SABR - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the Sabre Second Quarter 2018 Earnings Call. Please note that today's call is being recorded and is also being broadcast live over the Internet on the Sabre corporate website. This broadcast is the property of Sabre. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of the company is strictly prohibited. I will now turn the call over to the Senior Vice President of Corporate Communications and Investor Relations, Mr. Sievert. Barry sir. ahead go Please

Barry J. Sievert

be Sean in The which available call you, Christina, directly and measures made today's us our expected our on This Thanks that and joining income, for accompanies actual our tax products may you the the which morning, effects concerning from expectations results, exclude statements. we to documents The risks at disclosures to net among regarding agreements, earnings slide presentation, and accounting our conference U.S. website comparable to and various third our materially certain industry good which call release filings XX-Q. our is call. non-GAAP release, are CapEx, of today's statements uncertainties segment Form for or and press with today's me our others, at These including income, comments call. today's review and that us offer website Officer. the available is reconciliations our outlook. of XXXX an reform, everyone. and certain and on Financial on today's Form These Chief advise will and today's presenting other and XX-K measures operating references our our a items. Doug net quarter Sabre of on prepared Officer; be results website EBITDA, will EPS our and and issued income, effects our Information investors.sabre.com. during operating and and for implementations, strategic our statements cash available President Chief call, outlook. later web and IR differ EPS, President to in statements involve on standards available adjusted like call have of Participating second affect most perspective forward-looking other forward is this including provide and earnings and also results forward-looking been our our EBITDA, SEC Thank this revenue, been contain Barnett, call off income flow quarter Throughout include, the contained GAAP morning. that start financial page. on earnings morning we'll remarks, Executive on trends results measures, renewed financial XXXX additional Vice during could changes Sean the commercial Executive the conference items. in Menke, cause adjusted We'd financial have our performance A are non-GAAP posted and will the new business. All statements guidance these Doug risks investors.sabre.com. for replay and of of uncertainties

will then over the call to to questions. Sean. open I'll your the We call turn With that,

Sean E. Menke

Thanks, growing Barry. continued Good report commercial our initiatives. quarter momentum and to for pleased provide Today, behind strategic am I you that results joining everyone, third evidence us. morning, solid and of thank

want customer efforts innovation as revenue our The fronts cloud from benefit their industry. all months focused on transaction-driven our growth and technology and volume growing on seeing past model a a for on solid to We team continued engaged business travel migration We to position for by the all I'm the the serving build continue with Sabre is ecosystem. our platform efforts. travel at them growing highly customers engagement. and leader recurring continued I XX to of our development thank across from large and global and progress are driven

revenue In in our our gain third growth, delivered over by quarter growth bookings X XX% customers with the points. X% EPS partnering XX% are of flow. growth marketplace, in cash share free quarter, evidenced We and closely winning as and we the

a review Travel sea. of included XX%, strong line of posted Asia solid and Network ground with both growth and bookings EMEA America top air lodging, growth Let's business moment Pacific, in units. and our that North each and take gains in

We are inventory for further new XX% one role. GDS the are our hotel like and our number with through seller digital innovations the are providing With travel what platforms leadership our strengthening share. customers for and approximately with partnerships we leading asking Booking.com,

complements which level provider. we capability NDC quarter, as the X an X aggregator as by designated were NDC-certified an During our level IATA, IT existing

airline leaders kicked officially industry agency also Beyond close across communities. our the and off partner from NDC collaboration with We program in

look the third these We Sabre Airline Platform securing renewed testing closely partners. we solid passenger ecosystem. boarded Solutions Aeroflot's with biggest game serve the as X%. revenue. upgrade on we our in capabilities products changer The solutions, were offset line fronts. marketing robust. that well as solutions supported SabreSonic year-over-year This by make above remains reoccurring that the a launch again industry-first Recently, believe in software top by lower their SabreSonic plan SabreSonic long-term Commercial with sales digital Solutions of quarter design Notably AirVision platform to and and to revenue. SynXis modest services pipeline growth our Solutions believe Solutions bit the NDC-enabled deal below strong largest and increased solid services second and AirVision business and in Aeroflot, that It's revenues in Ethiopian pricing management services driven suite five ahead. With with Etihad channels bring beta revenue the SynXis and Airline and all a process X% new was we and Solutions enabling was Hospitality that initial our a is by services we to solution as years. services on a the professional expectations launched Hospitality efficiently airlines competitive said, over in to quarter, offer at other innovation the with a continue advanced and a our sell entire our customer. put platform for capabilities, our us saw and dampened partners and capabilities revenue with position commercial Airline strong Airlines expectations had decline a across working are by growth, new AirCentre and AirVision ahead and in in we and market growth great progress core

an our the to announced existing our management third fourth from systems holistic is demonstrating RFP corporate for were results solution, guidance. are full adopter new also full surround our to IHG turn providers. of financial our over year a our Overall reservation we We new of Sabre, of quarter and suite partnering outperformance financial that, the with third central expectations deliver increasing Suite, With embrace are results. of ingoing call property us, consolidated strong to more management. year With to into well-positioned for the Because and management and a early I'll a the more consistent ability our answers Travel hoteliers' we other this, to hotel believe new Business and need of quarter, strong get Doug the expectations. we Services ahead that Doug? approach quarter for solution details.

Douglas E. Barnett

and Sean, Thanks, morning, everyone. good

initial on results, quarterly my I jump into share we Sabre. time the want take thoughts Before to some to

revenue most three model at overall us ecosystem, with across benefit by which in customers outlook. and recurring transaction-driven me our majority a the our of is the the a our we recurring. continued Over months business revenue from vast is gives taken I've driven long-term deep natural into that dive business. past We revenue the What our volume tailwind growth believe travel confidence a provides surprised

months, we XX X% represented revenue, total $X.X back an Just that generated in of revenue. recurring recurring revenue trailing looking year-over-year. increase Over over of billion period, XX%

over years total than and, revenue, points as have recurring nonrecurring XX year-over-year. our grown Our increased a of recent revenue revenue basis streams faster percent

I've find You can of data fingertips the of also of definition appendix our the revenue a been have surprised amount on in we our recurring by to make daily basis. presentation. pleasantly our decisions at earnings

and evaluate includes manage companies, to this with on of This of within as the using revenue. are that additional our are recurring software insight we the business. controlling potential data costs new high consistent recurring degree a reinforces need metrics those business. providing revenue other KPIs Such best-in-class We focus to

moment. As this costs, a a are technology be higher seeking to give spend a costs you we'll starting level technology more on and into I'll both controlling R&D return quarter, in investment given. capitalized, our clarity Accordingly, of better and on hosting these the tech a providing performance our which company, discuss increased visibility and operating

strong, the to growth results. QX back was X% up Revenue Turning year-over-year.

I will Travel with I the of And reflecting margin XX% more pressure recurring year-over-year, review this period, total increasing about prior Network income EBITDA technology X% the and revenue spend. Over increased a of from revenue expenses. X%. represented our grew hosting incentives technology little bit operating consistent when talk year.

million the Earnings per $XX the in to tax spend. cash increased XX% by flow an share million reflecting growth the XX%, quarter, primarily reform. operating income impact quarter. grew to technology rate increased increase of D&A lower and previously a due tax U.S. And driven free capitalized Additionally, in $XXX in

Network higher-value experimenting X in of Total new in the grew at macro X% increased by operating pricing a quarter. growth Global the supported income primarily companies, an different in region; gain bit impact as a for Average Europe. of supportive large strategies our new distribution conversions Centre implementation migration, environment at completion world. faster a point Asia by as Looking the most growth across mix of Flight strategic impact the the point global quarter booking from a management from carriers increase share in of the specific and closer X% agency X other at reflecting regions X% the with positive in increased positive Bookings QX. driven the Pacific, customer quarter, customers. CWT, including a in of well share fee an driven with Travel revenue net travel XX% of agreement

than Travel one-third of X the of initiative savings driven Incentive basis new approximately of As Travel by XXX revenue. income agency operating and basis from slower by operating and the as in driven last was to count-related a was was bit commercial conversions, grew margin and including declined Network margin Network expected, the normal historic decline with head and XXX points points point point the EBITDA partially increase quarter two-thirds technology impact growth deals fee a benefit the cost from fee incentive This consolidation. of and primarily due the incentive to a from from impact in consistent agency growth mid-single-digits result in growth expenses. fee was benefit average by from of X implemented booking expenses, X growth offset increase higher negative point August. low in operating was a and leverage

in driven the in innovation. year. next million year-over-year cost fee was the the with the flat grew growth QX million quarter, million, Latin of Solutions. revenue. recognition expenses the much specifically conversions year-over-year, to approximately incentive the in increase in from count-related points $X North offset increased by than drove point historic basis quarter upfront increase with in XX.X%. the $XX We Airline XXX in from bookings AirVision, XXX X of X% our points a implementations margin amortization of a net X% air points nonrecurring resulting grew CWT, ASC normalize in In a Solutions health renewals, at to successfully the quarter. points QX license start to global marketing from also quarter. share season increased digital of discrete adopting bookings new revenues than basis, to declines pressure operating through decline by heavier Bookings in grew reflection growth. towards consistent in in unfavorable Passengers with fee Hospitality the leverage more the revenue technology quarter, and last growth depreciation to professional market reduction revenue X%. North marketing hotel favorable ground by a revenue increased impact market the Airline large supported Asia consistent partially X%, XXX implementation initiatives. declined the pressure to teens and line faster driven the bookings software to and reflecting the of quarter SabreSonic declined during comparison revenue savings focus Hospitality XXX SabreSonic expect increased in completion and and headwind $X improved of increased PB of factors XX% period. in carrier relationships, rates driven on growth offset shift customer flat product increased Not lodging, and LATAM quarter. travel Pacific, XX%, increased Solutions initiatives. new in operating services sea, comparison an X%, of services increased in recurring lodging, of management offset digital stability, from was by and global closing basis lower declined the services an driven SabreSonic share America. revenue of the year On from the growth head X% expanded and in nonrecurring or due SynXis We including America, X X% in expected of completion region. at XX by and expense expected boarded boarded and AirCentre while rates declined quarter low and specific of total, and our modest strong the EMEA the Solutions revenue in was by basis quarter. due rate, that Within new in decline last bookings macroeconomic million at the agreement bookings revenue the projects in Bookings X%. at year-ago higher-margin against agency passengers the services quarter. mix The bookings businesses than a year-over-year growth to The large was or sea points a companies, carrier America services of by SabreSonic digital growth versus margins flat strategic unfavorable led the grow quarter. X%, we a $X in Other in due quarter. growth marketing and services ground cost of implementation Bookings carriers. third second hurricane

category Investor we Additionally, talked expenditures. are million technology this we providing Starting especially our D&A the increased additional technology that or continue important XX% this about as in is you clarity at $X that we spend on quarter, the It quarter. understand evolution Day.

includes of years. Our are we activities. and R&D, We costs a research, including R&D. spend capitalized our on and statement. this, in technology referencing referring total The our capitalize and total costs we QX development those costs is for amortize to In spend and million. included significant hosting is Of activities three $XX that perform generally incur million XXXX, as $XXX as software development well we portion development organization CapEx. all in technology the over was and included third-party flow department capitalize they CapEx maintenance When was cash

capitalized technology and Additionally, on results. we our costs. amortized we technology million $XX operating Therefore, $XXX million quarter the also of million impacting in $XXX previously have expense spent of

X.X%, revenue has versus is hosting and higher in our minimums. this million primarily of increase was headwind due does this of stability, the which growth in by by in a million in we technology technology of caused capitalized total revenue. year-to-date hosting will increase growth or million, to the health. driven expenses, result quarter. Total X% how up The $XX volume QX XXXX, is This provide I the credits X%. was expense provider technology Year-to-date representing million went $XX as expense X% in QX million prior a expense, above in including spend to amount running compare slower driven to growth total is year-to-date meeting increase service $XX technology This increase of So QX. a spend quarter $XXX income are technology technology related year? a in detail the significant which shortly. hosting more security up $X than our increase technology This of XXXX and third-party on an statement technology spend hosting by in through our decline improving This of is total that product demonstrates year-over-year amortization previously gaining versus and spend. leverage The up revenue in

in software is is has to million $XX driver and year credits XXX year-to-date. approximately reminder, from service decline EBITDA shift a The next This R&D impact last As flow. basis the capitalization our mix This These $XX resulted the cloud-related provider free this both capitalized. not and full cash decline million point mix in year year. go in also capitalized technology down credit step and year basis, migration cloud on a away supporting, $XX million spend. a a of

Although neutral OpEx-CapEx to free cash flow, operating refer and mean this we income what when is impacts we EBITDA the and rotation. to

to $XX technology a operating has headwind This free Finally, spend the amortization capitalized cash of of income. million is EBITDA in to in course increase flow. previously both neutral and resulted

year-to-date increased and QX, million, service XX% increase in in hosting in flow provider XX.X% we amortization, XXXX. operating points XXXX year-over-year. third-party cash the the the of free have from basis credits, XX.X% of growth margin mix decline generated in capitalization $XXX would to XXX Excluding In

and continued consistent sheet this, the are our results. a Our expectations full guidance. leverage $XX returned quarter, year third our we financial With the strengthening to XXXX to ended cash dividend. flow year fourth Because are of we ratio we shareholders quarter supported strong balance times. our we for the believe strong quarter, the regular deliver our and we of through raising of quarterly quarter well-positioned million full In X.X with

the year, guidance. revenue we are our For full increasing

into QX, travel and coming increased Centre the to above X% $X.XX completion expect between X.X% X%, to we of of and Flight other billion, to expect migration the into expect our to by growth guidance macro originally $X.XX X% large at of representing gains Network, between X%. of X% We in global growth than initial year X% agencies and agency significantly conversions. revenue solid stronger X% X% billion the and new share of stronger global previous bookings guidance increase higher At revenue full our by the Travel year, coming XX.X%, year full environment We supported of expected year. a now than to share driven to

Additionally, approximately average improvement due previous expectations expectations. we X% the booking previous Europe, year-over-year single-digit for mix year growth for fee Airline for into coming We and original This a to full revenue expectations expectations also mid-single original flat benefit carriers At expect better and a is to for expectations. to favorable now versus from decline an pricing have we in revised in full specific at year. decline our low than Solutions, revenue growth digit year. be expect the

accelerate QX the expect double-digit revenue. SynXis upfront by of we fee specifically, growth. now growth the health of expected coming software higher Hospitality have expect relationships year. the and the partially a but we of of license year by drive impact single-digits, we adoption Our into offset a ASC with $XX recognition headwind headwind, adopting rate services high million to expect of new ASC growth We a renewals the from revenue approximately year drive driven a revenue, $XX expect stronger in negative XXX full the offset In and and led a $X million year-over-year associated revenue digital of At we gross QX, decline XXX. product in portion impact now million revenue services than expect to revenue net $XX implementations. in to to of renewals net offset to revenue impact marketing XXX customer reduction, full Because this, Solutions, with to by large million

level. Now to consolidated back the

$X.X and our billion. billion increasing for are to EBITDA $X.XX the full adjusted We between expectations year

evolution is into faster progressing a technology bit year. coming than we Our expected the

our $XXX operating the instead. therefore not As expectation P&L year and cloud cloud-related full software our adjusted million. R&D and between our $XXX earlier, million increasing I to migration capitalized We're hits income is and mentioned supporting

amortization the our products we into and and into total service than year bit faster placing now year expected expect full coming are a million. to We $XXX depreciation

million raised million, results adjusted lower $X.XX. $XXX of all We tax to adjusted expectations incorporates have full net expectations. XX%, updated This than year effective $X.XX our to full year in guidance EPS of approximately which expectations for income to $XXX previous for rate

accelerate this we Finally, amount of a expectations for as to flow working approximately well funding free has as to Sean, drag. year expect back our The continue pension of renewal year cash increased full full activity million. you. year capital to decision $XXX

Sean E. Menke

Thanks, Doug.

Before to very without take year. some about see I so Day to of be Q&A, I wanted expectations they're perspective And think I I team what Sabre of summarize had moment, we we XXXX. earlier and see the do that accomplished. things sort we things important we things that getting a really, want discussed in place. go to up of of, to Investor open the it's at I Day the doubt, And is good a continued Investor continue a us to and talked We the put And in high do this for one taking in that of it it to some of has set want impressed team through the And standing. where what what by had just perform. I

seeing of half what's ability over years we that really this seen relates the thing we and focus I'm So and with talked our one to it I'm second best that product understanding throughout about really in performance investment the is year what to – the happy on our have on and that stability. as the very systems. monitor, happening to our report had five And year,

focused real have been So that that. to a the teams on call-out

we point. was that But that down in down server gone been we're processing, approximately by the if path, The place underway. thing growth look quarter examples, DXC probably to and had a about right really if up X%. this at you peak the reduced give But you a if essentially I'll we've to is at just was look look are well our other perspective And it where with the is do of and the that data count server would – it important XX%. – XXXX. DXC, you to actually the in have And another is cloud from other taking we continued couple at fourth and migration if understand here's down now, a in shopping you – go

mid-range at on computing we XX%. at to to, in quarter, XXXX, look that the that XX%, drop look through low sitting the the DXC, as quarter, December you in about estimates, we will were fourth is now our into of reduced third XXs. into If And based

as taking honest, and they're did taking the progress good taking from be And on the migration. good have again, recent Travel cylinders seeing number think and to seeing relates now. and the what cloud strength. the Group we're airlines, with with the I again, engagement place. really I board. perspective. what's across if to things I'm you of So, happy it significant from relationship there happy announcement look what place I'm hitting at progress we I agencies Solutions, If CWT, Airline at what all see Flight share look Centre our that right a growth a place we're with TN, the I with of

on mentioned, advancement a the a Doug really have place. a product number had in taking As what's we've us of focus up lot and well, the set renewals year that

I So they a If of look digital about good just taking Hospitality, at outside we good again, place. feel had underperformance, what's job. done really

executive with platform about And team. conversation, the about the SynXis If on. feel have. we've and it's I'd finally, talk we what's outlined in and look to at line you again, And in this pipeline that we performance, like as good just the going expectations

to that foundation like questions. months. that, I'd that with setting up As at we building last operator, ramping been of coming XX the the onboard, we've open And over up really members up they're been quickly the look have the for call off and new

Operator

Thank with Moerdler take you first from our We'll question Bernstein Research. Mark

Mark L. Moerdler

to Thank you. got two parts the – question slightly I've questions. two or different

this And of next the August we a you follow-up. ago, The which then roughly beyond? alignment for continue and first that impressive. And is Should is got to to one quarters in business expect that's effect seeing we're three a I going the year XXXX. started quarter layer the

Sean E. Menke

I break think have it you to Mark. down,

as relates on the it, look can overhang this is this be the and consider we're it have before. we as it Doug that you operating why to that the how understand was the some I we business how and actions performed of down, based to at been I As would think taking helpful broke then things that company

clarity. that creating it's So

on had to about, side, progress see Day outlined, the will about to I momentum So we on and place talked momentum we sort feel that really, specifically we at and believe Investor as of actions what's unit TN. we good in happening continue look continue are at is technology the the we're it's that taking side I what the business gaining

Solutions how On the our gone and capabilities focusing that we've a on at really ourselves And feel we the position period do through products how Airline future. look sit side, I we and we good for where there. it was about

That's more I that to what the but building have step a do, we I momentum back, is, so when say feel the going work we not don't And and where continues take – that organization good it's one how into they've forward. this continue is accomplished have to Mark, I do we been believe, future. to drive momentum

Mark L. Moerdler

looks be going on this way next Is details it Quickly, Appreciate digital something And Hospitality we're quarter. point that it very all on a the tech just done. like drag some this has for the a is side. the lot information helpful. being been or have It's going a that's the thanks the think to And detail. investment do long-term at but you to and turns? marketing of drag, tech

Douglas E. Barnett

very expect to it's if news a be did a Well, for that There wouldn't we expected I quarter, the this business. businesses Hospitality I high it close be low-margin a Solutions. some close. will it long-term good not to area were And know growth is drag. don't I think

decline, decline we won't does to a to even grow bottom So the that extent impact continue slightly on the have expect it material in it or doesn't line. QX, to do

Mark L. Moerdler

you. quarter. the thank congrats And Perfect, on

Sean E. Menke

Mark. Thanks,

Operator

Stanley. our from take Brian Morgan with We'll question Essex next

Brian Essex

anticipate for results. the a that we thank – from Hey, I good some me as additional And on takes taking wanted just detail. think sense thanks and morning well Congrats to the get about puts good for Hi, you question. of as the and of and you Doug, develop that do the cash way that how how cash on we there? do trail flow the might some may expectations were on impact off side, investments focus flow maintain of we cash have the on forward, and conversion. going If flow to or that

Douglas E. Barnett

Obviously focus actually expense, flow to the spent. February, give where and you don't understood you a XXXX expect expense, be. being cash But we to we'll overall year-over-year. expect (XX:XX) where moving in I tech we make more guidance the amount sure into on with material is regard want that's increase Well, tech to we spend

on of So that's sense how a happen to going cash you what's flow. I'd give

Brian Essex

Okay. that projects flow that Or impacting are for improve right forward? cash expected But they're leverage going anticipate to in are might we are there or initiatives, business off? ongoing now conversion this that trailing extraordinary items any flow cash is the whether transition

Sean E. Menke

can thing the years we're been focused come as that will that'll off cloud this the and what now again, about midst on end And process making the in of products we're going the to it the to is where level invest granularity other is to we're we gets But as of there. for a is forward. where opportunities over up and level some to budget Well, that I it scrutiny continue think we thing that'll bit. we our investing returns. place the on as the Doug we've also big – to one seeing services, happen have of of that'll it that things imagine, the happening, the relates at and within in stability, we we're balance outlined. is If of as that, And right you focused be driving little Brian, at it that relates it, that want the look as and we're sure piece look number high taking there's DXC relates a XXXX the that seeing of migration and talked the

Brian Essex

Okay. That's you much. helpful. Thank very

Operator

We'll question John King from next with Lynch. take Merrill our

John P. King

taking morning. as good the got I've two well, please. questions. Yeah, Thanks for

think the back were the I fare So how of the bit in trajectory. coming Hospitality would half little was growth out you question year. on upbeat first on Obviously, a QX, more the of

to ramp-up with a that's the the question specific Is from pretty been with some going out into then client so understand, changed Just back understand transactional delayed? of they're that's trying business. was trying services businesses, that And been Obviously, what's to impacted. what work maybe how second we that? kind

as think Solutions, weak. both being called Airline out I you Hospitality and services

implications wondered some bit So services a any plan or there's of that a to of whether has if gross on a risk you. Thank restructuring for be margin I your of that continues just drag? if kind

Sean E. Menke

the let piece, me Hospitality about first So John. talk

that the performed quarter have a in CRS the is about it PMS that If the find what SynXis lot the expecting fourth consider to the as of side with relates underlying feel future. of essentially, is of on of that. do what I The that we out, we're as close-in and the the we why to then digital. there, And part at we is, nature. offer I And one business you foundation growth look into that in be would what that And the as imagine, seen, we and hasn't what the equation. good you we thing and because of the Hospitality you look that's called

be feel low-margin feel where management limited the the that's as service question does But to in and and Airline of the CRS tie that we're where relatively what on and closed. the I back of good forward, identified, to on quarter relates and were of we're side it frank, on Doug third But, getting aren't to just fourth deals the drive more forward, the the in relates place. specifically piece, going taking the on and your as to the the that And seeing business opportunities piece you going as thought on thing softening health we product implementations. to services good we quarter we that moving equation. Solutions that's they So teams business. that. some one to positioned second To services go property the close primary what's there, with it find said the focus I typically that professional

out, expanding marketplace been of and this of it engaged within and on understand. our The out group the helping heavily what's the of is capabilities playing NDC thing I beginning that to in capabilities other I also that think play is and sort have sits

the and we're and So I when at on John. is a out think I capabilities there's I Solutions, as transition going of what of continue this part rolling we're the to we look Airline follow. shared focus lot products And just to think through, a we within lot

John P. King

you. Thank

Operator

We'll next question take our from Ashish with Sabadra Deutsche Bank.

Ashish Sabadra

again, also wondering CWT you why you I Question the color Amadeus. going on or the about highlighted like taking highlight was can improvement Centre decision-making? could for was And be for Flight strategic like just you think you several modest we did times. here? Thanks. should materiality the the What and benefit. And my win – if then about Is good big CWT how it to it choose is the question. used results. from on CWT, one Thanks if congrats a of provide criterias any

Sean E. Menke

Yeah.

is go I testament sort new to Flight the TN back made of what's the think With level investment wanted product think the that and agencies at taking of this, of But it's its going to did and look relative to moving be in we're that the that, to our has best technology a impact around of with of place. the the forward. place. XXX% same we've way done that side with product There's through balance strategic not I back, bookings the assessment you Workspace, walking capabilities. invested what organization an will Flight So partner and – it do Centre help I that and and sit world a when way Sabre Travel taking Ashish, with Network place. you taking the win level they're what level them and believe I to go Red back felt increased really seeing it's And conversion. to be on what's because CWT not the The I they and is number a ability understand at how the Centre,

Ashish Sabadra

maybe migrating question. there made on any front a And clarifying just as on your they the onto decision quick platform then La well? the That's CRS helpful. Wyndham acquired La Quinta Quinta, have

Sean E. Menke

bit second on will is here based little that quarter. I what I off Based on remember converted – and on might to think be a but I – dates going and correctly, my be it be the over, in Yeah.

XXXX. quarter I second think begins it in of the

Ashish Sabadra

that. Okay. maybe question. Congrats on final And one

revenues create Any there? comps quarter for forward, Just some does and there. in it it on difficult the Airline revenue color license going the sort Solutions, fee the third XXXX? some well. particularly growth first of as the create lumpiness we And saw quarter in that in Does

Douglas E. Barnett

work done create of a I in renewals. comparisons testament will those business the little Solutions Airline a little the stabilize bit it's in It of importantly, But lumpiness all to and real to think to tough that's been more bit XXXX. get a

that little cause in take headwinds us So XXXX. I'll benefit the will it that over

Ashish Sabadra

Thanks. Thanks for the color.

Operator

We'll Neil with take Steer our from Redburn. next question

Neil Steer

much. just very two thanks I've quick Hi, got questions.

during on that PMS Firstly, of color you just work that and CRS bit Can to presentation they're you're that please? with selling mentioned doing a into links and you using. IHG little add the Hospitality, some third-party product the a potentially that

Sean E. Menke

do hoteliers bookings, at that gets to to allows into – them number in it improvements a of consolidation bit they out Part Yeah. little of group out going – drives going it really better book of when a to rate essentially look Neil, essentially, revenue.

a I capabilities it's as as groups. are to, to there well that from as attach CRS the allows us So, current that PMS stated, out capability other

Neil Steer

platform license-based me them or is – that excuse asking you're there? – that a And is selling that transaction-based

Sean E. Menke

It a license-based. is

Neil Steer

Network, why Okay. to that year. Travel the and be normalization suggested pressures see just Thank you're the that's add you to little you And of think of the bit incentive QX the suggested, you on I a comments going that was coming think during you case? confident you. as Could question a next color through, I context second so

Sean E. Menke

Yeah.

Douglas E. Barnett

we I'm going deals anniversary – through Once XXXX, impacted XXXX. the incentive occur some that second will the major in of to have the begin sorry. fees that of Yeah quarter

actually begin why have know those confidence that's on we we when guidance. that to So, anniversary, so

Neil Steer

Okay.

any anniversarying your to peer not it's based it's So, more do specific deals? upon of actions, with group the

Douglas E. Barnett

No.

Sean E. Menke

But side you Neil, to relates driven just see based more relates and that's then which gets going booking capacity to about on we what it from sit as about, And and are No. is our is into sort this because fourth how perspective fee basis, we we it's Doug were a the now lower on what the and is this right we of, lot based versus the as we or environment at because a But – right that of the do seat into see it growth, QX, that in the where future. forward, look ASKs. ASMs mean, Xs. was what bit X%. to incentive we year, quarter this do fee on talking and of questions how just low in transactions see we global at and little a where was And a I last look X.X% than get now, I

was As looking between year, to last schedules in And X.X%. we're and based we X%. on QX, growth about at it at look loaded the X.X% X% range of

little from what's fee of booking we're we seeing articulated our the seeing significant hasn't in but on been the And capacity point equation, roughly trimming marketplace. EMEA bit a of trimming upside of capacity. of side X of a So we're the there within then comments, happening as

Doug region If at talking the with the in And Centre. with KLM, And France year. place France quarter other the you we quarter look see it specifically uptick through third had actually about, because last actually had that. piece Flight mix more the then you of the then Air specific incentive that just side, APAC to of second We you because beginning was then that took the moved on place this the walked the is in IAG he with quarter, staying and are associated new in we based the some get we into KLM. where lower on impact Air that model

So into look again, right now as this is see just we based the we future. on what

Neil Steer

the congrats Thanks Okay. for and quarter.

Douglas E. Barnett

Neil. Thanks,

Operator

We'll take Kelly Oppenheimer. our from next question Jed with

Jed Kelly

for Great. taking my Thanks questions.

the sort comment Can in kind you you on us levels? three COGS mean incentives further can there's you historical other growth the on give for? been I line know looking tell of preliminary the outlook how travel historical over just us years, First with growing be environment any question, just just what thinking And then last pretty assumptions levels, the you're into of think elevated, factors. just should by we rate's sort and of XXXX, what of you

Sean E. Menke

– basis at global recap XXXX, Neil Jed. quarter a and trimming we capacity, the that could this is year-over-year we just on look see what right based to – we're and just slight there capacity is go into now. responding as was first on really as what on we seeing Yeah, I'll is it

X%. I is to up is X.X%. this see And that X.X% is on X% schedules mentioned capacity, So on seats to based versus loaded, we about what based what in

grow it's When So in look see relative rates to we low at basis, you we place growing there. a look historical historically taking Airline we at a lot it And where line line mid-single-digit was, on on it again, question with the don't incentives. really if the in have to side your second had growth. the with

see the of taking quarter. in to begin we where normalization that's second level place So a

Jed Kelly

And then your leverage I it you ratio, X.X was said times. think

And how mean, guess would segment, pretty Hospitality So you mean, right, lower I I I your the to range. a are of fragmented end still point thinking the targeted that's of market. acquisitions? it's I in

you how thinking Just of overall acquisition now? the environment are right

Sean E. Menke

Yeah.

I focused on internally. that So we things last one it's would we where if we that were you now, look needed to very at sort do XX doing months, over of the are the say right

to able As what not essentially are be opportunities three in tuck-in at it continue do be with and opportunities opportunities us exploring what the relates and business move a forward we to we to look as M&A those each of grow. may are afraid to to help the units,

Jed Kelly

quarter. on the Congrats you. Thanks

Sean E. Menke

Thanks.

Operator

Schneider Your James next Goldman with Sachs. question from

James Schneider

my Thanks morning. for question. Good taking

of of of years. past, you see at think you rationalization over point fully about wanted to new that a Maybe we to things the between at to Do And high you terms margin some you margin more opportunities technologies and level the that that. little material level what be the is. wrap kind need kind ask of you in couple respect to the what in maybe you up see in those about a investment opportunities but the high of invested Sorry model? or to trade-off could costs with bit that these you're know expansion could started alluded of two the next balance very the some I see at in? a all then in potential

Douglas E. Barnett

have obviously obviously, I to that the in us would go negative you just XXXX First P&L running we've only XXXX, straight XXXX, impact, on tell margin $XX with talked about through and from regards that of credits out to a year-over-year have they we those to impact zero. the million credits

bit year. the We've So expect this top pressure seen the faced this I year, a D&A what that's to not as had. grow little the incentive we've into seen line XXXX at growth a to we've and D&A we as the that same much talked XXXX headwind as occur significant year. in levels coming We've the in $XX well above about million don't growth.

to figure we we our of a get next we obviously, at QX And rationalize look where into out We and normalize going total that technology take continue could as obviously more forward. year. that to spend expect

that had we XXXX those impact in forward. what us going are of XXXX major will So XXXX not some impacts and

Sean E. Menke

that the data into taking there. the place strategy to first organization the definitely our take the look this, and we what's we one focused we're as is infrastructure to things And to need talked the is on that place. on future, And need sequencing thing of focus that about as I thing

walked I've It then of gets that. into through equation. the side So product

that continue we improving you will a allow look there's that will you quickly place. there's to how taking do is that can is at So balance to one of improvements years, over do ways really several what to the with this allow next see, more But these us and I to forward. going going continue it, margin can do, that to us think I see the sequencing, of

James Schneider

kind ask of GDS a and market color. Centre go. look to expect of helpful about a the some wanted where share And (XX:XX) maybe as as you you very to bit forward, That's follow-up, helping market Travel little then wins flings talk of a bit. other from a about that. APAC and can the you mix perspective But that just in are things the normally little around beyond share the kind strength regional booking anything Clearly,

Sean E. Menke

Yeah.

I continued the As to of the and and is technology these improvements that, back does engagement that what exceptional this our just side what have to seeing we're where is times agency team not competitive only nature. airline difficult is and And back but the do. doing have we the where to what side have, go the think on you focus I And know, product on side. do because the to that that's we this predict, we on associated we're doing of getting job we've products, our in through customers that, there what out what done it talking relates be with with in to to on shopping an equation. side And capabilities, it it the doing the drive able or are as about the of

more couple a the that developing. in believe with taking the of months. we've are best the of And hard those we're right, pivoting of you've that the to technology there's continuing marketplace, way to definitely deals believe, on things So that the I we've in that here very last things taking we're doing. if And I over notice. really that seen XX that us focused win essentially are done doing customers been our pipeline is advantage And the

James Schneider

Thank you.

Operator

Hackel with We'll Capital. take our next from Adam Imperial question

Adam Jay Hackel

the about just and Hi, Sabreists months business your they're in initial long surprises time side just of takeaways for how here. can Thanks here. how for guys. using sort talked data or fit first term? terms airline either taking the business some Any or (XX:XX) a your customer of of into curious, the you, technically few of the sides in Doug, you sort

Douglas E. Barnett

Yeah.

to here, I at things of has the ecosystem, digital me industry looked the – that look opportunity excited that a to have, run decided transformation the monetize our yet and come businesses I I and run was use customers and take this think the I be our one fact going that if don't travel we're help that really to eventually As their to an when about believe to to a data able businesses adopted find way that going have forward. whole enormous I lot of we a amount and other businesses of

take transformation within that So ecosystem. there's lot the the opportunity travel a could I digital think whole place with

Adam Jay Hackel

That's ahead dividend about thinking it look at we into returns at is us great. for And looking and point an going guess some I start forward, least XXXX on at look to line? or time as and appropriate shareholder maybe the – that down

Douglas E. Barnett

Yeah, organization, can we let in benefit my I cycle on more that? before favor could color comments I'd through get the I make that this Because you obviously, do you with more on that. the me get like a first the that and me once February to budgeting is of give – any

Adam Jay Hackel

quarter. taking no Yeah, guys, for problem. the Thanks great time,

Sean E. Menke

you. Thank

Operator

I would for And Menke with to turn that, closing like call Mr. back Mr. to the remarks. Menke?

Sean E. Menke

forward support and here again interest look you more our day. call again for Christina, the Sabre. We joining this us talking and you, to Great. morning. Thank and thank great progress appreciate Have your that to making at about we're a for you

Sabre (SABR) 30 Oct 182018 Q3 Earnings call transcript