Executive Summary

Delivered record Q3 results: revenue $8.15B, GAAP net income $1.85B ($1.33 diluted EPS), and record adjusted EPS $1.43; all exceeded June guidance, with net yields +4.6% YoY (cc) on strong close-in demand and onboard spend .
Beat Wall Street on all key metrics: Adjusted EPS $1.43 vs $1.32 consensus; revenue $8.15B vs $8.11B; EBITDA $2.99B vs $2.90B; and raised FY25 outlook for the third time (now adj. net income ≈$2.93B, adj. EBITDA ≈$7.05B) . Estimates from S&P Global: see table and note below.
Balance sheet momentum: refinanced ~$11B YTD, prepaid ~$1B; quarter-end debt $26.5B, net debt/EBITDA 3.6x; called remaining converts (Dec. 5 settlement, ~$500M cash plus shares) and continued 2029 note refinancing at lower coupons .
2026 bookings nearly half on the books at higher prices; Celebration Key launched to “rave” reviews, with island/destination strategy set to drive utilization and pricing; management previewed pivot to capital returns as leverage approaches ~3.5x in early FY26 .

What Went Well and What Went Wrong

What Went Well

Pricing power and demand: net yields +4.6% YoY (cc), 1.1 pts above guidance, driven by close‑in demand and strong onboard spending; gross margin yields +6.4% YoY .
Cost execution: adjusted cruise costs ex‑fuel/ALBD up 5.5% YoY (cc) but 1.5 pts better than June guidance; fuel consumption per ALBD -5.2% YoY on efficiency initiatives .
Strategic destinations: Celebration Key launched on time and on budget, generating “overwhelmingly positive” media and early returns meeting expectations; 2.8M guests expected to visit in 2026 as infrastructure expands .

Management quote: “This was a phenomenal quarter… Strong demand and onboard spending drove a 4.6% improvement in net yields (in constant currency)… all on a same ship basis.” – CEO Josh Weinstein .

What Went Wrong

Cost inflation still visible: cruise costs per ALBD up 4.6% YoY; adjusted cruise costs ex‑fuel/ALBD +5.5% YoY (cc) despite better‑than‑guided performance .
Interest and refinancing costs: $111M debt extinguishment/modification costs in Q3; interest expense remained substantial at $(317)M, though improving YoY .
Known headwinds into 2026: loyalty program expected to be ~50 bps drag on yields (2H‑weighted), destination opex ~50 bps, and heavier dry dock activity up to ~100 bps on costs YoY .

Financial Results

GAAP vs Prior Periods and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025	Q3 2025 Consensus	Beat/(Miss)
Revenue ($USD Millions)	$7,896	$6,328	$8,153	$8,107.8*	$45.2
Net Income ($USD Millions)	$1,735	$565	$1,852	—	—
Diluted EPS ($)	$1.26	$0.42	$1.33	—	—
Adjusted Net Income ($USD Millions)	$1,751	$470	$1,982	—	—
Adjusted EPS – Diluted ($)	$1.27	$0.35	$1.43	$1.3175*	$0.1125
Adjusted EBITDA ($USD Millions)	$2,822	$1,508	$2,993	$2,899.2*	$93.8

Estimates marked with * are Values retrieved from S&P Global.

Yield, Cost and Profitability KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Net Yields per ALBD ($, constant currency where shown)	$233.87	$198.58	$244.51
Adjusted Cruise Costs ex Fuel per ALBD ($, cc)	$103.97	$116.39	$109.65
Operating Income ($USD Millions)	$2,178	$934	$2,271

Operating Statistics

Metric	Q3 2024	Q2 2025	Q3 2025
Passenger Cruise Days (Millions)	28.1	25.3	27.5
ALBDs (Millions)	25.2	24.2	24.6
Occupancy (%)	112%	104%	112%
Fuel Cost per Metric Ton (ex‑EUA) ($)	$670	$614	$607

Guidance Changes

Metric	Period	Previous Guidance (June 24)	Current Guidance (Sept 29)	Change
Net Yields (YoY, constant currency)	FY 2025	≈ +5.0%	≈ +5.3%	Raised
Adjusted Cruise Costs ex Fuel/ALBD (YoY, cc)	FY 2025	≈ +3.6%	≈ +3.3%	Lowered (better)
Adjusted EBITDA ($B)	FY 2025	≈ $6.9	≈ $7.05	Raised
Adjusted Net Income ($B)	FY 2025	≈ $2.69	≈ $2.925	Raised
Adjusted EPS – Diluted ($)	FY 2025	≈ $1.97	≈ $2.14	Raised
Net Yields (YoY, cc)	Q4 2025	“Consistent with prior expectation”	≈ +4.3%	Maintained
Adjusted EBITDA ($B)	Q4 2025	n/a	≈ $1.34	—
Adjusted Net Income ($M)	Q4 2025	n/a	≈ $300	—
Adjusted EPS – Diluted ($)	Q4 2025	n/a	≈ $0.23 (diluted, includes convert add‑back)	—

Additional guided items for FY25/Q4: ALBDs 96.5M/24.1M; fuel expense ~$1.84B/$0.45B; D&A ~$2.79B/$0.73B; net interest ~$1.31B/$0.30B .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
Demand & Pricing	Record 1Q net yields; 2025 pricing at historical highs; 2026+ bookings at record volumes .	Record 2Q net yields +6.4% YoY (cc); 2026 bookings in line with 2025 at higher prices .	Yields +4.6% YoY (cc), >guidance; 2026 ~50% booked at higher prices; 2027 bookings hit a record 13‑week rate .	Improving
Destination Strategy	Highlighted Celebration Key build (pre‑opening) .	Opening in July; part of “Paradise Collection,” broader Caribbean development .	Celebration Key launched to strong reviews; driving pricing/utilization; Half Moon Cay pier in mid‑2026; 8M destination visits in 2026 .	Positive
Cost Discipline	Adj. cruise costs ex‑fuel +1.0% YoY (cc) .	Adj. cruise costs ex‑fuel +3.5% YoY (cc), timing of expenses .	Adj. cruise costs ex‑fuel +5.5% YoY (cc) but 1.5 pts better than guidance; efficiency cut fuel/ALBD -5.2% .	Mixed but better than plan
Balance Sheet & Leverage	Refi $5.5B; avg cash interest 4.6%; debt $27.0B .	Refi ~$7B YTD; revolver to $4.5B; debt $27.3B; net debt/EBITDA 3.7x .	Refi >$11B YTD; Q3 debt $26.5B; net debt/EBITDA 3.6x; called remaining converts; path to <3.0x longer term .	Improving
Capital Returns	Not in near term; focus deleveraging .	Pivot possible as leverage falls .	“Walk and chew gum” as ~3.5x approaches early FY26; priority to reinstate dividend, potential buybacks later (board decision) .	Emerging
2026 Headwinds	—	—	Loyalty program ~50 bps yield drag (2H‑weighted); destination opex ~50 bps; more dry docks up to ~100 bps costs YoY .	Manageable

Management Commentary

“Adjusted ROIC reached 13% for the first time in nearly 20 years… driven not only by consistently strong performance from Carnival Cruise Line and AIDA, but also great advancement across the rest of our portfolio.” – CEO Josh Weinstein .
“During the quarter we… reduced secured debt by nearly $2.5B… issued two senior unsecured notes… and used the proceeds… to repay over $5B of debt.” – CFO David Bernstein .
On Celebration Key: “The returns… are indeed meeting expectations… we couldn’t be happier.” – CEO Josh Weinstein .
On capital returns: “Once we get to that three and a half times, we can walk and chew gum… reinstating the dividend [is priority], not to the exclusion of buybacks over time.” – CEO Josh Weinstein .

Q&A Highlights

Bookings/pricing: Both North America and Europe pricing now at historical highs; close‑in demand remained strong; 2027 bookings hit unprecedented levels during the quarter .
Celebration Key uplift: Early returns in line with plan; premium on itineraries calling the island; operational tweaks underway (staging, shade, F&B, beach improvements) to optimize experience .
Capital returns: As leverage approaches ~3.5x in early FY26, management expects to reintroduce dividends first, with buybacks possible later; board decision pending .
2026 headwinds: Loyalty program (~50 bps yield drag, 2H), destination opex (~50 bps), heavier dry docks (up to ~100 bps on costs) offset by price/mix, destination benefits and cost actions .
Occupancy vs price: Management prioritizes total revenue optimization over max occupancy; scope to improve occupancy at the right price over time .

Estimates Context

Q3 2025 vs consensus: Adjusted EPS $1.43 vs $1.3175; revenue $8.153B vs $8.1078B; EBITDA $2.993B vs $2.899B – broad‑based beats (see Financial Results). Values retrieved from S&P Global.
Q4 2025 setup: Company guides diluted adjusted EPS ≈$0.23; consensus EPS ≈$0.2479 – suggests a modest potential shortfall on EPS vs current Street at mid‑quarter; company maintained Q4 yield outlook (≈+4.3% YoY cc) . Values retrieved from S&P Global.
FY 2025: Company guides diluted adjusted EPS ≈$2.14; Street ≈$2.1628 – essentially in line; company raised FY EBITDA to ≈$7.05B and adjusted net income to ≈$2.925B . Values retrieved from S&P Global.

Key Takeaways for Investors

Q3 operational outperformance was driven by same‑ship yield gains and stronger onboard spend, with costs better than plan – a constructive read‑through for pricing power and execution into year‑end .
The third FY25 guidance raise plus record profitability should support estimate revisions; near‑term catalysts include continued destination uptake, seasonal Q4, and debt service tailwinds from refinancings .
Balance sheet repair remains on track; convert redemption and lower‑coupon debt reduce interest expense and accelerate the path to capital returns as leverage approaches ~3.5x in early FY26 .
2026 headwinds (loyalty, destination opex, dry docks) are identified and quantified; management plans offsets via pricing, mix, efficiency programs and further destination monetization .
Destination strategy (Celebration Key, Half Moon Cay pier) is a multi‑year yield/capacity utilization lever and competitive moat in Caribbean itineraries .
Watch for a formal capital return framework and long‑term targets in early CY2026/FQ2 commentary, per management .

Appendix: Additional Facts and Subsequent Events

GAAP details: debt extinguishment and modification costs $(111)M in Q3; GAAP diluted EPS $1.33; weighted‑average diluted shares 1,402M .
Liquidity/debt: Q3 liquidity $6.263B; total debt $26.481B; customer deposits $7.146B at Aug 31, 2025 .
Capital markets actions: redeemed remaining $322M 5.75% 2027 notes (Aug 29); priced and then closed $1.25B 5.125% 2029 notes to redeem $2.0B 6.00% 2029 notes (Sept 30 and Oct 15) .

Notes:

“cc” denotes constant currency.
Estimates marked with * are Values retrieved from S&P Global.

Sources: Q3 2025 8‑K earnings release and exhibits ; Q3 2025 earnings call transcript -; Q2 2025 8‑K -; Q1 2025 8‑K -; press releases on debt redemptions and new notes .

CARNIVAL PLC (CUK)·Q3 2025 Earnings Summary