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Norwegian Cruise Line Holdings Ltd. (NCLH)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $2.94B (+5% YoY), GAAP EPS $0.86; Adjusted EPS $1.20, above company guidance, with occupancy 106.4% and Net Yield +1.6% YoY .
  • Versus Street (S&P Global): EPS beat ($1.20 vs $1.16*), but revenue missed ($2.94B vs $3.03B*); EBITDA slightly below consensus ($1.013B vs ~$1.019B*) .
  • Guidance: FY25 Adjusted EPS raised to $2.10 (from $2.05), while FY25 Adjusted EBITDA ~unchanged at ~$2.72B; FY25 Net Yield now +2.4–2.5% CC and ANCC ex fuel +~0.75% CC; YE net leverage guided to ~5.3x .
  • Strategic and capital actions: eliminated all secured notes, extended maturities, and reduced fully diluted shares by ~38.1M (~7.5%); bookings in Q3 (and October) up >20%, supporting Q4 occupancy ~101.9% and Q4 Net Yield +3.5–4% CC .
  • Potential stock catalysts: FY EPS raise, stronger Q4 occupancy/yield setup, capital structure simplification, and Great Stirrup Cay activation driving 2H26 mix/tailwinds .

What Went Well and What Went Wrong

What Went Well

  • Beat internal guidance and set records: Adjusted EBITDA ~$1.019B (vs $1.015B guide) and Adjusted EPS $1.20 (vs $1.14 guide); record quarterly revenue $2.94B (+5% YoY) .
  • Demand momentum and mix strategy traction: Q3 bookings the strongest on record; bookings up >20% YoY in Q3 and continued into October; occupancy 106.4% topped guide ~105.5% .
  • Balance sheet optimization: refinanced 2027 exchangeables, removed all secured notes, extended maturities, reduced fully diluted shares by ~38.1M; leverage essentially neutral through the transactions .

Quote: “Bookings in the third quarter marked the strongest third-quarter bookings in company history, with bookings up over 20% from last year… continuing into October.” — CEO Harry Sommer .

What Went Wrong

  • Revenue/EBITDA vs Street: revenue came in below consensus (~$2.94B vs $3.03B*) and EBITDA modestly below ($1.013B vs ~$1.019B*) despite guidance beat on Adjusted EBITDA .
  • YoY GAAP earnings down: GAAP net income fell to $419.3M from $474.9M YoY; occupancy slipped to 106.4% from 108.1% in Q3’24 as mix shifted to family/short Caribbean .
  • Fuel and leverage headwinds: fuel price/MT (net of hedges) rose to $744 (from $699) and net leverage ticked to 5.4x (from 5.3x in Q2) given newbuild delivery (Oceania Allura) .

Analyst concern addressed: family mix lifts occupancy but dilutes per-cabin pricing; management reiterated the trade-off is accretive to yields, margins and profitability .

Financial Results

Quarterly trend (Q1–Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$2,127.6 $2,517.5 $2,938.1
GAAP Diluted EPS ($)-$0.09 $0.07 $0.86
Adjusted EPS ($)$0.07 $0.51 $1.20
Adjusted EBITDA ($USD Millions)$453.1 $694.0 $1,019.3
Occupancy (%)101.5% 103.9% 106.4%
Net Yield YoY Growth (%)+0.6% +2.7% +1.6%

Q3 2025 vs Q3 2024 and vs S&P Global consensus

MetricQ3 2024 ActualQ3 2025 ActualQ3 2025 Consensus*Surprise% Surprise
Revenue ($USD Billions)$2.81 $2.94 $3.03*-$0.09-2.9%
GAAP Diluted EPS ($)$0.95 $0.86 $1.1616*-$0.30-25.6%
Adjusted EPS ($)$1.02 $1.20 ———
EBITDA ($USD Billions)—$1.013 $1.0186*-$0.005-0.5%

Note: Consensus values marked with * are from S&P Global; Values retrieved from S&P Global.

KPIs and unit costs (Q3 YoY)

KPIQ3 2024Q3 2025
Capacity Days (Millions)6.034 6.418
Passenger Cruise Days (Millions)6.522 6.828
Occupancy (%)108.1% 106.4%
Net Yield ($)$336.48 $341.89
Net Per Diem ($)$311.31 $321.34
Gross Cruise Cost/Capacity Day ($)$314.39 $301.95
Adjusted Net Cruise Cost ex Fuel/Capacity Day ($)$154.84 $155.66
Fuel price/MT, net of hedges ($)$699 $744

Guidance Changes

FY 2025 guidance (previous vs current)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$2.05 $2.10 Raised
Adjusted EBITDAFY 2025~$2.72B ~$2.72B Maintained
Net Yield (CC)FY 2025~+2.5% ~+2.4%–2.5% Narrowed
Adj. Net Cruise Cost ex Fuel/Capacity Day (CC)FY 2025~+0.6% ~+0.75% Raised
Net Leverage (YE)FY 2025~5.2x ~5.3x Raised

Q4 2025 guidance snapshot

MetricPeriodGuidance
Net Yield (CC)Q4 2025~+3.5%–4.0%
Adjusted Net Cruise Cost ex Fuel/Capacity Day (CC)Q4 2025~+0.5%
Capacity DaysQ4 2025~6.28M
OccupancyQ4 2025~101.9%
Adjusted EBITDAQ4 2025~$555M
Adjusted EPSQ4 2025~$0.27
D&AQ4 2025~$259M
Interest expense (net)Q4 2025~$179M

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q1)Current Period (Q3)Trend
Family/Caribbean mix and short sailingsQ2: Building GSC; short-haul demand; reiterated cost control; bookings rebounded after early-April softness . Q1: Announced GSC enhancements; delivered Norwegian Aqua; cost savings to offset macro .Strategy intensifying: short Caribbean mix up; Q4 short sailings +80% YoY; load factors to ~102%; family mix dilutes per-cabin price but accretive to yields/margins .Improving load factor; margin accretive mix
Great Stirrup Cay (GSC) island developmentQ2: Phase two announced; waterpark summer 2026; pier/pool/tram by year-end 2025 . Q1: GSC expansion plans alongside new pier .Soft open around holidays 2025; waterpark summer 2026; expected tailwind to yields into 2H26 .Building tailwind into 2026
Cost discipline and marginsQ1/Q2: FY25 Adjusted EBITDA ~$2.72B; ANCC ex fuel growth contained; sub-inflationary cost growth .2025 ANCC ex fuel +~0.75% CC; Op EBITDA margin ~37% FY25; further expansion targeted in 2026 .Continued margin expansion
Balance sheet and capital marketsQ1: Refi 2025 notes; reduced diluted shares ~15.5M . Q2: RCF upsized; leverage down to 5.3x .Refi 2027 notes; removed secured notes; reduced fully diluted shares ~38.1M; YE leverage ~5.3x .Structural de-risking
Sustainability/fuels—8-year Repsol renewable marine fuels agreement for Barcelona; supports Sail & Sustain goals .New long-term decarbonization lever

Management Commentary

  • “We delivered another record quarter… delivered the highest quarterly revenue in our company's history. Load factor finished ahead of expectations at 106.4%… Adjusted EPS came in at $1.20, exceeding guidance by $0.06.” — CEO Harry Sommer .
  • “We completed… transactions that… reduced our shares outstanding… eliminated all secured notes… while remaining essentially Net Leverage neutral.” — CFO Mark A. Kempa .
  • “In Q4… the highest mix of short sailings since 2019… driving load factors higher… addition of children as third and fourth… will naturally dilute blended pricing… end result remains strong yield growth and strong margin expansion.” — CEO Harry Sommer .
  • “Q3 bookings… strongest… in company history… up over 20% from last year… continuing into October across all three brands.” — CEO Harry Sommer .

Q&A Highlights

  • Family mix vs yield: Management emphasized first/second guest pricing up, while more 3rd/4th (children) dilutes average price but lifts yields, margins and profitability; expects 200–300 bps load factor lift in Q1’26 .
  • Caribbean promotional landscape: Not seeing unusual promotions; supports Q4 net yield +3.5–4% guide .
  • GSC ramp and yield impact: Anticipates meaningful tailwind as amenities open (soft open holidays 2025; waterpark summer 2026) with yield benefits ramping in 2H26 .
  • Costs and savings: On track for >$300M multi-year savings, enabling sub-inflationary unit cost growth and margin expansion toward ~39% in 2026 .
  • Bookings cadence: Strength broad-based across brands; Q3 and October were strong, with close-in Caribbean demand contributing .

Estimates Context

  • Q3 2025 vs S&P Global consensus:
    • EPS: $1.20 vs $1.1616* (beat by ~$0.04) .
    • Revenue: $2.94B vs ~$3.03B* (miss by ~$0.09B) .
    • EBITDA: ~$1.013B vs ~$1.019B* (slight miss) .
  • Implications: Street likely raises FY25 EPS on company increase to $2.10 and solid Q4 setup, while top-line expectations for near-term may moderate given mix-driven per-cabin pricing dilution commentary .

Note: Consensus values marked with * are from S&P Global; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix strategy is working: higher load factors via family/short Caribbean boosts yields and margins despite per-cabin price dilution; Q4 net yield guide +3.5–4% and occupancy ~101.9% reinforce near-term setup .
  • FY25 profitability stepping up: FY Adjusted EPS raised to $2.10 with FY Adjusted EBITDA unchanged at ~$2.72B; management reiterates margin expansion path into 2026 .
  • Capital structure cleaner: secured notes eliminated; fully diluted share count reduced ~7.5% via exchanges; leverage path toward mid-4x in 2026 remains intact .
  • Demand backdrop robust: bookings +20% in Q3 and October across all brands; close-in Caribbean demand strong, supporting Q4 and early 2026 volumes .
  • Watch the near-term optics: Q3 revenue/EBITDA came in below Street despite internal guidance beat; family mix will continue to pressure per-cabin pricing metrics even as it benefits margins .
  • 2026 catalysts: GSC full amenity ramp and new ships (Norwegian Luna, Seven Seas Prestige) plus cost savings underpin further margin expansion and deleveraging .
  • Fuel hedging and price sensitivity: 2025 net fuel price/MT $690 guide and 10% price move ~ $0.02 EPS in Q4; Q3 fuel price/MT net of hedges rose to $744 (from $699) .

Sources

  • Q3 2025 8-K/Press Release and financial statements .
  • Q3 2025 earnings call transcript .
  • Q2 2025 8-K/Press Release (prior-quarter context) .
  • Q1 2025 8-K/Press Release (prior-quarter context) .
  • Repsol renewable marine fuels agreement (Q3 relevant press) .

Note: Consensus values marked with * are from S&P Global; Values retrieved from S&P Global.