Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 18.5% year over year to $1.9 billion, driven by an 8.8% capacity growth and higher occupancy [18][21] - Adjusted gross margin rose by 19.2% year over year to $1.2 billion, resulting in a net yield of $607, which is 7.8% higher than in 2024 [20][21] - Adjusted EBITDA for Q2 was $633 million, a 28.5% increase compared to the same period last year [20] Business Line Data and Key Metrics Changes - In the river segment, capacity PCDs increased by 7.5% year over year, with occupancy at 95.6% and adjusted gross margin growing by 15.8% [24] - For the ocean segment, capacity PCDs increased by 11.2% year over year, with occupancy at 95.2% and adjusted gross margin rising by 24.9% [25] Market Data and Key Metrics Changes - As of August 10, 2025, 96% of the 2025 capacity for core products was booked, with advanced bookings of $5.6 billion, 21% higher than the previous year [29][30] - For 2026, 55% of capacity was already booked, with advanced bookings at $3.9 billion, a 13% increase compared to the same point in 2025 [30] Company Strategy and Development Direction - The company is focused on expanding its fleet and strengthening its global presence, with new ships added to both river and ocean segments [8][9] - The strategy emphasizes selective expansion into culturally rich regions, such as India and Egypt, to enhance guest experiences [13][15] Management's Comments on Operating Environment and Future Outlook - Management noted sustained strength in demand, with a strong start for 2026 bookings, reflecting consumer engagement [41] - The company is committed to optimizing its cost structure while investing in teams and marketing to support future growth [20][43] Other Important Information - The company completed a secondary offering of 30.5 million shares at $44.2 per share, increasing institutional float and diversifying the shareholder base [10][16] - As of June 30, 2025, total cash and cash equivalents were $2.6 billion, with net debt at $3.2 billion and net leverage at 2.1 times [26] Q&A Session Summary Question: Can you walk us through booking progress for 2026? - Management reported strong demand with 55% of 2026 bookings sold, indicating consistent consumer behavior [40] Question: Is the increase in marketing spend broad-based? - The increase in marketing spend was a strategic response to softening demand, aimed at stimulating interest without discounting [43] Question: How do you see pricing optimization for 2026? - Management indicated a careful balance in pricing strategy, aiming for mid-single-digit yield growth while ensuring good value for guests [50][51] Question: What are the expectations for expense growth? - Management noted that quarterly variances in expenses are expected, but overall revenue growth has outpaced expense growth [67] Question: How does capacity growth impact pricing growth? - Management clarified that growth in ocean capacity does not negatively impact pricing, as demand remains strong [82] Question: What is the outlook for capital returns to shareholders? - Currently, the company is not contemplating dividends or share buybacks but remains open to capital returns in the long term [77][106]

Viking Holdings (VIK) Q2 2025 Earnings Call August 19, 2025 08:00 AM ET Speaker0Good morning. My name is Paul, and I will be your conference operator today. At this time, I would like to welcome everyone to Viking's Second Quarter twenty twenty five Earnings Conference Call. As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise.After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the program to ...

Company Overview - Viking Holdings Inc. is a new entrant in the cruise line industry, known for its longships and child-free cruises, having completed its IPO in April 2024 [1] - The company reported its first-quarter earnings for 2025, indicating maturity and potential for future growth despite a premium valuation [1] Financial Performance - Viking achieved a revenue of $897.06 million, exceeding analysts' estimates of $841.18 million by over 6% and showing a year-over-year increase of 24.9% [2] - The company reported a loss of $0.24 per share, which was better than the expected loss of $0.27 and an improvement from the $0.74 loss reported in May 2024 [3] Demand and Capacity - Despite the first quarter being historically weak for cruise lines, Viking's capacity passenger cruise days increased by 14.9% with a 94.5% occupancy rate for the quarter [2] - The company has booked 92% of its capacity for the current season, although 2026 bookings are at 37%, slightly below last year's 39% [7] Fleet Expansion - Viking announced the delivery of its newest river ship, the Viking Thoth, in October, and plans to expand its Nile River fleet to 12 ships by 2027 [8] - The company is also set to take delivery of one ocean ship and nine river vessels in 2025, indicating a bullish outlook with favorable demand trends [9] Stock Performance - Viking's stock forecast shows a 12-month price target of $46.89, representing a 6.85% upside based on 18 analyst ratings [4] - The stock experienced a drop of nearly 7% post-earnings report but recovered some losses, suggesting potential support levels [11] Market Position - The cruise line targets a demographic with disposable income, focusing on a non-party atmosphere with no casinos and no passengers under 18 [6] - Despite concerns about passenger numbers being approximately 88,000 below estimates, there is no evidence of waning demand [7]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 increased by 24.9% year over year to almost $900 million, driven by increased capacity, higher occupancy, and higher revenue per passenger cruise day (PCD) [17][18] - Adjusted gross margin rose by 23.8% year over year to $613 million, resulting in a net yield of $544, which is 7.1% higher than Q1 2024 [18][19] - Adjusted EBITDA for Q1 totaled $73 million, improving by over $77 million compared to the same quarter last year, marking a significant year-over-year increase [19] Business Line Data and Key Metrics Changes - **River Segment**: Capacity PCDs increased by 22.3% year over year, with occupancy at 93.9%, about 180 basis points higher than last year. Adjusted gross margin grew by 21.5% year over year, while net yield was $593, down 2.7% year over year [20] - **Ocean Segment**: Capacity PCDs increased by 10.4% year over year, with occupancy at 94.4%, in line with last year. Adjusted gross margin increased by 25.3% year over year to $395 million, and net yield was $499, up 13.6% compared to the previous year [21] Market Data and Key Metrics Changes - Advanced bookings for 2025 reached $5.5 billion, which is 21% higher than the previous year at the same point in time, with 92% of capacity booked [25] - For 2026, 37% of capacity is already booked with $2.7 billion in advanced bookings, which is 11% higher than the 2025 season at the same point in time [26] Company Strategy and Development Direction - The company focuses on a disciplined growth strategy, emphasizing direct marketing to stimulate demand without resorting to pricing promotions [11][39] - The introduction of the Viking Libra, the world's first hydrogen-powered cruise ship, reflects the company's commitment to sustainability and innovation in the industry [14][15] - The company maintains a strong balance sheet with a net debt to EBITDA ratio of two times, allowing for stability and flexibility in navigating market volatility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model and consumer demand, noting that bookings have remained strong despite macroeconomic uncertainties [8][14] - The company anticipates mid-single-digit yield growth alongside planned capacity increases, supported by a loyal customer base that prioritizes travel experiences [39][68] Other Important Information - The company has a total cash and cash equivalents of $2.8 billion as of March 31, 2025, with an undrawn revolver facility of $375 million [22] - Committed capital expenditures for 2025 are expected to be about $850 million, with $1.1 billion projected for 2026 [23] Q&A Session Summary Question: Pricing and Promotions - Management confirmed that they have not turned to pricing promotions for future seasons, indicating that pricing dynamics are nuanced and dependent on inventory sold [38][39] Question: Booking Window Changes - Management stated that there have been no material changes to the booking window, which remains similar to prior years [41] Question: Diverging Net Yield Growth - Management explained that the ocean segment typically operates year-round, while the river segment has a seasonal nature, affecting yield comparisons [45][48] Question: Consumer Demand Signals - Management indicated that booking pace is closely monitored, and they would engage consumers directly to stimulate demand if necessary [54][56] Question: Impact of Geopolitical Situations - Management confirmed that they are ready to reactivate ships in Russia and Ukraine if geopolitical conditions improve, which would contribute positively to EBITDA [104][105] Question: Cost Management - Management emphasized a strong internal discipline in cost management, focusing on enhancing margins while ensuring product quality [118][119]