Great. Good afternoon, everyone. Thanks for joining. My name is Deepak Mathivanan. I cover global internet here. I have my partner, Jack Halpert, here with me as well. We're very excited to have Kurt Ekert, CEO of Sabre, and Mike Randolfi, the CFO, join us for the fireside chat today. We're gonna have a lot of topics to discuss, and we'll hopefully have some time at the end for audience questions. To start off with the main topic of the conference around AI, you know, Kurt, you've argued that AI makes Sabre more essential in the travel ecosystem, not less. What would you point out as the clearest evidence so far that AI can strengthen Sabre's comparative position in the ecosystem? Yeah. If you look at Sabre, one of the ways to think about what we do is we are the technical plumbing of the travel industry. We provide a lot of complexity between buyers and sellers, and in a world of AI, the need for that is going to be enhanced. We also sit on a massive complex of data from availability and search data. In a future world, to drive a consumer-grade conversational commerce experience, it's going to be about relevance of search response. Unlike, say, your typical OTA interface, where you may have three or four pages you're searching on, you're going to want to provide three or four transactable searches there, and they have to be the right searches. You need very sophisticated caching, which requires a lot of data, and you need basically the ability to process that in a very, very rapid fashion. When you look at that, I think one of the questions is, why wouldn't a generative AI player just direct connect into suppliers? The reason for that is facilitating a direct connection into somebody's API is technically very simple. Then handling massive search volumes, integrating that in an intelligent sort, handling the fulfillment, handling the servicing of that transaction, there's a tremendous amount of complexity there. We basically, for example, in the deal we just announced with PayPal and Mindtrip, Mindtrip being an early stage LLM layer, we're going to basically provide all of the search, all the content, all the fulfillment servicing, and they'll be able to keep the consumer captive for the entire end-to-end experience. We do that by taking about 1.5% of the value of a ticket or a hotel room booked. We do all of that very efficiently. Now, if you're the LLM, one is why do you want to try to solve for that technical complexity and try to replicate what an OTA and/or a GDS already does? Number two is if you're looking for margin disintermediation, you're probably better off focusing on hotel OTAs who are deriving 15% margins than saying we're going to chase 1.5% margins on air, which is much more complex. I can also tell you that when we've engaged with the agentic players, again, they all want an end-to-end experience, not a metasearch type experience where you link off, which is an ad model, and we think we'll fulfill that very, very well. For example, with PayPal and Mindtrip, we'll be live in production in the second quarter of this year with a full end-to-end integrated user experience. Think about it as a next generation online travel agent that we'll be providing them on all they have to do is solve the front-end layer. Makes a lot of sense. Just to follow up here, I guess there's been a lot of shifts in views around how agentic AI experience will play out in travel. I think recently OpenAI has said that they might be leaning towards apps. Google's stance is a little bit unclear. How do you guys think about these agentic experiences emerging? Obviously, you have the Mindtrip, PayPal stuff going on, but just in general. We've engaged with all the big players. Most of them are very focused on retail e-commerce, and tackling that first as a bigger category than travel. Selling sneakers is easier than selling an airline ticket. We've heard from them that starting this summer they're going to start to focus on travel as the next category. They have all uniformly said, we want integrated end-to-end user experience. We don't want to be providing metasearch ad model. That's not the user experience that's going to win. Even Google, for example, who has the leading ad model in the world, is thinking through how they protect their cash cow, but how they offer a better UX at the same time, and I don't think that they've solved that. I think that what will win is the best user experience. For example, if Mindtrip and PayPal are going to launch with us, I think that will take the market by storm because it's going to be pretty compelling from a user standpoint. If you don't mind, go on Mindtrip. AI and take a look at the way you can search. It's pretty darn cool. Combined with, again, all the booking and all the service and capabilities of what went behind that. I was actually surprised to see what OpenAI came out with. I think part of that is just they're thinking through, "Gee, this is quite complex to try to solve travel." They're also looking for how they monetize traffic as quickly as possible. They're sort of envious of what Google does, for example, with hotels. Again, I think it's a question of does business model win or does leading UX win? I think the leading user experience is going to prevail, and that's going to force the hand of somebody like that. What OpenAI may be looking at is they've got to fund all of their growth and investment. How do they do that expediently? I think they may be looking at that from a near-term standpoint versus what their long-term ambition is. We feel very well positioned to basically leapfrog that intermediary advertising platform, and go to what they have all articulated as the vision of what they want to have. Got it. That's super helpful. Then I guess just from a monetization perspective, I mean you guys are really early launching some of these APIs as you talked about. Obviously you have the Mindtrip, PayPal partnership going on. Should we think about monetization as, hey, this is a channel that's going to continue to drive incremental bookings or are there maybe usage-based APIs, these other avenues that you have to monetize this going forward? If you look at it today, again, what we charge suppliers, airlines, hoteliers is around 1.5% of the value of what gets booked. In almost any industry, certainly in travel, that's a very attractive cost of sale. From the standpoint of what the suppliers pay, we think we have a very defendable model in terms of what that number looks like. Now, could the components of that be different than the traditional segment fees that we charge? Yes, absolutely. We'll learn our way into what that's going to be. I'd expect that there'll be a revenue share from us to the agentic layer to the LLM. But there will not be an agency incentive per se, the way it exists in the GDS business today. We look at this and I think where is there gonna be “disintermediation?” I think managed corporate travel will not be disintermediated because the corporation, your employers are directing you where to book your travel at Mike's Travel Agency or Kurt's booking tool, just like they tell you where to go for your payroll. That's not gonna change tomorrow, but they're responsible for your safety, where they want you to book negotiated rates. It will require that the large travel management companies build conversational commerce on top of what they do, and it will probably accelerate the technology arms race that is already there. Number two is when you have niche travel agencies, let's say people who do safaris or cruise. I think those are high-end, high-value purchases. I don't think that's likely to be disintermediated, at least in the near to medium term. Then the loyal customers of the supplier.com of a large airline or a hotelier, they're not going anywhere either. You have three spaces I think we're gonna see disintermediation. I'll get to your question. One is the non-loyal customer of supplier direct. The person who buys one ticket on airline.com tomorrow or today, if they get a better experience on Perplexity tomorrow, they're gonna book there. What's different is that booking may still accrue to the carrier, but it's not gonna accrue on the carrier's website, and the carrier may pay for it where they don't pay for it today. Number two is metasearch. Metasearch is a great user experience from the standpoint of providing price arbitrage to the consumer, which compare price across different channels. The user experience sort of deteriorates thereafter as you get linked into different ecosystems. Service and quality is poor, and so I think it's very likely that users are gonna get a better UX over time from the agentic players. Number three would be OTAs, which are actually, I think, well-positioned to build conversational commerce, but to the extent they're driving traffic from metasearch, that will be at risk. Of those three things I cited, the first two, supplier direct and metasearch, we derive effectively zero volumes in distribution. OTAs are about 25% of our air distribution volumes today, and again, a subset of that comes from metasearch. There's some risk there, but we look at that and say, as agentic emerges the way online travel agents emerged 30 years ago and they create this vast new channel, we think we can get a disproportionate share of that channel and really play offense there. We think it's gonna be almost entirely informal bookings versus our portfolio today. Kurt, you talked a little bit about this, but I also wanted to ask you about how vertical specific experiences emerge? You know, we have a thesis that many of the vertical providers, marketplaces, travel agencies, and so on will have to build their own conversational experience, AI agents. How do you think that plays out? Do you think large airlines have capabilities to put these types of vertical specific experiences? How does it affect your business? You know, what sort of opportunities it creates? There's two sides to it. For example, Virgin Australia, which is a Sabre-hosted carrier, actually has an integration with ChatGPT. That's Sabre technology. That technology is available to all the carriers in the world right now, whether they're Sabre-hosted or not, for example. I think all the airlines, any retailer in the world, all things equal, they'd like to own a direct relationship with the consumer, and that's to mitigate comparison shopping, and that's to drive up their yields. That's why they do that. The question will be, as you think about where the funnel's gonna be, if somebody's shopping on Virgin Australia tomorrow the way they are today, nothing's gonna change other than it's a different user interface, different. You know, they're gonna transact through conversational commerce versus an app per se. If they're coming through Perplexity or they're coming through Mindtrip, and that's the case, I don't think that those players are gonna wanna have 500 link offs to different carriers and different experiences. They're gonna want one uniform experience that they control, which lends itself very well to our distribution solution. I think that's what's being missed here, is people are saying, "What does the airline want or what does the hotel want?" If you look at the hotel, who transacts more hotels than anybody in the world? It's not Marriott or Hilton, it's Booking.com. It's by far the biggest travel company in the world. Why? Because they control the e-commerce funnel better than anybody else. I think that the agentic layer, whether it's Booking or let's say a new agentic player, I think they're gonna do the same thing. They'll be able to compete at a scale that any individual supplier would not be able to compete at. In the same way that Google Flights is able to control a lot of traffic that doesn't go airline direct. I think you could see actually some level of disintermediation away from the supplier direct channel. Again, they'll eventually get those bookings, but they're not gonna get those bookings directly the way they do today. I think that's gonna fundamentally change. The question was, do suppliers have the prowess and the wherewithal to do this themselves? I'd say the largest hoteliers and the largest airlines, they have the balance sheets and they have the technology spend. They can if they want. Are they gonna be able to do that at the pace, and the throughput that technology companies are able to do it? I doubt it. I think there's a really good opportunity for partnership, and for us to bring new value to a lot of our supplier customers. Makes sense. Yeah. I guess shifting gears a little bit here and just to talk about kind of some macro geopolitical factors at play right now. I mean, obviously 2025 you had some headwinds from corporate and obviously the shutdown, but I think more recently you've spoken about since December, things have been really strong, with what's going on currently in the Middle East within the last couple days. Like how should we think about exposure to Sabre and just general kind of travel trends you guys are seeing? Sure. As you noted, coming into this year, and I would say starting in December through our earnings call, we saw what I would describe as broad-based strength in bookings across geographies, across customer types. We saw that all the way through our earnings call. Overall, we're very optimistic about the year. It feels like it's setting up in a stronger way, particularly from corporate travel. You know, we haven't provided any guidance beyond that. What I'd tell you is a couple things. Obviously, if you look at the Middle East in the last couple of weeks, the travel there has grounded to a halt. For us, that represents a very small proportion of our bookings. It's only a few percentage points of bookings. Europe obviously is impacted because there's a lot of travel that flies through Europe to other regions of the world. For us, if you're looking at May overall, it represents 16% of our bookings. You know, obviously there's going to be some impact there as a result. I would say overall, we're really excited about the setup this year. Carriers are growing capacity. We're seeing strength in the corporate market. Overall, we think we're in a relatively good backdrop despite the more recent geopolitical events. Yeah. Got it. We don't know how long that's gonna last. Right. We think it will be weeks or a month or two. We don't think it's gonna be a year-long thing, but we don't know, obviously. Yeah. Then I guess just on that topic, I guess looking back at prior kind of conflicts, maybe Russia, Ukraine, wherever, and you see the oil prices go up and fuel prices. Did you guys see similar impacts? I know you guys are a little bit separate from the airlines when in terms of how you- Well, Russia was unique because we used to host most of the Russian airlines. Sure. We were required by the State Department to. Sure. Divest those relationships. We used to be the biggest GDS provider in Russia. We don't do GDS in Russia these days. That was sort of disruptive, and I think a very unique example. Typically what you see, and I'll compare it to a recession. In a recessionary environment, let's say you have a recession of 3%, which would be a pretty severe recession, 2007-08 outstanding. You would typically see air volumes globally compressed by maybe 1%-2%. Not as bad as GDP because air volumes typically grow at or ahead of the rate of growth of GDP, and/or in the intermediary part of the world behaves in a similar manner. Even if there's a regional conflict, there's been regional conflict, you know, going on. I would say before the Middle Eastern War, you had Russia, Ukraine going on. As we articulated on the earnings call, we were growing at a 7% year-over-year or 7% clip from the start of December through the middle of February. Nothing unreasonable was happening. Again, there's regional impact, but I think globally there's still a very positive backdrop. Over time, if you look at global conflict, you know, generally once it's resolved, history indicates everything kind of reverts to the mean. You know, overall, I would look at that as there's an event, you know, at some point it gets resolved and the travel comes back. People want to go conduct commerce, business, travel. Does that make sense? I guess so beyond macro, beyond AI, although I suspect AI may be a part of the answer to this question, but you made good progress on a lot of key initiatives in 2025. Delevering the balance sheet, laying the groundwork for agentic booking flows, bringing on new NDC/ LCC partners in 2025. What are the key focus areas for 2026? Obviously AI, it seems like we talked about that as a part of it, but beyond that, maybe kind of the key. We've talked about we have two core strategies. One is delever the balance sheet, two is growth through innovation. The delevering the balance sheet is very focused on EBITDA expansion and over time, applying free cash flow to pay down debt. On the innovation side, as you indicated, we released a new platform for the airline seat space called Sabre Mosaic, which is a modular AI infused cloud native platform that does offer orders to replace the PSS. Tremendous progress on the offer side of that. We'll see airline seat grow at a mid-single digit revenue growth this year. That's a business that has not grown for Sabre for quite a while. We've really started to turn the corner on that. That could turn into a huge growth accelerant for us going forward. Major focus there. On the distribution side, which is about 80% of our business, there are several strategies. One is just what we call air expansion, which is winning share in the traditional sense, but then expanding the addressable market with NDC and with low-cost carrier long tail. Again, as we've indicated, we think that combination will lead to strong mid-single-digit distribution growth in the coming years. On the hotel side, we have a burgeoning hotel distribution business. I think many people don't know this. Even after we divested the hotel IT business, our hotel distribution business turned over more than $20 billion of volume last year. We indicated we did $250 million + of revenue last year, growing at a high single-digit rate. For hoteliers, they derive a yield that's 30% higher than any other channel they do business with. They pay cost of sale about 1.5%. It's a highly attractive channel, and 80%+ of our agency customers buy no hotels from us. We think the growth opportunity there is substantial. The other is payments. We own the Conferma business, which is a virtual payments business. We have the Sabre Direct Pay network, which is an orchestration layer integrating multiple third-party products. The combination of those two, we transacted more than $20 billion of payments last year, grew at a 40% clip. We've not broken that out yet. I think you'll start to see us break out revenue this year, but that's not being integrated whatsoever. Then last, and probably most exciting is the world of agentic AI. We've announced a key partnership. We've done a lot of work. We were the first to market with an MCP server, first to market with brand new agentic APIs that basically expose everything that we already do. We're marching aggressively down the partnership path today. It's really about just digging in on our core growth strategies and agentic. I think that can change the growth curve for Sabre going forward for quite a while. Got it. Yeah, no, I think you touched on a lot of the areas that I maybe want to pick and choose a couple to go a little bit deeper on here. I guess just at a high level, you're guiding mid-single digits air bookings growth for 2026, 2027. Can you just talk about the visibility into these volumes as you go forward? Sure. You know, first, as we talked about, we started the year with really a good degree of strength. When we look at underlying markets, put the geopolitical effects aside, we see that as a very strong base. The other thing is, as we look at mid-single digits for planning purposes, even though capacity is growing, corporate strength looks good. We made an underlying base assumption of industry GDS industry growth of flat. Hopefully that's conservative, and there's good reason to believe it will be. Now, what that means is when we talk about mid-single digits growth, that mid-single digits growth is entirely derived of our own strategic growth strategies that Kurt just talked about. It's a combination of continuing to take share, as we have taken share. It's re-intermediation on the NDC side, and then after that it's capturing those long tail of LCC customers to a multi-source platform, where we're able to grow. We have good visibility to that based on our internal traction, and we see good reason for that momentum to continue into 2027. Got it. On the LCC solution, I know you guys I think launched it recently in the past couple of months here. How should we think about kind of the steady-state contribution from these new LCC segments coming online? Maybe speak a little bit about like the margin profile of that. Yeah, it's a different. Before we started this, if you go back a year ago, we had about 150 low-cost carriers at Sabre. They looked and felt a lot like network carriers. You typically had lower unit revenue and lower unit margin for that portfolio. You know, an important part of our business. You know, in the sort of the 15% range of our volumes. What we've done here is if you've heard of Travelfusion, which is a proxy for the long tail of stuff that traditionally was not integrated into GDS. We've integrated 50+ new low-cost carriers into this different solution, and that's predominantly through API connectivity, albeit not NDC or EDIFACT connectivity. From a buyer perspective or a travel agent perspective, integrates seamlessly from a shopping and a workflow standpoint. It should be a massive improvement to user experience and productivity for them. Now it's a different model. Traditionally it's a supplier pay model, and then we provide inducements or incentives to the person who makes the booking. Here it's going to be different. It's a buyer pay model, which is what Travelfusion as a proxy looks like. The supplier doesn't pay us anything. That market is $1-$2 per transaction is what's paid. There's no incentive structure on it, and the marginal processing costs are not that high. It's much lower unit revenue, but it's a high gross margin percentage product. We look at it and say the gross margin dollars are purely additive. It'll over time slightly change what our effective booking fee, and what our effective margin position are. We think it also enhances our value proposition to the buyer. It makes it simpler for them to get everything in a one-stop shop. Got it. Got it. Got another topic that's coming up quite a bit is the Constellation Software involvement. I've heard of them. Yeah. Between the rights plan last week and the agreement recently, what can you tell us about the backdrop to the whole, and where do you stand currently? Maybe take a guess also on how it plays out from here. Yeah. I tend not to try to guess at my job, but we'll start with so Constellation approached us in early January of this year, indicated they had acquired a beneficial position of 9.7% of Sabre. They asked for a couple of board seats, and we engaged a process then through January, February, where they nominated two people to the board. We interviewed and went through a formal process there. We came back to them and said, "We're willing to appoint Damian McKay, who runs their Vela Software Group, subject to reaching a strategic partnership agreement with them." We were negotiating with that. If you go back two weeks ago, we thought we were razor close to an agreement. What would you have to agree on? Typically, there's something called a standstill and provisions like that. You know, their ability to own competitors and sit on our board, those sort of standard things. Anyway, a week and a half ago that Thursday, they terminated the negotiations, made some interesting statements, and we had noticed a tremendous amount of activity in our stock trading. We put in place the shareholder rights plan, what other people may call a poison pill, a week ago Sunday, to stop them from acquiring basically a negative control position in the company without our consent. They came back and they filed paperwork then last week, which showed that they had acquired up through the prior week 12.7% of our shares, but effectively were stopped there, given what we had done. They came back to the table. We consummated an agreement last Thursday. We've appointed Damian to our board. We filed all the paperwork with that, and I think they're gonna be at worst a neutral partner. They come to the party with a deep wallet, a lot of expertise around vertical software. I think over time, you know, I hope that it's something that can be fruitful for Sabre and its shareholders, but time will tell. We don't know. I know they're very interested in getting to know us and the business better. They were very clear. They like the management team. They like our strategy. They love the market position. Don't love the balance sheet. We agree with that. They believe the company is dramatically undervalued. At face value, they're looking at a long-term value play here, but with the ability perhaps to deploy capital if it's intelligent and it makes sense for all the parties. Let's see if there's any audience question, follow-up. Got it. This is the new market now, especially this category of market. We actually grew EBITDA faster than Amadeus in 2025 at a higher rate. Let me start. What's different about Amadeus versus Sabre? Their airline seat business is a EUR 2 billion revenue business. They made cash out of that business, and they're in a monopolistic position in that market. We're number two. We're at just number two in airline seat to Amadeus. On distribution, we compete on a very even playing field. 45% of our air bookings are corporate. I think only about 20% of theirs are. Corporate was down 600-700 basis points last year. Had dramatic negative impact on Sabre. Really didn't impact them. The geographic footprint really favored them versus us last year. I would predict that if you look at the next couple of quarters, you're going to see us outgrow Amadeus on distribution pretty readily. I think that's going to be a consistent theme that's going to emerge. Obviously, Amadeus has a balance sheet that, with much lower leverage than we do today. Those are the differences. When you look at what happened last year, we thought the GDS market would be flattish, and we'd grow measurably on top of that. We realized 30 million segments, air segments last year of newly implemented growth from market share wins. The negative part was because of the GDS market trading down 300-400 basis points. What happened with corporate and US government, where we have a strong position, we traded down 800-900 basis points on our base business before the addition of new business. Again, we started to see that revert and change December forward. We're pretty optimistic for the setup as we think about it. Here's what I want you to think about, which is we'll produce this year at or above $500 million of unlevered free cash flow normalizing out our one-time restructuring. A normal company like ours would trade at, let's say, 10-12 x that. If you look at where our debt and our equity is trading, clearly the market is missing something. They're pricing a distress risk to the balance sheet, despite the fact that we have no large maturities for over three years. We had $900 million on the balance sheet at the end of last quarter. Number two is I think they're saying while you fix up your house, while you're doing good stuff from a product and customer standpoint, we don't like the GDS neighborhood. I think that story is very, very negative and should be more neutral. Three is they're lumping us in and saying agentic AI is going to be the death of us. We actually think it's going to be the biggest growth stimulant Sabre's realized in decades. I think the market is really missing it. I think what do we have to do? We have to execute. We've got to demonstrate to people through numbers that we can perform very consistently on the top and bottom line. Over time, there is a path to delever the balance sheet. I think you're going to see us produce and improve that this year and next year. It wasn't pricing pressure. That's just volume. Whereas the industry, air industry was up three or four percentage points last year, the GDS was down three. That's what Mike said is we're expecting, if you look at capacity, airlines to be up 4%-5% this year. We've assumed for planning purposes a flat GDS marketplace. I think it will be better than that. We've assumed our growth is on top of that flat GDS marketplace. Yeah. For clarity, our average booking fee in 2025 was higher than 2024. For this year, as we talked about our guidance, we talked about air distribution bookings mid-single digits, revenue mid-single digits basically implies that average booking fee this year will be roughly flat with last year. There's not price degradation. Yeah. No, it's not. Don. Well, the corporate travel effectively all goes through the GDS. Corporate travel was down 600-700 basis points last year. Leisure was up a couple of percent. That in and of itself clears up the ratio. I think you will see GDS grow much closer to the rate of growth of the airlines this calendar year. Lastly, I'll say on Amadeus, and I have a lot of respect for them and know them very well, is they're now basically in the position of being Oracle or SAP. They're innovating slowly. They're protecting their moat. They're doing what you would do in their position. We're playing offense in a very, very different way. You might be able to make 5%-10% as an investor there. If we get this right, part of this is because of our leverage. Equity investors can make multiples on their money investing in Sabre, assuming we execute, which we're very confident we will. I guess one more just a thought to finish this up. On the profitability side of things, I think you've talked about the free cash flow targets here, but I think you also just put in place this Inflation Offset Program for which this quoting that. Kind of what are the specific areas that you guys are looking to reduce costs in? I think obviously we know at like the P&L level what you guys are targeting, but where operationally are you guys doing there to drive that? Yeah, sure. First, let me just tell you the whole thought around the Inflation Offset Program. As we grow bookings, as we grow revenue, we grow gross profit, we want to see more of that flow to the bottom line over the next couple of years. We're very specifically targeting to keep our SG&A and technology expenses roughly flat over the next two, three years, except for, call it, variable hosting costs. At the same time, we're very focused on funding our core strategic objectives. I would highlight that we expect to have more engineers at the end of this year than we do now. We have more engineers than we did last year. What are we doing? We're essentially working to work more efficiently and more effectively. We're really focusing on three areas. One is most effective location, so a geography strategy. The second is there are certain third parties that we work with that have very deep expertise that perform certain work very efficiently and very effective. We're leveraging those third parties to a greater degree. Then within our business, just like you hear AI, we're incorporating AI in our internal processes to drive greater efficiency. At the same time we're being more effective, we're also at the same time earmarking specific additional resources to drive growth at the same time to really reach that balance while allowing more of those top-line dollars to make it to EBITDA, ultimately free cash flow. I think if you went out and talked to T2RL, which is the lead analyst or lead consultant in the airline seat space, or you went and spoke to almost every travel agency in the world, they would tell you we are innovating at a different and better pace than Amadeus today. While our R&D is not equivalent, our throughput is really remarkable versus what it was a couple of years ago. All right. I think with that, we're out of time. Mike, Kurt, thank you so much for joining us today. Thank you.