Financial Performance Highlights - Q2 2025 Adjusted EBITDA reached $694 million, exceeding guidance of approximately $670 million[7] - Q2 2025 Adjusted EPS was $051, meeting guidance despite an $008 impact from foreign exchange[7] - Net Yield increased by 31% compared to 2024, surpassing guidance by 60 bps[7] - Adjusted Net Cruise Cost Excluding Fuel per Capacity Day was $163, flat compared to 2024 and better than the guidance of $165[7] - The company expects to deliver over $200 million in cumulative total savings by the end of 2025 and is confident in achieving a $300 million+ target through 2026[30] Growth and Capacity - The company anticipates a net capacity growth with a 4% CAGR[22] - The company has 7 new ships on order, representing approximately 31,250 berths[22] - Oceania Cruises has 4 new ships on order, representing approximately 5,560 berths[22] - Regent Seven Seas has 2 new ships on order, representing approximately 1,650 berths[22] Financial Targets and Leverage - The company targets an Adjusted Operational EBITDA Margin of approximately 39% and Adjusted EPS of approximately $245 for 2026[35] - The company aims to reduce Net Leverage to the mid-4x range[35] - Q2 2025 Net Leverage decreased to 53x and is expected to end 2025 at approximately 52x[7,68] Sustainability - The company aims for a 10% reduction in GHG intensity from the 2019 baseline[36] - By the end of 2024, 59% of the company's fleet was equipped with shore power technology[45] - 47% of the company's fleet was tested with biofuel blends, exceeding the 40% goal by 2024[52]

Core Insights - The company reported record total revenue of $2.5 billion for the second quarter of 2025, a 6% increase compared to the same period in 2024, and reaffirmed its full-year guidance for 2025 [6][7][9] - Strong consumer demand has led to bookings exceeding historical levels, with a notable increase in onboard spending [3][9] - The company is expanding its private island destination, Great Stirrup Cay, with the addition of a new waterpark and other amenities expected to enhance guest experience [3][6][34] Financial Performance - GAAP net income for the second quarter was $30 million, with earnings per share (EPS) of $0.07, reflecting a decline of $133.4 million year-over-year [6][7] - Adjusted EBITDA reached $694 million, an 18% increase from $588 million in 2024, exceeding guidance of $670 million [8][14] - Adjusted EPS was $0.51, in line with guidance, despite a negative impact of $0.08 from foreign exchange losses [8][14] Operational Metrics - Gross margin per Capacity Day increased by 11% on an as-reported basis and 12% on a Constant Currency basis [7] - Net Yield increased approximately 2.7% on an as-reported basis, surpassing the guidance of around 2.5% [7][14] - Occupancy for the second quarter was 103.9%, consistent with guidance, and the advance ticket sales balance reached a record high of $4 billion [9][10] Liquidity and Debt Management - The company successfully upsized its senior secured Revolving Loan Facility from $1.7 billion to approximately $2.5 billion, enhancing its liquidity position [6][12] - Total debt stood at $13.8 billion, with Net Leverage decreasing to 5.3x, down from 5.7x in the previous quarter [10][12] - Liquidity at quarter-end was $2.4 billion, including $184 million in cash and cash equivalents [11][12] Future Outlook - The company reiterated its full-year 2025 guidance, expecting a 2.5% increase in Net Yield and a 0.6% growth in Adjusted Net Cruise Cost excluding Fuel per Capacity Day [14][16] - Full-year Adjusted EBITDA is projected to be approximately $2.72 billion, reflecting an 11% increase compared to 2024 [14][16] - The company remains committed to achieving its 2026 financial targets, including reducing Net Leverage to the mid-4x range [12][14]

Core Viewpoint - Royal Caribbean Cruises Ltd. is experiencing a decline in share price due to a tempered yield outlook for 2025, despite a significant rally in shares over the past three months [1][2]. Group 1: Share Performance and Analyst Ratings - RCL shares are trading lower by 1.01% to $331.06 [5]. - Goldman Sachs analyst Lizzie Dove has reiterated a Buy rating on the company, while lowering the price forecast from $364 to $361 [1]. Group 2: Yield Outlook and Earnings Estimates - The company's updated yield outlook for 2025 has been revised down, with the high end of net yield guidance decreasing from 4.6% to 4.0%, indicating limited upside to earnings estimates [2][5]. - The full-year guidance does not account for any potential acceleration in close-in demand, which could allow for upward revisions in the future [5]. Group 3: Booking Trends and Future Growth - A shortening booking window, which has already narrowed by one week for 2026, is not seen as alarming, but investors are advised to monitor Norwegian Cruise Line's upcoming update for further insights on cruise trends [3]. - The setup for 2026 net yield growth could exceed current expectations, driven by contributions from new ships and the Beach Club, alongside a more stable macroeconomic environment [4].

Group 1: Financial Performance - Royal Caribbean raised its full-year earnings guidance for 2025 to between $15.41 and $15.55 per share, up from the previous range of $14.55 to $15.55 [1] - The company reported second-quarter adjusted earnings per share of $4.38 on revenue of $4.54 billion, exceeding Wall Street's expectations of $4.09 EPS and $4.55 billion in revenue [5] - The cruise line's income rose to $1.2 billion, or $4.41 per share, compared to $854 million, or $3.11 per share, a year earlier [5] Group 2: Market Trends and Consumer Behavior - CEO Jason Liberty noted that 75% of consumers plan to spend the same amount or more on leisure travel over the next 12 months, indicating a shift towards experience-driven travel [2] - The company observed growth in bookings, particularly from younger travelers, with millennials and younger generations now accounting for about half of total guests [3] - There is a trend of travelers booking closer to their departure date, with many willing to pay a premium for last-minute cabins [4] Group 3: Capacity and Demand - Royal Caribbean reported a 5.8% increase in capacity compared to the previous year, with 2.3 million guests taking a cruise during the second quarter [6] - Bookings for new ships launching this year, such as Star of the Seas and Celebrity Xcel, are performing well, reinforcing the effectiveness of the company's strategy [6][7]

Core Viewpoint - Royal Caribbean Cruises Ltd. reported second-quarter earnings that exceeded EPS expectations but fell short on revenue, leading to a decline in stock price. The company's earnings guidance for the upcoming quarter and full year also disappointed investors, contributing to the stock's drop. Financial Performance - The company reported EPS of $4.38, beating expectations of $4.04 by 34 cents, and showing a 36% increase year-over-year [1] - Revenue for the quarter was $4.54 billion, slightly below the expected $4.55 billion [2] - For the upcoming quarter, Royal Caribbean forecasts EPS between $5.55 and $5.65, lower than analysts' estimates of $5.84 [2] - Full-year EPS guidance is between $15.41 and $15.55, which is below the consensus estimate of $15.46 [3] Stock Performance - RCL stock is currently trading at $337.37, down 4.16% [2] - The stock has increased over 44% in 2025, but the recent earnings report led to a pullback [3] - The consensus price target for RCL stock is $311.05, indicating a potential downside of 11.64% from the current price [6] Valuation Metrics - RCL stock has a P/E ratio of over 27x, significantly higher than its historical average and above the sector average for consumer discretionary stocks [4] - The stock's P/E ratio is about twice that of Norwegian Cruise Line Holdings Ltd. and Carnival Corp. [4] Debt Management - Royal Caribbean's debt-to-equity ratio is 2.21, which is lower than its peers, indicating a relatively strong position in terms of leverage [7] - The company repaid $1.4 billion in debt last quarter and plans to pay $3.3 billion for the full year, which may impact short-term earnings but is seen as a positive long-term strategy [8] Market Sentiment - Short interest in RCL stock has increased over 20% in the last month, indicating growing bearish sentiment among investors [5] - The stock has dipped below its 50-day simple moving average, suggesting a strong negative market reaction [9] - Despite bearish momentum, there are indications that the sell-off may be overdone, with potential support levels between $340 and $350 [10]

Market Overview - Pre-market futures are up due to various earnings reports, economic data, and a significant railway merger [1] - The Dow is slightly down by 12 points, while the S&P 500 is up by 11 points, and the Nasdaq is up by 88 points [1] Railway Merger - Union Pacific (UNP) is set to acquire Norfolk Southern (NSC) for $72 billion, or $320 per share, creating the first trans-continental railroad in the U.S. [2] - The merger requires approval from the Surface Transportation Board, and the current administration may favor the deal despite monopolistic concerns [3] Trade Balance - The Advanced U.S. Trade Balance in Goods for June shows a pullback to -$86 billion, better than expected, driven by a 4.2% decline in imports [4] - This indicates a slowdown in trade due to higher tariff expectations, contrasting with the record-low trade balance of -$162 billion in March 2025 [4] Q2 Earnings Highlights - Boeing (BA) reported a Q2 loss of $1.24 per share, improving by 30 cents over consensus, with revenues of $22.75 billion exceeding estimates by 4.1% [5] - UnitedHealth (UNH) missed earnings expectations with $4.08 per share versus $4.84 expected, while revenues of $111.6 billion slightly beat estimates [6] - Royal Caribbean (RCL) reported earnings of $4.38 per share, surpassing consensus by 6.8%, despite revenues of $4.54 billion missing projections [7] - Spotify (SPOT) reported a loss of $0.48 per share, significantly missing the $2.13 consensus estimate, with revenues of $4.76 billion also falling short [8]

Core Insights - Norwegian Cruise Line Holdings Ltd. (NCLH) is set to release its second-quarter 2025 results on July 31, with an expected earnings per share (EPS) of 51 cents, reflecting a 27.5% increase from 40 cents in the same quarter last year [1][3] - The consensus revenue estimate for the second quarter is $2.56 billion, indicating a 7.8% growth year-over-year [3][8] Earnings Estimate Trend - The EPS estimates for the current quarter have remained stable at 51 cents over the past 30 days, with projections for the next quarters being 1.17 for Q3 2025, 2.01 for the current year, and 2.42 for next year [3][4] - The company has a history of earnings surprises, having outperformed the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 34% [4][6] Revenue Drivers - The anticipated revenue growth is attributed to firm pricing discipline, resilient onboard spending, and the full-quarter impact of the newly launched Norwegian Aqua [9][10] - Onboard revenues, including specialty dining and excursions, are expected to rise significantly, with passenger ticket revenues projected to increase by 1.5% to $1.6 billion and onboard revenues expected to grow by 17.9% to $908.7 million [10][11] Margin Considerations - Cost pressures from the launch of Norwegian Aqua and deferred costs from Q1 are expected to impact margin expansion, with adjusted net cruise costs anticipated to rise by approximately 1.4% [15][16] - Despite these pressures, the company expects adjusted EBITDA to be around $670 million for the second quarter [16] Stock Performance and Valuation - NCLH shares have increased by 49% over the past three months, outperforming the Zacks Leisure and Recreation Services industry, which rose by 31.8% [17] - The stock is currently trading at a forward P/E ratio of 10.64X, which is below the industry average of 20.26X, indicating a potential undervaluation [19] Strategic Focus - The company is enhancing its position in the leisure travel market through fleet modernization and improved guest experiences, with a focus on maximizing yield and onboard engagement [21][26] - Ongoing initiatives, such as the "Charting the Course" program, aim to improve cost control and operational efficiency, supporting long-term margin performance [24][26]

Q2 2025 Performance - Load Factor reached 110%[7] - Net Yield Growth vs 2024 was 5.2% in constant currency[7] - NCCx Growth vs 2024 was 2.1% in constant currency[7] - Adjusted EBITDA was $1.9 billion, a 19% increase compared to 2024[7] - Adjusted EBITDA Margin was 40.8%[7] - Adjusted Earnings Per Share was $4.38, a 36% increase compared to 2024[7] - Operating Cash Flow was $1.7 billion[7] FY 2025 Guidance - APCDs are projected to be 53.3 million[9] - Net Yield Growth vs 2024 is expected to be between 3.5% and 4.0% in constant currency[9] - NCCx Growth vs 2024 is expected to be approximately 0.3% in constant currency[9] - Adjusted Earnings Per Share is projected to be between $15.41 and $15.55[9] Q3 2025 Guidance - APCDs are projected to be 13.7 million[14] - Net Yield Growth vs 2024 is expected to be between 2.0% and 2.5% in constant currency[14] - NCCx Growth vs 2024 is expected to be between 6.0% and 6.5% in constant currency[14] - Adjusted Earnings Per Share is projected to be between $5.55 and $5.65[14]

Core Insights - Norwegian Cruise Line is enhancing the guest experience at Great Stirrup Cay with new attractions and amenities, including a waterpark and various recreational facilities [2][3][8] Group 1: Waterpark Features - Great Tides Waterpark will feature 19 waterslides, a nearly 800-foot dynamic river, and a 9,000-square-foot splash zone for kids, offering a mix of adrenaline and relaxation [3][6] - The Tidal Tower will include eight waterslides, with the two tallest providing thrilling experiences, and select slides will have conveyor belts for easier access [4] - Cliffside Cove will introduce racer slides and cliff jumps, marking a first in the cruise industry, along with a family slide for simultaneous use by four guests [5] Group 2: Additional Island Enhancements - A new heated pool area, a multi-ship pier, and an island-wide tram service will improve accessibility and comfort for guests [8] - The Great Life Lagoon will feature private cabanas, two swim-up bars, and a vibrant atmosphere with a DJ at the Reef Bar [9] - Horizon Park will offer various recreational activities, including lawn games and a mini-golf course, while Hammock Bay will provide a relaxing environment with over 50 hammocks [10] Group 3: Marketing and Promotions - Norwegian Cruise Line is launching a nationwide sweepstakes from July 29 to August 31, 2025, offering 250 cruises to Great Stirrup Cay [11] - Consumer activations in New York City and Miami will promote the island experience, featuring immersive environments and opportunities to win cruise giveaways [12][14] - The company anticipates welcoming one million guests to Great Stirrup Cay in 2026, with new ships and itineraries planned to meet growing demand [15] Group 4: Special Offers - Norwegian Cruise Line is currently offering up to $1,500 off Caribbean and Bahamas sailings as part of "The Great Life Sale," along with additional benefits for Latitudes Members [16]

Royal Caribbean shares fell after the cruise operator’s quarterly profit outlook trailed expectations because of costs related to its newest ship https://t.co/ECxdokqvY9 ...