Carnival plc(CUK) - 2025 Q3 - Quarterly Results

Executive Summary Q3 2025 Performance Highlights Carnival achieved record Q3 2025 financial results, with $1.9 billion net income and $8.2 billion revenues | Metric | Q3 2025 Value | YoY Change | | :----- | :------------ | :--------- | | Net Income | $1.9 billion | +$116 million (vs 2024) | | Adjusted Net Income | $2.0 billion | N/A | | Revenues | $8.2 billion | +$250 million (vs prior year) | | Net Yields (constant currency) | N/A | +4.6% (vs 2024) | | Adjusted EBITDA | $3.0 billion | N/A | | Adjusted ROIC (trailing 12-months) | 13% | N/A | Strategic & Operational Achievements The company launched Celebration Key and strengthened its balance sheet via significant debt refinancing - Successfully opened Celebration Key, a new exclusive destination, receiving rave guest reviews and overwhelming media coverage[4] - Refinanced $4.5 billion of debt and prepaid an additional $0.7 billion during the quarter, simplifying the capital structure[7] Updated Outlook & Guidance Carnival raised full-year 2025 adjusted net income guidance by nearly 55% and maintains strong 2026 bookings - Raised full year 2025 adjusted net income guidance for the third quarter in a row, now expected to be up nearly 55 percent year over year[7] - Cumulative advanced booked position for 2026 remains strong, in line with 2025 record levels and at historical high prices (in constant currency)[7] Third Quarter 2025 Detailed Results Financial Performance Carnival reported record Q3 2025 financial metrics, including net income, adjusted EBITDA, and 4.6% net yield growth | Metric | Q3 2025 | Q3 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Income | $1.9 billion | $1.735 billion | +$116 million | | Adjusted Net Income | $2.0 billion | $1.751 billion | N/A | | Adjusted EBITDA | $3.0 billion | $2.822 billion | N/A | | Revenues | $8.2 billion | $7.896 billion | +$250 million | | Gross Margin Yields | 6.4% higher than 2024 | N/A | N/A | | Net Yields (constant currency) | 4.6% higher than 2024 | N/A | N/A | Operational Metrics Cruise costs per ALBD increased, but adjusted cruise costs excluding fuel per ALBD improved better than guidance | Metric | Q3 2025 | Q3 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Cruise Costs per ALBD | +4.6% (vs 2024) | N/A | N/A | | Adjusted Cruise Costs excl. Fuel per ALBD (constant currency) | +5.5% (vs 2024) | N/A | N/A | | Fuel Consumption per ALBD | -5.2% (vs prior year) | N/A | N/A | | Customer Deposits | $7.1 billion | $6.425 billion (Nov 30, 2024) | N/A | Booking Trends Booking trends strengthened since May, with higher volumes outpacing capacity growth and strong 2026/2027 positions - Booking trends have continued to strengthen since May, with higher booking volumes than last year and far outpacing capacity growth[9] - Nearly half of 2026 is booked, in line with 2025 record levels (at the same time last year) but at historical high prices (in constant currency) for both North America and Europe segments[9] - 2027 is already off to a great start, achieving record booking volumes during the third quarter[9] Financial Management & Capital Structure Debt Refinancing and Reduction Carnival aggressively refinanced over $11 billion of debt and prepaid another $1 billion, simplifying its capital structure - Opportunistically refinanced over $11 billion of debt and prepaid another $1 billion this year[10] - Issued two senior unsecured notes: $1.2 billion at 4.125% due 2031 and $3.0 billion at 5.75% due 2032, and entered into a $400 million loan, using proceeds to repay over $5 billion of debt[10] - Reduced secured debt by nearly $2.5 billion during the quarter[10] Credit Rating Update Moody's upgraded the company's credit rating and maintained a positive outlook, reflecting improved leverage and momentum - Moody's upgraded the company's credit rating and maintained a positive outlook, reflecting improved leverage metrics and strong momentum[11] Balance Sheet and Cash Flow Summary The company ended the quarter with $26.5 billion in total debt and a significantly improved net debt to adjusted EBITDA ratio | Metric (in millions) | August 31, 2025 | August 31, 2024 | November 30, 2024 | | :----- | :-------------- | :-------------- | :---------------- | | Total Debt | $26.5 billion | N/A | $27.475 billion | | Net Debt to Adjusted EBITDA Ratio | 3.6x | 4.7x | N/A | | Customer Deposits | $7.1 billion | N/A | $6.779 billion | | Liquidity | $6.263 billion | N/A | $4.155 billion | | Cash from Operations (9 months) | $4.7 billion | $5.012 billion | N/A | | Capital Expenditures (9 months) | $2.105 billion | $4.034 billion | N/A | Recent Operational Highlights New Destinations and Fleet Additions Carnival launched Celebration Key, its new exclusive destination, and Princess Cruises welcomed the Star Princess - Successfully opened Celebration Key, the company's new exclusive destination on Grand Bahama Island, featuring the largest freshwater lagoon in the Caribbean and the world's largest swim-up bar[13] - Carnival Cruise Line hosted nearly half a million guests at Celebration Key since its opening in July[13] - Princess Cruises welcomed Star Princess, sister to the successful Sun Princess, which was previously awarded Condé Nast Traveler's 2024 Mega Ship of the year[13] Brand Recognition and Sustainability Holland America Line received multiple awards, Cunard launched a new campaign, and Carnival released its sustainability report - Holland America Line was recognized as both the Best Large Ship Ocean Cruise Line and Best Mid-Sized Ship Ocean Cruise Line in Travel + Leisure's 2025 World's Best Awards[14] - Cunard launched its new campaign, 'Why cruise when you can Cunard,' inviting guests to experience its iconic blend of style, elegance, and uncompromising luxury[14] - Named by Forbes as one of America's Best Employers for Women and one of the Best-in-State Employers for Florida in 2025[14] - Released its 15th annual sustainability report, 'Doing Business Responsibly from Ship to Shore,' detailing continued progress towards sustainability goals[14] Outlook and Guidance Full Year 2025 Guidance For full year 2025, Carnival expects significant improvements in net yields and adjusted net income, with adjusted EBITDA projected at $7.05 billion | Metric | Full Year 2025 Outlook | YoY Change (vs 2024) | | :----- | :--------------------- | :------------------- | | Net Yields (constant currency) | Approx. 5.3% | +0.3 percentage points better than June guidance | | Adjusted Cruise Costs excl. Fuel per ALBD (constant currency) | Approx. 3.3% | Better than June guidance | | Adjusted Net Income | Approx. $2,925 million | Up nearly 55% | | Adjusted EBITDA | Approx. $7.05 billion | Up 15% | | Adjusted EPS - diluted | Approx. $2.14 | N/A | Fourth Quarter 2025 Guidance For Q4 2025, the company forecasts net yields (constant currency) to be up approximately 4.3% and adjusted net income to increase by over 60% | Metric | 4Q 2025 Outlook | YoY Change (vs 4Q 2024) | | :----- | :-------------- | :---------------------- | | Net Yields (constant currency) | Approx. 4.3% | N/A | | Adjusted Net Income | Approx. $300 million | Up over 60% | | Adjusted EBITDA | Approx. $1.34 billion | N/A | | Adjusted EPS - diluted | Approx. $0.23 | N/A | Capital Expenditures Newbuild capital expenditures for Q4 2025 are projected at $1.0 billion, with an additional $0.7 billion for non-newbuilds | Category | 4Q 2025 Capital Expenditures | | :------- | :--------------------------- | | Newbuild | $1.0 billion | | Non-newbuild | $0.7 billion | Company Overview About Carnival Corporation & plc Carnival Corporation & plc is the largest global cruise company, operating a portfolio of world-class cruise lines - Carnival Corporation & plc is the largest global cruise company, with a portfolio of world-class cruise lines[19] - Portfolio includes AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn[19] Conference Call and Contacts The company scheduled a conference call to discuss earnings, with additional information available on its website - A conference call with analysts was scheduled for September 29, 2025, at 10:00 a.m. EDT to discuss the earnings release[18] - Additional information, including the earnings presentation and debt maturities schedule, is available on www.carnivalcorp.com and www.carnivalplc.com[18](index=18&type=chunk) Cautionary Note Concerning Factors That May Affect Future Results Forward-Looking Statements The document contains forward-looking statements involving risks and uncertainties regarding future results, operations, and financial position - The document contains 'forward-looking statements' involving risks, uncertainties, and assumptions concerning future results, operations, strategy, outlooks, plans, goals, reputation, cash flows, and liquidity[21] - These statements are based on current expectations, estimates, forecasts, and projections about the business and industry, and are intended to qualify for safe harbors from liability[21] Key Risk Factors Various factors could cause actual results to differ materially, including global events, incidents, regulations, and debt levels - Events and conditions around the world, including geopolitical uncertainty, war, pandemics, inflation, higher fuel prices, and higher interest rates, could lead to a decline in demand for cruises and negatively impact financial condition[24] - Risks include incidents concerning ships/guests, non-compliance with laws/regulations, factors associated with climate change, cybersecurity incidents, loss of key team members, increases in fuel prices, reliance on suppliers, fluctuations in foreign currency exchange rates, overcapacity/competition, and the company's debt levels[24][28] Consolidated Financial Statements (Unaudited) Consolidated Statements of Income (Loss) The consolidated statements of income show total revenues of $8,153 million for Q3 2025 and $20,292 million for the nine months ended August 31, 2025 | Metric (in millions) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total Revenues | $8,153 | $7,896 | $20,292 | $19,083 | | Operating Income | $2,271 | $2,178 | $3,748 | $3,013 | | Income Before Income Taxes | $1,857 | $1,743 | $2,368 | $1,626 | | Net Income (Loss) | $1,852 | $1,735 | $2,338 | $1,613 | | Diluted EPS | $1.33 | $1.26 | $1.71 | $1.21 | Consolidated Balance Sheets As of August 31, 2025, total assets were $50,831 million, with total liabilities of $38,903 million and equity of $11,928 million | Metric (in millions) | August 31, 2025 | November 30, 2024 | | :------------------- | :-------------- | :---------------- | | Total Assets | $50,831 | $49,057 | | Cash and cash equivalents | $1,763 | $1,210 | | Property and Equipment, Net | $42,889 | $41,795 | | Total Current Liabilities | $11,436 | $11,617 | | Long-Term Debt | $25,064 | $25,936 | | Total Shareholders' Equity | $11,928 | $9,251 | Other Balance Sheet and Statistical Information The company reported $6,263 million in liquidity, $26,481 million in total debt, and record customer deposits of $7,146 million | Metric (in millions) | August 31, 2025 | November 30, 2024 | | :------------------- | :-------------- | :---------------- | | Liquidity | $6,263 | $4,155 | | Debt (current and long-term) | $26,481 | $27,475 | | Customer deposits | $7,146 | $6,779 | | Statistical Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :----------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Passenger cruise days (PCDs) | 27.5 | 28.1 | 77.1 | 76.0 | | ALBDs | 24.6 | 25.2 | 72.3 | 71.7 | | Occupancy percentage | 112% | 112% | 107% | 106% | | Passengers carried | 3.8 | 3.9 | 10.3 | 10.3 | | Fuel consumption (metric tons) | 0.7 | 0.7 | 2.1 | 2.2 | | Fuel cost per metric ton (excl. EUA) | $607 | $670 | $621 | $680 | Non-GAAP Financial Measures Reconciliation of Non-GAAP Measures The report reconciles non-GAAP measures like adjusted net income, adjusted EBITDA, and net yields to comparable U.S. GAAP measures | Metric (in millions, except per share) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $1,852 | $1,735 | $2,338 | $1,613 | | Adjusted net income (loss) | $1,982 | $1,751 | $2,625 | $1,705 | | Adjusted EBITDA | $2,993 | $2,822 | $5,706 | $4,890 | | Diluted EPS | $1.33 | $1.26 | $1.71 | $1.21 | | Adjusted earnings per share - diluted | $1.43 | $1.27 | $1.91 | $1.27 | | Metric (per ALBD) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2025 (Constant Currency) | Three Months Ended Aug 31, 2024 | | :---------------- | :------------------------------ | :-------------------------------------------------- | :------------------------------ | | Gross margin yields | $124.20 | N/A | $116.77 | | Net yields | $249.11 | $244.51 | $233.87 | | Adjusted cruise costs excluding fuel per ALBD | $111.96 | $109.65 | $103.97 | Explanation of Non-GAAP Measures Non-GAAP measures provide insights into core operating performance, leverage, and cost control by excluding certain non-core items - Adjusted net income (loss) and adjusted earnings per share exclude certain gains, losses, and expenses not considered part of core operating business to provide insight into future earnings performance[44] - Adjusted EBITDA, adjusted EBITDA per ALBD, and adjusted EBITDA margin provide information on core operating profitability by excluding non-core items, interest, taxes, depreciation, and amortization[45] - Net yields measure cruise segment performance on a per ALBD basis, using adjusted gross margin to reflect revenues net of significant variable costs[47] - Adjusted cruise costs per ALBD and excluding fuel per ALBD help monitor cost performance by separating capacity changes and excluding fuel expense[48][49] Constant Currency Reporting Constant currency reporting removes exchange rate impacts to facilitate a comparative view of business changes amidst fluctuations - Constant currency reporting removes the impact of changes in exchange rates on the translation of operations and transactional impacts from revenues and expenses denominated in a currency other than the functional currency[53] - This method facilitates a comparative view for changes in the business in an environment with fluctuating exchange rates, applied to metrics like adjusted gross margin, net yields, and adjusted cruise costs excluding fuel[54] - The company does not provide a reconciliation of forecasted non-GAAP financial measures to GAAP due to the unreasonable effort required to predict future foreign exchange rates, fuel prices, and non-core gains/losses[51]