Q3 2025 Earnings Presentation November 19, 2025 Colors 176 6 48 0 46 94 69 99 126 129 129 129 174 174 174 220 220 220 Disclaimers and additional information Forward-looking statements Certain statements in this presentation constitute "forward-looking statements" within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statementsinclude, but are not limited to, all ...

Core Insights - Royal Caribbean Cruises Ltd. (RCL) reported mixed third-quarter 2025 results, with adjusted EPS exceeding expectations while revenues fell slightly short [1][9] - The company experienced year-over-year growth in key metrics, driven by strong demand for cruise vacations and robust close-in bookings [1][10] Financial Performance - Adjusted earnings per share reached $5.75, an 11% increase from the previous year [2] - Revenues amounted to $5.14 billion, reflecting a 5% year-over-year growth [2] - The company delivered nearly 2.5 million vacations during the quarter, supported by higher capacity and strong booking trends [2][10] Market Position and Stock Performance - RCL's shares have increased by 7.3% year-to-date, outperforming the Zacks Leisure and Recreation Services industry's decline of 7.5% [6] - The stock has also outperformed the S&P 500's growth of 14.5% during the same period [6] - Despite solid demand and growth, RCL's stock dropped by 15.5% following the earnings report, highlighting concerns about future performance [7][26] Booking Trends and Demand - The company reported strong booking momentum, with accelerated bookings for both new and existing ships, particularly for close-in sailings [11] - Booked load factors for 2025 and 2026 are at record levels, with 2026 pricing tracking at the high end of historical norms [11] - Royal Caribbean anticipates continued strong booking momentum across brands and regions [11] Fleet Expansion and Innovation - RCL is advancing a strategic fleet expansion plan focused on innovation and guest experience, with new vessels designed for high-margin amenities and improved fuel efficiency [12] - Upcoming ships, including Star of the Seas and Celebrity Xcel, are expected to drive double-digit capacity growth in late 2025 [13] - The introduction of Legend of the Seas in 2026 and a long-term shipbuilding agreement with Meyer Turku reinforce the company's commitment to sustainable growth [14] Digital Engagement and Onboard Spending - Digital engagement has become a significant revenue driver, with nearly 90% of onboard revenues booked pre-cruise through digital channels [15][16] - The company reported double-digit growth in e-commerce visits and conversion rates, enhancing guest satisfaction and spending trends [16] Earnings Estimates and Analyst Confidence - For 2025, adjusted EPS is expected to be between $15.58 and $15.63, an increase from previous estimates [17] - The Zacks Consensus Estimate for RCL's 2025 and 2026 earnings implies year-over-year increases of 32.5% and 14.6%, respectively [18] Cost Pressures and Operational Challenges - Net cruise costs excluding fuel rose by 4.3% in Q3 2025, reflecting higher operating expenses and investments in new destinations [20] - Projected fuel expenses for 2025 are estimated at $1.14 billion, alongside increased dry dock activity planned for 2026 [21] - The company noted a more promotional environment in the Caribbean due to broader industry capacity growth [21] Valuation and Investment Outlook - RCL is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 13.98X, below the industry average of 15.48X, indicating an attractive investment opportunity [22] - The stock's post-earnings pullback is attributed to near-term headwinds rather than a decline in demand fundamentals [26] - Analysts suggest holding RCL shares as earnings visibility for 2026 improves, while new investors may wait for a more favorable entry point [27]

Core Viewpoint - Royal Caribbean Cruises Ltd. (NYSE:RCL) has faced a 15% decline in share price over the past month, primarily following its fiscal third-quarter earnings report released on October 28th, which revealed a lower-than-expected fourth-quarter profit guidance [2][3]. Group 1: Financial Performance - The company's fiscal third-quarter earnings report indicated that while the actual numbers were not significantly negative, the fourth-quarter revenue outlook was disappointing, with expected profit-per-share guidance revised down to between $2.74 and $2.79, compared to analyst expectations of $2.89 [2]. - Jim Cramer defended the company's performance, suggesting that the results were not as bad as perceived, despite the stock's recent troubles [2]. Group 2: Market Context - Cramer highlighted the impact of the experiential economy on Royal Caribbean, noting that the sector has experienced a downturn, but he believes the company has been oversold [3]. - There is a general sentiment of caution among consumers regarding experiences, but Cramer anticipates a shift away from this negative sentiment soon, particularly for well-executing companies like Royal Caribbean [3].

Core Insights - Disney Cruise Line's seventh ship, Disney Destiny, is set to embark on its maiden voyage, following a christening ceremony that featured a 10-minute drone show [1][2] - The ship showcases characters from Disney, Pixar, and Marvel, reflecting the company's commitment to creativity and innovation in its offerings [2] - Disney Cruise Line is undergoing significant expansion, aiming to have 13 ships by 2031, with the next ship, Disney Adventure, scheduled to launch in March 2026 from Singapore [7] Ship Features - Disney Destiny will offer four and five-night cruises to the Bahamas and the Western Caribbean during its inaugural season [5] - Onboard dining experiences include rotational dining at themed restaurants such as Pride Lands: Feast of The Lion King, Worlds of Marvel, and 1923 [5] - The ship includes various amenities for families, such as 10 pools and water play areas, while also providing exclusive dining and lounge options for adults [7] Company Vision - Disney emphasizes its legacy of entertaining fans through innovative experiences, with Disney Cruise Line serving as a global ambassador for the brand [10] - The company aims to connect guests with beloved Disney stories, enhancing the overall experience through its cruise offerings [10]

Core Insights - Viking Holdings (VIK) is expected to report quarterly earnings of $1.19 per share, reflecting a 33.7% increase year-over-year, with revenues projected at $2 billion, a 19.1% increase compared to the previous year [1] - The consensus EPS estimate has remained stable over the last 30 days, indicating analysts have reassessed their initial projections [1][2] Revenue and Earnings Estimates - Analysts estimate 'Onboard and other' revenues will reach $134.85 million, marking an 18.4% increase from the year-ago quarter [4] - The 'Cruise and land' segment is forecasted to generate $1.86 billion, representing a 19.1% increase from the prior-year quarter [4] - 'Occupancy' is projected to be 94.5%, slightly up from 94.0% in the previous year [4] Key Metrics Projections - The 'Net Yield' is expected to reach $613.36, compared to $576.00 from the previous year [5] - 'Capacity PCDs' are projected to be 2,272,497 days, up from 2,030,236 days year-over-year [5] - The average prediction for 'PCDs' stands at 2,148,208 days, an increase from 1,908,364 days in the prior year [5] Stock Performance - Viking shares have seen a -1.1% change over the past month, contrasting with a +1.4% move in the Zacks S&P 500 composite [5] - With a Zacks Rank of 3 (Hold), VIK is anticipated to perform in line with the overall market in the near future [5]

Core Insights - Princess Cruises has partnered with Handshake Speakeasy, recognized as The Best Bar in North America for two consecutive years, to introduce five exclusive cocktails aboard its ships [1][4][5] Partnership Details - This collaboration marks Handshake Speakeasy's first venture with a cruise line, bringing the essence of Mexico City's cocktail culture to Princess Cruises [2][4] - The five signature cocktails will be available starting November 14, 2025, on Star Princess, with plans to expand availability across all 17 Princess ships [2][3] Cocktail Offerings - The exclusive cocktails include three available at Crooners bar and two reserved for The Sanctuary Collection [2][4] - Handshake Speakeasy is celebrated for its innovative drinks and unique Mexican hospitality, featuring a hidden flavor lab for cocktail creation [4][5] Experience Enhancement - The partnership aims to elevate guest experiences by offering unique cocktails that embody the vibrant bar culture of Mexico City [3][5] - Rob Floyd, a renowned mixologist and global ambassador for Princess Cruises, leads a digital storytelling journey showcasing the cocktail creation process [3][5] Additional Offerings - Princess Cruises continues to enhance its bar scene with the Love Line Premium Liquors collection, featuring a variety of curated wines and spirits [6]

Core Insights - Norwegian Cruise Line Holdings Ltd. (NCLH) is identified as one of the 13 most undervalued stocks under $20 to buy [1] - Morgan Stanley analyst Stephen Grambling has reduced the price target for NCLH from $27 to $25 while maintaining an Equal Weight rating [2] Financial Performance - NCLH reported a record quarterly revenue of $2.94 billion, which is a 4.7% increase from the previous year, but it fell short of the estimated $3.02 billion due to a decline in air program participation [3] - The company's earnings per share (EPS) was $1.20, exceeding estimates by 4 cents and guidance by 6 cents; however, the profit forecast for Q4 is $0.27 per share, below the analysts' expectation of $0.30 due to soft demand for cruise vacations and cost pressures [4] Market Reactions - Following the earnings call, NCLH's stock has declined by over 14%, with investor concerns regarding a decrease in ticketing revenue amid a focus on family-oriented offerings [4] - Morgan Stanley has also reduced its EBITDA forecasts by approximately 1% for the fiscal years 2025 to 2027, indicating ongoing debates about the pricing power of cruise operators [5] Company Overview - Norwegian Cruise Line Holdings Ltd. operates a global cruise business with itineraries to over 700 destinations, managing a fleet of 32 ships and over 66,500 berths under the brands Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises [6]

Core Insights - The experiential economy, which thrived post-pandemic, is showing signs of decline as recent data and earnings reports raise concerns about consumer spending and demand [2][20]. Economic Indicators - The labor market is deteriorating, with an average of less than 30,000 net new jobs per month from June to August, and a recent report indicating an average loss of 11,250 jobs per week in October [3][4]. - Inflation is rising, with the consumer price index increasing from 2.3% in April to 3% in September, leading to uncertainty about future Federal Reserve rate cuts [5][6]. Company Performance - Major players in the experiential economy, such as Chipotle, Cava, and Sweet Green, reported disappointing earnings, with younger customers reducing dining out frequency [8]. - Cruise lines like Royal Caribbean and Norwegian Cruise Line have seen stock declines of 20% and 16% respectively, despite Royal Caribbean raising its full-year earnings forecast [9][10]. - Live Nation's stock dropped over 10% following a miss in earnings, attributed to weaker concert business and profitability from Ticketmaster [11][12]. - Disney's stock fell nearly 8% after reporting a topline miss and a bottom line beat, indicating challenges in its domestic experiences business [15][16]. Market Sentiment - Investor confidence in the experiential economy is waning, with companies no longer receiving the benefit of the doubt despite management's optimistic outlooks [10][11]. - The overall sentiment is increasingly negative, with concerns about the sustainability of the experiential economy amid weaker macro data and disappointing earnings reports [20][21].

Core Insights - Bank of America has identified AT&T among 16 stocks recommended for investors seeking diversification away from AI-related investments [1][8] - The selected stocks are believed to be undervalued, have seen profit estimates raised in the last three months, and are trading at least 10% below their 52-week highs [2][8] Consumer-Focused Stocks - Notable companies include AT&T, Walt Disney Co., Dollar General, and Viking Holdings, which are familiar to American consumers [4][8] - Disney is expected to benefit from its sports offerings and theme parks, while AT&T has exceeded phone subscriber estimates, indicating potential growth [5][8] Financial and Logistics Stocks - KeyCorp and Progressive are highlighted, with Progressive showing strong positive revisions in earnings per share estimates [10] - BGC Group is noted for its dominant position in energy derivatives, and J.B. Hunt Transport Services is recognized for effective cost-cutting measures [11] Industrial and Energy Stocks - Analysts have identified natural gas and energy stocks like Eversource Energy and Oneok, along with Freeport-McMoRan, which is expected to recover from recent operational issues [12] - Industrial firms such as Amcor are considered undervalued following recent acquisitions and leadership changes [13]

Core Insights - Disney is focusing on a broad entertainment strategy that combines family-friendly content with sports, leveraging its brands like ESPN, Disney Plus, and Hulu to attract subscribers [2][3][4] - The company reported a significant increase in subscribers, with 3.8 million new Disney Plus subscribers in the last quarter, driven by strong content and international expansion [8] - Despite some mixed results in theme park performance, Disney remains optimistic about its growth outlook and has reiterated its EPS growth guidance for the next two years [4][7] Streaming and Subscriber Growth - The new ESPN All Access bundle has attracted a substantial number of subscribers, with 80% also subscribing to Disney Plus and Hulu, indicating a successful cross-promotion strategy [2] - Disney Plus saw a 3.8 million increase in subscribers, attributed to content strength and international market expansion [8] Theme Parks and Experiential Offerings - Theme parks continue to be a critical revenue driver for Disney, with strong performance in international markets and new cruise ship bookings showing promising growth [7][13] - The company is launching two new cruise ships in the first half of next year, with strong bookings indicating robust demand for Disney's experiential offerings [13] Market Dynamics and Challenges - The recent sell-off in Disney's stock surprised analysts, who expected a smaller decline, highlighting investor concerns despite the company's positive outlook [6][7] - The blackout of Disney channels on YouTube TV has raised questions about potential costs, but Disney remains confident in its negotiating position and the necessity of its content for platforms like YouTube TV [9][11][12]