Sabre is making progress on its migration to the cloud, a journey that the travel tech company embarked on in 2017.
The company says it migrated approximately 15,000 servers to Google Cloud Platform in 2022. The cloud now contains 66% of Sabre’s “total compute capacity,” and the company expects to reach 90% this year.
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Sabre expects the migration will lead to $150 million in total adjusted technology savings by 2025, compared with 2019.
“Our cloud-based infrastructure is more scalable, distributed and secure than the prior mainframe environment,” says Sean Menke, chair of the board and CEO. “Just as importantly, it allows us to build more advanced and agile products and capabilities to serve our customers.”
The cloud migration was a focus of Sabre’s February 15 earnings presentation in which several company leaders discussed financial results for the fourth quarter and all of 2022.
Sabre executives also highlighted partnerships and an improvement in key financial measurements as last year’s accomplishments, and they say they expect the travel recovery to continue this year.
“In 2022, the demand recovery was uneven, driven by a resurgence in COVID-19 cases at the beginning of the year, airline and airport operational constraints, airline capacity limits and regional travel restrictions,” Menke says.
“We believe some of these factors negatively impacted the recovery in the latter half of the fourth quarter of 2022,” he says, adding the “negative impacts were temporary” and “we have seen volumes improve in the new year.”
The full year’s revenue reached $2.5 billion, a 50% increase from 2021. Q4 revenue totaled $631 million, up 26% from the same period in 2021. The revenue spike was driven by an increase in global air, hotel and other travel bookings, the company says.
Sabre reports $1 million of adjusted EBITDA in the fourth quarter, up from negative $26 million in the the same period in 2021. Adjusted EBITDA for all of 2022 was $65 million, up from negative $261 million in 2021.
In the fourth quarter, the company generated $38 million in operating cash flow and $22 million in free cash flow and ended the year with a cash balance of $816 million.
The net loss attributable to common stockholders totaled $165 million in the fourth quarter, down from $192 million in the fourth quarter of 2021. Also in the fourth quarter, operating loss was $55 million, a “significant improvement” compared with $126 million in the same period of 2021.
Operating loss for all of 2022 was $261 million, down from $665 million in 2021. Net loss attributable to common stockholders totaled $457 million, about half of $950 million in 2021.
Menke says Sabre solidified key partnerships with travel management industry leaders BCD and American Express Global Business Travel.
“We expect these partnerships will be a meaningful volume driver for Sabre going forward. In addition, we renewed and extended important agreements with many of our airline customers including American, United and, most recently, JetBlue.”
Read earnings reports for the previous two quarters here and here.
Sabre President Kurt Ekert explains why he is optimistic about travel’s continued recovery:
Executive Interview: The Sabre View - The Phocuswright Conference 2022