Sabre Hunts for More Tech Deals to Overcome Sales Slump
Skift Take
Sabre's management must have seen this quarter's sales slowdown coming. After all, the company's prior management had underspent in the research and development work necessary to keep its sales growth humming. Sabre's new leaders have been investing in its long-term growth, but the payoff in sales growth may take awhile.
Sabre, the U.S. travel technology giant, has lost momentum.
Second-quarter revenue rose only 1.6 percent to $1 billion, the Southlake, Texas-based company reported on Thursday.
That figure represented a slowdown. In the same period a year ago, the company had a 9 percent growth rate. In 2015 and 2016, the company enjoyed double-digit annualized growth.
In the midst of this slowdown, Sabre is searching for more airline deals. The company's flagship airline operations product is its passenger service system, SabreSonic. It needs to persuade airlines to switch to using that system away from others in the market, including the two offered by its arch rival Amadeus.
It is also retooling some of its other airline enterprise software tools to try to win back customers who had been turned off by them in the past.
It's also looking for more buyers for its hotel technology, in particular of its recently debuted array of hotel property management services called Sabre Property Hub.
A Slower Pace of Growth
Sabre, famously a cash cow thanks to a high-margin business, is also throwing off less cash. In the second quarter, Sabre earned a net income of $27.8 million. That was notably less than the $92 million quarterly gain it generated in the same period a year earlier.
Cash provided by operating activities totaled $105.7 million in the quarter, down from $146.6 million in the same quarter a year earlier.
Sabre's slower income was due to airline and hotel industry-level issues in each of its business segments. The company's rising expenses were primarily due to increased technology expenses in the quarter as the company tries to overcome a perceived or actual research-and-development deficit.
Sabre appears to be playing a bit of a g
