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ROYAL CARIBBEAN CRUISES LTD (RCL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid growth with total revenue of $3.76B, GAAP diluted EPS of $2.02, and Adjusted EPS of $1.63; net yield growth of 7.3% in constant currency exceeded guidance on stronger pricing and onboard revenue .
  • FY 2025 guidance calls for Adjusted EPS of $14.35–$14.65 (including ~$0.65 headwind from FX and fuel vs the last call), with net yields up 2.5%–4.5% (constant currency) and NCC ex-fuel flat to up 1% (constant currency) .
  • WAVE season is off to a record start, with bookings accelerating to the best five booking weeks in company history; load factors are in line with prior years at higher rates, supporting yield optimization .
  • Strategic catalysts: launch of Celebrity River Cruises (initial 10 ships beginning 2027), continued private-destination expansion (Beach Club Nassau opening Dec-2025; Perfect Day Mexico in 2027), and dividend raised to $0.55 in Dec-2024 .
  • Estimate comparison: S&P Global consensus was unavailable due to API limits; therefore, beats/misses vs Wall Street estimates cannot be assessed this quarter. Values retrieved from S&P Global were unavailable.

What Went Well and What Went Wrong

What Went Well

  • Yield outperformance: Net yields rose 7.3% YoY in constant currency, above guidance, driven by higher pricing across key products and stronger onboard revenue .
  • Booking momentum: Best five booking weeks in company history during WAVE season, with booked load factors in line with prior years and at higher rates, enabling margin expansion .
  • Strategic expansion: Announced entry into river cruising with Celebrity River Cruises (initial order of 10 ships) to capture more of the $2T vacation market; management emphasized high-ROIC, high-margin characteristics and faster deployment cycles .
    • “We are obsessed with delivering the best vacation experiences… Today’s launch of Celebrity River Cruises… ultimately capture a greater share of the $2 trillion global vacation market” — CEO Jason Liberty .

What Went Wrong

  • Cost pressure in Q4: NCC ex-fuel per APCD increased 13.5% YoY (13.4% as-reported), largely due to a ~340 bps headwind from higher stock-based compensation tied to share price .
  • Margin compression: Adjusted EBITDA margin fell to 29.2% in Q4 (from 44.0% in Q3), reflecting seasonality and the Q4 cost cadence .
  • Conservative yield framing for 2025: Management noted tougher comps (11.6% 2024 growth, 13.5% in 2023) and a ~40 bps headwind from Q4 outperformance affecting 2025 yield growth optics; analysts questioned whether guidance was conservative .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Billions)$4.11 $4.89 $3.76
Diluted EPS ($)$3.11 $4.21 $2.02
Adjusted EPS ($)$3.21 $5.20 $1.63
Adjusted EBITDA ($USD Billions)$1.55 $2.15 $1.10
Adjusted EBITDA Margin (%)37.8% 44.0% 29.2%
Net Yields YoY (%) (Constant Currency)+13.3% +7.9% +7.3%
NCC ex-Fuel per APCD YoY (%) (Constant Currency)+5.7% +4.0% +13.5%

Segment revenue breakdown (seasonality and product mix):

Revenue Line ($USD Billions)Q2 2024Q3 2024Q4 2024Q4 2023
Passenger Ticket Revenues$2.89 $3.47 $2.60 $2.29
Onboard and Other Revenues$1.22 $1.42 $1.16 $1.05

Key KPIs:

KPIQ2 2024Q3 2024Q4 2024
Occupancy (Load Factor, %)108.2% 111.0% 107.6%
APCD (millions)12.23 13.32 12.72
Passenger Cruise Days (millions)13.23 14.79 13.68
Passengers Carried (millions)2.04 2.31 2.16

Fuel metrics (Q4 and Q1 outlook):

MetricQ4 2024Q1 2025 Guidance
Bunker Pricing ($/mt)$650 n/a
Fuel Consumption (mt)437,000 424,000
Fuel Expense ($USD Millions)n/a$277
Hedge (% of forward consumption)n/a62%

Note on non-GAAP impacts: Q4 Adjusted EPS of $1.63 vs GAAP $2.02 reflects exclusion of items including litigation loss contingency release ($124M) and loss on extinguishment of debt, among others .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)FY 2025“Start with a $14 handle” (≥ $14.00) $14.35–$14.65 Raised
Net Yields (% CC)FY 2025n/a+2.5% to +4.5% New
Net Yields (% as-reported)FY 2025n/a+1.8% to +3.8% New
NCC ex-Fuel per APCD (% CC)FY 2025n/aFlat to +1.0% New (low growth)
Adjusted EPS ($)Q1 2025n/a$2.43–$2.53 New
Net Yields (% CC)Q1 2025n/a+4.75% to +5.25% New
NCC ex-Fuel per APCD (% CC)Q1 2025n/a+1.6% to +2.1% New
APCDs (millions)FY 2025n/a53.3 New
Capacity Change vs 2024FY 20255% (framework) 5.4% Raised (detail)
Depreciation & Amortization ($M)FY 2025n/a$1,715–$1,725 New
Net Interest ($M, excl. extinguishment)FY 2025n/a$935–$945 New
Fuel Consumption (mt)FY 2025n/a1,724,000 New
Fuel Expense ($M)FY 2025n/a$1,172 New
Hedge (% of fwd consumption)FY 202560% (prev. framework) 60% Maintained
Dividend per Share ($)Quarterly$0.40 (declared Jul-2024) $0.55 (Dec-2024) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2024)Trend
AI/digital capabilitiesTrifecta achieved; no detailed AI in Q2 PR Over 300 digital capabilities launched; in-app chat adoption +35%, 20% reduction in customer service line Increasing emphasis on AI/digital
Macro & demandRecord booked position; strong onboard spend (Q2) ; demand acceleration (Q3) Best five booking weeks ever; strong North America demand; consumers prioritizing experiences, favorable wages/unemployment Positive momentum
Product performanceDelivered Utopia and Silver Ray; strong yields (Q2) Icon/Utopia/Silver Ray performing above expectations; new ships a tailwind Sustained strength
Private destinationsAnnounced Perfect Day Mexico; Beach Clubs in Nassau & Cozumel (Q3) Nassau pricing strategy to launch in April; ~1M guests expected first full year; complementary to CocoCay Expanding footprint
Regional mixEuropean & Alaska strength (Q3) Caribbean ~57% of deployment; Europe ~15%; Alaska ~6%; strong demand across regions Caribbean-heavy; balanced
Regulatory/legal—Litigation loss contingency release (Havana Docks) excluded in non-GAAP One-time positive
Balance sheet & capitalDividend reinstated (Q2) ; unsecured structure & lower interest (Q3) Liquidity $4.1B; leverage low 3x YE-2024; targeted mid–high 2x YE-2025; buybacks opportunistic (not in guide) Strengthening
New ventures—Celebrity River Cruises initial 10 ships, 2027 start; target high ROIC/margin New growth vector

Management Commentary

  • “2024 was exceptional… 2025 is shaping up to be another great year, with expected adjusted earnings growth of 23%” — Jason Liberty, CEO .
  • “Our strong booked position allows us to optimize our yield profile and drive margin expansion and strong financial returns” — Naftali Holtz, CFO .
  • On River Cruises: “This is not a hobby for us… initial order was 10 ships… smaller scale and shorter build timelines allow for faster deployment and return profiles” — Jason Liberty .
  • On 2025 yields/costs: “Yield growth of 2.5% to 4.5%… NCC ex-fuel flat to up 1%… fuel expense of $1.17B; 60% hedged” — Naftali Holtz .

Q&A Highlights

  • Yield guidance calibration: Management emphasized tough comps and Q4 outperformance impacting optics (~40 bps), but confidence in the 2025 yield guide remained high .
  • River Cruise positioning: Celebrity to elevate product (design, culinary, entertainment) and leverage loyalty ecosystem; ramp ~2 ships in 2027 then ~4/year; berthing secured; consider future Silversea river opportunity .
  • CapEx outlook: ~$5B in 2025 (Star of the Seas and Celebrity Xcel deliveries; private destinations; modernization program); committed financing in place; strong cash flow supports investment-grade metrics and potential capital returns .
  • Private destination economics: Beach Club Nassau to be all-inclusive; ~1M guests first full year; complementary with CocoCay; some ramp-up costs late 2025 .
  • Loyalty reciprocity: Cross-brand loyalty program has been “grossly successful,” increasing repeat behavior and improving lifetime customer value .

Estimates Context

  • S&P Global consensus for Q4 2024 (EPS, revenue, EBITDA) was unavailable due to API daily limit, so beats/misses vs Wall Street estimates cannot be assessed this quarter. Values retrieved from S&P Global were unavailable.

Where estimates may adjust:

  • Given revenue and net yield outperformance in Q4 and record WAVE bookings, near-term revenue and EPS estimates for Q1/FY 2025 could see upward revisions, tempered by cost cadence (dry docks) and FX/fuel headwinds embedded in guidance .

Key Takeaways for Investors

  • Q4 operational strength: Yield outperformance and record WAVE bookings validate commercial momentum; near-term pricing power remains intact .
  • 2025 setup: Guide implies 23% Adjusted EPS growth despite ~$0.65 FX/fuel headwind; moderate capacity (+5.4%) and disciplined costs (NCC ex-fuel flat to +1%) support margin durability .
  • New growth vector: Celebrity River Cruises adds a high-ROIC, high-margin adjacency with faster deployment cycles; expect incremental demand from existing ecosystem and loyalty cross-pollination .
  • Private destinations: Beach Club Nassau (Dec-2025) and Perfect Day Mexico (2027) should enhance product differentiation and onboard/upcharge economics; initial Nassau volume ~1M guests is meaningful .
  • Capital returns: Dividend raised to $0.55 in Dec-2024; buybacks remain opportunistic and not embedded in guidance—potential upside lever with strengthening balance sheet and rising EBITDA .
  • Watch cost cadence: Q2–Q3 costs higher due to dry docks and ramp-up of destination investments; Q4 2025 benefits from fewer dry dock days .
  • Trading implications: Near-term sentiment likely driven by booking momentum updates during WAVE, River Cruise disclosures, and Beach Club pricing launch in April; estimate revisions could lean positive if booking strength persists and FX/fuel headwinds ease .