Core Viewpoint - Royal Caribbean's stock has doubled over the past year, indicating strong market positioning and potential for investors to reconsider the cruise line despite competition from Carnival and Viking Holdings [1][10]. Group 1: Market Positioning - Royal Caribbean holds the second-largest market share in the cruise industry, claiming 27% of all cruise passengers, while Carnival leads with 41.5% [4]. - The company's strategy aligns with the "number one or number two" approach proposed by former General Electric CEO Jack Welch, suggesting a strong chance of success and profitability [3]. Group 2: Financial Performance - In the first half of 2025, Royal Caribbean reported revenue exceeding $8.5 billion, a 9% increase compared to the same period in 2024 [7]. - The company achieved a net income of over $1.9 billion in the first two quarters of 2025, up from just over $1.2 billion in the same timeframe in 2024 [8]. Group 3: Debt Management - As of the end of Q2 2025, Royal Caribbean's total debt stands at $19 billion, significantly improved from nearly $24 billion at the end of 2022 [9]. - The company has managed to pay down debt while simultaneously expanding its fleet, indicating effective handling of its financial challenges [10]. Group 4: Future Outlook - Royal Caribbean continues to book cruises at over 100% capacity, demonstrating robust demand despite economic uncertainties [14]. - The company is positioned to benefit from a cycle of rising profits, higher stock prices, and an improving balance sheet, making it a compelling option for investors in the travel industry [14][15].

Core Viewpoint - Carnival, Lyft, and Peloton are identified as undervalued turnaround opportunities despite the S&P 500 being near its all-time high and historically expensive [1][2]. Group 1: Carnival - Carnival, the leading cruise line operator, faced significant challenges during fiscal 2020 and 2021 due to the pandemic, leading to a drastic increase in debt from $11.5 billion in fiscal 2019 to $33.2 billion in fiscal 2021 [4]. - The company has since stabilized, attracting more passengers and achieving over 100% occupancy, returning to profitability in fiscal 2024 with reduced net debt of $27.5 billion [5]. - Analysts project Carnival's revenue and EPS to grow at a CAGR of 5% and 22% from fiscal 2024 to fiscal 2027, with the stock trading at just 13 times next year's earnings, still over 55% below its all-time high from January 2018 [6]. Group 2: Lyft - Lyft, the second-largest ride-sharing provider in the U.S. and Canada, struggled during the pandemic but has rebounded by enhancing competitive rates and expanding its service offerings [7][8]. - In the latest quarter, Lyft reported a 10% year-over-year increase in active riders to 26.1 million and a 14% rise in total rides to 234.8 million, both record highs, yet the stock trades over 80% below its March 2019 peak [9]. - Analysts expect Lyft's revenue and adjusted EBITDA to grow at a CAGR of 12% and 28%, respectively, with GAAP net income projected to grow at a CAGR of 134% from 2024 to 2027, while the stock trades at less than one times this year's adjusted EBITDA [10][11]. Group 3: Peloton - Peloton experienced significant growth during the pandemic but has faced declining sales post-lockdown due to increased competition from cheaper alternatives [12]. - The company is focusing on stabilizing margins and cash flow by expanding subscriptions and reducing costs, leading to improved gross margins despite declining revenue [13]. - Peloton's stock trades over 95% below its January 2021 high, with an enterprise value of $3.3 billion, making it appear cheap at 1.3 times next year's sales, presenting potential for recovery if it can grow its subscriber base [14][15].

2025 EARNINGS CALL Q2 FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL INFORMATION Certain statements in this presentation relating to, among other things, our future performance estimates, forecasts and projections constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to: statements regarding revenues, costs and financial results for 2025 and beyond; our progress toward achievement of our Perfecta Program; demand for ...

Core Insights - Royal Caribbean (RCL) experienced a significant trading signal known as Power Inflow at a price of $331.57, indicating a potential uptrend and a bullish sign for traders [1][5]. Group 1: Power Inflow and Market Trends - The Power Inflow occurred within the first two hours of the market open, suggesting the overall direction of the stock for the remainder of the day, driven by institutional activity [3]. - Following the Power Inflow, RCL's stock reached a high price of $334.48 and a close price of $334.26, resulting in returns of 0.9% and 0.8% respectively [7]. Group 2: Order Flow Analytics - Order flow analytics, which involves analyzing the flow of buy and sell orders, helps traders gain insights into market conditions and make informed trading decisions [2][4]. - The Power Inflow is interpreted as a bullish signal by active traders, emphasizing the importance of understanding institutional movements in the market [2][5].

Financial Data and Key Metrics Changes - The company achieved record revenues and yields for eight consecutive quarters, with EBITDA up 26%, operating income increasing by 67%, and net income more than tripling year-over-year [9][10]. - Net income exceeded guidance by $185 million, driven by strong performance across all metrics [28]. - Yields grew by almost 6.5%, surpassing guidance by 200 basis points, with both ticket and onboard spending outperforming expectations [9][28]. Business Line Data and Key Metrics Changes - Customer deposits reached an all-time high, increasing by over $250 million compared to the previous year [30]. - Cruise costs without fuel per available lower berth day (ALBD) were up 3.5%, which was 200 basis points better than guidance [29][30]. - The company reported that EBITDA margins were 200 basis points higher than 2019 levels, marking the highest margins achieved in nearly twenty years [10][12]. Market Data and Key Metrics Changes - The company noted a strong close in demand across all core programs, contributing to improved ticket prices and onboard spending [28]. - The company is 93% booked for 2025, indicating strong demand despite geopolitical uncertainties [66]. Company Strategy and Development Direction - The company plans to set new targets in early Q2 next year after exceeding its 2026 fee change targets ahead of schedule [11][13]. - The launch of Celebration Key, a new private island destination, is expected to enhance customer experience and drive demand [17][19]. - The company is focused on achieving yield improvement by driving demand that outpaces supply, with significant investments in marketing and fleet enhancements [21][22]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the geopolitical tensions in the Middle East but stated that it has not yet had a discernible impact on business [6][7]. - The company remains optimistic about its ability to meet or exceed guidance, despite acknowledging a more unpredictable environment [15][69]. - Management indicated that onboard spending has remained strong even during periods of volatility, suggesting resilience in consumer behavior [74]. Other Important Information - The company has successfully met its carbon intensity reduction target, achieving a 20% reduction compared to 2019 levels [12]. - The new loyalty program, Carnival Rewards, is expected to enhance customer engagement and increase lifetime value, although it may have a short-term impact on yields [24][36]. Q&A Session Summary Question: Can you speak to improvements in product and experience that are translating to pricing and onboard spend? - Management highlighted ongoing incremental improvements across the business, emphasizing the importance of innovation and guest experience [46][49]. Question: What are the pricing expectations for Celebration Key itineraries? - Management confirmed that Celebration Key is seeing a premium in pricing, aligning with expectations, and marketing efforts are being ramped up [56][57]. Question: How has booking demand been affected by recent geopolitical events? - Management noted volatility in bookings during April, but improvements were seen in May and June, indicating a recovery in demand [66][68]. Question: Can you characterize demand for Europe in Q3? - Management reported strong demand for Europe in Q3, with onboard revenues outperforming expectations [75][76]. Question: What is the impact of the new loyalty program on customer engagement? - Management stated that the new loyalty program is designed to enhance engagement without pushing for direct bookings, benefiting both the company and travel agents [60].

Financial Performance Highlights - The company achieved record revenues, net yields, Adjusted EBITDA, Adjusted EBITDA per ALBD, and operating income in the second quarter of 2025[9] - Second quarter 2025 net yields increased by 64% compared to 2024 guidance of approximately 44%[10] - Adjusted net income more than tripled compared to the second quarter of 2024[10] - Adjusted EBITDA for the second quarter of 2025 reached $151 billion, exceeding the guidance of approximately $132 billion[10] - Adjusted net income for the second quarter of 2025 was $470 million, surpassing the guidance of approximately $285 million[10] - Adjusted earnings per share - diluted for the second quarter of 2025 was $035, exceeding the guidance of approximately $022[10] - The company exceeded its 2026 SEA Change financial targets 18 months early[14, 48, 49] - Full year 2025 Adjusted EBITDA is projected to be approximately $69 billion[17, 53] - Full year 2025 Adjusted net income is projected to be approximately $269 billion[17, 53] - Full year 2025 Adjusted earnings per share - diluted is projected to be approximately $197[17, 53] Demand and Booking Trends - 93% of 2025 is already booked, with occupancy for the remainder of the year being the second-highest on record at historically high prices[18] - Customer deposits in the second quarter of 2025 increased by approximately 40% compared to the second quarter of 2019, despite only a 10% capacity growth[22] - Customer deposits reached $85 billion in the second quarter of 2025, a $25 billion increase compared to the prior quarter's record[21] Strategic Initiatives and Investments - The company is continuing to invest in its highest-returning brands[32] - Carnival Cruise Line is launching "Carnival Rewards" in June 2026, a new and improved loyalty program[39] Debt Management and Financial Position - The company prepaid $350 million of 7625% notes due in 2026 and refinanced the remainder with $10 billion of 5875% senior unsecured notes due in 2031, resulting in over $20 million net interest expense reduction through early 2026[44] - Net debt to Adjusted EBITDA improved from 41x in the first quarter of 2025 to 37x in the second quarter of 2025[43]

The page numbering is dependent on the placeholder text boxes on the page layout in the master view, so please DO NOT remove them Disclaimers, Forward Looking Statements and Responsibility This presentation includes certain financial measures not presented in accordance with generally accepted accounting principles ("GAAP") including, but not limited to, Adjusted EBITDA, Adjusted Net Income (loss), and certain ratios and metrics derived therefrom. These non-GAAP measures are supplemental measures that are n ...

Financial Performance & Outlook - The company achieved record full-year operating results in 2024[2, 11] - The company expects 20% earnings growth in 2025[2, 16] - The company anticipates hitting the 2026 SEA Change EBITDA target one year early[2, 16, 45] - Q4 2024 adjusted EBITDA reached $1.22 billion, exceeding the guidance of approximately $1.14 billion[12] - Full year 2024 adjusted EBITDA reached $6.1 billion, outperforming the December guidance of approximately $5.6 billion by $500 million[13] - Full year 2024 adjusted net income reached $1.9 billion, exceeding the December guidance of approximately $1.2 billion by $700 million[13] Demand & Bookings - Net yields in FY 2024 increased by 11% compared to 2023, outperforming the December guidance of approximately 8.5%[13] - Adjusted cruise costs excluding fuel per ALBD in FY 2024 decreased by 3.5% compared to 2023, outperforming the December guidance of approximately 4.5%[13] - Customer deposits reached a record of $6.8 billion in 4Q 2024[40] Debt Management - The company achieved approximately 2.5 turn net debt to adjusted EBITDA improvement in 2024[44] - Debt prepayments exceeded $3 billion[44]

Core Insights - Royal Caribbean Cruises Ltd. (RCL) shares have increased by 17.8% in the past month, outperforming the Zacks Leisure and Recreation Services industry's 10.1% rise and the S&P 500's growth of 6.3% [1][2] Group 1: Growth Drivers - Strong demand for cruise vacations is evident, with record-breaking bookings during the 2025 WAVE season, indicating consumer willingness to spend on leisure travel [7] - Fleet expansion is a significant catalyst, with new ships like Icon of the Seas and Utopia enhancing guest satisfaction and premium pricing [9] - Operational efficiency has improved margins, with a reported 35% EBITDA margin in Q1 2025, reflecting a 360-basis-point improvement year over year [10] Group 2: Financial Performance - Earnings per share (EPS) estimates for 2025 have been revised upward from $14.95 to $15.36 over the past 60 days, indicating strengthened analyst confidence [12] - RCL's forward 12-month price-to-earnings (P/E) multiple is 16.33X, below the industry average of 18.16X, suggesting an attractive investment opportunity [20] Group 3: Strategic Initiatives - Investments in digital innovation and exclusive private destinations are enhancing competitive advantages, with initiatives like the Royal Beach Club aimed at offering differentiated experiences [11] - Enhanced loyalty programs and app-based engagement are increasing guest retention and pre-cruise spending [11] Group 4: Challenges - Despite strong demand, RCL faces macroeconomic uncertainties and rising costs, which could impact consumer spending behavior [17] - Transitional pressures from fleet expansion and new ship rollouts may temporarily affect yield performance [19]

Core Viewpoint - Carnival's stock has seen significant volatility in 2023, currently trading around $23, down from a 52-week high of $28.72, despite more than doubling since 2022 [1] Group 1: Financial Performance - Carnival reported record quarterly revenue of $5.8 billion in Q1, with operating income nearly doubling year over year to $543 million, driven by strong demand across its cruise brands [6] - Analysts expect Carnival's earnings per share to improve from $1.42 in fiscal 2024 to $1.86 in fiscal 2025, despite the company carrying $27 billion in debt [9] - The company saved $94 million in interest expense last quarter due to lower debt, which has positively impacted profitability [8] Group 2: Market Demand and Pricing - Demand for cruises is exceeding the limited availability of rooms, leading to higher pricing and historically high prices for 2025, with bookings extending into 2026 [7] - The consensus price target for Carnival's stock is $27.73, indicating a potential upside of 20% from current prices [3] Group 3: Risks and Challenges - Declining consumer confidence could weaken demand for cruise vacations, with consumer confidence down for five consecutive months as of April [2][10] - Potential new taxes on cruise lines could negatively impact Carnival's profitability, as indicated by comments from Commerce Secretary Howard Lutnick [11] Group 4: Future Outlook - The upcoming launch of Celebration Key, an exclusive destination, is expected to drive strong demand through 2030, potentially offsetting risks and contributing to revenue growth [13] - If Carnival's earnings reach analyst estimates of $2.46 in 2027, with a fair P/E of 15, the share price could rise to nearly $37, implying a 60% upside over the next few years [13]