Why Royal Caribbean Will Look Very Different By 2028 https://t.co/C0I4OXBV2L https://t.co/K6DGR3TeRk ...

Core Insights - Royal Caribbean Group's stock surged over 15% intraday following the release of fourth-quarter earnings that met expectations and provided 2026 guidance surpassing analyst forecasts [1] Financial Performance - The company reported adjusted earnings per share (EPS) of $2.80 for the fourth quarter, aligning with consensus estimates, and generated revenue of $4.26 billion, also in line with forecasts [2] - For the full year 2025, Royal Caribbean achieved adjusted EPS of $15.64 on revenue of $17.9 billion, exceeding prior guidance due to stronger revenue and improved joint venture performance [2] Future Projections - For 2026, the company projected adjusted EPS between $17.70 and $18.10, above the consensus estimate of $17.66, anticipating double-digit growth in revenue and earnings supported by a 6.7% increase in capacity and continued yield growth [3] - Booking trends are strong, with the highest seven booking weeks in history recorded during Cyber Sales and the start of WAVE season, with approximately two-thirds of 2026 capacity already booked at record pricing levels [3] Expansion Plans - Royal Caribbean announced fleet expansion plans, including a new Discovery Class with two firm ship orders and options for four additional vessels, with the first delivery expected in 2029 [4] - Celebrity Cruises plans to expand its river cruise fleet to 20 ships by 2031 [4] - For the first quarter of 2026, adjusted EPS is projected between $3.18 and $3.28, with net yields expected to rise 2.4% to 2.9% year over year [4]

Core Insights - Royal Caribbean Group reported record fourth-quarter earnings, with revenue and adjusted EPS growth of 13% and 72% respectively, despite missing Wall Street's Q4 earnings expectations [2] - The company projected double-digit sales and adjusted EPS growth for 2026, with capacity set to rise nearly 7% [2] - Record bookings were achieved at the start of 2026, marking the best seven booking weeks in the company's history [4] Financial Performance - Royal Caribbean's stock increased by 16% this week, reflecting positive market sentiment [2] - The company earned $6.3 billion in operating cash flow last year and expects to spend $1.8 billion on maintenance capex in 2026 [5] - The current market cap stands at $80 billion, with a gross margin of 39.53% and a dividend yield of 1.20% [3] Future Outlook - Management plans to double the fleet of Celebrity River Cruises ships to 20 by 2031 and invest $5 billion in new initiatives in 2026 [4] - The company experienced a 6% decline in net cruise costs (excluding fuel expenses) over the past year, enhancing profitability [4] - Royal Caribbean's stock is considered reasonably priced at roughly 22 times free cash flow relative to its enterprise value of $100 billion, especially given its growth plans [5]

Core Insights - Royal Caribbean Cruises Ltd. (RCL) reported fourth-quarter 2025 results with adjusted earnings and revenues missing the Zacks Consensus Estimate, but both metrics increased year-over-year. The stock rose 6.2% in pre-market trading due to strong guidance for 2026 [1][9]. Financial Performance - In Q4 2025, RCL reported adjusted earnings per share (EPS) of $2.80, missing the consensus estimate of $2.81, compared to $1.63 in the prior-year quarter [4]. - Quarterly revenues were $4,259 million, below the consensus estimate of $4,269 million, but up 13.2% year-over-year from $3.76 billion [4]. - Passenger ticket revenues reached $2.94 billion, up from $2.6 billion in the prior-year quarter, while onboard and other revenues increased to $1.32 billion from $1.16 billion [5]. - Total cruise operating expenses were $2.24 billion, a 9.3% increase year-over-year [5]. Booking and Demand Trends - RCL has seen record booking momentum, with about two-thirds of 2026 sailings already booked at higher prices, reflecting strong demand [9][10]. - The company experienced the seven strongest booking weeks in its history, driven by strong Cyber Sales and a solid start to the WAVE season [10]. - Spending trends are also improving, with onboard and pre-cruise purchases outpacing prior years, indicating higher guest participation and pricing [11]. Future Outlook - For Q1 2026, RCL expects adjusted EPS to be in the range of $3.18-$3.28, with the Zacks Consensus Estimate at $3.00 per share [13]. - The company anticipates net yields to increase by 2.4-2.9% on a reported basis year-over-year [14]. - For 2026, adjusted EPS is projected to be between $15.41 and $15.55, lower than the previous expectation of $17.70-$18.10, with the Zacks Consensus Estimate at $17.72 [15]. Strategic Initiatives - RCL is increasing investments in next-generation vacation offerings, including the launch of new Discovery Class ships and the expansion of Celebrity River Cruises [3]. - The rollout of five new exclusive destinations by 2028 aims to deepen the company's appeal and expand its addressable market [3].

Core Viewpoint - Royal Caribbean has forecasted annual profit exceeding Wall Street estimates, driven by strong demand from affluent travelers and a robust start to a crucial booking season [1] Group 1 - The company anticipates strong financial performance due to increased demand from wealthy customers [1] - The positive outlook is supported by a solid beginning to the key booking season, indicating healthy future sales [1]

Financial Data and Key Metrics Changes - In 2025, the company achieved nearly $18 billion in total revenue, with a 33% year-over-year earnings growth and a record 9.4 million vacations delivered [5][9] - Adjusted earnings per share (EPS) for the fourth quarter was $2.80, exceeding guidance, while full-year adjusted EPS grew 33% to $15.64 [9][22] - Operating cash flow reached nearly $6.5 billion, with $2 billion returned to shareholders through dividends and share buybacks [5][23] Business Line Data and Key Metrics Changes - The fourth quarter saw net yields grow by 2.5% on a constant currency basis, driven by both new and existing hardware [21][22] - Total revenue growth in the fourth quarter was 13%, with adjusted EBITDA growing by 17.6% to just over $7 billion [22][23] - The company announced a commitment for 10 additional ships for Celebrity River Cruises, expanding its fleet to 20 vessels by 2031 [7][17] Market Data and Key Metrics Changes - The Caribbean represents 57% of the company's capacity, with yields growing 35% since 2019, and continued yield growth is expected in 2026 [25][26] - European sailings are performing well, with strong demand from both American and European consumers, despite a decrease in capacity in the first half of the year due to dry dock timing [27] - Alaska is expected to account for 5% of total capacity, with a 3% increase compared to last year [27] Company Strategy and Development Direction - The company is focused on creating a lifetime of vacations for guests by strengthening its ecosystem, which includes differentiated experiences, world-class brands, and exclusive destinations [15][16] - Investments in technology and AI are aimed at enhancing guest experiences and operational efficiency, with a 25% year-over-year increase in active users on the app in the fourth quarter [17][18] - The company aims for moderate capacity growth of 6.7% in 2026, with revenue expected to increase by double digits year-over-year [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong consumer demand and loyalty, with a significant percentage of guests planning to increase leisure travel spending [12][13] - The company anticipates achieving its Perfecta financial targets by 2027, with adjusted EPS expected to be in the range of $17.70-$18.10 for 2026, representing a 14% year-over-year increase [15][31] - The management highlighted the importance of maintaining price integrity in the Caribbean market despite increased capacity [88] Other Important Information - The company is expanding its private destination portfolio, with Royal Beach Club Paradise Island opening in December and receiving positive guest feedback [16][63] - The introduction of Discovery Class ships is expected to redefine guest experiences, although specific details are yet to be disclosed [76][77] - The company plans to invest $5 billion in strategic growth initiatives while maintaining an investment-grade balance sheet [31][32] Q&A Session Summary Question: Can you elaborate on the further acceleration and momentum into 2026? - Management noted strong consumer demand and loyalty, with capacity growing 6.7% and an increase in high-quality demand due to loyalty programs [40][41] Question: What is the current state of the Caribbean market regarding pricing and capacity? - Management indicated strong demand trends in the Caribbean across all brands, with pricing higher than last year despite concerns about capacity increases [53][55] Question: How does the company view organic versus inorganic growth? - Management stated that about half of the yield growth will come from new hardware, with the other half from like-for-like improvements [60] Question: Can you discuss the net yield cadence for the year? - Management highlighted that dry dock timing and the ramp-up of Royal Beach Club will impact yield cadence throughout the year [71] Question: What is the outlook for net cruise costs? - Management expects net cruise costs to remain low due to economies of scale and effective cost management strategies [80]

Royal Caribbean Cruises (NYSE:RCL) Q4 2025 Earnings call January 29, 2026 10:00 AM ET Company ParticipantsBlake Vanier - VP of Investor RelationsBrandt Montour - Director of Equity ResearchConor Cunningham - DirectorDavid Katz - Managing DirectorJason Liberty - Chairman and CEOMichael Bayley - President and CEONaftali Holtz - CFORobin Farley - Managing DirectSteven Wieczynski - Managing DirectorConference Call ParticipantsJames Hardiman - Leisure and Travel AnalystLizzie Dove - VP and Equity Research Analys ...

Financial Data and Key Metrics Changes - In 2025, the company achieved nearly $18 billion in total revenue, with a 33% year-over-year earnings growth and a record 9.4 million vacations delivered [4][19] - Adjusted earnings per share (EPS) for the fourth quarter was $2.80, exceeding guidance, while full-year adjusted EPS grew 33% to $15.64 [8][19] - Operating cash flow for the year was approximately $6.5 billion, with $2 billion returned to shareholders through dividends and share buybacks [4][19] Business Line Data and Key Metrics Changes - The fourth quarter saw net yields grow by 2.5% on a constant currency basis, driven by both new and existing hardware [18] - Total revenue growth in the fourth quarter was 13%, with adjusted EBITDA growing by 17.6% to just over $7 billion [18][19] - The company is expanding its Celebrity River Cruises fleet with a commitment for 10 additional ships, increasing the fleet to 20 vessels by 2031 [5][15] Market Data and Key Metrics Changes - The Caribbean represents 57% of the company's capacity, with an 8% growth compared to last year, and Caribbean yields have increased by 35% since 2019 [21] - European capacity is growing by 5% year-over-year, with strong demand from both American and European consumers [22] - Alaska is expected to account for 5% of total capacity, up 3% from last year, with premium hardware deployed in the region [22] Company Strategy and Development Direction - The company is focused on creating a lifetime of vacations for guests by strengthening its ecosystem, which includes differentiated experiences, exclusive destinations, and an industry-leading loyalty program [13][14] - Investments in technology and AI are aimed at enhancing guest experiences and operational efficiency, with a 25% year-over-year increase in active users on the app [15][16] - The launch of the new Discovery Class ships is part of the company's innovation roadmap to enhance guest experiences and maintain leadership in the vacation space [6][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, with a strong start to 2026 and record booking rates [10][12] - The company anticipates double-digit revenue growth for 2026, with adjusted EPS expected to be in the range of $17.70-$18.10, representing a 14% year-over-year increase [13][25] - Management noted that consumer demand remains strong, with 40% of consumers planning to increase leisure travel spending in the next year [11] Other Important Information - The company is committed to investing $5 billion in strategic growth initiatives while maintaining an investment-grade balance sheet [25][26] - Fuel efficiency is improving, with a projected fuel expense of approximately $1.17 billion for the year, and 60% of fuel consumption is hedged [24] Q&A Session Summary Question: Can you elaborate on the further acceleration and momentum into 2026? - Management noted strong consumer demand and an increase in loyalty program participation, which is driving high-quality demand [30][31] Question: What is the current state of the Caribbean market regarding pricing and capacity? - Management indicated strong demand trends in the Caribbean, with pricing higher than last year, despite concerns about increased capacity [36][39] Question: How does the company view its organic versus inorganic growth? - Management stated that half of the yield growth will come from new hardware, with the other half from like-for-like improvements [42][44] Question: Can you discuss the new Discovery Class ship order? - Management expressed excitement about the Discovery Class ships, indicating they will be a game changer, but provided limited details at this time [51][53] Question: What is the outlook for net cruise costs? - Management expects net cruise costs to follow their established formula, with a focus on maintaining a spread between yield growth and cost growth [54][55]

Q4 2025 EARNINGS CALL 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 2026 and beyond; anticipated timing for launch of new ship deliveries and private de ...

Group 1 - The core viewpoint of the articles highlights the strong growth in cruise vacation demand, with Royal Caribbean Cruises (RCL.US) providing better-than-expected guidance for 2026 performance [1][2] - Royal Caribbean reported a 13.2% year-over-year revenue increase to $4.26 billion for Q4 2025, aligning with market expectations, and a net profit increase of 36.3% to $754 million [1] - The company anticipates adjusted earnings per share for 2026 to be between $17.70 and $18.10, surpassing the analyst average estimate of $17.65, with expected revenue growth in double digits [1] Group 2 - The "wave season" for cruise bookings has started strong, with Royal Caribbean experiencing the highest booking volume in its history over the past seven weeks [2] - Approximately two-thirds of the 2026 cruise capacity has already been booked, with booking prices reaching all-time highs [2] - Royal Caribbean has entered into an agreement to build two "Discovery Class" ships, with an option for four additional ships, the first of which is expected to launch in 2029 [2]