Lunch With D CEO: Rick Simonson

The executive vice president and CFO of Sabre Corp. talks business models and what's next for the company.

When Sabre’s Rick Simonson and I sat down recently for a lunch of salmon, greens, and Farro salad in a small conference room at the company’s headquarters in Southlake, Sabre was a few weeks away from naming a successor to president and CEO Tom Klein, who’d announced his retirement last June. Simonson, who works closely with the chief executive as Sabre’s executive vice president and chief financial officer, smiled and shook his head when I asked whether he might be next in line for the corner office.

He also seemed supremely confident about his ability to work with the new top executive, whoever it might be. “I’ve got a track record of working with many different CEOs. What I’m good at—and hopefully better at, than many—is helping drive the company’s strategies in partnership with the CEO. That’s what I do for a living,” Simonson said. “The financial model is the numerical articulation of your strategy. Your products, your technology, and so on, are physical manifestations of the financial model. If you keep everything in balance, that’s how you continue to win with customers—and how you don’t get surprised by new innovations.”

Tall (6-feet-3-inches) and whip-thin, the bespectacled, plainspoken Simonson, who’s 58, joined Sabre Corp., a global travel technology provider, in 2013. The company was founded by American Airlines in 1960, was spun off by American parent AMR Corp. in 2000, and was acquired by two private-equity firms, TPG Capital and Silver Lake Partners, seven years later.

Prior to 2013, Simonson had worked as the CFO and president of business operations at San Francisco-based Rearden Commerce, a business-travel technology company. Before that he’d been a leading global executive for telecommunications company Nokia, as well as a telecom/media/technology banker with Barclays Capital and Bank of America Securities.

He also enjoyed a longtime relationship with TPG advisor Gary Kusin, who sat on Sabre’s board of directors. “Why not” join the Southlake company? Simonson remembers Kusin asking him. “We think we’re ready to go public.”

Simonson answered the call, and Sabre went on to conduct a successful IPO, joining Nasdaq with a market value of $3.93 billion, in April of 2014. One of his first tasks, the CFO recalled, was convincing people that Sabre was “not a travel company. We understand the travel industry, but we’re not a travel company,” he said. “We’re a global technology provider to the travel and hospitality industries. People would say, ‘That’s just semantics, Rick.’ And I’d say, no, it’s important.

“You have to have a business model that’s scalable, that’s able to innovate. That’s how you create value and will be less susceptible to decline,” Simonson went on. “That’s what brought me to Sabre. I figured Sabre had a strong degree of scale in its offerings—travel solutions—and a well-demonstrated market leadership position. So I thought, how do you bring the lessons of growing technology companies to this model?”

Have you done that? I asked. Replied Simonson: “I think we’ve been pretty successful by any measure.” With its SaaS (software as a service) and other offerings to the aviation and hotel industries, Sabre processes more than $120 billion worth of travel spending each year. It played a key role in the 2015 integration of the reservations systems of American Airlines and US Airways. And, in the two years since the IPO, the company’s stock has delivered an 83 percent total return to shareholders. The company now has nearly 10,000 employees (including 3,000 in Southlake) in about 65 countries.

So, what’s on the horizon for 2017? “Our solutions business is growing fast, and we’ll be looking to accelerate that,” Simonson said, referring to the company’s business intelligence, mobile, and distribution solutions used by travel suppliers and buyers. “We’ll also continue our move to run Sabre as a global business, in word and deed.”

When lunch was over, I noticed the CFO hadn’t touched his dinner roll—even though he’d explained earlier that he’s a dedicated “ultra-trail-runner” and so, presumably, had earned the right to splurge. But he did grab a cookie to go.