Q3 2024 Earnings Summary
Metric | YoY Change | Reason |
---|---|---|
Total Revenue | +11% (to $2.81B) | The strong recovery in cruise demand and higher occupancy drove overall revenue growth, aided by robust consumer spending on ticket fares and onboard offerings. Looking ahead, continued capacity additions and sustained demand trends are expected to support further revenue gains. |
Passenger Ticket Revenue | +12% (to $1.94B) | Higher pricing and increased capacity days, along with the normalization of cruise operations compared to the prior year, boosted ticket sales. Close-in bookings and expanded deployments in popular regions are likely to sustain momentum in future periods. |
Onboard and Other Revenue | +7% (to $862M) | Elevated onboard spending per passenger, driven by strong demand for specialty dining, excursions, and improved internet services, contributed to this growth. Pre-cruise purchases and ongoing enhancements to guest experiences are anticipated to further stimulate onboard spending over time. |
North America | +6% (to $1.32B) | Growth in consumer confidence and steady demand for short Caribbean and Alaskan itineraries underpinned revenue gains in North America. While the segment performed well, the company’s continued investment in fleet optimization could shift capacity deployments and shape regional revenue in upcoming quarters. |
Europe | +12% (to $1.44B) | Strong pent-up demand for European sailings and higher ticket pricing supported the YoY revenue jump. Geopolitical factors and cost management efficiencies may influence future performance, but robust bookings suggest sustained European growth. |
Asia-Pacific | +214% (to $50M) | The substantial rebound reflects post-pandemic reopening and easing travel restrictions in key Asia-Pacific markets. Further expansion in this region is likely as the company reintroduces itineraries and benefits from improving consumer confidence. |
Net Income | +37% (to $475M) | The significant bottom-line improvement stemmed from heightened revenue and effective cost controls, including fuel optimization and margin enhancement initiatives. Going forward, interest rate volatility and broader macroeconomic conditions could affect profitability, but strong booking trends remain supportive. |
Diluted EPS | +22% (to $0.96) | The upswing in net income—alongside disciplined expense management—resulted in higher earnings per share despite a larger share count. Future EPS growth will likely hinge on capacity expansion and continued revenue-per-passenger gains, balanced against debt and interest considerations. |
Metric | Period | Previous Guidance | Current Guidance | Change |
---|---|---|---|---|
Net Yield Growth | FY 2024 | 8.2% | 9.4% | raised |
Adjusted Net Cruise Cost Excl. Fuel | FY 2024 | flat year-over-year | flat year-over-year | no change |
Adjusted EBITDA | FY 2024 | $2.35B | $2.425B | raised |
Adjusted EPS | FY 2024 | $1.53 | $1.65 | raised |
Adjusted ROIC | FY 2024 | double-digit by year-end | double-digit by year-end | no change |
Adjusted Operational EBITDA Margin | FY 2024 | 34.5% | 35.3% | raised |
Net Leverage | FY 2024 | no prior guidance | 5.4x | no prior guidance |
Net Yield Growth | Q4 2024 | 5% | 6.9% | raised |
Adjusted Net Cruise Cost Excl. Fuel PCD | Q4 2024 | no prior guidance | 2.7% increase to $155 | no prior guidance |
Adjusted EBITDA | Q4 2024 | no prior guidance | $445M | no prior guidance |
Adjusted EPS | Q4 2024 | no prior guidance | $0.09 | no prior guidance |
Metric | Period | Guidance | Actual | Performance |
---|---|---|---|---|
Adjusted EBITDA | Q3 2024 | $870 million | Approximately $909.64 million (calculated by adding Operating Income of $691,210KAnd D&A of $218,428K) | Beat |
Adjusted EPS | Q3 2024 | $0.92 | $1.09 (GAAP Basic EPS)(used as proxy for adjusted EPS due to lack of separate adjusted EPS figure) | Beat |
Topic | Previous Mentions | Current Period | Trend |
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Consistent focus on pricing power and yield growth | Q2 2024: Highlighted 6.3% net yield increase and focus on yield over occupancy. Q1 2024: Posted 16.2% yield growth, raising full-year guidance. Q4 2023: Projected 5.5% annual yield increase. | Emphasized 9.4% net yield growth for 2024, exceeding prior guidance; reaffirmed low to mid-single-digit long-term yield growth targets. | Consistently mentioned, with robust pricing performance reinforced every quarter |
Strong demand and booking trends across brands | Q2 2024: Reported record-breaking advanced ticket sales of $3.9 billion. Q1 2024: Achieved record bookings with all-time high forward positions. Q4 2023: Highlighted strong Caribbean and Hawaii demand. | Cited robust broad-based demand for 2025, with solid pricing and load factors above 2024 levels. | Continues to be strong across all brands, fueling confidence in forward bookings |
Ongoing cost control efforts including a $300 million savings program | Q2 2024: Confident in delivering $300M over three years through 2026, already ahead for 2024. Q1 2024 & Q4 2023: Mentioned cost optimization but did not specify the $300M figure. | On track to meet $300M savings by 2026; expects flat adjusted net cruise costs ex fuel yoy in 2024, despite inflation. | New key initiative introduced in Q2; reinforced progress in Q3 |
Leverage reduction goals aiming for mid-4x by 2026, still above pre-COVID levels | Q2 2024: Achieved net leverage of 5.9x and reiterated mid-4x by 2026 goal. Q1 2024: Aimed to reduce leverage by 1.5 turns in 2024. Q4 2023: Anticipated steady progress, but above pre-COVID levels. | Net leverage at 5.58x, down 1.75x from year-end 2023; targeting 5.4x by year-end and mid-4x by 2026. | Consistent deleveraging trajectory, improving but still higher than pre-pandemic |
Geopolitical disruptions in the Middle East | Q2 2024: Estimated a 1–2 point yield impact from rerouted Middle East itineraries. Q1 2024: Proactive cancellations and redeployments for 2025. Q4 2023: Projected disruptions mainly for Oceania/Regent. | Noted 10% of Q4 capacity was affected; despite challenges, overall demand and pricing remained strong. | Still mentioned in Q3, though less prominent as redeployments mitigate impact |
Dry dock scheduling uncertainties | Q2 2024: Timing of certain dry-dock expenses shifted into Q3. Q1 2024 & Q4 2023: No specific references to Q3 2024 scheduling uncertainties. | Mentioned 6 more dry dock days but impacting 50% more capacity days, affecting Q1 comparisons. | New detail in Q3 regarding timing and capacity impact |
Inflationary pressures on costs and newbuild expenses | Q2 2024: Aimed to keep core costs flat excluding fuel, with 3% general inflation assumption. Q1 2024: Acknowledged inflation on newbuilds but mitigating via efficiencies. Q4 2023: Focus on cost offsets. | Maintained sub-inflationary cost increases; no major newbuild cost overruns discussed. | Ongoing focus on offsetting inflation and carefully managing newbuild expenses |
Loyalty program development gap | Q2 2024: Not ready to discuss loyalty program details, though exploring industry trends. Q1 2024 & Q4 2023: No specific commentary. | No mention in Q3 2024. | Briefly noted in Q2; no follow-up thereafter |
Cautious outlook for 2025 yield growth | Q2 2024: Targeted organic yield increase for 2025. Q1 2024: Planned Middle East redeployments to minimize 2025 impact. Q4 2023: Modest tailwind expected post-disruptions. | Reiterated low to mid-single-digit outlook; emphasized tough comps from 16% Q1 2024 yield growth and more dry dock days. | Heightened caution due to strong 2024 comps and operational factors |
Long-term 2026 targets for margin, EPS, leverage, and ROIC | Q2 2024: Detailed plan to reach 39% margin, $2.45 EPS, mid-4x leverage, 12% ROIC. Q1 2024 & Q4 2023: No explicit figures mentioned; planned to share at Investor Day. | Reiterated 39% EBITDA margin, $2.45 EPS, mid-4x leverage, and 12% ROIC by 2026. | Core strategic targets reaffirmed, showing confidence in meeting 2026 goals |
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Yield Growth Expectations
Q: Could yield growth exceed historical low single-digit rates?
A: While aiming to grow yields rapidly, we're sticking to our algorithm of low to mid-single-digit yield growth with below inflationary cost growth. 2024 was an unusually positive year, but we expect to continue with moderate capacity growth and low to mid-single-digit yield growth in the longer term. -
Cost Savings Target
Q: Could the $300 million cost-saving target be exceeded?
A: We wouldn't want to get ahead of ourselves, but we've done a very good job identifying our goals and are increasingly confident. This is a multi-year journey, and we're focused on every process in the business. We're feeling good with where we are today. -
2025 Bookings Strength
Q: Any signs of softening as you look into 2025?
A: We're happy with all brands, geographies, and guest sourcing markets. It's hard to see any cracks, and we're absolutely happy with what we're seeing today. -
Yield vs Cost Spread
Q: Will yield growth exceed cost growth by 2.5 points yearly?
A: We're focused on our long-term targets for 2026, not on specific annual spreads. While this year was better than expected, future spreads may vary as we work towards our 2026 goals. -
Occupancy Trends
Q: Will occupancy boost yield growth in coming years?
A: Our ships are essentially full, so occupancy isn't expected to be a tailwind or headwind for yield growth. We expect occupancy to remain relatively stable through 2025. -
Great Stirrup Cay Expansion
Q: Update on the Great Stirrup Cay project?
A: We're on schedule to open the new pier in Q4. This will allow us to double the guests visiting the island starting in 2026 compared to today, generating higher guest satisfaction and revenue.
Research analysts covering Norwegian Cruise Line Holdings.