Royal Caribbean Cruises Ltd.

Third-quarter adjusted EPS was $6.57, $0.26 above the midpoint of guidance. Revenue increased 9% year over year, capacity rose 8%, and net yields were up 0.6% year over year, about 60 basis points above guidance. Adjusted EBITDA was $2.5 billion, margin was 45%, and operating cash flow was $1.6 billion. Net cruise costs excluding fuel fell 1.8% year over year, about $0.05 better than expected. For full-year 2026, management now expects net yields to grow approximately 2.1%, total revenue to grow 9%, capacity to grow 6.6%, and adjusted EPS to be $17.85-$17.95. For fourth quarter 2026, capacity is expected to rise 5%, net yields to grow 4.2%-4.7%, and adjusted EPS to be $3.48-$3.58. For 2027, capacity growth is expected to be 4.5%, with yield growth weighted to the second half of the year.

Jason Liberty said the quarter reflected accelerating demand, stronger guest engagement, and the continued strength of Royal Caribbean’s connected-vacation strategy. He framed the Sandals and Beaches investment as a way to expand from capturing 20%-25% of guests’ annual vacation spend toward roughly 50% of the vacation wallet, while reinforcing the cruise business. His tone was confident and expansive: he repeatedly emphasized record booking positions, high loyalty participation, and confidence in growth into 2027 and beyond.

Naftali Holtz walked through the quarter’s financial performance and guidance raise. He cited adjusted EPS of $6.57, adjusted EBITDA of $2.5 billion, a 45% margin, and operating cash flow of $1.6 billion, while noting net cruise costs excluding fuel fell 1.8% year over year and came in about $0.05 better than expected because of timing. He said liquidity ended at $7.4 billion and leverage was below three times, and added that the company issued $1.25 billion of senior unsecured notes due 2034, entered a $400 million delayed-draw term loan with Export Development Canada, and increased its revolver to $6.65 billion. He also said fuel expense is now expected to be about $1.35 billion for the full year, with fourth-quarter fuel expense around $379 million.

Analysts focused on whether close-in demand reflects a broader behavioral shift, how to think about 2027 earnings power, and what Sandals and Beaches could add over time. Management said close-in demand has been a recurring trend for several years and is partly driven by product mix, shorter itineraries, and a younger customer base, while also noting onboard spend has been stronger than expected. On 2027, Jason Liberty said the company is not moderating its long-term view and sees strong opportunities from its cruise brands, river cruises, and the new all-inclusive platform. On Sandals, management said the transaction should close in early 2027, will be reported on a one-quarter lag, and is expected to be immaterial to 2027 earnings because timing matters, with synergies building over time.