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Norwegian Cruise Line Holdings Ltd. (NCLH)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 revenue of $2.52B (+6% YoY) with Adjusted EBITDA $694M (beat guidance) and Adjusted EPS $0.51 (in line), but GAAP EPS $0.07 declined YoY due to $158.5M FX losses (including $121.9M non-cash mark-to-market on euro debt) .
  • Net Yield rose ~3.1% constant currency, above guidance; Adjusted Net Cruise Cost ex-fuel per capacity day was flat vs 2024 and better than guidance due to timing of cost savings .
  • FY25 guidance reiterated (Adjusted EBITDA ~$2.72B, Adjusted EPS $2.05), with Net Yield cc now ~2.5% and Net Leverage year-end ~5.2x reflecting euro-debt mark-to-market; Q3 guidance: occupancy ~105.5%, Adjusted EPS ~$1.14 .
  • Catalysts: record bookings (ATS $4.0B), upsized revolver to ~$2.5B, Great Stirrup Cay expansion (Great Tides Waterpark) to drive late-2026/2027 demand and onboard revenue .

What Went Well and What Went Wrong

  • What Went Well

    • Net Yield outperformed (~3.1% cc vs ~2.5% guide) on strong close-in demand and onboard spend; Adjusted EBITDA ($694M) exceeded guide by ~$24M .
    • Disciplined cost execution: Adjusted Net Cruise Cost ex-fuel per capacity day flat vs 2024 and better than guidance due to timing of savings initiatives .
    • CEO tone: “We delivered another record quarter... bookings now ahead of historical levels... continued strength in onboard spend” (Harry Sommer) .

  • What Went Wrong

    • GAAP net income down YoY ($30.0M vs $163.4M) as FX losses totaled $158.5M (incl. $121.9M non-cash euro debt MTM; $36.6M advance ticket sales revaluation) .
    • Occupancy 103.9%, below 105.9% prior year, impacted by earlier softness in long-haul European itineraries; Q3 occupancy guided below prior year (~105.5%) .
    • Non-GAAP adjustments increased: $68.4M debt extinguishment/modification losses added back; FX remeasurement of euro-denominated debt excluded from Adjusted EPS .

Financial Results

MetricQ2 2024Q1 2025Q2 2025 ActualQ2 2025 Consensus*
Total Revenue ($USD Billions)$2.372 $2.128 $2.517 $2.558*
GAAP EPS ($)$0.35 $(0.09) $0.07 —
Adjusted EPS ($)$0.39 $0.07 $0.51 $0.516*
Operating Income ($USD Millions)$341.6 $200.9 $423.8 —
Net Income ($USD Millions)$163.4 $(40.3) $30.0 —
Adjusted EBITDA ($USD Millions)$587.7 $453.1 $694.0 $675.2*

Notes: Q2 2025 revenue slightly missed consensus (~$40M); Adjusted EPS matched consensus within ~1¢; Adjusted EBITDA beat company guidance but modestly below SPGI consensus. Values retrieved from S&P Global for consensus.*

Margins and Unit Economics:

MetricQ2 2024Q1 2025Q2 2025
Net Yield ($ per Capacity Day)$296.31 $279.51 $304.34
Net Per Diem ($)$279.68 $275.32 $292.90
Gross Cruise Cost per Capacity Day ($)$315.27 $297.39 $305.65
Adjusted Net Cruise Cost ex-Fuel per Capacity Day ($)$163.36 $169.33 $163.67

Revenue Mix (Q2):

Revenue Component ($USD Millions)Q2 2024Q1 2025Q2 2025
Passenger Ticket$1,602.1 $1,418.7 $1,709.0
Onboard and Other$770.4 $708.9 $808.5
Total Revenue$2,372.5 $2,127.6 $2,517.5

KPIs:

KPIQ2 2024Q1 2025Q2 2025
Occupancy (%)105.9% 101.5% 103.9%
Capacity Days (Millions)5.736 5.701 6.052
Passengers Carried711,918 669,099 738,635
Passenger Cruise Days6,077,574 5,787,243 6,288,800
Fuel Price per Metric Ton, net of hedges ($)$719 $687 $659
Fuel Expense ($USD Millions)$175.0 $175.0 $157.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Yield (Constant Currency)FY20252.0%–3.0% ~2.5% Narrowed; effectively maintained mid-point
Adjusted Net Cruise Cost ex-Fuel per Capacity Day (Constant Currency)FY20250%–1.25% ~0.6% Clarified mid-point
Adjusted EBITDA ($)FY2025~$2.72B ~$2.72B Maintained
Adjusted Operational EBITDA MarginFY2025~37% ~37% Maintained
Adjusted Net Income ($)FY2025~$1,045M ~$1,045M Maintained
Adjusted EPS ($)FY2025~$2.05 ~$2.05 Maintained
Net Leverage (x)FY2025 YE~5x ~5.2x (euro debt MTM) Raised (FX effect)
Occupancy (%)Q3 2025—~105.5% Provided
Net Yield (Constant Currency)Q3 2025—~1.5% Provided
Adjusted EBITDA ($)Q3 2025—~$1.015B Provided
Adjusted EPS ($)Q3 2025—~$1.14 Provided
D&A ($)Q3 2025—~$252M Provided
Interest Expense, net ($)Q3 2025—~$180M Provided

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Demand/bookings & pricingOptimal booked position; FY25 price growth ~4% and Net Yield growth trajectory Record bookings May–July; price growth ~4–4.5% consistent across quarters; ATS balance record $4.0B Improving
European itineraries softnessNoted planning and deployment focus; dry-dock/itinerary impacts Early-April softness in long-haul Europe; pivot to shorter itineraries, modestly reduced Europe mix for 2026 Stabilizing
Great Stirrup Cay expansionAnnounced amenities/pier late 2025 Phase-two unveiled: Great Tides Waterpark (19 slides, dynamic river) opening summer 2026; marketing activations Positive momentum
Cost savings & margin expansionTransformation office; margins up; sub-inflationary cost growth Flat unit cost in Q3/Q4; >$200M savings by YE; targeting $300M+ by 2026; TTM margin 36.3% Improving
Balance sheet & leverageRevolver upsized to $1.7B; deleveraging Revolver upsized to ~$2.5B; mid-4x leverage target by 2026 Improving
Fuel hedging/efficiencyHedge ratios and price; biofuel/shore power progress 2025 hedged ~65% at $617/ton blended; fuel price down; FX/fuel sensitivities provided Stable

Management Commentary

  • Harry Sommer (CEO): “We delivered another record quarter... bookings now ahead of historical levels... continued strength in onboard spend.”
  • On Great Stirrup Cay: “Great Tides Waterpark... will further enhance the guest experience... reinforcing our commitment to measured growth and long-term value creation.”
  • Mark Kempa (CFO): “We reduced Net Leverage to 5.3x in the second quarter, down from 5.7x in the first quarter... firmly on track to reach our 2026 goal of reducing Net Leverage to the mid-4x range.”
  • Cost program: “Adjusted net cruise cost ex-fuel is expected to be essentially flat... we are delivering sub-inflationary unit cost growth while protecting the guest experience.”

Q&A Highlights

  • Deployment pivot: 2026 Europe itineraries shortened and modestly reduced; strategy aimed at optimizing profitability and brand health rather than pure yield maximization .
  • Bookings momentum: July was a record month; early marketing halo from GSC announcement led to doubled leads in first 48 hours .
  • Revenue management: New system phase one by end-2025; benefits expected 2026–2027; close-in demand strong without sacrificing booking curve discipline .
  • Margin outlook: Target ~37% margin in 2025 and ~39% by end-2026; savings >$200M by YE, $300M+ by 2026 .
  • Guidance clarity: Q3 EPS guided to ~$1.14; management reiterated FY25 Adjusted EPS $2.05 despite FX headwinds .

Estimates Context

  • Q2 2025 performance vs SPGI consensus: Revenue $2.52B vs $2.56B* (minor miss); Adjusted EPS $0.51 vs $0.516* (in line); Adjusted EBITDA $694M vs $675M* (company beat guidance; modestly above or near consensus depending on definition). Values retrieved from S&P Global.*
  • Forward: Q3 2025 consensus EPS ~$1.162* vs guidance ~$1.14 (slight guided-below consensus); Q3 revenue consensus ~$3.03B*; Q3 EBITDA consensus ~$1.02B* aligns with guidance .
  • Potential estimate revisions: FX remeasurement impacts GAAP; occupancy guided below prior year; Net Yield growth maintained—sell-side may modestly trim Q3 EPS toward guidance, while FY25 remains anchored at $2.05. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mix shift and experiences: Measured pivot toward “fun & sun” plus Great Stirrup Cay enhancements should support occupancy, onboard revenue, and Net Yield accretion from late-2026 onward .
  • Margin and costs: Sub-inflationary unit cost growth and >$200M savings year-to-date underpin margin expansion to ~37% in 2025; $300M+ goal by 2026 supports EPS trajectory .
  • Balance sheet: Liquidity strengthened (revolver ~$2.5B); net leverage trending to mid-4x by 2026 despite euro debt MTM noise .
  • Near-term trading setup: FY25 guidance reiterated; Q3 EPS guide slightly below consensus—watch for estimate convergence and booking cadence updates; onboard spend resilience is a support .
  • FX sensitivity: Euro-denominated debt remeasurement creates GAAP volatility; Adjusted metrics strip this effect—monitor FX and interest-rate sensitivities provided .
  • Pricing discipline: Management unwilling to trade price for occupancy; consistent ~4–4.5% price growth across quarters supports Net Yield despite itinerary changes .
  • Strategic growth: Allura delivery and Sonata-class orders reinforce luxury segment confidence; GSC expansion and marketing activations are designed to broaden brand appeal and monetization .
Estimates disclaimer: Values retrieved from S&P Global.*

Document sources: Q2 2025 press release and 8-K **[1513761_1b37c17a8608471cb131fd0e54604cd0_0]** **[1513761_1b37c17a8608471cb131fd0e54604cd0_2]** **[1513761_1b37c17a8608471cb131fd0e54604cd0_5]** **[1513761_1b37c17a8608471cb131fd0e54604cd0_19]** **[1513761_0001171843-25-004871_exh_991.htm:1]** **[1513761_0001171843-25-004871_exh_991.htm:3]** **[1513761_0001171843-25-004871_exh_991.htm:13]**; Q2 2025 call transcript **[0001513761_2235036_1]** **[0001513761_2235036_5]** **[0001513761_2235036_6]** **[0001513761_2235036_11]** **[0001513761_2235036_14]**; Q1 2025 press release **[1513761_db0898aaaac0437796a222430a6fe493_0]** **[1513761_db0898aaaac0437796a222430a6fe493_2]** **[1513761_db0898aaaac0437796a222430a6fe493_4]** **[1513761_db0898aaaac0437796a222430a6fe493_20]**; Q4 2024 press release **[1513761_b7e7fbabfb9a4aa5be7573ef65df4189_0]** **[1513761_b7e7fbabfb9a4aa5be7573ef65df4189_4]** **[1513761_b7e7fbabfb9a4aa5be7573ef65df4189_18]**; Great Stirrup Cay press releases **[1513761_20250729AQ39616:0]** **[1513761_20250729AQ39616:1]**; Oceania press release **[1513761_20250806FL45123:0]**.