Royal Caribbean Cruises Ltd.

Second-quarter adjusted EPS was $4.21, which was $0.33 above the midpoint of guidance. Revenue grew 6% year over year, capacity increased 5%, and net yields rose 1.2%; adjusted EBITDA was $1.8 billion, EBITDA margin was 38%, and operating cash flow was $1.9 billion. Net cruise costs per APCD excluding fuel were up 3.9% year over year, about 90 bps better than expected. For 2026, management expects net yield growth of 1.75% to 2.25%, capacity growth of 6.6%, total revenue growth of 9%, and adjusted EPS of $17.73 to $17.87. For Q3, capacity is expected to be up 8.5%, net yields roughly flat, net cruise costs excluding fuel down 1.1% to 1.6%, and adjusted EPS of $6.26 to $6.36.

Jason Liberty said the quarter showed the company’s “flywheel is accelerating,” with stronger demand, record pricing, and continued strength in onboard and pre-cruise spending. He emphasized the connected vacation platform strategy, highlighting loyalty, data, technology, new destinations like Celebrity River, and high guest satisfaction scores in the low to mid-70s NPS range. His tone was constructive and confident, while acknowledging the Middle East conflict is affecting Europe sailings and Q3 more than expected.

Naftali Holtz focused on the financial outperformance and the updated outlook. He said adjusted EPS of $4.21 was driven by higher revenue, lower costs, and better-than-expected joint venture and below-the-line results; net cruise costs excluding fuel were up 3.9%, but about 90 bps better than expected due to timing. He also pointed to $6.9 billion in liquidity, leverage below 3x, $404 million of dividends, 0.8 million shares repurchased, and $805 million remaining under the buyback authorization. He said fuel expense is expected to be $1.3 billion for 2026 and that the company hedged 58% of the remainder of 2026 at below-market rates.

Analysts pressed management on Caribbean pricing, 2027 pacing, and whether promotions by competitors are forcing Royal Caribbean to take less price; Jason said the company is still in a very good position in the Caribbean and that better product differentiation is helping protect pricing. Questions also focused on the jump in close-in bookings, with management saying guests value flexibility and that close-in demand has been elevated for several years, but is now being monetized rather than discounted. On Mexico/Mahahual, management said the project timeline could slip because of stakeholder engagement, but they do not expect it to impair long-term Western Caribbean demand or their ability to grow yields.