Carnival Reports Record Q2 Results

Core Insights - Carnival Corp. reported its eighth consecutive quarter of record revenue, with EBITDA rising 26% year over year and net income of $565 million exceeding management's guidance by $185 million [1] - The company surpassed all three of its 2026 strategic targets 18 months early and upgraded its full-year guidance [1] Financial Performance - In the trailing 12 months, EBITDA per available lower berth day (ALBD) was 52% above the 2023 baseline, and return on invested capital (ROIC) surpassed 12.5%, marking the highest levels in nearly two decades [2][3] - Unit net yields expanded by over 6.4% on an adjusted basis compared to the prior year, building on a comparable 12% gain from last year [2] Strategic Initiatives - Carnival is investing in exclusive destinations like Celebration Key, which features 275,000 square feet of lagoon space, to capture greater price premiums and boost market share against land-based vacation alternatives [4] - Early pricing premiums on Celebration Key itineraries are in line with expectations, supporting the company's portfolio yield management strategy [5] Financial Flexibility - During the second quarter, Carnival prepaid $350 million in senior notes due in 2026 and increased its revolving credit capacity by 50% to $4.5 billion [6] - The net-debt-to-EBITDA ratio improved from 4.1x to 3.7x, with rating upgrades bringing the company just one notch below investment-grade status at both S&P Global and Fitch [6][7] Future Outlook - Full-year 2025 net income guidance was increased by $200 million to approximately $2.7 billion, with net yield growth guidance raised to 5% for FY2025 [8] - The company plans to set new post-2026 financial and environmental targets and focus on the launch of Celebration Key in July 2025 and the new Carnival Rewards loyalty program in the second half of 2026 [9]