Sabre Corp Q1 FY2025 Earnings Call

Good morning. And welcome to the Sabre First Quarter 2025 Earnings Conference Call. My name is Rivka, and I’ll be your operator. As a reminder, please note today’s call is being recorded. I will now turn the call over to the Senior Vice President, Investor Relations and Treasurer, Brian Evans. Please go ahead, sir.

Good morning. And welcome to our first quarter 2025 earnings call. This morning, we issued an earnings press release, which is available on our website at investors.sabre.com. A slide presentation, which accompanies today’s prepared remarks, is also available during this call on the Sabre Investor Relations webpage. A replay of today’s call will be available on our website later this morning. We advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including the timing and effects of the agreement to sell our Hospitality Solutions business, including pro forma financial information, results of our growth strategies, transactions and bookings growth, commercial and strategic arrangements, and our financial guidance, outlook and expectations, free cash flow, net leverage and liquidity, among others. All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today’s conference call. More information on these risks and uncertainties is contained in our earnings release issued this morning and our SEC filings, including our Form 10-Q for the quarter ended March 31, 2025. Throughout today’s call, we will also be presenting certain non-GAAP financial measures. References during today’s call to adjusted EBITDA, adjusted EBITDA margin, and free cash flow have been adjusted to exclude certain items. The most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on our website at investors.sabre.com. We are also presenting certain financial information on a pro forma basis to give effect to the sale of the Hospitality Solutions business and the application of the proceeds from the sale to pay down outstanding indebtedness as if the transaction and actions had occurred on January 1, 2025. Participating with me are Kurt Ekert, President and CEO; and Mike Randolfi, Chief Financial Officer. Scott Wilson, EVP and President of Hospitality Solutions, will be available for Q&A after the prepared remarks. With that, I will turn the call over to Kurt.

Thanks, Brian. Hello, everyone. And thank you for joining us today on our first quarter 2025 earnings call. In addition to discussing our quarterly financial results and outlook, we will also provide details on the agreement to sell our Hospitality Solutions business, which we announced last week. Business performance was solid in the first quarter, and I commend the team for outstanding execution in what was and continues to be a challenging macro environment. It’s important to provide perspective on our resilient business model and why we believe we are well-positioned even in times of economic uncertainty. Our revenues are largely tied to air distribution bookings rather than airline ticket prices. This structural characteristic is important for Sabre, generally enabling more stable and predictable revenue, even in periods of pricing volatility. That said, we are of course not immune from sector dynamics, and as such, we are adjusting our assumption for full year 2025 GDS industry growth from flat to nominal to down 1% to 2%. This update incorporates recent airline traffic softness and planned airline capacity adjustments. As a reminder, in February we provided full year 2025 guidance, which included expectations for double-digit air and hotel B2B distribution bookings growth, driven largely by the realization of volumes from business we have already signed. Mike will provide more details momentarily and I’m pleased to share that today we are reaffirming our expectations for full year double-digit distribution bookings growth, despite the market backdrop. Further, we expect the revenue impact from the softer market dynamics to be largely offset by outperformance from our growth strategies. Specifically, new airline content being distributed through our multi-source platform that is above our initial expectations, expected momentum in our Payments business, and a more profitable customer mix. Turning to Slide 4, you’ll see an overview of the topics Mike and I will cover today. First, I will discuss the agreement to sell Hospitality Solutions, followed by an overview of the quarter. Then, I’ll provide a brief update on the progress we’ve made on our growth strategies. Next, Mike will walk you through the expected financial impacts of the sale of Hospitality Solutions, our first quarter financial results, and our outlook for the second quarter and full year 2025. Turning to Slide 6. We recently announced an agreement to sell the Hospitality Solutions business. This sale positions Sabre to focus on our core airline IT and travel marketplace platforms, while giving us confidence that our CRS hotelier customers will be positioned for ongoing success. The transaction value of $1.1 billion is testament to the incredible job the Hospitality Solutions team did in transforming this business over the last few years, with significant improvements in technology and product capabilities, revenue and adjusted EBITDA, from 2022 to today. Net of fees and taxes, we expect to use the approximate $960 million of proceeds primarily to pay down debt. This is an important step in Sabre’s ongoing transformation, which I will touch on in a moment. For clarity, Hospitality Solutions is distinct from the company’s fast-growing and large hotel B2B distribution business, which remains a key strategic focus for Sabre. Turning to Slide 7, our strategic priorities remain the same; first, generate free cash flow and delever the balance sheet; and second, continue investing to innovate and drive sustainable, long-term growth. The decision to sell Hospitality Solutions is an important milestone in advancing these goals. It enables us to strengthen our balance sheet by reducing leverage nearly a full turn and sharpen our focus on core growth areas, which we expect will unlock greater shareholder value. In line with this strategy, the sale is the latest in a series of strategic financial moves by the company, including Q4 2024 debt refinancing and the recent repayment of April 2025 debt maturities. These actions further strengthen our capital structure. Looking ahead, we believe our improving credit profile should better position us to proactively manage upcoming maturities, reduce interest expense, enhance free cash flow generation and support our growth initiatives. Turning to Slide 9 and our quarterly results. Revenue in the first quarter was roughly flat on a year-on-year basis and adjusted EBITDA was in line with our guidance. First quarter adjusted EBITDA margin improved 110 basis points year-on-year to 19.3%, building on our margin expansion in 2024. Turning to Slide 10. For Travel Solutions, first quarter 2025 air distribution bookings were down 3% year-on-year, below our assumption of flat to nominal growth. Of the 3 percentage points to 4 percentage points of air distribution bookings softness versus our prior assumption, roughly three-quarters was driven by lower group bookings in the APAC region and global travel weakness. The remainder was driven by a meaningful pullback in U.S. Government and Military travel. As discussed on our February earnings call, we expect to realize greater than $30 million incremental air distribution segments this year from business signed during 2024. And as expected, we generated strong bookings growth of 7% year-on-year in our hotel B2B distribution business. Moving to Slide 11, within our strategy, we have three core focus areas to drive innovation and growth; a modern technology stack, open marketplace and intelligent retailing solutions. Our modern technology stack is strengthened by our strategic partnership with Google, which enables us to quickly deploy AI-powered solutions for our industry-leading multi-source content and airline IT platforms. These next-generation solutions improve retail intelligence and optimize revenue for our customers and are built on top of Google’s full Vertex AI platform, of which Gemini GenAI is one component. To-date, we have deployed Gemini to improve productivity in three areas; engineering throughput, product quality and customer service efficiency. On to Slide 12, now I will walk through the progress achieved in the first quarter and the sustained commercial momentum we’re seeing across the business. Sabre continues to rapidly advance the transformation of our GDS platform into a modern, open marketplace. Our focus is on integrating content and capabilities from myriad sources into a unified platform that increases the efficiency and transparency of booking travel. The integration of new sources of content is important as it expands our total addressable market. We are accomplishing this transformation through four strategic priorities; multi-source content aggregation, distribution expansion, hotel B2B distribution, and the growth of our digital payments business. Our multi-source content aggregation platform continues to scale. We are rapidly establishing our position as a leading aggregator of fragmented content, spanning NDC, low-cost carriers and traditional EDIFACT into a consolidated view, offering a more seamless and comprehensive experience for travel buyers. Notably, we are leading the competitive set with 38 live NDC airline integrations, as well as industry-leading functionality following the recent implementations of Air France and KLM, British Airways, Iberia, LATAM and Saudia. Within our distribution expansion strategy, we are on track with the implementation ramp of the more than $30 million incremental air segments we discussed last quarter. We are making rapid progress and expect the implementations to meaningfully contribute to our air distribution bookings growth beginning in Q2 and accelerating significantly in Q3. Building off the notable agency wins in 2024, we are pleased with the recent addition of Gray Dawes, one of the industry’s largest independent travel management companies, which selected Sabre as its sole global distribution platform partner. In hotel B2B distribution, we are building on our leadership position. Continued investments in product innovation and commercial partnerships drove an 11% increase in Q1 gross booking value transacted through the platform. This business generates over $20 billion in annual hotel gross booking value, is a high yield and low cost channel for hoteliers, and has very strong growth prospects. Our digital payments team continues to win new business and drove a 30% year-on-year increase in gross spending to $4 billion in the first quarter. We have a strong pipeline and customer adoptions are growing. The continued momentum in this business reinforces our confidence in the strategy, as we streamline business with virtual payment solutions. Airline IT is a key area of focus for us. SabreMosaic, our next-generation offer and order-retailing platform, is a modular set of PSS-agnostic solutions that enable airlines to adopt modern retailing strategies easily. We are seeing strong traction with the AI-powered Offer Management suite of IQ products, a cornerstone of SabreMosaic. These products are well-timed to help airlines optimize revenue as they navigate today’s shifting demand. We have recently signed Aeromexico, Avelo, and GOL to this product suite, following four foundational customer wins for the SabreMosaic platform in 2024. Alaska Airlines will be transitioning Hawaiian Airlines to the Sabre PSS as part of their broader integration efforts. The migration is expected to be completed by mid-year 2026. In addition, the combined airline will be utilizing dynamic pricing, one of the offer components of our SabreMosaic platform. Overall, we are on track with our strategy and confident in our long-term growth potential. On to Slide 13, looking ahead, despite a challenging macro environment, we expect Sabre distribution bookings growth of low-single digits for Q2, with accelerating momentum and double-digit air and hotel B2B distribution bookings growth expected for the full year. In summary, we had a solid start to the year and we expect to have a strong 2025. The team is executing at a high level and we are delivering on the objectives we set out for ourselves. The recent agreement to sell Hospitality Solutions is an important step in the company’s transformation as it accelerates our ability to further delever the business and to continue to drive towards long-term sustainable growth. Thank you and now over to Mike.

Thanks Kurt, and good morning everyone. Please turn to Slide 15. I’m pleased to report that Sabre delivered solid financial results in the first quarter and our resilient business continues to perform well. Revenue of $777 million was roughly flat year-on-year. Adjusted EBITDA of $150 million increased 5% year-on-year and was also roughly in line with our guidance. Adjusted EBITDA margin of 19.3% increased 110 basis points year-on-year, as lower technology costs and effective cost management offset lower than expected revenue. We ended the quarter with $672 million of cash on the balance sheet. Free cash flow reflects typical seasonality. Importantly, our full year free cash flow objective remains on track. Before I flip to the next slide, with the agreement to sell Hospitality Solutions, we believe presenting our key financial metrics on a pro forma basis provides the most representative view of Sabre’s anticipated future results when incorporating the impact of the sale. On today’s call when referring to pro forma expectations, the financial metrics are calculated assuming the transaction and associated debt pay down occurred on January 1, 2025. For comparability, we have also provided on our website normalized financial metrics for the first quarter of 2024 through the first quarter of 2025. Moving to Slide 16, the first quarter results came in generally as expected. Revenue in the quarter was nearly flat compared to our expectation of flat-to-low single-digit growth. Within revenue, IT Solutions was lower by $8 million year-on-year primarily due to the impact of prior demigrations, which we have discussed on prior earnings calls. Consistent with our view on the February earnings call, we expect IT Solutions revenue to resume year-on-year growth during the second half of 2025. Gross margin, as expected, decreased 190 basis points in the first quarter versus the prior year. Roughly half of this decline is due to upfront costs associated with new agency business where expenses are incurred ahead of expected accelerating air distribution volumes. The remaining half is due to lower revenue in IT Solutions from carriers that demigrated prior to 2024. Notably, we expect this gross margin pressure to be transitory and anticipate gross margins for the remaining quarters of the year to be roughly in line with 2024 on a normalized basis. As mentioned, adjusted EBITDA of $150 million was in line with our outlook. Turning to Slide 18 and details about the agreement to sell our Hospitality Solutions business. We expect this transaction will accelerate our deleveraging process as we plan to use the majority of the $960 million in net proceeds to pay down debt. Following the April repayment of approximately $200 million of maturing debt, we expect these actions will result in bringing 2025 pro forma leverage down nearly a full turn, ending the year at approximately 5.4 times versus approximately 6.3 times pre-transaction. This, along with the successful refinancing we completed in the fourth quarter of 2024, is a significant step in our proactive approach to strengthening our balance sheet, as we work towards our long-term net leverage target of 2.5 times to 3.5 times. On to Slide 19, looking at the expected net proceeds, we plan to use the majority of the $960 million to pay down debt. Specifically, as we have shown on the slide here, we plan to use approximately $825 million to pay down four of the Term Loan B senior secured credit facilities as required within our credit agreement. We plan to retain the balance of proceeds, approximately $135 million, on our balance sheet, for reinvesting in our business as permitted within our credit agreements. On the right side of the slide, we have provided a reconciliation of net leverage ratios both pre- and post-transaction. This shows how the sale and subsequent debt pay down drives nearly a full turn of deleveraging as I mentioned earlier. This is a significant step in our ongoing efforts to strengthen our balance sheet as we work to improve our credit profile. Turning to Slide 20, we have updated our 2025 guidance to remove the revenue and adjusted EBITDA associated with the Hospitality Solutions business, which will be treated as discontinued operations for the full year and all prior periods beginning in the second quarter. For full year 2025, excluding the effects from the sale of Hospitality Solutions, our expectations remain the same. We continue to expect high single-digit year-on-year revenue growth, driven by expected double-digit air and hotel B2B distribution bookings growth. For the second quarter, we expect year-on-year revenue growth in the low-single digits, driven by our expectation of low-single-digit air distribution bookings growth. We expect pro forma adjusted EBITDA of approximately $140 million. We expect to generate positive free cash flow in the second quarter on a pro forma basis. As Kurt mentioned, we remain confident in our ability to achieve double-digit distribution bookings growth for the year, despite lower-than-expected Q1 air distribution bookings. To provide more context, we expect the Q1 to Q2 sequential change in air distribution bookings growth rate to be driven by stronger APAC group booking trends in Q2, which we are currently experiencing, as well as ongoing agency implementations from contracts signed in 2024. In the second half of 2025, we anticipate further acceleration resulting in growth of at least 20% year-on-year in air distribution bookings. As mentioned on our February earnings call, we expect the majority of growth in air distribution bookings will come from a number of signed, but not yet fully implemented agency agreements. More specifically, the three larger agency contracts highlighted last year are expected to drive nearly half of our anticipated year-on-year growth in Q3 and Q4. We expect the other half will be driven by mid-size agency implementations signed in 2024, in addition to growth from LCC bookings within our multi-source content platform. Based on that outlook, we expect full year 2025 pro forma adjusted EBITDA of greater than $630 million, which reflects the full impact of the removal of Hospitality Solutions adjusted EBITDA from the full year. On to Slide 21, on a pro forma basis, the only change to our financial outlook is the removal of the Hospitality Solutions contribution to adjusted EBITDA of approximately $15 million for the second quarter and approximately $70 million for the full year. We expect to generate pro forma free cash flow of greater than $200 million. The pro forma removal of Hospitality Solutions adjusted EBITDA of approximately $70 million is expected to be offset by $5 million of lower CapEx and the implied pro forma cash interest savings of approximately $65 million. Please turn to Slide 22. In closing, our strategic focus remains unchanged, to generate free cash flow and delever the balance sheet and drive sustainable growth and innovation. We believe the progress we have made so far this year positions us well to deliver shareholder value in 2025 and beyond. And with that, Operator, please open the line for questions.

Thank you. Our first question comes from Jed Kelly of Oppenheimer & Company. Your line is now open.

Hey. Great. Thanks for taking my questions. Just two, if I may, I might have missed some of your opening comments. Can you just expound more on sort of what you’re seeing in the macro? And I guess my question is more related to, I guess, last summer, some of the travel companies were calling out some softness that didn’t materialize. And I guess I’m wondering if this time is different. And then can you just talk about post the Hospitality Solutions and congrats on getting that done? What that allows you to do to potentially accelerate some of the refinance conversation? Thanks.

Good morning, Jed. This is Kurt. Thank you for your questions. I'll address the first part and then pass it to Mike. Regarding the macro environment, Sabre is certainly affected by the current situation. For the full year, we now anticipate a decline of 1% to 2% in the GDS market, compared to our previous expectation of flat growth. This represents a significant downward adjustment from our outlook a quarter ago. It's important to note that our revenue model primarily depends on transaction volume, rather than the pricing conditions faced by airlines and hotels. Therefore, even though there might be downward pressure on prices, the fundamental need for bookings remains strong. We believe this will minimize the impact on our business compared to many of our supplier customers. Additionally, I want to emphasize that both our hotel and air distribution segments are expected to grow at double-digit rates year-on-year, despite the softer market conditions. So, importantly, despite the macro challenges, we are maintaining our full-year guidance. We are also providing a normalized pro forma result based on the HS sale.

And with regard to Hospitality Solutions and the sale and what that means from a capital structure standpoint, first, we’re very excited about the disposition, and while it’s a great business, definitely we feel is a significant credit-enhancing event for Sabre. As we highlighted on the call, it improves our net debt-to-EBITDA by approximately 1 turn. It also reduces our interest expense by $65 million. But associated with that, by improving our credit profile, we believe that ultimately is going to allow for more efficient financings in the future. And so what you should look for, as you’ve seen in the past is, as the credit markets allow and our results get realized in the market, we will continue to be opportunistic to refinance our maturities in an efficient way.

Great. And then just one quick follow-up. If you see fuel costs kind of stay where they are, we really haven’t seen since COVID the airlines sort of lean into price to drive volume. Is there potential where you could see sort of the airlines take advantage of lower fuel costs to drive more volume and then therefore lean into more third-party channels? Thanks.

Yeah. Jed, the way I think about it from us, from our perspective at Sabre is, ultimately passenger traffic aligns closely over time with capacity. And so we have pretty good visibility right now with capacity because the airlines have generally indicated what their capacity trends are going to be out there. Generally, what you see is once the capacity is out there, the airlines ultimately price one way or another to fill that capacity. So, certainly a fuel price is lower. Historically, that sometimes has resulted in lower fares to fill the planes. But from our standpoint, ultimately, airlines won’t have lower load factors. Ultimately, they’ll give a little on yield in order to fill the planes, and that will result in bookings, and that’s what we based our forecast on.

Yeah. And the other thing I’d add, importantly, not on fuel per se, but on capacity, is while capacity is going to grow slower than everybody anticipated three months or four months ago, capacity is still growing this year based on what’s projected by almost every key carrier.

Hi, everyone. Thanks for taking my question. So I guess my first question is on the free cash flow guide. How quickly can you use the cash proceeds of the sale to pay down debt to realize the interest cost savings? And I guess what was the free cash flow conversion of the Hospitality segment? I guess I’m just trying to sort of get a steer on where actual free cash flow will land this year rather than pro forma? Thanks.

Yeah. In terms of how quickly you pay down debt, so what will happen is it’ll ultimately, shortly after the close when we receive the proceeds, in accordance with our credit agreements, we basically pay down the notes as we’ve indicated in our earnings slides within five days of receiving those proceeds. So it’s very, very quick. And what I would say is if you do the math, James, with regards to either free cash flow as it would be reported or pro forma, you get to roughly the same number and we would have roughly the same expectation of greater than $200 million free cash flow this year.

Yeah. Very clear. Thank you. And then I guess just the second one is on sort of some of the SabreMosaic wins. It looks like you’ve had some good conversion of some of your larger airlines. And I was just wondering how far reaching those agreements are. Are any of them sort of full stack OOSD agreements or just sort of portions of offer management as per sort of the Alaskan Airline deal? And then where are you with sort of some of your other airlines that you have contracts with like sort of American or JetBlue? Cheers.

Yeah. James, thank you. With respect to SabreMosaic, we’re winning and we’re winning at a very good pace. A few of those are full stack. The majority are mainly offer components and those airlines have not gone down the order path yet. The pipeline, both with existing clientele and non-Sabre customers, is very rich. So there’s a number of non-Sabre conversations about full stack conversion or elements of the stack where we’re in there in the final bake-off where we would never have been there in the past. So we’re very optimistic about the medium- to long-term growth prospects this provides for the AirlineIT business.

Hi. Thanks for taking my questions. Couple if I may. I guess, first of all, can you give us some more color on Q1? I think there are a lot of maybe moving parts in Q1 thinking about government cutting travel and then maybe some corridors more impacted by the current macro, think the Canada-U.S. corridor. And can you give us some color on the mix by region or corporate versus leisure? And obviously, you gave us some color already on the Q2 progression on APAC group bookings, but the impact you saw in Q1, do you see that still happening in Q2 as well? Thank you.

Victor, thank you. Good morning. So the softness we saw in Q1 was a broad softness globally. It spanned corporate, leisure, pretty much all channels. The most acute softness was in two specific areas. Inbound travel to the United States from certain European markets and from Canada. And then secondly, as we mentioned, group bookings out of North Asia. The last component is U.S. Military and Government was down in the range of 30% on a unit basis in Q1 versus last year. If you look at that project into Q2, what I can tell you is, we’re seeing recent improvements in general market trends. And remember, we’re looking at things largely on a unit basis, not on a yield basis.

Got it. And then if I think about the full year guide where it’s been reaffirmed on the double-digit bookings growth and the high single-digit revenue growth, is it a function of maybe previously you have a bit more headroom to when you provide that guide and you’re still that’s why confident on it given Q1 was a bit soft or is it some incremental wins that you have between when you previously died to today?

Yeah. I mean, look, at the end of the day, I would just say, our team’s performing amazingly well and kudos to our Sabre team members. What I would say is, we’re seeing outperformance in certain elements of our business. We’re seeing a greater degree of content come on our platform than we originally expected. Our payments business, which outperformed this quarter, and we see that continuing to outperform, is certainly additive both from revenue and even now to a little bit more from an EBITDA standpoint. And then we’re also seeing a more profitable customer mix than we originally contemplated. So, while there’s definitely some macro weakness there and maybe within distribution bookings, our distribution bookings may be still double-digit, but maybe slightly lower double-digit than we originally anticipated. We see that from a revenue standpoint being offset by the three things that I just mentioned.

Thank you for taking our questions. This is Jack on behalf of Deepak. I have two questions for you. First, can you clarify how you plan to allocate the remaining proceeds from the Hospitality sale, given that most will be used to pay down debt? I noticed you mentioned in your presentation about $135 million earmarked for investment in other areas of the business. Secondly, could you provide an update on the trend of air bookings and your industry share in the first quarter? I remember that last quarter you suggested you might not disclose this, but any qualitative insights would be appreciated. Thank you.

Yeah. Thank you, Jack. I’ll answer them in reverse order. On the share number, as we indicated last quarter, you have EDIFACT, you have NDC, and now we have long-tail LCC growth as well. And so reporting market share on what is one subcomponent we don’t think makes sense. But in a market where we see the GDS EDIFACT market being down a projected 1% to 2% for the full year and where we’re going to be growing at double digits with air distribution for the full year, I think it’s fair to infer from there that we are growing market share very considerably through 2025. With respect to the remaining proceeds after the pay down debt from the sale of HS, those will be applied mainly to our strategic investment areas, which are the strategic growth initiatives that we are beginning to see some real traction with, and then just continued modernization of our technology.

For clarity, we expect our CapEx expenditures this year to be approximately $80 million.

Hi. Good morning. Two for me, please. First of all, the new wins with agencies you’ll be implementing over the course of the year, can you please describe how the gross margin of that volume differs from the gross margin of existing booking volume, if at all? Is there any nuance to call out here? Second question is on Coforge. You’ve signed a partnership since we last spoke. Presently, as I’ve seen talks about that as being worth $1.56 billion over 13 years, which averages out to $120 million per year over the life of that contract. How does the timing look? Is it approaching other costs? Will you be getting an exchange? How else should we think about that agreement in the context of your earnings, please?

Yeah. With regards to gross margin, what I would say is if you look at the new business, we articulated this on the February earnings call. With regards to the new air distribution bookings that we’re anticipating getting, there’s a couple of elements on that. One, we did indicate that we would expect average booking fee to be slightly lower than where we were about a year ago and margin to be slightly lower. I’d say it’s very slightly lower. That’s driven by a few reasons. One is, as we articulated, two of the agencies we won were some of the largest North American agencies. And so there is a geographical mix component there where U.S. domestic air bookings have a slightly lower average booking fee. Then after that, it also incorporates additional NDC volumes and LCC volumes. So, there is some, I would say, very slightly lower margins. But, overall, when you look at our margins in aggregate for the remaining quarters of the year for Q2, Q3, and Q4, I would expect gross margin to be roughly in line for this year where it was last year.

With respect to Coforge, just a reminder, this is a 13-year deal. It is focused on helping us accelerate product delivery and also launching additional innovative AI-embedded solutions. This is all incorporated within our ongoing technology costs and our investments in our growth strategies. Commercially, the new agreement with Coforge has both a fixed-fee component and a gain-share component that is subject to certain commercial outcomes. We’ve not provided additional commercial details beyond that. Thank you, everybody. Despite a challenging market backdrop, we’re pleased with the execution and the traction that we’re gaining in the business. We’re confident in our ability to deliver against the expectations and the guide that we have provided today, and we look forward to talking again next quarter. Thank you.

Thank you for your participation in today’s conference. This concludes the program. You may now disconnect.