Royal Caribbean Group Q1 FY2025 earnings call

• Jason Liberty highlighted strong first quarter results, best WAVE Season, and focus on delivering top vacation experiences. He emphasized the company's strong financial position, investment-grade balance sheet, and growth strategy. - Naftali Holtz reviewed first quarter results exceeding expectations, with yield growth of 5.6% in constant currency, net cruise costs excluding fuel increasing 0.1%, and EBITDA margin at 35%. He discussed guidance for 2025, including yield growth range of 2.6%-4.6%, adjusted earnings per share range of $14.55-$15.55, and second quarter guidance on capacity and net yield.

During the first quarter, Royal Caribbean Group delivered over 2 million unforgettable vacations with exceptional guest satisfaction scores. WAVE Season was the best in the company's history, positioning them well for the remainder of 2025 and 2026. Financial results exceeded expectations with yields growing 5.6% and adjusted earnings per share of $2.71 in Q1, $0.23 higher than guidance.

• Full year adjusted earnings per share expected to be $14.55 to $15.55, growing approximately 28% and up from prior guidance. - Yield growth expected to be in the range of 2.6% to 4.6%, supported by new ships and existing fleet performance. - Capacity expected to grow 5.5% in 2025 driven by new ships and full year benefit of existing vessels. - Second quarter guidance: capacity up 6% year-over-year, net yield growth 4.3%-4.8%, and adjusted earnings per share $4-$4.10.

• Macro volatility and uncertainty in the broader economy and consumer behavior. However, the company is focused on delivering best experiences, optimizing revenue, managing costs, and executing long-term strategies.

Q: Could you speak to drivers of the better-than-planned performance in the first quarter?

A: Jason Liberty noted strong close-in demand, focus on the flywheel (loyalty, app, etc.), flight to quality, and value gap to land-based vacation.

Q: Why are new ships a headwind in 3Q and 4Q?

A: Naftali Holtz explained it's about timing of ship entry into service, with lower APCDs and load factors ramping up.

Q: Any difference in bookings for 2026 versus usual trends?

A: Jason Liberty said book position for 2026 is in line with last year on volume, with more capacity and higher prices.

Q: Thoughts on recession scenario and load factors?

A: Jason Liberty stated they focus on optimizing revenue and price integrity, not sacrificing brand integrity for load factors.

Q: How are you thinking about capital allocation with share repurchases?

A: Naftali Holtz mentioned strong balance sheet, confident in strategies, and share repurchases are opportunistic while maintaining financial flexibility.