Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score capitalizes on existing price trends and earnings outlook [5] - VGM Score combines all three styles to provide a comprehensive evaluation of stocks [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to aid in portfolio building [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 top-rated stocks available, making the selection process potentially overwhelming for investors [9] Investment Strategy Recommendations - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have Style Scores of A or B to maximize upside potential [10] - The direction of earnings estimate revisions is crucial when selecting stocks to invest in [11] Company Spotlight: Norwegian Cruise Line - Norwegian Cruise Line Holdings Ltd. is a leading cruise line operator with a Zacks Rank of 3 (Hold) and a VGM Score of A [12] - The company is projected to experience year-over-year earnings growth of 12.1% for the current fiscal year, with a Growth Style Score of B [13] - Recent upward revisions in earnings estimates and a strong average earnings surprise of +29.1% make NCLH a noteworthy consideration for growth investors [13]

Departing February 26, 2027, the 1,200-guest ship will embark on a once-in-a-lifetime 129-day sojourn from iconic Sydney, Australia, traversing some of the world's most captivating coastlines, cultural marvels and hidden gems. Over the course of four and a half adventure-filled months, luxury travelers can explore some of the world's most fascinating destinations, inviting them to discover renowned cultural and natural wonders across the globe. Guests will begin their journey along the magnificent coastline ...

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q2 2025 financials show revenue growth to $2.5 billion, but net income sharply declined due to non-operating expenses, despite asset expansion [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue increased to $2.52 billion, but net income significantly decreased to $30.0 million due to higher non-operating expenses, leading to lower EPS Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,517,497 | $2,372,492 | $4,645,050 | $4,563,707 | | **Operating Income** | $423,836 | $341,561 | $624,778 | $559,955 | | **Net Income (Loss)** | $29,992 | $163,436 | $(10,303) | $180,789 | | **Diluted EPS** | $0.07 | $0.35 | $(0.02) | $0.41 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to $21.6 billion and liabilities to $20.0 billion, primarily due to increased property and long-term debt Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $184,015 | $190,765 | | **Total assets** | $21,595,817 | $19,969,811 | | **Advance ticket sales** | $3,833,775 | $3,105,964 | | **Long-term debt** | $12,633,183 | $11,776,721 | | **Total liabilities** | $20,026,247 | $18,544,372 | | **Total shareholders' equity** | $1,569,570 | $1,425,439 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow was $1.39 billion, slightly down, while investing cash outflow surged to $1.87 billion, and financing cash flow turned positive Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,394,072 | $1,478,064 | | **Net cash used in investing activities** | $(1,868,062) | $(620,872) | | **Net cash provided by (used in) financing activities** | $467,240 | $(665,509) | | **Net (decrease) increase in cash** | $(6,750) | $191,683 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail operations, $2.4 billion liquidity, and H1 2025 financing activities, including €18.4 billion in future ship commitments - As of June 30, 2025, the company operated **33 ships** and had orders for **13 additional ships** for delivery through 2036[25](index=25&type=chunk)[26](index=26&type=chunk) - Total liquidity was approximately **$2.4 billion** as of June 30, 2025, comprising **$184.0 million** in cash, **$2.0 billion** available under the Revolving Loan Facility, and a **€200 million** newbuild payment commitment[27](index=27&type=chunk) - In H1 2025, the company undertook significant debt restructuring, including issuing **$1.8 billion** in **6.750%** senior unsecured notes due 2032, exchanging **$353.9 million** of 2025 Exchangeable Notes for new 2030 notes, and increasing its revolving credit facility to **$2.5 billion**[50](index=50&type=chunk)[55](index=55&type=chunk)[60](index=60&type=chunk) - The combined contract price for **13 ships** on order is approximately **€18.4 billion ($21.7 billion)**. Total minimum payments for ship construction contracts are scheduled at **$21.4 billion** through 2036[89](index=89&type=chunk)[163](index=163&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports strong bookings, Q2 2025 revenue up 6.1% to $2.5 billion, but net income sharply declined, while Adjusted EBITDA improved to $694.0 million - The company experienced strong bookings in the quarter, with its forward **12-month** booked position remaining within its optimal range[121](index=121&type=chunk) - Announced a second phase of expansion for its private island, Great Stirrup Cay, including a new waterpark expected to open in summer **2026**[122](index=122&type=chunk) Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2.5 billion | $2.4 billion | +6.1% | | **Net Income** | $30.0 million | $163.4 million | -81.6% | | **Adjusted EBITDA** | $694.0 million | $587.7 million | +18.1% | | **Diluted EPS** | $0.07 | $0.35 | -80.0% | - As of June 30, 2025, liquidity was approximately **$2.4 billion**, and management believes it is sufficient to satisfy obligations for at least the next **12 months**[146](index=146&type=chunk)[151](index=151&type=chunk) [Results of Operations](index=34&type=section&id=MD%26A%20Results%20of%20Operations) Q2 2025 revenue rose to $2.5 billion due to increased capacity, but higher interest expense and foreign currency losses impacted profitability - Q2 2025 revenue increased primarily due to a rise in Capacity Days following the delivery of Norwegian Aqua in March **2025**[137](index=137&type=chunk) - Q2 2025 interest expense of **$236.8 million** included **$68.4 million** in losses from debt extinguishment and modification[139](index=139&type=chunk) - Other expense of **$156.4 million** in Q2 2025 was driven by net losses from foreign currency remeasurements of euro-denominated debt, a significant swing from a **$1.9 million** gain in Q2 2024[140](index=140&type=chunk) Key Operating Statistics | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Capacity Days** | 6,052,273 | 5,736,385 | | **Occupancy Percentage** | 103.9% | 105.9% | | **Net Yield** | $304.34 | $296.31 | | **Adjusted Net Cruise Cost Excl. Fuel per Capacity Day** | $163.67 | $163.36 | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained $2.4 billion liquidity, actively managing its capital structure through new debt issuances and facility increases, with advance ticket sales at $4.0 billion - In January 2025, NCLC issued **$1.8 billion** in senior unsecured notes due 2032 and used proceeds to redeem notes due in 2026 and 2028. The Revolving Loan Facility was increased to **$1.7 billion** and extended to **2030**[147](index=147&type=chunk) - In April 2025, **$353.9 million** of 2025 Exchangeable Notes were exchanged for new 2030 Exchangeable Notes and a **$64.0 million** cash payment[148](index=148&type=chunk) - In June 2025, the Revolving Loan Facility was further upsized from **$1.7 billion** to approximately **$2.5 billion**[149](index=149&type=chunk) - As of June 30, 2025, advance ticket sales stood at **$4.0 billion**[156](index=156&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates, foreign currency, and fuel prices, with 94% fixed-rate debt and significant unhedged euro exposure - **Interest Rate Risk:** **94%** of debt is fixed-rate. A **one percentage point** increase in annual variable rates would raise annual interest expense by approximately **$8.6 million**[174](index=174&type=chunk) - **Foreign Currency Risk:** The company has unhedged exposure on **€15.6 billion** in ship construction contracts. A **10%** change in the EUR/USD exchange rate would change the U.S. dollar value of these payments by **$1.8 billion**[175](index=175&type=chunk)[177](index=177&type=chunk) - **Fuel Price Risk:** The company has hedged **65%** of remaining 2025, **48%** of 2026, and **22%** of 2027 projected fuel purchases. A **10%** increase in average fuel price would increase anticipated 2025 fuel expense by **$34.7 million**[179](index=179&type=chunk)[180](index=180&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, **2025**[181](index=181&type=chunk) - No changes occurred in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[182](index=182&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is cooperating with ongoing investigations and successfully appealed a $112.9 million judgment in the Helms-Burton Act lawsuit - The company is cooperating with ongoing investigations by the Florida Attorney General and other agencies related to marketing during the COVID-19 pandemic[90](index=90&type=chunk) - In the Helms-Burton Act case (Havana Docks Matter), the Eleventh Circuit Court of Appeals reversed a lower court's judgment against the company and dismissed the claim in October **2024**[91](index=91&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, though macroeconomic conditions may heighten previously disclosed risks - There have been no material changes in risk factors from those disclosed in the company's Annual Report on Form 10-K[188](index=188&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, **2025**[189](index=189&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including key agreements related to recent financing activities and amendments to incentive plans - Key exhibits filed include the indenture for the new **0.875%** Exchangeable Senior Notes due 2030 and the Second Amendment to the Seventh Amended and Restated Credit Agreement[191](index=191&type=chunk) ```

Core Insights - Norwegian Cruise Line Holdings Ltd. (NCLH) reported Q2 results on July 31, showing revenues and EPS slightly below expectations, yet indicating surprisingly good performance signals [1] Financial Performance - The company reported revenues that were marginally below expectations, suggesting potential areas for improvement in future quarters [1] - Despite the slight miss in revenue and EPS, the quarter revealed positive indicators of Norwegian's operational performance [1] Investment Perspective - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through DCF model valuation [1] - This approach allows for a comprehensive assessment of a stock's prospects, considering various investment styles beyond traditional value, dividend, or growth investing [1]

Business Performance - Norwegian Cruise Line Holdings experienced a stock surge following earnings, indicating positive market reaction [1][2] - The company faced a challenging April due to tariff announcements and macro uncertainties [2][3] - Booking pace and consumer demand have been strong, with record months in May, June, and July [3] Market Trends and Consumer Behavior - There's a shift in consumer demand towards shorter and closer-to-home itineraries [6] - The Caribbean is gaining popularity as a destination compared to Europe [5] - Cruising is considered a good value, approximately 30% less expensive than a typical hotel stay [9] Growth and Investment - The cruise industry's growth is limited to 5% per year due to shipyard capacity [12] - Norwegian Cruise Line Holdings has 13 ships on order over the next 10-11 years, representing about 4% annual growth [11][12] - Investments are being made in destinations like Great Stirrup Cay, including water parks and adult-only beach clubs, to enhance the customer experience [5][6][7]

Core Insights - Norwegian Cruise Line Holdings Ltd. (NCLH) reported second-quarter 2025 results with earnings and revenues missing the Zacks Consensus Estimate, although both metrics increased year-over-year [1][3][9] Financial Performance - Adjusted earnings per share (EPS) for Q2 were 51 cents, slightly below the consensus estimate of 52 cents, compared to 39 cents in the prior-year quarter [3] - Quarterly revenues reached $2.52 billion, missing the consensus mark of $2.55 billion, but reflecting a 6.1% year-over-year increase [3] - Passenger ticket revenues were $1.7 billion, up from $1.6 billion in the prior-year quarter, while onboard and other revenues increased to $808.5 million from $770.4 million [4] Expenses and Operating Results - Total cruise operating expenses rose 0.1% year-over-year to $1.45 billion, below the anticipated $1.51 billion [5] - Gross cruise costs per Capacity Day were $305.65, slightly higher than $305.38 reported in the prior-year period [5] - Net interest expenses were $236.8 million, an increase from $178.5 million in the year-ago quarter [6] Balance Sheet - As of June 30, 2025, cash and cash equivalents stood at $184 million, down from $190.8 million at the end of 2024, while long-term debt increased to $12.6 billion from $11.8 billion [7] Booking Trends - The company reported strong booking trends for third-quarter long-haul and extended European itineraries, with booking volumes surpassing historical levels [2][8] - Second-quarter 2025 occupancy was 103.9%, consistent with guidance, and advance ticket sales reached $4 billion compared to $3.9 billion in the prior-year quarter [8] Guidance - For Q3 2025, NCLH anticipates occupancy of approximately 105.5% and adjusted EPS of nearly $1.14, with expected adjusted EBITDA of about $1 billion [10] - For the full year 2025, the company expects occupancy of approximately 103%, with adjusted EPS projected at $2.05 and adjusted EBITDA expected to be nearly $2.72 billion [11]

Core Insights - Norwegian Cruise Line (NCLH) reported revenue of $2.52 billion for the quarter ended June 2025, reflecting a 6.1% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $0.51, up from $0.40 in the same quarter last year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $2.56 billion, resulting in a surprise of -1.55% [1] - EPS also missed the consensus estimate of $0.52, with a surprise of -1.92% [1] Performance Metrics - Passenger Cruise Days totaled 6,288.80 KDays, exceeding the average estimate of 6,253.23 KDays [4] - Capacity Days were reported at 6,052.27 KDays, slightly below the average estimate of 6,059.58 KDays [4] - Net Yield was $304.34, marginally above the average estimate of $304.22 [4] - Occupancy percentage reached 103.9%, surpassing the estimated 103.2% [4] - Fuel price per metric ton was $659.00, lower than the estimated $676.24 [4] - Net Cruise Cost per Capacity Day was $194.04, better than the average estimate of $197.17 [4] - Total Passengers carried amounted to 738,635, exceeding the average estimate of 729,271 [4] - Revenue from onboard and other sources was $808.51 million, below the average estimate of $838.93 million, but showed a year-over-year increase of 4.9% [4] - Revenue from passenger tickets was $1.71 billion, slightly below the average estimate of $1.72 billion, with a year-over-year increase of 6.7% [4] Stock Performance - Shares of Norwegian Cruise Line have returned +9.5% over the past month, outperforming the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported record Q2 revenue, with net yield growing by 3.1%, driven by strong closing demand and onboard spending [9][28] - Adjusted EBITDA reached $694 million, exceeding guidance by $24 million, with a trailing twelve-month margin of 36.3%, reflecting a year-over-year improvement of over 300 basis points [9][35] - Adjusted EPS for the quarter was $0.51, in line with guidance despite an $0.08 headwind from foreign exchange losses [9][30] Business Line Data and Key Metrics Changes - The successful delivery of Oceana Cruises' Allura, the eighth vessel for the brand, and the confirmation of two additional Sonata class ships, bringing the total order book to four ships [8][16] - The company is enhancing its private island experience with the announcement of the Great Tides Waterpark, set to open in 2026, which is expected to drive incremental onboard revenue [10][12] Market Data and Key Metrics Changes - The company experienced record bookings over the last three months, indicating strong customer demand [7][31] - The advanced ticket sales (ATS) balance reached an all-time high of $4 billion, reflecting robust demand [31] Company Strategy and Development Direction - The company is focused on its "Charting the Course" strategy, balancing return on investment with return on experience to deliver exceptional vacations while driving strong financial results [7][8] - The strategy includes a measured expansion with 13 ships on order across three brands, ensuring investment in the unique strengths of each brand [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, with expectations for net yield growth in the low to mid-single-digit range [22][24] - The company anticipates a positive demand driver from the Great Tides Waterpark, with expected benefits starting in 2026 [22][24] Other Important Information - The company has made significant progress on cost savings, expecting to deliver over $200 million in savings by year-end 2025 [23][35] - The company was recognized by Forbes as one of America's best large employers for 2025, highlighting the dedication of its team [27] Q&A Session Summary Question: Can you discuss the increase in demand across all three brands and changes for 2026? - Management noted a shift to shorter itineraries in Europe and a modest decrease in deployment, which reflects consumer demand [47][48] - The company is in an optimal booking position for 2026, with strong demand observed in Q3 [49][50] Question: What are the key drivers for 2026 yield and cost expectations? - Management expects tailwinds from Q3 2025 and a focus on fun and sun itineraries to improve load factors over time [53][54] Question: How does the company view the potential ROI yield benefit from Great Stirrup Cay? - Management emphasized that while Caribbean itineraries may not yield higher ticket prices, they optimize profitability and guest satisfaction [60][62] Question: Can you elaborate on the recent bookings momentum and promotional strategies? - The improvement in bookings was attributed to a better macroeconomic environment and a shift towards brand-oriented marketing [97][98]

Financial Data and Key Metrics Changes - The company reported record Q2 revenue, with net yield growing by 3.1% due to strong closing demand and onboard spending, exceeding expectations [8][29] - Adjusted EBITDA for the quarter was $694 million, which was $24 million above guidance, resulting in a trailing twelve-month margin of 36.3%, an improvement of over 300 basis points year-over-year [8][29] - Adjusted EPS was in line with guidance at $0.51, despite an $0.08 headwind from foreign exchange losses [29] Business Line Data and Key Metrics Changes - The successful delivery of Oceana Cruises' Allura, the brand's eighth vessel, and the confirmation of two additional Sonata class ships for Oceana Cruises were highlighted as significant milestones [7][15] - The company is focusing on enhancing the guest experience at Great Stirrup Cay with the introduction of the Great Tides Waterpark, expected to open in 2026, which aims to attract approximately 1 million guests [10][12] Market Data and Key Metrics Changes - The company experienced record bookings over the last three months, indicating strong customer demand [6][28] - The advanced ticket sales (ATS) balance reached an all-time high of $4 billion, reflecting robust demand [31] Company Strategy and Development Direction - The company is committed to its "Charting the Course" strategy, balancing return on investment with return on experience to deliver exceptional vacations while driving strong financial results [6][7] - The focus remains on long-term value creation through disciplined execution and strategic investments in new ships and enhanced guest experiences [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing strong customer demand and a favorable macroeconomic environment [6][28] - The company anticipates net yield growth in the low to mid-single-digit range for 2026, supported by the opening of the Great Tides Waterpark [21][40] Other Important Information - The company has made significant progress in cost management, expecting to deliver over $200 million in savings by year-end 2025 [22][34] - The company was recognized by Forbes as one of America's best large employers for 2025, reflecting the dedication of its team [27] Q&A Session Summary Question: Demand increase across brands and changes for 2026 - Management noted a shift to slightly shorter itineraries in Europe for 2026 and a modest decrease in deployment, which they believe better reflects consumer demand [46][47] Question: Yield and cost considerations for 2026 - Management expects tailwinds from the Q3 dip in 2025 and anticipates a return to historical load factors as they pivot to more Caribbean itineraries [52][53] Question: Early indications of demand for Great Stirrup Cay - Management reported a material increase in website visits and leads following the announcement of the Great Tides Waterpark, indicating positive early signs [83] Question: Booking momentum and tactical tools used - Management attributed the rebound in bookings to an improved macroeconomic environment and a shift towards more brand-oriented marketing efforts [91] Question: Competitive positioning of Great Stirrup Cay - Management emphasized their goal to create the greatest island experience in the Caribbean, focusing on amenities that appeal to their demographic [95][96]

Financial Performance - Norwegian Cruise Line (NCLH) reported quarterly earnings of $0.51 per share, missing the Zacks Consensus Estimate of $0.52 per share, but showing an increase from $0.40 per share a year ago [1] - The company posted revenues of $2.52 billion for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 1.55%, and an increase from $2.37 billion year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Norwegian Cruise Line shares have declined approximately 9.1% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $3.02 billion, and for the current fiscal year, it is $2.02 on revenues of $10.07 billion [7] - The outlook for the Leisure and Recreation Services industry, where Norwegian Cruise Line operates, is currently in the bottom 29% of over 250 Zacks industries, which may impact stock performance [8]