Royal Caribbean Cruises .(US:RCL)2025-10-28 10:34Financial Performance - Third quarter 2025 EPS was $5.74, with Adjusted EPS at $5.75, exceeding guidance due to higher demand and lower costs[1] - Full year 2025 Adjusted EPS guidance raised to $15.58 to $15.63, reflecting a 32% year-over-year growth[1] - Total revenues for Q3 2025 reached $5.1 billion, with Net Income of $1.6 billion, compared to $1.1 billion in Q3 2024[4][6] - Net income attributable to Royal Caribbean Cruises Ltd. for the quarter was $1.575 billion, compared to $1.111 billion in Q3 2024, representing a 41.8% increase[54] - Operating income for the nine months ended September 30, 2025, was $3.977 billion, compared to $3.482 billion for the same period in 2024, reflecting a 14.2% increase[54] - The company reported a total of $4.842 billion in net cash provided by operating activities for the nine months ended September 30, 2025, compared to $3.798 billion in 2024[61] - Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for Q3 2025 was $1,577 million, compared to $1,435 million in Q3 2024, representing an increase of 9.9%[75] - For the nine months ended September 30, 2025, Adjusted Net Income was $3,523 million, compared to $2,794 million for the same period in 2024, an increase of 26.1%[75] Revenue and Yield Metrics - Total revenues for the quarter ended September 30, 2025, increased to $5.139 billion, up 5.2% from $4.886 billion in the same quarter of 2024[54] - Passenger ticket revenues rose to $3.637 billion, a 4.8% increase compared to $3.471 billion in Q3 2024[54] - Gross Margin Yields increased by 3.8% and Net Yields rose by 2.8% in Q3 2025[3] - Net Yields, representing Adjusted Gross Margin per APCD, are utilized to manage pricing performance by reflecting cruise revenues net of significant variable costs[40] - Adjusted Gross Margin for the nine months ended September 30, 2025, was $11,077 million, up from $10,240 million in 2024, indicating an increase of 8.2%[67] - Gross Margin Yields for the quarter ended September 30, 2025, were $162.39, compared to $156.52 in 2024, representing a year-over-year increase of 3.7%[67] Capacity and Operations - Load factor for Q3 2025 was 112%, with a 7% increase in guests served, totaling 2.5 million[7] - The company carried 2,466,039 passengers in Q3 2025, an increase of 6.7% from 2,310,220 passengers in Q3 2024[57] - The occupancy rate for the quarter was 112.1%, up from 111.0% in the same quarter last year[57] - Passenger Cruise Days (PCD) for the nine months ended September 30, 2025, totaled 39,299,263, compared to 37,836,007 in 2024, reflecting a growth of 3.9%[71] Future Outlook and Guidance - Fourth quarter 2025 Adjusted EPS is expected to be in the range of $2.74 to $2.79[13] - The company targets a 20% compound annual growth rate in Adjusted EPS by 2027 under its Perfecta Program, aiming for a ROIC of 17% or higher[42] - Forward-looking statements include expectations for revenues and costs for 2025 and beyond, highlighting potential risks and uncertainties affecting performance[46] Capital and Liquidity - As of September 30, 2025, the company's liquidity position was $6.8 billion, including cash and credit facilities[21] - Capital expenditures for 2025 are projected at approximately $5 billion, primarily for new ship orders and land-based initiatives[25] - Cash and cash equivalents at the end of the period were $432 million, up from $388 million at the beginning of the period[61] - Total assets increased to $40.109 billion as of September 30, 2025, compared to $37.070 billion as of December 31, 2024[59] - The current portion of long-term debt increased to $3.074 billion as of September 30, 2025, from $1.603 billion at the end of 2024[59] Cost Management - Gross Cruise Costs include total cruise operating expenses plus marketing, selling, and administrative expenses, impacting overall profitability[37] - Net Cruise Costs Excluding Fuel for the quarter ended September 30, 2025, were $1,695 million, compared to $1,573 million in 2024, reflecting an increase of 7.8%[71] - Total cruise operating expenses for the quarter ended September 30, 2025, were $2,479 million, up from $2,391 million in 2024, an increase of 3.7%[71] Shareholder Actions - The company repurchased approximately 1.3 million shares in Q3 2025, with $345 million remaining for future repurchases[22] - The weighted-average shares outstanding for diluted EPS increased from 264 million in Q3 2024 to 274 million in Q3 2025[75] Non-GAAP Measures - Adjusted EBITDA Margin is a key non-GAAP measure, calculated as Adjusted EBITDA divided by total revenues[31] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $5,545 million, compared to $4,874 million in 2024, marking an increase of 13.7%[73] - The Adjusted EBITDA Margin for the quarter ended September 30, 2025, was 44.6%, compared to 44.0% in 2024, showing a slight improvement[73] Special Items and Adjustments - Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. excludes specific items such as debt extinguishment losses and restructuring charges, providing a clearer performance assessment[32] - The company incurred a loss on extinguishment of debt of $323 million in Q3 2024, which was not present in Q3 2025[75] - Restructuring charges and other initiative expenses were $1 million in Q3 2025, down from $2 million in Q3 2024[75] - The company included $10 million of inducement expense related to convertible notes in Q3 2025, compared to $119 million in Q3 2024[75] - The company reported a gain on the sale of noncontrolling interest of $11 million for the nine months ended September 30, 2025, compared to no gain in the same period of 2024[75] Industry Context - The company’s financial results reflect ongoing recovery and growth in the cruise industry, with significant improvements in both net income and earnings per share metrics[75]