
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]