Sabre Corporation ("Sabre") (NASDAQ: SABR) today announced financial results for the quarter and year ended December 31, 2015.
“In 2015, we increased investment in our core strengths, deepened our customer relationships by adding more critical capability to our platforms and continued to out-innovate our competitors,” said Tom Klein, Sabre president and CEO. “Our commitment to operational excellence and sales execution, along with our ability to bring innovative technology to market with speed and scale, drove our strong full year results. For the year, we delivered a double-digit increase in revenue and Adjusted EBITDA, a 17% increase in Adjusted EPS and growth of more than 50% in Free Cash Flow. Our strong momentum gives us confidence in our 2016 expectations for accelerated growth in revenue, Adjusted EBITDA, Adjusted EPS and importantly, Free Cash Flow.”
Q4 2015 Financial Summary
Fourth quarter results continued to demonstrate the strength of Sabre's vertical SaaS software and travel distribution businesses. Sabre consolidated fourth quarter revenue increased 17.4% to $758.5 million, compared to $646.1 million for the same period last year.
Airline and Hospitality Solutions
Fourth quarter 2015 Airline and Hospitality Solutions revenue increased 8.0% to $231.6 million, compared to $214.5 million for the same period in 2014. Contributing to the rise in revenue was a 41.8% increase in airline passengers boarded through the SabreSonic reservation solution and continued momentum in Sabre Hospitality Solutions. Passenger boarded growth reflects solid underlying growth and the successful technology integration of American Airlines. Fourth quarter Sabre Airline and Hospitality Solutions Adjusted EBITDA increased 0.9% to $85.7 million from $85.0 million in the prior year period. Adjusted EBITDA margin was 37.0%, compared to 39.6% for the prior year quarter.
On October 17, 2015, Sabre seamlessly executed the largest technology integration in the airline industry's history, making American Airlines the largest customer in the SabreSonic community. Subsequent to the fourth quarter, Sabre completed the acquisition of the Trust Group expanding Sabre's hospitality customer base more than 30%, to approximately 32,000 properties worldwide.
Fourth quarter 2015 Travel Network revenue increased 22.3% to $531.2 million, compared to $434.4 million for the same period in 2014. Fourth quarter 2015 Travel Network Adjusted EBITDA increased 20.9% to $208.0 million from $172.0 million in the fourth quarter of 2014. Total bookings increased 33.0% driven by the acquisition of Abacus and continued strong growth in North America and EMEA.
Full Year 2015 Financial Summary
The fourth quarter capped a year of strong financial performance at Sabre. For the full year 2015, Sabre reported total consolidated revenue of $2.961 billion compared to $2.631 billion for the prior year, a 12.5% increase.
Full year Airline and Hospitality Solutions revenue increased 10.9% to $872.1 million, compared to $786.5 million in 2014. Contributing to the increase in revenue was full year SabreSonic passenger boarded growth of 14.5%.
Travel Network revenue increased 13.4% to $2.103 billion, compared to $1.855 billion in 2014.
2015 consolidated income from continuing operations totaled $234.6 million, compared to $110.9 million in 2014. Consolidated Adjusted EBITDA totaled $941.6 million, a 12.1% increase from $840.0 million in 2014.
The increase in Adjusted EBITDA is the result of a 14.4% increase in Airline and Hospitality Solutions Adjusted EBITDA and a 12.7% increase in Travel Network Adjusted EBITDA. Sabre Airline and Hospitality Solutions Adjusted EBITDA increased 14.4% to $323.5 million, compared to $282.6 million in 2014. Full year Adjusted EBITDA margin for Airline and Hospitality Solutions increased to 37.1% compared to 35.9% in 2014.
Full year Travel Network Adjusted EBITDA increased 12.7% to $877.3 million, compared to $778.7 million in 2014.
For the full year 2015, Sabre reported income from continuing operations of $0.83 per share, compared to $0.39 for the full year 2014.
Cash flow from operations totaled $529.2 million for the full year of 2015, an increase of 36.5% from $387.7 million in 2014.
Business Outlook and Financial Guidance
In Airline and Hospitality Solutions, Sabre expects 2016 revenue growth of 17% or more. In Travel Network, Sabre expects 2016 revenue growth of between 13.5% and 14.5%, driven by bookings growth of approximately 15%, reflecting the positive impact of the Abacus acquisition and continued solid growth in North America and EMEA.
Free Cash Flow is expected to increase more than 60% and to approach $400 million for the full year 2016.