Royal Caribbean Cruises .(US:RCL) Yahoo Finance·2025-12-23 18:05Core Insights - Royal Caribbean Cruises has distinguished itself as the second-largest cruise line by passenger volume, boasting a market cap of $80 billion, which is more than double that of its competitor Carnival [1] - The company has outperformed the S&P 500 over the past year, although it trades at the second-highest valuation in the industry, only surpassed by Viking Holdings [2] Company Performance - Royal Caribbean has largely recovered from the pandemic-related shutdowns of 2020 and 2021, achieving record load factors with a reported occupancy of 112% in Q3 2025 [3] - Bookings for 2026 are currently higher than those for 2025 at the same time last year, allowing the company to reduce discounts and positively impacting revenue, which reached nearly $14 billion for the first nine months of 2025, a 7% increase from 2024 [4] - The company has effectively managed cost and expense growth, resulting in a net income of $3.5 billion for the first three quarters of 2025, reflecting a 51% year-over-year increase [5] Financial Challenges - Royal Caribbean's reduced interest expenses are crucial as the company incurred significant debt during the COVID-19 pandemic, with current debt standing at nearly $20.8 billion, only slightly down from $21.4 billion a year ago [6] - The debt burden is substantial compared to the company's $10.3 billion in book value, but decreased interest payments due to debt repayments and refinancing efforts are favorable for its financial health [7] - Despite the ongoing debt concerns, the company has launched two new ships to meet high demand, and strong bookings continue to support its growth trajectory [8]