Carnival Plc Q3 FY2024 earnings call

• Third quarter was phenomenal with record revenues, EBITDA, and net income. Revenues hit an all-time high, EBITDA exceeded $2.8 billion, and net income was over 60% higher than the prior year.
• Strong demand has built a robust business base for 2025 and an unprecedented start to 2026. 2025 has historical highs in occupancy and price across core deployments, and 2026 has seen record booking volumes in the last three months.
• Marketing efforts are paying off with year-to-date web visits up over 40% vs 2019, paid search up over 60%, and natural search up over 70%. Brands are effectively marketing to attract new and repeat guests.
• Upcoming introductions include the North American premier of Sun Princess, the opening of Celebration Key in 2025, and a two-berth pier at Half Moon Cay in 2026. Also, continuing to invest in fleet modernization like AIDA evolution.
• Focus on high-margin same-ship yield growth and progress towards investment grade balance sheet with clear debt paydown path.

Third quarter revenues reached an all-time high of nearly $8 billion, which is $1 billion more than last year's record levels. Record EBITDA exceeded $2.8 billion, up $600 million from the prior year. High-margin same-ship yield growth across all major brands drove these results. Revenue contribution from each segment wasn't specifically detailed in terms of percentage, but overall the company saw significant growth in top-line and EBITDA.

• Fourth quarter yield guidance is set at 5% over the prior year. Cruise costs without fuel per available lower berth day for the fourth quarter are expected to be up 8%.
• Full year 2024 net income guidance is $1.76 billion, an improvement over June guidance. Yields improved, cruise costs were better, and fuel pricing/currency contributed.
• 2025 forecasted capacity increase is 7%. Celebration Key's operating expenses will impact year-over-year cost comparisons by about half a point. 2025 is expected to have 688 dry dock days, an increase of 17% vs 2024, impacting costs by about 0.75.
• Expect continued EBITDA growth from strong operational execution and limited newbuild order book through 2028.

• Potential impact of widening conflict in the Middle East, though the company's business isn't heavily reliant on that region as it's not a major source market and ships are mobile to other strong source markets.

Q: Matthew Boss asked about the stronger base of business for 2025 and the record start to 2026, and balance sheet capital priorities.

A: Josh Weinstein stated that 2025 book position is higher across regions including North America and European brands, and David Bernstein mentioned that the priority is debt reduction towards achieving investment grade.

Q: Steve Wieczynski inquired about the fourth quarter yield guidance and 2025/2026 bookings.

A: Josh Weinstein said there was no change in the fourth quarter yield guidance from June, and Josh discussed optimizing the booking curve and the impact of Celebration Key on bookings.

Q: Robin Farley asked if 2025 is off to a better start than a typical year and about expense shifts.

A: Josh responded that 2025 is starting better than 2024, and David Bernstein mentioned onetime cost savings that contributed to the cost improvements.

Q: Ben Chaiken asked about cost saves and portfolio streamlining.

A: David Bernstein talked about cost savings from various opportunities like crew travel savings, port savings, and sourcing savings, and Josh mentioned reviewing the portfolio brand-by-brand.

Q: James Hardiman asked about cost commentary and Middle East impact.

A: David Bernstein discussed the cost guidance and Josh stated that the Middle East isn't a major source market for the company's business.

Q: Patrick Scholes asked about dry docks and Half Moon Cay plans.

A: David Bernstein said he could provide detailed dry dock information, and Josh talked about enhancing Half Moon Cay beyond just the pier.

Q: Brandt Montour asked about SEA Change and land-based leisure impact.

A: Josh discussed outperforming SEA Change targets and brand demand profiles, and Josh said cruise is a great value compared to land-based alternatives.

Q: Conor Cunningham asked about new-to-cruise and Celebration Key.

A: David Bernstein talked about new-to-cruise demographics, and Josh discussed Celebration Key's premium nature and its potential.

Q: David Katz asked about consumer behavior and trade-down.

A: Josh said there's no evidence of trade-down, and David Bernstein mentioned the growth in onboard spending.

Q: Jaime Katz asked about Chinese consumer and occupancy.

A: Josh stated that China isn't a major focus area currently, and Josh discussed the occupancy range and its potential for slight improvement.

Q: Assia Georgieva asked about debt and encroachment.

A: David Bernstein talked about debt refinancing strategies including looking at cost of debt, maturity towers, and secured vs unsecured debt, and Josh said he doesn't view encroachment as a major concern.

Q: Dan Politzer asked about the fourth quarter yield and investor event.

A: Josh said there's no specific near-term issue affecting the fourth quarter yield and discussed the focus of the upcoming investor event with Sun Princess.

Q: Chris Stathoulopoulos asked about demand moving parts and advertising.

A: Josh discussed demand generation efforts, and David Bernstein said advertising plans will be detailed in December during the planning process.

Q: Fred Wightman asked about new-to-cruise acceleration.

A: Josh discussed factors driving new-to-cruise such as better advertising, trade efforts, and Alaska's role in attracting new-to-cruise guests