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Viking Holdings Ltd(VIK) - 2024 Q4 - Earnings Call Transcript

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 reported 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 full-year adjusted EPS at $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 by 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 - The company reported a repeat guest rate of 53% and direct bookings exceeding 50%, with a leading market share of 52% in the river segment and 24% in the ocean segment [10] - As of February 23, 2025, advance bookings for 2025 were at $5.3 billion, 26% higher than the same point in 2024, with 88% of capacity already booked [27] Company Strategy and Development Direction - The company 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] - Viking is committed to maintaining high customer satisfaction and operational efficiency, leveraging its unique fleet design and in-house operations to enhance product delivery [30][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for core products, with 2025 shaping up to be a great year despite macroeconomic uncertainties [27][84] - The company highlighted its ability to generate demand through its extensive database, allowing for a contrarian approach in uncertain times [83] 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 has a strong balance sheet with total cash and cash equivalents of $2.5 billion and a net leverage ratio of 2.4 times as of December 31, 2024 [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 showing strong early demand but not yet ready for detailed discussion [53][55] Question: How will the company respond to new competition in the river market? - Management believes they are well-positioned with a 52% market share and a strong order book, emphasizing their unique product offerings and customer satisfaction [57][60] 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: What are the barriers to entry for new competitors? - Management highlighted their extensive docking rights and established market presence as significant barriers to entry for new competitors [77][78] Question: How does the company manage booking curves in uncertain macro environments? - Management noted that their strong booking curves provide flexibility to respond to market conditions, with a focus on high-end customers who are more resilient [84][85] Question: What are the company's priorities for growth in the next 3 to 5 years? - Management indicated a focus on expanding in markets like Egypt and China, with a commitment to direct marketing to these regions [90][91]