Q1 2025 Carnival Corp & PLC Earnings Call

March 21, 2025

Presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: As a reminder, this conference is being recorded its now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Speaker Change: Thank you good morning, and welcome to our first quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, Our Chief Financial Officer, David Bernstein, and our Chairman Micky Arison before we begin. Please note that some of our remarks on this call will be forward looking therefore, I will refer you to the point.

Ladies and gentlemen, thank you for standing by the Carnival Corporation Conference call will begin momentarily. Once again, we thank you for standing by please continue to hold our conference will begin momentarily.

Speaker Change: Looking statement in today's press release, all references to ticket prices yields and cruise costs without fuel will be in constant currency unless otherwise stated references to yields will be on a net basis references to cruise costs without fuel EBITDA net income and our I C will be on an adjusted basis.

[music].

Speaker Change: Unless otherwise stated.

All of these references are non-GAAP financial measures defined in our earnings press release.

Speaker Change: Reconciliation to the most directly comparable U S GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Speaker Change: Please visit our corporate website, where our earnings press release and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks Beth.

Josh Weinstein: Once again, we delivered a fantastic quarter. This time hitting first quarter high watermarks for revenue.

Josh Weinstein: EBITDA EBITDA for a L B D operating income and customer deposits.

Josh Weinstein: Net income came in more than a $170 million better than guidance as we outperformed across the board led by incredibly strong demand throughout our portfolio.

Josh Weinstein: We achieved a robust seven 3% yield increase.

Josh Weinstein: Matching our yield guidance on top of last year's 17% yield improvement.

Josh Weinstein: Both ticket and onboard equally outperformed them very strong close in demand, which speaks to the strength of our consumer.

Greetings and welcome to the Carnival Corporation and plc conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Unit costs also came in better than expected, mainly due to timing between the quarters.

Josh Weinstein: This resulted in a near doubling of operating income for the quarter.

Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Josh Weinstein: And EBITDA that reached $1.2 billion approaching a 40% year over year increase.

Josh Weinstein: Operating margins and EBITDA margins, each improved over 400 basis points year over year with both of these now surpassing 2019 levels.

Beth Roberts: Thank you good morning, and welcome to our first quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, Our Chief Financial Officer, David Bernstein, and our Chairman Micky Arison.

Josh Weinstein: For the full year, and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by half a point to 4.7% based on our strong first quarter results, while affirming yield expectations for the.

Speaker Change: Before we begin please note that some of our remarks on this call will be forward looking therefore, I will refer you to the forward looking statement in today's press release, all references to ticket prices, yes, and cruise costs without fuel will be in constant currency unless otherwise stated references to yields will be on a net basis.

Josh Weinstein: The remainder of the year.

Josh Weinstein: In addition.

Josh Weinstein: David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone.

Speaker Change: References to cruise costs without fuel EBITDA net income and our I C will be on an adjusted basis unless otherwise stated.

Josh Weinstein: Combined this successful execution has enabled us to take up our earnings guidance for the year by $185 million.

Speaker Change: All of these references are non-GAAP financial measure as defined in our earnings press release, a reconciliation to the most directly comparable U S. GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Josh Weinstein: 2025 remains on track to be another very strong year for our brands with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth delivering approximately $600 million incrementally to the bottom line.

Speaker Change: Please visit our corporate website, where our earnings press release and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh: Thanks Beth.

Josh: Once again, we delivered a fantastic quarter. This time hitting first quarter high watermarks for revenue.

Josh Weinstein: More than a 30% improvement from 'twenty to 'twenty, four and that is essentially flat capacity growth.

Josh Weinstein: Achieving our March guidance will also result in reaching both of our 'twenty twenty-six sea change financial targets, one year early with Rois see hitting 12% and EBITDA per a L. B D more than 50% higher than just two years ago taking.

Josh: EBITDA EBITDA for a L B D operating income and customer deposits.

Josh: Net income came in more than a $170 million better than guidance as we outperformed across the board led by incredibly strong demand throughout our portfolio.

Josh Weinstein: Taking each of these two metrics to levels not seen in the better part of 20 years at.

Josh: We achieved a robust seven 3% yield increase.

Josh Weinstein: At the same time, we're also closing in on our 'twenty 'twenty six greenhouse gas targets with an over 19% reduction in carbon intensity compared to 2019.

Josh: Matching our yield guidance on top of last year's 17% yield improvement.

Josh: Both ticket and onboard equally outperformed them very strong close in demand, which speaks to the strength of our consumer.

Josh Weinstein: We're generating demand well in excess of our very limited inventory remaining.

Josh: Unit costs also came in better than expected, mainly due to timing between the quarters.

Josh Weinstein: Which has been driving strong pricing for the remainder of the year, while also building demand for future years.

Josh: This resulted in a near doubling of operating income for the quarter.

Josh Weinstein: In fact.

Josh Weinstein: We're at historical high prices across all core programs for 2025, and all quarters of the year, while booking volumes for 2020 six sailings M beyond taken during the first quarter also reached an all time high.

And EBITDA that reached $1.2 billion approaching a 40% year over year increase.

Josh: Operating margins and EBITDA margins, each improved over 400 basis points year over year with both of these now surpassing 2019 levels.

Josh Weinstein: We were very well positioned going into wave this year, and we exited with over 80% of the year on the books at higher prices and with the booking curve that is still the farthest out on record.

Josh: For the full year, and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by half a point to 4.7% based on our strong first quarter results, while affirming yield expectations for the.

Josh Weinstein: We have no plans to let up anytime soon.

Josh Weinstein: As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during wave season to fuel more broad based consideration for cruise travel and keep the strong momentum going.

Josh: The remainder of the year.

Josh: In addition.

Josh: David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone.

Josh Weinstein: Caustic ticked up the volume at the San Raimo Music Festival, among Italy's most renowned music events, which was watched by over two thirds of Italy's TV audience, featuring a live performance onboard Costa Toscano.

Josh: Combined this successful execution has enabled us to take up our earnings guidance for the year by $185 million.

Josh Weinstein: Carnival cruise line was also a standout at the Oscars selected along with a few other household names for a themed promo honoring stone performers and featuring a daring skydive into a pool onboard carnival celebration.

2025 remains on track to be another very strong year for our brands with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth delivering approximately $600 million incrementally to the bottom line.

Josh Weinstein: Of course Carnival cruise line has clearly amped up the volume around celebration key which was showcased while lighting the iconic new year's Eve ball drop in times square and continued through the Super Bowl in New Orleans, featuring our celebrity Chef partners, Emeril, Lagasse, and Guy fieri as well as brand.

Josh: More than a 30% improvement from 'twenty to 'twenty, four and that is essentially flat capacity growth.

Josh: Achieving our March guidance will also result in reaching both of our 'twenty to 'twenty six C change financial targets, one year early with our Oh, I see hitting 12% and EBITDA for a L. B D more than 50% higher than just two years ago.

Josh Weinstein: Or Shaquille O'neal.

Josh Weinstein: These two events alone captured over 5 billion impressions across paid earned and owned media.

Speaker Change: And carnivals Adorable wave campaign flip lost in Paradise was a hits get a huge cut through with marketing kpis up across the board.

Josh: Taking each of these two metrics to levels not seen in the better part of 20 years at.

Josh: At the same time, we're also closing in on our 'twenty 'twenty six greenhouse gas targets with an over 19% reduction in carbon intensity compared to 2019.

Speaker Change: Our marketing team managed to get that kind of traction around what is still computer generated animation.

Speaker Change: Look forward to four months from now when all five portals built for fun at celebration key are open for our guests and can be showcased.

We're generating demand well in excess of our very limited inventory remaining.

Josh: Which has been driving strong pricing for the remainder of the year, while also building demand for future years.

Speaker Change: We're on track for a July opening and executing our ramp up plan into the fourth quarter as our teams settles into these new operations and focuses on delivering the kind of phenomenal experience. Our guests have come to expect from our exclusive destinations.

Josh: In fact.

Josh: We're at historical high prices across all core programs for 2020 five in all quarters of the year well booking volumes for 'twenty 'twenty six sailings M beyond taken during the first quarter also reached an all time high.

Speaker Change: Lacks away half Moon Cay is also on schedule for the second half of 2026.

Josh: We were very well positioned going into wave this year, and we exited with over 80% of the year on the books at higher prices and with the booking curve that is still the farthest out on record.

Speaker Change: We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean.

Speaker Change: And we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Josh: We have no plans to let up anytime soon.

Josh: As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during wave season to fuel more broad based consideration for cruise travel and keep the strong momentum going.

Turning to Alaska, We just announced an expansion and renovation project to Denali large one of our nine owned and operated hotel properties building on this unmatched strategic advantage for Holland America and Princess cruises.

Speaker Change: Caustic ticked up the volume at the San Raimo Music Festival, among Italy's most renowned music events, which was watched by over two thirds of Italy's TV audience, featuring a life performance onboard Costa Toscano.

Speaker Change: Enhancements will include the addition of 120, new guest rooms and suites.

Speaker Change: Remodeling additional food and beverage venues and improvements to public spaces and nature trails.

Speaker Change: Carnival cruise line was also a standout at the Oscars selected along with a few other household names for a themed promo honoring stunt performers and featuring a daring sky dive into a pool onboard carnival celebration.

Speaker Change: Our brands Lanzi packages are a huge draw for new to cruise guests and truly the best way to experience the greatness of Alaska.

Speaker Change: We also just completed the first of seven Aida ships to undergo our Aida evolution program.

Speaker Change: Of course Carnival cruise line has clearly amped up the volume around celebration key which was showcased while lighting the iconic new year's Eve ball drop in times square and continued through the Super Bowl in New Orleans, featuring our celebrity Chef partners, Emeril, Lagasse, and Guy fieri as well as brand.

Speaker Change: I eat a diva is now sailing from room, having just returned from a seven week dry dock with many added features that our German guests have come to love and I eat as newer vessels.

Speaker Change: This includes over half a dozen new bar and dining venues, new suites and equipment upgrades to enhance fuel efficiency.

Speaker Change: Or Shaquille O'neal these.

Speaker Change: These two events alone captured over 5 billion impressions across paid earned and owned media.

Speaker Change: I eat of Luna will start her evolution later this year, followed by Aida Bella and eat them are in 2026.

Speaker Change: And carnivals Adorable wave campaign flip lost in Paradise was a hit get a huge cut through with marketing kpis up across the board.

Speaker Change: We also further progressed on optimizing our portfolio.

Speaker Change: If our marketing team managed to get that kind of traction around what is still computer generated animation I look forward to four months from now when all five portals built for fun at celebration key are open for our guests and can be showcased.

Speaker Change: Just this month, we completed the sunsetting of our piano cruises, Australia brands by folding its two remaining ships into carnival cruise lines.

Speaker Change: We also consolidated our Seabourn fleet with the sale of seaborne soldier and while we were not actively looking to sell to ship. The author was in the best interests of our shareholders.

Speaker Change: We're on track for a July opening and executing our ramp up plan into the fourth quarter as our team settles into these new operations and focuses on delivering the kind of phenomenal experience. Our guests have come to expect from our exclusive destinations.

Speaker Change: The sale leas, seaborne well positioned where they phenomenal fleet of three ultra luxury ocean vessels.

Speaker Change: Two recently launched ultra luxury expedition ships, which comprises one of the most modern fleets in the industry.

Speaker Change: Relax away half Moon Cay is also on schedule for the second half of 'twenty twenty-six we've.

Speaker Change: We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean.

Speaker Change: At an average age of just over seven years now turning back to the business and as you can see from our first quarter outperformance.

Speaker Change: And we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Speaker Change: Onboard spending and booking levels.

Speaker Change: We have proven to be incredibly resilient to the volatility around the globe.

Speaker Change: Having said that even with a resilience and strong visibility given that so much of 2025 is already on the books, we arent taking the current backdrop lately, we will be working hard to achieve these results thankfully our team is nimble and agile characteristics is.

Speaker Change: Turning to Alaska, We just announced an expansion and renovation project to Denali large one of our nine owned and operated hotel properties building on this unmatched strategic advantage for Holland America, and Princess cruises enhancements.

Speaker Change: Enhancements will include the addition of 120, new Guestrooms and suites Roomba.

Speaker Change: You know, we honed so well over the first half of this decade, leaving us better positioned to manage through whatever comes our way.

Speaker Change: Room remodeling.

Speaker Change: Additional food and beverage venues and improvements to public spaces and nature trails.

Speaker Change: We have strong well recognized brands that are number one or two in every major market for cruise often tailored specifically to phenomenal national markets, such as the U S, Germany, and the U K markets that are deep and Underpenetrated.

Our brands land sea packages are a huge draw for new to cruise guests and truly the best way to experience the greatness of Alaska.

Speaker Change: We also just completed the first of seven Aida ships to undergo our Aida evolution program.

Speaker Change: Eat a diva is now sailing from Rome, having just returned from a seven week dry dock with many added features that our German guests have come to love and Aida is newer vessels.

Speaker Change: We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with friends and family.

Speaker Change: This includes over half a dozen new bar and dining venues, new suites and equipment upgrades to enhance fuel efficiency.

Speaker Change: And on top of that we are still a ridiculous Lee amazing value compared to land based alternatives.

Speaker Change: I eat of Luna will start her evolution later this year, followed by Aida Bella and Itamar in 2020 six.

Speaker Change: We have been chipping away at the price gap to land based alternatives the price to experience ratio of cruising versus those other options remains massively disproportionate.

Speaker Change: We also further progressed on optimizing our portfolio.

Speaker Change: Just this month, we completed the sunsetting of our piano cruises, Australia brand by folding its two remaining ships into carnival cruise lines.

Speaker Change: While somewhat frustrating and while it's still a big opportunity over the coming years. This huge value for money is also truly a strength when people are looking to make their vacation dollars go even further.

Speaker Change: We also consolidated our Seabourn fleet with the sale of seaborne soldiering, while we were not actively looking to sell to ship. The author was in the best interests of our shareholders.

Speaker Change: And it's about to get even better with the opening of celebration key our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

Speaker Change: The sale lease seaborne well positioned where they phenomenal fleet of three ultra luxury ocean vessels.

Speaker Change: Two recently launched ultra luxury expedition ships, which comprises one of the most modern fleets in the industry.

We have been making huge strides in rebuilding our financial fortress as we close in on investment grade leverage metrics.

Speaker Change: We have a well managed near term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt in fact.

Speaker Change: At an average age of just over seven years now turning back to the business and as you can see from our first quarter outperformance.

Speaker Change: Onboard spending and booking levels.

Speaker Change: We have proven to be incredibly resilient to the volatility around the globe.

Speaker Change: We have just three ships on order over the next four years further supporting our ability to reach investment grade leverage metrics within 2026 <unk>.

Speaker Change: Having said that even with a resilience and strong visibility given that so much of 20 to 25 is already on the books, we arent taking the current backdrop lately, we will be working hard to achieve these results thankfully our team is nimble and agile characteristics as.

Speaker Change: Simply put we are well positioned for the future and are pushing forward with intention.

Speaker Change: I'll end by saying, thanks to our travel agent partners loyal guests investors destination partners and other stakeholders, who have contributed greatly to our results and of course, a special thank you to each of our team members for driving outperformance once again.

Speaker Change: As you know, we honed so well over the first half of this decade, leaving us better positioned to manage through whatever comes our way.

Speaker Change: But most important for our long term success.

Speaker Change: Thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations, while honoring the integrity of every osha, we sell place we visit and life we touch.

Speaker Change: That are deep and underpenetrated.

David Thank: With that I'll turn the call over to David Thank.

Speaker Change: Thank you Josh.

David Thank: I'll start today with a summary of our 2025 first quarter results.

David Thank: Next I will provide some color on our improved full year March guidance.

Speaker Change: And on top of that we are still a ridiculous Lee amazing value compared to land based alternatives.

David Thank: Then I'll finish up with an update of our refinancing and deleveraging efforts.

Speaker Change: We have been chipping away at the price gap to land based alternatives the price to experience ratio of cruising versus those other options remains massively disproportionate.

David Thank: Turning to the summary of our first quarter results.

David Thank: Net income exceeded December guidance by more than $170 million as we outperformed once again.

Speaker Change: While somewhat frustrating and while it's still a big opportunity over the coming years.

David Thank: The outperformance was essentially driven by three things.

It's huge value for money is also truly a strength when people are looking to make their vacation dollars go even further.

David Thank: Favorability in revenue with $98 million as yields came in at over 7% compared to the prior year.

David Thank: This was two seven points better than December guidance, driven by both close in strength in ticket prices and strong onboard spending.

Speaker Change: And it's about to get even better with the opening of celebration key our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

David Thank: Second cruise costs without fuel per available lower birthday, or a L. B D. We're only up 1% compared to the prior year. This was two points four points better than December guidance and was worth $65 million.

Speaker Change: We have been making huge strides in rebuilding our financial fortress as we close in on investment grade leverage metrics.

Speaker Change: We have a well managed near term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt in fact.

David Thank: The favorability in cost was mainly due to the timing of expenses between the quarters.

We did find some permanent savings, which flowed through to the full year, which I will touch on later in my remarks.

Speaker Change: We have just three ships on order over the next four years further supporting our ability to reach investment grade leverage metrics within 20 twenty-six simply put we are well positioned for the future and are pushing forward with intention.

David Thank: And third favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter.

David Thank: Yield improvement in the first quarter versus the prior year was driven by improvements in both sides of the Atlantic from higher ticket prices and improved onboard spending.

David Thank: The improvement in ticket prices was broad based across all core programs.

David Thank: The improvement in onboard spending which accelerated from last quarter was also broad based as all categories of spending were meaningfully higher.

Speaker Change: But most important for our long term success. Thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations.

David Thank: Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

Speaker Change: Honoring the integrity of every Osha, we sell place we visit and life we touch.

David Thank: Customer deposits at the end of the first quarter were up over $300 million versus the prior year driven by both improved ticket prices and increased pre cruise onboard sales.

David: With that I'll turn the call over to David.

David: Thank you Josh I'll start today with a summary of our 2025 first quarter results.

David: Next I will provide some color on our improved full year March guidance.

David Thank: Next I will provide some color on our improved full year March guidance.

David: Then I'll finish up with an update of our refinancing and deleveraging efforts.

David Thank: March guidance net income of approximately $2 $5 billion is 185 million dollar improvement over December guidance.

David: Turning to the summary of our first quarter results net income exceeded December guidance by more than $170 million as we outperformed once again.

David Thank: The improvement was essentially driven by two things.

David Thank: Our first quarter favorability in yield flowed through to the full year, improving our full year yield guidance by half a point to four 7% versus the prior year.

David: The outperformance was essentially driven by three things.

David: Favorability in revenue with $98 million as yields came in at over 7% compared to the prior year.

David Thank: And our refinancing efforts during the quarter allowed us to lower our full year interest expense guidance by $100 million.

David: This was two seven points better than December guidance, driven by both close in strength in ticket prices and strong onboard spending.

David Thank: I did want to point out that absolute cruise costs, excluding fuel are expected to be slightly less in December guidance.

David: Second cruise costs without fuel per available lower birthday, or a L. B D. We're only up 1% compared to the prior year.

David Thank: As I previously indicated we did find some permanent savings during the first quarter, which flowed through to the full year. However, those savings were partially offset by higher dry dock costs because of a couple of unplanned drydocks and charter higher costs associated with the sale of one <unk>.

David: This was two points four points better than December guidance and was worth $65 million.

David: The favorability in cost was mainly due to the timing of expenses between the quarters.

David Thank: Our vessels during the month of March while charter hire cost increase cruise costs, they were offset by lower depreciation expense.

David: We did find some permanent savings, which flowed through to the full year, which I will touch on later in my remarks.

David: And third favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter.

David Thank: With absolute cruise costs slightly better the change in cruise costs without fuel per <unk> is three 8% for March guidance, which is simply the math of spreading lower cruise costs over the revised <unk>, which changed from December guidance because of a couple of unplanned drydocks.

David: Yield improvement in the first quarter versus the prior year was driven by improvements in both sides of the Atlantic from higher ticket prices and improved onboard spending.

David Thank: In 2025.

David: The improvement in ticket prices was broad based across all core programs.

David Thank: All of this results in $6 7 billion of EBITDA.

David: The improvement in onboard spending which accelerated from last quarter was also broad based as all categories of spending were meaningfully higher.

David Thank: Nearly 10% improvement over 2020 for virtually all of which was driven by same store revenue growth as our capacity is essentially flat year over year.

Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

David Thank: Now I'll finish up with an update of our refinancing and deleveraging efforts.

David Thank: During the quarter, we refinanced $5 5 billion of debt, which is 20% of our total debt with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental $145 million in annualize.

David: Customer deposits at the end of the first quarter were up over $300 million versus the prior year driven by both improved ticket prices and increased pre cruise onboard sales.

David: Next I will provide some color on our improved full year March guidance.

David Thank: <unk> interest expense savings.

David: March guidance net income of approximately $2 $5 billion is 185 million dollar improvement over December guidance.

David Thank: We have been opportunistically, reducing interest expense, while simplifying our capital structure and managing our future debt maturities.

David: The improvement was essentially driven by two things.

Today, our average cash interest rate is down significantly at just four 6%.

David: Our first quarter favorability as yields flowed through to the full year.

David Thank: Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David: Proving our full year yield guidance by half a point to four 7% versus the prior year.

David: And our refinancing efforts during the quarter allowed us to lower our full year interest expense guidance by $100 million.

David Thank: Our near term maturity towers are well managed with just $1 1 billion of debt maturities for the remainder of 2025 and $2 7 billion for the full year 2026.

David: I did want to point out that absolute cruise costs, excluding fuel are expected to be slightly less in December guidance as I. Previously indicated we did find some permanent savings during the first quarter, which flowed through to the full year.

David Thank: During the first quarter, we reduced debt by another half a billion dollars in the quarter with $27 billion of total debt.

David Thank: With the benefit of well manage near term maturity towers and improved leverage metrics over the remainder of this year and through 2026, we expect to Opportunistically execute the rest of our current refinancing plan.

David: However, those savings were partially offset by higher dry dock costs because of a couple of unplanned drydocks and charter higher costs associated with the sale of one of our vessels during the month of March while charter hire cost increased cruise costs, they were offset by lower depreciation.

David Thank: Prepaying debt further simplifying our capital structure, optimizing our future debt maturities and further reducing our interest expense.

David: Creation experience.

David: With absolute cruise costs slightly better they change in cruise costs without fuel per <unk> a L. B D is three 8% for March guidance, which is simply the math of spreading lower cruise costs over the revised <unk>, which changed from December guidance because of a couple of unplanned drydocks.

David Thank: For the two year period of 2025 and 2026. This refinancing plan combined with our strong and growing cash flow and just one <unk> being delivered over this time has the potential to reduce debt by nearly $5 billion from where we ended 2024.

David: In 2025.

David: All of this results in $6 7 billion of EBITDA.

David Thank: Sure.

David Thank: And let's not forget that we ended 2024 over $8 billion off the January 2023 peak.

David: And nearly 10% improvement over 2020 for virtually all of which was driven by same store revenue growth as our capacity is essentially flat year over year.

David Thank: Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink increasing our confidence in achieving an investment grade leverage metrics in the short term as we move further down the road rebuilding how far.

David: Now I'll finish up with an update of our refinancing and deleveraging efforts.

David: During the quarter, we refinanced $5 5 billion of debt, which is 20% of our total debt with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental 145 million hanger.

David Thank: The annual fortress, while continuing the process of transferring value from debt holders back to shareholders.

David Thank: Now operator, let's open the call for questions.

David Thank: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

David: <unk> interest expense savings.

David: We have been opportunistically, reducing interest expense, while simplifying our capital structure and managing our future debt maturities.

David: Today, our average cash interest rate is down significantly at just four 6%.

Speaker Change: Passing the starches.

David: Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

Speaker Change: To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow up thank you.

Speaker Change: Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

David: Our near term maturity towers are well managed with just $1 1 billion of debt maturities for the remainder of 2025 and $2 7 billion for the full year 2026.

Speaker Change: Hey, Hey, good morning, Thanks for taking the questions and for all the helpful commentary I think it would be great. If you could provide some more color on maybe how were trending since the <unk> period anything notable regarding changes to the consumer demand trends I know that you. You know you noted not being immune from the macro which I guess.

David: During the first quarter, we reduced debt by another half a billion dollars ending the quarter with $27 billion of total debt.

David: With the benefit that well manage near term maturity towers and improved leverage metrics over the remainder of this year and through 2026, we expect to Opportunistically execute the rest of our current refinancing plan.

Speaker Change: Shouldn't be a surprise, but just maybe some more color on what exactly that means and then one quick follow up thanks.

Speaker Change: Good morning, Matt and thank you for $1 and we do live on planet Earth. So you know look wave where it was a success right I mean, we set a record for bookings for further out years, we came into wave that historic occupancy and price we use that to our advantage, we took price and we're well.

David: Prepaying debt further simplifying our capital structure, optimizing our future debt maturities and further reducing our interest expense.

Speaker Change: Set up for the rest of the year has not only did we pretty much smashed Q1.

David: For the two year period of 2025 and 2026. This refinancing plan combined with our strong and growing cash flow and just one new beds being delivered over this time has the potential to reduce debt by nearly $5 billion from where we ended 2024.

Speaker Change: Yields, but we maintained your guidance for the rest of the year over 4%. So I think we feel real good about how we how we've been tackling things and our brands are doing a good job.

Speaker Change: Got it that's very helpful. And then just to clarify maybe somewhat David comment David's comments.

David: Sure.

David: And let's not forget that we ended 2024 over $8 billion. After January 2023 peak.

Speaker Change: You beat the <unk> smashed the <unk> to your point by 165 million raise the guide at least from what we can tell by around 100 or take from your comments is that the net yield outlook for quarters. Two through four is the same I think costs were actually slightly lower per David's comments, but the net cruise cost higher because of lower L.

David: Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink increasing our confidence in achieving an investment grade leverage metrics in the short term as we move further down the road rebuilding.

Speaker Change: It is from the dry docks I guess, what was the Abd impact if I got that right and then I hate to be overly granular, but does the 165 feet in <unk> versus the 100 million flow through driven entirely by the law.

David: Natural fortress, while continuing the process of transferring value from debt holders back to shareholders.

David: Now operator, let's open the call for questions.

Speaker Change: L D D dry dock dynamic or is there anything else that you would flag. Thanks a lot.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question. Kim you May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

Speaker Change: So the float first of all the flow through to the year was a combination of two things. It was the the yield that flowed through from the first quarter, which was a 98 million as well as $100 million of interest expense and the total improvement for the year I think was $183 million.

Speaker Change: Passing the starches.

Speaker Change: To allow for as many questions as possible, we ask that you limit yourself to one question and one follow up thank you.

Speaker Change: I guess I was referring to EBITDA, sorry, yeah, sorry that one.

Speaker Change: Yeah. So the EBITDA is just basically you're done.

Speaker Change: Our first question comes from the line I've been taken with Mizuho Securities. Please proceed with your question.

Speaker Change: Net income less the interest yes.

Speaker Change: The short answer is the yield flu.

Speaker Change: Hey.

Speaker Change: Flow through for the year.

Speaker Change: Hey, good morning, Thanks for taking the questions and for all the helpful commentary I think it would be great. If you could provide some more color on maybe how were trending since the <unk> period anything notable regarding changes to the consumer demand trends I know that you. You know you noted not being immune from the macro which I guess shouldn't be a surprise, but just maybe some more color on.

Speaker Change: The cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year, we did reduce our absolute costs in a couple of ways. You know a few tens of millions of dollars, but because of the the reduction in <unk> because of the extra drydocks.

Speaker Change: That covers it up.

Speaker Change: On what exactly that means and then one quick follow up thanks. Good morning, Good morning, Matt and thank you for a dollar and we do live on planet Earth.

Speaker Change: Okay got it that's very helpful. Thanks for clarifying.

Speaker Change: Sure. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: So you know look wave, where it was a success right I mean, we set a record for bookings for further out years, we came into wave at historic occupancy and price we use that to our advantage, we took price and we're well set up for the rest of the year has not only did we pretty much smack.

Robin Farley: Great. Thanks very much.

Speaker Change: Obviously, a lot of concern among investors because of some airline commentary last night, a hotel data point, so great news too.

Robin Farley: To raise.

Speaker Change: Our raised guidance, mostly by the Q1 beat when we look at the yield.

Speaker Change: Q1 on the yield, but we maintain your guidance for the rest of the year over 4%.

Speaker Change: And just given how you talked about the close end being strong and onboard being strong does that suggest that youre not raising the next three quarters yield because you know you want to be cautious obviously given the environment.

Speaker Change: So I think we feel real good about how we how we've been tackling things and our brands are doing a good job.

Speaker Change: Got it that's that's very helpful. And then just to clarify maybe somewhat David comment David's comments.

Speaker Change: But there would be that potential if your if your expectations for the close in and onboard are still what they were three months ago that there's potential upside to that guide is that the way to think about.

Speaker Change: The rest of the year.

Speaker Change: Yeah look I mean, the strength of Q1 was pretty fantastic and that was driven by both the close in demand on the ticket and just tremendous onboard spending we're talking about 10% growth year over year for the for the for the first quarter, which is actually an acceleration of onboard spend trends versus year over year growth from the.

Speaker Change: I think costs were actually slightly lower per David's comments, but the net cruise cost higher because of lower ABTS from the dry docks I guess, what was the Abd impact if I got that right and then I hate to be overly granular, but does the 165 beat in <unk> versus the 100 million flow through driven entirely by the lower L. D D.

Speaker Change: <unk> fourth quarter.

Frankly, the onboard spend that we've seen in the first couple of weeks of March.

Speaker Change: March has it slowed down so we do feel good about the strength of our consumer.

Speaker Change: Dry dock dynamic or is there anything else that you would flag. Thanks a lot.

Speaker Change: Clearly.

Speaker Change: Clearly I just wanted to.

You recognize that there's just there's just a lot of volatility in the backdrop right and with new cycles comes volatility we feel good about our guidance, we feel good about our ability to deliver it.

Speaker Change: We always want to outperform and brands work on that day in and day out certainly don't promise.

Speaker Change: I guess I was referring to EBITDA, sorry, yeah, sorry, that's a 165.

Speaker Change: Anything other than we're going to do our best.

Speaker Change: So the EBITDA is just basically the.

Speaker Change: The net income less the interest yes.

Speaker Change: Okay, great. Thank you and then maybe just as a quick follow up.

Speaker Change: The short answer is the yield fluke.

Speaker Change: Just if there's a way to maybe quantify them with the the expense. Obviously you said some of it was because of the <unk> is there a way to think about the dollar amount of sort of ongoing structural net cruise cost expense reduction.

Speaker Change: Flow through for the year the cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year, we did reduce our absolute costs in a couple of ways. You know a few tens of millions of dollars, but because of the the reduction in <unk> because of the extra dry docks.

Speaker Change: Is it and also excluding from that the higher charter cost from the seaborne ship right. Because that's just sort of shifting from depreciation sort of temporarily I'm not not really structural cost. So what how should we think about.

Speaker Change: They basically covers it up.

Speaker Change: Okay got it that's very helpful. Thanks for clarifying.

Speaker Change: Sure. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: Additional dollar amounts of structural costs, excluding that and excluding it.

Speaker Change: Great. Thanks very much.

Speaker Change: The aggregate dollar amount than that the L. P DS in the denominator won't matter. Thanks, yes.

Speaker Change: Obviously, a lot of concern among investors because it's an airline commentary last night, a hotel data point, so great news to them too.

Speaker Change: Yes, so the.

Speaker Change: On the $65 million of cost in the first quarter and we said most of it was timing, but probably about a third of it was permanent cost savings.

Speaker Change: <unk> guidance.

Speaker Change: Mostly by the Q1 beat when we look at the yield and just given how you talked about the close ending strong and onboard being strong does that suggest that you're not raising the next three quarters yield because you know you want to be cautious obviously given the environment.

Speaker Change: Always looking for ongoing cost savings.

Speaker Change: We do have the lowest the best cost structure in the industry.

Speaker Change: But that we don't stop there we keep on finding ways to improve over time, and we'll do that this year and next year and beyond.

Speaker Change: Okay, great that was totally clear thank you got it.

Speaker Change: Thank you. Our next question comes from the line of seafood with Stifel. Please proceed with your question.

Speaker Change: The rest of the year.

Speaker Change: Yeah look I mean, the strength of Q1, which was pretty fantastic and that was driven by both the close in demand on the ticket and just tremendous onboard spending we're talking about 10% growth year over year for the for the for the first quarter, which is actually an acceleration of onboard spend trends versus year over year growth from the <unk>.

Speaker Change: Hey, guys good morning.

Speaker Change: And congrats on the first quarter so Josh.

Speaker Change: Just wanted to ask about bookings that you're you're taking in right now for 2026.

Speaker Change: And I know, it's still a little bit early on but just wondering if you're seeing any more.

Speaker Change: Fourth quarter.

Speaker Change: And frankly, the onboard spend that we've seen in the first couple of weeks of.

Speaker Change: We would call kind of material differences in bookings for 26 by you know by brand.

Speaker Change: March hasn't slowed down.

Speaker Change: Or maybe if youre seeing customers book.

Speaker Change: So we do feel good about the strength of our consumer I mean clearly.

Speaker Change: Book, but maybe that are pre booking onboard as much or they're taking lower cabin categories. Just I mean, just trying to make sure there isn't anything youre seeing right now as we look further out that would be concerning to you guys.

Speaker Change: <unk> clearly I just wanted to.

Speaker Change: You recognize that there's just there's just a lot of volatility in the backdrop right and with new cycles comes volatility we feel good about our guidance, we feel good about our ability to deliver it we always want to outperform and brands work on that day in and day out certainly don't promise.

Speaker Change: First thanks, Steve Thanks for the compliment no I mean, I guess the short answer is no. There's nothing that I would say on a brand by brand basis was raise any anything of interest to talk about I love. The fact that we can say that we can.

Anything other than we're going to do our best.

Speaker Change: Okay, great. Thank you and then maybe just as a quick follow up.

Speaker Change: Walk and Chew gum at the same time and finished out 25, and still you know ground ground ourselves with a good foundation for 26, and I think with a record booked position at higher prices that's exactly what the teams are doing.

Speaker Change: Just if there's a way to maybe quantify them with E. M. You expense. Obviously, you said some of it was because of the a L. B day, where it is.

Speaker Change: Is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction.

Speaker Change: Okay got you makes sense sounds good and then second question.

Speaker Change: It's going to be kind of somewhat the same question that Robin I, just want to ask a little bit differently, but.

Speaker Change: You beat the first quarter by.

Speaker Change: I think it was 270 basis points on the yield side of things. So you know I guess as we think about the and we can see your second quarter guidance now. So if we think about the back half of the year. If you know if the consumer stays.

Additional dollar amounts of structural costs, excluding that and excluding you know if you think of the aggregate dollar amount of net debt L. P. DS in the denominator won't matter. Thanks.

Speaker Change: <unk> quo Theres no change in onboard close and remains strong.

Speaker Change: I'm guessing, there's probably upside to your back half guidance I just I'm just trying to ask that question, maybe a little bit differently or maybe.

Speaker Change: Yes, so the <unk>.

Speaker Change: The $65 million of cost in the first quarter and we said most of it was timing, but probably about a third of it was permanent cost savings.

Specific clear just to be clear if our onboarding remains real strong close in demand remains really strong, but yeah, I think you're right.

Speaker Change: Always looking for ongoing cost savings.

Speaker Change: [laughter], Okay. That's all I needed to hear thank you very much.

We do have the lowest the best cost structure in the industry.

Steve: Hi, Steve.

Thank you. Our next question comes from the line of branch month work with Barclays. Please proceed with your question.

Speaker Change: But that we don't stop there we keep on finding ways to improve over time, and we'll do that this year and next year and beyond.

Branch Montwork: Good morning, everybody and thanks for taking my question and Echo the congratulations on the first quarter and raising the full year guide.

Speaker Change: Okay, great that was totally clear. Thank you. Thanks Robyn.

Speaker Change: My question is a is a permutation of something you may have already gotten I hope I hope not but Josh you guys see.

Speaker Change: Thank you. Our next question comes from the line of seafood with Stifel. Please proceed with your question.

Speaker Change: Hey, guys good morning.

Speaker Change: A lot of different consumers and you see a lot of different areas of the world and how the behavior of those consumers can evolve with with the current macro backdrop. We're in I'm curious, if you're seeing any sort of relative differences between onboard and consumer booking behavior between Europe and America as well as.

Speaker Change: And congrats on the first quarter so Josh.

Speaker Change: Just wanted to ask about bookings that you're taking in right now for 2026.

Speaker Change: And I know, it's still a little bit early on but just wondering if you're seeing any what we would call kind of material differences in bookings for 26 by you know by brand.

Speaker Change: Between drive to and fly to.

Speaker Change: Or maybe if youre seeing customers book.

Speaker Change: Got it so Gordon Brown.

Speaker Change: So you know we've been talking for a long time about the strength of the portfolio and the portfolio approach that we have and I'm going to sound like a broken record, but as I've been saying probably for the last Oh.

Speaker Change: Yeah first thanks, Steve Thanks for the compliment no I mean, I guess the short answer is no. There's nothing that I would say on a brand by brand basis was raised any anything of interest to talk about you know I love. The fact that we can say that we can.

Speaker Change: Six quarters now Europe has been driving things forward real nicely and that has continued so that's not a surprise for us.

Speaker Change: Because of the whole structural way that you know we were amping up everything since our since a couple of years ago. So that's remained consistent which doesn't mean that North America is not performing it just means that our European brands are outperforming the outperformance we got on this side.

Speaker Change: A walk and chew gum at the same time and finish out 25, and still you know ground ground ourselves with a good foundation for 26, and I think with a record booked position at higher prices and that's exactly what the teams are doing.

Speaker Change: So I.

Speaker Change: I feel I feel pretty good about that I'd say, you know consumers, whether you are low and middle of the road high end luxury every person is different and every person who's going to internalize the backdrop of what they're dealing with differently and make their choices.

Speaker Change: Okay got you makes sense sounds good and then second question.

Speaker Change: It's going to be kind of somewhat the same question that Robin I, just want to ask it a little bit differently, but you.

Speaker Change: You beat the first quarter by.

Speaker Change: And our portfolio approach works incredibly well against that backdrop.

Speaker Change: I think it was 270 basis points on the yield side of things.

Speaker Change: So you know I guess as we think about the and we can see your second quarter guidance now. So if we think about the back half of the year. If you know if the consumer stays.

Speaker Change: Thanks for that and then just a quick follow up.

Speaker Change:

If they let's say that no one has a crystal ball, let's say consumer slows further and if there's a slowdown in bookings are industry wide or let's just even say away from you. How do you perceive the industry's current willingness to sort of hold price or act more rationally than it has in the past.

Speaker Change: Status quo Theres no change in onboard close and remains strong.

Speaker Change: I'm guessing, there's probably upside to your back half guidance I just I'm just trying to ask that question, maybe a little bit differently or maybe just to be clear just to be clear if our onboarding remains real strong close in demand remains really strong, but again I think you're right [laughter] okay.

Speaker Change: Look I'll speak for myself I won't.

Not speak for the industry other than to say I think the industry. Overall is on good solid ground <unk> got great leaders at those operations that are doing real good things for the industry as well as their brands.

Speaker Change: All I needed to hear thank you very much.

Speaker Change: Steve.

Speaker Change: Thank you. Our next question comes from the line of Brent months' work with Barclays. Please proceed with your question.

Brent: Good morning, everybody and thanks for taking my question and Echo the congratulations on the first quarter and raising the full year guide.

Speaker Change: And were increasing consideration increasing demand, which is a great thing for everybody with respect to us.

Speaker Change: Question is it is a permutation of something you may have already gotten I hope I hope not but Josh you guys see a lot of different consumers and you see a lot of different areas of the world and how the behavior of those consumers can evolve with with the current macro backdrop. We're in I'm curious, if you're seeing any sort of relative <unk>.

Speaker Change: We're executing on the things that we've been talking about for years, It's resulted right now and us being better book than you know pretty much we've ever been.

Speaker Change: We we have great visibility are not that much to go in this year onboard spends we pull forward, which is enhanced visibility versus prior periods. So.

Brent: <unk> between.

Speaker Change: And we in particular, we have no capacity growth right. So where we are in a fairly enviable position I think.

Brent: Onboard and consumer booking behavior between Europe, and America, as well as between drive to and fly to.

Speaker Change: Even though new builds are great, but we can do a lot with what we've got and having only one ship coming this year. None in 2026 127, I mean that for US that's a fantastic roadmap for success. So we're looking forward to it.

Speaker Change: Got it so Brian So you know we've been talking for a long time about the strength of the portfolio and the portfolio approach that we have and I'm going to sound like a broken record, but as I've been saying probably for the last.

Speaker Change: Six quarters now Europe has been driving things forward real nicely and that has continued so that's not a surprise for us because of the whole structural way that you know we were amping up everything since our since a couple of years ago. So that's remained consistent which doesn't mean that North America is not performing it just means.

Speaker Change: Thanks, a lot congrats again on the quarter.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

Speaker Change: Yes.

Speaker Change: With the I guess.

Speaker Change: Tying this all up outside of bookings in onboard spend which you've talked about are there any other forward indicators that you that you think.

Our European brands are outperforming the outperformance we got on this side so I.

Speaker Change: It might be a good indicator of your consumer sentiment or whether how they are respected making payments for their trips or how many are buying travel or insurance or any what any of those indicators there Sean.

Speaker Change: I feel I feel pretty good about that I'd say, you know consumers, whether you are low and middle of the road high end luxury every person is different and every person who's going to internalize the backdrop of what theyre dealing with differently and make their choices in our portfolio approach works incredibly well against that backdrop.

Speaker Change: Hey, James are going deep.

Speaker Change: No no nothing nothing out of the ordinary that would trigger flags cancellations are fairly consistent so there's really nothing else that would probably put on the table to talk about is our anything of significance.

Speaker Change: Thanks for that and then just a quick follow up.

Speaker Change: You know if they let's say that no one has a crystal ball, let's say the consumer slows further and if there's a slowdown in bookings are industry wide or let's just even say away from you. How do you perceive the industry's current willingness to sort of hold price or act more rationally than.

Speaker Change: Fair enough.

Speaker Change: With the 12% of RSC insight.

Can you give us any indication on what you think the long term opportunity is there specifically.

Speaker Change: How you guys think about the return profile for celebration key and there are other sort of non shift investments are there any other investments that we should be thinking about that are significantly ahead of the your corporate average.

Speaker Change: It has in the past.

Speaker Change: Look I'll speak for myself, but I won't.

Speaker Change: Not speak for the industry other than to say I think the industry. Overall is on good solid ground got great leaders at those operations that are doing real good things for the industry as well as their brands.

Speaker Change: Well I think overall, we feel real good about the progress we've been making on the returns that we're generating I certainly don't view and never give you 12% as an ending point so mid teens is certainly realistic.

Speaker Change: And were increasing consideration increasing demand, which is a great thing for everybody with respect to us.

Speaker Change: And certainly what we'll be shooting for the things that are going to drive it are really the continuation of doing our jobs better across the brands and the commercial space watching the cost like we always do as a low cost industry leader and being able to lean into the investments that we're making around celebration key relax away.

Speaker Change: We're executing on the things that we've been talking about for years, It's resulted right now and us being better book than you know pretty much we've ever been.

Speaker Change: We we have great visibility are not that much to go in this year onboard spends we pull forward, which is enhanced visibility versus prior periods. So.

Speaker Change: And doing some other things with the positioning of the some of the destinations that we currently own which are phenomenal and on top of that.

Speaker Change: We in particular, we have no capacity growth right. So where we are in a fairly enviable position I think.

Speaker Change: <unk> from the moderate.

Speaker Change: Modest capacity growth. We have we are we are investing in ourselves in other ways. We've talked about our evolution. For example, I think I said in my prepared remarks.

Speaker Change: Even though new builds are great, but we can do a lot with what we've got and having only one ship coming this year. None in 2026, one and 27 I mean that for US that's a fantastic roadmap for success. So we're looking forward to it.

Speaker Change: Which you know you take one of the most successful brands in the world.

Speaker Change: You reinvest in them and their existing capacity to add revenue opportunities cabins.

Speaker Change: Yeah.

Speaker Change: That's going to serve us incredibly well as is the investments we're making in Alaska.

Speaker Change: Thanks, a lot congrats again on the quarter.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

Speaker Change: To delight, our guests and really cement our strategic advantage even further.

Speaker Change: On our landscape packages and what we have to offer in Alaska. So I think that we're in a we're in a pretty strong place right.

Speaker Change: Yes.

Speaker Change: With the I guess.

Speaker Change: Hi, tying this all up outside of bookings in onboard spend which you've talked about are there any other forward indicators that you that you think.

Speaker Change: I guess, just really quick on the off of that delivering your targets. So early any indication when we might get new long term outlook Matt.

Speaker Change: Might be a good indicator of your consumer sentiment or whether how they are respected making payments for their trips or how many youre buying travel or insurance or any what any of those indicators are showing.

Speaker Change: Man I love, a European asking that so I think we got a we got to get to the targets not just you know forecast them. So you know my expectation would be we'll be talking about our next set hopefully in early 2026, but that's you know we got to deliver.

Speaker Change: Hey, James are going deep.

Speaker Change: No no nothing nothing out of the ordinary that would trigger flags cancellations are fairly consistent so there's really nothing else that we'd probably put on the table to talk about is our anything of significance.

Speaker Change: Alright, Thanks, a lot guys.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from the line of Patrick Scholes with true Security. Please proceed with your question.

Patrick Scholes: Great. Thank you good morning, everyone.

Speaker Change: Fair enough.

Speaker Change: I wanted to follow up on the comment in here.

Speaker Change: With the 12% of RSC insight.

Patrick Scholes: In the press release about not being completely immune.

Speaker Change: Can you give us any indication on what you think the long term opportunity is there specifically.

Speaker Change: From the heightened macro economic geopolitical volatility since given your guidance in December.

Regarding that volatility have you actually seen.

The volatility have any impact on our booking pace as the quarter progressed.

Speaker Change: Well I think overall, we feel real good about the progress we've been making on the returns that we're generating I certainly don't view I never give you 12% as an ending point so mid teens is certainly realistic.

Speaker Change: Yes, what we say look we certainly saw ups and downs I mean, we see ups and downs.

Speaker Change: Every year, so that's not terribly surprising.

Speaker Change: It all it all came out of the bookings we were able to make at the pricing that we wanted to make.

Speaker Change: And sets us up as we talked about and are in a really good position.

Speaker Change: At the end of the day people just need to be getting used to the new normal which is exactly what's happening you know as a matter of fact last week.

Speaker Change: You know bookings nicely ahead year over year and not everything is the and there'll be off our year over year, but it's what we talked about publicly.

Speaker Change: With the positioning of the some of the destinations that we currently own.

Speaker Change: And particularly to the point people were asking about close in our close in bookings last week for the second quarter for literally sailing in the second quarter. We don't have that much to go and the booking volume and pricing, but just off the charts.

Speaker Change: Which are phenomenal and on top of that.

Speaker Change: Aside from the moderate.

Speaker Change: I'd say modest capacity growth. We have we are in we are investing in ourselves in other ways. We've talked about our evolution. For example, I think I said in my prepared remarks.

Speaker Change: So we just got it.

Speaker Change: Let let the world progress and we will take what we wanted to take as we go and carry out the year.

Speaker Change: Which you know you take one of the most successful brands in the world.

Speaker Change: And you reinvest in them and their existing capacity to add revenue opportunities cabins.

Speaker Change: Okay. Thank you.

Speaker Change: That's going to serve us incredibly well as is the investments we're making in Alaska.

Speaker Change: Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Speaker Change: To delight, our guests and really cement our strategic advantage even further.

Jamie Katz: Hey, good morning, I wanted to talk a little bit about the cadence of cost over the rest of the year I think there were set to be higher dry docks.

Speaker Change: On our land packages and what we have to offer in Alaska. So I think that we're in a we're in a pretty strong place right.

Speaker Change: I guess, just really quick on offer that delivering your targets. So early any indication when we might get new long term outlook.

Jamie Katz: Q2, and Q3 this year and so as we think about the arc of expenses can you help us sort of flow through whether those are more equal or if maybe that is more weighted to Q2 of those dry docks. Thanks.

Speaker Change: Man I love the European asking so I think we got a we got to get to the targets not just you know forecast them. So you know my expectation would be we'll be talking about our next set hopefully in early 2026, but that's you know we got to deliver.

Jamie Katz: So.

As I had indicated.

Jamie Katz: The December call.

Jamie Katz: Expected.

Speaker Change: Alright, Thanks, a lot guys.

Jamie Katz: The second and third quarter cost would be up a little bit more than the full year and then the fourth quarter would be up a little bit less than the full year. So.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from the line of Patrick Scholes with true Security. Please proceed with your question.

Jamie Katz: And nothing has changed since then.

Patrick Scholes: Great. Thank you good morning, everyone.

Jamie Katz: Okay.

Jamie Katz: And then as we think about the lengthening of the booking curve I'm just trying to triangulate what the visibility looks like now relative to the past I think historically it used to be that.

Speaker Change: I wanted to follow up on the comment in here.

Patrick Scholes: In the press release about not being completely immune.

Patrick Scholes: From the heightened macro economic geopolitical volatility since given your guidance in December.

Jamie Katz: Guys were booked maybe like 50 to 70 per cent out for Q2, and then maybe 30 to 50 per cent out for Q3 is that the.

Patrick Scholes: Regarding that volatility have you actually seen.

Patrick Scholes: The volatility have an impact on our booking pace as the quarter progressed.

Jamie Katz: Couple of a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like.

Patrick Scholes: Yes, what we say look we certainly saw ups and downs I mean, we see ups and downs.

Patrick Scholes: Every year, so that's not terribly surprising.

Jamie Katz: Yes.

Josh Weinstein: All of those numbers that they used to get for the next the current quarter in the next three we're above the top end of all of those ranges and so as a result, as Josh said.

Patrick Scholes: It all it all came out of the bookings we were able to make at the pricing that we wanted to make.

Patrick Scholes: And sets us up as we talked about and are in a really good position.

Patrick Scholes: At the end of the day people just need to be getting used to the new normal which is exactly what's happening and it was a matter of fact last week.

Josh Weinstein: About 80% booked for the remainder of this year. If you took the top end of all the ranges you'd be it you would get an average of 70 for the rest of the year. So we're at the top end of <unk> or over the top end of all of the ranges.

Patrick Scholes: You know bookings nicely ahead year over year and not everything is the end all be all for year over year, but it's what we talked about publicly.

Josh Weinstein: Excellent that's very helpful. Thank you.

Patrick Scholes: And particularly to the point people were asking about close in our close in bookings last week for the second quarter for literally selling in the second quarter. We don't have that much to go and the booking volume and pricing, but just off the charts.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Josh Weinstein: Okay.

Josh Weinstein: Hi, everyone. Thank you you've been super clear on the strength of bookings, but.

Patrick Scholes: So we just got it.

Patrick Scholes: But that's the world progress and will take what we wanted to take as we go and carry out the year.

Speaker Change: I wanted to just maybe come back to the levers that you have if things did weaken you talked about how you would work to achieve a lot of these results that are kind of falling through and again it doesn't seem like it's a demand problem, but like at the end of the day, if things were to weaken what cost levers do you think you have right now that could be low hanging fruit.

Patrick Scholes: Okay. Thank you.

Jamie Katz: Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Jamie Katz: Hey, good morning, I wanted to talk a little bit about the cadence of cost over the rest of the year I think there were set to be higher dry docks.

Speaker Change: If things were to deteriorate on some level. Thank you.

Speaker Change: Well good morning.

Speaker Change: The the best lever, we probably have as you know if if the world takes a turn we don't hedge because we don't hedge on commodities generally speaking commodities turn with that world and.

Speaker Change: And so there's a natural hedge in our business by by the basis of how we run it.

Speaker Change: But we clearly can do a lot of things, if we really choose or need to do that.

Jamie Katz: So.

Jamie Katz: As I had indicated.

Jamie Katz: The December call.

Jamie Katz: Expected.

Speaker Change: Our first goal is to deliver the results that we want to deliver because we think that's the right thing for the business right. The guest experience that we want to give.

Jamie Katz: The second and third quarter cost would be up a little bit more than the full year and then the fourth quarter would be up a little bit less than the full year. So.

Speaker Change: The investments that we want to make for the long term not just for the short term.

Jamie Katz: And nothing has changed since then.

Speaker Change: But everything is always looked at pretty critically to decide what makes sense in the current environment because the world does change and we've clearly got room should we need to to make a lot of changes depending on what that circumstance could be.

Jamie Katz: Okay.

Jamie Katz: Guys weren't booked maybe like 50 to 70 per cent out for Q2, and then maybe 30 to 50 per cent out for Q3 is that the.

Speaker Change: Okay, and then I think a big part of the plan this year.

Speaker Change: Over the next couple of years.

Speaker Change: Supply is a little bit limited for you guys has been to push marketing spend and to drive.

Jamie Katz: Couple of a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year it looks like.

Speaker Change: Improved revenue quality and so on so can you just talk a little bit about how that strategy is playing out right now it seems like it's working but I just did the two levers that I think from a revenue management standpoint, or just like inventory and marketing. So if you could just talk.

Jamie Katz: Yes.

Jamie Katz: All of those numbers that they used to get for the next the current quarter in the next three we're above the top end of all of those ranges and so as a result, as Josh said.

Speaker Change: Talk about the balance of those two going forward that'd be helpful. Thank you.

Speaker Change: Yes, thanks very much.

Jamie Katz: About 80% booked for the remainder of this year. If you took the top end of all the ranges you'd be it you would get an average of 70 for the rest of the year. So we're at the top end of <unk> or over the top end of all of the ranges.

Speaker Change: We've talked about it we've strategically been changing our investment approach when it comes to things like advertising, we're spending much more on a per unit basis than we did back.

Speaker Change: Excellent that's very helpful. Thank you.

Speaker Change: Five six years ago.

Speaker Change: And still.

Speaker Change: A good amount less than many others in the vacation and leisure space. We think we're getting the balance right as far as you know is it working.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Okay.

Speaker Change: You know look first quarter just ended our yields over the last two years are up 24%.

Conor Cunningham: Hi, everyone. Thank you you've been super clear on the strength of bookings, but.

Speaker Change: I think that's probably a pretty good indication indication that it is working and also that you don't you don't need new builds to drive that demand because the vast majority of our brands don't have any so that same ship sales.

Speaker Change: I wanted to just maybe come back to you.

Conor Cunningham: Or is that you have if things did weaken you talked about how you would work.

Conor Cunningham: To achieve a lot of these results that are kind of falling through and again it doesn't seem like it's a demand problem, but like at the end of the day, if things were to weaken what cost levers do you think you have right now that could be low hanging fruit if things were to deteriorate on some level. Thank you.

Speaker Change: Sales if you will.

Speaker Change: It goes to how we manage the curve on the on the on the yields the advertising that we do both the creative top of funnel type of things and then the digital performance our relationships with the trade and then delivering on board and I think the brands are doing an incredible.

Speaker Change: Well good morning.

Speaker Change: The amount of work to make that happen and I do think advertising helps unlock that and so we've we have unleashed it while maintaining the cost structure that we think is appropriate.

Speaker Change: And so there's a natural hedge in our business by by the basis of how we run it.

Speaker Change: I appreciate it. Thank you. Thank you.

Speaker Change: But we clearly can do a lot of things, if we really choose or need to do that.

Speaker Change: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change: Our first goal is to deliver the results that we want to deliver because we think that's the right thing for the business right. The guest experience that we want to give.

David Katz: Hi, good morning.

Speaker Change: And well done all around I wanted to.

Speaker Change: Just bring forth a debate.

Speaker Change: The investments that we wanted to make for the long term not just for the short term.

Speaker Change: We have a lot and is there any evidence that as sheryl around.

But everything is always looked at pretty critically to decide what makes sense in the current environment because the world does change and we've clearly got room should we need to make a lot of changes depending on what that circumstance could be.

Speaker Change: Any of the bookings from consumers trading down.

Speaker Change: Right.

Speaker Change: I assume that there is some trading down to the value of our crews versus the much more expensive hotels, particularly domestically and.

Speaker Change: Okay, and then I think a big part of the plan this year.

Speaker Change: Potentially.

Speaker Change: Over the next couple of years.

Speaker Change: Some that are maybe priced out of our crews that may be at a different ends of the spectrum is there anything that we can discuss or unpack there.

Speaker Change: Supply is a little bit limited for you guys has been to push marketing spend and to drive.

Speaker Change: Improved revenue quality and so on so could you just talk a little bit about how that strategy is playing out right now it seems like it's working but I just did the two levers that I think from a revenue management standpoint, or just like inventory and marketing. So if you could just talk.

Speaker Change: So I think there's two separate questions. So first the concept of a core trading down to a cruise.

Speaker Change: I look at it differently I would say that we have a tremendous price to experience ratio compared to land.

Speaker Change: Talk about the balance of those two going forward that'd be helpful. Thank you.

Speaker Change: People recognize that value more and more if they're looking to make the dollar go further.

Speaker Change: Yes, thanks, very much yeah, we've talked about it we've we've strategically been changing our investment approach when it comes to things like advertising, we're spending much more on a per unit basis than we did back.

Speaker Change: And even though it Pisses me off when we look at the price gap because theres, so much opportunity for us and I'm excited about.

Speaker Change: And those types of times that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land.

Speaker Change: Five six years ago.

Speaker Change: And still a good amount less than many others in the vacation and leisure space. We think we're getting the balance right as far as you know is it working.

Speaker Change: As far as the fact that we're carrying more new to cruise than we ever have new to cruise the growth rate for Q1 alone was significantly multi.

Speaker Change: You know look first quarter just ended our yields over the last two years are up 24%.

Speaker Change: Multiple times higher than the growth rate on the capacity so it's working.

Speaker Change:

Speaker Change: I think that's probably a pretty good invitation indication that it is working and also that you don't you don't need new builds to drive that demand because the vast majority of our brands don't have any so that same ship.

Speaker Change: As far as trading down within cruise Theres, nothing that we see because our brands have a pretty good.

Speaker Change: Mix within themselves to be able to cater to people at lots of different price points, we talk about carnival, a lot and people have concerns about carnival because of X y Z in consumer keep in mind Carnival's got suites eight.

Speaker Change: Sales, if you will and that goes to how we manage the curve on the on the on the yields the advertising that we do both the creative top of funnel type of things and then the digital performance our relationships with the trade and then delivering on board and I think the brands are doing an incredible amount of.

Speaker Change: Eight days, which are very different from inside cabins on <unk>. So we have a lot of product to be able to source lots of folks brand by brand up and down the price points.

Speaker Change: Work to make that happen and I do think advertising helps unlock that and so we've we have unleashed it while maintaining the cost structure that we think is appropriate.

Speaker Change: Uh huh.

Speaker Change: Oh I apologize for the word choice about trading down.

Speaker Change: But.

Speaker Change: Alright, Thank you very much okay.

Speaker Change: I appreciate it thank you.

Speaker Change: Thank you.

Speaker Change: My quick follow up.

Speaker Change: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change: Is that the sale of the seaborne ship at a gain.

Speaker Change: Can you just elaborate on that.

David Katz: Hi, good morning.

Speaker Change: The reasoning behind that and the timing of it.

David Katz: And well done all around I wanted to.

Speaker Change: Just a little insight. Thank you yeah, yeah, I mean, it's.

David Katz: Just bring forth a debate that we.

Speaker Change: It's actually pretty simple, we got a cash offer that when I look at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage this yields.

David Katz: Have a lot and is there any evidence that as sheryl around.

David Katz: Any of the bookings from consumers trading down.

We assume that there is some trading down to the value of our crews versus the much much more expensive hotels, particularly domestically.

Speaker Change: If it was a decision that was in the best interest of the shareholders.

Speaker Change: It's as simple as that you know nothing is for sale, we don't have a for sale sign up but if people are approaching us unsolicited for offers I'll listen.

David Katz: And potentially.

David Katz: Some that are maybe priced out of our crews that may be at a different ends of the spectrum is there anything that we can discuss or unpack there.

Speaker Change: If it's the right thing to do for the shareholders.

Speaker Change: I'll do it or not was it doesn't happen very often but that was one of these cases.

David Katz: So I think that's two separate questions. So first the concept of a core trading down to a cruise.

Speaker Change: I appreciate it thanks very much yeah, I would just say seaborne is a phenomenal brand we're.

David Katz: I'd look at it differently I would say that we have a tremendous price to experience ratio compared to land.

Speaker Change: We are talking about one of the youngest fleets around the world Ultra luxury and.

David Katz: And people recognize that value more and more if they're looking to make the dollar go further.

Speaker Change: And they are going gangbusters. So the yields are up nicely like every.

David Katz: Even though it Pisses me off when we look at the price gap because theres, so much opportunity for us and I'm excited about.

Speaker Change: Theres nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

Speaker Change: Got it thanks a lot.

David Katz: And those types of times that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land as.

Speaker Change: Thanks.

Speaker Change: Thank you. Our next question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Speaker Change: Great. Thanks, So Josh close in demand off the charts no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. So maybe multiyear could you elaborate on new customer acquisition that youre seeing across the portfolio, maybe tied to the new marketing that you that you saw.

David Katz: As far as the fact that we're carrying more new to cruise than we ever have.

David Katz: New to cruise the growth rate for Q1 alone with significantly multi.

Multiple times higher than the growth rate on the capacity so it's working.

David Katz: As far as trading down within cruise Theres, nothing that we see because our brands have a pretty good.

Speaker Change: <unk> and <unk> and walked through and just structural improvement opportunities that you see across your brands given the portfolio approach that you have.

David Katz: Mix within themselves to be able to cater to people at lots of different price points, we talk about carnival, a lot and people have concerns about carnival because of X y Z in consumer keep in mind Carnival's got suites eight.

Speaker Change: Yes, so with respect to gas composition.

Speaker Change: It's actually a pretty interesting place now right because effectively.

David Katz: Eight days, which are very different from inside cabins on <unk>. So we have a lot of product to be able to source lots of folks brand by brand up and down the price points.

Speaker Change: With no growth on the Horizon every brand has the same capacity that they have year over year, which means that if we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies.

David Katz: Uh huh.

Speaker Change: Oh I apologize for the word choice about trading down.

David Katz: But.

Speaker Change: And so the idea of first time cruisers brand switchers and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship.

David Katz: Alright, Thank you very much okay.

David Katz: My my quick follow up.

David Katz: The sale of the seaborne ship at a gain can.

Speaker Change: Can you just elaborate on that.

Speaker Change: And so yes, we have been ramping up first timers, which I think is a testament to the to the brand strengths in the marketing that they've been doing in the experiences that they give.

David Katz: The reasoning behind that and the timing of it.

David Katz: Just a little insight. Thank you yeah, yeah, I mean, it's it's actually pretty simple we got a cash offer that when I looked at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage this yields.

Speaker Change: Ultimately, though ultimately it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue I think it is also useful over the next couple of years.

David Katz: If it was a decision that was in the best interest of the shareholders. It's as simple as that you know nothing is for sale. We don't have a for sale sign up but if people are approaching us unsolicited for offers all listen.

Speaker Change: Extreme slowdown for us and capacity growth, but the industry overall is slowing.

Speaker Change: Its growth rate, so I think that there is.

Speaker Change: That certainly doesn't hurt us it helps us.

David Katz: And if it's the right thing to do for the shareholders.

Speaker Change: With respect to your second question could you just elaborate a little bit more on what you were thinking.

David Katz: And we'll do it or not was it doesn't happen very often but that was one of these cases.

Speaker Change: Just with the new marketing, what Youre seeing in terms of new customers as well as brands that maybe haven't returned to 2019 metrics. Just the next leg of opportunity that you have relative to maybe others in the industry. If we remained at robust levels.

David Katz: I appreciate it thanks very much yeah, I would just say seaborne is a phenomenal brand.

David Katz: Talking about one of the youngest fleets around the world Ultra luxury and there and they are going gangbusters. So the yields are up nicely like theres nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

Speaker Change: Our.

Speaker Change: <unk> or on our on our spectrum from having recovered past 19 level to not yet there some of that has to do as you've heard me say in the past was what what Theyre 19 levels were to begin with.

David Katz: Got it thanks a lot.

David Katz: Yes.

Speaker Change: Thank you. Our next question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Speaker Change: And so we're not patting ourselves on the back in some cases, because they exceed the 2019 levels because they should have been higher than that and they are now with plenty of runway I would say the vast majority of our brands have.

Matthew Boss: Great. Thanks, So Josh close in demand off the charts no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. So maybe multiyear could you elaborate on new customer acquisition that youre seeing across the portfolio, maybe tied to the new marketing that you that you.

Speaker Change: If we if we boil it down to Iraq, the vast majority of our brands.

Speaker Change: Multiple points.

Speaker Change: And in the medium term that we're going to be able to take advantage of and primarily that's going to be due to continuation on the improvement we've been making on the revenue side.

Matthew Boss: Site, and and and walked through and just structural improvement opportunities that you see across your brands given the portfolio approach that you have.

Speaker Change: And Thats, what the direct the trajectory is for those brands they are making jumped by leaps and bounds and they've got a lot more to go and I am excited about that.

Matthew Boss: So are we.

Matthew Boss: With respect to guest composition, you know where we're at.

Matthew Boss: It's actually a pretty interesting place now right because effectively.

Speaker Change: Great and then David maybe just to switch gears on your goal to return to the fortress balance sheet. How are you thinking about capital allocation priorities beyond debt pay down as you approach investment grade metrics.

Matthew Boss: With no growth on the Horizon every brand has the same capacity that they have year over year, which means it's it's we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies.

David: So as Josh said before.

Speaker Change: In the immediate.

Matthew Boss: And so the idea of first time cruisers brand switchers and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship.

Speaker Change: Debt pay down is priority, one two and three but as I indicated.

Speaker Change: My remarks were talking about a.

Speaker Change: Potentially a $5 billion additional pay down and when you start thinking about 2026.

Matthew Boss: And so yes, we have been ramping up first timers, which I think is a testament to the to the brand strengths in the marketing that they've been doing in the experiences that they give.

Speaker Change: We should be beyond investment grade metrics.

Speaker Change: And so as a result of that will be you know not only are we investing in ourselves and all the examples that Josh Gabe.

Matthew Boss: Ultimately, though ultimately it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue I think it is also useful.

Speaker Change: We will be considering other priorities.

Speaker Change: And we'll be talking about that as we move forward into 2026 and beyond.

Matthew Boss: For the next couple of years.

Speaker Change: Great Congrats on the continued momentum.

Matthew Boss: If extreme slowdown for us and capacity growth, but the industry overall is slowing.

Speaker Change: Thank you.

Speaker Change: Yeah.

Matthew Boss: Its growth rate. So so I think that there is there is that certainly doesn't hurt us it helps us.

Speaker Change: Thank you. Our next question comes from the line of Lizzie Dove with Goldman Sachs. Please proceed with your question.

Matthew Boss: With respect to your second question could you just elaborate a little bit more on what you were thinking.

Lizzie Dove: Hi, guys. Thank you so much for taking the question and congrats on a great Q1, I guess going back to luxury for a second you know you have seaborne you have Cunard obviously the last few weeks, we've had mixed commentary from other companies about luxury curious just to zoom in on that anything you would kind of flat now and what you're seeing on the luxury.

Speaker Change: Specifically.

Matthew Boss: Yeah.

Speaker Change: Yes Martin.

Brands are on our on our spectrum from having recovered past 19 level to not yet there some of that has to do as you've heard me say in the past with what Theyre 19 levels were to begin with and so we're not patting ourselves on the back in some cases, because they exceed the 2019 levels because they should've been higher then and they are now with plenty of.

Speaker Change: Nothing nothing interesting to talk about I don't think as you heard me say seaborne has been making great progress year over year as as Qunar. So yeah I'm sorry.

Speaker Change: I guess the answer is no.

Speaker Change: So short and sweet.

Speaker Change: That's great to hear and I guess totally switching gears for a second I'll ask about celebration key I mean, you know through massive wave season, I'm curious just what you've been seeing that how much the kind of consumer reception has been to that marketing you put around that whether you're still on track to kind of opened right at the end of a semi just any updates you can.

Matthew Boss: A runway I would say the vast majority of our brands have.

Matthew Boss: If we if we boil it down to Iraq, the vast majority of our brands.

Matthew Boss: Multiple points.

Matthew Boss: And in the medium term that we're going to be able to take advantage of.

Matthew Boss: And primarily that's going to be due to continuation on the improvement we've been making on the revenue side.

Speaker Change: Give around that would be helpful. Thanks.

Speaker Change: Yes.

Speaker Change: No first of all from an operational standpoint.

Matthew Boss: And Thats, what the trajectory is for those brands they are making jumped by leaps and bounds and they've got a lot more to go and I am excited about that.

Speaker Change: Everything is proceeding exactly on track and the teams are doing a phenomenal job not only in the in the finishing up of the construction, but in the the massive undertaking that is training and getting ready on the land based operations themselves to be able to deliver the experiences that we want to deliver.

Great and then David maybe just to switch gears on your goal to return to the fortress balance sheet.

Matthew Boss: Are you thinking about capital allocation priorities beyond debt pay down as you approach investment grade metrics.

Speaker Change: We are.

Speaker Change: Seeing the premiums that we expected to see.

Speaker Change: So as Josh said before into the immediate.

Speaker Change: When when we started this project a long time ago.

Speaker Change: Debt pay down is priority one two and three but has indicated in my remarks, we're talking about a.

Speaker Change: So things are progressing exactly I honestly exactly as planned which is a which is a shout out to the teams for doing all the right things.

Speaker Change: Potentially a 5 billion dollar additional pay down and when you start thinking about 2026.

Speaker Change: Great. Thank you.

Speaker Change: Excellent.

Speaker Change: We should be beyond investment grade metrics.

Speaker Change: Thank you. Our next question comes from the line of Vince C. P O.

Speaker Change: Average and so as a result of that will be not only are we investing in ourselves and all of the examples that Josh gave but.

Speaker Change: Cleveland Research. Please proceed with your question.

Speaker Change: Thanks, I wanted to lean a little bit more into land there.

Speaker Change: We will be considering other priorities.

Speaker Change: What would you expect the celebration key to kind of be.

Speaker Change: And we'll be talking about that as we move forward into 2026 and beyond.

Speaker Change: Peak.

Speaker Change: Notice ability in your bookings surged in light of how the carnival product books, the opening and awareness of the island and then additionally.

Speaker Change: Great Congrats on the continued momentum.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of Lucy desk with Goldman Sachs. Please proceed with your question.

Speaker Change: This is a new part of your land portfolio, but you have quite a sizable footprint already I know theres expansion with I think it's half Moon Cay tier and investment into the Alaska part of the portfolio. How are you thinking about your opportunity in the land stuff in years ahead.

Speaker Change: Hi, there. Thanks, so much for taking the question and congrats on a great Q1, I guess going back to luxury for a second you know you have seaborne you have Cunard obviously the last few weeks, we've had mixed commentary from other companies about luxury curious just to zoom in on that anything you would kind of slack, there and what you're seeing on the luxury.

Speaker Change: Yeah. Thanks.

Speaker Change: Thanks, Ben So a.

Speaker Change: A bunch of questions there so as far as the impact of celebration I think it's pretty fascinating.

Speaker Change: Specifically.

Speaker Change: Yes, Martin was a nothing nothing interesting to talk about I don't think as you heard me say seaborne has been making great progress year over year as as Qunar. So yeah I'm sorry.

Speaker Change: We're still a make believe land right. So everything we're putting out and on the marketing side really is in the imagination.

Speaker Change: And I think.

Speaker Change: That coupled with as you said the primary tenant there is gonna be carnival cruise line, a huge amount of which is short cruises three four or five nighters that have a much shorter window than booking on the sevens and eights.

Speaker Change: I guess the answer is no.

Speaker Change: So short and sweet.

Speaker Change: That's great to hear and I guess totally switching gears for a second I'll ask about celebration key I mean, you know through massive wave season, I'm curious just what you've been seeing that how much the kind of consumer reception has been to that marketing you'd put around that whether you're still on track to kind of opened right at the end of semis just any updates you can.

Speaker Change: Means that we haven't seen the.

Speaker Change: By any stretch of imagination, we haven't seen the full impact carnival hasn't seen the full impact on the benefits and I do think the ability to the ability to leverage in operations and generate content and guest experience with the with our guests with the trade.

Speaker Change: Give around that would be helpful. Thanks.

Speaker Change: Yes, yes.

Speaker Change: No first of all from an operational standpoint.

Speaker Change: It's going to be a springboard forward.

Speaker Change: Which is a great thing for them for celebration.

Speaker Change: We we easily see a path where you know by the end of the decade.

Speaker Change: About $6 5 million gas flowing to our Caribbean footprint in 2024 could be upwards of $11 million, which is which is a phenomenon that I think the thing that we're learning, which we haven't really benefited from in fall is how we position, how we brand and position our.

Speaker Change: We are.

Speaker Change: Seeing the premiums that we expected to see.

Speaker Change: When when we started this project a long time ago.

Speaker Change: So things are progressing exactly I honestly exactly as planned which is a which is a shout out to the teams for doing all the right things.

Speaker Change: Our our destinations themselves to make them part of the consideration set of the consumer.

Speaker Change: Great. Thank you.

Speaker Change: Excellent.

Speaker Change: Because historically it has very much been about just the crews and the brand and then delight them when they're in our destination, but we have the ability to make it a driver for taking the crews to begin with and so we're we're starting to lean into that obviously with celebration key and were going to do more of that in celebration key is something that you know when we.

Speaker Change: Thank you. Our next question comes from the line of Vince C. P M.

Speaker Change: Cleveland Research. Please proceed with your question.

Speaker Change: Thanks, I wanted to lean a little bit more into land there.

Speaker Change: What would you expect the celebration key to kind of be.

Speaker Change: Peak.

Speaker Change: Notice ability in your bookings surge them up in light of how that carnival product books, the opening and awareness of the island and then additionally.

Speaker Change: When we open that's just phase one.

Speaker Change: And we've got plans that will take us through the end of the decade to be able to significantly increase that throughput, which as I mentioned and helps us drive that guest count up.

Speaker Change: This is a new part of your land portfolio, but you have quite a sizable footprint already I know there was expansion with.

Speaker Change: To about $11 million.

Speaker Change: With respect to with respect to Alaska.

Speaker Change: I think it's half Moon Cay tier and investment into the Alaska part of the portfolio. How are you thinking about your opportunity in the land stuff in years ahead.

Speaker Change: Look we if you if you haven't been there I strongly suggests you've got to do it by cruise and if you do it you have to do a cruise land Sea Packers because that is the greatest way to see the great state.

Speaker Change: Yeah. Thanks. Thanks.

Speaker Change: So a.

Speaker Change: And it is a strategic advantage that we do have given the scope of our operations in a lab and Alaska and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change: A bunch of questions there so.

Speaker Change: As far as the impact of celebration key I think it's pretty fascinating.

Speaker Change: We're still a make believe land right. So everything we're putting out and on the marketing side really is in the imagination.

Speaker Change: And I think.

Speaker Change: Uh huh.

Speaker Change: That coupled with as you said the primary tenant there is going to be carnival cruise line.

Speaker Change: Great I wanted to sneak one more in you mentioned a little bit earlier on the European business in the travel industry more broadly right now there's a lot of talk on inbound and outbound.

Speaker Change: Amount of which is short cruises three four or five nighters that have a much shorter window than booking on the sevens and eights.

Speaker Change: For the U S and I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the north American brands heavily over indexed to North American guests, but anything that you've seen in your data on any shift in flow of inbound interest to the U S and if that at all is a big part of it.

Speaker Change: Means that we haven't seen the but by any stretch of imagination, we haven't seen the full impact of carnival hasnt seen the full impact on the benefits and I do think the ability to the.

Speaker Change: The ability to leverage in operations and generate content and guest experience with our guests with the trade is going to be a springboard forward.

Speaker Change: Your business.

Speaker Change: Well I guess I'll answer it in reverse is it a big part of our business.

Speaker Change: It's not a huge part of our business, we strategically try to put our ships where our guest base is.

Speaker Change: Which is which is a great thing for them for celebration.

Speaker Change: We we easily see a path where you know by the end of the decade.

Speaker Change: Hum.

Speaker Change: I think in the volatility that we talked about in the first quarter.

Speaker Change: It was about $6 5 million gas flowing to our Caribbean footprint in 2024 could be upwards of $11 million.

Speaker Change: Certainly Canada were swept up in that enough for us that's 3% to 4% of our business just to put it into context, but clearly we read that you're you know everybody read the news and we're not we're not immune from from from that dynamic, but going back to the strategy by being able to target specific countries with specific brands.

Speaker Change: Which is which is a phenomenal thing and I think the thing that we're learning, which we haven't really benefited from <unk> is how we position, how we brand and position our.

Speaker Change: Our our destinations themselves to make them part of the consideration set of the consumer.

Speaker Change: Cater to their needs and preferences and position them where people can get to.

Speaker Change: Because historically it has very much been abele.

Speaker Change: Drive if they want to it's a recipe for success for us in this environment.

Speaker Change: Out just the crews and the brand and then delight them when they're in our destination, but we have the ability to make it a driver for taking the crews to begin with and so we're we're starting to lean into that obviously with celebration key and were going to do more of that in celebration key is something that.

Speaker Change: Great. Thanks, operator, we have time for one more.

Speaker Change: Thank you. Our final question comes from the line of Chris Stathopoulos with <unk>. Please proceed with your question.

Speaker Change: Good morning, Josh David team. Thanks for taking my question, so I'm going to close it out I'll keep it to one.

When we when we opened that is just phase one and.

Speaker Change: And hopefully try to I guess consolidate here.

Speaker Change: The questions around demand because I think it's the questions I'm getting here you know investors are trying to tease out the health.

Speaker Change: About $11 million.

Speaker Change: With respect to with respect to Alaska.

Speaker Change: Of the consumer and whether any weakness at this point is localized to a specific consumer demographic regions. So if we use the airlines here as a proxy there was a comment earlier on the call.

Speaker Change: Look we if you haven't been there.

Speaker Change: Wrong. It suggests you've got to do it by cruise and if you do it you have to do a cruise land sea package because that is the greatest way to see the great state.

Speaker Change: Last week.

Speaker Change: Domestic basic economy close in weakness.

Speaker Change: Opposite of what you're seeing here.

Speaker Change: It's similar it sounded like premium international.

Speaker Change: Demand similar so as we look across your brand scale from contemporary premium luxury and we adjust for mix shifts.

Speaker Change: Uh huh.

Speaker Change: The earlier question a question on regional source travelers is there anything that is different or unique with the pace of bookings were onboard spend.

Speaker Change: At this point.

Speaker Change: So I guess consolidated question the short answer is no.

Speaker Change: Keep in mind, where airlines come out with a lot of commentary.

Speaker Change: Commentary, we are different from airlines and even different from hotels, we don't rely on business business travel is not part of our.

Speaker Change: Your business.

Speaker Change: Well I guess I'll answer it in reverse is it a big part of our business.

Speaker Change: Portfolio.

Speaker Change: So it is about the consumer and good times and bad times people take vacations.

Speaker Change: It's not a huge part of our business we strategically.

Strategically tried to put our ships where our guest base is.

Speaker Change: Unemployment rate in this country in the developed countries that we really sourced from our fantastically low.

Speaker Change: <unk>.

Speaker Change: And the volatility that we talked about you know in the first quarter.

Speaker Change: Certainly Canada were swept up in that enough for us.

Speaker Change: So does it mean that people want to think hard about how they spend their vacation dollar absolutely is it more important when times are stressful that they'd get away and take a vacation does it mean more to them absolutely and I think we've learned that.

Speaker Change: 3% to 4% of our business just to put it in context, but clearly we read that you're you know everybody read the news and we're not we're not immune from from from that dynamic, but going back to the strategy by being able to target specific countries with specific brands cater to their needs and preferences and position them.

Speaker Change: Since the turn of this decade.

Speaker Change: How much how much importance people people place on it.

Speaker Change: So I think we are resilient and we will continue to work hard to deliver so since you said it was one question. Thank you for.

Speaker Change: Where people can get to.

Speaker Change: Drive if they want to it's a recipe for success for us in this environment.

Speaker Change: Doing what I asked.

Speaker Change: Great. Thanks, operator, we have time for one more.

Speaker Change: Well, we'll end it there so thanks, everybody and talk to you next quarter.

Speaker Change: Thank you. Our final question comes from the line of Chris stuff a lot Lewis with <unk>. Please proceed with your question.

Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: Good morning, Josh David team. Thanks for taking my question, so I'm going to close it out I'll keep it to one.

Speaker Change: And hopefully try to I guess consolidate here.

Speaker Change: The question is around the math because I think it's the questions I'm getting here you know investors are trying to tease out the health.

Speaker Change: Last week.

Speaker Change: Domestic basic economy close in weakness.

Speaker Change: Opposite of what you're seeing here.

Speaker Change: What is similar it sounded like premium international.

Speaker Change: Demand similar so as we look across your brand scale from contemporary premium luxury and we adjust for mix shifts.

Speaker Change: The earlier question a question on regional source travelers.

Speaker Change: Anything that is different or unique with the pace of bookings were onboard spend.

Speaker Change: At this point.

Speaker Change: So I guess consolidated question the short answer is no.

Speaker Change: Just keep in mind, where airlines come out with a lot of commentary.

Speaker Change: Commentary, we are different from airlines and even different from hotels, we don't rely on business business travel is not part of our portfolio.

Speaker Change: Bolio so it too it is about the consumer and good times and bad times people take vacations.

Speaker Change: The unemployment rate in this country in the developed countries that we really sourced from our fantastically low.

Speaker Change: So does it mean that people want to think hard about how they spend their vacation dollar absolutely is it more important when times are stressful that they get away and taking a vacation does it mean more to them absolutely and I think we've learned that since the turn of this decade.

Speaker Change: How much how much importance people people place on it so you know.

I think we are resilient and we will continue to work hard to deliver so since you said it was one question. Thank you for.

Speaker Change: Doing what I asked.

Speaker Change: Well, we'll end it there so thanks, everybody and talk to you next quarter.

Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: [music].

Speaker Change: Greetings and welcome to the Carnival Corporation and plc conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: This conference is being recorded.

Speaker Change: Now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Josh Weinstein: Thank you good morning, and welcome to our first quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, Our Chief Financial Officer, David Bernstein, and our chair Micky Arison.

Josh Weinstein: Before we begin please note that some of our remarks on this call will be forward looking therefore, I will refer you to the forward looking statement in today's press release, all references to ticket prices, yes, and cruise costs without fuel will be in constant currency unless otherwise stated references to yields will be on a net basis.

Josh Weinstein: References to cruise costs without fuel EBITDA net income and our I C will be on an adjusted basis unless otherwise stated all of these references are non-GAAP financial measure as defined in our earnings press release, a reconciliation to the most directly comparable U S GAAP financial measures and other associated.

Josh Weinstein: <unk> are also contained in our earnings press release and in our Investor presentation.

Josh Weinstein: Please visit our corporate website, where our earnings press release and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks Beth.

Josh Weinstein: Once again, we delivered a fantastic quarter. This.

Josh Weinstein: At this time hitting first quarter high watermarks for revenue EBITDA EBITDA for a L. B D operating income and customer deposits.

Josh Weinstein: Net income came in more than $170 million better than guidance as we outperformed across the board led by incredibly strong demand throughout our portfolio.

Josh Weinstein: We achieved a robust seven 3% yield increase smashing our yield guidance on top of last year's 17% yield improvement.

Josh Weinstein: Both ticket and onboard equally outperformed them very strong close in demand, which speaks to the strength of our consumer.

Josh Weinstein: Unit costs also came in better than expected, mainly due to timing between the quarters.

Josh Weinstein: This resulted in a near doubling of operating income for the quarter.

Josh Weinstein: And EBITDA that reached $1.2 billion approaching a 40% year over year increase.

Josh Weinstein: Operating margins and EBITDA margins, each improved over 400 basis points year over year with both of these now surpassing 2019 levels.

The remainder of the year.

In addition.

Josh Weinstein: David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone.

Josh Weinstein: Combined this successful execution has enabled us to take up our earnings guidance for the year by $185 million.

Josh Weinstein: More than a 30% improvement from 'twenty to 'twenty, four and that is essentially flat capacity growth.

Josh Weinstein: Achieving our March guidance will also result in reaching both of our 2026 C change financial targets, one year early with borrow I see hitting 12% and EBITDA per a L. B D more than 50% higher than just two years ago.

Josh Weinstein: Taking each of these two metrics to levels not seen in the better part of 20 years at.

Josh Weinstein: At the same time, we're also closing in on our 'twenty 'twenty six greenhouse gas targets with an over 19% reduction in carbon intensity compared to 2019.

Josh Weinstein: We're generating demand well in excess of our very limited inventory remaining.

Josh Weinstein: Which has been driving strong pricing for the remainder of the year, while also building demand for future years.

Josh Weinstein: In fact.

Josh Weinstein: We're at historical high prices across all core programs for 2020 five in all quarters of the year well booking volumes for 'twenty 'twenty six sailings N beyond taken during the first quarter also reached an all time high.

Josh Weinstein: We have no plans to let up anytime soon.

Josh Weinstein: Or Shaquille O'neal.

Josh Weinstein: These two events alone captured over 5 billion impressions across paid earned and owned media.

Josh Weinstein: And carnivals Adorable wave campaign flip lost in Paradise was a hits get a huge cut through with marketing kpis up across the board.

Josh Weinstein: If our marketing team managed to get that kind of traction around what is still computer generated animation I look forward to four months from now when all five portals built for fun at celebration key are open for our guests and can be showcased.

Josh Weinstein: We're on track for a July opening and executing our ramp up plan into the fourth quarter as our team settles into these new operations and focuses on delivering the kind of phenomenal experience. Our guests have come to expect from our exclusive destinations.

Josh Weinstein: Relax away half Moon Cay is also on schedule for the second half of 'twenty twenty-six we've.

Josh Weinstein: We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean.

Josh Weinstein: And we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Josh Weinstein: Turning to Alaska, We just announced an expansion and renovation project to Denali large one of our nine owned and operated hotel properties building on this unmatched strategic advantage for Holland America, and Princess cruises and.

Josh Weinstein: Enhancements will include the addition of 120, new guest rooms and suites Roomba.

Josh Weinstein: Room remodeling additional food and beverage venues.

Josh Weinstein: And improvements to public spaces and nature trails.

Josh Weinstein: Our brands land sea packages are a huge draw for new to cruise guests and truly the best way to experience the greatness of Alaska.

Josh Weinstein: We also just completed the first of seven Aida ships to undergo our Aida evolution program I eat a diva is now sailing from Rome, having just returned from a seven week dry dock with many added features that our German guests have come to love and Aida is newer vessels. This is.

Josh Weinstein: Kluge over half a dozen new bar and dining venues, new suites and equipment upgrades to enhance fuel efficiency.

I eat of Luna will start her evolution later this year, followed by Aida Bella and eat them are in 2026.

Josh Weinstein: We also further progressed on optimizing our portfolio.

Josh Weinstein: Just this month, we completed the sunsetting of our piano cruises, Australia brand by folding its two remaining ships into carnival cruise lines.

Josh Weinstein: We also consolidated our Seabourn fleet with the sale of seaborne soldiering.

Josh Weinstein: Well, we were not actively looking to sell to ship.

Speaker Change: The author was in the best interests of our shareholders.

Speaker Change: The sale lease seaborne well positioned where they phenomenal fleet of three ultra luxury ocean vessels.

Speaker Change: And two recently launched ultra luxury expedition ships, which comprises one of the most modern fleets in the industry at an average age of just over seven years now turning back to the business and as you can see from our first quarter outperformance.

Speaker Change: Onboard spending and booking levels.

Speaker Change: We have proven to be incredibly resilient to the volatility around the globe.

Speaker Change: Having said that even with a resilient and strong visibility given that so much of 2025 is already on the books, we arent taking the current backdrop lately.

Speaker Change: We will be working hard to achieve these results thankfully our team is nimble and agile characteristics as you know we honed so well over the first half of this decade, leaving us better positioned to manage through whatever comes our way.

Speaker Change: And on top of that we are still a ridiculous Lee amazing value compared to land based alternatives.

Speaker Change: While we have been chipping away at the price gap to land based alternatives the price to experience ratio of cruising versus those other options remains massively disproportionate.

Speaker Change: While somewhat frustrating and while it's still a big opportunity over the coming years.

Speaker Change: It's huge value for money is also truly a strength when people are looking to make their vacation dollars go even further.

Speaker Change: And it's about to get even better with the opening of celebration key our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

Speaker Change: We have been making huge strides in rebuilding our financial fortress as we close in on investment grade leverage metrics.

Speaker Change: We have well managed near term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt in fact.

Speaker Change: Honoring the integrity of every Osha, we sell place we visit and life we touch.

David Katz: With that I'll turn the call over to David.

David Katz: Thank you Josh I'll start today with a summary of our 2025 first quarter results.

David Katz: Next I will provide some color on our improved full year March guidance.

David Katz: Then I'll finish up with an update of our refinancing and deleveraging efforts.

David Katz: Turning to the summary of our first quarter results net income exceeded December guidance by more than $170 million as we outperformed once again.

David Katz: The outperformance was essentially driven by three things.

David Katz: Favorability in revenue with $98 million as yields came in at over 7% compared to the prior year.

David Katz: This was two seven points better than December guidance, driven by both close in strength in ticket prices and strong onboard spending.

David Katz: Second cruise costs without fuel per available lower birthday, or a L. B day were only up 1% compared to the prior year.

David Katz: This was two points four points better than December guidance and was worth $65 million.

David Katz: The favorability in cost was mainly due to the timing of expenses between the quarters.

David Katz: We did find some permanent savings, which flowed through to the full year, which I will touch on later in my remarks.

David Katz: And third favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter.

David Katz: Yield improvements in the first quarter versus the prior year was driven by improvements in both sides of the Atlantic from higher ticket prices and improved onboard spending.

David Katz: The improvement in ticket prices was broad based across all core programs.

David Katz: The improvement in onboard spending which accelerated from last quarter was also broad based as all categories of spending were meaningfully higher.

David Katz: Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

David Katz: Customer deposits at the end of the first quarter were up over $300 million versus the prior year driven by both improved ticket prices and increased pre cruise onboard sales.

Next I will provide some color on our improved full year March guidance.

David Katz: March guidance net income of approximately $2 $5 billion is a 185 million dollar improvement over December guidance.

David Katz: The improvement was essentially driven by two things.

David Katz: Our first quarter favorability in yield flowed through to the full year.

David Katz: Proving our full year yield guidance by half a point to four 7% versus the prior year.

And our refinancing efforts during the quarter allowed us to lower our full year interest expense guidance by $100 million.

David Katz: I did want to point out that absolute cruise costs, excluding fuel are expected to be slightly less than December guidance. As I. Previously indicated we did find some permanent savings during the first quarter, which flowed through to the full year.

David Katz: However, those savings were partially offset by higher dry dock costs because of a couple of unplanned drydocks and charter higher costs associated with the sale of one of our vessels during the month of March while charter hire cost increased cruise costs, they were offset by lower depreciation.

David Katz: Aviation experience.

David Katz: With absolute cruise costs slightly better they change in cruise costs without fuel per <unk> is three 8% for March guidance, which is simply the math of spreading lower cruise costs over the revised <unk>, which changed from December guidance because of a couple of unplanned drydocks.

David Katz: 2025.

David Katz: All of this results in $6 7 billion of EBITDA.

David Katz: And nearly 10% improvement over 2020 for virtually all of which was driven by same store revenue growth as our capacity is essentially flat year over year.

David Katz: Now I'll finish up with an update of our refinancing and deleveraging efforts.

David Katz: During the quarter, we refinanced $5 5 billion of debt, which is 20% of our total debt with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental $145 million in hanger.

David Katz: <unk> interest expense savings.

David Katz: We have been opportunistically, reducing interest expense, while simplifying our capital structure and managing our future debt maturities.

David Katz: Today, our average cash interest rate is down significantly at just four 6%.

David Katz: Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David Katz: Our near term maturity towers are well managed with just $1 1 billion of debt maturities for the remainder of 2025 and $2 7 billion for the full year 2026.

David Katz: During the first quarter, we reduced debt by another half a billion dollars ending the quarter with $27 billion of total debt.

David Katz: With the benefit of well manage near term maturity towers and improved leverage metrics over the remainder of this year and through 2026, we expect to Opportunistically execute the rest of our current refinancing plan.

David Katz: Prepaying debt further simplifying our capital structure, optimizing our future debt maturities and further reducing our interest expense.

David Katz: For the two year period of 2025 and 2026. This refinancing plan combined with our strong and growing cash flow and just one new beds being delivered over this time has the potential to reduce debt by nearly $5 billion from where we ended 2024.

David Katz: Sure.

David Katz: And let's not forget that we ended 2024 over $8 billion. After January 2023 peak.

David Katz: Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink increasing our confidence in achieving an investment grade leverage metrics in the short term as we move further down the road rebuilding power.

David Katz: Natural fortress, while continuing the process of transferring value from debt holders back to shareholders.

David Katz: Now operator, let's open the call for questions.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

Pressing the starches.

To allow for as many questions as possible, we ask that you limit yourself to one question and one follow up thank you.

Speaker Change: Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Speaker Change: Hey.

Speaker Change: Regarding changes to the consumer demand trends I know that you know you noted not being immune from the macro which I guess shouldn't be a surprise, but just maybe some more color on what exactly that means and then one quick follow up. Thanks. Good morning, Good morning, Matt and thank you for acknowledging we do live on planet Earth.

Speaker Change: So you know look wave wave was a success right I mean, we set a record for bookings for further out years, we came into wave at historic occupancy and price we use that to our advantage, we took price and we're well set up for the rest of the year, hence not only do we pretty much smashed.

Speaker Change: Q1 on the yields.

Speaker Change: But we maintain yield guidance for the rest of the year over 4%.

Speaker Change: So I think we feel real good about how we how we've been tackling things and our brands are doing a good job.

Speaker Change: Got it that's very helpful. And then just to clarify maybe somewhat David comment David's comments.

Speaker Change: The dry dock dynamic or is there anything else that you would flag. Thanks a lot.

Speaker Change: I guess I was referring to EBITDA, sorry, yeah, sorry, that's a 165.

Yeah.

Speaker Change: The EBITDA is just basically the.

Speaker Change: Net income less the interest yes.

Speaker Change: The short answer is the yield flew flowed.

Speaker Change: Flow through for the year.

Speaker Change: The cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year, we did reduce our absolute costs in a couple of ways. You know few tens of millions of dollars, but because of the the reduction in <unk> because of the extra dry docks.

Speaker Change: That covers it up.

Speaker Change: Okay got it that's very helpful. Thanks for clarifying.

Speaker Change: Sure. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: Great. Thanks very much.

Speaker Change: Obviously, a lot of concern among investors because of some airline commentary last night, a hotel data point, so great news too.

Speaker Change: Two.

Speaker Change: The raised guidance, mostly by the Q1 beat when we look at the yield and just given how you talked about the close ending strong and onboard being strong does that suggest that youre not raising the next three quarters yield because you know you want to be cautious obviously given the environment.

Speaker Change: But there would be that potential if your if your expectations for the close in.

Speaker Change: Onboard are still what they were three months ago that there's potential upside to that guide is that the way to think about.

Speaker Change: The rest of the year.

Speaker Change: And fourth quarter.

Speaker Change: Frankly, the onboard spend that we've seen in the first couple of weeks of March.

Speaker Change: March patent slow down so we do feel good about the strength of our consumer.

Speaker Change: Clearly.

Speaker Change: Clearly I just wanted to.

Speaker Change: We always want to outperform and brands work on that day in and day out certainly don't promise.

Speaker Change: Anything other than we're going to do our best.

Speaker Change: Okay, great. Thank you and then maybe just as a quick follow up.

Speaker Change: Just if there's a way to maybe quantify.

Speaker Change: With the new expense, obviously, you said some of it was because of the <unk>.

Speaker Change: Is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction.

Speaker Change: And also excluding from that the higher charter cost from the seaborne ship right. Because that's just sort of shifting from depreciation sort of temporarily I'm not not really structural cost. So what how should we think about.

Speaker Change: Additional dollar amounts of structural costs, excluding that and excluding.

Speaker Change: The aggregate dollar amount of net <unk> in the denominator won't matter. Thanks, yes.

Speaker Change: Yes, so the.

Speaker Change: The $65 million of cost in the first quarter and we said most of it was timing, but probably about a third of it was permanent cost savings.

Speaker Change: We're always looking for ongoing cost savings.

Speaker Change: We do have the lowest the best cost structure in the industry.

Speaker Change: But that we don't stop there we keep on finding ways to improve over time, and we'll do that this year and next year and beyond.

Speaker Change: Okay, great that was totally clear thank you Robert.

Speaker Change: Thank you. Our next question comes from the line of Steve <unk> with Stifel. Please proceed with your question.

Speaker Change: Hey, guys good morning.

Speaker Change: And congrats on the first quarter so.

Speaker Change: Just wanted to ask about bookings that you're taking in right now for 2026.

Speaker Change: And I know, it's still a little bit early on but just wondering if youre seeing any what we would call kind of.

Speaker Change: <unk> differences in bookings for 26 by by brand.

Speaker Change: Or maybe if youre seeing customers.

Speaker Change: Book, but maybe that are pre booking onboard as much or they're taking lower cabin categories. Just I mean, just trying to make sure there isn't anything youre seeing right now.

Speaker Change: We look further out that would be concerning to you guys.

Speaker Change: First thanks, Steve Thanks for the compliment.

Speaker Change: No I mean, I guess the short answer is no. There's nothing that I would say on a brand by brand basis was raised any anything of interest to talk about.

Speaker Change: The fact that we can say that we can.

Speaker Change: Walk and chew gum at the same time and finish out 25 and still.

Speaker Change: Ground ground ourselves with a good foundation for 26, and I think with a record booked position at higher prices that's exactly what the teams are doing.

Speaker Change: Okay got you makes sense sounds good and then the second question.

Speaker Change: Going to be kind of somewhat the same question that Robin I, just want to ask a little bit differently, but.

Speaker Change: You beat the first quarter by.

Speaker Change: I think it was 270 basis points on the yield side of things.

Speaker Change: So I guess as we think about the and we can see your second quarter guidance now. So if we think about the back half of the year. If you know if the consumer stays stat.

Speaker Change: Status quo Theres no change in onboard close and remains strong.

Speaker Change: I'm guessing, there's probably upside to your back half guidance I just I'm just trying to ask that question, maybe a little bit differently or maybe.

Speaker Change: Specific clear just to be clear if our onboarding remains really strong and our close in demand remains really strong, but again I think you're right.

Speaker Change: Okay. That's all I needed to hear thank you very much.

Speaker Change: Thanks, Steve.

Speaker Change: Thank you. Our next question comes from the line of Brent month, where with Barclays. Please proceed with your question.

Brent: Good morning, everybody and thanks for taking my question and Echo the congratulations on the first quarter and raising the full year guide.

Speaker Change: My question is it is a permutation of something you may have already gotten I hope I hope not but Josh you guys see.

Speaker Change: Between drive to and fly to.

Speaker Change: Got it so Brian So you know.

Speaker Change: We've been talking for a long time about the strength of the portfolio and the portfolio approach that we have.

Speaker Change: Im going to sound like a broken record, but as I've been saying probably for the last.

Speaker Change: Six quarters now Europe has been driving things forward real nicely and that has continued so that's not a surprise for us.

Speaker Change: So I.

Speaker Change: I feel I feel pretty good about that I'd say, you know consumers, whether you are low and middle of the road high end luxury every person is different and every person who's going to internalize the backdrop of what theyre dealing with differently and make their choices.

Speaker Change: Our portfolio approach works incredibly well against that backdrop.

Speaker Change: Thanks for that and then just a quick follow up.

Speaker Change:

Speaker Change: If they let's say that no one has a crystal ball, let's say the consumers slows further and if there's a slowdown in bookings are industry wide or let's just even say away from you. How do you perceive the industry's current willingness to sort of hold price or act more rationally than it has in the past.

Speaker Change: Look I'll speak for myself I won't.

Speaker Change: And were increasing consideration increasing demand, which is a great thing for everybody with respect to us.

Speaker Change: We're executing on the things that we've been talking about for years, It's resulted right now and us being better book than you know pretty much we've ever been.

Speaker Change: We we have great visibility.

Speaker Change: Not that much to go in this year onboard spends we pull forward, which is enhanced visibility versus prior periods. So and we in particular, we have no capacity growth right. So where we are in a fairly enviable position I think that even though new builds are great, but we can.

Speaker Change: We do a lot with what we've got and having only one ship coming this year. None in 2026 127, I mean that for US that's a fantastic roadmap for success. So we're looking forward to it.

Speaker Change: Thanks, a lot congrats again on the quarter.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

Speaker Change: Yes.

Speaker Change: With the I guess.

Speaker Change: Hi.

Speaker Change: It's all up outside of the bookings in onboard spend which you've talked about are there any other forward indicators that that you think.

Speaker Change: It might be a good indicator of your consumer sentiment or whether how they are respected making payments for their trips or how many youre buying travel or insurance or any what any of those indicators are showing.

James Hardiman: James we're going deep.

James Hardiman: No no nothing nothing out of the ordinary that would trigger flags cancellations are fairly consistent so there's really nothing else that would probably put on the table to talk about is.

James Hardiman: Anything of significance.

James Hardiman: <unk>.

Fair enough.

James Hardiman: With the 12% of RSC insight.

James Hardiman: Can you give us any indication on what you think the long term opportunity is there specifically and how you guys think about the return profile for celebration key and there are other.

James Hardiman: Sort of non shift investments are there any other investments that we should be thinking about that are significantly ahead of the your corporate average.

James Hardiman:

James Hardiman: Overall, we feel real good about the progress we've been making on the returns that we're generating I certainly don't view I never give you, 12% as an ending point.

So mid teens is certainly.

James Hardiman: Realistic.

James Hardiman: And certainly what we'll be shooting for the things that are going to drive it are really the continuation of doing our jobs better across the brands and the commercial space watching the cost like we always do as a low cost industry leader.

James Hardiman: Being able to lean into the investments that we're making around celebration key relax away.

James Hardiman: And doing some other things with the positioning of the some of the destinations that we currently own.

James Hardiman: Which are phenomenal and on top of that.

James Hardiman: Aside from the moderate.

James Hardiman: I'd say modest capacity growth. We have we are in we are investing in ourselves in other ways. We've talked about our evolution. For example, I think I said in my prepared remarks.

James Hardiman: Which you know you take one of the most successful brands in the world.

James Hardiman: And you reinvest in them and their existing capacity to add revenue opportunities cabins.

James Hardiman: That's going to serve us incredibly well as is the investments we're making in Alaska.

James Hardiman: To delight, our guests and really cement our strategic advantage even further on.

James Hardiman: On our landscape packages and what we have to offer in Alaska. So I think that we're in a we're in a pretty strong place right.

James Hardiman: I guess, just really quick on the offer that delivering your targets early any indication when we might get new long term outlook Matt.

Man I love that you have been asking that so I think we got a we got to get to the targets not just forecast them. So my expectation would be we'll be talking about our next set hopefully in early 2026, but that's you know we got to deliver.

James Hardiman: Alright, Thanks, a lot guys.

James Hardiman: Yeah.

Speaker Change: Thank you. Our next question comes from the line of Patrick Scholes with true Security. Please proceed with your question.

Patrick Scholes: Great. Thank you good morning, everyone.

I wanted to follow up on the comment in here.

Patrick Scholes: In the press release about not being completely immune.

Patrick Scholes: From the heightened macro economic geopolitical volatility since given your guidance in December.

Patrick Scholes: Regarding that volatility have you actually seen.

Patrick Scholes: The volatility have an impact on our booking pace as the quarter progressed.

Patrick Scholes: Yes, what we say look we certainly saw ups and downs I mean, we see ups and downs.

Patrick Scholes: Every year, so that's not terribly surprising.

Patrick Scholes: It all it all came out of the bookings we were able to make at the pricing that we wanted to make.

Patrick Scholes: And sets us up as we talked about in a really good position.

Patrick Scholes: At the end of the day people just need to be getting used to the new normal which is exactly what's happening and you know as a matter of fact last week.

Patrick Scholes: Bookings are nicely ahead year over year and not everything is the end all be all for year over year, but it's what we've talked about publicly.

And particularly to the point people were asking about close in our close in bookings last week for the second quarter for literally selling in the second quarter. We don't have that much to go and the booking volume and pricing, but just off the charts.

Patrick Scholes: So we just got it.

Patrick Scholes: Let let the world progress and we will take what we wanted to take as we go.

Patrick Scholes: And carry out the year.

Patrick Scholes: Okay. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Jamie Katz: Hey, good morning, I wanted to talk a little bit about the cadence of cost over the rest of the year I think there were set to be higher dry docks.

Jamie Katz: As I had indicated.

Jamie Katz: On the December call.

Jamie Katz: Expected.

Jamie Katz: The second and third quarter cost would be up a little bit more than the full year and the fourth quarter would be up a little bit less than the full year. So.

Jamie Katz: And nothing has changed since then.

Jamie Katz: Okay.

Jamie Katz: Guys weren't booked maybe like 50% to 70% out for Q2, and then maybe 30 to 50 per cent out for Q3, how is that.

Jamie Katz: Couple of a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like.

Jamie Katz: Yes.

Jamie Katz: All of those numbers that they used to get for the next the current quarter in the next three we're above the top end of all of those ranges and so as a result, as Josh said.

Jamie Katz: About 80% booked for the remainder of this year. If you took the top end of the ranges you'd be if you will.

Jamie Katz: Get an average of 70 for the rest of the year. So we're at the top end of or over the top end of all the ranges.

Speaker Change: Excellent that's very helpful. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Okay.

Conor Cunningham: Hi, everyone. Thank you you've been super clear on the strength of bookings, but.

Speaker Change: I wanted to just maybe come back to the law.

Speaker Change: Levers that you have if things did weaken you talked about how it would work.

Speaker Change: To achieve a lot of these results that are kind of falling through and again it doesn't seem like it's a demand problem, but like at the end of the day, if things were to weaken what cost levers do you think you have right now that could be low hanging fruit if things were to deteriorate on some level. Thank you.

Speaker Change: Well good morning.

Speaker Change: The the best lever, we probably have as you know if if the world takes a turn we do.

Speaker Change: Don't hedge because we don't hedge on commodities generally speaking commodities turn with that world and so there's a natural hedge in our business by by the basis of how we run it.

Speaker Change: But we clearly can do a lot of things, if we really choose or need to do that.

Speaker Change: Our first goal is to deliver the results that we want to deliver because we think that's the right thing for the business right. The guest experience that we want to give.

Speaker Change: The investments that we want to make for the long term not just for the short term.

Speaker Change: But everything is always looked at pretty critically to decide what makes sense in the current environment because the world does change and.

Speaker Change: And we've clearly got room should we need to make a lot of changes depending on what that circumstance could be.

Speaker Change: Okay, and then I think a big part of the plan this year.

Speaker Change: Over the next couple of years.

Speaker Change: Supply is a little bit limited for you guys has been to push marketing spend and to drive improvement.

Improved revenue quality and so on so could you just talk a little bit about how that strategy is playing out right now it seems like it's working but I just did the two levers that I think from a revenue management standpoint, or just like inventory and marketing. So if you could just.

Speaker Change: Talk about the balance of those two going forward that'd be helpful. Thank you.

Speaker Change: Yes, thanks very much.

Speaker Change: Five six years ago.

Speaker Change: Still.

Speaker Change: A good amount less than many others in the vacation and leisure space. We think we're getting the balance right as far as you know is it working.

Speaker Change: You know look first quarter just ended our yields over the last two years are up 24%.

Speaker Change: I think that's probably a pretty good indication indication that it is working and also that you don't you don't need new builds to drive that demand.

Speaker Change: The majority of our brands don't have any so that same ship.

Speaker Change: Sales if you will.

Speaker Change: I appreciate it. Thank you. Thank you.

Speaker Change: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

David Katz: Hi, good morning.

Speaker Change: And well done all around I wanted to.

Speaker Change: Just bring forth a debate.

Speaker Change: We have a lot and is there any evidence that as sheryl around.

Speaker Change: Any of the bookings from consumers trading down.

Speaker Change: Right.

Speaker Change: We assume that there is some trading down to the value of our crews versus the much much more expensive hotels, particularly domestically and.

Speaker Change: Potentially.

Speaker Change: Some that are maybe priced out of our crews that may be at a different out into the spectrum is there anything that we can discuss or unpack there.

So I think there's two separate questions. So first the concept of a core trading down to a cruise.

Speaker Change: I'd look at it differently I would say that we have a tremendous price to experience ratio compared to land.

Speaker Change: And people recognize that value more and more if they're looking to make the dollar go further.

And even though it Pisses me off when we look at the price gap because theres, so much opportunity for us and I'm excited about.

Speaker Change: And those types of times that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land.

Speaker Change: As far as the fact that we're carrying more new to cruise than we ever have.

Speaker Change: New to cruise the growth rate for Q1 alone was significantly mulch.

Speaker Change: Multiple times higher than the growth rate on the capacity so it's working.

Speaker Change: As far as trading down within cruise Theres, nothing that we see because our brands have a pretty good.

Speaker Change: Eight days, which are very different from inside cabins on <unk>. So we have a lot of product to be able to source lots of folks brand by brand up and down the price points.

Speaker Change: Uh huh.

Speaker Change: Oh I apologize for the word choice about trading down.

Speaker Change: But.

Speaker Change: Alright, Thank you very much okay.

Speaker Change: My quick follow up.

Speaker Change: Is that the sale of the seaborne ship at a gain can.

Speaker Change: Can you just elaborate on the.

Speaker Change: The reasoning behind that and the timing of it.

Speaker Change: Just a little insight. Thank you yeah yeah.

Speaker Change: If it was a decision that was in the best interest of the shareholders.

Speaker Change: It's as simple as that you know nothing is for sale, we don't have a for sale sign up but if people are approaching us unsolicited for offers I'll listen.

Speaker Change: If it's the right thing to do for the shareholders.

Speaker Change: And then we'll do it or not was it doesn't happen very often but that was one of these cases.

Speaker Change: I appreciate it thanks very much.

Speaker Change: Seaborne is a phenomenal brand we are talking about one of the youngest fleets around the world Ultra luxury.

Speaker Change: And they are going gangbusters. So the yields are up nicely like theres nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

Speaker Change: Got it thanks a lot.

Speaker Change: Thanks.

Speaker Change: Thank you. Our next question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Speaker Change: Great. Thanks.

Speaker Change: So Josh close in demand off the charts no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear.

Speaker Change: So maybe multiyear could you elaborate on new customer acquisition that youre seeing across the portfolio, maybe tied to the new marketing that you that you cited and walked through and just structural improvement opportunities that you see across your brands given the portfolio approach that you have.

Speaker Change: Yes, so with respect to gas composition.

Speaker Change: It's actually a pretty interesting place an outright because effectively.

Speaker Change: With no growth on the Horizon and every brand has the same capacity that they have year over year, which means it's if we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies.

Speaker Change: And so the <unk>.

D of first time cruisers brand switchers and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship.

Speaker Change: And so yes, we have been.

Speaker Change: Ramping up first timers, which I think is a testament to the to the brand strength and the marketing that they've been doing in the experiences that they give.

Speaker Change: Streams slow down for us in capacity growth, but the industry overall is slowing.

Speaker Change: Its growth rate. So so I think that there is.

Speaker Change: It certainly doesn't hurt us it helps us.

Speaker Change: With respect to your second question could you just elaborate a little bit more on what you were thinking.

Speaker Change: Yes.

Speaker Change: Our brands are on our on our spectrum from <unk>.

Speaker Change: Haven't recovered past 19 level to not yet there some of that has to do as you've heard me say in the past was what their 19 levels were to begin with.

Speaker Change: And so we're not patting ourselves on the back in some cases, because they exceed the 2019 levels because they should have been higher than in the end. They are now with plenty of runway I would say the vast majority of our brands have.

Speaker Change: If we boil it down to ROIC, the vast majority of our brands.

Speaker Change: Multiple points.

Speaker Change: And Thats, what the direct the trajectory is for those brands they are making jumped by leaps and bounds and they've got a lot more to go and I am excited about that.

Matthew Boss: Great and then David maybe just to switch gears on your goal to return to the fortress balance sheet. How are you thinking about capital allocation priorities beyond debt pay down as you approach investment grade metrics.

Speaker Change: So as Josh said before.

In the immediate.

Speaker Change: Debt pay down is priority, one two and three but as I indicated in my.

Speaker Change: Remarks, we're talking about a potentially.

Speaker Change: Potentially a $5 billion additional pay down and when you start thinking about 2026.

Speaker Change: It should be beyond investment grade metrics leverage and so as a result of that will be not only are we investing in ourselves and all of the examples that Josh gave but we will be considering other priorities and we'll be talking about that as we move forward into 2026 and beyond.

Speaker Change: Great Congrats on the continued momentum.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Lindsay desk with Goldman Sachs. Please proceed with your question.

Lindsay desk: Hi, guys. Thank you so much for taking the question and congrats on a great Q1, I guess going back to luxury for a second you know you have seaborne you have Cunard obviously the last few weeks, we've had mixed commentary from other companies about luxury curious just to zoom in on that anything you would kind of flat now and what you're seeing on the luxury.

Speaker Change: Any trends specifically.

Lindsay desk: Yes, good morning.

Lindsay desk: Nothing nothing interesting to talk about I don't think as you heard me say seaborne has been making great progress year over year as as Qunar. So.

Speaker Change: Yeah I'm sorry.

Lindsay desk: Yes, I guess the answer is no.

Lindsay desk: So Jordan suite.

Lindsay desk: Give around that would be helpful. Thanks.

Lindsay desk: Yes. Thanks.

Lindsay desk: No first of all from an operational standpoint.

Lindsay desk: Everything is proceeding exactly on track and the teams are doing a phenomenal job not only in the in the finishing up of the construction, but in the the massive undertaking that is training and getting ready on the land based operations themselves to be able to deliver the experiences that we want to deliver.

Lindsay desk: We are.

Lindsay desk: Seeing the premiums that we expected to see.

Lindsay desk: When when we started this project a long time ago.

Lindsay desk: And so things are progressing exactly I honestly exactly as planned which is a which is a shout out to the teams for doing all the right things.

Lindsay desk: Great. Thank you.

Lindsay desk: Excellent.

Speaker Change: Thank you. Our next question comes from the line of Vince <unk> with.

Speaker Change: Cleveland Research. Please proceed with your question.

Speaker Change #100: Thanks, I wanted to lean a little bit more into land there.

Speaker Change #100: What would you expect the celebration key to kind of be.

Speaker Change #100: Peak.

Speaker Change #100: Notice ability in your bookings surge in light of how that carnival product books, the opening and awareness of the island and then additionally.

Speaker Change #102: This is the new part of your land portfolio, but you have quite a sizable footprint already I know there is expansion with I.

Speaker Change #102: I think it's half Moon Cay, Pierre and investment into the Alaska part of the portfolio. Just how are you thinking about your opportunity in the land stuffs in years ahead.

Speaker Change #102: Yeah. Thanks.

Ben Chaiken: Thanks, Ben So a.

Ben Chaiken: A bunch of questions there so as far as the impact of celebration of <unk> I think it's pretty fascinating.

Ben Chaiken: We're still a make believe land right. So everything we're putting out in and on the marketing side really is in the imagination.

Ben Chaiken: And I think.

Ben Chaiken: That coupled with as you said the primary tenant there is gonna be carnival cruise line.

The amount of which is short cruises three four or five nighters that have a much shorter window than booking on the sevens and eights.

Ben Chaiken: Means that we haven't seen this but by any stretch of imagination, we haven't seen the full impact carnival hasnt seen the full impact on the benefits and I do think.

Ben Chaiken: The ability to.

Ben Chaiken: Ability to leverage in operations and generate content and guest experience with our guests with the trade is going to be a springboard forward.

Ben Chaiken: Which is which is a great thing for them for celebration.

Ben Chaiken: We we easily see a path where by the end of the decade, what was about $6 5 million gas flowing to our Caribbean footprint in 2024 could be upwards of $11 million.

Ben Chaiken: Which is which is a phenomenal thing that I think the thing that we're learning, which we haven't really benefit from unfold is how we position, how we brand and position our.

Ben Chaiken: Our our.

Ben Chaiken: Our destinations themselves to make them part of the consideration set of the consumer.

Ben Chaiken: Because historically it has very much been about just the crews and the brand and then delight them when they're in our destination, but we have the ability to make it a driver for taking the crews to begin with and so we're starting to lean into that obviously with celebration key and were going to do more of that in celebration key is something that when.

Ben Chaiken: When we opened that is just phase one.

Ben Chaiken: And we've got plans that will take us through the end of the decade to be able to significantly increase that throughput, which as I mentioned and helps us drive that guest count up.

Ben Chaiken: To about $11 million.

Ben Chaiken: With respect to with respect to Alaska.

Ben Chaiken: Look we if you haven't been there I strongly suggests you've got to do it by cruise and if you do it you have to do a cruise land Sea Packers because that is the greatest way to see the great state.

Ben Chaiken: And it is a strategic advantage that we do have given the scope of our operations in a lab and Alaska and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change #104: Uh huh.

Speaker Change #105: Great I wanted to sneak one more in you mentioned a little bit earlier on the European business in the travel industry more broadly right now theres a lot of talk on inbound and outbound.

Speaker Change #105: For the U S and I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the north American brands heavily over indexed to North American guests, but anything that you've seen in your data on any shift in flow of inbound interest to the U S and if that at all as a big part of <unk>.

Speaker Change #105: Your business.

Speaker Change #105: Well I guess I'll answer it in reverse is it a big part of our business.

Speaker Change #105: It's not a huge part of our business.

Speaker Change #105: We strategically tried to put our ships where our guest base is.

Speaker Change #105: I think in the volatility that we talked about in the first quarter.

Certainly Canada were swept up in that now for us that's 3% to 4% of our business just to put it into context, but clearly we read that you're you know everybody read the news and we're not we're not immune from from from that dynamic, but going back to the strategy by being able to target specific countries with specific brands.

Speaker Change #105: Cater to their needs and preferences and position them where people can get to.

Speaker Change #105: Drive if they want to it's a recipe for success for us in this environment.

Speaker Change #105: Great. Thanks.

Speaker Change #106: Operator, we have time for one more.

Speaker Change #107: Thank you. Our final question comes from the line of Chris Stifle apples with <unk>. Please proceed with your question.

Speaker Change #108: Good morning, Josh David team. Thanks for taking my question, so I'm going to close it out I'll keep it to one.

Speaker Change #107: And hopefully try to I guess consolidate here.

Speaker Change #108: The question is around the math because I think this is the question that I'm getting here investors are trying to tease out the health.

Speaker Change #108: Of the consumer and whether any weakness at this point is localized to a specific consumer demographic or region. So if we use the airlines here as a proxy there was a comment earlier on the call.

Speaker Change #108: Last week U S domestic basic economy close in weakness.

Speaker Change #108: Opposite of what you're seeing here.

Speaker Change #108: What is similar it sounds like premium international.

Speaker Change #108: Demand similar so as we look across your brand scale.

Speaker Change #108: Temporary premium luxury and we adjust for mix shifts.

Speaker Change #108: The earlier question a question on regional source of travelers is there anything that is different or unique with the pace of bookings were onboard spend.

Speaker Change #108: At this point.

Speaker Change #108: So I guess consolidated question the short answer is no.

Speaker Change #108: Keep in mind, we're airlines come out with a lot of commentary.

Speaker Change #108: Commentary, we are different from airlines and even different from hotels, we don't rely on business business travel is not part of our ports.

Speaker Change #108: Portfolio.

Speaker Change #108: So it is about the consumer and good.

Good times and bad times people take vacations.

Speaker Change #108: The unemployment rate in this country in the developed countries that we really sourced from our fantastically low.

Speaker Change #108: So does it mean that people want to think hard about how they spend their vacation dollar absolutely is it more important when times are stressful that they get away and take a vacation does it mean more to them absolutely.

Speaker Change #108: And I think we've learned that.

Speaker Change #108: Since the turn of this decade.

Speaker Change #108: How much importance people people place on it.

Speaker Change #108: So I.

Speaker Change #108: I think we are resilient and will continue to work hard to deliver so since you said it was one question. Thank you for.

Speaker Change #108: Doing what I asked I think we'll end it there. So thanks, everybody and talk to you next quarter.

Speaker Change #109: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Q1 2025 Carnival Corp & PLC Earnings Call

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