Carnival (US:CCL)2025-06-24 15:00Financial Data and Key Metrics Changes - The company achieved record revenues for the eighth consecutive quarter, with EBITDA up 26% year-over-year, operating income increasing by 67%, and net income more than tripling [6][7][26] - Net income exceeded guidance by $185 million, with yields growing by almost 6.5%, surpassing guidance by 200 basis points [7][26] - EBITDA margins were 200 basis points higher than 2019 levels, marking the highest margins achieved in nearly twenty years [8][9] Business Line Data and Key Metrics Changes - Customer deposits reached an all-time high, up over $250 million compared to the previous year [28] - Cruise costs without fuel per available lower birthday (ALBD) increased by 3.5% year-over-year, which was 200 basis points better than guidance [26][30] - The company reported strong onboard spending across all major categories, contributing to the overall revenue growth [26] Market Data and Key Metrics Changes - The company noted a strong close in demand, reaffirming consumer strength despite geopolitical tensions [5][12] - The advanced booking window remains elongated, with historically high prices, providing flexibility for pricing strategies [13] Company Strategy and Development Direction - The company plans to set new targets in early Q2 next year after exceeding 2026 fee change targets ahead of schedule [9][11] - The launch of Celebration Key is expected to enhance guest experiences and drive demand, with significant marketing efforts planned [15][55] - Investments in existing fleet and new builds are aimed at increasing demand and enhancing pricing power [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning despite geopolitical uncertainties, emphasizing the ability to navigate challenges [5][12] - The company anticipates continued strong performance in the second half of the year, although the upside potential may not be as high as previously expected due to external factors [66][73] Other Important Information - The company has successfully reduced its net debt to EBITDA ratio from 4.1 times to 3.7 times, with ongoing efforts to improve leverage metrics [36][37] - A new loyalty program, Carnival Rewards, is set to launch in June 2026, which is expected to enhance customer engagement and lifetime value [22][34] Q&A Session Summary Question: Can you speak to improvements in product and experience that are translating to above-plan pricing and onboard spend? - Management highlighted ongoing incremental improvements across all areas of the business, emphasizing the importance of innovation and guest experience [43][44] Question: How best to think about the margin opportunity moving forward? - Management indicated that margins are expected to continue improving, with a focus on maintaining low costs while driving incremental revenue [48][49] Question: Can you provide color on pricing 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 [54][55] Question: How has booking demand been affected by recent geopolitical events? - Management noted volatility in bookings, particularly in April, but observed a recovery in May and June, indicating resilience in demand [62][63] Question: What is the expected impact of the new loyalty program on onboard spending? - Management believes the new loyalty program will enhance onboard spending without cannibalizing it, as guests will earn points through their total spend [113][115]