods presented.
Loss on extinguishment of debt
We recognized a loss on extinguishment of debt of $85 million during the nine months ended September 30, 2025 as a result of the refinancing activity that occurred in the second quarter of 2025. We recognized a loss on extinguishment of debt of $38 million during the nine months ended September 30, 2024, as a result of the refinancing activity that occurred in the first quarter of 2024. See Note 7. Debt for further details.
Other, net
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Other, net | $ | (6,432) | $ | 863 | $ | (7,295) | (845) | % | |||||||||||||||
Other, net decreased $7 million for the nine months ended September 30, 2025 compared to the same period in the prior year primarily due to $10 million of TSA income, net, associated with the Hospitality Solutions disposition and a gain on the sale of assets of $5 million recognized in the current year period, partially offset by a $4 million change in other non-operating expense from prior year, a fair value gain from our investments in securities of $3 million recognized in the prior year period and a $1 million increase in realized and unrealized foreign currency exchange losses in the current period. See Note 9. Fair Value Measurements for further details regarding our investments in securities.
Provision for Income Taxes
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Provision for income taxes | $ | 21,068 | $ | 16,564 | $ | 4,504 | 27 | % | |||||||||||||||
For the nine months ended September 30, 2025, we recognized $21 million of income tax expense for continuing operations, compared to an income tax expense of $17 million for the nine months ended September 30, 2024. The effective tax rate decreased for the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to an increase in U.S. permanent adjustments recorded in the current period, offset by various discrete items recorded in each of the respective nine month periods. The difference between our effective tax rates and the U.S. federal statutory income tax rate primarily results from valuation allowances, our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits.
Liquidity and Capital Resources
Our current principal source of liquidity is our cash and cash equivalents on hand. As of September 30, 2025 and December 31, 2024, our cash and cash equivalents and outstanding letters of credit were as follows (in thousands):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Cash and cash equivalents | $ | 661,722 | $ | 724,479 | |||||||
|
Outstanding balance under the AR Facility(1)
|
78,400 | 82,200 | |||||||||
|
Available undrawn balance under the AR Facility(1)
|
- | - | |||||||||
| Outstanding letters of credit under the bilateral letter of credit facility | 11,242 | 12,535 | |||||||||
| Available under the bilateral letter of credit facility | 8,758 | 7,465 | |||||||||
______________________
(1)AR Facility (as defined below) does not include the FILO Facility (as defined below).
As of September 30, 2025, we had $78 millionoutstanding under the AR Facility.TheAR Facility matures on March 29, 2027 andallows us the ability to prepay the principal amount prior to the maturity date without penalty. See Note 7. Debt.
We consider cash equivalents to be highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are considered cash equivalents. We record changes in a book overdraft position, in which our bank account is not overdrawn but recently issued and outstanding checks result in a negative general ledger balance, as cash flows from financing activities. We invest in a money market fund which is classified as cash and cash equivalents in our consolidated balance sheets and statements of cash flows. We held no short-term investments as of September 30, 2025 and December 31, 2024. We had $21 million held as cash collateral for standby letters of credit in restricted cash on our consolidated balance sheets as of September 30, 2025 and December 31, 2024.
Liquidity Outlook
The travel ecosystem has shifted over the past few years, resulting in the changing needs of our airline, hotel and agency customers, for which we have established strategic priorities with the goal of achieving sustainable long-term growth. We have experienced volume growth that has generally leveled off, which may continue into the future and could impact our rate of growth. These changes have had, and we believe they will continue to have, a material negative impact on our financial results and liquidity, and this negative impact may continue. Given the uncertain economic environment, we cannot provide assurance that the assumptions used to estimate our liquidity requirements will be accurate. However, based on our assumptions and estimates with respect to our financial condition, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months.
In 2024 and 2025, we refinanced and extended the maturity on portions of our debt, which increased our interest rates at the time of these transactions and reduced our liquidity due to our utilizing cash from our balance sheet. In that time frame, we repaid debt using cash from our balance sheet of $96 million. We used proceeds of $822 million from the sale of Hospitality Solutions to pay down debt and added approximately $135 million of cash to the balance sheet, in accordance with the terms of the Amended and Restated Credit Agreement. In 2023 and 2024, we implemented a cost reduction plan to reposition our business to the environment and to structurally reduce our cost base. We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through continued headwinds. We are currently evaluating measures to enhance our financial position, which may include implementing additional refinancings, profit improvement initiatives, and further AI and other operational efficiencies; these actions may result in the incurrence of initial upfront costs.
We utilize cash and cash equivalents primarily to pay our operating expenses, make capital expenditures, invest in our information technology infrastructure, products and offerings, pay taxes, service our debt as it becomes due, and pay other long-term liabilities. Free cash flow is calculated as cash flow from operations reduced by additions to property and equipment. We expect the full year 2025 pro forma free cash flow to be approximately $70 million, which we expect to be impacted by normal seasonality on a quarterly basis. Pro forma free cash flow is calculated 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 the second quarter of 2025, from pro forma Free Cash Flow.
Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations. Our ability to make payments on and to refinance our indebtedness, and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control. See "Risk Factors-We may require more cash than we generate in our operating activities, and additional funding on reasonable terms or at all may not be available."
We have regularly evaluated and considered, and in the future we will continue to evaluate and consider, strategic acquisitions, divestitures, joint ventures, equity method investments, refinancing our existing debt or repurchasing our outstanding debt obligations in open market or in privately negotiated transactions or otherwise, as well as other transactions we believe may create stockholder value or enhance financial performance. These transactions may require cash expenditures or
generate proceeds and, to the extent they require cash expenditures, may be funded through a combination of cash on hand, debt or equity offerings, or asset sales.
While our business has incurred net losses on a GAAP basis, we recognized federal taxable income in 2024 based on our operating and non-operating results pursuant to the provisions of the Tax Cuts and Jobs Act that limit interest expense deduction and the annual use of net operating loss ("NOL") carryforwards and requires companies to capitalize and amortize research and development costs. On July 4, 2025, tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have accounted for the effects of the OBBBA in our consolidated financial statements, and certain provisions of OBBBA, such as the reinstatement of bonus depreciation, full expensing of R&D expenses, and increases in the limitation of interest deductibility, have provided a U.S. federal cash tax benefit for 2025. Additionally, several countries, primarily Canada and in Europe, have adopted DST on revenue earned by multinational companies from the provision of certain digital services, such as the use of an online marketplace, regardless of physical presence. As DSTs are proposed, enacted or changed in jurisdictions around the world, we monitor such legislation and determine its applicability to our operations in these jurisdictions. We record DST in selling, general and administrative costs in the consolidated statements of operations.
Capital Resources
As of September 30, 2025, our outstanding debt totaled $4.2 billion, which is net of debt issuance costs and unamortized discounts of $106 million. Currently approximately 13% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates. See "Risk Factors-We are exposed to interest rate fluctuations." From time to time, we review and consider opportunities to refinance or repurchase our existing debt, as well as conduct debt or equity offerings to support future strategic investments, support operational requirements, provide additional liquidity, or pay down debt.
The global capital markets experienced periods of volatility throughout 2024, which has increased through the third quarter of 2025, in response to the geopolitical conflict, changes in the rate of inflation, uncertainty regarding the path of U.S. monetary policy, and more recently tariff-related policy. During 2024 and 2025, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense. Through June 4, 2025, the 2023 Term Loan Agreement, as defined below, provided the ability for interest to be payable-in-kind, such that amounts due were capitalized into the note balance at the payment date rather than paid in cash, reducing our near-term cash payments for interest on this debt. On June 4, 2025, we repaid all outstanding borrowings under the Senior Secured Term Loan Due 2028. Subject to market conditions, we may opportunistically refinance portions of our debt in the near term which, at current interest rates and market conditions, may negatively impact our interest expense or result in higher dilution. In addition, from time to time, we may decide to repurchase or otherwise retire portions of our existing indebtedness through transactions in the open market, privately negotiated transactions, tender offers, exchange offers or otherwise, or we may redeem or prepay portions of our existing indebtedness. Any such action will depend on market conditions and various other factors existing at that time.
Our continued access to capital resources depends on multiple factors, including global economic conditions, the condition of global financial markets, the availability of sufficient amounts of financing, our ability to meet debt covenant requirements, our operating performance, and our credit ratings. These factors could lead to further market disruption and potential increases to our funding costs. While the terms of our outstanding indebtedness allow us to incur additional debt, subject to limitations, our ability to incur additional secured indebtedness is significantly limited. As a result, we expect that any material increases in total indebtedness, if available and to the extent issued in the future, may be unsecured. If our credit ratings were to be downgraded, or financing sources were to become more limited or to ascribe higher risk to our rating levels or our industry, our access to capital and the cost of any financing would be negatively impacted. There is no guarantee that additional debt financing will be available in the future to fund our obligations, or that it will be available on commercially reasonable terms, in which case we may need to seek other sources of funding. In addition, the terms of future debt agreements could include more restrictive covenants than those we are currently subject to, which could restrict our business operations. For more information, see "Risk Factors-We may require more cash than we generate in our operating activities, and additional funding on reasonable terms or at all may not be available."
Under the Amended and Restated Credit Agreement, dated as of February 19, 2013 (the "Amended and Restated Credit Agreement"), the loan parties are subject to certain customary non-financial covenants, including restrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends. In the first quarter of 2023, we entered into the AR Facility of up to $200 million,and in the first quarter of 2024, we increased the overall size of the AR Facility through the FILO Facility, resulting in a Securitization Facility of $235 million (as each of such terms is defined below). As of September 30, 2025, we were in compliance with all covenants under the terms of the Amended and Restated Credit Agreement and the Securitization Facility (as defined below).
We are required to pay down our term loans by an amount equal to 50% of annual excess cash flow, as defined in the Amended and Restated Credit Agreement. This percentage requirement may decrease or be eliminated if certain leverage ratios are achieved. Based on our results for the year ended December 31, 2023, we were not required to make an excess cash flow payment in 2024, and no excess cash flow payment is required in 2025 with respect to our results for the year ended December 31, 2024. We are further required to pay down the term loans with proceeds from certain asset sales, net of taxes, or borrowings, that are not otherwise reinvested in the business, as provided in the Amended and Restated Credit Agreement.
Recent Events Impacting Our Liquidity and Capital Resources
Following the closing of the Hospitality Solutions Sale, we used the net proceeds primarily to repay a portion of our outstanding indebtedness, including repayments under our (i) 2021 Term Loan B-2 in the amount of $158 million, (ii) 2022 Term Loan B-1 in the amount of $164 million, (iii) 2022 Term Loan B-2 in the amount of $178 million, and (iv) 2024 Term Loan B-1 in the amount of $299 million, in accordance with the terms of the Amended and Restated Credit Agreement. We recognized a loss on extinguishment of debt during the nine months ended September 30, 2025 of approximately $14 million in discontinued operations within our results of operations, primarily consisting of unamortized debt issuance cost and discount associated with these prepayments. In addition, receivables related to the Hospitality Solutions business were removed from the Securitization Facilityon July 3, 2025, and we repaid $23 million of the outstanding balance on our Securitization Facility.
Senior Secured Credit Facilities
On November 25, 2024, we entered into a third and fourth amendment to the Amended and Restated Credit Agreement (together, the "Term Loan B Amendments") to which Sabre GLBL agreed to exchange $775 million of our existing senior secured term loans (the "Existing Term Loans") for the same amount of new senior secured term loans maturing on November 15, 2029 (the "2024 Term Loans"). We incurred no additional indebtedness as a result of this refinancing. The Term Loan B Amendments included the application of the proceeds of a new $700 million and $75 million term loan "B" facility (the "2024 Term Loan B-1" and the "2024 Term Loan B-2", respectively), borrowed by Sabre GLBL under the Amended and Restated Credit Agreement, with the effect of extending the maturity of approximately $775 million of the existing Term Loan B credit facility under the Amended and Restated Credit Agreement. Sabre GLBL did not receive any cash proceeds from the exchange and did not incur additional indebtedness as a result of the Term Loan B Amendments. We incurred third-party fees of approximately $10 million plus $14 million of accrued and unpaid interest, of which $9 million and $14 million were paid in cash, respectively, during the year ending December 31, 2024. The remaining third-party fees have been paid as of September 30, 2025. We determined that the Term Loan B Amendments represent a debt modification and therefore we expensed all $10 million of third-party costs, to Other, Net in our consolidated statements of operations for the year ended December 31, 2024 and were included in cash flow from operations as paid. The 2024 Term Loan B-1 and 2024 Term Loan B-2 mature on November 15, 2029. They offer us the ability to prepay or repay with a 1.0% call premium on or prior to the six-month anniversary of the amendment effective date, or without a call premium thereafter. The 2024 Term Loans bear interest at Term SOFR, plus an applicable margin of 600 basis points, or at base rate, plus an applicable margin of 500 basis points. The term SOFR for the 2024 Term Loans is subject to a floor of 0.50% per annum and the base rate is subject to a floor of 1.50% per annum. Except for the extended maturity and new pricing terms, the 2024 Term Loans have substantially similar terms as the Existing Term Loans, including guarantees and security interests.
Senior Secured Notes
On June 4, 2025, Sabre GLBL issued $1.325 billion aggregate principal amount of 11.125% Senior Secured Notes due 2030 (the "July 2030 Notes"). The net proceeds from the issuance were used (i) to fully prepay $900 million of its outstanding principal under an intercompany loan agreement with Sabre Financial Borrower, LLC, which applied such amounts toward full prepayment of Sabre Financial Borrower, LLC's Senior Secured Term Loan due 2028; and (ii) to repurchase $325 million in principal amount of its June 2027 Notes (the "June 2025 Refinancing"). Interest on the July 2030 Notes is due semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2026, at a rate of 11.125% per year, and the notes mature on July 15, 2030. As a result of the refinancing, Sabre GLBL incurred additional indebtedness of $100 million. In connection with the June 2025 Refinancing, we repaid an aggregate of $1.225 billion in outstanding principal, $44 million in creditor fees, $34 million in accrued and unpaid interest, and $27 million in new note issuance costs. We concluded that the June 2025 Refinancing represented a debt extinguishment and therefore recognized a loss on extinguishment of debt during the nine months ended September 30, 2025 of approximately $85 million. The July 2030 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL's restricted subsidiaries that guarantee Sabre GLBL's credit facilities governed by the Amended and Restated Credit Agreement.
On November 25, 2024, Sabre GLBL exchanged approximately $246 million in principal amount of our 8.625% senior secured notes due 2027 (the "June 2027 Notes") and approximately $509 million in principal amount of our 11.250% senior secured notes due December 2027 (the "December 2027 Notes") for approximately $800 million of new 10.750% senior secured notes due November 2029 (the "November 2029 Notes") (the "Initial November 2024 Exchange Transactions"). Shortly thereafter, on November 27, 2024, Sabre GLBL issued an additional approximately $25 million in aggregate principal amount of November 2029 Notes in exchange for approximately $21 million of 9.250% senior secured notes due 2025 (the "April 2025 Notes") and approximately $4 million of our 7.375% senior secured notes due 2025 (the "September 2025 Notes") (together with the Initial November 2024 Exchange Transactions, the "November 2024 Exchange Transactions"). Other than the issuance date and issue price, these additional November 2029 notes have the same terms, form a single series with, and are fungible with the November 2029 Notes described above. The November 2029 Notes bear interest at a rate of 10.750% per annum, and interest payments are due semi-annually in arrears on May 15 and November 15 of each year, beginning May 15, 2025. The November 2029 Notes mature on November 15, 2029. Sabre GLBL did not receive any cash proceeds from the exchange and did not incur additional indebtedness as a result of the exchange other than $45 million of early exchange consideration on the November 2029 Notes, which was recorded as a discount. We incurred $11 million in fees, along with $31 million in accrued and unpaid interest. We determined that the November 2024 Exchange Transactions, including the impact of the early exchange consideration, represent a debt modification and therefore, expensed $11 million of debt modification costs in Other, net in our consolidated statements of operations for the year ended December 31, 2024 and included in cash flow from operations as paid. The November 2029 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL's restricted subsidiaries that guarantee Sabre GLBL's credit facilities governed by the Amended and Restated Credit Agreement.
On March 7, 2024, Sabre GLBL exchanged approximately $36 million of the September 2025 Notes and approximately $7 million of the April 2025 Notes for approximately $50 million aggregate principal amount of additional June 2027 Notes (the "March 2024 Senior Secured Exchange Transaction"). No additional indebtedness was incurred as a result of the March 2024 Senior Secured Exchange Transaction, other than amounts covering exchange fees of approximately $7 million. Other than the issuance date and issue price, these additional June 2027 Notes have the same terms, form a single series with, and are fungible with the June 2027 Notes issued in September 2023. We incurred additional fees of approximately $1 million, which were funded with cash on hand. We determined that the March 2024 Senior Secured Exchange Transaction, including the impact of the exchange fees, represents a debt extinguishment and therefore recognized a loss on extinguishment of debt during the nine months ended September 30, 2024 of approximately $7 million, primarily consisting of exchange fees related to the June 2027 Notes. The April 2025 Notes and the September 2025 Notes matured, and were repaid in full in the second and third quarters of 2025, respectively.
Exchangeable Notes
On March 19, 2024, Sabre GLBL exchanged $150 million aggregate principal amount of our then-outstanding 4.000% senior exchangeable notes due 2025 (the "2025 Exchangeable Notes")for $150 million aggregate principal amount of Sabre GLBL's newly-issued 7.32% senior exchangeable notes due 2026 (the "2026 Exchangeable Notes" and, together with the 2025 Exchangeable Notes, the "Exchangeable Notes") and approximately $30 million of cash (the "March 2024 Exchangeable Notes Exchange Transaction"). We incurred additional fees of approximately $5 million in associated fees and expenses plus $3 million of accrued and unpaid interest, all of which were funded with cash on hand. We determined that the March 2024 Exchangeable Notes Exchange Transaction, including the impact of the exchange fees, represents a debt extinguishment and therefore recognized a loss on extinguishment of debt of $31 million. We did not receive any cash proceeds from the exchange and did not incur additional indebtedness in excess of the aggregate principal amount of existing notes that were exchanged. The 2026 Exchangeable Notes are senior, unsecured obligations of Sabre GLBL, accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, and mature on August 1, 2026, unless earlier repurchased or exchanged in accordance with specified circumstances and terms of the indenture governing the 2026 Exchangeable Notes (the "2026 Exchangeable Notes Indenture"). As of September 30, 2025, we have $150 million aggregate principal amount of 2026 Exchangeable Notes outstanding. The 2025 Exchangeable Notes matured on April 15, 2025, and were settled with cash.
Securitization Facility
On February 14, 2023, Sabre Securitization, LLC, our indirect, consolidated subsidiary and a special purpose entity ("Sabre Securitization"), entered into a three-year committed accounts receivable securitization facility (as amended from time to time the "Securitization Facility") of up to $200 million with PNC Bank, N.A.
On March 29, 2024, Sabre Securitization increased the overall size of the existing Securitization Facility from $200 million to $235 million by issuing a $120 million "first-in, last-out" term loan tranche under the Securitization Facility (such tranche, the "FILO Facility") and reducing the revolving tranche under the Securitization Facility to $115 million (such tranche, the "AR Facility"). In connection with the issuance of the FILO Facility, the maturity date of the Securitization Facility was extended to March 29, 2027 and the springing maturity date thereunder was terminated. The FILO Facility provides the ability to prepay or repay at certain redemption premiums as set forth in the agreement. The net proceeds received from the FILO Facility of $117 million, net of $3 million in fees paid to creditors, will be used for general corporate purposes. We incurred additional fees of $4 million, which were funded with cash on hand.
The amount available for borrowings at any one time under the Securitization Facility is limited to a borrowing base calculated based on the outstanding balance of eligible receivables, subject to certain reserves. As of September 30, 2025, we had $198 million outstanding under the Securitization Facility, consisting of $78 million under the AR Facility and $120 million outstanding under the FILO Facility.
Share Repurchase Program
In February 2017, we announced the approval of a multi-year share repurchase program (the "Share Repurchase Program") to purchase up to $500 million of Sabre's common stock outstanding. Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions. On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with the cash management measures we undertook as a result of the market conditions caused by COVID-19. During the nine months ended September 30, 2025, we did not repurchase any shares pursuant to the Share Repurchase Program. As of September 30, 2025, the Share Repurchase Program remains suspended and approximately $287 million remains authorized for repurchases. In addition, the terms of certain of the agreements governing our indebtedness contain covenants that, among other things, limit our ability to repurchase our common stock. See "Risk Factors-The terms of our debt covenants could limit our discretion in operating our business and any failure to comply with such covenants could result in the default of all of our debt."
Cash Flows
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (Amounts in thousands) | |||||||||||
| Cash used in operating activities | $ | (248,155) | $ | (5,463) | |||||||
| Cash used in investing activities | (50,352) | (10,307) | |||||||||
| Cash (used in) provided by financing activities | (804,408) | 46,049 | |||||||||
| Cash provided by (used in) discontinued operations | 1,035,759 | (9,898) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,385 | 176 | |||||||||
| (Decrease) increase in cash, cash equivalents and restricted cash | $ | (62,771) | $ | 20,557 | |||||||
Operating Activities
Cash used in operating activities totaled $248 million for the nine months ended September 30, 2025. The $243 million decrease in operating cash flow from the same period in the prior year was primarily due to payments in June 2025 of previously paid-in-kind interest and currently accrued interest of $227 million in connection with refinancing our Senior Secured Term Loan Due 2028 and a contribution of $14 million to our defined benefit pension plan, offset by a $19 million decrease in interest payments in connection with our other debt.
Investing Activities
For the nine months ended September 30, 2025, we used $59 million of cash for capital expenditures primarily related to software developed for internal use, partially offset by the proceeds received from the sale of assets of $9 million.
For the nine months ended September 30, 2024, we used $65 million of cash for capital expenditures primarily related to software developed for internal use and acquired software licenses associated with our internal billing systems, partially offset by proceeds received from the sale of investment in securities of $55 million.
Financing Activities
For the nine months ended September 30, 2025, financing activities used $804 million. Significant highlights of our financing activities include:
•payments of $806 million on our 2021 Term Loan B-1, 2021 Term Loan B-2, 2022 Term Loan B-1, 2022 Term Loan B-2, 2024 Term Loan B-1 and 2024 Term Loan B-2, $700 million on our Senior Secured Term Loan Due 2028, $325 million on our June 2027 Notes, $183 million on our 2025 Exchangeable Notes, $23 million on our September 2025 Notes and $10 million on our April 2025 Notes;
•proceeds of $1.325 billionfrom the issuance of the July 2030 Notes;
•payment of $72 million for debt discount and issuance costs;
•net payments of $10 million from the settlement of employee stock awards;
•net payments of $4 million on borrowings on our AR Facility; and
•net receipts received on behalf of Hospitality Solutions under the TSA of $5 million.
For the nine months ended September 30, 2024, financing activities provided $46 million. Significant highlights of our financing activities include:
•proceeds of $150 million from the issuance of the 2026 Exchangeable Notes;
•payment of $150 million on our then-outstanding 2025 Exchangeable Notes;
•proceeds of $120 million from the issuance of the FILO Facility;
•proceeds of $50 million from the issuance of our June 2027 Notes;
•payment of $50 million for debt discount and issuance costs;
•payment of $36 million on our then-outstanding September 2025 Notes and $7 million on our April 2025 Notes;
•net payment of $23 million on borrowings on our AR Facility; and
•net payments of $7 million from the settlement of employee stock awards.
Contractual Obligations
There were no material changes to our future minimum contractual obligations since December 31, 2024, as previously disclosed in our Annual Report on Form 10-K filed with the SEC on February 20, 2025, and in our Quarterly Report on Form 10-Q filed with the SEC on May 7, 2025, other than impacts of the debt repayments under our senior secured credit facilities and the Securitization Facility as a result of the Hospitality Solutions Sale.
We had no off balance sheet arrangements during the nine months ended September 30, 2025 and year ended December 31, 2024.
Recent Accounting Pronouncements
Information related to Recent Accounting Pronouncements is included in Note 1. General Information, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported assets and liabilities, revenues and expenses and other financial information. Actual results may differ significantly from these estimates, and our reported financial condition and results of operations could vary under different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.
We regard an accounting estimate underlying our financial statements as a "critical accounting estimate" if the accounting estimate requires us to make assumptions about matters that are uncertain at the time of estimation and if changes in the estimate are reasonably likely to occur and could have a material effect on the presentation of financial condition, changes in financial condition, or results of operations. For a discussion of the accounting policies involving material estimates and assumptions that we believe are most critical to the preparation of our financial statements, how we apply such policies and how results differing from our estimates and assumptions would affect the amounts presented in our financial statements, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" included in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. Since the date of the annual report on Form 10-K filed with the SEC on February 20, 2025, there have been no material changes to our critical accounting estimates.
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