Norwegian Cruise Line Holdings Ltd. Q1 FY2025 earnings call

• Strong first quarter performance: Met or exceeded key expectations with net yields up 1.2% above expectations, adjusted EBITDA at $453 million, trailing 12-month margin at 35.5%. • Norwegian Aqua delivery: Took delivery in March on time and budget, showcasing guest-first experiences with redesigned spaces and innovative offerings. • Great Stirrup Cay enhancements: Announced new pier, resort-style pool, cabanas, welcome center, tram system, and expanded experiences including Vibe Beach Club and Horizon Lagoon. • NCL app rollout: Full rollout in January with over 800,000 guests logging in, driving pre-cruise revenue through shore excursions and specialty dining bookings. • Fleet management: Progress in modernizing existing fleet (e.g., drydocks for Norwegian Bliss and Norwegian Breakaway with guest-focused enhancements) and repurposing older tonnage (e.g., charters to Cordelia Cruises and Crescent Seas). • Booking trends: Advanced ticket sales up 3%; Q2 nearly all sold; Q3 inventory choppy with focus on price over load factor; Q4 Caribbean capacity up 10% with shorter booking curve.

No specific product segments with revenue contribution percentages provided. Key financial highlights: First quarter results met or exceeded key expectations. Net yields increased 1.2% above expectations. Adjusted EBITDA was $453 million, above guidance. Adjusted EPS ended at $0.07, slightly below guidance due to a $0.05 FX headwind. Notable initiatives: Delivery of Norwegian Aqua, the first ship in Norwegian Cruise Line’s new Prima Plus class; enhancements at Great Stirrup Cay; progress in fleet management including modernizing existing fleet and repurposing older tonnage.

• Full-year net yield growth outlook revised to 2% to 3% range. • Maintaining full-year 2025 adjusted EBITDA guidance at $2.72 billion and adjusted EPS guidance at $2.05. • Adjusted net cruise costs excluding fuel expected to grow 0% to 1.25% range. • Trailing 12-month adjusted operational EBITDA margin at 35.5% in Q1, expecting further expansion to ~37% for full year 2025 towards the long-term 39% target. • Net leverage expected to decline from 5.7 times in Q1 to ~5 times by year-end.

• Macroeconomic uncertainty causing choppiness in bookings, particularly on Q3 inventory, leading to a headwind to occupancy. • Potential impact of geopolitical or macroeconomic environment shifts on top line and financial performance. • Uncertainty in consumer behavior affecting booking patterns and yields.

Q: Could you elaborate on recent changes in the booked position for 2025 and early ’26, and updated guidance for volumes and pricing?

A: Harry Sommer discussed Caribbean deployment increase, shift in Europe deployment to shorter itineraries, and strong historical booked position for ’26. He noted Caribbean capacity up 10% in Q4 with shorter booking curve, and Europe deployment in ’26 shifted to less reliance on Europe with shorter itineraries to improve booking curve and margin.

Q: On historical lead indicators, any change in on-board spending and cost structure flexibility?

A: Mark Kempa noted strong on-board revenue trends in Q1 and April; cost structure flexibility with targeted approach, not cutting important things, increasing spend in guest-related areas while finding efficiencies in other areas like fuel.

Q: Break down brands' bookings and Oceania promotional work?

A: Harry Sommer stated all brands seeing similar booking patterns with slight pressure on Q3 Europe; Oceania promotion not significantly different in discounting, and all brands are performing similarly.

Q: What's on the books going forward in terms of price and booking volume?

A: Mark Kempa said ATS up 3%, closer to home itineraries book closer, but optimal range maintained with slight volatility in Q3 Europe. He emphasized current booking trends are healthy with an uptick in the last week.

Q: ROI of investments in Great Stirrup Cay and ’26 capacity mix?

A: Harry Sommer said investments in GSC meet ROI goals, make it marketable and drive price. For ’26 capacity mix, greater Alaska, Africa, and Asia capacity have modest yield and cost tailwinds.

Q: Stabilization of trends for 2025 and 2026?

A: Harry Sommer said current week booking improving, but not extrapolating one week; ’26 booked position ahead of historical averages, and confident in achieving ’26 targets.

Q: Inventory management velocity and marketing spend during soft patch?

A: Harry Sommer and Mark Kempa discussed revenue management techniques, maintaining price integrity, increasing marketing spend while finding cost efficiencies through eliminating waste and gaining efficiencies system-wide.

Q: American hesitation to go to Europe this summer and Europe into ’26?

A: Mark Kempa said related to macroeconomic uncertainty; Harry Sommer said no challenges seen for Europe ’26 with normal booking patterns.