ROYAL CARIBBEAN GROUP REPORTS 2025 RESULTS, ISSUES 2026 GUIDANCE

Core Insights - Royal Caribbean Group reported a strong performance in 2025, with earnings per share (EPS) of $15.61 and adjusted EPS of $15.64, exceeding guidance due to favorable revenue and joint venture performance [1][4] - The company anticipates continued growth in 2026, projecting adjusted EPS between $17.70 and $18.10, representing a compound annual growth rate (CAGR) of 23% over the first two years of its Perfecta program [1][8] Financial Performance - For Q4 2025, net income was $0.8 billion or $2.76 per share, compared to $0.6 billion or $2.02 per share in Q4 2024, with adjusted net income also showing significant growth [6][8] - Total revenues for 2025 reached $17.9 billion, with adjusted EBITDA of $7.0 billion, indicating strong operational performance [8][49] Revenue and Yield Growth - Gross margin yields increased by 9.2% and net yields by 3.1% in Q4 2025 compared to Q4 2024, with a load factor of 108% [7][8] - The company expects net yields to increase by 2.1% to 4.1% in 2026, driven by higher capacity and anticipated yield growth [8][12] Capacity and Expansion Plans - Royal Caribbean is expanding its vacation portfolio with the introduction of the new Discovery Class ships and an additional 10 ships for Celebrity River Cruises, aiming to enhance guest experiences and long-term growth [3][14][15] - Capacity for 2026 is expected to increase by 6.7% compared to 2025, with further growth projected for 2027, 2028, and 2029 [8][24] Booking Trends and Onboard Revenue - The onset of the WAVE season has led to record booking weeks, with approximately two-thirds of 2026 capacity already booked at record rates [10] - Onboard revenue continues to exceed prior years, with nearly 50% of onboard revenue in 2025 booked pre-cruise, primarily through digital channels [10][11] Liquidity and Capital Expenditures - As of December 31, 2025, the company's liquidity position was $7.2 billion, including cash and undrawn credit facilities [20] - Capital expenditures for 2026 are projected to be around $5 billion, primarily related to new ship orders and private destination developments [22][23]