Royal Caribbean Group (RCL) has reported first quarter earnings per share (EPS) of $2.70 and adjusted EPS of $2.71.
These results were better than the company’s guidance, due to stronger than expected pricing on close-in demand and lower costs mainly due to timing, the group said.
RCL has also increased its full year 2025 adjusted EPS guidance from $14.55 to $15.55.
The increase in earnings expectations is driven by the better than expected revenue performance in 1Q25 and the benefit of currency exchange rates and lower fuel costs for the remainder of the year.
“Our strong first quarter results are a testament to the enduring appeal and attractive value proposition of our leading brands and the incredible vacations they deliver,” said Jason Liberty, RCL’s President and CEO (pictured).
“As we navigate the complexities of the current macroeconomic landscape, we remain focused on what we can control – delivering the best vacation experiences, optimising revenue, and managing costs, while continuing to invest in our future and drive further differentiation.
“With our industry-leading brands, state-of-the-art ships, exclusive destinations, and a fortified balance sheet, we will continue dreaming and innovating to win a greater share of the growing $2 trill global vacation market,” he said.
First quarter 2025 highlights:
- Load factor in the first quarter was 109%.
- Gross Margin Yields were up 13.9% as-reported. Net Yields were up 4.7% as-reported and 5.6% in Constant Currency.
- Gross Cruise Costs per Available Passenger Cruise Days (APCD) decreased 1.1% as-reported. Net Cruise Costs (NCC), excluding fuel, per APCD decreased 0.3% as-reported and increased 0.1% in Constant Currency.
- Total revenues were $4 bill, net income was $0.7 bill or $2.70 per share, adjusted net income was $0.7 bill or $2.71 per share, and adjusted EBITDA was $1.4 bill.
Full year 2025 outlook:
- Net Yields are expected to increase 2.5% to 4.5% as-reported (2.6% to 4.6% in Constant Currency).
- NCC, excluding Fuel, per APCD are expected to be 0.1% to 1.1% as-reported and (0.1%) to 0.9% in Constant Currency.
- Adjusted EPS is expected to grow about 28% year-over-year and be in the range of $14.55 to $15.55.
First quarter net income was $0.7 bill or $2.70 per share, compared to $0.4 bill or $1.35 per share for the same period in 2024. Adjusted net income was $0.7 bill or $2.71 per share, compared to $0.5 bill or $1.77 per share for the same period in the previous year.
RCL also reported total revenues of $4 bill and adjusted EBITDA of $1.4 bill.
Capacity for the first quarter was up 3% year-on-year and the company handled 2.2 mill guests, a 9% increase year-on-year.
Gross margin yields increased 13.9% as-reported, and net yields increased 4.7% as-reported (5.6% in Constant Currency), when compared to 1Q24. The load factor for the quarter was 109%.
Net yield growth exceeded the company’s guidance mainly due to higher pricing across key products driven by strong close-in demand.
During the first quarter, the company took record bookings during WAVE season. In addition, during April, the company’s bookings were greater than the same period last year, including continued strength in close-in bookings.
Booked load factors remain in line with previous years and at higher rates. Guest spending on board and pre-cruise purchases continue to exceed the previous years driven by greater participation at higher prices.
To account for broader external factors, the company has expanded its guidance ranges in response to the complexity of the current macroeconomic landscape.
“Bookings for 2025 have remained on track, cancellation levels are normal, and we continue to see excellent close-in demand” Liberty said.
“This year continues our guest experience innovation with the debut of ’Star of the Seas’, ’Celebrity Xcel’, and the opening of Royal Beach Club Paradise Island by year-end – all of which continue to generate consumer excitement and strengthen our competitive moat.”
The cadence of yield growth throughout the year, as expected, is driven by the timing of new vessels entering service, with the arrival of ’Star of the Seas’ in late summer and the related ramp-up of load factors, as is typical for new ship launches.
As for the second quarter of this year, capacity is expected to increase by 6%, driven by lower drydock days and a full year of ’Utopia of the Seas’, compared to 2Q24.
Net Yields are expected to increase 4.4% to 4.9% as-reported and 4.3% to 4.8% in Constant Currency, compared to the same period in 2024.
The expected yield growth is driven by healthy demand across all key products and on board spend, both from new and like-for-like hardware.
NCC, excluding fuel, per APCD, is expected to increase 4.1% to 4.6% as-reported and 3.7% to 4.2% in Constant Currency, compared to the same period in the previous year. About 140 bps of cost growth is attributable to the timing shift from the first quarter.
Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects second quarter adjusted EPS to be in the range of $4 to $4.10.
As of 31st March, 2025, the company’s liquidity position was $4.5 bill, which includes cash and cash equivalents and undrawn revolving credit facility capacity.
“This quarter, we continued to opportunistically reduce debt, while lowering cost of capital and recapturing a portion of our Covid-era share dilution,” said CFO Naftali Holtz.
“Our strong balance sheet allows us the flexibility to continue to expand capital return to shareholders, invest in growth and innovation, and maintain investment grade balance sheet metrics in a range of macroeconomic environments.”
The company also said that as of 31st March, 2025, the scheduled debt maturities for the remainder of 2025, 2026, 2027, and 2028 were $1.2 bill, $2.9 bill, $2.6 bill and $3.1 bill, respectively.
Capital expenditures for 2025 are expected to be around $5 bill, based on current foreign exchange rates, and are predominantly related to the new ship orderbook and land-based destination initiatives. Non-new ship related capital expenditures are expected to be $1.6 bill.
