Core Insights - The "May Day" holiday has significantly boosted the cruise market in China, with a notable increase in bookings and interest from middle-class consumers [1][2][3] Group 1: Market Performance - The number of cruises departing from domestic ports during the "May Day" holiday reached 8, accommodating nearly 30,000 tourists [2] - Guangzhou Kanghui International Travel Agency reported a 30.2% year-on-year increase in cruise tourism participants as of April 25 [15] - The cruise market is showing signs of recovery, with many ships operating at near full capacity as of April [12][13] Group 2: Pricing Trends - Cruise prices have increased significantly, with some interior cabins priced over 10,000 yuan per person, more than double the early booking prices [7][8] - The demand for cruises during peak holiday periods has led to a more stable pricing environment compared to previous years [8][21] Group 3: Consumer Behavior - Young consumers are increasingly looking for shared accommodations to reduce costs, with many seeking roommates for cabins [10] - There is a growing interest in less crowded cruise experiences, with middle-class consumers favoring cruises for their limited passenger capacity and onboard amenities [8][10] Group 4: Industry Adjustments - Cruise companies have learned from past market fluctuations and are adopting more flexible pricing and booking strategies to avoid overcapacity and price drops [20][21] - The industry is seeing a shift in focus from traditional ports like Shanghai to a more diversified approach, with cruises departing from cities like Tianjin, Qingdao, and Guangzhou [6][23] Group 5: Future Outlook - Despite the current surge in demand, industry professionals remain cautious about the summer market, anticipating potential price drops if sales do not meet expectations [24][25]

Financial Performance - Net Income attributable to Royal Caribbean Cruises Ltd. for Q1 2025 was $730 million, up from $360 million in Q1 2024, representing a 102.8% increase [154]. - Adjusted Net Income for Q1 2025 was $744 million, compared to $478 million in Q1 2024, reflecting a 55.7% increase [154]. - Total revenues increased by $271 million in Q1 2025 compared to Q1 2024, driven by higher capacity, ticket prices, and onboard spending [156]. - Total revenues for Q1 2025 increased by $271 million to $3.999 billion, up from $3.728 billion in Q1 2024 [170]. - Passenger ticket revenues rose by $202 million, or 7.9%, to $2.744 billion, accounting for 68.6% of total revenues in Q1 2025 [170]. - Onboard and other revenues increased by $69 million, or 5.8%, to $1.255 billion, representing 31.4% of total revenues in Q1 2025 [170]. - Operating income for Q1 2025 was $945 million, a 26% increase from $750 million in Q1 2024 [170]. - Adjusted EBITDA for Q1 2025 was $1.402 billion, compared to $1.174 billion in Q1 2024, marking a 19.4% increase [163]. - The company carried 2,241,673 passengers in Q1 2025, an increase from 2,054,382 passengers in Q1 2024 [163]. - The occupancy rate for Q1 2025 was 108.8%, up from 107.0% in Q1 2024 [163]. Cash Flow and Financing - Net cash provided by operating activities was $1.6 billion for Q1 2025, an increase of $0.3 billion compared to $1.3 billion in Q1 2024 [176]. - Net cash used in financing activities was $1.2 billion in Q1 2025, compared to $1.1 billion in Q1 2024, primarily due to dividend payments and treasury stock purchases [178]. - A cash dividend of $0.75 per share was declared during the quarter ended March 31, 2025, and paid in April 2025 [194]. - The company is in compliance with financial covenants as of March 31, 2025, and expects to remain compliant for at least the next twelve months [193]. - The company anticipates sufficient financial resources to fund obligations for at least the next twelve months, though future liquidity requirements remain uncertain [192]. Capital Expenditures and Investments - As of March 31, 2025, the aggregate expected cost of ships on order is $7.9 billion, with $1.0 billion already deposited [180]. - Total anticipated capital expenditures for 2025 are approximately $5 billion, primarily for existing ships on order and land-based destination initiatives [181]. - Material cash requirements total $12.31 billion through 2029, including $4.91 billion for interest on debt and $5.81 billion for ship purchase obligations [182]. - As of March 31, 2025, the company has $6.1 billion of committed financing for ships on order [189]. - Liquidity as of March 31, 2025, is $4.5 billion, comprising $0.4 billion in cash and cash equivalents and $4.1 billion in undrawn revolving credit facility capacity [190]. Strategic Goals - The company targets a 20% compound annual growth rate in Adjusted EPS by the end of 2027 under its Perfecta Program [151]. - The company aims for a Return on Invested Capital (ROIC) of 17% or higher by the end of 2027 [151]. - The company continuously considers opportunities for building additional ships and potential acquisitions, which would be financed through various means including additional debt [186]. - Approximately 36.5% of the aggregate ship costs are exposed to fluctuations in the Euro exchange rate as of March 31, 2025 [180]. Operational Highlights - Total cruise operating expenses rose by $23 million in Q1 2025 compared to the same period in 2024, primarily due to increased capacity [156]. - In February 2025, TUI Cruises, a 50% joint venture, took delivery of Mein Schiff Relax [156]. - In March 2025, the company completed an exchange of approximately $213 million in Convertible Senior Notes for about 3 million shares of common stock and $214 million in cash [156]. - Available Passenger Cruise Days (APCD) is used to evaluate capacity and revenue performance, excluding canceled cruise days [142]. - Constant Currency is monitored to assess revenue and expenses in relation to currency exchange rate fluctuations [143].

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.71 for the first quarter, which was $0.23 higher than guidance, driven by better revenue and favorable timing of expenses [10][21] - Yields grew by 5.6% in constant currency compared to the first quarter of 2024, exceeding initial guidance by 60 basis points [21] - Adjusted EBITDA margin was 35%, which is 360 basis points better than the previous year [22] Business Line Data and Key Metrics Changes - Bookings in the first quarter outpaced last year across all products, resulting in the best wave season in the company's history [10][11] - Onboard spending and pre-cruise purchases exceeded prior years, driven by increased participation in onboard activities and experiences at higher prices [11][12] - The Caribbean accounted for 57% of deployment this year and 49% of capacity in the second quarter [22] Market Data and Key Metrics Changes - The company expects capacity to grow by 5.5% in 2025, supported by the introduction of new ships [15] - Europe is projected to account for 15% of capacity for the year, while Alaska is expected to account for 6% [24] - The company reported that 7 out of 10 consumers intend to spend the same or more on leisure travel over the next twelve months [12] Company Strategy and Development Direction - The company is focused on delivering exceptional vacation experiences, optimizing revenue, managing costs, and executing long-term strategies [7][8] - The introduction of seven new ships over the next three years is expected to enhance customer experiences and drive growth [18] - The company aims for a 20% compound annual growth rate in adjusted earnings per share through 2027 [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged heightened uncertainty in the macro landscape but emphasized strong consumer demand for cruising experiences [6][7] - The company remains confident in its growth strategy and the opportunity to capture a larger share of the $2 trillion vacation market [7][15] - Recent booking trends and disciplined cost management position the company well for strong earnings growth despite macroeconomic uncertainties [15][28] Other Important Information - The company ended the quarter with $4.5 billion in liquidity and received an investment-grade credit rating upgrade from S&P Global Ratings [30][31] - The company repurchased 1 million shares under its $1 billion share repurchase program [31] Q&A Session Summary Question: Drivers of better than planned performance in Q1 - Management noted strong close-in demand and the ability to raise pricing during this period, alongside high-quality customers spending well on the ship [38][39] Question: Areas of guidance expansion due to macro backdrop - Management expanded guidance ranges to account for broader external factors while maintaining confidence in long-term growth strategies [46][48] Question: Pricing strategy for new ships and potential headwinds - New ships entering service later in the year may create a headwind due to lower average passenger cruise days initially [54][56] Question: Onboard spending and consumer behavior - Management indicated that consumer spending remains strong, with no significant trade-down behavior observed among loyalty program members [78][79] Question: Capital allocation and share repurchase strategy - The company is focused on maintaining a strong balance sheet while also returning capital to shareholders through dividends and share repurchases [92][94]

Core Viewpoint - Royal Caribbean Cruises Ltd. (RCL) reported mixed first-quarter 2025 results, with adjusted earnings exceeding expectations while revenues fell short, although both metrics showed year-over-year growth [1][3]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were $2.71, surpassing the Zacks Consensus Estimate of $2.53 by 7.1%, compared to $1.77 in the prior-year quarter [3]. - Quarterly revenues reached $4 billion, missing the consensus mark by 0.2%, but up 7.3% from $3.72 billion year-over-year [3]. - Passenger ticket revenues increased to $2.74 billion from $2.54 billion in the prior-year quarter, aligning with estimates [4]. - Onboard and other revenues rose to $1.26 billion from $1.19 billion year-over-year, exceeding estimates [4]. - Total cruise operating expenses were $2.08 billion, up 1.1% year-over-year, below estimates [4]. Cost and Yield Metrics - Net yields increased by 5.6% on a constant currency basis and 4.7% on a reported basis compared to Q1 2024 [5]. - Net cruise costs, excluding fuel, per Available Passenger Cruise Day (APCD) decreased by 0.1% on a constant currency basis and 0.3% on a reported basis year-over-year [5]. Balance Sheet and Cash Flow - As of March 31, 2025, cash and cash equivalents were $386 million, slightly down from $388 million at the end of 2024 [6]. - Long-term debt decreased to $17.99 billion from $18.47 billion at the end of 2024, with the current portion of long-term debt also declining [6]. Booking Trends - The company experienced strong booking trends during the WAVE season, with April bookings surpassing the same period last year [7]. - Customer deposits as of March 31, 2025, were $6.33 billion, up from $5.5 billion in the prior-year period [8]. Management Outlook - Management expressed optimism regarding ongoing consumer enthusiasm for new offerings, which is expected to drive yield growth throughout 2025 [9]. - For Q2 2025, the company anticipates adjusted EPS between $4 and $4.10, with net yields projected to increase by 4.4-4.9% on a reported basis [10][11]. - For the full year 2025, adjusted EPS is expected to be between $14.55 and $15.55, an increase from previous expectations [12].

Q1 2025 Performance Highlights - Load Factor reached 109%[8] - Net Yield Growth vs 2024 was 56% in Constant Currency[8] - NCCx Growth vs 2024 was 01% in Constant Currency[8] - Adjusted EBITDA reached $14 billion, a 20% increase compared to 2024[8] - Adjusted EBITDA Margin was 351%[8] - Adjusted Earnings Per Share was $271, a 35% increase compared to 2024[8] - Operating Cash Flow reached $16 billion[8] FY 2025 Guidance - APCDs are projected to be 533 million[10] - Net Yield Growth vs 2024 is expected to be between 26% and 46% in Constant Currency[10] - NCCx Growth vs 2024 is projected to be between (01)% and 09% in Constant Currency[10] - Fuel expenses are estimated to be approximately $114 billion[10] - Adjusted Earnings Per Share are projected to be between $1455 and $1555[10] Q2 2025 Guidance - APCDs are projected to be 129 million[14] - Net Yield Growth vs 2024 is expected to be between 43% and 48% in Constant Currency[14] - NCCx Growth vs 2024 is projected to be between 37% and 42% in Constant Currency[14] - Fuel expenses are estimated to be approximately $286 million[14] - Adjusted Earnings Per Share are projected to be between $400 and $410[14]

Core Insights - Royal Caribbean reported $4 billion in revenue for Q1 2025, a year-over-year increase of 7.3% and an EPS of $2.71 compared to $1.77 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $4.01 billion, resulting in a surprise of -0.17%, while the EPS exceeded expectations by +7.11% [1] Financial Performance Metrics - Available Passenger Cruise Days (APCD) were reported at 12,657.99 days, slightly below the average estimate of 12,680.56 days [4] - Net Yields stood at $258.83, slightly above the average estimate of $257.86 [4] - The occupancy rate was 108.8%, exceeding the average estimate of 107.7% [4] - Passenger Cruise Days totaled 13,768.33 days, compared to the estimated 13,646.2 days [4] - Net Cruise Costs Excluding Fuel per APCD were $129.54, lower than the average estimate of $131.66 [4] - Net Cruise Costs per APCD were reported at $151.44, below the average estimate of $153.69 [4] - The number of passengers carried was 2.24 million, slightly above the average estimate of 2.23 million [4] - Onboard and other revenues reached $1.26 billion, matching the average estimate and reflecting a year-over-year change of +5.8% [4] - Passenger ticket revenues were $2.74 billion, consistent with the average estimate and representing an 8% year-over-year increase [4] Stock Performance - Royal Caribbean shares returned +5.3% over the past month, outperforming the Zacks S&P 500 composite, which changed by -0.8% [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 adjusted earnings per share of $2.71 for the first quarter, which was $0.23 higher than guidance, driven by better revenue and favorable timing of expenses [10][21] - Yields grew by 5.6% in constant currency compared to the first quarter of 2024, exceeding initial guidance by 60 basis points [21] - Adjusted EBITDA margin was 35%, which is 360 basis points better than the previous year [22] Business Line Data and Key Metrics Changes - Bookings for 2025 are outpacing last year, with the best wave season in the company's history [10][11] - Onboard spending and pre-cruise purchases have exceeded prior years, driven by increased participation in onboard activities [11][12] - The Caribbean represents 57% of the company's deployment for the year, with 49% of capacity in the second quarter [22][23] Market Data and Key Metrics Changes - The company is seeing strong demand across all commercial channels, particularly in direct-to-consumer channels [11] - Europe is expected to account for 15% of capacity for the year, while Alaska will account for 6% [23] - Consumer sentiment around leisure vacations remains positive, with 70% of surveyed consumers intending to spend the same or more on leisure travel over the next twelve months [12][13] Company Strategy and Development Direction - The company aims for a 20% compound annual growth rate in adjusted earnings per share through 2027, focusing on moderate capacity and yield growth along with strong cost control [16][24] - Investments are being made in new ships and exclusive destinations to enhance guest experiences and drive loyalty [18][19] - The company is focused on maintaining price integrity while optimizing revenue through a global yield management platform [64] Management's Comments on Operating Environment and Future Outlook - Management acknowledges heightened macroeconomic uncertainty but remains confident in the company's ability to deliver strong financial performance [6][7] - The company is well-positioned to capitalize on the growing $2 trillion vacation market, with a strong balance sheet and cash flow generation [7][15] - Recent booking trends and disciplined cost management are expected to support another year of strong earnings growth [15][28] Other Important Information - The company ended the quarter with $4.5 billion in liquidity and received an investment-grade credit rating upgrade from S&P Global Ratings [30][31] - Share repurchase programs are ongoing, with $1 billion authorized for repurchases, and the company has repurchased 1 million shares [31][32] Q&A Session Summary Question: Drivers of better than planned performance in Q1 - Management noted strong close-in demand and the ability to raise pricing during this period, alongside high-quality customer spending [38][39] Question: Areas of guidance expansion due to macro backdrop - Management expanded guidance ranges to account for broader external factors while maintaining confidence in long-term growth strategies [46][48] Question: Pricing strategy for new ships and potential headwinds - New ships entering service later in the year may create a temporary headwind due to lower average passenger cruise days [54][56] Question: Onboard spending and close-in pricing outlook - Management remains optimistic about consumer spending and has not seen significant changes in cancellation rates or customer behavior [60][62] Question: Capital allocation and share repurchase strategy - The company is focused on maintaining a strong balance sheet while also returning capital to shareholders through dividends and share repurchases [92][94]

Core Viewpoint - Royal Caribbean reported quarterly earnings of $2.71 per share, exceeding the Zacks Consensus Estimate of $2.53 per share, and showing a significant increase from $1.77 per share a year ago, indicating strong performance in the cruise industry [1][2] Financial Performance - The company achieved revenues of $4 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.17%, but up from $3.73 billion year-over-year [2] - Over the last four quarters, Royal Caribbean has surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance - Royal Caribbean shares have declined approximately 6.2% since the beginning of the year, compared to a 6% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.92 on revenues of $4.52 billion, and for the current fiscal year, it is $14.88 on revenues of $17.96 billion [7] - The trend of estimate revisions for Royal Caribbean is mixed, which may change following the recent earnings report [6] Industry Context - The Leisure and Recreation Services industry, to which Royal Caribbean belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Performance - First quarter 2025 EPS was $2.70, with Adjusted EPS at $2.71, exceeding guidance due to strong pricing and lower costs[1] - Total revenues for the first quarter reached $4.0 billion, with Net Income of $0.7 billion, compared to $0.4 billion in the same period last year[7] - Total revenues for the quarter ended March 31, 2025, were $3,999 million, an increase of 7.3% compared to $3,728 million in the same quarter of 2024[48] - Net income attributable to Royal Caribbean Cruises Ltd. for the quarter was $730 million, up from $360 million in the prior year, representing a 102.8% increase[48] - Adjusted EPS for the quarter was $2.70, compared to $1.35 in the same quarter of 2024, reflecting a 100% year-over-year growth[48] - Net income for the three months ended March 31, 2025, was $736 million, compared to $364 million in the same period of 2024, representing a 102% increase[55] - Adjusted net income attributable to Royal Caribbean Cruises Ltd. for Q1 2025 was $744 million, up from $478 million in Q1 2024, marking a 55.7% increase[66] - Adjusted EBITDA for Q1 2025 was $1,402 million, compared to $1,174 million in Q1 2024, indicating an increase of 19.4%[63] Operational Metrics - Load factor for the first quarter was 109%, with a 9% increase in guests served, totaling 2.2 million[8] - Passenger cruise days increased to 13,768,332 in Q1 2025, up from 13,149,708 in Q1 2024, indicating a growth of 4.7%[51] - Occupancy rate for the quarter was 108.8%, compared to 107.0% in the same quarter of the previous year[51] - Customer deposits increased to $838 million in Q1 2025, compared to $729 million in Q1 2024, showing a 15% growth[55] - Adjusted gross margin per passenger cruise day (PCD) for Q1 2025 was $237.96, compared to $230.96 in Q1 2024, indicating a 3% increase[59] Guidance and Future Outlook - Full year 2025 Adjusted EPS guidance increased to a range of $14.55 to $15.55, reflecting a year-over-year growth of approximately 28%[6] - Net Yields are expected to increase by 2.5% to 4.5% for the full year, with Gross Margin Yields up 13.9% in the first quarter[6] - The company is targeting a 20% compound annual growth rate in Adjusted EPS by the end of 2027 under its Perfecta Program[37] - Return on Invested Capital (ROIC) is aimed to be 17% or higher by the end of 2027[37] Capital Expenditures and Liquidity - The company anticipates capital expenditures of approximately $5 billion for 2025, primarily for new ship orders and land-based initiatives[21] - As of March 31, 2025, the company's liquidity position was $4.5 billion, including cash and undrawn credit facilities[17] - The company repurchased approximately 1.0 million shares during the quarter, with $759 million remaining for future repurchases[19] Expenses and Cash Flow - Fuel expenses for the second quarter are projected at $286 million, with consumption of 428,000 metric tons, 59% of which is hedged[16] - Total cruise operating expenses for Q1 2025 were $2,079 million, a slight decrease from $2,086 million in Q1 2024[61] - Net cash provided by operating activities for Q1 2025 was $1,627 million, compared to $1,328 million in Q1 2024, an increase of 22.5%[55] Assets and Liabilities - Total assets as of March 31, 2025, were $37,452 million, an increase from $37,070 million as of December 31, 2024[53] - Current liabilities increased to $10,300 million as of March 31, 2025, compared to $9,817 million at the end of 2024[53] New Initiatives - The company is set to debut new ships and destinations, including Star of the Seas and Royal Beach Club Paradise Island, enhancing its competitive position[11] - The company reported a comprehensive income of $837 million for the quarter, up from $417 million in the same quarter of 2024[48]

Core Insights - Celebrity Xcel aims to enhance guest experiences with new dining options and entertainment, focusing on creating memorable moments for couples [1][5] Dining Experience - Celebrity Xcel will feature 32 globally inspired dining options, including a new al fresco restaurant named Bora, offering a seafood-forward Mediterranean menu with panoramic ocean views [1][2] - Bora will serve Mediterranean-inspired brunch classics and customizable cocktails during the day, transitioning to chef-led tableside dining at night with fresh seafood and elevated Mediterranean dishes [2][3] Entertainment Offerings - The cruise will introduce an expansive entertainment lineup, including three new theatre shows and over 75 resident performers, the most of any Celebrity ship [4][5] - Evening entertainment options will include interactive shows, dance parties, and live music, catering to various moods and preferences for couples [5][6] Community Engagement - Celebrity Xcel will involve guests in shaping their experiences through the "Dream Makers" community, allowing them to vote on new culinary, design, and entertainment options [6] Itineraries - The inaugural season will begin in November 2025 from Fort Lauderdale, featuring seven-night itineraries to destinations like the Bahamas and Mexico, followed by a European season in Summer 2026 [7][8]