Royal Caribbean Cruises Ltd. (RCL) and Carnival Corporation & plc (CCL) are the two giants of the cruise industry, with market caps of $48.5 billion and $22.6 billion, respectively. Both stocks have outperformed the industry in the past year.With the demand for the cruise industry on the rise, find out which stock has more upside potential right now. Let us take a closer look at both companies' fundamentals, earnings growth and valuation.Thesis on RCLRoyal Caribbean is benefiting from robust cruise demand, ...

Financial Data and Key Metrics Changes - The company reported a net income exceeding guidance by more than $170 million, driven by strong demand and a 7.3% yield increase, surpassing last year's 17% yield improvement [6][20] - EBITDA reached $1.2 billion, marking a nearly 40% year-over-year increase, with operating income nearly doubling [7][19] - Operating and EBITDA margins improved over 400 basis points year-over-year, now surpassing 2019 levels [7][9] Business Line Data and Key Metrics Changes - Both ticket and onboard spending outperformed expectations, indicating strong consumer demand [6][20] - Customer deposits increased by over $300 million compared to the prior year, reflecting improved ticket prices and pre-cruise onboard sales [22] Market Data and Key Metrics Changes - The company is experiencing historical high prices across all core programs for 2025, with booking volumes for 2026 sailings also reaching an all-time high [10] - European brands continue to outperform year-over-year on both price and occupancy [20] Company Strategy and Development Direction - The company is focused on enhancing its marketing campaigns to drive broader consideration for cruise travel and maintain momentum [10][12] - Strategic investments include the expansion and renovation of Denali Lodge and the Aida Evolution program, aimed at enhancing guest experiences and operational efficiency [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged heightened macroeconomic and geopolitical volatility but expressed confidence in achieving strong results due to robust demand and effective execution [9][15] - The company is well-positioned for future growth, with a focus on maintaining investment-grade leverage metrics and reducing debt [17][18] Other Important Information - The company has successfully refinanced $5.5 billion of debt, resulting in significant interest expense savings [25][26] - The sale of Seabourn Sojourn was executed in the best interest of shareholders, consolidating the fleet while maintaining a strong luxury offering [15][106] Q&A Session Summary Question: Can you provide more color on consumer demand trends since Q4? - Management noted that Wave season was a success, with record bookings and strong pricing, indicating robust consumer demand [30] Question: Is there potential upside to the yield guidance for the rest of the year? - Management confirmed that strong Q1 performance and ongoing onboard spending trends suggest potential for upside in yield guidance [42][44] Question: Are there any material differences in bookings for 2026 by brand? - Management indicated no significant concerns across brands, with a strong foundation for 2026 bookings [51] Question: What cost levers are available if demand weakens? - Management highlighted the absence of hedging on commodities as a natural hedge, allowing flexibility in cost management [87] Question: How is the company approaching capital allocation beyond debt paydown? - Management stated that immediate debt paydown is the priority, but future considerations will include investments in growth opportunities [117]

Carnival (CCL) Q1 2025 Earnings Call March 21, 2025 10:00 AM ET Company Participants Beth Roberts - Senior Vice President and Investor RelationsJosh Weinstein - President, CEO, Chief Climate Officer & DirectorDavid Bernstein - CFO & CAORobin Farley - Managing DirectorSteven Wieczynski - Managing DirectorPatrick Scholes - Managing Director - Lodging & Leisure Equity ResearchDavid Katz - Managing DirectorLizzie Dove - Vice President Equity Research Conference Call Participants Benjamin Chaiken - Equity Analys ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 increased by 20.5% year-over-year to almost $1.4 billion, driven by higher capacity and revenue per passenger cruise day (PCD) [16] - Adjusted gross margin rose by 19.5% year-over-year to nearly $870 million, resulting in a net yield of $507, which is 7.4% higher than Q4 2023 [17] - Adjusted EBITDA for Q4 totaled $306 million, up 39.7% from the previous year, with net income for Q4 2024 at $104 million compared to a loss of $594 million in Q4 2023 [18] - Adjusted net income attributable to Viking Holdings Limited for Q4 2024 was $200 million, with adjusted EPS at $0.45, and for the full year 2024, adjusted EPS was $1.86 [19] Business Line Data and Key Metrics Changes - In the river segment, capacity PCDs increased by 3.7% year-over-year, with adjusted gross margin growing by 15.8% to $1.6 billion and net yield up 11.7% to $533 [21] - For the ocean segment, capacity PCDs increased by 6.2% year-over-year, with adjusted gross margin rising by 12.1% to $1.5 billion and net yield increasing by 5% to $522 [23] Market Data and Key Metrics Changes - As of February 23, 2025, Viking was 88% booked for the year with $5.3 billion in advance bookings, which is 26% higher than the same point in 2024 [27] - For ocean cruises, advanced bookings reached $2.4 billion, 30% higher than the previous year, with operating capacity up 18% year-over-year [41] - For river cruises, advanced bookings were nearly $2.6 billion, 24% higher than last year, with operating capacity up 7% year-over-year [43] Company Strategy and Development Direction - Viking aims to grow its core capacity by 12% in 2025 with the delivery of 10 river ships and one ocean ship, emphasizing a leadership position in the river cruise market [28] - The company focuses on maintaining high customer satisfaction and operational efficiency, leveraging its unique fleet design and in-house operations to enhance profitability [30][36] - Viking is committed to expanding its market presence, including a focus on the Chinese market with tailored offerings for Chinese-speaking guests [88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for core products, with a positive outlook for 2025 despite macroeconomic uncertainties [27][84] - The company highlighted the resilience of its high-end customer demographic, which is less impacted by economic downturns compared to average consumers [106] - Management noted that they are prepared to adapt their booking strategies based on market conditions, emphasizing the importance of analyzing booking curves [44][85] Other Important Information - Viking became a publicly traded company on the New York Stock Exchange on May 1, 2024, and received the 2024 North America IPO of the Year award [12] - The company ended 2024 with total cash and cash equivalents of $2.5 billion and an undrawn revolver of $375 million, with a net leverage ratio of 2.4 times [24] Q&A Session Summary Question: Why hasn't 2026 been added to the booking curve charts? - Management focused on 2024 performance and 2025 bookings, with 2026 bookings currently ahead of 2025 at the same point in time [53][54] Question: How will Viking respond to new competition from Royal Caribbean? - Viking holds a strong market share of 52% and has a large order book, which positions it well against new entrants [57][58] Question: What are the current demand trends by region? - Management reported strong demand for 2025, with 88% of capacity sold and positive trends in both river and ocean segments [64] Question: Are there any barriers to entry for new competitors? - Viking has secured valuable docking rights in key locations, which serve as significant barriers to entry for new competitors [77][78] Question: How does Viking manage booking curves in uncertain macro environments? - Viking's strong database allows for direct demand generation, providing flexibility to adapt to market conditions [84][85] Question: What are the priorities for growth in the next 3 to 5 years? - Viking is focusing on expanding its presence in Egypt and China, with plans for additional river vessels in these markets [88][89] Question: How does Viking plan to enhance customer interaction through technology? - The company is investing in technology for online booking and customer interaction, aiming to stay ahead of industry trends [123][124]