Sabre stock soared Tuesday morning, rising as much as 21% after the company's fourth-quarter earnings call.
Sabre reported fourth-quarter revenue of $501 million, up 60% over the same period in 2020, thanks to an increase in global bookings as travel recovers from the pandemic. The company operated at a loss of $126 million, compared with an operating loss of $220 million in the fourth quarter of 2020.
For the full year of 2021, Sabre revenue totaled $1.7 billion, up 27% over the year prior. Operating loss was $665 million, compared with an operating loss of $988 million in 2020.
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In the fourth quarter, Sabre said, global bookings totaled 58 million, or a recovery of 45% of 2019 levels.
The omicron variant did impact Sabre starting in December, but CEO Sean Menke said recovery was back on track in early 2022.
"The global travel recovery was slow at the beginning of the year, but that has significantly changed," Menke said. "February month-to-date global GDS bookings are on pace to reach a similar level of recovery versus the same period in 2019 as November 2021, which was the best month since the onset of Covid-19.
"For these reasons," he added, "we believe 2022 is shaping up to be a year of recovery and progress."
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In January, hotel transactions recovered 77% compared with the same period in 2019. Passengers boarded recovered 68% in January. And gross bookings recovery was 31% in January compared with January 2019. Booking recovery further accelerated in January, reaching 37% of 2019 levels in the last week of the month.
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Sabre highlighted its financial targets in 2025 based on a number of scenarios of travel recovery. As a baseline, in 2019, Sabre recorded adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) of $863 million. If bookings have recovered by 80% in 2025, adjusted Ebitda is projected to be more than $900 million. If bookings have recovered by 100%, adjusted Ebitda is projected to be more than $1.1 billion. And if bookings have recovered by 120%, adjusted Ebitda is predicted to be more than $1.3 billion.
On the call, Menke detailed Sabre's technology transformation and its longer-term impacts on the company. In 2019, he said, Sabre spent around $450 million in hosting costs to run its systems. That number would have increased by about $200 million to $250 million by 2025 without Sabre's efforts to overhaul its technology, which includes migrating its systems to the cloud. He said he believes that in the next 10 years, Sabre will realize a return on investment between 30% to 35% thanks to its technology updates.