PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Royal Caribbean Cruises Ltd.'s unaudited consolidated financial statements, including income, balance sheets, cash flows, and equity, with detailed notes [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The company reported significant year-over-year increases in Q2 and H1 2025 revenues and net income, driven by strong operational performance Quarterly Financial Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$4,538** | **$4,110** | **+10.4%** | | Passenger ticket revenues | $3,199 | $2,887 | +10.8% | | Onboard and other revenues | $1,339 | $1,223 | +9.5% | | **Operating Income** | **$1,329** | **$1,099** | **+20.9%** | | **Net Income** | **$1,214** | **$858** | **+41.5%** | | Diluted EPS | $4.41 | $3.11 | +41.8% | Six-Month Financial Performance (H1 2025 vs H1 2024) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$8,537** | **$7,838** | **+8.9%** | | **Operating Income** | **$2,275** | **$1,848** | **+23.1%** | | **Net Income** | **$1,950** | **$1,222** | **+59.6%** | | Diluted EPS | $7.10 | $4.46 | +59.2% | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$38.54 billion** as of June 30, 2025, while liabilities slightly decreased, leading to a rise in shareholders' equity Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$38,542** | **$37,070** | | Cash and cash equivalents | $735 | $388 | | Property and equipment, net | $32,351 | $31,831 | | **Total Liabilities** | **$29,182** | **$29,335** | | Customer deposits | $6,379 | $5,496 | | Long-term debt | $17,612 | $18,473 | | **Total Shareholders' Equity** | **$9,360** | **$7,735** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly, while cash used in investing activities decreased, and financing activities saw higher outflows Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,373 | $2,901 | | Net cash used in investing activities | $(1,146) | $(2,494) | | Net cash used in financing activities | $(1,887) | $(511) | | **Net increase (decrease) in cash** | **$347** | **$(106)** | | Cash and cash equivalents at end of period | $735 | $391 | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, debt structure, new ship commitments, and derivative instruments used to manage market risks - The company operates three global cruise brands (Royal Caribbean, Celebrity Cruises, Silversea Cruises) and holds a 50% interest in TUI Cruises. The combined fleet operated **67 ships** as of June 30, 2025[28](index=28&type=chunk) - Customer deposits, including future cruise credits (FCCs), totaled **$6.38 billion** as of June 30, 2025, with **$139 million** in unredeemed pandemic-era FCCs[14](index=14&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Total debt, net of unamortized costs, was **$19.01 billion** as of June 30, 2025, a decrease from year-end 2024, with the company in compliance with all debt covenants[62](index=62&type=chunk)[69](index=69&type=chunk) - New ship orders had an aggregate cost of approximately **$12.1 billion** as of June 30, 2025, with significant committed financing[84](index=84&type=chunk) - Approximately **59%** of projected 2025 fuel purchases were hedged using derivative instruments as of June 30, 2025, to manage market risks[106](index=106&type=chunk)[124](index=124&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q2 2025 financial performance, driven by revenue growth and improved operational metrics, alongside robust liquidity and future capital commitments [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q2 2025 total revenues increased to **$4.5 billion**, driven by capacity growth and higher yields, leading to significant net income growth for both the quarter and six-month period Key Performance Indicators (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | APCD (in thousands) | 12,942 | 12,233 | +5.8% | | Occupancy | 110.3% | 108.2% | +2.1 p.p. | | Net Yields (per APCD) | $283.56 | $269.38 | +5.3% | | Net Cruise Costs Ex. Fuel (per APCD) | $126.76 | $123.65 | +2.5% | - The increase in Q2 2025 passenger ticket revenue was driven by **$167 million** from capacity growth (new ships Utopia of the Seas and Silver Ray) and **$144 million** from yield growth due to higher load factors and pricing[175](index=175&type=chunk) - Interest expense for Q2 2025 decreased by **$70 million** year-over-year, primarily due to debt refinancing at lower rates and the absence of a **$17 million** loss on debt extinguishment recorded in Q2 2024[172](index=172&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of **$7.1 billion**, with **$3.4 billion** in net cash from operations, and anticipates **$5 billion** in 2025 capital expenditures, primarily for new ships - Total liquidity as of June 30, 2025 was **$7.1 billion**, including **$6.4 billion** available under revolving credit facilities[200](index=200&type=chunk) - Anticipated capital expenditures for the full year 2025 are approximately **$5 billion**, mainly for new ships and land-based destination projects[189](index=189&type=chunk) Material Cash Requirements (as of June 30, 2025, in millions) | Category | Remainder of 2025 | 2026 | 2027 | Total | | :--- | :--- | :--- | :--- | :--- | | Interest on debt | $489 | $868 | $733 | $4,759 | | Ship purchase obligations | $2,696 | $2,004 | $1,930 | $9,334 | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risk exposure, primarily related to interest rates, foreign currency, and fuel prices, have occurred since the 2024 Annual Report - There have been no material changes to the company's market risk exposure since the 2024 Annual Report[205](index=205&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective in providing reasonable assurance for timely and accurate reporting[206](index=206&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[207](index=207&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company provides an update on the Havana Docks Action lawsuit, where an appeals court reversed a judgment, leading to a U.S. Supreme Court petition and the release of a **$124 million** loss contingency - Regarding the Havana Docks Action, the 11th Circuit Court of Appeals reversed a judgment against the company; the plaintiff has now petitioned the U.S. Supreme Court[211](index=211&type=chunk) - Following the appeals court's decision, the company released approximately **$124 million** of a previously recorded loss contingency for the year ended December 31, 2024[211](index=211&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes from the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to risk factors have occurred since the company's most recent Annual Report on Form 10-K[213](index=213&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no common stock repurchases during the quarter ended June 30, 2025. As of that date, approximately $759 million remained available for future repurchases under the $1.0 billion program authorized in February 2025 - No common stock was repurchased during the second quarter of 2025[214](index=214&type=chunk) - As of June 30, 2025, **$759 million** remains available under the board-authorized stock repurchase program[215](index=215&type=chunk) [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the second quarter of 2025[216](index=216&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to credit agreements, CEO and CFO certifications, and the Interactive Data File (iXBRL) - Filed exhibits include amendments to credit facilities, CEO/CFO certifications (Rules 13a-14(a) and 13a-14(b)), and iXBRL data files[219](index=219&type=chunk)

Group 1: Financial Performance - Royal Caribbean raised its full-year earnings guidance for 2025 to between $15.41 and $15.55 per share, up from the previous range of $14.55 to $15.55 [1] - The company reported second-quarter adjusted earnings per share of $4.38 on revenue of $4.54 billion, exceeding Wall Street's expectations of $4.09 EPS and $4.55 billion in revenue [5] - The cruise line's income rose to $1.2 billion, or $4.41 per share, compared to $854 million, or $3.11 per share, a year earlier [5] Group 2: Market Trends and Consumer Behavior - CEO Jason Liberty noted that 75% of consumers plan to spend the same amount or more on leisure travel over the next 12 months, indicating a shift towards experience-driven travel [2] - The company observed growth in bookings, particularly from younger travelers, with millennials and younger generations now accounting for about half of total guests [3] - There is a trend of travelers booking closer to their departure date, with many willing to pay a premium for last-minute cabins [4] Group 3: Capacity and Demand - Royal Caribbean reported a 5.8% increase in capacity compared to the previous year, with 2.3 million guests taking a cruise during the second quarter [6] - Bookings for new ships launching this year, such as Star of the Seas and Celebrity Xcel, are performing well, reinforcing the effectiveness of the company's strategy [6][7]

Financial Performance & Guidance - Royal Caribbean shares are up more than 100% over the last 12 months [1] - Second quarter earnings came in higher than expected, and guidance was raised [1] - Initial investor reaction saw shares declining, potentially due to high expectations for continued outperformance [1] - Performance in the first and second quarters was driven by close-in demand, which was not fully incorporated into forward-looking guidance [3] Demand & Consumer Behavior - Travelers are booking cruises closer to the departure date than traditionally [4] - Approximately half of the guests are now millennials or younger, contributing to closer-in booking trends [5] - Strong demand for remaining cabins in the weeks leading up to sailing, with customers willing to pay considerably more [6] - Loyalty programs are important for incentivizing guests within the ecosystem [8] Competition & Brand - Royal Caribbean competes with all experiences, including land-based travel destinations and events [7][8] - Delivering exceptional experiences and building trust are crucial for guest retention [9] - The company aims to create a "lifetime of vacations" through its brands [11] International Travel & Market Flexibility - There has been some pullback from international guests traveling to the US, particularly from Canada and Western Europe [12][13] - Royal Caribbean operates global brands supported by yield management systems that seek the highest paying guests worldwide [14] - The company is flexible in adapting to customer origin and willingness to pay [14] - A rebound of international travelers coming to the US is beginning [15]

Core Viewpoint - Royal Caribbean Cruises Ltd. reported second-quarter earnings that exceeded EPS expectations but fell short on revenue, leading to a decline in stock price. The company's earnings guidance for the upcoming quarter and full year also disappointed investors, contributing to the stock's drop. Financial Performance - The company reported EPS of $4.38, beating expectations of $4.04 by 34 cents, and showing a 36% increase year-over-year [1] - Revenue for the quarter was $4.54 billion, slightly below the expected $4.55 billion [2] - For the upcoming quarter, Royal Caribbean forecasts EPS between $5.55 and $5.65, lower than analysts' estimates of $5.84 [2] - Full-year EPS guidance is between $15.41 and $15.55, which is below the consensus estimate of $15.46 [3] Stock Performance - RCL stock is currently trading at $337.37, down 4.16% [2] - The stock has increased over 44% in 2025, but the recent earnings report led to a pullback [3] - The consensus price target for RCL stock is $311.05, indicating a potential downside of 11.64% from the current price [6] Valuation Metrics - RCL stock has a P/E ratio of over 27x, significantly higher than its historical average and above the sector average for consumer discretionary stocks [4] - The stock's P/E ratio is about twice that of Norwegian Cruise Line Holdings Ltd. and Carnival Corp. [4] Debt Management - Royal Caribbean's debt-to-equity ratio is 2.21, which is lower than its peers, indicating a relatively strong position in terms of leverage [7] - The company repaid $1.4 billion in debt last quarter and plans to pay $3.3 billion for the full year, which may impact short-term earnings but is seen as a positive long-term strategy [8] Market Sentiment - Short interest in RCL stock has increased over 20% in the last month, indicating growing bearish sentiment among investors [5] - The stock has dipped below its 50-day simple moving average, suggesting a strong negative market reaction [9] - Despite bearish momentum, there are indications that the sell-off may be overdone, with potential support levels between $340 and $350 [10]

Core Viewpoint - Royal Caribbean Cruises Ltd. (RCL) reported mixed second-quarter 2025 results, with adjusted earnings exceeding estimates while revenues fell short, leading to a 5.4% decline in stock price during pre-market trading [1][8]. Financial Performance - Adjusted earnings per share (EPS) for Q2 2025 were $4.38, surpassing the Zacks Consensus Estimate of $4.10, and up from $3.21 in the same quarter last year [2][8]. - Quarterly revenues reached $4,538 million, missing the consensus estimate of $4,550 million, but reflecting a year-over-year increase of 10.4% from $4.11 billion [2][8]. Revenue Breakdown - Passenger ticket revenues were $3.2 billion, an increase from $2.9 billion in the prior-year quarter, aligning with estimates [3]. - Onboard and other revenues rose to $1.34 billion from $1.22 billion year-over-year, also meeting estimates [3]. - Total cruise operating expenses were $2.28 billion, up 6.1% year-over-year, matching estimates [3]. Cost and Yield Analysis - Net yields increased by 5.2% on a constant currency basis and 5.3% on a reported basis compared to Q2 2024 [4]. - Net cruise costs, excluding fuel, per Available Passenger Cruise Day (APCD) rose by 2.5% on a reported basis and 2.1% at constant currency from the previous year [4]. Financial Position - As of June 30, 2025, cash and cash equivalents stood at $735 million, up from $388 million at the end of 2024 [5]. - Long-term debt decreased to $17.61 billion from $18.47 billion at the end of 2024, with the current portion of long-term debt also declining to $1.4 billion from $1.6 billion [5]. Booking Trends - Strong booking momentum is noted for 2025 and 2026, with load factors exceeding previous years and higher pricing levels [6]. - There has been an acceleration in bookings, particularly for close-in sailings, contributing to the second-quarter performance [6]. - Demand remains robust across all product categories, supported by strong digital and commercial channel performance [6]. Future Outlook - For Q3 2025, RCL anticipates depreciation and amortization expenses between $425-$435 million and net interest expenses of $235-$245 million, with adjusted EPS projected between $5.55-$5.65 [9]. - For the full year 2025, depreciation and amortization expenses are expected to be $1.70-$1.71 billion, with adjusted EPS anticipated between $15.41 and $15.55, an increase from previous expectations [11]. - Net yields are projected to rise by 3.5-4% year-over-year on both a reported and constant currency basis [11].

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $4.38 for the second quarter, which was 36% higher year over year and exceeded guidance by $0.33 [7][22] - Net yield grew by 5.2%, 70 basis points higher than guidance, driven by better-than-expected demand across key itineraries [6][20] - Adjusted EBITDA margin was 41%, 300 basis points better than last year, with operating cash flow reaching $1.7 billion [22][26] Business Line Data and Key Metrics Changes - The company delivered over 2.3 million vacations in the second quarter, with new-to-cruise guests accounting for approximately 60% of total guests, more than half of whom were millennials or younger [21] - Load factor was reported at 110%, two percentage points higher than the previous year, indicating strong demand for the company's brands [7][20] - Onboard revenue increased across all key categories, with approximately half of onboard spend booked before sailing [21] Market Data and Key Metrics Changes - The Caribbean represents 57% of the company's deployment for the year, while Europe accounts for 15% and Alaska for 6% [23][24] - Bookings have accelerated, particularly for close-in sailings, with 75% of consumers intending to spend the same or more on leisure travel over the next twelve months [8][10] - The company is seeing strong demand across demographics, particularly among millennials, who represent half of the customer base [11][12] Company Strategy and Development Direction - The company plans to introduce seven new ships by 2028, including Star of the Seas and Celebrity XL, to support moderate capacity growth and enhance its global reach [16][19] - The strategic focus includes expanding destination experiences with new Royal Beach Clubs and enhancing digital capabilities to improve customer engagement and loyalty [17][18] - The company aims to close the gap with land-based vacations, targeting a significant share of the $2 trillion global vacation market [5][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment, noting that consumers are financially secure and willing to spend on leisure travel [10][19] - The outlook for 2025 is positive, with expected adjusted earnings per share growth of 31% and net yield growth of 3.5% to 4% [13][25] - Management emphasized the importance of operational excellence and customer trust as they ramp up new destinations and experiences [90] Other Important Information - The company ended the quarter with $7.1 billion in liquidity and received investment-grade ratings from all three major credit agencies [28][29] - The company is committed to maintaining a competitive dividend yield and opportunistically buying back shares as part of its capital return strategy [30][45] Q&A Session Summary Question: Could you elaborate on the continued acceleration in demand and July booking trends? - Management noted an overall acceleration in closing demand, with strong consumer confidence and spending behavior observed across various markets [34][35] Question: What is embedded for close-in demand in the back half of the year? - Management indicated that further acceleration in closing demand could create upside potential for the second half of the year, with a focus on moderate capacity and yield growth [43][44] Question: How do you view the impact of new ships and dry dock days on yield? - Management explained that the timing of new ship deliveries and dry dock days would impact yield, with a quantifiable drag of approximately 90 basis points expected [72] Question: What are the operational expectations for the Royal Beach Club? - Management reported strong pre-booking activity and high interest in the Royal Beach Club, with a thoughtful ramp-up strategy to ensure operational excellence [87][90]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $4.38 for Q2 2025, a 36% increase year over year, exceeding guidance by $0.33 [8][25] - Net yield grew by 5.2%, which was 70 basis points higher than guidance, driven by strong demand across key itineraries [7][22] - Load factor reached 110%, two percentage points higher than the previous year, indicating strong demand for the company's brands [8][22] Business Line Data and Key Metrics Changes - The company delivered over 2,300,000 vacations in Q2, with approximately 60% of guests being new to cruise or new to the brand, and more than half of these guests were millennials or younger [22][23] - Onboard revenue increased across all key categories, with about half of onboard spend booked before sailing [22][23] - Capacity increased by 6% for the year, with a projected 10% growth in Q4 due to the full operation of new ships [26][30] Market Data and Key Metrics Changes - The Caribbean accounted for 57% of deployment for the year, while Europe and Alaska represented 15% and 6% of total capacity, respectively [26] - The company noted that 75% of consumers intend to spend the same or more on leisure travel over the next twelve months, with a significant portion booking closer to departure dates [9][12] Company Strategy and Development Direction - The company is focused on a strategic initiative called "Perfecta," aiming for a 20% compound annual growth rate in adjusted earnings per share through 2027 [16][46] - Plans include launching seven new ships and expanding private destinations, which are expected to enhance competitive positioning and drive significant growth [18][19] - The company is investing in digital innovation and AI to improve customer experience and operational efficiency [20][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment, noting that consumers are financially secure and willing to spend on leisure travel [11][12] - The outlook for 2025 has been revised to expect adjusted earnings per share growth of 31%, reflecting better-than-expected performance in Q2 [14][29] - Management highlighted the importance of operational excellence and customer trust in new destination launches, emphasizing a gradual ramp-up strategy [96] Other Important Information - The company ended the quarter with $7.1 billion in liquidity and received investment-grade ratings from all three major credit agencies [31][32] - The company is committed to maintaining a competitive dividend yield and opportunistically buying back shares as part of its capital return strategy [32][47] Q&A Session Summary Question: Could you elaborate on the continued acceleration in demand and July booking trends? - Management noted an overall acceleration in closing demand, with strong consumer confidence and spending behavior observed across various demographics [36][37] Question: What have you embedded for close-in demand in the back half of the year? - Management indicated that further acceleration in closing demand could create upside potential for the second half of the year, with a focus on moderate capacity and yield growth [45][46] Question: How should we interpret the change in the top end of the yield range? - Management explained that the range was expanded due to geopolitical noise, and the current guidance reflects a return to normal forecasting practices [81][86] Question: Is growth in onboard spend still higher than growth in ticket price? - Management confirmed that growth in onboard spend is strong and similar to ticket price growth, with increasing pre-cruise sales activities contributing to overall spend [88]

Core Insights - Royal Caribbean reported $4.54 billion in revenue for Q2 2025, a year-over-year increase of 10.4% and an EPS of $4.38 compared to $3.21 a year ago, with a slight revenue miss of -0.25% against the Zacks Consensus Estimate [1] - The EPS exceeded the consensus estimate of $4.10 by +6.83% [1] Financial Performance Metrics - Available passenger cruise days (APCD) were reported at 12,942.38 days, slightly above the average estimate of 12,923.00 days [4] - Net yields were $283.56, surpassing the average estimate of $282.52 [4] - The occupancy rate reached 110.3%, exceeding the average estimate of 109.6% [4] - Passenger cruise days totaled 14,277.89 days, compared to the average estimate of 14,167.96 days [4] - Net cruise costs excluding fuel per APCD were $126.76, lower than the average estimate of $129.25 [4] - Net cruise costs per APCD were $148.34, compared to the average estimate of $151.33 [4] - The number of passengers carried was 2.25 million, below the average estimate of 2.34 million [4] - Onboard and other revenues were $1.34 billion, slightly above the average estimate of $1.33 billion, reflecting a year-over-year change of +9.5% [4] - Passenger ticket revenues were $3.2 billion, compared to the average estimate of $3.21 billion, with a year-over-year change of +10.8% [4] Stock Performance - Royal Caribbean shares returned +12.4% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Q2 2025 Performance - Load Factor reached 110%[7] - Net Yield Growth vs 2024 was 5.2% in constant currency[7] - NCCx Growth vs 2024 was 2.1% in constant currency[7] - Adjusted EBITDA was $1.9 billion, a 19% increase compared to 2024[7] - Adjusted EBITDA Margin was 40.8%[7] - Adjusted Earnings Per Share was $4.38, a 36% increase compared to 2024[7] - Operating Cash Flow was $1.7 billion[7] FY 2025 Guidance - APCDs are projected to be 53.3 million[9] - Net Yield Growth vs 2024 is expected to be between 3.5% and 4.0% in constant currency[9] - NCCx Growth vs 2024 is expected to be approximately 0.3% in constant currency[9] - Adjusted Earnings Per Share is projected to be between $15.41 and $15.55[9] Q3 2025 Guidance - APCDs are projected to be 13.7 million[14] - Net Yield Growth vs 2024 is expected to be between 2.0% and 2.5% in constant currency[14] - NCCx Growth vs 2024 is expected to be between 6.0% and 6.5% in constant currency[14] - Adjusted Earnings Per Share is projected to be between $5.55 and $5.65[14]

Core Viewpoint - Royal Caribbean Cruises (RCL.US) reported strong earnings for Q2 despite slightly lower revenue than market expectations, leading to an upward revision of its full-year profit forecast [1][2] Financial Performance - Adjusted earnings per share for Q2 reached $4.38, exceeding analyst expectations of $4.08 - Revenue increased to $4.54 billion year-over-year, although it was slightly below the market expectation of $4.55 billion - Passenger volume for the quarter was 2.3 million, a 10% year-over-year increase, with a load factor of 110% indicating improved operational efficiency [1] Profit Guidance - The company raised its full-year adjusted earnings per share forecast for 2025 to a range of $15.41 to $15.55, compared to the previous analyst average expectation of $15.45 - The increase in guidance is attributed to better-than-expected Q2 performance, effective cost control, and confidence in profitability for the second half of the year [1] Cost and Market Challenges - The company anticipates a 230 basis point increase in operating costs for Q3, influenced by geopolitical tensions and adjustments in the delivery schedule of the luxury cruise ship "Star of the Seas" - Despite these challenges, the booking trends remain positive, with increased demand for close-to-home itineraries and effective promotional strategies [2] Stock Market Reaction - Following the earnings report, Royal Caribbean's stock fell over 6% in pre-market trading, despite the strong quarterly earnings and upward guidance - The decline may be attributed to profit-taking by investors, as the stock has risen 53% year-to-date, significantly outperforming competitors like Carnival Cruises (CCL.US) and Norwegian Cruise Line (NCLH.US) [2]