Sabre raises its profit target. The loss behind it hasn't changed.
The travel-technology company lifted its adjusted earnings outlook, but the calculation still assumes a $133 million annual loss from continuing operations. Cash flow is improving, with a long way to go.
Research by Ticker Byline shows that both outlook calculations start with an approximately $133 million loss from continuing operations for 2026. The November release lifts the target for pro forma adjusted EBITDA from about $600 million to $610 million. The loss figure is an assumption in the calculation supporting that outlook, rather than a separate earnings-per-share forecast.
The distinction matters because Sabre's business is improving while financing and other costs still absorb much of the benefit. Its cash-flow forecast also improved, although the company still expects to use cash this year.
What improved, and what gets added back
Adjusted EBITDA measures earnings before interest, taxes, depreciation and amortization, with further costs excluded. Sabre's pro forma version also removes costs historically allocated to the hotel-software business it sold.
| Measure | August | November |
|---|---|---|
| Pro forma adjusted EBITDA | $600 | $610 |
| Loss from continuing operations | ($133) | ($133) |
| Free cash flow | ($65) | ($50) |
Some expected costs excluded from the adjusted target rose. The full-year assumption for restructuring and other costs increased from $5 million to $18 million, while stock-based compensation rose from $67 million to $71 million. Expected net interest expense edged down from $497 million to $494 million, still a heavy burden.
Third-quarter revenue rose 3% to $738.4 million, and operating income increased 17% to $109.4 million. Sabre's normalized adjusted EBITDA, which uses the same hotel-cost adjustment as the annual target, reached $169.7 million. That beat its own August target of about $155 million.
Air bookings fell 1.4%, missing the company's expectation of flat to low-single-digit growth. More lodging bookings and a higher average booking fee helped revenue grow anyway.
Interest takes more than operating profit
Quarterly net interest expense reached $123.4 million, up from $111.3 million a year earlier and more than the quarter's operating income. Sabre reported a $26 million loss from continuing operations, against a $48.2 million profit a year earlier. A much smaller tax benefit also weighed on that comparison.
A September refinancing replaced expensive debt with $1.35 billion of 9.875% notes due in October 2032. The remaining old notes were retired on October 13. The lower coupon has not yet translated into lower reported quarterly interest expense.
A better cash forecast still means cash going out
Third-quarter operating cash flow was negative $24.7 million. After capital spending, free cash flow was negative $47.5 million. Those figures included about $15 million of refinancing fees paid and $40 million of accrued interest payments.
Sabre now expects about $50 million of negative free cash flow for 2026, an improvement from its previous $65 million forecast. Chief Executive Kurt Ekert expects positive free cash flow in 2027.
The next test is whether better booking economics and cost control can start covering the financing bill in cash. The higher adjusted target is progress; the unchanged loss assumption shows why that progress has yet to reach the bottom line. Our Sabre company page tracks the results, debt and completed hotel-business sale.