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Norwegian Cruise Line Holdings Ltd. (NCLH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record fourth-quarter revenue of $2.11B (+~6% YoY), GAAP diluted EPS of $0.52, and Adjusted EPS of $0.26, all above company guidance; Net Yield grew ~9% and beat guidance by 210 bps, driven by strong onboard spend .
  • Full-year 2024 set records: revenue $9.48B (+~11% YoY), Adjusted EBITDA $2.45B (+32% YoY), Adjusted EPS $1.82; net leverage improved by ~2 turns to 5.3x, aided by ~$2.05B operating cash flow and liability management .
  • 2025 guidance introduced: Adjusted EBITDA ~$2.72B (+11% YoY), Adjusted EPS ~$2.05 (+~13% YoY), Net Yield +~3% (cc), occupancy ~103.4%, and continued deleveraging to 5x or better; FX and fuel headwinds ($70M) embedded in outlook .
  • Credit upgrades (S&P to B+ positive outlook; Moody’s to B1 positive), $1.8B 2032 unsecured notes refinancing, and upsized revolver to $1.7B improve capital structure—key catalysts alongside sustained demand strength in Europe and Alaska .

What Went Well and What Went Wrong

What Went Well

  • Net Yield +~9% (cc) beat guidance by 210 bps in Q4, with Adjusted EBITDA of $468.2M above ~$445M guidance; onboard spend was particularly strong .
  • Balance sheet progress: net leverage down to 5.3x, liquidity ~$2.0B, and credit upgrades from S&P and Moody’s; revolver upsized to $1.7B, enhancing flexibility .
  • CEO highlighted execution on “Charting the Course” strategy and product enhancements: “record revenue, Net Yield growth, and Adjusted EBITDA…strengthen our balance sheet and reduce our Net Leverage two full turns” .

What Went Wrong

  • Adjusted Net Cruise Cost ex Fuel per Capacity Day in Q4 was slightly above guidance ($157 cc vs guidance ~$155), driven by higher variable compensation; dry-dock timing impacted costs .
  • Q1 2025 occupancy expected down ~3% YoY due to repositioning and dry-docks on large vessels; management flagged lower load factors on repositioning sailings .
  • FX contributed ~$70M benefit to Q4 net income but will be a future period headwind as advanced ticket sales revalue through P&L; 2025 guidance includes ~$70M combined FX/fuel headwind .

Financial Results

Quarterly Financial Summary

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$2.372 $2.807 $2.109
GAAP Diluted EPS ($)$0.35 $0.95 $0.52
Adjusted EPS ($)$0.40 $0.99 $0.26
Adjusted EBITDA ($USD Millions)$587.7 $931.0 $468.2

Q4 YoY Comparison

MetricQ4 2023Q4 2024
Revenue ($USD Billions)$1.986 $2.109
GAAP Diluted EPS ($)-$0.25 $0.52
Adjusted EPS ($)-$0.18 $0.26
Net Yield ($ per Capacity Day)$243.27 $265.28

Margin Proxies

MetricQ2 2024Q3 2024Q4 2024
Net Yield ($ per Capacity Day)$296.31 $336.48 $265.28
Gross Margin per Capacity Day ($)$124.01 $176.45 $101.77

Revenue Breakdown

Metric ($USD Millions)Q2 2024Q3 2024Q4 2024
Passenger Ticket$1,602.1 $1,944.9 $1,408.7
Onboard and Other$770.4 $861.7 $700.6
Total Revenue$2,372.5 $2,806.6 $2,109.4

KPIs

KPIQ2 2024Q3 2024Q4 2024
Passengers Carried711,918 812,529 665,788
Passenger Cruise Days6,077,574 6,521,610 5,881,777
Capacity Days5,736,385 6,033,707 5,834,290
Occupancy (%)105.9% 108.1% 100.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Yield (cc)Q4 2024~6.9% ~9.0% Raised/Beat
Adjusted Net Cruise Cost ex Fuel / Capacity Day (cc)Q4 2024~$155 ~$157 Higher (above guidance)
Adjusted EBITDA ($M)Q4 2024~$445 $468.2 Beat
Adjusted EPS ($)Q4 2024~$0.09 $0.26 Beat
Net Yield (cc)FY 2024~9.4% ~9.9% Raised/Beat
Adjusted EBITDA ($B)FY 2024~$2.425 $2.45 Raised/Beat
Adjusted EPS ($)FY 2024~$1.65 $1.82 Raised/Beat
Net Yield (cc)FY 2025N/A~3.0% New
Adjusted EBITDA ($B)FY 2025N/A~$2.72 New
Adjusted EPS ($)FY 2025N/A~$2.05 New
Occupancy (%)FY 2025N/A~103.4% New
Capacity Days (M)FY 2025N/A~24.55 New
D&A ($M)FY 2025N/A~$985 New
Adjusted Interest Expense ($M)FY 2025N/A~$700 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI/Technology initiativesFleet-wide Starlink rollout ongoing; focus on product tech enhancements Starlink installation completed across entire fleet; brand experience upgrades Positive completion; enhanced onboard connectivity
Supply chain/operationsDry-dock impacts flagged; cost control maintained Q1 2025 occupancy to dip ~3% YoY due to dry-dock repositioning; plan to perform dry-docks closer to Caribbean going forward Short-term headwind; mitigation underway
Tariffs/Macro (FX)FX modest headwinds/volatility ~$70M FX benefit in Q4 (also future headwind via advance ticket revaluation); 2025 includes ~$70M headwind FX+fuel FX volatility continues; embedded in guidance
Product performance/Regional trendsStrong Alaska and Canada-New England; booking strength shifting to 2025 Strong demand for Europe and Alaska; NCL brand outperforming, luxury brands lag modestly due to capacity growth Demand robust; mix benefits
Regulatory/LegalOngoing ESG disclosures, no specific tax topics Discussion of potential U.S. tax regime changes (Section 883) complexity; no quantification Monitor; uncertain impact
Growth platform/R&D executionCharting the Course targets; newbuilds announced Two 2025 debuts (Norwegian Aqua, Oceania Allura), Great Stirrup Cay pier opening late 2025 with ~1M guests planned in 2026 Capacity/product expansion accelerating

Management Commentary

  • CEO: “record revenue, Net Yield growth, and Adjusted EBITDA, enabling us to further strengthen our balance sheet and reduce our Net Leverage two full turns…confident in achieving our 2026 Charting the Course targets” .
  • CFO: “refinancing $1.8B of debt…upsized our revolving credit facility to $1.7B…optimize collateral utilization and strengthen capital structure; confident net leverage will improve to ~5x or better in 2025” .
  • Prepared remarks emphasized cost control and margin expansion: adjusted operational EBITDA margin ~35.5% in 2024, targeting ~37% in 2025 .

Q&A Highlights

  • Bookings and brand mix: Europe and Alaska demand strong; NCL brand pacing better, luxury brands modestly slower due to capacity absorption .
  • Occupancy dynamics: Q1 occupancy lower due to dry-dock repositioning; mix shift (longer Alaska itineraries, more Asia/Africa/Pacific) explains slight occupancy moderation across balance of 2025 .
  • FX impact clarification: ~+$70M Q4 benefit reverses as advanced ticket sales are realized; 2025 includes ~$70M headwind from FX and fuel .
  • Great Stirrup Cay: ~1M passengers in 2026 (~30% of total guests); pier opening expected late 2025; potential brand tailwind .
  • Section 883 tax discussion: complex and would require legislation; too early to assess impact; management highlighted broader geopolitical tailwinds if peace efforts succeed (e.g., reopening St. Petersburg) .

Estimates Context

  • S&P Global Wall Street consensus estimates were unavailable at the time of request due to data access limits; therefore, we cannot provide beat/miss vs consensus across EPS/revenue/EBITDA for Q4 2024 or 2025 guidance. Values not retrieved from S&P Global; comparisons to estimates are not provided.
  • Implications: In lieu of consensus comparisons, company guidance comparisons show beats in Q4 on Adjusted EPS ($0.26 vs ~$0.09), Adjusted EBITDA ($468.2M vs ~$445M), and Net Yield (~9% vs ~6.9% cc), suggesting potential for sell-side upward revisions to near-term profitability assumptions, offset by embedded ~$70M FX+fuel headwinds and Q1 occupancy mix effects .

Key Takeaways for Investors

  • Operational momentum: Q4 beats on Net Yield and Adjusted EBITDA with strong onboard revenue; confirms pricing power and cost discipline .
  • Balance sheet strengthening: net leverage to 5.3x in 2024 and guided to ~5x in 2025; $1.8B unsecured refinancing and $1.7B revolver expansion improve flexibility .
  • 2025 visibility: Guidance embeds FX/fuel headwinds (~$70M), yet still targets +11% Adjusted EBITDA and +~13% Adjusted EPS, with Net Yield +~3% (cc) .
  • Near-term watch items: Q1 occupancy dip (~101.5%) due to dry-docks/repositioning; Adjusted Net Cruise Cost ex fuel growth (~3.9% cc in Q1, ~1.25% for FY) .
  • Demand catalysts: Europe and Alaska pacing strong; Great Stirrup Cay pier enhances Caribbean throughput (aiming ~1M guests in 2026) .
  • Non-GAAP adjustments matter: Q4 GAAP EPS includes ~$162M tax valuation allowance release; Adjusted EPS strips this nonrecurring item for performance comparability .
  • Regulatory/geopolitical: Monitor potential U.S. tax changes; peace developments could unlock Northern Europe itinerary upside (e.g., St. Petersburg) .