Sabre Corp - 6.50% PRF CONVERT 01/09/2023 USD 100 - Ser A

Q1 delivered strong beat vs expectations (good): Revenue +$760M (+8% YoY); normalized adj. EBITDA $169M (+21% YoY) with margin up 235 bps to 22.2%; operating income $116M (+27% YoY). Air distribution bookings grew +6% YoY (best rate in >2 years) and materially outpaced industry. Marketplace bookings +5% YoY; average booking fee/mix supported higher gross margin (56.4%).

Middle East + fuel disrupted near-term growth, but offset by Americas/corporate (challenge/risk): ~11% of bookings originate in or transit through the Middle East. In March, those bookings declined ~600 bps: flights to/from/transiting region down ~50%, flights originating out down ~70%, plus ~-100 bps from fuel/price dynamics + softer leisure demand. Management estimates this created an approximate ~7 percentage point headwind to March air distribution bookings. April continued similar pattern but slightly improved.

2026 outlook maintained but slightly trimmed growth expectations (forecast; mixed): Management reaffirmed full-year guidance for pro forma adjusted EBITDA (~$585M) and free cash flow (~-$70M), despite now expecting full-year air distribution bookings and revenue growth in the low-to-mid single digits (slightly modest pace vs prior expectation). Q2 guidance: air distribution bookings near flat YoY; pro forma adj. EBITDA ~ $130M; revenue flat to nominal YoY; gross margin high end of 56–57% range (mix tailwind). H2 expected positive bookings growth, with normalization by Q4 if assumptions hold.