Q2 2025 Carnival Corp & PLC Earnings Call

Beth Roberts: Greetings. Welcome to the Carnival Corporation PLC's second quarter 2025 earnings call.

Operator: Greetings. Welcome to the Carnival Corporation PLC's Q2 2025 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may now begin.

Greetings and welcome to the Carnival Corporation and plc second quarter 2025 earnings call.

Operator: At this time, all participants are in listen-only mode.

At this time, all participants are in listen only mode.

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad.

A brief question and answer session will follow the formal presentation.

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

Operator: As a reminder, this conference is being recorded.

This conference is being recorded.

Beth Roberts: It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may now begin. Thank you.

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

Beth Roberts: Thank you. Good morning, and welcome to our Q2 2025 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. I will refer you to the forward-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, ROIC, and related statistics for all will be on an adjusted basis unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release.

Speaker Change: Thank you good morning, and welcome to our second quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our chairman Micky Arison.

Beth Roberts: Good morning and welcome to our second quarter 2025 earnings conference call.

Beth Roberts: I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our Chair, McIarist. 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, 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, ROIC, and related statistics, for all, will be on an adjusted basis unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release.

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 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.

Speaker Change: Without fuel EBITDA net income Rois C and related statistics for all 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 disclosures are also continue.

Beth Roberts: A reconciliation to the most directly comparable US GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. 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.

Beth Roberts: 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.

Speaker Change: And in our earnings press release and in our Investor presentation.

Beth Roberts: Please visit our corporate website where our earnings press release and investor presentation can be found.

Please visit our corporate website, where our earnings press release and Investor presentation can be found.

Beth Roberts: With that, I'd like to turn the call over to Josh. Thanks, Beth.

Josh Weinstein: With that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Before we begin, I'd like to take a moment to address the conflict in the Middle East. The escalation of the past 2 weeks, culminating over the last few days, has been swift. While we certainly hope for a quick and peaceful resolution, and it has not yet had any discernible impact on our business, this is all unfolding too quickly in real-time to try to project how it could impact our future business. Like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed. In the interim, our thoughts and prayers are for the safety of all innocent civilians and for the brave men and women of the US Armed Forces who work tirelessly to protect the United States of America. Turning to our business.

Josh Weinstein: Thanks, Bob before we begin I'd like to take a moment to address the conflict in the middle East.

Josh Weinstein: Before we begin, I'd like to take a moment to address the conflict in the Middle East. The escalation of the past two weeks culminating over the last few days has been Swift. While we certainly hope for a quick and peaceful resolution, and it has not yet had any discernible impact on our business, This is all unfolding too quickly in real time to try to project how it could impact our future. Like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed.

The escalation of the past two weeks, culminating over the last few days.

Speaker Change: Has been Swift.

Speaker Change: Well, we certainly hope for a quick and peaceful resolution and it has not yet had any discernible impact on our business. This is all unfolding too quickly in real time to try to project, how it could impact our future business like many others, we will actively monitor the situation over the coming days and weeks.

To evaluate its potential effects on our business and provide updates as needed.

Josh Weinstein: In the interim, our thoughts and prayers are for the safety of all innocent civilians and for the brave men and women of the U.S. Armed Forces who work tirelessly to protect the United States of America.

The interim.

Speaker Change: Our thoughts and prayers are for the safety of all innocent civilians.

Speaker Change: For the Brave men and women of the U S Armed forces, who work tirelessly to protect the United States of America.

Josh Weinstein: Turning to our business. another quarter on the books, and another set of phenomenal results. This marks eight quarters in a row we've achieved record revenues on record yield. We also hit new second quarter highs for EBITDA and operating income, both in total and on a per ALBD basis, while customer deposits also reached an all-time high. Year over year, EBITDA was up 26%. Operating income increased by 67%. and net income more than tripled as we continue to benefit from our focus on commercial execution. Net income came in $185 million better than guidance as we outperformed across the board.

Speaker Change: Turning to our business.

Josh Weinstein: Another quarter on the books and another set of phenomenal results. This marks 8 quarters in a row we've achieved record revenues on record yields. We also hit new Q2 highs for EBITDA and operating income, both in total and on a per ALBD basis, while customer deposits also reached an all-time high. Year-over-year, EBITDA was up 26%, operating income increased by 67%, and net income more than tripled as we continue to benefit from our focus on commercial execution. Net income came in $185 million better than guidance as we outperformed across the board. Yields grew by almost 6.5%, beating our guidance by 200 basis points. Both ticket and onboard equally outperformed on very strong closing demand, reaffirming the strength of our consumer. Unit costs also came in 200 basis points better than expected on timing between the quarters.

Another quarter on the books and another set of phenomenal results.

Speaker Change: This marks eight quarters in a row, we have achieved record revenues on record yields.

Speaker Change: We also hit new second quarter highs for EBITDA and operating income both in total and on a per a L. B day basis, while customer deposits also reached an all time high.

Speaker Change: Year over year EBITDA was up 26%.

Speaker Change: Operating income increased by 67%.

Speaker Change: Net income more than tripled as we continue to benefit from our focus on commercial execution.

Speaker Change: Net income came in at $185 million better than guidance as we outperformed across the board.

Josh Weinstein: Yields grew by almost six and a half percent, beating our guidance by 200 bases. Both ticket and on board equally outperformed on very strong closing demand, reaffirming the strength of our consumer. Unit costs also came in 200 basis points better than expected on timing between the course. This was yet another quarter with EBITDA margins up significantly year over year. You know, investors often ask me, can margins get above 2019 levels? Well, as I've always answered, I never thought of 2019 as a ceiling. And we've now proven that out. Last quarter EBITDA margins were 140 basis points above 2019 and this quarter they were 200 basis points higher.

Speaker Change: Yields grew by almost 6.5% beating.

Speaker Change: Beating our guidance by 200 basis points.

Speaker Change: Both ticket and onboard equally outperformed a very strong close in demand reaffirming the strength of our consumer.

Speaker Change: Unit costs also came in 200 basis points better than expected on timing between the quarters.

Josh Weinstein: This was yet another quarter with EBITDA margins up significantly year-over-year. Investors often ask me, Can margins get above 2019 levels? Well, as I've always answered, I never thought of 2019 as a ceiling, and we've now proven that out. Last quarter, EBITDA margins were 140 basis points above 2019, and this quarter, they were 200 basis points higher. In fact, this past quarter's margins were the highest we've achieved in nearly 20 years. This consistently strong performance significantly accelerated progress towards our 2026 SEA Change targets. In December, we telegraphed being able to hit our 50% EBITDA per ALBD growth target at the end of 2025. In March, we said that we expected our 12% return on invested capital target to also materialize at the end of 2025.

Speaker Change: This was yet another quarter with EBITDA margins up significantly year over year.

Speaker Change: Investors often ask me can margins get above 2019 levels well as I've always answered I never thought of 2019 as a ceiling and we've now proven that out laugh.

Speaker Change: Last quarter EBITA margins were 140 basis points above 2019, and this quarter. They were 200 basis points higher in fact, this past quarter's margins were the highest we've achieved in nearly 20 years.

Josh Weinstein: In fact, this past quarter's margins were the highest we've achieved in nearly 20 years. This consistently strong performance significantly accelerated progress towards our 2026 sea change target. In December, we telegraphed being able to hit our 50% EBITDA per ALBD growth target at the end of 2025. In March, we said that we expected our 12% return on invested capital target to also materialize at the end of 2020. And now, we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule.

Speaker Change: This consistently strong performance significantly accelerated progress towards our 2026 C change targets.

Speaker Change: In December.

Speaker Change: We telegraph to being able to hit our 50% EBITDA for a L. B D growth target at the end of 'twenty five.

Speaker Change: In March we said that we expected our 12% return on invested capital target to also materialized at the end of 2025.

Josh Weinstein: Now we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule. We were able to deliver trailing 12-month EBITDA per berth day 52% above our 2023 baseline, and our ROIC surpassed 12.5%, more than doubling in less than 2 years. Now, this was no small feat, given these are both the highest levels this company has seen in nearly 20 years. Not to be forgotten is our third 2026 commitment to reduce our carbon intensity by 20% as compared to 2019. I'm very pleased to report we have also just met this target as well. This is not only great for the environment, it's also great for our bottom line. Again, thanks to each of our phenomenal team members, we topped these milestones in half the time originally expected.

Speaker Change: And now we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule.

Josh Weinstein: We were able to deliver trailing 12-month EBITDA per birthday, 52% above our 2023 baseline, and our ROIC surpassed 12.5%, more than doubling in less than two years. This was no small feat, given these are both the highest levels this company has seen in nearly 20 years.

Speaker Change: We were able to deliver trailing 12 months EBITDA per birthday, 52% above our 20th twenty-three baseline.

Speaker Change: And our Rois see surpassed 12.5% more than doubling in less than two years of.

Speaker Change: This was no small feat given these are both the highest levels. This company has seen in nearly 20 years.

Josh Weinstein: Not to be forgotten is our third 2026 commitment to reduce our carbon intensity by 20% as compared to 2019. I'm very pleased to report we have also just met this target as well. This is not only great for the environment, it's also great for our bottom line. Again, thanks to each of our phenomenal team members, we topped these milestones in half the time originally expected. And even better news, we have so much more potential to take our margins, returns, and results even higher.

Speaker Change: Not to be forgotten is our third 20 twenty-six commitment to reduce our carbon intensity by 20% as compared to 2019.

Speaker Change: I'm very pleased to report we have also just met this target as well.

Speaker Change: This is not only great for the environment. It's also great for our bottom line.

Speaker Change: Again thanks.

Speaker Change: Thanks to each of our phenomenal team members, we top these milestones and half the time originally expected.

Josh Weinstein: Even better news, we have so much more potential to take our margins, returns, and results even higher. With our 2026 targets in the rear-view mirror, we anticipate setting new targets in early Q2 next year, and I look forward to raising the bar even higher. In the short term, this outperformance has also enabled us to take up our full-year guidance again. This includes raising our yield guidance to 5% based on our strong Q2 results while affirming yield expectations for the remainder of the year. Cumulatively, that will take our yields up 16% across 2024 and 2025. In a world of heightened volatility, the amazing cruise experiences our portfolio of cruise brands deliver at a truly exceptional value simply stand out.

Speaker Change: And even better news, we have so much more potential to take our margins returns and results even higher.

Josh Weinstein: So, with our 2026 targets in the rear view mirror, we anticipate setting new targets in early Q2 next year, and I look forward to raising the bar even higher. In the short term, this outperformance has also enabled us to take up our full-year guidance again. This includes raising our yield guidance to 5% based on our strong second quarter results while affirming yield expectations for the remainder of the year. Cumulatively, that will take our yields up 16% across 2024 and 2025. In a world of heightened volatility, the amazing cruise experiences our portfolio of cruise brands deliver at a truly exceptional value simply stand out.

Speaker Change: So with our 'twenty 'twenty six targets in the rearview mirror, we anticipate setting new targets in early Q2 next year and I look forward to raising the bar even higher.

Speaker Change: In the short term. This outperformance has also enabled us to take up our full year guidance again.

Speaker Change: This includes raising our yield guidance to 5% based on our strong second quarter results, while affirming yield expectations for the remainder of the year.

Speaker Change: Cumulatively.

Speaker Change: That will take our yields up 16% across 'twenty 'twenty, four and 'twenty 'twenty five.

Speaker Change: In a world of heightened volatility the.

Speaker Change: The amazing cruise experiences our portfolio of cruise brands deliver a truly exceptional value.

Speaker Change: <unk> stand out it's enabled us to deliver two consecutive quarters that were significantly better than expected.

Josh Weinstein: It's enabled us to deliver 2 consecutive quarters that were significantly better than expected and maintain strong 4% yield growth in the H2 of the year, consistent with our original guidance in December, which I would remind you was given well before much of 2025's macroeconomic and geopolitical turbulence had surfaced. Now, would the H2 of the year have been even stronger but for all of this noise? Absolutely. No excuses, though. We need to deal in the realities of the world we live in. While it's proving to be a fairly unpredictable place of late, we are well-positioned, and clearly, we'll do our best to meet or exceed guidance, taking another significant step forward for the company. We also continue to set ourselves up well for 2026. Our book position is in line with last year's record levels and at historically high prices.

Josh Weinstein: It's enabled us to deliver two consecutive quarters that were significantly better than expected and maintain strong four percent yield growth in the back half of the year, consistent with our original guidance in December, which I would remind you was given well before much of 2025's macroeconomic and geopolitical turbulence had surfaced. Now, Would the second half of the year have been even stronger, but for all of this noise? Absolutely. No excuses, though. We need to deal in the realities of the world we live in. And while it's proving to be a fairly unpredictable place of late, we are well positioned and clearly will do our best to meet or exceed guidance, taking another significant step forward for the.

Speaker Change: And maintained strong 4% yield growth in the back half of the year consistent with our original guidance in December which I would remind you was given well before much of 'twenty 'twenty fives macroeconomic and geopolitical turbulence had surfaced.

Speaker Change: No.

Speaker Change: With the second half of the year have been even stronger but for all of this noise absolutely no excuses, though we need to deal with the realities of the world We live in.

Speaker Change: And while it's proving to be a fairly unpredictable place of late.

Speaker Change: We are well positioned and clearly we will do our best to meet or exceed guidance, taking another significant step forward for the company.

Josh Weinstein: We also continue to set ourselves up well for 2020. Our book position is in line with last year's record levels and at historically high prices. Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price and our sharpened yield management tools are helping us optimize our performance in the current environment. Our strong results, book position, and outlook are a testament to the success of our ongoing strategy to deliver same-ship, high-margin revenue growth. We remain focused on achieving yield improvement by driving demand that outpaces our supply, and we have a lot more in store to keep our strong momentum going.

Speaker Change: We also continue to set ourselves up well for 2026.

Speaker Change: Our book position is in line with last year's record levels and at historically high prices.

Josh Weinstein: Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price, and our sharpened yield management tools are helping us optimize our performance in the current environment. Our strong results, book position, and outlook are a testament to the success of our ongoing strategy to deliver same-ship, high-margin revenue growth. We remain focused on achieving yield improvement by driving demand that outpaces our supply, and we have a lot more in store to keep our strong momentum going. We are counting down the days to the opening of Celebration Key, which is now less than a month away.

Speaker Change: Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price and our sharpened yield management tools are helping us optimize our performance in the current environment.

Speaker Change: Our strong results book position and outlook are a testament to the success of our ongoing strategy to deliver same ship high margin revenue growth.

Speaker Change: We remain focused on achieving yield improvement by driving demand that outpaces, our supply and we have a lot more in store to keep our strong momentum going.

Josh Weinstein: We are counting down the days to the opening of Celebration Key, which is now less than a month away. with the largest lagoons in the Caribbean at over 275,000 surface square feet, multiple times that of any other private cruise destination in existence or in construction. Over one and a half miles of white sand beach and the world's largest swim up bar and largest sand castle, we are gearing up to deliver even more fantastic experiences for Carnival guests than ever before. We are on schedule to welcome our first ship, Carnival Vista, on July 19th and intentionally ramp up from there into the fourth quarter so that we can make sure the guest experience is as extraordinary as possible from the start.

Speaker Change: We are counting down the days to the opening of celebration kit, which is now less than a month away.

Josh Weinstein: With the largest lagoons in the Caribbean at over 275,000 surface square feet, multiple times that of any other private cruise destination in existence or in construction, over one and a half miles of white sand beach, and the world's largest swim-up bar and largest sandcastle, we are gearing up to deliver even more fantastic experiences for Carnival guests than ever before. We are on schedule to welcome our first ship, Carnival Vista, on 19 July and intentionally ramp up from there into Q4 so that we can make sure the guest experience is as extraordinary as possible from the start. It's gratifying to see that already Celebration Key is consistently ranked among the most searched cruise destinations on Google, and it hasn't even opened yet.

Speaker Change: With the largest lagoons and the Caribbean at over 275000 surface square feet multiple times that of any other private cruise destination in existence or in construction.

Speaker Change: Over one and a half miles of white sand beach, and the world's largest swim up bar and largest sand castle, we are gearing up to deliver even more fantastic experiences for carnival guests than ever before.

Speaker Change: We are on schedule to welcome our first ship Carnival Vista on July 19th and intentionally ramp up from there into the fourth quarter. So that we can make sure. The guest experience is as extraordinary as possible from the start.

Josh Weinstein: You know, it's gratifying to see that already Celebration Key is consistently ranked among the most searched cruise destinations on Google, and it hasn't even opened yet. We fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests to our expertly curated ultimate beach day. Once complete, we'll be augmenting our marketing materials with live footage and imagery from this amazing destination. And of course, word of mouth from over 2 million guests annually will amplify our share of voice.

Speaker Change: It's gratifying to see that already celebration key is consistently ranked among the most searched cruise destinations on Google and it hasn't even opened yet we fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests who are expertly curated.

Josh Weinstein: We fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests to our expertly curated ultimate beach day. Once complete, we'll be augmenting our marketing materials with live footage and imagery from this amazing destination. Of course, word of mouth from over 2 million guests annually will amplify our share of voice. We're also on track for the mid-2026 opening of a significant expansion at RelaxAway Half Moon Cay, our pristine Caribbean oasis. This spectacular tropical paradise, already ranked among the best private islands in the Caribbean, invites our guests to enjoy an idyllic beach day full of white sand, turquoise waters, refreshing ocean breezes, delicious food, tropical drinks, and opportunities galore to do exactly as its new name invites you to do, relax.

Speaker Change: Ultimate Beach day.

Speaker Change: Once complete will be augmenting our marketing materials with live foot addition imagery from this amazing destination and of course word of mouth from over 2 million guests annually will amplify our share of voice.

Josh Weinstein: We're also on track for the mid-2026 opening of a significant expansion at Relax Away, Half Moon Key, our pristine Caribbean oasis. This spectacular tropical paradise, already ranked among the best private islands in the Caribbean, invites our guests to enjoy an idyllic beach day full of white sand, turquoise waters, refreshing ocean breezes, delicious food, tropical drinks, and opportunities galore to do exactly as its new name invites you to do, relax. We've shaped many itineraries that combine these perfectly paired destinations in order to provide our guests with both the ultimate and the idyllic beach days, all on one vacation.

Speaker Change: We're also on track for the mid twenties 26 opening of a significant expansion at relax away half Moon Cay are pristine Caribbean Oasis.

Speaker Change: This spectacular tropical Paradise already ranked among the best private islands in the Caribbean.

Speaker Change: Invites our guests to enjoy and idyllic Beach day full of white sand turquoise waters refreshing ocean breezes delicious food tropical drinks and opportunities galore to do exactly as its new name invites you to do.

Speaker Change: Relax.

Josh Weinstein: We've shaped many itineraries that combine these perfectly paired destinations in order to provide our guests with both the ultimate and the idyllic beach days, all on one vacation. During the quarter, we also announced another meaningful expansion and enhancement to our beautiful destination, Mahogany Bay in Roatán, Honduras. Already rated one of the highest destinations in the Caribbean, upgrades will include a large pool with a swim-up bar, a beautiful new private beach club, and doubling the beach line to almost half a mile. This destination will be renamed Isla Tropicale and, along with Celebration Key and RelaxAway Half Moon Cay, as the pinnacle of our seven Caribbean gems, marketed as the Paradise Collection. As beaches are the number one destination for vacationing Americans, it is no accident that this is central to our destination strategy.

Speaker Change: We've shaped many itineraries that combined these perfectly paired destinations in order to provide our guests with both the ultimate.

Speaker Change: And the idea of like Beach days, all one vacation.

Josh Weinstein: During the quarter, we also announced another meaningful expansion and enhancement to our beautiful destination, Mahogany Bay in Roatan, Honduras. Already rated one of the highest destinations in the Caribbean, upgrades will include a large pool with a swim-up bar, a beautiful new private beach club, and doubling the beach line to almost half a mile. This destination will be renamed Isla Tropical and, along with Celebration Cay and Relax Away Half Moon Cay, as the pinnacle of our seven Caribbean gems, marketed as the Paradise Collection. You know, if beaches are the number one destination for vacationing Americans, it is no accident that this is central to our destination strategy.

Speaker Change: During the quarter, we also announced another meaningful expansion and enhancement to our beautiful destination mahogany Bay in Roatan Honduras.

Speaker Change: Already rated one of the highest destinations in the Caribbean upgrades will include a large pool with the swim up bar, a beautiful new private Beach club and.

Speaker Change: And doubling the beach line to almost half a mile.

Speaker Change: This destination will be renamed East to let Tropicana and along with celebration key and relax away half Moon Cay as the pinnacle of our seven Caribbean gems marketed as the Paradise collection.

Speaker Change: You know its beaches are the number one destination for vacationing Americans. It is no accident that this is central to our destination strategy.

Josh Weinstein: Our seven Caribbean gems collectively provide miles upon miles of some of the most beautiful beaches in the world. by making targeted incremental investments and stepping up our marketing efforts across this portfolio. We believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion, taking share from land-based alternatives.

Josh Weinstein: Our seven Caribbean gems collectively provide miles upon miles of some of the most beautiful beaches in the world. By making targeted incremental investments and stepping up our marketing efforts across this portfolio, we believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion, taking share from land-based alternatives. At the same time, we continue to make investments in our existing fleet that will generate new demand and enhance pricing. AIDAdiva recently reentered service, the first ship to undergo the AIDA Evolution upgrade. Since her revamp and reintroduction, AIDAdiva has been knocking it out of the park with a huge take-up for its many added bar and specialty dining venues and rave reviews for its ship-wide enhancements.

Speaker Change: Our seven Caribbean Jim's collectively provide miles upon miles of some of the most beautiful beaches in the world.

Speaker Change: Making targeted incremental investments and stepping up our marketing efforts across this portfolio.

Speaker Change: We believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion taking share from land based alternatives.

Josh Weinstein: At the same time, we continue to make investments in our existing fleet that will generate new demand and enhance price. AIDA DIVA recently re-entered service, the first ship to undergo the AIDA Evolution Upgrade. Since her revamp and reintroduction, AIDA DIVA has been knocking it out of the park with a huge take up for its many added bar and specialty dining venues and rave reviews for its ship-wide enhancements. This success is a great sign for the remaining six vessels in the AIDA fleet that will undergo this upgrade over the next few years. We also recently ordered two new builds for AIDA for delivery in fiscal 2030 and 2032 as we reinforce our strategy to rebalance the company towards our higher returning brand.

Speaker Change: At the same time, we continue to make investments in our existing fleet that will generate new demand and enhanced pricing.

Speaker Change: I eat a diva recently reentered service the first ship to undergo the ETA evolution upgrade.

Speaker Change: Since her revamp and reintroduction.

Speaker Change: <unk> has been knocking it out of the park with a huge take up for its many added bar and specialty dining venues and rave reviews for its ship wide enhancements.

Josh Weinstein: This success is a great sign for the remaining 6 vessels in the AIDA fleet that will undergo this upgrade over the next few years. We also recently ordered 2 new builds for AIDA for delivery in fiscal 2030 and 2032, as we reinforce our strategy to rebalance the company towards our higher-returning brands. These next-generation ships, coupled with the AIDA Evolution program, modernizing much of the existing fleet, will drive even more demand for our AIDA brand, which is already synonymous with cruising in Germany. Additionally, Carnival Cruise Line recently announced exciting new features for its fourth and fifth incredibly successful Excel-class ships for delivery in 2027 and 2028. Carnival Festivale and Carnival Tropicale will feature Sunsation Point, a new outdoor zone on the top 3 decks. Purposely designed to be the most family-friendly water park at sea with 6 exhilarating slides, including 2 family raft slides.

Speaker Change: This success is a great sign for the remaining six vessels in the Aida fleet that will undergo this upgrade over the next few years.

Speaker Change: We also recently ordered two new builds for Aida for delivery in fiscal 'twenty 30, and 2032 as we reinforce our strategy to rebalance the company towards our higher returning brands.

Josh Weinstein: These next generation ships, coupled with the AIDA evolution program, modernizing much of the existing fleet. will drive even more demand for our AIDA brand, which is already synonymous with cruising in Germany.

Speaker Change: These next generation ships, coupled with the Aida evolution program modernizing much of the existing fleet.

Speaker Change: We will drive even more demand for our Aida brand, which is already synonymous with cruising in Germany.

Josh Weinstein: Additionally, Carnival Cruise Line recently announced exciting new features for its fourth and fifth incredibly successful XL class shifts for delivery in 2027 and 2028. Carnival Festival and Carnival Tropical will feature Sensation Point, a new outdoor zone on the top three decks, purposely designed to be the most family-friendly water park at sea, with six exhilarating slides, including two family raft slides, and, for the first time, the fun will continue into the evening, with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a DJ and a slew of other special evening activities. These shifts will be ideally suited for families, with 70% more interconnecting rooms than prior XL-class shifts.

Speaker Change: Additionally.

Speaker Change: Carnival cruise line recently announced exciting new features for its fourth and fifth incredibly successful X L class ships for delivery in 2027 and 2028.

Speaker Change: Carnival Festival and Carnival tropical will feature sensation point, a new outdoor zone on the top three decks purposely designed to be the most family friendly water Park at sea with six exhilarating slides, including two family RAF slides and for the first.

Josh Weinstein: For the first time, the fun will continue into the evening with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a DJ and a slew of other special evening activities. These ships will be ideally suited for families, with 70% more interconnecting rooms than prior Excel-class ships. Just around the corner, we'll be welcoming our next new build, Star Princess, sister ship to the hugely successful Sun Princess, awarded Condé Nast Traveler's 2024 Mega Ship of the Year. That means we'll be doubling down on Sun Princess' innovative platform and tremendously successful guest operations, spanning across F&B, entertainment, and its elevated ship within a ship suites sanctuary collection.

Speaker Change: Times, the phone will continue into the evening with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a D J and a slew of other special evening activities.

Speaker Change: These shifts will be ideally suited for families with 70% more interconnecting rooms than prior X L class ships.

Josh Weinstein: And, just around the corner, we'll be welcoming our next new build, Star Prince. Sister Ship to the hugely successful Sun Princess awarded Condé Nast Travelers 2024 Mega Ship of the Year. That means we'll be doubling down on Some Princess's innovative platform and tremendously successful guest operations spanning across F&B, entertainment, and its elevated ship-within-a-ship Suites Sanctuary Collection. With our moderate new build pipeline, including just three ships on order over the next four years, we have ample room to continue to pay down additional debt and return to investment grade leverage metrics, while providing ourselves with a headroom to return value to shareholders.

Speaker Change: And just around the corner, we will be welcoming our next Newbuild Star Princess.

Speaker Change: Sister ship to the hugely successful some princess awarded Condi Nast Traveler's 'twenty 'twenty four mega ship of the year.

Speaker Change: That means we'll be doubling down on some princesses innovative platform and tremendously successful guest operations spanning across F&B entertainment and it's elevated ship within a ship suites sanctuary collection.

Josh Weinstein: With our moderate new build pipeline, including just 3 ships on order over the next 4 years, we have ample room to continue to pay down additional debt and return to investment-grade leverage metrics while providing ourselves with the headroom to return value to shareholders. Yet another opportunity that will help propel us forward is the exciting news Carnival Cruise Line announced just last week. In June 2025, Carnival will be launching a brand new and improved loyalty program. This will be an industry first, tying loyalty benefits and status to total spending on Carnival and spending on everyday purchases with Carnival's co-branded credit card, rather than being based on the lifelong accumulation of days sailed.

Speaker Change: With our moderate Newbuild pipeline, including just three ships on order over the next four years, we have ample room to continue to pay down additional debt and returned to investment grade leverage metrics, while providing ourselves with the headroom to return value to shareholders.

Josh Weinstein: And yet another opportunity that will help propel us forward is the exciting news Carnival Cruise Line announced just last week.

Speaker Change: And yet another opportunity that will help propel us forward is the exciting news Carnival cruise line announced just last week.

Josh Weinstein: In June of next year, Carnival will be launching a brand new and improved loyalty program. This will be an industry-first, tying loyalty benefits and status to total spending on Carnival and spending on everyday purchases with Carnival's co-branded credit card, rather than being based on the lifelong accumulation of days. David will speak to the financial impact, so I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and a long term strategic differentiator for us.

Speaker Change: In June of next year Carnival will be launching a brand new and improved loyalty program.

Speaker Change: This will be an industry first tying loyalty benefits and status. The total spending on carnival and spending on everyday purchases with carnivals co branded credit card rather than being based on a lifelong accumulation of days sales day.

Josh Weinstein: David will speak to the financial impact, so I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and a long-term strategic differentiator for us. I would like to thank our team members, ship and shore, once again for the enthusiasm and commitment they exhibit, which enabled us to deliver happiness to almost three and a half million guests this past quarter by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. It is their combined effort that has made a truly transformational change in this company inside of just two years. I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Speaker Change: David will speak to the financial impact so I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and our long term strategic differentiator for us.

Josh Weinstein: I would like to thank our team members, Ship and Shore, once again, for the enthusiasm and commitment they exhibit, which enabled us to deliver happiness to almost 3.5 million guests this past quarter by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. It is their combined effort that has made a truly transformational change in this company inside of just two years. I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Speaker Change: I would like to thank our team members ship and shore once again for the enthusiasm and commitment they exhibit which enabled us to deliver happiness to almost three and a half a million guests this past quarter by providing them with extraordinary cruise vacations, while honoring the integrity of every ocean we sale.

Speaker Change: Place, we visit and life, we touch it is their combined effort that has made a truly transformational change in this company inside of just two years.

Speaker Change: I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Josh Weinstein: Thank you to our travel agent partners, destination partners, investors, and of course our loyal guests. We could not have done this without all of you.

Josh Weinstein: Thank you to our travel agent partners, destination partners, investors, and of course, our loyal guests. We could not have done this without all of you. While I'm incredibly proud of the great progress our teams have made in such a short amount of time, these results are nowhere near our endpoint. The tailwinds and opportunities before us give us the potential for so much more. With that, I'll turn the call over to David.

Speaker Change: To our travel agent partners destination partners investors and of course, our loyal guests we could not have done this without all of you.

Josh Weinstein: While I'm incredibly proud of the great progress our teams have made in such a short amount of time, these results are nowhere near our end point. The tailwinds and opportunities before us give us the potential for so much more.

Speaker Change: Well I'm incredibly proud of the great progress our teams have made in such a short amount of time.

Speaker Change: These results are nowhere near our endpoint, the tailwind and opportunities before us give us the potential for so much more with that I'll turn the call over to David.

David Bernstein: With that, I'll turn the call over to David. Thank you, Josh. I'll start today with a summary of our 2025 second quarter results. Next I'll provide some color on our improved full year June guidance as well as some key insights on our third quarter guidance. I will also explain the financial impact of Carnival Cruise Line's exciting new loyalty program Carnival Rewards for 2026 and beyond.

David Bernstein: Thank you, Josh. I'll start today with a summary of our Q2 2025 results. Next, I'll provide some color on our improved full-year June guidance, as well as some key insights on our Q3 guidance. I will also explain the financial impact of Carnival Cruise Line's exciting new loyalty program, Carnival Rewards, for 2026 and beyond, and then finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging. Turning to the summary of our Q2 results. Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest-ever Q2 operating results. The outperformance was essentially driven by five things. First, favorability in revenue worth $84 million as yields came in up over 6.4% compared to the prior year, and that was on top of last year's robust 12% increase.

Speaker Change: Josh.

Speaker Change: Start today with a summary of our 2025 second quarter results.

Speaker Change: Next I'll provide some color on our improved full year June guidance as well as some key insights on our third.

Third quarter guidance.

Speaker Change: It will also explain the financial impact of Carnival cruise lines exciting new loyalty program Carnival rewards for 2026 and beyond.

David Bernstein: and then finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging. Returning to the summary of our second quarter results. Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest ever second quarter operating result. The outperformance was essentially driven by five things. First, favorability in revenue worth $84 million as yields came in up over 6.4% compared to the prior year, and that was on top of last year's robust 12% increase. This was 200 basis points better than March guidance, driven by close-in strength in ticket prices and continued strong onboard spending.

Speaker Change: And then finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging.

Speaker Change: Turning to the summary of our second quarter results.

Speaker Change: Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest ever second quarter operating results.

Speaker Change: The outperformance was essentially driven by five things.

Speaker Change: Favorability in revenue with $84 million.

Speaker Change: Came in up over six 4% compared to the prior year and that was on top of last year's robust 12% increase this was 200 basis points better than March guidance, driven by close in strength in ticket prices.

David Bernstein: This was 200 basis points better than March guidance, driven by close-in strength in ticket prices and continued strong onboard spending. The yield increase was a result of improvements on both sides of the Atlantic. The improvement in ticket prices was across all core programs. The improvement in onboard spending was broad-based, as all major categories of spending were meaningfully higher. Second, cruise costs without fuel per available lower berth day or ALBD were up 3.5% compared to the prior year. This was also 200 basis points better than March guidance and was worth $56 million. The favorability in costs was driven by the timing of expenses between the quarters. Third, favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations, leveraging technology and best practices paid off once again.

Speaker Change: <unk> strong onboard spending.

David Bernstein: The yield increase was a result of improvements on both sides of the Atlantic. The improvement in ticket prices was across all core programs. The improvement in onboard spending was broad-based as all major categories of spending were meaningfully higher. Second, cruise costs without fuel per available lower birthday or ALBD were up three and a half percent compared to the prior year. This was also 200 basis points better than March guidance and was worth $56 million. The favorability and cost was driven by the timing of expenses between the quarters. Third, favorability and fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations, leveraging technology and best practices, paid off once again.

Speaker Change: The increase was a result of improvements on both sides of the Atlantic.

Speaker Change: The improvement in ticket prices was across all core programs the improvement in onboard spending was broad based as all major categories of spending were meaningfully higher.

Speaker Change: Cruise costs without fuel per available at Woodbury day, or a L. P. D. We're up three and a half per cent compared to the prior year.

Speaker Change: This was also 200 basis points better than March guidance.

Speaker Change: With $56 million the.

Speaker Change: The favorability in cost was driven by the timing of expenses between the quarters.

Speaker Change: Third favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations leveraging technology and best practices paid off once again.

David Bernstein: Fourth, interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayment. And fifth, $15 million from the favorable net impact of currency and fuel prices.

David Bernstein: Fourth, interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayment. Fifth, $15 million from the favorable net impact of currency and fuel price. Customer deposits at the end of the Q2 were at an all-time high, up over $250 million versus the prior year, despite the impact from our Q3 capacity decline of 2.4%. Next, I will provide some color on our improved full-year June guidance. June guidance net income of approximately $2.7 billion is a $200 million improvement over March guidance. The improvement was essentially driven by five things. First, our Q2 favorability and yield flow-through to the full year, improving our full-year yield guidance by 30 basis points to 5% higher than strong 2024 levels, which were up almost 11%.

Speaker Change: For interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayments.

Speaker Change: $15 million from the favorable net impact of currency and fuel price cut.

David Bernstein: Customer deposits at the end of the second quarter were at an all-time high, up over $250 million versus the prior year, despite the impact from our third-quarter capacity decline of 2.4 percent.

Speaker Change: Customer deposits at the end of the second quarter were at an all time high up over $250 million versus the prior year. Despite the impact from our third quarter capacity decline of two 4%.

David Bernstein: Next, I will provide some color on our improved full year June guide. June guidance net income of approximately $2.7 billion is a $200 million improvement over March guidance. The improvement was essentially driven by five things. First, our second quarter favorability and yield flowed through to the full year, improving our full year yield guidance by 30 basis points to 5% higher than strong 2024 levels, which were up almost 11%. The total increase in full year revenue was over $100 million, which included not only the flow through the second quarter favorability and revenue, but also additional voyages that were added by Carnival Cruise Lines, primarily in the fourth quarter as a result of the change in the dry dock schedule into 2026.

Speaker Change: Next I will provide some color on our improved full year June guidance.

Speaker Change: <unk> net income of approximately $2 7 billion is a 200 million dollar improvement over March guidance.

Speaker Change: The improvement was essentially driven by <unk> first.

Speaker Change: Second quarter favorability in yield flow through to the full year, improving our full year yield guidance by 30 basis points to 5% higher and strong 'twenty 'twenty four levels, which were up almost 11%.

David Bernstein: The total increase in full-year revenue was over $100 million, which included not only the flow-through as a Q2 favorability in revenue, but also additional voyages that were added by Carnival Cruise Line, primarily in the Q4, as a result of the change in the dry dock schedule into 2026. These additional voyages improved June guidance net income. However, given the seasonality of our business and the late opening of the voyages added to the Q4, these voyages tempered the full-year positive yield impact by approximately 0.1 of a point, which is included in the full-year yield guidance of 5%. Second, cruise costs without fuel per ALBD are now expected to be up 3.6% compared to the prior year. This is 0.2 of a point better than March guidance.

Speaker Change: The total increase in full year revenue was over $100 million, which included not only the flow through in the second quarter favorability in revenue, but also additional voyages that were added by Carnival cruise lines, primarily in the fourth quarter as a result of the change in the dry dock schedule into 2020.

Speaker Change: Yeah.

David Bernstein: These additional voyages improve June Guidance Net Income. However, given the seasonality of our business and the late opening of the voyages added to the fourth quarter, these voyages tempered the full year positive yield impact by approximately one tenth of a point, which is included in the full year yield guidance of five percent. Second, cruise costs without fuel per ALBD are now expected to be up 3.6% compared to the prior year. This is two-tenths of a point better than March guidance. The improvement in this cost metric was driven by the increase in ALBDs as a result of the added voyages.

Speaker Change: These additional voyages improved June guidance net income however, given the seasonality of our business and the reopening of the voyages added to the fourth quarter. These voyages tempered the full year positive yield impact by approximately 110th of a point, which is included in the full year.

Speaker Change: Our real guidance of 5%.

Speaker Change: Second cruise costs without fuel per L. P. D are now expected to be up three 6% compared to the prior year. This is two tenths of a point better than March guidance. The improvement in this cost metric was driven by the increase in <unk> as a result of the added voyages.

David Bernstein: The improvement in this cost metric was driven by the increase in ALBDs as a result of the added voyages. Even though we already have the industry-leading cost structure, our teams will always keep looking for ways to further optimize our costs while continuing to improve the onboard experience for our guests. Third, favorability in fuel consumption and fuel mix from the Q2 is expected to continue throughout the H2 and grow to approximately $30 million for the full year compared to March guidance. Fourth, favorability in interest, income, and expense from the Q2 is also expected to continue throughout the H2 and grow to approximately $30 million for the full year compared to March guidance, driven by our refinancing efforts during the Q2. Fifth, approximately $35 million from the favorable net impact of currency and fuel price.

David Bernstein: Even though we already have the industry-leading cost structure, our teams will always keep looking for ways to further optimize our costs while continuing to improve the onboard experience for our guests. Third, favorability in fuel consumption and fuel mix from the second quarter is expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance. Fourth, favorability and interest income and expense from the second quarter is also expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance driven by our refinancing efforts during the second quarter.

Speaker Change: Even though we already have the industry, leading cost structure. Our teams will always keep looking for ways to further optimize our cost while continuing to improve the onboard experience for our guests.

Speaker Change: Third favorability in fuel consumption and fuel mix from the second quarter is expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance.

Speaker Change: Boy.

Speaker Change: Every ability and interest income and expense from the second quarter is also expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance, driven by our refinancing efforts during the second quarter.

David Bernstein: And fifth, approximately $35 million from the favorable net impact of currency and fuel.

Speaker Change: And fifth approximately $35 million from the favorable net impact of currency and fuel price. All of this results in $6 9 billion of EBITDA, a 13% improvement over 'twenty 'twenty four virtually all of which is being driven by same store revenue growth as our.

David Bernstein: All of this results in $6.9 billion of EBITDA, a 13% improvement over 2024, virtually all of which is being driven by same-store revenue growth as our capacity is only up 1% year over year.

David Bernstein: All of this results in $6.9 billion of EBITDA, a 13% improvement over 2024, virtually all of which is being driven by same-store revenue growth as our capacity is only up 1% year over year. Next, I will provide some key insights on our Q3 guidance. As I previously indicated during the last two earnings calls, Q3 cruise costs are expected to be higher than the full-year increase. Q3 cruise costs without fuel per ALBD are expected to be up 7% compared to the prior year. Four factors are driving nearly half the year-over-year increase. First, the introduction next month of our game-changing exclusive Caribbean destination, Celebration Key. While we anticipate that Celebration Key will be a smash hit with our guests and provide an excellent return on our investment, operating expenses for the destination will impact our overall year-over-year cost comparisons.

Speaker Change: If he is only up 1% year over year.

David Bernstein: Next, I will provide some key insights on our third quarter guidance. As I previously indicated during the last two earnings calls, third quarter cruise costs are expected to be higher than the full year increase. Third quarter cruise costs without fuel per ALBD are expected to be up 7% compared to the prior year. Four factors are driving nearly half the year-over-year increase. First, the introduction next month of our game-changing exclusive Caribbean destination Celebration Cay. While we anticipate that Celebration Cay will be a smash hit with our guests and provide an excellent return on our investment, operating expenses for the destination will impact our overall year-over-year cost comparison.

Speaker Change: Next I will provide some key insights on our third quarter guidance as I previously indicated during the last two earnings calls third quarter cruise costs are expected to be higher than the full year increase third quarter cruise costs without fuel per <unk> are expected to be up 7% compared to.

Speaker Change: The prior year four factors are driving nearly half the year over year increase first the introduction next month of our game changing exclusive Caribbean destination celebration key while we anticipate that celebration will be a smash hit with our guests and providing excellent return on our.

Speaker Change: Our investments operating expenses for the destination will impact our overall year over year cost comparisons second 'twenty 'twenty four benefited from one time items that we mentioned last year also impacting our year over year cost comparisons.

David Bernstein: Second, 2024 benefited from one-time items that we mentioned last year, also impacting our year-over-year cost comparison. Third, higher advertising expense which we discussed on the December call and fourth, lower third quarter capacity which results in spreading our fixed costs over fewer ALBDs.

David Bernstein: Second, 2024 benefited from one-time items that we mentioned last year, also impacting our year-over-year cost comparisons. Third, higher advertising expense, which we discussed on the December call. Fourth, lower Q3 capacity, which results in spreading our fixed costs over fewer ALBDs. Now let me explain the financial impact of Carnival Cruise Line's exciting new loyalty program, Carnival Rewards, on 2026 and beyond. As Josh described, this new program will start in June 2026, impacting results for H2 2026. While the program will be cash flow positive from day one, it does impact our yields and our P&L during the first couple of years. Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guest, equal to the value of future program benefits earned.

Speaker Change: Third.

Speaker Change: Higher advertising expense, which was discussed on the December call and four.

Speaker Change: Lower third quarter capacity, which results in spreading fixed costs over fewer L. B DS.

David Bernstein: Now let me explain the financial impact of Carnival Cruise Line's exciting new loyalty program Carnival Rewards on 2026 and beyond. As Josh described, this new program will start in June 2026, impacting results for the second half of 2026. While the program will be cash flow positive from day one, it does impact our yields and our P&L during the first couple of years.

Speaker Change: Now, let me explain the financial impact of Carnival cruise lines exciting new loyalty program Carnival rewards on 2026 and beyond.

Josh Weinstein: As Josh described this new program will start in June 2026 impacting results for the second half of 2026.

Josh Weinstein: The program will be cash flow positive from day, one it does impact our yields and our P&L during the first couple of years.

David Bernstein: Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guest, equal to the value of future program benefits earned. Over time, the redemption of benefits by guests will build, and so will the revenue recognized for delivering these benefits to the guests. We expect that it will take approximately two years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens, after approximately two years, the program will be accretive to our As a result, the year-over-year impact on yields is expected to be about half a point in 2026, a bit less in 2027, neutral for 2028, and turn positive thereafter.

Speaker Change: Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guests equal to the value of future program benefits earned overtime. The redemption of benefits by guests will build so will the revenue recognized for delivering these benefits to the gas.

David Bernstein: Over time, the redemption of benefits by guests will build, and so will the revenue recognized for delivering these benefits to the guests. We expect that it will take approximately 2 years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens, after approximately 2 years, the program will be accretive to our yields. As a result, the year-over-year impact on yields is expected to be about a half a point in 2026, a bit less in 2027, neutral for 2028, and turn positive thereafter. It should also be noted that we do not anticipate any meaningful impact on costs from the new loyalty program when compared to the current program.

Speaker Change: We expect that it will take approximately two years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens after approximately two years the program will be accretive tour yields as a.

Speaker Change: Result, the year over year impact on yields is expected to be about a half a point in 2026.

Speaker Change: A bit less in 'twenty 'twenty seven neutral for 2028.

Speaker Change: And turn positive thereafter.

David Bernstein: It should also be noted that we do not anticipate any meaningful impact on costs from the new loyalty program when compared to the current program. We look forward to building greater engagement with our guests because of the new exciting Carnival Rewards program. Most airlines introduced similar types of loyalty programs many years ago, and we know how beneficial those programs turned out to be.

Speaker Change: It should also be noted that we do not anticipate any meaningful impact on cost from the new loyalty program when compared to the current program.

David Bernstein: We look forward to building greater engagement with our guests because of the new exciting Carnival Rewards program. Most airlines introduced similar types of loyalty programs many years ago, and we know how beneficial those programs turned out to be. I'll finish up with an update of our refinancing and de-leveraging efforts. During the quarter, we prepaid $350 million of our $1.4 billion notes due 2026 and refinanced the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million through early 2026. We also upsized our euro-denominated floating rate loan from 200 million to 300 million euros, extending its maturity and amending its margin at a favorable rate, resulting in an all-in interest rate of less than 4%. These transactions continued our efforts rebuilding an investment-grade balance sheet.

Speaker Change: We look forward to building greater engagement with our guests because of the new exciting Carnival rewards program. Most airlines introduce similar types of loyalty programs. Many years ago, and we know how beneficial those programs turned out to be now I'll finish up with an update of our refinancing and dealer.

David Bernstein: Now I'll finish up with an update of our refinancing and deleveraging efforts. During the quarter, we prepaid $350 million of our $1.4 billion notes due 2026 and refinanced the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million through early 2026. We also upsized our euro-denominated floating rate loan from 200 million to 300 million euros, extending its maturity and amending its margin at a favorable rate, resulting in an all-in interest rate of less than 4%. These transactions continued our efforts, rebuilding an investment-grade balance. We have been working aggressively to reduce interest expense, simplify our capital structure, and manage our future debt maturities, refinancing nearly $7 billion of debt already this year at favorable rates.

Speaker Change: <unk> efforts during the quarter, we prepaid $350 million of about 1.4 billion notes due 2026 and refinance the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million too early.

Speaker Change: 2026, we also upsized, our euro denominated floating rate loan from 200 million to 300 million euros, extending its maturity and amending its margin at favorable rate, resulting in an all in interest rate of less than 4%.

Speaker Change: These transactions continued our efforts rebuilding an investment grade balance sheet.

David Bernstein: We have been working aggressively to reduce interest expense, simplify our capital structure, and manage our future debt maturities, refinancing nearly $7 billion of debt already this year at favorable rates. We are pleased that our efforts have been recognized with the recent credit rating upgrades. In fact, we now have only one notch to go to reach our investment-grade rating with both S&P and Fitch. Over the last three months, we saw a marked improvement in our net debt to EBITDA ratio, going from 4.1x at the end of Q1 to 3.7x as of the end of Q2. During H2 2025, we anticipate continuing to pay down debt. However, it will not impact net debt as we'll be utilizing cash already on the books.

Speaker Change: We have been working aggressively to reduce interest expense simplify our capital structure and manage our future debt maturities refinancing nearly $7 billion of debt already this year had favorable rates. We are pleased that our efforts have been recognized with the recent credit rating upgrades in.

David Bernstein: We are pleased that our efforts have been recognized with the recent credit rating upgrades. In fact, we now have only one notch to go to reach our investment grade rating with both S&P and FIT. Over the last three months, we saw a marked improvement in our net debt to EBITDA ratio, going from 4.1 times at the end of the first quarter to 3.7 times as of the end of the second quarter. During the second half of 2025, we anticipate continuing to pay down debt. However, it will not impact net debt, as we'll be utilizing cash already on the book.

Speaker Change: Fang.

Speaker Change: We now have only one notch to go to reach our investment grade rating with both S&P and Fitch.

Speaker Change: Over the last three months, we saw a marked improvement in our net debt to EBITDA ratio going from four one times at the end of the first quarter to three seven times as of the end of the second quarter during.

Speaker Change: During the second half of 2025, we anticipate continuing to pay down debt. However will not impact net debt as we will be utilizing cash already on the books.

David Bernstein: While we are guiding to improved EBITDA in the second half of 2025 given the delivery of Star Princess later this year with its associated export credit, we expect our net debt to EBITDA ratio to remain flat at year-end with second quarter.

David Bernstein: While we are guiding to improved EBITDA in H2 2025, given the delivery of Star Princess later this year with its associated export credit, we expect our net debt to EBITDA ratio to remain flat at year-end with Q2. Earlier this month, we extended and upsized our revolver capacity by 50% to $4.5 billion on more favorable terms, meaningfully enhancing our liquidity. With this in hand and coupled with our well-managed near-term maturity towers through 2026, we expect to opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026, executing the rest of our current refinancing plan.

Speaker Change: Well, we are guiding to improved EBITDA in the second half of 2025, given the delivery of Star Princess later this year with its associated export credit we expect our net debt to EBITDA ratio to remain flat at yearend with second quarter.

David Bernstein: Earlier this month, we extended and upsized our revolver capacity by 50% to $4.5 billion on more favorable terms, meaningfully enhancing our liquidity. With this in hand and coupled with our well-managed near-term maturity towers through 2026, we expect to opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026, executing the rest of our current refinancing plan. 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 investment grade leverage metrics in the not too distant future as we move further down the road, rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders.

Speaker Change: Earlier this month, we extended and Upsized, our revolver capacity by 50% to $4 $5 billion on more favorable terms meaningfully enhancing our liquidity.

Speaker Change: With this in hand, and coupled with our well manage near term maturity towers through 2026, we expect to Opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026 executing the rest of our current refinancing plan.

David Bernstein: 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 investment-grade leverage metrics in the not-too-distant future as we move further down the road rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders. Now, operator, let's open the call for questions.

Speaker Change: 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 investment grade leverage metrics in the not too distant future as we move further down the road rebuilding.

Speaker Change: Our financial fortress, while continuing the process of transferring value from that holds us back to shareholders.

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

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

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. One moment please while we poll for questions. Thank you. Our first question is from the line of Matthew Boss with JPMorgan. Please proceed with your question.

Speaker Change: Thank you well now be conducting a question and answer session if.

Operator: We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in question queue. Let me press star 2 if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up the handset before placing the star key.

Speaker Change: If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Antonio indicate your line is in the question queue.

Speaker Change: Let me press star two if you'd like to withdraw your question from the queue.

Speaker Change: For persistency in figure equipment, it may be necessary to pick up the handset before pressing the star keys.

Operator: To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. One moment, please, before we poll for questions. Thank you.

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

Speaker Change: Thank you one more piece, where we pull for questions.

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

Matthew Boss: Our first question is from the line of Matthew Boss with J.P. Morgan. Great thanks and congrats on the phenomenal quarter. Thanks, Matt.

Matthew Boss: Great. Thanks. Congrats on the phenomenal quarter.

Matthew Boss: Great, Thanks, and congrats on a phenomenal quarter.

Josh Weinstein: Thanks, Matt.

Speaker Change: Thanks, Matt So maybe.

Matthew Boss: Josh, maybe could you speak to improvements in product and experience so far that you think is translating to today's above-plan pricing and onboard spend? Maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited? You talked about continued fleet improvements, you talked about the launch of private islands exiting this year, and also loyalty. Maybe just the incremental opportunity or maybe where we stand in terms of innings relative to what you've already done?

Josh Weinstein: So maybe so, Josh, maybe could you speak to improvements in product and experience so far that you think is translating to today's above plan pricing and on board spend and and maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited. You talked about continued fleet improvement. You talked about the launch of private islands exiting this year and also loyalty. So maybe just the incremental opportunity or maybe where we stand in terms of innings relative to what you've already done. Sure. You know, we've been talking about this for a few years now at this point.

Speaker Change: Josh maybe could you speak to improvements in product and experience. So far that you think is translating to today is above planned pricing and onboard spend in and maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers. You cited you talked about continued fleet improvements Utah.

Speaker Change: About the launch of private islands exiting this year and also loyalty. So maybe just the incremental opportunity or maybe where we stand.

Speaker Change: In terms of earnings relative to what you've already done.

Josh Weinstein: Sure. We've been talking about this for a few years now at this point. Really when we look at what the teams have done across the commercial space, they've been making step-by-step improvements in pretty much all areas of the business. When it comes to onboard experience and product, that's the one I've always talked about the least in this context because they're always on their game, right? Nothing is going to be, from my perspective, about recreation. Really, it's going to be about innovation step by step, responding to the guests that they are targeting. It's small incremental things that make us have this improved profile on board every single quarter.

Speaker Change: Sure.

Speaker Change: We've been talking about this for a few years now at this point you know really when we look at what things have gone across the commercial space.

Josh Weinstein: You know, really when we look at what the teams have done across the commercial space, they've been making, you know, step-by-step improvements in pretty much all areas for the business. And when it comes to onboard experience and product, that's the one I've always talked about the least in this context because they're always on their game, right? Nothing is going to be, from my perspective, about recreation. Really, it's going to be about innovation, step-by-step, responding to the guests that they are targeting. And it's small, incremental things that make us, you know, have this improved profile onboard every single quarter.

Speaker Change: They've been making step by step improvements.

Speaker Change: Pretty much all areas of the business and when it comes to onboard experience.

Speaker Change: Product that's the one I've always talked about the Leafs in this context, because they're always on their game right. Nothing is going to be from my perspective about recreation really it's gonna be about innovation step by step responding to the guests.

Speaker Change: We are targeting a small.

Speaker Change: Paul incremental things that make us have.

Speaker Change: This improved profile onboard every single quarter.

Josh Weinstein: They're not necessarily exciting in the eyes of lots of folks, but the way that Holland America, for example, understands its guests really lean into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally fresh and be able to champion that and make that part of the experience. Little things like that go a long way, and all of our brands do that all the time. Now, on top of that, we obviously do take opportunities to make some investments in the assets themselves. We've talked about AIDA Evolution, and as you heard me talk about in my notes, it's exceeded our expectations when it comes to the returns that it's generating. This is business as usual as far as I'm concerned, and that will continue well into the future.

Josh Weinstein: You know, and they're not necessarily exciting in the eyes of lots of folks, but the way that Holland America, for example, understands its guests really lean into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally fresh and be able to champion that and make that part of the experience. Little things like that go a long way, and all of our brands do that all the time. Now, on top of that, we obviously do take opportunities to make some investments in the assets themselves. We talked about AIDA Evolution, and as you heard me talk about in my notes, it's exceeded our expectations when it comes to the returns that it's generating.

Speaker Change: And they're not necessarily exciting.

Speaker Change: Lots of folks, but the way the Holland America for example understand its guests.

Speaker Change: Really lean into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally for us.

Speaker Change: Were you able to champion that makes that part of the experience little things like that go a long way in all of our brands do that all the time and go on top of that we obviously do take opportunities.

Speaker Change: To make some investments in the assets themselves, we've talked about Aida evolution unless you heard me talk about it in my notes.

Speaker Change: Exceeded our expectations when it comes to the returns that it's generating so this is this is this is business as usual as far as I'm concerned and that will continue well into the future.

Josh Weinstein: So this is business as usual as far as I'm concerned, and that will continue well into the future.

Josh Weinstein: As far as looking forward, I'd say we're still in the early innings, right? Celebration Key doesn't exist yet. We have another month before that happens. And there's lots more in the pipeline, some of which we've already talked about, other things we've not, which doesn't mean it's huge incremental investments the size of Celebration Key, but things that we can do to make our experiences and products on the land side even better. We look forward to talking about those over time. Great.

Josh Weinstein: As far as looking forward, I'd say we're still in the early innings, right? Celebration Key doesn't exist yet. We have another month before that happens. There's lots more in the pipeline, some of which we've already talked about, other things we've not, which doesn't mean it's huge incremental investments the size of Celebration Key, but things that we can do to make our experiences and products on the land side even better. We look forward to talking about those over time.

Speaker Change: As far as.

Speaker Change: Looking forward.

Speaker Change: I'd say, we're still in the early innings right celebration he doesn't exist yet.

Speaker Change: We have another month before that happens.

Speaker Change: And there's lots more in the pipeline some of which we've already talked about other things we've not moved.

Speaker Change: Doesn't mean, it's huge incremental investments to the size of celebration key but things that we can do to make our our experiences and products on the land side, even better and we look forward to talking about the overtime.

Matthew Boss: Great. Maybe, Josh, on the bottom line, how best to think about the margin opportunity, which I think you cited as so much more from here with the last 2 quarters now exceeding 2019, and I think you've made it clear that you don't see 2019 as a ceiling.

Matthew Boss: Great and then maybe Josh on the bottom line, how best to think about the margin opportunity, which I think you've cited is so much more from here with the last few quarters now exceeding 2019, and I think you've made it clear that you don't see 2019 as a ceiling.

Josh Weinstein: And then maybe, Josh, on the bottom line, how best to think about the margin opportunity, which I think you cited as so much more from here, with the last two quarters now exceeding 2019. And I think you've made it clear that you don't see 2019 as a ceiling. Right. No, I mean, highest in 20 years, right? So we feel good about that trajectory. From our perspective, it's maintaining our low-cost industry leadership status while continuing to focus on driving incremental revenue. I mean, it is as simple as that. And the incremental revenue is flowing to the bottom line.

Josh Weinstein: No, highest in 20 years, right? We feel good about that trajectory. From our perspective, it's maintaining our low-cost industry leadership status while continuing to focus on driving incremental revenue. It is as simple as that. Incremental revenue is flowing to the bottom line, and that's exactly where the teams have been focused. We can do both. We can chew gum and walk, and we can manage our costs and increase revenue, which is what you've been seeing.

Speaker Change: Right no.

Speaker Change: 20 years right. So we feel good about that trajectory from from our perspective, it's maintaining our low cost industry leadership status, while continuing to focus on driving incremental revenue I mean, it isn't as simple as that and the incremental revenue is flowing to the bottom line and that's exactly where the teams have been focused and we can do both.

Matthew Boss: And that's exactly where the teams have been focused. And we can do both. We can chew gum and walk. And we can manage our costs and increase revenue, which is what you've been Great color. Best of luck.

Speaker Change: You've got to work and we can manage our costs and increase revenue, which is what we've been seeing.

Matthew Boss: Great color. Best of luck.

Speaker Change: Great color best of luck.

Josh Weinstein: Thanks, Matt.

Matt: Thanks, Matt.

Ben Chaykin: Our next questions are from the line of Ben Chaykin with Mizuho Securities. Hey, good morning. Thanks for taking my question.

Operator: Our next questions are from the line of Ben Chaiken with Mizuho Securities. Please proceed with your questions.

Speaker Change: Our next questions are from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Ben Chaiken: Hey, good morning. Thanks for taking my questions. Maybe you could provide some color on pricing for Celebration Key itineraries. Is this asset getting a premium today, or is it too early? Related, what plans do you have to market the destination? Do you anticipate putting marketing dollars behind the project, or will this stay more word of mouth for the time being? One follow-up. Thanks.

Ben Chaiken: Hey, good morning, Thanks for taking my questions.

Ben Chaykin: Maybe you could provide some color on pricing for Celebration Key itineraries. Is this asset getting a premium today, or is it too early? And then related, what plans do you have to market the destination? Do you anticipate putting marketing dollars behind the project, or will this stay more word of mouth for the time being?

Speaker Change: Maybe you could provide some color on pricing for celebration key.

Speaker Change: Temporary is this asset getting a premium today or is it too early and then related what plans do you have to market. The destination like do you anticipate putting marketing dollars behind the project or will this stay more word of mouth for the time being and then one follow up thanks.

Josh Weinstein: And then one follow-up. Thank you. Good morning, Ben.

Josh Weinstein: All right, sir. Good morning, Ben. We are seeing a premium. It is in line with what our expectations were. Everything is proceeding exactly as we had anticipated it to be. With respect to marketing dollars, we have been putting marketing dollars and shifting marketing dollars to really lean into Celebration Key, and I think that is why it is one of the most sought-after destinations, even though it does not take people yet. We need 1 more month before that happens. There is more to come on that, and there is more that we will be doing in shifting the marketing spend so that we can leverage the same type of enthusiasm for the other things that we have got in the works, like the expansion for RelaxAway, which is going to be another wind at our backs, so to speak, as we get into 2026 and beyond.

Speaker Change: Alright.

Josh Weinstein: So we are seeing a premium. It's in line with what our expectations were, so everything's proceeding exactly as we had anticipated it to be. With respect to marketing dollars, you know, we have been putting marketing dollars and shifting marketing dollars to really lean into Celebration Quay, and I think that's why it's one of the most sought-after destinations, even though it doesn't take people yet, and we need one more month before that happens.

Speaker Change: Good morning.

Speaker Change: So we are seeing a premium it's in line with what our expectations were so.

Speaker Change: Thanks proceeding exactly as we had anticipated it to be with respect to marketing dollars. You know we have been we have been putting marketing dollars are shifting marketing dollars to really lean into celebration Kian I think that's why it's one of the most sought after destination, even though it doesn't it doesn't it.

Speaker Change: It doesn't take take people yet.

Speaker Change: Walmart a month before that happens so there's more to come on that and Theres more that we will be doing in shifting the marketing.

Ben Chaykin: So there's more to come on that, and there's more that we'll be doing in shifting the marketing spend so that we can leverage the same type of enthusiasm for the other things that we've got in the works, like the expansion for Relax Away, which is going to be another wind at our backs, so to speak, as we get into 2026 and beyond. Got it.

Speaker Change: So that we can leverage the same type of enthusiasm for the other things that we've got in the works like the expansion for relax away.

Speaker Change: Is it going to be another wind at our backs.

Speaker Change: Because we get into 2026 and beyond.

Ben Chaiken: Got it. I guess the essence of the marketing question was just, I would imagine it's difficult to market it too much prior to there being bodies there, but totally appreciate where you're coming from. On the loyalty program announcement, is this potentially a gateway to more of a book direct push, or is it more about just keeping customers in the network? Curious how you think about the benefits. Obviously, David walked us through some of the yield impacts over the next couple of years. Thanks.

Speaker Change: Got it I guess I got the essence of the marketing question was just I would imagine it's difficult to market it too much prior to their being bodies, there, but totally appreciate kind of where you're coming from and then on the on the loyalty program announcement is this potentially a gateway to more of a book direct push or is it more about.

Josh Weinstein: I guess I guess the essence of the marketing question was just that I would imagine it's difficult to market it too much prior to there being bodies there but but totally appreciate kind of where you're coming from.

Josh Weinstein: And then on the loyalty program announcement, is this potentially a gateway to more of a book direct push, or is it more about people just keeping customers in the network? Curious how you think about the benefits. Obviously, David walked us through some of the yield impacts of the next couple of years. Thanks. Sure, sure. No, definitely not a push to go more direct. Bookings with our travel agents will get the same benefit for the guest and for the trade that they always would. So we think that this is a great avenue for increased business and loyalty and engagement, not only directly with us, but through our valuable trade partners.

Speaker Change: People, just keeping customers in the network curious how you think about the benefits obviously, David walked us through some of the yield impacts.

Speaker Change: The next couple of years. Thanks.

Josh Weinstein: Sure. No, definitely not a push to go more direct. Bookings with our travel agents will get the same benefit for the guest and for the trade that they always would. We think that this is a great avenue for increased business and loyalty engagement, not only directly with us, but through our valuable trade partners as well.

Speaker Change: Sure sure no definitely not.

Speaker Change: Pushed didn't go more direct bookings with our travel agents will get the same benefit for them for the guest them for the trains that they're always what.

Speaker Change: We think that this is a great avenue for increased business and loyalty and engagement.

Speaker Change: Not only directly with us.

Speaker Change: Our valuable trade partners as well.

Ben Chaykin: Got it, thank you.

Ben Chaiken: Got it. Thank you.

Speaker Change: Got it thank you.

Josh Weinstein: Thanks.

Speaker Change: Thanks.

Steve Wozinski: Next question is from the line of Steve Wozinski with Stiefel. Please proceed with your question. Yeah. Hey, guys. Good morning. And congrats, Josh, on the second quarter in Outlook here. So, Josh, since, you know, we heard from you guys back in March, obviously, there's a lot, you know, that's been going on out in the world. But maybe wondering if, you know, you can kind of walk us through kind of how those last three months look from a booking perspective. Just, yeah, I think what we're trying to figure out here, were there, you know, were there stronger months versus softer months?

Operator: Next questions are from the line of Steven Wieczynski with Stifel. Please proceed with your questions.

Speaker Change: Next question is from the line of Steve <unk> with Stifel. Please proceed with your question.

Steven Wieczynski: Yeah. Hey, guys. Good morning, and congrats, Josh, on the Q2 and outlook here. Josh, since we heard from you guys back in March, obviously there's a lot that's been going on out in the world. Maybe wondering if you can walk us through how those last three months look from a booking perspective. Just, I think what we're trying to figure out here, were there stronger months versus softer months, or have bookings been pretty much status quo across geographies and sourcing? Maybe also wondering how bookings have looked more recently with all the noise out in the marketplace around Iran, Israel, and all that stuff you noted in your prepared remarks.

Speaker Change: Yeah, Hey, guys good morning.

Speaker Change: Congrats Josh on the second quarter or not what's your.

Speaker Change: So Josh since we heard from you guys back in March obviously, there's a lot that's been going on out in the world.

Speaker Change: But maybe wondering if you can kind of walk us through kind of how those last three months look from a from a booking perspective, just that I think what we're trying to figure out here, where there were the stronger months versus softer months or you don't have bookings have been pretty much status quo status quo across geographies and sourcing and maybe also wondering how bookings have looked no more.

Steve Wozinski: Or, you know, have bookings been pretty much status quo across, you know, geographies and sourcing? And maybe also wondering how bookings have looked, you know, more recently, you know, with all the noise out in the marketplace around Iran, Israel, and all that stuff you noted in your prepared remarks. Sure.

Speaker Change: Recently.

Speaker Change: Without the noise out of the marketplace around Iran, Israel and all that stuff you noted in your prepared remarks.

Josh Weinstein: Sure. Good morning, Steve. Yeah, no, we definitely saw more volatility in the month of April, as probably should not be expected. That took a dip versus where we were in the trajectory in March. May, nicely better than April, and the first couple of weeks of June, nicely better than May. We'll keep responding as appropriately to a very tricky environment.

Martin: Sure Martin.

Josh Weinstein: Morning, Steve. So, yeah, no, we definitely saw more volatility in the month of April. That's probably should not be expected. So that's a good dip versus where we were in the trajectory in March. But May, nicely better than April and the first couple of weeks of June, nicely better than May. So, you know, we'll, you know, we'll keep responding appropriately to a very tricky environment. Okay, gotcha. And then, Josh, as we think about the back half of the year, I mean, I think in your presentation, it said you're 93% booked for 2025. And if we think about, you know, you guys have actually, you know, you've exceeded your first and second quarter guidance.

Martin: So yes, no we definitely saw.

Speaker Change: More volatility in the month of April that's.

Speaker Change: Thats, probably should not be expected.

Speaker Change: So that took a dip versus where we were and the trajectory in March but.

Speaker Change: May nicely better than April and the first couple of weeks of June actually better than that so well.

Speaker Change: Well keep responding.

Speaker Change: Brokerage into a very tricky environment.

Steven Wieczynski: Okay. Gotcha. Josh, as we think about H2, I think in your presentation, it said you're 93% booked for 2025. If we think about you guys have actually exceeded your Q1 and Q2 guidance, and that was pretty much driven by stronger close-in pricing and onboard trends. Josh, I guess I'm guessing as we think about Q3 and Q4, should we be thinking that there probably won't be as much potential upside to your revised guidance given not as much close-in pricing is left, and then the real driver of yield outperformance for H2 is essentially just the onboard spend? Is that the right way to think about Q3 and Q4?

Speaker Change: Okay got you and then just as we think about the back half of the year I mean I.

Speaker Change: I think in your presentation that said your 93% booked for 2025.

Speaker Change: If we think about you guys are actually you know you've exceeded your first and second quarter guidance.

Josh Weinstein: And, you know, that was pretty much driven by stronger closing pricing and onboard trends. So, you know, Josh, I guess I'm guessing as we think about the last two quarters, should we be thinking that, you know, there probably won't be as much potential upside to, you know, to your revised guidance, given, you know, not as much close in pricing is left. And then the real driver of yield out performance for the last six months is, you know, essentially just the onboard spend. Is that kind of the right way to think about the next two quarters?

Speaker Change: That was pretty much driven by stronger close in pricing and onboard trends, so Josh because I'm guessing as we think about the last two quarters should we be thinking that there probably won't be as much potential upside to your revised guidance given.

Josh Weinstein: Not as much close in pricing is left and then the real driver of yield out performance for the last six months is essentially just the onboard spend does that does that kind of the right way to think about the next two quarters.

Josh Weinstein: I think I'll answer maybe at a little bit of a higher level, which is, I think it's fair to say the upside that we thought we'd have in December for the back half of the year is not at the same place, and hopefully people would expect that because the world over the last five, six months has taken some turns that nobody expected. And as we talked about before, in the grand scheme of things, a lot of times what happens is there's just a reflection for a lot of consumers about what does this mean for me, internalizing it, figuring it out, and then moving forward with their plans.

Josh Weinstein: Well I mean, I'll take I'll answer maybe at a little bit of a higher level, which is I think it's fair to say.

Josh Weinstein: I think I'll answer maybe at a little bit of a higher level, which is, I think it's fair to say the upside that we thought we'd have in December for H2 of the year is not at the same place. Hopefully people would expect that because the world over the last 5, 6 months has taken some turns that nobody expected. As we talked about before, in the grand scheme of things, a lot of times what happens is, there's just a reflection for a lot of consumers about what does this mean for me, internalizing it, figuring it out, and then moving forward with their plans. That's all well and good, and that's part of the process when these types of things occur. The issue is, there's just been a lot in H1, a lot of those points in time.

Speaker Change: The upside that we thought we'd have in December for the back half of the year is not is not at the same place.

Speaker Change: Hopefully people would expect that because the world over the last five six months six months.

Speaker Change: Has taken.

Speaker Change: <unk> taken some terms in terms of nobody expected and as we've talked about before in the Grand scheme of things a lot of times. What happens is there's just there's just a reflection for a lot of consumers about what does this mean for me.

Speaker Change: Internalizing it figuring it out and then moving forward with their plants and that's all well and good and Thats part of the process. When these types of things occur. The issue is there's just been a lot in the first half.

Josh Weinstein: And that's all well and good, and that's part of the process when these types of things occur. The issue is, you know, there's just been a lot in the first half, a lot of those points in time. And I think the team's been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve and how we manage our revenue in this environment. So definitely not saying there's not upside. We're always going to strive to meet and exceed guidance.

Speaker Change: A lot of those quite some time and I think the team has been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve and how we manage our revenue in this environment, so definitely not saying theres not outside we're always going to strive to meet.

Josh Weinstein: I think the team's been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve, and how we manage our revenue in this environment. Definitely not saying there's not upside. We're always going to strive to meet and exceed guidance. Yeah, no, definitely not the same view of the upside as we had in December.

Speaker Change: <unk> guidance, but yeah, no definitely not the same.

Steve Wozinski: But yeah, no, definitely not the same view of the upside as we had in December. Okay. Thanks, Josh.

Speaker Change: Okay.

Speaker Change: The upside is we had in December.

Steven Wieczynski: Okay. Thanks, Josh. Appreciate it.

Speaker Change: Okay. Thanks, guys appreciate it.

Robin Farley: Appreciate it. The next questions are from the line of Robin Farley with UBS. Please just use your Great.

Josh Weinstein: Sure.

Speaker Change: Sure.

Operator: The next question is from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: The next questions are from the line of Robin Farley with UBS.

Speaker Change: With your question.

Robin Farley: Great. Yeah, sort of similarly thinking about H2 of the year, can you characterize a little bit how demand for Europe is in Q3? Just thinking about, totally understand your comments about what's going on in the world impacting bookings, and also it seems like you maybe have less left to sell anyway for H2. In terms of onboard revenues, that's a little bit closer. It seems like that came in well despite kind of volatility in geopolitical events that people were still spending when they got on board. Does it seem reasonable that the onboard piece that there's maybe some upside potential in H2 from that? Perfectly understand you may not want to bake it into your guidance today. It sounds like the onboard spend did kind of continue through the period of volatility.

Speaker Change: Great.

Robin Farley: Yeah, sort of similarly thinking about the second half of the year, can you characterize a little bit how demand for Europe is in Q3? And then just thinking about, I totally understand your comments about, you know, what's going on in the world impacting bookings. And also, it seems like you, you know, maybe have less left to sell anyway for the second half. But in terms of, you know, onboard revenues, that's a little bit closer in. It seems like that came in well, despite, you know, kind of volatility and geopolitical events that people were still spending when they got on board.

Speaker Change: Really thinking about the second half of the year can you characterize a little bit how demand for Europe is in Q3, and then just thinking about.

Speaker Change: I understand your comments about what's going on in the world impacting bookings and can also it seems like you maybe have less left to sell anyway for for the second half but.

Speaker Change: In terms of onboard revenues, that's a little bit closer and it seems like that came in well despite kind of volatility and geopolitical events that people were still spending when they got on board. So does it seem reasonable that the onboard piece that there's maybe some upside potential in the second half from that end.

Robin Farley: So, does it seem reasonable that the onboard piece that there's maybe some upside potential in the second half from that? And perfectly understand, you may not want to bake it into your guidance today. But it sounds like the onboard spend did kind of continue through the period of volatility. Is that, you know, just trying to characterize that. Thanks.

Speaker Change: Perfect I understand you may not want to bake it into your guidance today, but.

Speaker Change: It sounds like the onboard spend did kind of continues through the period of volatility is that is that just trying to characterize thanks.

Robin Farley: Just trying to characterize that. Thanks.

Robin Farley: Good morning, Robin. How are you? So, we clearly said one question is not a follow-up, but since it's you. So, Europe Q3 is looking great. So, nothing but good things to talk about there. With respect to onboard, you know, I say, you know, we outperformed, as David, I think, said in his notes, or maybe I did, I can't even remember, David. We outperformed on both the passenger revenue and the onboard. And the onboard was really quite strong throughout the month of, throughout the quarter. And so far, what we've seen in the first couple of weeks of June is that's continued.

Josh Weinstein: Good morning, Robin. How are you?

Robyn: Good morning, Robyn how are you.

Robin Farley: Okay.

Josh Weinstein: We clearly said one question and then a follow-up, but since it's you, Europe Q3 is looking great. Nothing but good things to talk about there. With respect to onboard, I'd say we outperformed as David, I think said in his notes, or maybe I did, I can't even remember, David. The onboard was really quite strong throughout the quarter. So far what we've seen in the first couple of weeks of June is that's continued. The yield guidance that we gave is based on what we want to be able to achieve on both the ticket and the onboard side. It's in there. As I said, we always want to outperform, but that's the guidance that we've given.

Speaker Change: So.

Speaker Change: We said one question a follow up since you.

Speaker Change: So Europe Q3 is looking great. So nothing nothing but good things to talk about there.

Speaker Change: With respect to.

Speaker Change: Onboard I'll say, we outperformed as David I think certainly as notes there might be I think I can't even remember David.

Speaker Change: We outperformed on both the passenger revenue on the onboard.

Speaker Change: The onboard was was really quite strong throughout the month of the quarter and so far what we've seen in the first couple of weeks of June and that's continued.

Josh Weinstein: You know, the yield guidance that we gave is based on, you know, what we want to be able to achieve on both the ticket and the onboard side. So, it's in there. As I said, we always want to outperform, but that's the guidance that we've...

Speaker Change: The yield guidance that we gave is as is.

Speaker Change: Based on you know, what we want to be able to achieve on both the ticket and the onboard side. So it's in there.

Speaker Change: As I said, we always wanted to outperform but but that's the guidance that we've given.

Robin Farley: Okay, great. Thank you. And I guess that already had my follow-up. So, maybe just one thought, David, but just if I could just mention... Oh, wait. Are you serious? Okay. All right. Go ahead. No, no, no. Not a question.

Robin Farley: Okay, great. Thank you. I guess that I have my follow-up. Maybe just one thought, David.

Speaker Change: Okay, great. Thank you and I guess that I had my phone so maybe just one David.

Josh Weinstein: That's very fair. Thank you, Robin.

David Bernstein: Thank you Robyn.

Robin Farley: If I could just mention one thing.

Speaker Change: But just if I could just mentioned went away.

Josh Weinstein: Oh, wait, I hear you. Okay. All right. Go ahead.

Speaker Change: Alright.

Robin Farley: No, not a question, just a suggestion that when David, just talking about the impact of the rewards program next year, maybe next year, in the first year of the program, it might be helpful for all of us if you kind of break out what the yield would have been under the old accounting, just so we can see whether if it's 50 basis points, it's more, if it's less, just that might be helpful in the first year. Just that thought, no follow-up question. Thanks.

Speaker Change: No no no no no not a question just a suggestion that when David just talking about the impact of the rewards program next year just to maybe next year in the first year of the program. It might be helpful. For all of US if you kind of break out what the yield would have been.

Robin Farley: Just a suggestion that when David...just talking about the impact of the rewards program next year, just that maybe next year in the first year of the program, it might be helpful for all of us if you kind of break out what the yield would have been under the old accounting, you know, just so we can see whether it's, you know, if it's 50 basis points, it's more, if it's less, just that might be helpful in the first year. So, just that thought. No follow-up question. Thanks. Okay. Yeah, happy to do that when the time comes in the back.

Speaker Change: Under the old accounting just so we can see whether it's if it's 50 basis points. That's more if its less just that might be helpful. In the first year. So just wanted just not sought no follow up question. Thanks.

Josh Weinstein: Yeah, happy to do that when the time comes in the back half of 2026.

Speaker Change: Yeah happy to do that when the time comes in the back half of 'twenty.

Operator: Thank you.

Operator: Thank you. The next question's from the line of Brandt Montour with Barclays. Please proceed with your question.

Speaker Change: Thank you.

Brent Montour: The next questions are from the line of Brent Montour with Barclays. Please proceed with your question. Good morning, everybody. Congrats on the quarter. The first question is on the consumer, Josh. You know, the lower-income consumer, we're seeing some struggle in that segment across other travel verticals. You know, but we've seen that for the last, you know, two years, and you guys have done really well throughout that.

Speaker Change: The next questions are from the line of Brent <unk> with Barclays. Please proceed with your question.

Brandt Montour: Good morning, everybody. Congrats on the quarter. First question is on the consumer, Josh. The lower income consumer we're seeing some struggle in that segment across other travel verticals. We've seen that for the last 2 years, and you guys have done really well throughout that. I want to get your thoughts on, geopolitical events aside, if that consumer feels different today, right now, this year, H1, whatever you want to kind of talk about, versus last year or the year before. If you think you can kind of keep sort of knocking the ball off the cover with that consumer, if they're sort of accumulating a struggle, that's going to start showing up.

Speaker Change: Good morning, everybody congrats on the quarter.

Speaker Change: The first question is on the the consumer Josh.

Speaker Change: The lower income consumer we're seeing.

Speaker Change: Seeing some struggle in that segment across other travel verticals, but we've seen that for the last two years and you guys have done really well throughout that I just wanted to get your thoughts on geopolitical events. Aside is that consumer feels different today right. Now this year first half whatever you want to kind of talk about versus last year the year before.

Josh Weinstein: I just want to get your thoughts on, you know, geopolitical events aside. If that consumer feels different today, right now, this year, first half, whatever you want to kind of talk about, versus last year or the year before, if you think you can kind of keep sort of, you know, knocking the ball off the cover with that consumer, if they're sort of accumulating a struggle, that's going to start showing up. Sure, so we haven't seen anything that's really showing us a differentiation in patterns between the lower-end consumer and those that are looking for the premium or even the luxury, so nothing in particular to speak of.

Speaker Change: Sure.

Speaker Change: If you think you can kind of keep sort of knocking the ball to cover with that consumer if that's if they're sort of accumulating a struggle.

Speaker Change: That's going to start showing up.

Josh Weinstein: Sure. We haven't seen anything that's really showing us a differentiation in patterns between the lower-end consumer and those that are looking for the premium or even the luxury. Nothing in particular to speak of. I go back to what I've said a lot, which a lot of people say is, we are a incredibly stupid value, when it comes to the alternatives. When people are looking to take vacation because they do, we hold up really, really well. The lower down you come in income, the more important that becomes, because they have to make their dollars really earn on their vacation, and that's what we try to do for everybody.

Speaker Change: Sure so yeah.

Speaker Change: We haven't seen anything that's really showing us a differentiation and patterns between the.

Speaker Change: Lower end consumer.

Speaker Change: They're looking for the premium or even the luxury so.

Speaker Change: Nothing nothing in particular to speak of.

Josh Weinstein: I go back to what I've said a lot, which a lot of people say is we are an incredibly stupid value when it comes to the alternatives, and when people are looking to take vacation because they do, we hold up really, really well, and the lower down you come in income, the more important that becomes because they have to make their dollars really earn on their vacation, and that's what we try to do for everybody.

Speaker Change: Go back to what I, what I've settled a lot, which a lot of people say is we are incredibly stupid value when it comes to the alternatives and when people are looking to take vacation because they do.

Speaker Change: We hold up really really well.

Speaker Change: The lower down you come in income and the more important that the comps because.

Speaker Change: Because they have to make their dollars really earn burn on their vacation and that's what we tried to do for everybody.

Brent Montour: Okay, thanks for that. And then just a second or another go at the second half here, just looking at the implied guidance and the cadence, it does look like the fourth quarter implied guide is higher than the third quarter. And the third quarter is obviously below the last couple quarters run rate growth. And so if Europe's not softer or there's anything to say there, is it fair to say that the fourth quarter just has a sequential lift implied from the ramping up of the island? Or is there sort of anything else in there that we could maybe highlight?

Brandt Montour: Okay. Thanks for that. Then just a second, or another go at the H2 here. Just looking at the implied guidance and the cadence, it does look like the Q4 implied guide is higher than the Q3. The Q3 is obviously below the last couple quarters run rate growth. If Europe's not softer or there's anything to say there, then is it fair to say that the Q4 just has a sequential lift implied from the ramping up of the island? Or is there sort of anything else in there that we could maybe highlight?

Speaker Change: Okay. Thanks for that and then just a second or another go at the second half year, just looking at the implied guidance and the cadence. It does yes. It does look like the fourth quarter implied guide is higher than the third quarter.

Speaker Change: We know that that in the third quarter is obviously below that.

Speaker Change: The last couple of quarters run rate growth and so if europe's not.

Speaker Change: Softer or there's anything to say there then is it fair to say that the fourth quarter just has a sequential lift implied from the ramping up of the island or is there sort of anything else in there that we could maybe highlight.

Josh Weinstein: Yes, certainly Celebration Key is helpful in our portfolio, so we're happy about that. But taking a step back from percentages, when you look at actual dollars, the increases that we're forecasting, because Q3 is seasonally higher as a base, they're each 8 bucks higher year over year.

Josh Weinstein: Yeah. Certainly Celebration Key is helpful in our portfolio, so we're happy about that. Taking a step back from percentages, when you look at actual dollars, the increases that we're forecasting, because Q3 is seasonally higher as a base, they're each up higher year over year.

Speaker Change: Yes.

Speaker Change: Certainly celebration he has helped.

Speaker Change: In our portfolio. So we're happy about that but taking a step back from percentages. When you look at actual dollars. The increases that we're forecasting because Q3 is seasonally higher as a base the reshape of higher year over year.

Brent Montour: Okay, great. Thanks for that, guys. Congrats again on the quarter.

Brandt Montour: Okay, great. Thanks for that, guys. Congrats again on the quarter.

Speaker Change: Okay, great. Thanks for that guys congrats again on the quarter.

Josh Weinstein: Thanks.

Speaker Change: Thanks.

James Hardiman: The next question is from the line of James Hardiman with Citi. Hey, good morning. Thanks for taking my call. And, you know, obviously, congrats on another strong quarter here. So Josh, you talked about a little bit of weakness in April, followed by a pickup from April to May, and then from May to June. I wanted to sort of connect that to the booking commentary for 2026. I think coming out of Q1, we were ahead in terms of bookings, and we're in line now.

Operator: The next question is from the line of James Hardiman with Citi. Please proceed with your questions.

Speaker Change: The next question is from the line of James Hardiman with Citi.

Speaker Change: With your question.

James Hardiman: Hey, good morning. Thanks for taking my call, and obviously congrats on another strong quarter here. Josh, you talked about a little bit of weakness in April, followed by a pickup from April to May and then from May to June. I wanted to sort of connect that to the booking commentary for 2026. I think coming out of Q1, we were ahead in terms of bookings, and we're in line now. Should the narrative ultimately be that you saw a little bit of a lull in booking demand, but that you held strong on pricing throughout, just given the fact that you've got a lot of time, obviously, to fill out that order book? Maybe I'm connecting dots that shouldn't be connected. Thanks.

Speaker Change: Hey, good morning, Thanks for taking my call.

Speaker Change: You know obviously congrats on another strong quarter here so.

Speaker Change: Josh you talked about a little bit of weakness in April followed by a pickup in from April to May and then from May to June.

Speaker Change: I wanted to sort of connect that to the booking commentary.

Speaker Change: For 2026, I think I think.

Speaker Change: Coming out of Q1, we were ahead in terms of bookings.

Speaker Change: And were in line now.

James Hardiman: Should the narrative ultimately be that We saw a little bit of a lull in booking demand, but that you held strong on pricing throughout, just given the fact that you've got a lot of time, obviously, to fill out that order book. Or maybe I'm connecting dots that shouldn't be connected. Yeah, no, I think generally, excuse me, I agree. You know, we don't have to panic and we don't have to do silly things. So, you know, volatility comes and it goes. And like I said, our teams are managing the curve and trying to do the right things and staying ahead of the game.

Speaker Change: Should the narrative ultimately be that that.

Speaker Change: You saw a little bit of a lull in.

Speaker Change: Booking demand, but that you held strong on pricing throughout.

Speaker Change: Just given the fact that you've got a lot of time, obviously to fill up that order book.

Speaker Change: Or maybe I'm connecting back, but it shouldn't be connected.

Josh Weinstein: No.

Speaker Change: Yeah, No I think that's good morning, John.

James Hardiman: Good morning, James

Josh Weinstein: Generally, excuse me, I agree. We don't have to panic, and we don't have to do silly things. Volatility comes and it goes, and like I said, our teams are managing the curve and trying to do the right things and staying ahead of the game.

Speaker Change: John generally.

Speaker Change: Excuse me I agree.

Speaker Change: We don't have to panic, and we don't have to do silly things so.

Speaker Change: So when it comes and it goes and that's R.

Speaker Change: Our teams are managing.

Speaker Change: Managing the curve and trying to do the right things and stay on a head to head up again.

Josh Weinstein: Got it. That's helpful.

James Hardiman: Got it. That's helpful. You talked about up top how it's way too early to really anticipate the Middle East conflict and how it might impact your business. Just based on where things are happening, this isn't new.

Speaker Change: Got it that's helpful and then.

Josh Weinstein: And then, I mean, you talked about up top how it's way too early to really anticipate. sort of the Middle East conflict and how it might impact your business. But just based on, um, where things are happening, right? This, this is. new at least in terms of having to take, you know, that part of the world off the board, right, going back to the Israel-Gaza conflict. Do you anticipate where we sit today having to meaningfully change any itinerary? Yeah, crystal balls are nice, but we really only have a couple of ships at the very end of this year and for the winter a few months into 2026 that would potentially have their itineraries impacting, and that's because they go and base themselves out of Dubai.

Speaker Change: I mean, you talked about how it's way too early to really anticipate sort of sort of the middle east conflict and how it might impact your business, but.

Speaker Change: Just based on.

Speaker Change: Where things are happening right. This isn't.

Josh Weinstein: Right

James Hardiman: at least in terms of having to take that part of the world off the board. Going back to the Israel-Gaza conflict. Do you anticipate, where we sit today, having to meaningfully change any itineraries?

Speaker Change: New at least in terms of having to take.

Speaker Change: That part of the World off the board right going back to the Israel Gaza conflict do you anticipate where we sit today having.

Speaker Change: To meaningfully change any itinerary.

Josh Weinstein: Yeah. Crystal balls are nice, but we really only have a couple of ships at the very end of this year and for the winter, a few months into 2026, that would potentially have their itineraries impacting, and that's because they go and base themselves out of Dubai. We have mitigation plans, and we're looking at this, and we'll make the right decision at the right time. We already avoid the Red Sea, as you know. When it comes to things like world cruises and exotic cruises, we really have no exposure in this area through the end of 2026. Safety is going to be paramount, and it always is. We'll make the right decision as we understand what the lay of the land looks like.

Speaker Change: Crystal balls are nice but.

Speaker Change: We really only have a couple of ships at the very end of this year and for the winter a few months into 2026 that would that would potentially have the right scenario is impacting and that's because they they've got one based on sales out of Dubai.

Speaker Change: And we're obviously, we have mitigation plans and we're looking at this and we will make the right decision at the right time.

Josh Weinstein: We have mitigation plans, and we're looking at this, and we'll make the right decision at the right time, but we already avoid the Red Sea, as you know, and when it comes to things like world cruises and exotic cruises, we really have no exposure in this area through the end of 2026, so we'll say that's going to be paramount, and it always is, so we'll make the right decision as we understand what the lay of the land will be. Got it. That's helpful. Thanks, Jeff.

Speaker Change: But we already avoid the Red Sea as you know so.

Speaker Change: When it comes to things like World cruises, and exotic cruises and we really have no exposure in this area through the end of 2026 so.

Speaker Change: Sure.

Speaker Change: Be paramount and it always is so we'll make the right decision as we understand what the lay of the land looks like.

James Hardiman: Got it. That's helpful. Thanks, Josh.

Jeff: Got it that's helpful. Thanks, Jeff.

Josh Weinstein: Thanks, James.

Speaker Change: Excellent.

Conor Cunningham: The next questions are in the line of Conor Cunningham with Melly's Research.

Operator: The next question is from the line of Conor Cunningham with Melius Research. Please proceed with your questions.

Speaker Change: The next questions are from the line of Conor Cunningham with Melius Research. Please proceed with your questions.

Conor Cunningham: Pleasure to see you. Hi, everyone. Thank you. Just on the 3Q cost guide, there's a couple things in there that I wanted to just understand a little better. I think you talked a little bit, I think you talked about 200 basis points of timing related stuff that shifted from 2Q to 3Q. And then you mentioned Celebration Key. Could you just, you know, give a number on Celebration Key, what that headwind is? And I'm just trying to, it's more for 26 as that kind of normalizes throughout the, as it matures and whatnot. Thank you. Sure, so the four factors that I included was about half of the increase, and the total increase is 7%.

Speaker Change: Hi, everyone. Thank you just on the.

Conor Cunningham: Hi, everyone. Thank you. Just on the Q3 cost guide, there's a couple things in there that I wanted to just understand a little better. I think you talked about 200 basis points of timing-related stuff that shifted from Q2 to Q3, and then you mentioned Celebration Key. Could you just give a number on Celebration Key, what that headwind is? It's more for 2026 as that kind of normalizes throughout the, as it matures and whatnot. Thank you.

Speaker Change: <unk> got it there's a couple of things in there that I wanted to just understand a little better I think you talked a little bit, but I think you're talking about 200 basis points of timing related stuff that shifted from <unk> to <unk> and then you mentioned celebration Keith could you just.

Speaker Change: Give a number on celebration key what that headwind is just I'm just trying to it's more for 'twenty six is that kind of normalizes throughout the AR as it matures and whatnot. Thank you.

David Bernstein: Sure. The 4 factors that I included was about half of the increase, and the total increase is 7%. Celebration Key, I had mentioned, was about a half a point impact for the full year. It's about a 1 point for the back H2 in each of the Q3 and Q4. I didn't say it was 200 basis points for the one-time benefits from last year. It's just that we had mentioned it. It's about a 1 point in the Q3 for that particular item. A 1 point for Celebration Key, a 1 point for the one-time benefit, and the advertising and the lower capacity was probably worth, between the two, a little over a point.

Speaker Change: Sure.

Speaker Change: Factors that I included about half of the increase in the total increase is 7% celebration key I had mentioned and talked about a half a point impact for the full year. So it's about a couple points for the back half of the hearing aid Shrek the third and the fourth quarter I didn't.

David Bernstein: Celebration Key, I had mentioned, was about a half a point impact for the full year, so it's about a full point for the back half of the year in each of the third and the fourth quarter. I didn't say it was 200 basis points for the one-time benefits from last year. just a little Okay, helpful.

Speaker Change: Say it was 200 basis points for the one time benefit from last year.

Speaker Change: Just you had mentioned it.

Speaker Change: It's about a point in the third quarter for that particular, right. So point for celebration key points for the one time benefit.

Speaker Change: And the advertising M D.

Speaker Change: The lower capacity was probably worth a feature.

Speaker Change: We'll get you a little over a point.

Conor Cunningham: Okay. Helpful. Just on loyalty, I don't know how much you want to talk about this, but you mentioned the airlines, and how they've benefited from that. When those companies talk about it, they talk a lot about the marketing component related to the credit card agreements that they have as well that are tied to it. I think you extended your credit card relationship with Barclays in 2022. When does that expire? Do you have any details around how many people actually have the card today?

Speaker Change: Okay helpful and then just on loyalty.

Conor Cunningham: And then just on loyalty, I don't know how much you wanna talk about this, but you mentioned the airlines and how they've benefited from that. When those companies talk about it, they talk a lot about the marketing component related to the credit card agreements that they have as well that are tied to it. I think you extended your credit card relationship with Barclays in 2022. When does that expire? And just, do you have any details around how many people actually have your card today? I'm sorry, you said you want to know how it ties to the credit card.

Speaker Change: I don't know how much you want to talk about this but you mentioned the airlines and how they've benefited from that when most companies talk about it.

Speaker Change: A lot about the marketing component related to the credit card agreements that they have as well that are tied to it.

Speaker Change: I think you extended your credit card relationship with Barclays. In 2022, when does that expire and just do you have any details around how you're constantly adding.

Speaker Change: Adding on to that.

Josh Weinstein: I'm sorry. You said? You broke up. I'm sorry. You want to know how it ties to the credit card? Is that the question?

Speaker Change: I'm, sorry, you said.

Speaker Change: I'm sorry, you Hugh you want to know how it ties to the credit card is that is that the question. Yeah. Yeah. Yeah. So basically you mentioned the airlines I'm just trying to make the parallel because.

Josh Weinstein: Is that is that the question? Yeah, yeah. Yeah. So basically, you mentioned the airlines, I'm just trying to make the parallel because they talked I mean, the numbers that are huge. And so just like how many people actually have the card, what percentage of you know, marketing revenue of your overall revenue you get from the marketing component from the credit card, just any details there, I think would be really helpful. Thank Okay. Got it. So, I'd rather not give specifics just from a competitive standpoint, but I would say that the existing program that we have for loyalty is disassociated with our co-branded credit card from Carnival, and several of our other brands have the same thing.

Conor Cunningham: Yeah. Basically, you mentioned the airlines, and I'm just trying to make the parallel because.

Josh Weinstein: Yeah

Speaker Change: They talk I mean, the numbers there are huge and so just like how many people actually have the card what percentage of marketing revenue D of your overall revenue you get from the marketing component from the credit card just any details there I think would be really helpful. Thank you.

Conor Cunningham: The numbers there are huge. Just how many people actually have the card? What percentage of your overall revenue you get from the marketing component from the credit card? Just any details there I think would be really helpful. Thank you.

Josh Weinstein: Okay. Got it. I'd rather not give specifics just from a competitive standpoint, but I would say that the existing program that we have for loyalty is disassociated with our co-branded credit card from Carnival, and several of our other brands have the same thing, and that's a very successful program in and of itself. The benefit of the new program, one of the benefits is there's a distinct tie between the two, which does not mean you need a credit card, a Carnival credit card, to be able to enjoy being part of the loyalty program. Having the card will supercharge your ability to generate points, generate status. We'll be talking more about that by the time we get to the end of the year, just from a consumer standpoint, about exactly how all of it will work.

Speaker Change: Okay got it so I'd, rather not give specifics just from a competitive standpoint, but I would say that.

Speaker Change: The existing program that we have.

Speaker Change: For loyalty is just associated with our co branded credit card from Carnival and several of our other brands have the same thing and that's a very successful program in and of itself. The benefit of the new program. One of the benefits is there was a there's a distinct tie between the two which does not mean you need a credit card a carnival credit cards.

Josh Weinstein: And that's a very successful program in and of itself. The benefit of the new program, one of the benefits is there's a distinct tie between the two, which does not mean you need a credit card, a Carnival credit card, to be able to enjoy being part of the loyalty program, but having the card will supercharge your ability to generate points, generate status, and we'll be talking more about that by the time we get to the end of the year, just from a consumer standpoint, about exactly how all of it will work, but the card is a great part of this, and so the card will be part of this for the foreseeable future.

Speaker Change: To be able to enjoy being part of the loyalty program, but having the card will supercharge your ability to generate points generate status and.

Speaker Change: And we'll be talking more about that by the time it gets to the end of the year just from a consumer standpoint about exactly how all of it will work, but we the card is as it is.

Josh Weinstein: The card is a great part of this, and so the card will be part of this for the foreseeable future.

Speaker Change: Great Great part of this and so the card will be part of this for the foreseeable future.

Conor Cunningham: Okay. I appreciate it. Thank you.

Conor Cunningham: Okay. Appreciate it. Thank you.

Speaker Change: Okay I appreciate it thank you.

Speaker Change: Okay.

David Katz: The next questions are from the line of David Katz with Jeffries. Pleasure to receive your questions. Hi, good morning, everybody. Thanks for taking my question. I wanted to just dig a little deeper on the ship sale, if you don't mind. I see, I think you've given us the gain, but not sort of what the amount or any color around a multiple on what that would be. And, you know, any thoughts around that strategically? And, you know, do you look at these as sort of a recycling exercise that could potentially grow over time? So we had sold the Costa Fortuna, and we announced that in the second quarter and in the first quarter.

Operator: The next question is from the line of David Katz with Jefferies. Please proceed with your questions.

Speaker Change: The next question is from the line of David Katz with Jefferies. Please proceed with your questions.

David Katz: Hi, Good morning, everybody. Thanks for taking my question I wanted to just dig a little deeper on the ship shale.

David Katz: Hi, good morning, everybody. Thanks for taking my question. I wanted to just dig a little deeper on the ship sale, if you don't mind. I think you've given us the gain, but not sort of what the amount or any color around a multiple on what that would be and any thoughts around that strategically and do you look at these as sort of a recycling exercise that could potentially grow over time?

David Katz: You don't mind.

Speaker Change: I see I think you've given us the gain but not sort of what the amount or any color around a multiple.

David Katz: And what that would be and any thoughts around that strategically.

David Katz: Do you look at these as sort of a recycling exercise.

David Katz: That could potentially grow over time.

Micky Arison: We had sold the Costa Fortuna, and we announced that in Q2.

David Katz: Yes, we had sold the <unk>.

David Katz: Hmm, we announced that in the second quarter and then the first quarter.

Micky Arison: Okay

Micky Arison: was the ship that was sold. We talked about both previously. In the case of the Costa Fortuna, we have sold many ships over time, and this is really just in the normal course of revitalization of our fleet as we move forward over time. As ships do get older, we will sell them to other parties. We do not feel that those parties come back to compete against us because they are generally in different marketplaces with different brands.

Josh Weinstein: ship that was sold. We talked about both, you know, previously. In the case of the Costa Fortuna, we have sold many ships over time, and this is really just in the normal course of revitalization of our fleet. forward over time. As ships do get older, we will sell them to other parties. We do not feel that those parties come back to compete again. It was opportunistic. People came to us looking for ships and gave us prices that we thought is the best long-term interest of the company, and so we made the decision. It doesn't impact Costa's capacity when it comes to its main markets of Europe because it's going to be taking the one ship that it had that was doing a lot of charter business in Asia and Korea and Taiwan and Japan, and we're going to be moving that back to Europe, which is slightly bigger.

David Katz: Ship that was so we.

David Katz: We talked about both.

David Katz: You know previously.

David Katz: In the case of the cost of approaching that.

David Katz: We have so many ships over time and this is really just in the normal course revitalization of our fleet as we move forward.

David Katz: Overtime.

David Katz: Chips, you'll get older we will sell them to other parties.

David Katz: We do not feel that those parties come back to compete against us because they are generally and in different marketplaces.

David Katz: Great.

David Katz: Understood.

David Katz: Understood.

Josh Weinstein: These are opportunistic.

David Katz: These are opportunities opportunistic.

David Katz: Please.

Josh Weinstein: Yeah, I'm sorry. It was opportunistic. People came to us looking for ships and gave us prices that we thought were in the best long-term interest of the company, and so we made the decision. It doesn't impact Costa's capacity when it comes to its main markets of Europe because it's going to be taking the one ship that it had that was doing a lot of charter business in Asia, Korea, Taiwan, and Japan, and we're going to be moving that back to Europe, which is slightly bigger. It's actually going to be increasing its capacity in Europe, which is a great sign for Costa as well.

David Katz: So I think these are it was opportunistic people came to us looking for ships and gave us prices that we thought it was the best long term interest of the company.

David Katz: And so we've made the decision that doesn't impact cost of capacity when it comes to its main markets of Europe, because it's going to be taking the one chip that it had that was doing a lot of charter business in Asia, and Korea, and Taiwan and.

David Katz: And we're gonna be moving that back to Europe, which is slightly bigger so it's actually going to be increasing its capacity in Europe, which is a great time for costa as well.

David Katz: It's actually going to be increasing its capacity in Europe, which is a great sign for Costa. Understood.

David Katz: Understood. Sorry for cutting in, but I wanted to see if we might be able to get some color on the multiples or valuations, or any perspective at all on what those ships sold for. Thanks.

Speaker Change: And just sorry for cutting in but I wanted to see if we might be able to get some color on the multiples.

David Katz: Sorry for cutting in, but I wanted to see if we might be able to get some color on the multiples or valuations or, you know, any perspective at all on what those ships sold for. Well, it was it was nicely overbooked value and we'll just leave it at that. Okey doke. Thanks, nice quarter. Thanks, David.

David Katz: Or valuations or any perspective at all on what those ships sold for X.

Josh Weinstein: Well, it was nicely over book value, and we'll just leave it at that.

David Katz: Well it was it was nicely over book value.

David Katz: I'll just leave it at that.

David Katz: Okie-doke. Thanks. Nice quarter.

David Katz: Okay.

David Katz: Thanks nice quarter.

Josh Weinstein: Thanks, David.

David Katz: Thanks, Dave.

Sharon Zachfieh: Our next question is from the line of Sharon Zafia with William Blair. Hi, good morning, thanks for taking the question. I wanted to ask more about the loyalty program. So I understand the deferral of revenue, but I'm also curious, it seems as if this would also kind of goose onboard spending quite a bit if passengers are getting rewarded for total spend. So how do we think about kind of a partial offset there in terms of onboard spend potentially accelerating? And will passengers actually have kind of real-time tracking of their spending onboard towards points? And how are you going to use data to kind of facilitate all of that onboard?

Operator: Our next question is from the line of Sharon Zackfia with William Blair. Please proceed with your questions.

Speaker Change: Our next question is from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Sharon Zackfia: Hi, good morning. Thanks for taking the question. I wanted to ask more about the loyalty program. I understand the deferral of revenue, but I'm also curious, it seems as if this would also kind of goose onboard spending quite a bit if passengers are getting rewarded for total spend. How do we think about kind of a partial offset there in terms of onboard spend potentially accelerating, and will passengers actually have kind of real-time tracking of their spending on board towards points, and how are you going to use data to kind of facilitate all of that on board?

Sharon Zackfia: Hi, good morning, and thanks for taking the question I wanted to ask more about the loyalty program. So I understand the deferral of revenue, but I'm also curious it seems as if this would also kind of goes onboard spending quite a bit if if passengers are getting rewarded for total spend so how do we think about kind of a parcel.

David Katz: I'll start there.

David Katz: Terms of the onboard spend potentially accelerating and well passengers actually have kind of real time tracking of their spending on board towards planes and how are you going to use data to kind of facilitate all of that on board.

Sharon Zachfieh: Yeah, so that's a great question. So as far as will it cannibalize onboard spending, no, the answer is no, we do not believe that that will. Oh, no, I thought maybe it would boost onboard spending. Yeah. So, you know, we think the engagement and the ability to earn points through spend is a great thing. So, you know, it's kind of like Celebration Key.

Josh Weinstein: Yeah. That's a great question. As far as will it cannibalize onboard spending, no. The answer is no, we do not believe that that will be the case.

David Katz: Yeah. So.

Speaker Change: Great question.

David Katz: So as far as will it cannibalize onboard spending not the answer is no. We do not believe that the Oh, no I thought I thought maybe it would boost onboard spending.

Sharon Zackfia: Oh, no, I thought maybe it would boost onboard spending.

Josh Weinstein: Yeah. We think the engagement and the ability to earn points through spend is a great thing. It's kind of like Celebration Key. This doesn't start for a year. We'll talk a lot more once the program is in place and we can talk about what it is that we're seeing. The whole goal of this, look, at the end of the day, Carnival Cruise Line is an incredibly successful brand that's got a great base of loyal guests. So much so that it's just hard. It's hard to be able to provide operationally all the things that we'd like to provide because there's just too many folks with the loyalty tiers on our ships. That's a good problem to have, but it is a problem. We want to make sure that we're delivering great experiences for our loyal guests.

David Katz: Yeah, So we think the engagement and the ability to earn points.

David Katz: To respond as it is a great thing so.

David Katz: It's kind of like calibration scheme. This doesn't start for a year. So we'll talk a lot more once the program is in place and we can talk about what it is that we're seeing but the whole the whole Gulf is like at the end of the day Carnival cruise line isn't incredibly successful brand that's got a great base of loyal guests.

Josh Weinstein: This doesn't start for a year, so we'll talk a lot more once the program is in place and we can talk about, you know, what it is that we're seeing. But the whole goal is, look, at the end of the day, Carnival Cruise Line is an incredibly successful brand that's got a great base of loyal guests, and so much so that it's just hard. It's hard to be able to provide operationally all the things that we'd like to provide because there's just too many folks with the loyalty tiers on our ships, and that's a good problem to have.

David Katz: So much so that it's just hard it's hard to be able to to provide operationally all the things that we'd like to provide because there's just too many folks with the royalty tiers.

David Katz: On our ships.

David Katz: And.

Speaker Change: That's a good problem to have but it is a problem we want to make sure that we're delivering great experiences.

Josh Weinstein: But it is a problem. We want to make sure that we're delivering great experiences for our loyal guests. So this is a way to be able to address that, stay engaged with our guests, and hopefully they'll see the benefits as the program gets rolled out and really meaningful.

David Katz: For our loyal guests.

Josh Weinstein: This is a way to be able to address that, stay engaged with our guests, and hopefully they'll see the benefits as the program gets rolled out and really lean into it.

David Katz: This is a way to be able to address that stay engaged with our guests and hopefully they'll see the benefits.

David Katz: As the program gets rolled out and really lean into them.

Speaker Change: Can I ask a follow up Josh I think about a year ago, you talked about about 35% of onboard being pre booked can you give us an update on where that stands today.

Josh Weinstein: Can I ask a follow-up, Josh? I think about a year ago, you talked about about 35% of onboard being pre-booked. Can you give us an update on where that stands today? Yeah, it's more or less the same. It's a little bit higher, but it's more or less there. We don't, you know, and I've said this before, we don't have a particular target in mind. What we're looking to do is provide our guests with lots of different ways and alternatives to be able to spend on their vacation with us. And we're doing that through bundles. We're doing that through packages.

Sharon Zackfia: Can I ask a follow-up, Josh? I think about 1 year ago, you talked about 35% of onboard being pre-booked. Can you give us an update on where that stands today?

Josh Weinstein: Yeah, it's more or less the same. It's a little bit higher. It's more or less there. I've said this before. We don't have a particular target in mind. What we're looking to do is provide our guests with lots of different ways and alternatives to be able to spend on their vacation with us. We're doing that through bundles, we're doing that through packages, we're doing that through targeted offers. Of course, spending on board in real time while you're there. As long as we keep seeing progress, it's obviously all flowing into the onboard spending numbers that we talk about and report on, which are consistently going up quarter over quarter, and we expect that to continue.

David Katz: Yes, it's more or less the same.

David Katz: But it's more or less.

Speaker Change: And I've said this before we don't have we don't have a particular target in mind, but we're looking to do is to provide our guests with lots of different ways and alternatives to be able to spend.

David Katz: Spend on their vacation with us and we're doing that through bundles, we're doing that through packages. We're doing that through targeted offers and of course spending on board in real time, while you're there so.

Josh Weinstein: We're doing that through targeted offers. And of course, spending on board in real time while you're there. So as long as we keep seeing progress, it's obviously all flowing into the onboard spending numbers that we talk about and report on, which are consistently going up quarter over quarter. And we expect that to continue.

David Katz: As long as we keep seeing progress. It's obviously all flowing into the onboard spending numbers that we talked about and report on which are consistently going up quarter over quarter.

David Katz: We expect that to continue.

Sharon Zachfieh: Okay, great. Thank you.

Sharon Zackfia: Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

David Katz: Yeah.

Operator: The next question is from the line of Jian Xu with BNP Paribas. Please proceed with your questions.

Jian Xu: The next questions are from the line of Jian Xu with BNP Paribas. Hi, thanks for the question. I wanted to ask a little bit more about Relax-A-Way and Gila Tropicana. I think Half Moon had about 900,000 visitors and Mahogany Bay about 500,000 previously. Can you talk about maybe the opportunity you see for those islands and how big they could get? expansion?

Speaker Change: The next question is from the line of Xi'an <unk> with BNP Paribas. Please proceed with your question.

Jian Xu: Hi. Thanks for the question. I wanted to ask a little bit more about RelaxAway and Isla Tropicale. I think Half Moon had about 900,000 visitors, Mahogany Bay about 500,000 previously. Can you talk about maybe the opportunity you see for those islands and how big they could get with the expansion?

Speaker Change: Alright. Thanks for the question I wanted to ask a little bit more about relaxed when tropicana.

Speaker Change: Think halfmoon and about 900000 visitors in mahogany Bay about 500000 previously can you talk about maybe the opportunity you see for.

Speaker Change: For those islands, and how big can they could get.

Speaker Change: And with the expansion sure well with respect to share with respect to relax away.

Josh Weinstein: Sure. Well, with respect to RelaxAway, the output can be significantly higher than the 900,000. It can certainly double and more, because in today's world, there's 1 ship that tenders. That's pretty much the extent of the operations. We're going to be able to berth 2 ships and still have the ability to tender in the existing location. Because we're building up the infrastructure on the island, we feel good that we can still accommodate all those folks and have them enjoy an amazing experience, as you heard me talk about in my notes at the beginning of this call. With respect to Isla Tropicale, we're going to be able to enhance the experience there. We're not talking about doing anything on the marine side to be able to accommodate more ships, but we can accommodate 2 ships at a time.

Josh Weinstein: Sure. Well, with respect to Relax Away, the output can be significantly higher than the $900,000, can certainly double and more, because in today's world, there's one shift that tenders, and that's pretty much the extent of the operations, and we're going to be able to birth two shifts and still have the ability to tender in the existing location, and because we're building up the infrastructure on the island, we feel good that we can still accommodate all those folks and have them enjoy an amazing experience, as you heard me talk about in my notes at the beginning of this call.

Speaker Change: The output can be significantly higher.

Speaker Change: 900000 can certainly double.

Speaker Change: More because in today's world, there's one shift of tenders and that's pretty much the extent of the operations and we're going to be able to berth two shifts and still have the ability to tender and the existing location because we're building up the infrastructure on the island, we feel good that we can still accommodate all of those folks and have them enjoying amazing.

Speaker Change: And so as you heard me talk about it.

Speaker Change: In my notes at the beginning of this call with respect to easily Tropic, how we're going to be able to enhance the experience.

Josh Weinstein: With respect to Isla Tropical, we're going to be able to enhance the experience there. We're not talking about doing anything on the marine side to be able to accommodate more shifts, but we can accommodate two shifts at a time, so we feel real good that we'll have the ability to maximize that destination as well over time. I don't have the number for you on Isla Tropical, but I'm sure we'll be able to talk more about that as we get those developments where we want them. Great. Thanks so much and good luck. Thank you.

Speaker Change: There were not talking about doing anything on the marine side to be able to accommodate more shifts, but we can accommodate two shifts at a time. So we feel real good that we'll have the ability to maximize.

Josh Weinstein: We feel real good that we'll have the ability to maximize that destination as well over time. I don't have a number for you on Isla Tropicale, but I'm sure we'll be able to talk more about that as we get those developments where we want them to be.

Speaker Change: That brought destination as well over time I don't have the number for you on Easter chocolate cow, but we'll I'm sure we'll be able to talk more about that as we get those developments, where we where we want them to be.

Jian Xu: Great. Thanks so much, and good luck.

Speaker Change: Great. Thanks, so much and good luck.

Josh Weinstein: Thank you.

Speaker Change: Thank you.

David Bernstein: You're welcome.

Operator: We have time for one more, Harper.

Josh Weinstein: We have time for one more, operator.

Speaker Change: We have time for one more Robert I think that that will be coming from the line of Chris Lewis with Susquehanna. Please proceed with your question.

Operator: Thank you. That will be coming from the line of Christopher Stathoulopoulos with Susquehanna. Please proceed with your questions.

Operator: Thank you.

Chris Sesopoulos: That will be coming from the line of Chris Sesopoulos with Susquehanna. Good morning, everyone. Thanks for getting me in here. I'll keep it to one. Josh, you know, we've spoken in the past on the the loyalty program, obviously, it is a big piece of the story with respect to airlines, but want to understand why the change now, you know, is this contemplated back at your. Investor Day, I think it was two years ago, and feedback so far. And then part B, David, the half point impact for next year, any color that you can give with respect to what's assumed with acquisitions and examples?

Christopher Stathoulopoulos: Good morning, everyone. Thanks for getting me in here. I'll keep it to one. Josh, we've spoken in the past on the loyalty program. Obviously, it is a big piece of the story with respect to airlines. Want to understand why the change now. Was this contemplated back at your investor day, I think it was two years ago? Feedback so far. Part B, David, the half-point impact for next year, any color that you can give with respect to what's assumed with acquisitions and existing users? Thanks.

Speaker Change: Good morning, everyone. Thanks for getting me in here I'll keep it to one Josh we've spoken in the past on the loyalty program obviously.

Speaker Change: It is.

Speaker Change: A big piece of the story with respect to airlines.

Speaker Change: I don't understand why the change now was this contemplated back at your <unk>.

Speaker Change: Investor Day, I think it was two years ago and feedback so far and then part B, David the half point impact for next year.

Speaker Change: Any color that you can give with respect to what's assumed with acquisitions and existing users.

Speaker Change: <unk>.

Josh Weinstein: So with respect to the loyalty program, no, it wasn't something that we, you know, two years ago were kind of, you know, focused on. I wasn't focused on it. So I guess that's the answer to the question. Yeah, and the half a point really just comes from the fact that once the program starts, We do have to initially defer a portion of the ticket price that's associated with the benefits that people will earn from the program. So, you know, as I said, we don't expect incremental costs associated with the new program. program. And it's just a deferral because, you know, initially when this first starts, you're not going to see the redemption of any benefits immediately.

Josh Weinstein: With respect to the loyalty program, no, it wasn't something that we, 2 years ago, were focused on. At least I wasn't focused on it. I guess that's the answer to the question.

Speaker Change: So with respect to the loyalty program no. It wasn't something that we you know two years ago were kind of focused on hurwitz I wasn't focused on it.

Speaker Change: So I guess, that's the answer to the question.

David Bernstein: The half a point really just comes from the fact that once the program starts, we do have to initially defer a portion of the ticket price that's associated with the benefits that people will earn from the program. As I said, we don't expect incremental costs associated with the new program versus the existing program. It's just a deferral because initially when this first starts, you're not going to see the redemption of any benefits immediately, and therefore you're not getting revenue from the redemption. It'll take some time for it to normalize itself, as I indicated.

Speaker Change: Yes.

Speaker Change: A point really just comes from.

Speaker Change: Fact that once the program starts we do have two English or we defer a portion of the ticket price that's associated with the benefits that people will earn.

Speaker Change: Prime is a program so.

Speaker Change: We don't expect incremental costs associated with the new program versus the existing program.

Speaker Change: And it's just a deferral because initially when this first starts you're not going to see the redemption of any benefits immediately and therefore youre not getting revenue from the retention. So it will take some time for it to normalize itself as I indicated.

David Bernstein: And therefore, you're not getting revenue from the redemption. So it'll take some time for it to normalize itself.

Christopher Stathoulopoulos: Okay. Thank you.

Josh Weinstein: Okay, thank you. Okay, so I'll just say thank you everybody for joining us for another earnings call and from my team I'd say take a bow. Congratulations on exceeding sea change targets 18 months in advance. That is an amazing job. Well done.

Speaker Change: Okay. Thank you.

Josh Weinstein: Okay, I'll just say thank you everybody for joining us for another earnings call. From my team, I'd say take a bow. Congratulations on exceeding SEA Change targets 18 months in advance. That is an amazing job. Well done.

Speaker Change: Okay. So I'll just say.

Speaker Change: Thank you everybody for joining us for another earnings call for my team I'd say.

Speaker Change: About congratulations on exceeding sea change targets 18 months in advance how does an amazing job well done.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: Welcome to the Carnival Corporation & plc's Q2 2025 Earnings Call. It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may now begin.

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

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Thanks.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Beth Roberts: Greetings, welcome to the Carnival Corporation PLC's second quarter 2025 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the forum presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. It's a reminder that this conference is being recorded.

Speaker Change: Greetings and welcome to the Carnival Corporation and plc second quarter 2025 earnings call.

Speaker Change: At this time, all participants are in listen only mode.

Speaker Change: 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 from your telephone keypad.

Speaker Change: A reminder, this conference is being recorded.

Operator: It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may now begin. Thank you.

Speaker Change: It is now my pleasure to introduce your host Beth Roberts.

Speaker Change: Your Vice President Investor Relations. Thank you Beth you may now begin.

Beth Roberts: Thank you. Good morning, and welcome to our Q2 2025 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. I will refer you to the forward-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, ROIC, and related statistics for all will be on an adjusted basis unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release.

Beth Roberts: Good morning and welcome to our second quarter 2025 earnings conference call. I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our Chair, McIarist. 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, 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, ROIC, and related statistics, for all, will be on an adjusted basis unless otherwise stated.

Speaker Change: Thank you good morning, and welcome to our second quarter 2025 earnings Conference call.

Speaker Change: And today by our CEO Josh Weinstein.

Speaker Change: So David Bernstein, and our chair Micky Arison.

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 yields and cruise costs without fuel will be in constant currency unless otherwise stated.

Speaker Change: <unk> yields will be on a net basis references to cruise costs without fuel EBITDA net income ROIC and related statistics for all will be on an adjusted basis unless otherwise stated all these references are non-GAAP financial measure as defined in our earnings press release, a reconciliation to the most directly comparable U S.

Beth Roberts: All these references are non-GAAP financial measures 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.

Beth Roberts: A reconciliation to the most directly comparable US GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. 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.

Speaker Change: GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Beth Roberts: Please visit our corporate website where our earnings press release and investor presentation can be found.

Speaker Change: Please visit our corporate website, where our earnings press release and Investor presentation can be found.

Beth Roberts: With that, I'd like to turn the call over to Josh. Thanks, Beth.

Josh Weinstein: With that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Before we begin, I'd like to take a moment to address the conflict in the Middle East. The escalation of the past 2 weeks, culminating over the last few days, has been swift. While we certainly hope for a quick and peaceful resolution, and it has not yet had any discernible impact on our business, this is all unfolding too quickly in real time to try to project how it could impact our future business. Like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed. In the interim, our thoughts and prayers are for the safety of all innocent civilians and for the brave men and women of the US Armed Forces who work tirelessly to protect the United States of America.

Josh Weinstein: Thanks, Beth before we begin I'd like to take a moment to address the conflict in the middle East.

Josh Weinstein: Before we begin, I'd like to take a moment to address the conflict in the Middle East. The escalation of the past two weeks, culminating over the last few days, has been swift. While we certainly hope for a quick and peaceful resolution, and it has not yet had any discernible impact on our business, This is all unfolding too quickly in real time to try to project how it could impact our future. Like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed.

Speaker Change: The escalation over the past two weeks, culminating over the last few days.

Speaker Change: Has been Swift.

Speaker Change: Well, we certainly hope for a quick and peaceful resolution and it has not yet had any discernible impact on our business. This is all unfolding too quickly in real time to try to project.

Speaker Change: It could impact our future business like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed.

Josh Weinstein: In the interim, our thoughts and prayers are for the safety of all innocent civilians and for the brave men and women of the U.S. Armed Forces who work tirelessly to protect the United States of America.

Speaker Change: In the interim.

Speaker Change: Our thoughts and prayers are for the safety of all innocent civilians.

Speaker Change: For the Brave men and women of the U S Armed forces, who work tirelessly to protect the United States of America.

Josh Weinstein: Turning to our business. another quarter on the books, and another set of phenomenal results. This marks eight quarters in a row we've achieved record revenues on record yield. We also hit new second quarter highs for EBITDA and operating income, both in total and on a per ALBD basis, while customer deposits also reached an all-time high. Year over year, EBITDA was up 26%. Operating income increased by 67%. and net income more than tripled as we continue to benefit from our focus on commercial execution. Net income came in $185 million better than guidance as we outperformed across the board.

Josh Weinstein: Turning to our business, another quarter on the books and another set of phenomenal results. This marks 8 quarters in a row we've achieved record revenues on record yields. We also hit new Q2 highs for EBITDA and operating income, both in total and on a per ALBD basis, while customer deposits also reached an all-time high. Year over year, EBITDA was up 26%, operating income increased by 67%, and net income more than tripled as we continue to benefit from our focus on commercial execution. Net income came in $185 million better than guidance as we outperformed across the board. Yields grew by almost 6.5%, beating our guidance by 200 basis points. Both ticket and onboard equally outperformed on very strong closing demand, reaffirming the strength of our consumer. Unit costs also came in 200 basis points better than expected on timing between the quarters.

Speaker Change: Turning to our business.

Speaker Change: Another quarter on the books and another set of phenomenal results.

Speaker Change: This marks eight quarters in a row, we have achieved record revenues on record yields.

Speaker Change: We also hit new second quarter highs for EBITDA and operating income both in total and on a per <unk> basis.

Speaker Change: <unk> deposits also reached an all time high.

Speaker Change: Year over year EBITDA was up 26%.

Speaker Change: Operating income increased by 67%.

Speaker Change: Net income more than tripled as we continue to benefit from our focus on commercial execution.

Speaker Change: Net income came in at $185 million better than guidance as we outperformed across the board.

Josh Weinstein: Yields grew by almost six and a half percent, beating our guidance by 200 bases. Both ticket and on board equally outperformed on very strong closing demand, reaffirming the strength of our consumer. Unit costs also came in 200 basis points better than expected on timing between the quarters. This was yet another quarter with EBITDA margins up significantly year over year. You know, investors often ask me, can margins get above 2019 levels? Well, as I've always answered, I never thought of 2019 as a ceiling. And we've now proven that out. Last quarter EBITDA margins were 140 basis points above 2019 and this quarter they were 200 basis points higher.

Speaker Change: Yields grew by almost 6.5% beating.

Speaker Change: Beating our guidance by 200 basis points.

Speaker Change: Both ticket and onboard equally outperformed very strong closing demand reaffirming the strength of our consumer.

Speaker Change: Unit costs also came in 200 basis points better than expected on timing between the quarters.

Josh Weinstein: This was yet another quarter with EBITDA margins up significantly year-over-year. Investors often ask me, Can margins get above 2019 levels? Well, as I've always answered, I never thought of 2019 as a ceiling, and we've now proven that out. Last quarter, EBITDA margins were 140 basis points above 2019, and this quarter, they were 200 basis points higher. In fact, this past quarter's margins were the highest we've achieved in nearly 20 years. This consistently strong performance significantly accelerated progress towards our 2026 SEA Change targets. In December, we telegraphed being able to hit our 50% EBITDA per ALBD growth target at the end of 2025. In March, we said that we expected our 12% return on invested capital target to also materialize at the end of 2025.

Speaker Change: This was yet another quarter with EBITDA margins up significantly year over year.

Speaker Change: Investors often ask me can margins get above 2019 levels well as I have always answered I never thought of 2019 as a ceiling and we've now proven that out.

Speaker Change: Last quarter EBITDA margins were 140 basis points above 2019, and this quarter. They were 200 basis points higher in fact, this past quarter's margins were the highest we've achieved in nearly 20 years.

Josh Weinstein: In fact, this past quarter's margins were the highest we've achieved in nearly 20 years.

Josh Weinstein: This consistently strong performance significantly accelerated progress towards our 2026 sea change target. In December, we telegraphed being able to hit our 50% EBITDA per ALBD growth target at the end of 2025. In March, we said that we expected our 12% return on invested capital target to also materialize at the end of 2025. And now, we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule. We were able to deliver trailing 12-month EBITDA per birthday, 52% above our 2023 baseline, and our ROIC surpassed 12.5%, more than doubling in less than two years.

Speaker Change: This consistently strong performance significantly accelerated progress towards our 2026 C change targets.

Speaker Change: In December we telegraph to being able to hit our 50% EBITDA per <unk> growth target at the end of 'twenty five.

Speaker Change: In March we said that we expected our 12% return on invested capital target to also materialized at the end of 2025.

Josh Weinstein: Now we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule. We were able to deliver trailing 12-month EBITDA per berth day 52% above our 2023 baseline, and our ROIC surpassed 12.5%, more than doubling in less than 2 years. This was no small feat, given these are both the highest levels this company has seen in nearly 20 years. Not to be forgotten is our third 2026 commitment to reduce our carbon intensity by 20% as compared to 2019. I'm very pleased to report we have also just met this target as well. This is not only great for the environment, it's also great for our bottom line. Thanks to each of our phenomenal team members, we topped these milestones in half the time originally expected.

Speaker Change: And now we can advise that through the hard work of our amazing global team, we met and exceeded both of these targets a full 18 months ahead of schedule.

Speaker Change: We were able to deliver trailing 12 months EBITDA per berth day, 52% above our 2023 baseline.

Speaker Change: And our ROIC surpassed 12, 5% more than doubling in less than two years of.

Josh Weinstein: Now this was no small feat, given these are both the highest levels this company has seen in nearly 20 years.

Speaker Change: This was no small feat given these are both the highest levels. This company has seen in nearly 20 years.

Josh Weinstein: Not to be forgotten is our third 2026 commitment to reduce our carbon intensity by 20% as compared to 2019. I'm very pleased to report, we have also just met this target as well. This is not only great for the environment, it's also great for our bottom line. Again, thanks to each of our phenomenal team members, we topped these milestones in half the time originally expected. And even better news, we have so much more potential to take our margins, returns and results even higher.

Speaker Change: Not to be forgotten is our third 2026 commitment to reduce our carbon intensity by 20% as compared to 2019.

Speaker Change: I'm very pleased to report we have also just met this target as well.

Speaker Change: This is not only great for the environment. It's also great for our bottom line.

Speaker Change: Again, thanks to each of our phenomenal team members, we top these milestones and half the time originally expected.

Josh Weinstein: Even better news, we have so much more potential to take our margins, returns, and results even higher. With our 2026 targets in the rear-view mirror, we anticipate setting new targets in early Q2 2025, and I look forward to raising the bar even higher. In the short term, this outperformance has also enabled us to take up our full year guidance again. This includes raising our yield guidance to 5% based on our strong Q2 results while affirming yield expectations for the remainder of the year. Cumulatively, that will take our yields up 16% across 2024 and 2025. In a world of heightened volatility, the amazing cruise experiences our portfolio of cruise brands deliver at a truly exceptional value simply stand out.

Speaker Change: And even better news, we have so much more potential to take our margins returns and results even higher.

Josh Weinstein: So, with our 2026 targets in the rear view mirror, we anticipate setting new targets in early Q2 next year, and I look forward to raising the bar even higher. In the short term, this outperformance has also enabled us to take up our full-year guidance again. This includes raising our yield guidance to 5% based on our strong second quarter results while affirming yield expectations for the remainder of the year. Simulatively, that will take our yields up 16% across 2024 and 2025. In a world of heightened volatility, the amazing cruise experiences our portfolio of cruise brands deliver at a truly exceptional value simply stand out.

Speaker Change: So with our 2026 targets in the rear view mirror, we anticipate setting new targets in early Q2 next year and I look forward to raising the bar even higher.

Speaker Change: In the short term.

Speaker Change: Our performance has also enabled us to take up our full year guidance again.

Speaker Change: This includes raising our yield guidance to 5% based on our strong second quarter results, while affirming yield expectations for the remainder of the year.

Speaker Change: Cumulatively.

Speaker Change: That will take our yields up 16% across 2024 and 2025.

Speaker Change: In a world of heightened volatility the amazing cruise experiences our portfolio of cruise brands deliver a truly exceptional value.

Speaker Change: Please stand out it's enabled us to deliver two consecutive quarters that were significantly better than expected.

Josh Weinstein: It's enabled us to deliver two consecutive quarters that were significantly better than expected and maintain strong 4% yield growth in the back half of the year consistent with our original guidance in December, which I would remind you was given well before much of 2025's macroeconomic and geopolitical turbulence had surfaced. Would the second half of the year have been even stronger, but for all of this noise? Absolutely. No excuses, though. We need to deal in the realities of the world we live in. And while it's proving to be a fairly unpredictable place of late, we are well positioned and clearly will do our best to meet or exceed guidance, taking another significant step forward for the.

Josh Weinstein: It's enabled us to deliver 2 consecutive quarters that were significantly better than expected and maintain strong 4% yield growth in the back H2, consistent with our original guidance in December, which I would remind you was given well before much of 2025's macroeconomic and geopolitical turbulence had surfaced. Now, would the H2 have been even stronger but for all of this noise? Absolutely. No excuses, though. We need to deal in the realities of the world we live in. While it's proving to be a fairly unpredictable place of late, we are well-positioned, and clearly we'll do our best to meet or exceed guidance, taking another significant step forward for the company. We also continue to set ourselves up well for 2026. Our book position is in line with last year's record levels and at historically high prices.

Speaker Change: And maintained strong 4% yield growth in the back half of the year consistent with our original guidance in December which I would remind you was given will be for much of 2020, fives macroeconomic and geopolitical turbulence had surfaced.

Speaker Change: No.

Speaker Change: With the second half of the year have been even stronger but for all of this noise absolutely no excuses, though.

Speaker Change: We need to deal and the realities of the World We live in.

Speaker Change: And while it is proving to be a fairly unpredictable place of late.

Speaker Change: We are well positioned and clearly we will do our best to meet or exceed guidance, taking another significant step forward for the company.

Josh Weinstein: We also continue to set ourselves up well for 2020. Our book position is in line with last year's record levels and at historically high prices. Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price and our sharpened yield management tools are helping us optimize our performance in the current environment. Our strong results, book position, and outlook are a testament to the success of our ongoing strategy to deliver same-ship, high-margin revenue growth. We remain focused on achieving yield improvement by driving demand that outpaces our supply, and we have a lot more in store to keep our strong momentum going.

Speaker Change: We also continue to set ourselves up well for 2026 or.

Speaker Change: Our book position is in line with last year's record levels and at historically high prices.

Josh Weinstein: Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price, and our sharpened yield management tools are helping us optimize our performance in the current environment. Our strong results, book position, and outlook are a testament to the success of our ongoing strategy to deliver same-ship, high-margin revenue growth. We remain focused on achieving yield improvement by driving demand that outpaces our supply, and we have a lot more in store to keep our strong momentum going. We are counting down the days to the opening of Celebration Key, which is now less than a month away.

Speaker Change: Our elongated advanced booking window and limited capacity growth give us flexibility to patiently take price and our sharpened yield management tools are helping us optimize our performance in the current environment.

Speaker Change: Our strong results book position and outlook are a testament to the success of our ongoing strategy to deliver same ship high margin revenue growth.

Speaker Change: We remain focused on achieving yield improvement by driving demand that outpaces, our supply and we have a lot more in store to keep our strong momentum going.

Josh Weinstein: We are counting down the days to the opening of Celebration Quay, which is now less than a month away. with the largest lagoons in the Caribbean at over 275,000 surface square feet, multiple times that of any other private cruise destination in existence or in construction. Over one and a half miles of white sand beach and the world's largest swim-up bar and largest sand castle, we are gearing up to deliver even more fantastic experiences for Carnival guests than ever before. We are on schedule to welcome our first ship, Carnival Vista, on July 19th and intentionally ramp up from there into the fourth quarter so that we can make sure the guest experience is as extraordinary as possible from the start.

Speaker Change: We are counting down the days to the opening of celebration key which is now less than a month away.

Josh Weinstein: With the largest lagoons in the Caribbean at over 275,000 surface square feet, multiple times that of any other private cruise destination in existence or in construction, over one and a half miles of white sand beach, and the world's largest swim-up bar and largest sandcastle, we are gearing up to deliver even more fantastic experiences for Carnival guests than ever before. We are on schedule to welcome our first ship, Carnival Vista, on 19 July and intentionally ramp up from there into Q4 so that we can make sure the guest experience is as extraordinary as possible from the start. It's gratifying to see that already Celebration Key is consistently ranked among the most searched cruise destinations on Google, and it hasn't even opened yet.

Speaker Change: With the largest lagoons and the Caribbean at over 275000 surface square feet multiple times that of any other private cruise destination in existence or in construction.

Speaker Change: Over one and a half miles of white sand beach, and the world's largest swim up bar and largest sand castle, we are gearing up to deliver even more fantastic experiences for carnival guests than ever before.

Speaker Change: We are on schedule to welcome our first ship Carnival Vista on July 19th and intentionally ramp up from there into the fourth quarter. So that we can make sure. The guest experience is as extraordinary as possible from the start.

Josh Weinstein: You know, it's gratifying to see that already Celebration Key is consistently ranked among the most searched cruise destinations on Google, and it hasn't even opened yet. We fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests to our expertly curated ultimate beach day. Once complete, we'll be augmenting our marketing materials with live footage and imagery from this amazing destination. And of course, word of mouth from over 2 million guests annually will amplify our share of voice.

Speaker Change: It's gratifying to see that already celebration key is consistently ranked among the most searched cruise destinations on Google and it Hasnt even opened yet we fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests who are expertly curated.

Josh Weinstein: We fully expect the buzz around it to only build once our five portals built for fun begin welcoming guests to our expertly curated ultimate beach day. Once complete, we'll be augmenting our marketing materials with live footage and imagery from this amazing destination. Of course, word of mouth from over 2 million guests annually will amplify our share of voice. We're also on track for the mid-2026 opening of a significant expansion at RelaxAway Half Moon Cay, our pristine Caribbean oasis. This spectacular tropical paradise, already ranked among the best private islands in the Caribbean, invites our guests to enjoy an idyllic beach day full of white sand, turquoise waters, refreshing ocean breezes, delicious food, tropical drinks, and opportunities galore to do exactly as its new name invites you to do, relax.

Speaker Change: Ultimate Beach day.

Speaker Change: Once complete we will be augmenting our marketing materials with live foot addition imagery from this amazing destination and of course word of mouth from over 2 million guests annually will amplify our share of voice.

Josh Weinstein: We're also on track for the mid-2026 opening of a significant expansion at Relax-Away Half Moon Cay, our pristine Caribbean oasis. This spectacular tropical paradise, already ranked among the best private islands in the Caribbean, invites our guests to enjoy an idyllic beach day full of white sand, turquoise waters, refreshing ocean breezes, delicious food, tropical drinks, and opportunities galore to do exactly as its new name invites you to do, relax. We've shaped many itineraries that combine these perfectly paired destinations in order to provide our guests with both the ultimate and the idyllic beach days, all on one vacation.

Speaker Change: We're also on track for the mid 2026 opening of a significant expansion at relax away half Moon Cay are pristine Caribbean Oasis.

Speaker Change: This spectacular tropical Paradise already ranked among the best private islands in the Caribbean.

Speaker Change: Bites, our guests to enjoy an idyllic beach day full of white sand turquoise waters refreshing ocean breezes delicious food tropical drinks and opportunities go lower to do exactly as its new name invites you to do.

Speaker Change: Relax.

Josh Weinstein: We've shaped many itineraries that combine these perfectly paired destinations in order to provide our guests with both the ultimate and the idyllic beach days, all on one vacation. During the quarter, we also announced another meaningful expansion and enhancement to our beautiful destination, Mahogany Bay in Roatán, Honduras. Already rated one of the highest destinations in the Caribbean, upgrades will include a large pool with a swim-up bar, a beautiful new private beach club, and doubling the beach line to almost half a mile. This destination will be renamed Isla Tropicale and, along with Celebration Key and RelaxAway Half Moon Cay, as the pinnacle of our seven Caribbean gems marketed as the Paradise Collection. As beaches are the number one destination for vacationing Americans, it is no accident that this is central to our destination strategy.

Speaker Change: We've shaped many itineraries that combined these perfectly paired destinations in order to provide our guests with both the ultimate.

Speaker Change: And the idea like Beach days, all one vacations.

Josh Weinstein: During the quarter, we also announced another meaningful expansion and enhancement to our beautiful destination, Mahogany Bay in Roatan, Honduras. Already rated one of the highest destinations in the Caribbean, upgrades will include a large pool with a swim-up bar, a beautiful new private beach club, and doubling the beachline to almost half a mile. This destination will be renamed Isla Tropical and, along with Celebration Cay and Relax Away Half Moon Cay, as the pinnacle of our seven Caribbean gems, marketed as the Paradise Collection.

Speaker Change: During the quarter.

Speaker Change: <unk> also announced another meaningful expansion and enhancement to our beautiful destination mahogany Bay in Roatan Honduras.

Speaker Change: Already rated one of the highest destinations in the Caribbean upgrades will include a large pool with the swim up bar, a beautiful new private Beach club.

Speaker Change: And doubling the beach line to almost half a mile.

Speaker Change: This destination will be renamed East, let Tropic cow and along with celebration key and relax away half Moon Cay as the pinnacle of our seven Caribbean gems marketed as the Paradise collection.

Josh Weinstein: You know, beaches are the number one destination for vacationing Americans. It is no accident that this is central to our destination strategy. Our seven Caribbean gems collectively provide miles upon miles of some of the most beautiful beaches in the world. by making targeted incremental investments and stepping up our marketing efforts across this portfolio. We believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion, taking share from land-based alternatives. At the same time, we continue to make investments in our existing fleet that will generate new demand and enhance price.

Speaker Change: Beaches are the number one destination for vacationing Americans. It is no accident that this is central to our destination strategy.

Josh Weinstein: Our seven Caribbean gems collectively provide miles upon miles of some of the most beautiful beaches in the world. By making targeted incremental investments and stepping up our marketing efforts across this portfolio, we believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion, taking share from land-based alternatives. At the same time, we continue to make investments in our existing fleet that will generate new demand and enhance pricing. AIDAdiva recently re-entered service, the first ship to undergo the AIDA Evolution upgrade.

Speaker Change: Our seven Caribbean gems collectively provide miles upon miles of some of the most beautiful beaches in the world.

Speaker Change: By making targeted incremental investments and stepping up our marketing efforts across this portfolio.

Speaker Change: We believe we have a significant opportunity to further monetize these strategic assets by using them to drive consumer consideration and conversion taking share from land based alternatives.

Speaker Change: At the same time we.

Speaker Change: Continue to make investments in our existing fleet that will generate new demand and enhanced pricing.

Josh Weinstein: AIDA DIVA recently re-entered service, the first ship to undergo the AIDA Evolution Upgrade. Since her revamp and reintroduction, Aida Diva has been knocking it out of the park with a huge take up for its many added bar and specialty dining venues and rave reviews for its ship-wide enhancements. This success is a great sign for the remaining six vessels in the AIDA fleet that will undergo this upgrade over the next few years. We also recently ordered two new builds for AIDA for delivery in fiscal 2030 and 2032 as we reinforce our strategy to rebalance the company towards our higher returning brand.

Speaker Change: I E. The Diva recently reentered service the first ship to undergo the EDA evolution upgrade.

Josh Weinstein: Since her revamp and reintroduction, AIDAdiva has been knocking it out of the park with a huge take-up for its many added bar and specialty dining venues and rave reviews for its ship-wide enhancements. This success is a great sign for the remaining 6 vessels in the AIDA fleet that will undergo this upgrade over the next few years. We also recently ordered 2 new builds for AIDA for delivery in fiscal 2030 and 2032 as we reinforce our strategy to rebalance the company towards our higher-returning brands. These next-generation ships, coupled with the AIDA Evolution program, modernizing much of the existing fleet will drive even more demand for our AIDA brand, which is already synonymous with cruising in Germany. Additionally, Carnival Cruise Line recently announced exciting new features for its fourth and fifth incredibly successful Excel-class ships for delivery in 2027 and 2028.

Speaker Change: Since her revamp and reintroduction.

Speaker Change: <unk> has been knocking it out of the park with a huge take up for its many added bar and specialty dining venues and rave reviews for its ship wide enhancements.

Speaker Change: This success is a great sign for the remaining six vessels in the Aida fleet that will undergo this upgrade over the next few years.

Speaker Change: We also recently ordered two new builds for Aida for delivery in fiscal 'twenty 30, and 2032 as we reinforce our strategy to rebalance the company towards our higher returning brands.

Josh Weinstein: These next generation ships, coupled with the AIDA evolution program, modernizing much of the existing fleet. will drive even more demand for our AIDA brand, which is already synonymous with cruising in Germany.

Speaker Change: These next generation ships.

Speaker Change: <unk> with the Aida evolution program modernizing much of the existing fleet will.

Speaker Change: We will drive even more demand for our Aida brand, which is already synonymous with cruising in Germany.

Josh Weinstein: Additionally, Carnival Cruise Line recently announced exciting new features for its fourth and fifth incredibly successful XL class ships for delivery in 2027 and 2028. Carnival Festival and Carnival Tropical will feature Sensation Point, a new outdoor zone on the top three decks, purposely designed to be the most family-friendly water park at sea, with six exhilarating slides, including two family raft slides, and, for the first time, the fun will continue into the evening, with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a DJ and a slew of other special evening activities. These shifts will be ideally suited for families, with 70% more interconnecting rooms than prior XL-class shifts.

Speaker Change: Additionally.

Speaker Change: Carnival cruise line recently announced exciting new features for its fourth and fifth incredibly successful XL class ships for delivery in 2027 and 2028.

Josh Weinstein: Carnival Festivale and Carnival Tropicale will feature Sunsation Point, a new outdoor zone on the top 3 decks, purposely designed to be the most family-friendly water park at sea, with 6 exhilarating slides, including 2 family raft slides. For the 1st time, the fun will continue into the evening with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a DJ and a slew of other special evening activities. These ships will be ideally suited for families with 70% more interconnecting rooms than prior Excel-class ships. Just around the corner, we'll be welcoming our next new build, Star Princess, sister ship to the hugely successful Sun Princess, awarded Condé Nast Traveler's 2024 Mega Ship of the Year. That means we'll be doubling down on Sun Princess' innovative platform and tremendously successful guest operations, spanning across F&B, entertainment, and its elevated ship-within-a-ship suites sanctuary collection.

Speaker Change: Carnival Festival and Carnival Tropic, Hal will feature sensation point, a new outdoor zone on the top three decks purposely designed to be the most family friendly water Park at sea with six exhilarating slides, including two family RAF slides and for the first.

Speaker Change: Times, the phone will continue into the evening with extended park hours for guests to enjoy a vibrantly illuminated nighttime waterworks, including a D J and a slew of other special evening activities.

Speaker Change: These shifts will be ideally suited for families with 70% more interconnecting rooms than prior XL class ships.

Josh Weinstein: And, just around the corner, we'll be welcoming our next new build, Star Prince. Sister Ship to the hugely successful Sun Princess awarded Condé Nast Travelers 2024 Mega Ship of the Year. That means we'll be doubling down on Some Princess's innovative platform and tremendously successful guest operations spanning across F&B, entertainment, and its elevated ship-within-a-ship Suites Sanctuary collection.

Speaker Change: And just around the corner, we will be welcoming our next Newbuild Star Princess.

Speaker Change: Your shift to the hugely successful some princess awarded <unk> Nast Traveler's 'twenty 'twenty four mega ship of the year.

Speaker Change: That means we'll be doubling down on some princesses innovative platform and tremendously successful guest operations spanning across F&B entertainment and it's elevated ship within a ship suites sanctuary collection.

Josh Weinstein: With our moderate new build pipeline, including just three ships on order over the next four years, we have ample room to continue to pay down additional debt and return to investment grade leverage metrics while providing ourselves with a headroom to return value to shareholders.

Josh Weinstein: With our moderate new build pipeline, including just 3 ships on order over the next 4 years, we have ample room to continue to pay down additional debt and return to investment-grade leverage metrics while providing ourselves with the headroom to return value to shareholders. Yet another opportunity that will help propel us forward is the exciting news Carnival Cruise Line announced just last week. In June 2025, Carnival will be launching a brand-new and improved loyalty program. This will be an industry first, tying loyalty benefits and status to total spending on Carnival and spending on everyday purchases with Carnival's co-branded credit card rather than being based on the lifelong accumulation of day sales.

Speaker Change: With our moderate Newbuild pipeline, including just three ships on order over the next four years, we have ample room to continue to pay down additional debt and return to investment grade leverage metrics, while providing ourselves with the headroom to return value to shareholders.

Josh Weinstein: And yet another opportunity that will help propel us forward is the exciting news Carnival Cruise Line announced just last week. In June of next year, Carnival will be launching a brand new and improved loyalty program. This will be an industry-first, tying loyalty benefits and status to total spending on Carnival and spending on everyday purchases with Carnival's co-branded credit card, rather than being based on the lifelong accumulation of days. David will speak to the financial impact, so I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and a long term strategic differentiator for us.

Speaker Change: Yet another opportunity that will help propel us forward is the exciting news Carnival cruise line announced just last week and.

Speaker Change: In June of next year Carnival will be launching a brand new and improved loyalty program.

Dave: This will be an industry first tying loyalty benefits and status to total spending on carnival and spending on everyday purchases with carnivals co branded credit card rather than being based on a lifelong accumulation of days sales Dave.

Josh Weinstein: David will speak to the financial impact. I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and a long-term strategic differentiator for us. I would like to thank our team members, ship and shore, once again for the enthusiasm and commitment they exhibit, which enabled us to deliver happiness to almost 3.5 million guests this past quarter by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. It is their combined effort that has made a truly transformational change in this company inside of just 2 years. I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Speaker Change: David will speak to the financial impact so I'll just add that we see this as an important tool for improving customer engagement and increasing customer lifetime value and our long term strategic differentiator for us.

Josh Weinstein: I would like to thank our team members, Ship and Shore, once again, for the enthusiasm and commitment they exhibit, which enabled us to deliver happiness to almost three and a half million guests this past quarter, by providing them with extraordinary cruise vacations, while honoring the integrity of every ocean we sail, place we visit, and life we touch. It is their combined effort that has made a truly transformational change in this company inside of just two years. I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Speaker Change: I would like to thank our team members ship and shore once again for the enthusiasm and commitment they exhibit which enabled us to deliver happiness to almost three and a half a million guests this past quarter by providing them with extraordinary cruise vacations, while honoring the integrity of every ocean we sale.

Speaker Change: Place, we visit and.

Speaker Change: We touch it.

Speaker Change: It is their combined effort that has made a truly transformational change in this company inside of just two years.

Speaker Change: I would be remiss if I also didn't express my appreciation for all of the many supporters who contributed to this successful outcome.

Josh Weinstein: Thank you to our travel agent partners, destination partners, investors, and of course our loyal guests. We could not have done this without all of you.

Josh Weinstein: Thank you to our travel agent partners, destination partners, investors, and, of course, our loyal guests. We could not have done this without all of you. While I'm incredibly proud of the great progress our teams have made in such a short amount of time, these results are nowhere near our endpoint. The tailwinds and opportunities before us give us the potential for so much more. With that, I'll turn the call over to David.

Speaker Change: Thank you to our travel agent partners destination partners investors and of course, our loyal guests we could not have done this without all of you.

Josh Weinstein: While I'm incredibly proud of the great progress our teams have made in such a short amount of time, these results are nowhere near our end point. The tailwinds and opportunities before us give us the potential for so much more.

Speaker Change: While I'm incredibly proud of the great progress our teams have made in such a short amount of time.

Speaker Change: These results are nowhere near our endpoint, the tailwind and opportunities before us give us the potential for so much more with that I will turn the call over to David.

David Bernstein: With that, I'll turn the call over to David. Thank you, Josh. I'll start today with a summary of our 2025 second quarter results. Next I'll provide some color on our improved full year June guidance as well as some key insights on our third quarter guidance. I will also explain the financial impact of Carnival Cruise Line's exciting new loyalty program Carnival Rewards for 2026 and beyond.

David Bernstein: Thank you, Josh. I'll start today with a summary of our 2025 Q2 results. I'll provide some color on our improved full-year June guidance, as well as some key insights on our Q3 guidance. I will also explain the financial impact of Carnival Cruise Line's exciting new loyalty program, Carnival Rewards, for 2026 and beyond, finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging. Turning to the summary of our Q2 results. Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest-ever Q2 operating results. The outperformance was essentially driven by five things. First, favorability in revenue worth $84 million as yields came in up over 6.4% compared to the prior year, that was on top of last year's robust 12% increase.

David: Thank you Josh.

David: Started today with a summary of our 2025 second quarter results.

David: Next I'll provide some color on our improved full year June guidance as well as some key insights on our third.

David: Third quarter guidance.

David: I will also explain the financial impact of Carnival cruise lines exciting new loyalty program Carnival rewards for 2026 and beyond.

David Bernstein: and then finish up with an update on our efforts to rebuild a financial fortress through refinancing and deleveraging. Returning to the summary of our second quarter results. Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest ever second quarter operating result. The outperformance was essentially driven by five things. First, favorability in revenue worth $84 million as yields came in up over 6.4% compared to the prior year, and that was on top of last year's robust 12% increase. This was 200 basis points better than March guidance, driven by close-in strength in ticket prices and continued strong onboard spending.

David: And then finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging.

Speaker Change: Turning to the summary of our second quarter results.

Speaker Change: Net income exceeded March guidance by $185 million as we outperformed once again, achieving our highest ever second quarter operating results.

Speaker Change: The outperformance was essentially driven by five things.

Speaker Change: First.

Speaker Change: Favorability in revenue with $84 million as yields came in up over six 4% compared to the prior year and that was on top of last year's robust 12% increase this was 200 basis points better than March guidance, driven by closing strength in ticket prices.

David Bernstein: This was 200 basis points better than March guidance, driven by close-in strength in ticket prices and continued strong onboard spending. The yield increase was a result of improvements on both sides of the Atlantic. The improvement in ticket prices was across all core programs. The improvement in onboard spending was broad-based, as all major categories of spending were meaningfully higher. Second, cruise costs without fuel per available lower berth day, or ALBD, were up 3.5% compared to the prior year. This was also 200 basis points better than March guidance and was worth $56 million. The favorability in costs was driven by the timing of expenses between the quarters. Third, favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations, leveraging technology and best practices, paid off once again.

Speaker Change: And continued strong onboard spending the yield increase was a result of improvements on both sides of the Atlantic.

David Bernstein: The yield increase was a result of improvements on both sides of the Atlantic. The improvement in ticket prices was across all core programs. The improvement in onboard spending was broad-based, as all major categories of spending were meaningfully higher. Second, cruise costs without fuel per available lower birthday, or ALBD, were up three and a half percent compared to the prior year. This was also 200 basis points better than March guidance and was worth $56 million.

Speaker Change: The improvement in ticket prices was across all core programs the improvement in onboard spending was broad based as all major categories of spending were meaningfully higher.

Speaker Change: Cruise costs without fuel per available lower birthday, or a L. D. We're up three and a half per cent compared to the prior year.

Speaker Change: This was also 200 basis points better than March guidance.

Speaker Change: We're at $56 million the favorability in cost was driven by the timing of expenses between the quarters.

David Bernstein: The favorability in costs was driven by the timing of expenses between the quarters. Third, favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations, leveraging technology and best practices, paid off once again. Fourth, interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayment. And fifth, $15 million from the favorable net impact of currency and fuel prices.

Speaker Change: Favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations leveraging technology and best practices paid off once again.

David Bernstein: Fourth, interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayment. Fifth, $15 million from the favorable net impact of currency and fuel price. Customer deposits at the end of Q2 were at an all-time high, up over $250 million versus the prior year, despite the impact from our Q3 capacity decline of 2.4%. Next, I will provide some color on our improved full-year June guidance. June guidance net income of approximately $2.7 billion is a $200 million improvement over March guidance. The improvement was essentially driven by five things. First, our Q2 favorability and yield flow-through to the full-year, improving our full-year yield guidance by 30 basis points to 5% higher than strong 2024 levels, which were up almost 11%.

Speaker Change: For interest income and expense favorability of $8 million was driven by higher interest income and an opportunistic debt prepayments.

Speaker Change: And fifth $15 million from the favorable net impact of currency and fuel price.

David Bernstein: Customer deposits at the end of the second quarter were at an all-time high, up over $250 million versus the prior year, despite the impact from our third quarter capacity decline of 2.4%.

Speaker Change: Customer deposits at the end of the second quarter were at an all time high up over $250 million versus the prior year. Despite the impact from our third quarter capacity decline of two 4%.

David Bernstein: Next, I will provide some color on our improved full year June guide. June guidance net income of approximately $2.7 billion is a $200 million improvement over March guidance. The improvement was essentially driven by five things. First, our second quarter favorability and yield flowed through to the full year, improving our full-year yield guidance by 30 basis points to 5% higher than strong 2024 levels, which were up almost 11%. The total increase in full-year revenue was over $100 million, which included not only the flow-through of the second quarter favorability in revenue, but also additional voyages that were added by Carnival Cruise Lines, primarily in the fourth quarter as a result of the change in the dry dock schedule into 2026.

Speaker Change: Next I will provide some color on our improved full year June guidance.

Speaker Change: June guidance net income of approximately $2 7 billion is a 200 million dollar improvement over March guidance.

Speaker Change: The improvement was essentially driven by <unk> first.

Speaker Change: Second quarter favorability in yield flowed through to the full year, improving our full year yield guidance by 30 basis points to 5% higher and strong 2024 levels, which were up almost 11%.

David Bernstein: The total increase in full-year revenue was over $100 million, which included not only the flow-through as a Q2 favorability in revenue, but also additional voyages that were added by Carnival Cruise Line, primarily in the Q4 as a result of the change in the dry dock schedule into 2026. These additional voyages improved June guidance net income. However, given the seasonality of our business and the late opening of the voyages added to the Q4, these voyages tempered the full-year +yield impact by approximately one-tenth of a point, which is included in the full-year yield guidance of 5%. Second, cruise costs without fuel per ALBD are now expected to be up 3.6% compared to the prior year. This is two-tenths of a point better than March guidance.

Speaker Change: The total increase in full year revenue was over $100 million, which included not only the flow through in the second quarter favorability in revenue, but also additional voyages that were added by Carnival cruise lines, primarily in the fourth quarter as a result of the change in the dry dock schedule into 2020.

Speaker Change: <unk>.

David Bernstein: These additional voyages improved June guidance net income. However, given the seasonality of our business and the late opening of the voyages added to the fourth quarter, these voyages tempered the full year positive yield impact by approximately one-tenth of a point, which is included in the full year yield guidance of five percent. Second, cruise costs without fuel per ALBD are now expected to be up 3.6% compared to the prior year. This is two-tenths of a point better than March guidance. The improvement in this cost metric was driven by the increase in ALBDs as a result of the added voyage.

Speaker Change: These additional voyages improved June guidance net income however, given the seasonality of our business and the opening of the voyages added to the fourth quarter. These voyages tempered the full year positive yield impact by approximately 110th of a point, which is included in the full year yoga.

Speaker Change: <unk>, 5%.

Speaker Change: Second cruise costs without fuel per <unk>.

Speaker Change: <unk> are now expected to be up three 6% compared to the prior year. This is two tenths of a point better than March guidance. The improvement in this cost metric was driven by the increase in <unk> as a result of the added voyages.

David Bernstein: The improvement in this cost metric was driven by the increase in ALBDs as a result of the added voyages. Even though we already have the industry-leading cost structure, our teams will always keep looking for ways to further optimize our costs while continuing to improve the onboard experience for our guests. Third, favorability in fuel consumption and fuel mix from Q2 is expected to continue throughout H2 and grow to approximately $30 million for the full year compared to March guidance. Fourth, favorability in interest income and expense from Q2 is also expected to continue throughout H2 and grow to approximately $30 million for the full year compared to March guidance, driven by our refinancing efforts during Q2. Fifth, approximately $35 million from the favorable net impact of currency and fuel price.

David Bernstein: Even though we already have the industry-leading cost structure, our teams will always keep looking for ways to further optimize our costs while continuing to improve the onboard experience for our guests. Third, favorability and fuel consumption and fuel mix from the second quarter is expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance. Fourth, favorability and interest income and expense from the second quarter is also expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance driven by our refinancing efforts during the second quarter.

Speaker Change: Even though we already have the industry, leading cost structure. Our teams will always keep looking for ways to further optimize our cost while continuing to improve the onboard experience for our guests.

Speaker Change: Third favorability in fuel consumption and fuel mix from the second quarter is expected to continue throughout the second half and grow to approximately $30 million for the full year compared to March guidance.

Speaker Change: Favorability in interest income and expense from the second quarter is also expected to continue throughout the second half and greater were approximately $30 million for the full year compared to March guidance, driven by our refinancing efforts during the second quarter.

David Bernstein: And fifth, approximately $35 million from the favorable net impact of currency and fuel All of this results in $6.9 billion of EBITDA, a 13% improvement over 2024, virtually all of which is being driven by same-store revenue growth as our capacity is only up 1% year over year.

Speaker Change: Approximately $35 million from the favorable net impact of currency and fuel price. All of this results in $6 9 billion of EBITDA, a 13% improvement over 2020 for virtually all of which is being driven by same store revenue growth as our capacity.

David Bernstein: All of this results in $6.9 billion of EBITDA, a 13% improvement over 2024, virtually all of which is being driven by same-store revenue growth as our capacity is only up 1% year-over-year. Next, I will provide some key insights on our Q3 guidance. As I previously indicated during the last two earnings calls, Q3 cruise costs are expected to be higher than the full-year increase. Q3 cruise costs without fuel per ALBD are expected to be up 7% compared to the prior year. Four factors are driving nearly half the year-over-year increase. First, the introduction next month of our game-changing exclusive Caribbean destination, Celebration Key. While we anticipate that Celebration Key will be a smash hit with our guests and provide an excellent return on our investment, operating expenses for the destination will impact our overall year-over-year cost comparisons.

Speaker Change: If he is only up 1% year over year.

David Bernstein: Next, I will provide some key insights on our third quarter guidance. As I previously indicated during the last two earnings calls, third quarter cruise costs are expected to be higher than the full year increase. Third quarter cruise costs without fuel per ALBD are expected to be up 7% compared to the prior year. Four factors are driving nearly half the year-over-year increase. First, the introduction next month of our game-changing, exclusive Caribbean destination, Celebration Cay. While we anticipate that Celebration Cay will be a smash hit with our guests and provide an excellent return on our investment, operating expenses for the destination will impact our overall year-over-year cost comparison.

Speaker Change: Next I will provide some key insights on our third quarter guidance as I previously indicated during the last two earnings calls third quarter cruise costs are expected to be higher than the full year increase third quarter cruise costs without fuel per <unk> are expected to be up 7% compare.

Speaker Change: Due to the prior year four factors are driving nearly half of the year over year increase first.

Speaker Change: The introduction next month of our game changing exclusive Caribbean destination celebration, Keith while we anticipate that celebration key will be a smash hit with our guests and providing excellent return on our investment and operating expenses for the destination will impact our overall year over year.

Speaker Change: Our cost comparisons.

David Bernstein: Second, 2024 benefited from one-time items that we mentioned last year, also impacting our year-over-year cost comparison. Third, higher advertising expense which we discussed on the December call. And fourth, lower third quarter capacity which results in spreading our fixed costs over fewer ALBDs.

David Bernstein: Second, 2024 benefited from one-time items that we mentioned last year, also impacting our year-over-year cost comparisons. Third, higher advertising expense, which we discussed on the December call. Fourth, lower Q3 capacity, which results in spreading our fixed costs over fewer ALBDs. Now let me explain the financial impact of Carnival Cruise Line's exciting new loyalty program, Carnival Rewards, on 2026 and beyond. As Josh described, this new program will start in June 2026, impacting results for the H2 2026. While the program will be cash flow positive from day one, it does impact our yields and our P&L during the first couple of years.

Speaker Change: 2024 benefited from one time items that we mentioned last year also impacting our year over year cost comparisons.

Speaker Change: Third higher advertising expense, which we discussed on the December call and for.

Speaker Change: Lower third quarter capacity, which results in spreading our fixed costs over fewer <unk> now let me explain the financial impact of Carnival cruise lines exciting new loyalty program Carnival rewards on 2026 and beyond.

David Bernstein: Now let me explain the financial impact of Carnival Cruise Line's exciting new loyalty program Carnival Rewards on 2026 and beyond. As Josh described, this new program will start in June 2026, impacting results for the second half of 2026. While the program will be cash flow positive from day one, it does impact our yields and our P&L during the first couple of years. Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guests, equal to the value of future program benefits earned. Over time, the redemption of benefits by guests will build, and so will the revenue recognized for delivering these benefits to the guests.

Speaker Change: As Josh described this new program will start in June 2026 impacting results for the second half of 2026.

Speaker Change: While the program will be cash flow positive from day, one it does impact our yields and our P&L during the first couple of years.

David Bernstein: Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guest, equal to the value of future program benefits earned. Over time, the redemption of benefits by guests will build, and so will the revenue recognized for delivering these benefits to the guests. We expect that it will take approximately 2 years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens, after approximately 2 years, the program will be accretive to our yields. As a result, the year-over-year impact on yields is expected to be about a half a point in 2026, a bit less in 2027, neutral for 2028, and turn positive thereafter.

Speaker Change: Accounting treatment for recognizing revenue requires a deferral of a portion of the ticket price paid by the guests equal to the value of future program benefits.

Speaker Change: Overtime, the redemption of benefits by guests will build so will the revenue recognized for delivering these benefits to the gas.

David Bernstein: We expect that it will take approximately two years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens, after approximately two years, the program will be accretive to our yields. As a result, the year-over-year impact on yields is expected to be about a half a point in 2026, a bit less in 2027, neutral for 2028, and turn positive thereafter. It should also be noted that we do not anticipate any meaningful impact on costs from the new loyalty program when compared to the current program.

Speaker Change: We expect that it will take approximately two years for the revenue recognized each quarter from the benefits redeemed by guests to exceed deferred revenue of the portion of the ticket price paid for the future benefits. Once this happens after approximately two years the program will be accretive to our yields.

Speaker Change: A result, the year over year impact on yields is expected to be about a half a point in 2026, a bit less in 2027 neutral for 2028.

Speaker Change: In turn positive thereafter, it should also be noted that we do not anticipate any meaningful impact on cost from the new loyalty program when compared to the current program.

David Bernstein: It should also be noted that we do not anticipate any meaningful impact on cost from the new loyalty program when compared to the current program. We look forward to building greater engagement with our guests because of the new exciting Carnival Rewards program. Most airlines introduced similar types of loyalty programs many years ago, and we know how beneficial those programs turned out to be. Now, I'll finish up with an update of our refinancing and de-leveraging efforts. During the quarter, we prepaid $350 million of our $1.4 billion notes due 2026 and refinanced the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million through early 2026.

David Bernstein: We look forward to building greater engagement with our guests because of the new exciting Carnival Rewards program. Most airlines introduced similar types of loyalty programs many years ago, and we know how beneficial those programs turned out to be.

Speaker Change: We look forward to building greater engagement with our guests because of the new exciting Carnival rewards program. Most airlines introduce similar types of loyalty programs. Many years ago, and we know how bandwidth issue those programs turned out to be now I'll finish up with an update of our refinancing and deal.

David Bernstein: Now I'll finish up with an update of our refinancing and deleveraging effort. During the quarter, we prepaid $350 million of our $1.4 billion notes due 2026 and refinanced the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million through early 2026. We also upsized our euro-denominated floating rate loan from 200 million to 300 million euros, extending its maturity and amending its margin at a favorable rate, resulting in an all-in interest rate of less than 4%. These transactions continued our efforts, rebuilding an investment-grade balance. We have been working aggressively to reduce interest expense, simplify our capital structure, and manage our future debt maturities, refinancing nearly $7 billion of debt already this year at favorable rates.

Speaker Change: Leveraging efforts during the quarter, we prepaid $350 million of about one 4 billion notes due 2026 and refinance the remainder with senior unsecured notes due 2031. These transactions will reduce net interest expense by over $20 million too early.

Speaker Change: 2026, we also upsized, our euro denominated floating rate loan from 200 million to 300 million euros, extending its maturity and amending its margin at favorable rate, resulting in an all in interest rate of less than 4%. These.

David Bernstein: We also upsized our euro-denominated floating rate loan from EUR 200 million to EUR 300 million, extending its maturity and amending its margin at a favorable rate, resulting in an all-in interest rate of less than 4%. These transactions continued our efforts rebuilding an investment-grade balance sheet. We have been working aggressively to reduce interest expense, simplify our capital structure, and manage our future debt maturities, refinancing nearly $7 billion of debt already this year at favorable rates. We are pleased that our efforts have been recognized with the recent credit rating upgrades. In fact, we now have only one notch to go to reach our investment-grade rating with both S&P and Fitch.

Speaker Change: <unk> continued our efforts rebuilding an investment grade balance sheet.

Speaker Change: We have been working aggressively to reduce interest expense simplify our capital structure and manage our future debt maturities refinancing nearly 7 billion balance of debt already this year had favorable rates we are pleased.

David Bernstein: We are pleased that our efforts have been recognized with the recent credit rating upgrades. In fact, we now have only one notch to go to reach our investment-grade rating with both S&P and FIT. Over the last three months, we saw a marked improvement in our net debt to EBITDA ratio, going from 4.1 times at the end of the first quarter to 3.7 times as of the end of the second quarter. During the second half of 2025, we anticipate continuing to pay down debt. However, it will not impact net debt, as we'll be utilizing cash already on the books.

Speaker Change: <unk> and our efforts have been recognized with the recent credit rating upgrades. In fact, we now have only one notch to go to reach our investment grade rating with both S&P and Fitch over.

David Bernstein: Over the last 3 months, we saw a marked improvement in our net debt to EBITDA ratio, going from 4.1x at the end of Q1 to 3.7x as of the end of Q2. During H2 2025, we anticipate continuing to pay down debt. However, it will not impact net debt as we'll be utilizing cash already on the books. While we are guiding to improved EBITDA in H2 2025, given the delivery of Star Princess later this year with its associated export credit, we expect our net debt to EBITDA ratio to remain flat at year-end with Q2. Earlier this month, we extended and upsized our revolver capacity by 50% to $4.5 billion on more favorable terms, meaningfully enhancing our liquidity.

Speaker Change: Over the last three months, we saw a marked improvement in our net debt to EBITDA ratio going from four one times at the end of the first quarter to three seven times as of the end of the second quarter. During the second half of 2025, we anticipate continuing to pay down debt.

Speaker Change: However, it will not impact net debt as we will be utilizing cash already on the books.

David Bernstein: While we are guiding to improved EBITDA in the second half of 2025 given the delivery of Star Princess later this year with its associated export credit, we expect our net debt to EBITDA ratio to remain flat at year-end with second quarter.

Speaker Change: While we are guiding to improved EBITDA in the second half of 2025, given the delivery of Star Princess later this year with its associated export credit we expect our net debt to EBITDA ratio to remain flat at yearend with second quarter.

David Bernstein: Earlier this month, we extended and upsized our revolver capacity by 50% to $4.5 billion on more favorable terms, meaningfully enhancing our liquidity. With this in hand and coupled with our well-managed near-term maturity towers through 2026, we expect to opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026, executing the rest of our current refinancing plan.

Speaker Change: Earlier this month, we extended and Upsized, our revolver capacity by 50% to $4 $5 billion on more favorable terms meaningfully enhancing our liquidity.

David Bernstein: With this in hand and coupled with our well-managed near-term maturity towers through 2026, we expect to opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026, executing the rest of our current refinancing plan. 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 investment-grade leverage metrics in the not-too-distant future as we move further down the road rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders. Now, operator, let's open the call for questions.

Speaker Change: With this in hand, and coupled with our well manage near term maturity towers through 2026, we expect to Opportunistically accelerate our debt reduction efforts during the remainder of 2025 and 2026 executing the rest of our current refinancing plan.

David Bernstein: 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 investment grade leverage metrics in the not too distant future as we move further down the road, rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders.

Speaker Change: 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 investment grade leverage metrics in the not too distant future as we move further down the road rebuilding.

Speaker Change: Our financial fortress, while continuing the process of transferring value from debt holders back to shareholders.

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

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

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. One moment please while we poll for questions. Thank you. Our first question is from the line of Matthew Boss with JPMorgan. Please proceed with your question.

Speaker Change: Thank you we will now begin.

Operator: We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in question queue. Let me press star 2 if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up the handset before placing the star key.

Speaker Change: Conducting a question and answer session.

Speaker Change: To ask a question. Please press star one on your telephone keypad.

Speaker Change: Information tone will indicate your line is in the question queue.

Speaker Change: You May press star two if you'd like to withdraw your question from the queue.

Speaker Change: For persistency seeker equipment may be necessary to pick up the handset before pressing the star keys.

Operator: To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. One moment please while we poll for questions. Thank you.

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

Speaker Change: Thank you Juan please pull for questions.

Matthew Boss: Our first question is from the line of Matthew Boss with J.P. Morgan. Please just use your question. Great, thanks and congrats on the phenomenal quarter. Thanks, Matt.

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

Matthew Boss: Great. Thanks. Congrats on the phenomenal quarter.

Matthew Boss: Great, Thanks, and congrats on a phenomenal quarter.

Josh Weinstein: Thanks, Matt.

Matthew Boss: Josh, maybe could you speak to improvements in product and experience so far that you think is translating to today's above-plan pricing and onboard spend? Maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited. You talked about continued fleet improvements. You talked about the launch of Private Islands exiting this year and also loyalty. Maybe just the incremental opportunity or maybe where we stand in terms of innings relative to what you've already done.

Josh Weinstein: Thanks, Matt So maybe so Josh maybe could you speak to improvements in product and experience. So far that you think is translating to today is above plan pricing and onboard spend in and maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited you talked about.

Josh Weinstein: So maybe so, Josh, maybe could you speak to improvements in product and experience so far that you think is translating to today's above plan pricing and on board spend and and maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited. You talked about continued fleet improvements. You talked about the launch of private islands exiting this year and also loyalty. So maybe just the incremental opportunity, or maybe where we stand in terms of innings relative to what you've already done. Sure, we've been talking about this for a few years now at this point.

Matthew Boss: <unk> continued fleet improvements you talked about the launch of private islands exiting this year and also loyalty. So maybe just the incremental opportunity or maybe where we stand.

Matthew Boss: In terms of earnings relative to what you've already done.

Josh Weinstein: Sure. We've been talking about this for a few years now at this point. Really, when we look at what the teams have done across the commercial space, they've been making step-by-step improvements in pretty much all areas of the business. When it comes to onboard experience and product, that's the one I've always talked about the least in this context because they're always on their game, right? Nothing is going to be, from my perspective, about recreation. Really, it's going to be about innovation step by step, responding to the guests.

Matthew Boss: Sure.

Matthew Boss: We've been talking about this for a few years now at this point really when we look at what the teams have done it across the commercial space.

Josh Weinstein: Really when we look at what the teams have done across the commercial space, they've been making step-by-step improvements in pretty much all areas of the business. When it comes to onboard experience and product, that's the one I've always talked about the least in this context because they're always on their game. Nothing is going to be, from my perspective, about recreation. It's going to be about innovation, step-by-step, responding to the guests that they are targeting. It's small incremental things that make us have this improved profile onboard every single quarter. They're not necessarily exciting in the eyes of lots of folks, but the way that Holland America, for example, understands its guests really lean into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally fresh and be able to champion that and make that part of the experience.

Speaker Change: They've been making.

Speaker Change: Step by step improvements in pretty much all areas of the business and when it comes to onboard experience.

Speaker Change: And product that's the one I've always talked about the Leafs in this context, because there are always on the game right nothing is going to be from my perspective.

Speaker Change: Recreation really it's going to be about innovation step by step responding to the guests.

Josh Weinstein: That they are targeting. It's small incremental things that make us have this improved profile on board every single quarter. They're not necessarily exciting in the eyes of lots of folks, but the way that Holland America Line, for example, understands its guests really lean into the concept of fresh seafood as an integral part of their cruise experience, and being able to source locally fresh and be able to champion that and make that part of the experience. Little things like that go a long way, and all of our brands do that all the time. Now, on top of that, we obviously do take opportunities to make some investments in the assets themselves. We've talked about AIDA Evolution, and as you heard me talk about in my notes, it's exceeded our expectations when it comes to the returns that it's generating.

Speaker Change: We are targeting.

Speaker Change: And it's small incremental things that make us have this improved profile onboard every single quarter.

Speaker Change: They're not necessarily exciting.

Speaker Change: Lots of folks, but the way the Holland America for example understand its guests really lean into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally fresh and be able to champion that and make that part of the experience little things like that go along way in all of our bra.

Josh Weinstein: Little things like that go a long way, and all of our brands do that all the time. On top of that, we obviously do take opportunities to make some investments in the asset themselves. We talked about AIDA Evolution, and as you heard me talk about in my notes, it's exceeded our expectations when it comes to the returns that it's generating. This is business as usual as far as I'm concerned, and that will continue well into the future.

Speaker Change: <unk> do that all the time now on top of that we obviously do take opportunities.

Speaker Change: To make some investments in the assets themselves, we've talked about Aida evolution and as you heard me talk about in my notes.

Speaker Change: <unk> exceeded our expectations when it comes to the returns that it's generating.

Josh Weinstein: This is business as usual as far as I'm concerned, and that will continue well into the future. As far as looking forward, I'd say we're still in the early innings, right? Celebration Key doesn't exist yet. We have another month before that happens. There's lots more in the pipeline, some of which we've already talked about, other things we've not. Which doesn't mean it's huge incremental investments the size of Celebration Key, but things that we can do to make our experiences and products on the land side even better. We look forward to talking about those over time.

Speaker Change: So this is this is this is business as usual as far as I'm concerned and that will continue well into the future as.

Josh Weinstein: As far as looking forward, I'd say we're still in the early innings, right? Celebration Key doesn't exist yet. We have another month before that happens. And there's lots more in the pipeline, some of which we've already talked about, other things we've not, which doesn't mean it's huge incremental investments the size of Celebration Key, but things that we can do to make our experiences and products on the land side even better. We look forward to talking about those over time. Great.

Speaker Change: As far as you know.

Speaker Change: Looking forward.

Speaker Change: We're still in the early innings right celebration he doesn't exist yet we have another month before that happens.

Speaker Change: There's lots more in the pipeline some of which we've already talked about other things we've not.

Speaker Change: It doesn't mean, it's huge incremental investments to the size of celebration key but things that we can do to make our our experiences and products on the land side, even better and we look forward to talking about the overtime.

Matthew Boss: Great. Maybe, Josh, on the bottom line, how best to think about the margin opportunity, which I think you cited as so much more from here with the last two quarters now exceeding 2019. I think you've made it clear that you don't see 2019 as a ceiling.

Josh Weinstein: And then maybe, Josh, on the bottom line, how best to think about the margin opportunity, which I think you cited as so much more from here, with the last two quarters now exceeding 2019. And I think you've made it clear that you don't see 2019 as a CLM. Right, no, I mean, highest in 20 years, right? So we feel good about that trajectory. From from our perspective, it's maintaining our low cost industry leadership status while continuing to focus on driving incremental revenue. I mean, it is as simple as that incremental revenue is flowing to the bottom line.

Speaker Change: Great and then maybe Josh on the bottom line, how best to think about the margin opportunity, which I think you cited is so much more from here with the last few quarters now exceeding 2019, and I think you've made it clear that you don't see 2019 as a ceiling.

Josh Weinstein: No, highest in 20 years, right? We feel good about that trajectory. From our perspective, it's maintaining our low-cost industry leadership status while continuing to focus on driving incremental revenue. It is as simple as that. Incremental revenue is flowing to the bottom line, and that's exactly where the teams have been focused. We can do both. We can chew gum and walk, and we can manage our costs and increase revenue, which is what you've been seeing.

Speaker Change: Right no.

Speaker Change: 20 years right. So we feel good about that trajectory from from our perspective, it's maintaining our low cost industry leadership status, while continuing to focus on driving incremental revenue.

Speaker Change: As simple as that and the incremental revenues flowing to the bottom line and Thats exactly where the teams have been focused.

Matthew Boss: And that's exactly where the teams have been focused. And we can do both, we can chew gum and walk, and we can manage our costs and increase revenue, which is what you can Great color. Best of luck.

Speaker Change: Can do both we can chew gum and walk when we can manage our costs and increase revenue, which is what you've been seeing.

Matthew Boss: Great color. Best of luck.

Speaker Change: Great color best of luck.

Josh Weinstein: Thanks, Matt.

Speaker Change: Thanks, Matt.

Ben Chaykin: Our next questions are from the line of Ben Chaykin with Mizzou Host Securities. Hey, good morning. Thanks for taking my question. Maybe you could provide some color on pricing for Celebration Key itineraries. Is this asset getting a premium today or is it too early? And then related, what plans do you have to market the destination? Like, do you anticipate putting marketing dollars behind the project or will this stay more word of mouth for the time being? And then one follow-up. Thanks. So we are seeing a premium. It's in line with what our expectations were. So everything's proceeding exactly as we had anticipated it to be.

Operator: Our next questions are from the line of Ben Chaiken with Mizuho Securities. Please proceed with your questions.

Speaker Change: Our next questions are from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Ben Chaiken: Hey, good morning. Thanks for taking my question. Maybe you could provide some color on pricing for Celebration Key itineraries. Is this asset getting a premium today, or is it too early? Related, what plans do you have to market the destination? Do you anticipate putting marketing dollars behind the project, or will this stay more word of mouth for the time being? One follow-up. Thanks.

Ben Chaiken: Hey, good morning, Thanks for taking my question.

Ben Chaiken: Maybe you could provide some color on pricing for celebration key itinerary is this asset getting a premium today or is it too early and then related what plans do you have to market. The destination like do you anticipate putting marketing dollars behind the project or will this stay more word of mouth for the time being and then one follow up thanks.

Josh Weinstein: All right, sir. Good morning, Ben. We are seeing a premium. It's in line with what our expectations were. Everything's proceeding exactly as we had anticipated it to be. With respect to marketing dollars, we have been putting marketing dollars and shifting marketing dollars to really lean into Celebration Key, and I think that's why it's one of the most sought-after destinations, even though it doesn't take people yet. We need 1 more month before that happens. There's more to come on that, and there's more that we'll be doing in shifting the marketing spend so that we can leverage the same type of enthusiasm for the other things that we've got in the works, like the expansion for RelaxAway, which is going to be another wind at our backs, so to speak, as we get into 2026 and beyond.

Ben Chaiken: Alright.

Speaker Change: Good morning.

Speaker Change: So we are seeing a premium it's in line with what our expectations were so everything's proceeding exactly as we had anticipated it to be.

Josh Weinstein: With respect to marketing dollars, you know, we have been. We have been putting marketing dollars and shifting marketing dollars to really lean into Celebration Quay. And I think that's why it's one of the most sought-after destinations, even though it doesn't take people yet. We need one more month before that happens. So there's more to come on that.

Speaker Change: With respect to marketing dollars you know we have been we have been putting marketing dollars and shifting marketing dollars to really lean into celebration Kian I think thats why its one of the most sought after destination, even though it doesn't it doesn't.

Speaker Change: It doesn't take take people yes.

Speaker Change: The Walmart a month before that happens so there's more to come on that and Theres more that we'll be doing in shifting the marketing.

Josh Weinstein: And there's more that we'll be doing in shifting the marketing spend so that we can leverage the same type of enthusiasm for the other things that we've got in the works, like the expansion for Relax Away, which is going to be another wind at our backs, so to speak, as we get into 2026 and beyond. Got it.

Speaker Change: So that we can leverage the same type of enthusiasm for the other things that we've got in the works like the expansion for relax away.

Speaker Change: It could be another wind at our backs.

Speaker Change: Speak as we get into 2026 and beyond.

Ben Chaiken: Got it. I guess the essence of the marketing question was just, I would imagine it's difficult to market it too much prior to there being bodies there, but totally appreciate where you're coming from. Then on the loyalty program announcement, is this potentially a gateway to more of a book direct push, or is it more about just keeping customers in the network? Curious how you think about the benefits. Obviously, David walked us through some of the yield impacts over the next 2 years. Thanks.

Josh Weinstein: I guess I guess the essence of the marketing question was just that I would imagine it's difficult to market it too much prior to there being bodies there but but totally appreciate kind of where you're And then on the loyalty program announcement, is this potentially a gateway to more of a book direct push, or is it more about people just keeping customers in the network? Curious how you think about the benefits. Obviously, David walked us through some of the yield impacts over the next couple of years. Thanks. Sure, sure. No, definitely not a push to go more direct.

Speaker Change: Got it I guess I got the essence of the marketing question was just I would imagine it's difficult to market it too much prior to their being bodies, there, but totally appreciate kind of where you're coming from.

Speaker Change: And then on the on the loyalty program announcement is this potentially a gateway to more of a book direct Bush or is it more about people just keeping customers in the network curious how you think about the benefits obviously, David walked us through some of the yield impact.

Speaker Change: In the next couple of years. Thanks.

Josh Weinstein: Sure. No, definitely not a push to go more direct. Bookings with our travel agents will get the same benefit for the guest and for the trade that they always would. We think that this is a great avenue for increased business, loyalty, and engagement, not only directly with us, but through our valuable trade partners as well.

Speaker Change: Sure sure no definitely not.

Josh Weinstein: Bookings with our travel agents will get the same benefit for the guest and for the trade that they always would. So we think that this is a great avenue for increased business and loyalty and engagement, not only directly with us, but through our valuable trade partners. Got it, thank you.

Speaker Change: Pushed didn't go more direct.

Speaker Change: Working with our travel agents will get the same benefit.

Speaker Change: For the gas to them for the trains that they always what so.

Speaker Change: This is a great Avenue for increased business and loyalty and engagement.

Speaker Change: Not only directly with us, but there are valuable trade partners as well.

Ben Chaiken: Got it. Thank you.

Speaker Change: Got it thank you.

Josh Weinstein: Thanks.

Speaker Change: Thanks.

Steve Wozinski: Next question is from the line of Steve Wozinski with Steeple. Yeah, hey guys, good morning. And congrats, Josh, on the second quarter in Outlook here. So Josh, since, you know, we heard from you guys back in March, obviously, there's a lot, you know, that's been going on out in the world. But, but maybe wondering if, you know, you can kind of walk us through kind of how those last three months look from a, from a booking perspective, just, I think what we're trying to figure out here, were there, you know, were there stronger months versus softer months?

Operator: Next questions are from the line of Steven Wieczynski with Stifel. Please proceed with your questions.

Speaker Change: Next question is from the line of Steve <unk> with Stifel. Please proceed with your question.

Steven Wieczynski: Yeah. Hey, guys. Good morning, and congrats, Josh, on the Q2 and outlook year. Josh, since we heard from you guys back in March, obviously there's a lot that's been going on out in the world. Maybe wondering if you can walk us through how those last three months look from a booking perspective. Just, I think what we're trying to figure out here, were there stronger months versus softer months, or have bookings been pretty much status quo across geographies and sourcing? Maybe also wondering how bookings have looked more recently with all the noise out in the marketplace around Iran, Israel, and all that stuff you noted in your prepared remarks.

Steve: Yeah, Hey, guys good morning.

Steve: <unk>, Josh on the second quarter and outlook here.

Speaker Change: So Josh since we heard from you guys back in March obviously, there's a lot that's been going on out in the world.

Speaker Change: But maybe wondering if you can kind of walk us through kind of how those last three months look from a from a booking perspective.

Speaker Change: I think what we're trying to figure out here, where there were the stronger months versus softer months or <unk>.

Steve Wozinski: Or, you know, have bookings been pretty much status quo across, you know, geographies and sourcing? And maybe also wondering how bookings have looked, you know, more recently, you know, with all the noise out in the marketplace around Iran, Israel, and all that stuff you noted in your prepared remarks. Sure. Morning, Steve. So, yeah, no, we definitely saw more volatility in the month of April as probably should not be expected. So that's a good dip versus where we were in the trajectory in March, but May, nicely better than April and the first couple of weeks of June, nicely better than May.

Speaker Change: Bookings have been pretty much status quo status quo across geographies and sourcing and maybe also wondering how bookings have looked more recently.

Speaker Change: Without the noise out in the marketplace around Iran, Israel and all that stuff you noted in your prepared remarks.

Josh Weinstein: Sure. Good morning, Steve. Yeah, no, we definitely saw more volatility in the month of April, as probably should not be expected. That took a dip versus where we were in the trajectory in March. May, nicely better than April, and the first couple of weeks of June, nicely better than May. We'll keep responding appropriately to a very tricky environment.

Speaker Change: Sure Mark So, yes, we definitely saw.

Speaker Change: More volatility in the month of April.

Speaker Change: That's probably should not be expected.

Speaker Change: So that took a dip versus where we were and the trajectory in March but.

Speaker Change: Hey nicely better than April and the first couple of weeks of June nicely better than May so well.

Josh Weinstein: So, you know, we'll, you know, we'll, we'll keep responding To a very tricky environment.

Speaker Change: Well keep responding.

Speaker Change: Brokerage is a very tricky environment.

Josh Weinstein: Okay, gotcha. And then, Josh, as we think about the back half of the year, I mean, I think in your presentation, it said you're 93% booked for 2025. And if we think about, you know, you guys have actually, you know, you've exceeded your first and second quarter guidance. And, you know, that was pretty much driven by stronger close-in pricing and onboard trends. So, you know, Josh, I guess I'm guessing as we think about the last two quarters, should we be thinking that, you know, there probably won't be as much potential upside to, you know, to your revised guidance given, you know, not as much close-in pricing is left.

Steven Wieczynski: Okay. Gotcha. Josh, as we think about the back half of the year, I think in your presentation, it said you're 93% booked for 2025. If we think about you guys have actually exceeded your Q1 and Q2 guidance, and that was pretty much driven by stronger close-in pricing and onboard trends. Josh, I guess I'm guessing as we think about the last two quarters, should we be thinking that?

Speaker Change: Okay got you and then just as we think about the back half of the year.

Speaker Change: In your presentation that said youre, 93% booked for 2025.

Speaker Change: If we think about you guys are actually you've exceeded your first and second quarter guidance.

Matthew Boss: That was pretty much driven by stronger close in pricing and onboard trends. So Josh I guess I'm guessing as we think about the last quarter. So should we be thinking that there probably won't be as much potential upside to your revised guidance given.

Steven Wieczynski: There probably won't be as much potential upside to your revised guidance given, not as much close in pricing is left, and then the real driver of yield outperformance for the last 6 months is essentially just the onboard spend. Is that the right way to think about the next 2 quarters?

Speaker Change: Not as much close in pricing is left and then the real driver of yield out performance for the last six months is essentially just the onboard spend does that does that kind of the right way to think about the next two quarters.

Josh Weinstein: And then the real driver of yield out performance for the last six months is, you know, essentially just the onboard spend. Is that kind of the right way to think about the next two quarters? I think I'll answer maybe at a little bit of a higher level, which is I think it's fair to say the upside that we thought we'd have in December for the back half of the year is not at the same place, and hopefully people would expect that because the world over the last five, six months has taken some turns that nobody expected.

Josh Weinstein: Well, I think I'll answer maybe at a little bit of a higher level, which is, I think it's fair to say, the upside that we thought we'd have in December for H2 is not at the same place. Hopefully, people would expect that because the world over the last six months has taken some turns that nobody expected. As we've talked about before, in the grand scheme of things, a lot of times what happens is there's just a reflection for a lot of consumers about what does this mean for me? Internalizing it, figuring it out, and then moving forward with their plans. That's all well and good, and that's part of the process when these types of things occur. The issue is, there's just been a lot in H1. A lot of those points in time.

Speaker Change: Well I mean, I'll take I'll answer maybe at a little bit of a higher level, which is I think it's fair to say.

Matthew Boss: The upside that we thought we'd have in December for the back half of the year.

Speaker Change: It is not at the same place.

Speaker Change: Hopefully people would expect that because the world over the last five six months six months.

Speaker Change: Has.

Speaker Change: <unk> taken some terms in terms of nobody expected and as we've talked about before in the Grand scheme of things a lot of times. What happens is there's just there's just a reflection for a lot of consumers about what does this mean for me.

Josh Weinstein: And as we talked about before, in the grand scheme of things, a lot of times what happens is there's just a reflection for a lot of consumers about what does this mean for me, internalizing it, figuring it out, and then moving forward with their plans. And that's all well and good, and that's part of the process when these types of things occur. The issue is there's just been a lot in the first half, a lot of those points in time. And I think the team's been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve and how we manage our revenue in this environment.

Speaker Change: <unk> at figuring it out and then moving forward with their plans and that's all well and good and Thats part of the process. When these types of things occur. The issue is there's just been a lot in the first half.

Josh Weinstein: I think the team's been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve, and how we manage our revenue in this environment. Definitely not saying there's not upside. We're always going to strive to meet and exceed guidance, but yeah, no, definitely not the same view of the upside as we had in December.

Speaker Change: Lot of those points in time, and I think the team has been doing an amazing job.

Speaker Change: Delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve.

Speaker Change: And how we manage our revenue in this environment, so definitely not saying, there's not upside we're always going to strive to meet and exceed guidance, but yeah, no definitely not the same.

Josh Weinstein: So definitely not saying there's not upside. We're always going to strive to meet and exceed guidance, but yeah, definitely not the same view of the upside as we had in December.

Speaker Change: Okay.

Speaker Change: As we had in December.

Steve Wozinski: Okay. Thanks, Josh. Appreciate it.

Steven Wieczynski: Okay. Thanks, Josh. Appreciate it.

Speaker Change: Okay. Thanks, guys appreciate it.

Josh Weinstein: Sure.

Speaker Change: Sure.

Robin Farley: The next questions are from the line of Robin Farley with UBS. Please just use your Great, sort of similarly thinking about the second half of the year, can you characterize a little bit how demand for Europe is in Q3, and then just thinking about, I totally understand your comments about what's going on in the world, impacting bookings, and also it seems like you maybe have less left to sell anyway for the second half, but in terms of onboard revenues, that's a little bit closer in. It seems like that came in well, despite kind of volatility and geopolitical events that people were still spending when they got on board, so does it seem reasonable that the onboard piece, that there's maybe some upside potential in the second half from that, and perfectly understand you may not want to bake it into your guidance today, but it sounds like the onboard spend did kind of continue through the period of volatility, is that just trying to characterize that?

Operator: The next question is from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: The next question is from the line of Robin Farley with UBS. Please proceed with your question.

Robin Farley: Great. Yeah, sort of similarly thinking about the H2 of the year, can you characterize a little bit how demand for Europe is in Q3? Just thinking about, totally understanding your comments about what's going on in the world impacting bookings and also it seems like you maybe have less left to sell anyway for the H2. In terms of onboard revenues, that's a little bit closer, and it seems like that came in well despite kind of volatility and geopolitical events that people were still spending when they got on board. Does it seem reasonable that the onboard piece, that there's maybe some upside potential in the H2 from that? Perfectly understand you may not want to bake it into your guidance today, it sounds like the onboard spend did kind of continue through the period of volatility.

Speaker Change: Great.

Speaker Change: Similarly, thinking about the second half of the year can you characterize a little bit how demand for Europe is in Q3, and then just thinking about.

Speaker Change: Totally understand your comments about what's going on in the world impacting bookings and also it seems like you maybe have less left to sell anyway.

Speaker Change: <unk> for the second half but.

Speaker Change: In terms of onboard revenues, that's a little bit closer and it seems like that came in well.

Speaker Change: Mike kind of volatility and geopolitical events that people were still spending when they got on board. So does it seem reasonable that the onboard piece that there's maybe some upside potential in the second half from that and perfectly understand you may not want to bake it into your guidance today, but.

Speaker Change: It sounds like the onboard spend did kind of continues through the period of volatility is that is that just trying to characterize that.

Robin Farley: Just trying to characterize that. Thanks.

Josh Weinstein: Thanks. Good morning, Robin, how are you? So we clearly said one question is a follow-up, but since it's you, so Europe Q3 is looking great. So nothing but good things to talk about there. With respect to onboard, I'd say we outperformed, as David, I think, said in his notes, or maybe I did. I can't even remember, David. We outperformed on both the passenger revenue and the onboard. And the onboard was really quite strong throughout the quarter. And so far, what we've seen in the first couple of weeks of June is that's continued. The yield guidance that we gave is based on what we want to be able to achieve on both the ticket and the onboard side.

Josh Weinstein: Good morning, Robin. How are you?

Robyn: Good morning, Robyn how are you.

Robin Farley: Okay.

Josh Weinstein: We clearly said 1 question and then a follow-up, but since it's you, Europe Q3 is looking great. Nothing but good things to talk about there. With respect to onboard, I'd say we outperformed as David, I think, said in his notes, or maybe I did, I can't even remember, David. We outperformed on both the passenger revenue and the onboard. The onboard was really quite strong throughout the quarter. So far, what we've seen in the 1st couple of weeks of June is that's continued. The yield guidance that we gave is based on what we want to be able to achieve on both the ticket and the onboard side. It's in there. As I said, we always want to outperform, but that's the guidance that we've given.

Robyn: So.

Robyn: We said one question a follow up.

Robyn: No.

Robyn: So Europe Q3 is looking great. So nothing nothing but good things to talk about there.

Robyn: With respect to.

Speaker Change: Onboard I'll say, we outperformed as David I think said in his notes or maybe I can't even remember David.

Speaker Change: We outperformed on both the passenger revenue on the onboard.

Speaker Change: The onboard was really quite strong throughout the month of the quarter and so far what we've seen in the first couple of weeks of June and that's continued.

Speaker Change: The yield guidance that we gave as is.

Speaker Change: Based on what we want to be able to achieve on both the ticket and the onboard side. So it's in there.

Josh Weinstein: So it's in there. As I said, we always want to outperform, but that's the guidance that we've given. Okay. Great.

Speaker Change: As I said, we always wanted to outperform but.

Speaker Change: That's the guidance that we've given.

Robin Farley: Okay, great. Thank you. I guess that I have my follow-up. Maybe just one-

David: Okay, great. Thank you and I guess that I had my phone so maybe just one David.

Robin Farley: Thank you. And I guess that I already had my follow-up. So, maybe just one thought, David. Yeah. Thank you, Robyn. But just if I could just mention when the Rewards Program... Oh, wait. Are you serious? Okay. All right. Go ahead. No, no, no. Not a question. Just a suggestion that when David... Just talking about the impact of the Rewards Program next year, just that maybe next year in the first year of the program, it might be helpful for all of us if you kind of break out what the yield would have been under the old accounting, you know, just so we can see whether it's...

Josh Weinstein: That's very fair. Thank you, Robin.

David: Thank you Robyn.

Robin Farley: If I could just mention with the Rewards Program.

David: But just if I could just mentioned.

Josh Weinstein: Oh, wait, are you serious? Okay. All right. Go ahead.

David: Alright, alright.

Robin Farley: No. Not a question, just a suggestion that when David, just talking about the impact of the rewards program next year. Just that maybe next year, in the first year of the program, it might be helpful for all of us if you kind of break out what the yield would have been under the old accounting, just so we can see whether if it's 50 basis points, it's more, if it's less. Just that might be helpful in the first year. That thought, no follow-up question. Thanks.

David: No no no no no not a question just a suggestion that when David just talking about the impact of the rewards program next year, but just to maybe next year in the first year of the program. It might be helpful. For all of US if you kind of break out what the yield would have been.

David: Under the old accounting just so we can see whether it's if it's 50 basis points. That's more if its less just that might be helpful. In the first year. So just wanted to just not sought no follow up question. Thanks.

Robin Farley: You know, if it's 50 basis points, it's more, if it's less, just that might be helpful in the first year. So, just that thought. No follow-up question. Thanks. Yeah. Happy to do that when the time comes in the back. Thank you.

David Bernstein: Yeah, happy to do that when the time comes in H2 2026.

Speaker Change: Yes happy to do that when the time comes in the back half of 'twenty six.

Operator: Thank you. The next question's from the line of Brandt Montour with Barclays. Please proceed with your question.

Speaker Change: Thank you next.

Brent Montour: The next questions are from the line of Brant Montour with Barclays. Please receive your question. Good morning, everybody. Congrats on the quarter.

Speaker Change: Our next questions are from the line of Brent <unk> with Barclays. Please proceed with your question.

Brandt Montour: Good morning, everybody. Congrats on the quarter. First question is on the consumer, Josh. The lower income consumer we're seeing some struggle in that segment across other travel verticals. We've seen that for the last 2 years, and you guys have done really well throughout that. I want to get your thoughts on, geopolitical events aside, if that consumer feels different today, right now, this year, H1, whatever you want to kind of talk about versus last year or the year before. If you think you can kind of keep sort of knocking the ball off the cover with that consumer, if they're sort of accumulating a struggle that's going to start showing up.

Brent: Good morning, everybody congrats on the quarter.

Josh Weinstein: First question is on the consumer, Josh, you know, the lower-income consumer we're seeing some struggle in that segment across other travel verticals, you know, but we've seen that for the last, you know, two years, and you guys have done really well throughout that. I just want to get your thoughts on, you know, geopolitical events aside, if that consumer feels different today, right now, this year, first half, whatever you want to kind of talk about, versus last year or the year before, if you think you can kind of keep sort of, you know, knocking the ball off the cover with that consumer, if they're sort of accumulating a struggle that's going to start showing up.

Speaker Change: The first question is on the the consumer Josh.

Speaker Change: Lower income consumer we're seeing.

Speaker Change: Seeing some struggle in that segment across other travel verticals, but we've seen that for the last two years and you guys have done really well throughout that I just wanted to get your thoughts on geopolitical events aside if that consumer feels different today right. Now this year first half whatever you want to talk about versus last year or the year before.

Speaker Change: Sure.

Speaker Change: Do you think you can kind of keep sort of knocking the ball off to cover with that consumer if thats. If there is sort of accumulating a struggle.

Speaker Change: That's going to start showing up.

Josh Weinstein: Sure, so we haven't seen anything that's really showing us a differentiation in patterns between the lower-end consumer and those that are looking for the premium or even the luxury, so nothing in particular to speak of. I go back to what I've said a lot, which a lot of people say is, we are an incredibly stupid value when it comes to the alternatives, and when people are looking to take vacation because they do, we hold up really, really well, and the lower down you come in income, the more important that becomes, because they have to make their dollars really earn on their vacation, and that's what we try to do for everybody.

Josh Weinstein: Sure. We haven't seen anything that's really showing us a differentiation in patterns between the lower-end consumer and those that are looking for the premium or even the luxury. Nothing in particular to speak of. I go back to what I've said a lot, which a lot of people say is we are a incredibly stupid value when it comes to the alternatives. When people are looking to take vacation because they do, we hold up really well. The lower down you come in income, the more important that becomes. They have to make their dollars really earn on their vacation, and that's what we try to do for everybody.

Speaker Change: Sure so.

Speaker Change: We haven't seen anything that's really showing us a differentiation and patterns between the.

Speaker Change: Lower end consumer and those that are looking for the premium or even the luxury so nothing nothing in particular to speak of.

Speaker Change: I'll go back to what I, what I've settled a lot, which a lot of people say is we are incredibly stupid value when it comes to the alternatives and when people are looking to take vacation because they do.

Speaker Change: We hold up really really well and the lower down you come in income and the more important that becomes big.

Speaker Change: Because they have to make their dollars really earn burn on their vacation and that's what we tried to do for everybody.

Brent Montour: Okay. Thanks for that.

Brandt Montour: Okay, thanks for that. Just a second or another go at the H2 here. Just looking at the implied guidance and the cadence, it does look like the Q4 implied guide is higher than the Q3. We know that the Q3 is obviously below the last couple quarters' run rate growth. If Europe's not softer or there's anything to say there, is it fair to say that the Q4 just has a sequential lift implied from the ramping up of the island? Or is there anything else in there that we could maybe highlight?

Speaker Change: Okay. Thanks for that and then just a second or another go at the second half year, just looking at the implied guidance and the cadence. It does yes. It does look like the fourth quarter implied guide is higher than the third quarter.

Josh Weinstein: And then just a second or another go at the second half here, just looking at the implied guidance and the cadence, it does look like the fourth quarter implied guide is higher than the third quarter, and the third quarter is obviously below the last couple of quarters run rate growth. And so if Europe's not softer or there's anything to say there, then is it fair to say that the fourth quarter just has a sequential lift implied from the ramping up of the island, or is there sort of anything else in there that we could maybe highlight?

Speaker Change: We know that that and we know in the <unk>.

Speaker Change: Third quarter is obviously below.

Speaker Change: Last couple of quarters run rate growth and so if europe's not.

Speaker Change: Softer or there is anything to say there then is it fair to say that the fourth quarter just has a sequential lift implied from the ramping up of the island or is there sort of anything else in there that we could maybe highlight.

Brent Montour: Yes, you know, certainly celebration key is helpful in our portfolio, so we're happy about that. You know, but taking a step back from percentages, when you look at actual dollars, the increases that we're forecasting, because Q3 is seasonally higher as a base, they're each 8 bucks higher year over year. Okay, great. Thanks for that, guys. Congrats again on the quarter.

Josh Weinstein: Yes. Certainly Celebration Key is helpful in our portfolio, so we're happy about that. Taking a step back from percentages, when you look at actual dollars, the increases that we're forecasting, because Q3 is seasonally higher as a base, they're each $8 higher year over year.

Speaker Change: Yes, Sir.

Speaker Change: Certainly celebration key is.

Speaker Change: Helpful. In our portfolio. So we're happy about that but taking a step back from percentages. When you look at absolute dollars. The increases that we're forecasting because Q3 is seasonally higher as a base.

Speaker Change: The reshape of higher year over year.

Brandt Montour: Okay, great. Thanks for that, guys, and congrats again on the quarter.

Speaker Change: Okay, great. Thanks for that guys congrats again on the quarter.

Josh Weinstein: Thanks.

Speaker Change: Thanks.

James Hardiman: The next question is from the line of James Harniman with Citi. Pleased to see you with your question. Hey, good morning. Thanks for taking my call. And, you know, obviously, congrats on another strong quarter here. So Josh, you talked about a little bit of weakness in April, followed by a pickup from April to May and then from May to June. I wanted to sort of connect that to the booking commentary for 2026. I think coming out of Q1, we were ahead in terms of bookings and we're in line now. Should the narrative ultimately be that saw a little bit of a lull in booking demand, but that you held strong on pricing throughout, just given the fact that you've got a lot of time, obviously, to fill out that order book.

Operator: The next question's from the line of James Hardiman with Citi. Please proceed with your questions.

James Hardiman: The next question is from the line of James Hardiman with Citi.

Speaker Change: With your question.

James Hardiman: Hey, good morning. Thanks for taking my call, and obviously, congrats on another strong quarter here. Josh, you talked about a little bit of weakness in April, followed by a pickup from April to May, and then from May to June. I wanted to sort of connect that to the booking commentary for 2026. I think coming out of Q1, we were ahead in terms of bookings, and we're in line now. Should the narrative ultimately be that you saw a little bit of a lull in booking demand, but that you held strong on pricing throughout, just given the fact that you've got a lot of time, obviously, to fill out that order book? Maybe I'm connecting dots that shouldn't be connected. Thanks.

James Hardiman: Hey, good morning, Thanks for taking my call.

Speaker Change: Obviously, congrats on another strong quarter here so.

Speaker Change:

Speaker Change: Josh you talked about a little bit of weakness in April followed by a pickup in from April to May and then from May to June.

Speaker Change: I wanted to sort of connect that to the booking commentary for.

Speaker Change: 2026, I think I think.

Speaker Change: Coming out of Q1, we were ahead in terms of bookings.

Speaker Change: And were in line now.

Speaker Change: So the narrative ultimately be that.

Speaker Change: You saw a little bit of a lull in.

Speaker Change: Booking demand, but you held strong on pricing throughout.

Speaker Change: Just given the fact that you've got a lot of time, obviously to fill out that order book.

Josh Weinstein: Or maybe I'm connecting dots that shouldn't be connected. Yeah, no, I think generally, excuse me, I agree. You know, we don't have to panic and we don't have to do silly things. So, you know, volatility comes and it goes. And like I said, our teams are managing the curve and trying to do the right things and staying ahead of the game.

Speaker Change: Or maybe I'm connecting dots, which shouldn't be connected.

Josh Weinstein: No.

John: Yeah, No I think good morning, Hey, John generally.

Josh Weinstein: Good morning, James.

Josh Weinstein: Excuse me, I agree. We don't have to panic, and we don't have to do silly things. Volatility comes and it goes, and like I said, our teams are managing the curve and trying to do the right things and staying ahead of the game.

Speaker Change: Excuse me I agree.

Speaker Change: We don't have to panic, and we don't have to do silly things so.

Speaker Change: Volatility comes and it goes in our like I said our teams are managing.

Speaker Change: Managing the curve and trying to do the right things and stay on a head to head up again.

Josh Weinstein: Got it. That's helpful.

James Hardiman: Got it. That's helpful. Then, you talked about up top how it's way too early to really anticipate the Middle East conflict and how it might impact your business, but just based on where things are happening.

Speaker Change: Got it that's helpful and then.

Josh Weinstein: And then, um, I mean, you talked about up top how it's way too early to really anticipate. sort of the Middle East conflict and how it might impact your business, but just based on where things are happening, right? This is. new at least in terms of having to take, you know, that part of the world off the board, right, going back to the Israel-Gaza conflict. Do you anticipate where we sit today having to meaningfully change any itinerary? Yeah, crystal balls are nice, but we really only have a couple of ships at the very end of this year and for the winter a few months into 2026 that would potentially have their itineraries impacting, and that's because they go and base themselves out of Dubai.

Speaker Change: I mean, you talked about how it's way too early to really anticipate sort of sort of the middle east conflict and how it might impact your business, but just based on.

Speaker Change: Where things are happening right. This isn't.

Josh Weinstein: Right

James Hardiman: at least in terms of having to take that part of the world off the board. Going back to the Israel-Gaza conflict. Do you anticipate, where we sit today, having to meaningfully change any itineraries?

Speaker Change: New at least in terms of having to take.

Speaker Change: Is that part of the world off the board right going back to the Israel Gaza conflict do you anticipate.

Speaker Change: Where we sit today having.

Speaker Change: Meaningfully changed any itinerary.

Josh Weinstein: Crystal balls are nice, we really only have a couple of ships at the very end of this year and for the winter, a few months into 2026, that would potentially have their itineraries impacting, and that's because they go and base themselves out of Dubai. We have mitigation plans, and we're looking at this, and we'll make the right decision at the right time. We already avoid the Red Sea, as you know. When it comes to things like world cruises and exotic cruises, we really have no exposure in this area through the end of 2026. Safety is going to be paramount, and it always is. We'll make the right decision as we understand what the lay of the land looks like.

Speaker Change: Yes.

Speaker Change: Crystal balls are nice but.

Speaker Change: We really only have a couple of ships at the very end of this year and for the winter a few months into 2026 that would that would potentially have the right scenario is impacting and that's because they go on based on sales out of Dubai.

Josh Weinstein: We have mitigation plans, and we're looking at this, and we'll make the right decision at the right time, but we already avoid the Red Sea, as you know, and when it comes to things like world cruises and exotic cruises, we really have no exposure in this area through the end of 2026, so safety is going to be paramount, and it always is, so we'll make the right decision as we understand what the lay of the land will be. Got it. That's helpful. Thanks, Jeff.

Speaker Change: And we're obviously, we have mitigation plans and we're looking at this and we will make the right decision at the right time.

Speaker Change: But we already avoid the Red Sea as you know so.

Speaker Change: When it comes to things like World cruises, and exotic cruises and we really have no exposure in this area through the end of 2026, So we'll see.

Speaker Change: Paramount is already there so we'll make the right decision as we understand what the lay of the land looks like.

James Hardiman: Got it. That's helpful. Thanks, Josh.

Speaker Change: Got it that's helpful. Thanks, Jeff.

Josh Weinstein: Thanks, James.

Speaker Change: Excellent.

Conor Cunningham: The next questions are from the line of Conor Cunningham with Melly's Research. Hi, everyone. Thank you. Just on the 3Q cost guide, there's a couple things in there that I wanted to just understand a little better. I think you talked a little bit, I think you talked about 200 basis points of timing related stuff that shifted from 2Q to 3Q. And then you mentioned Celebration Key. Could you just, you know, give a number on Celebration Key, what that headwind is? And I'm just trying to, it's more for 26, as that kind of normalizes throughout the, as it matures and whatnot.

Operator: The next question turns on the line of Conor Cunningham with TD Cowen. Please proceed with your questions.

Speaker Change: The next questions are from the line of Conor Cunningham with Melisa Research. Please proceed with your questions.

Conor Cunningham: Hi, everyone. Thank you. Just on the Q3 cost guide, there's a couple things in there that I wanted to just understand a little better. I think you talked about 200 basis points of timing-related stuff that shifted from Q2 to Q3, and then you mentioned Celebration Key. Could you just give a number on Celebration Key, what that headwind is? It's more for 2026 as that kind of normalizes as it matures and whatnot. Thank you.

Conor Cunningham: Hi, everyone. Thank you just on the <unk> cost guidance, there's a couple of things in there that I wanted to just understand a little better I think you talked a little bit I think you're talking about 200 basis points of timing related stop that shifted from <unk> to <unk> and then you mentioned celebration Keith could you just.

Conor Cunningham: Given number on celebration key what that headwind is I'm just trying to it's more for 'twenty six is that kind of normalizes throughout the AR as it matures and whatnot. Thank you.

David Bernstein: Thank you. Sure, so the four factors that I included was about half of the increase, and the total increase is 7%. Celebration key, I had mentioned, was about a half a point impact for the full year. So it's about a full point for the back half of the year in each of the third and the fourth quarter. I didn't say it was 200 basis points for the one-time benefits from last year. It's about a point in the third quarter for that particular item. Okay, helpful.

David Bernstein: Sure. The four factors that I included was about half of the increase, and the total increase is 7%. Celebration Key, I had mentioned, was about a half a point impact for the full year. It's about a full point for the back half of the year in each of the Q3 and Q4. I didn't say it was 200 basis points for the one-time benefits from last year. It's just that we had mentioned it. It's about a point in the Q3 for that particular item. A point for Celebration Key, a point for the one-time benefit, and the advertising and the lower capacity was probably worth between the two, a little over a point.

Conor Cunningham: Sure.

Conor Cunningham: Factors that I included.

Conor Cunningham: Half of the increase in the total increase is 7% celebration Keith mentioned with about a half a point impact for the full year. So it's about a couple of points for the back half of the hearing aid shrimp that third and the fourth quarter.

Conor Cunningham: I didn't say it was 200 basis points for the one time benefit from last year.

Conor Cunningham: Just you had mentioned it.

Conor Cunningham: But it's about a point in the third quarter for that particular, right. So point for celebration key points for the one time benefit and the advertising and media.

Conor Cunningham: The lower capacity was probably worth.

Conor Cunningham: Mitchell a little over a point.

Conor Cunningham: Okay. Helpful. Just on loyalty, I don't know how much you want to talk about this, but you mentioned the airlines and how they've benefited from that. When those companies talk about it, they talk a lot about the marketing component related to the credit card agreements that they have as well that are tied to it. I think you extended your credit card relationship with Barclays in 2022. When does that expire? Do you have any details around how many people actually have the card today?

Conor Cunningham: Okay helpful and then just on loyalty.

Conor Cunningham: And then just on loyalty, I don't know how much you wanna talk about this, but you mentioned the airlines and how they've benefited from that. When those companies talk about it, they talk a lot about the marketing component related to the credit card agreements that they have as well that are tied to it. I think you extended your credit card relationship with Barclays in 2022. When does that expire? And just, do you have any details around how many people actually have the card today? I'm sorry, you said you want to know how it ties to the credit card.

Conor Cunningham: I don't know how much you want to talk about this but you mentioned the airlines and how they've benefited from that when most companies talk about it I talk a lot about the marketing component related to the credit card agreements that they have as well that are tied to it.

Conor Cunningham: I think you extended your credit card relationship with Barclays in 2022, when does that expire and just do you have any details around alright.

Speaker Change: Oh, I'm, sorry, you said.

Josh Weinstein: I'm sorry. You broke up. I'm sorry. You want to know how it ties to the credit card? Is that the question?

Speaker Change: I'm sorry, you wanted to.

Josh Weinstein: Is that is that the question? Yeah. So basically, you mentioned the airlines. I'm just trying to make the parallel because they talk. I mean, the numbers that are huge. And so just like how many people actually have the card, what percentage of, you know, marketing revenue of your overall revenue you get from the marketing component from the credit card, just any details there, I think would be really helpful. Thank you. Okay. Got it. So I'd rather not give specifics just from a competitive standpoint, but I would say that the existing program that we have for loyalty is disassociated with our co-branded credit card from Carnival, and several of our other brands have the same thing.

Conor Cunningham: Tied to the credit card is that is that the question. Yes, yes, yes. So basically you mentioned the airlines I'm just trying to make the parallel because.

Conor Cunningham: Yeah. Basically, you mentioned the airlines, and I'm just trying to make the parallel.

Josh Weinstein: Yeah

Conor Cunningham: The numbers there are huge. Just how many people actually have the card? What percentage of your overall revenue you get from the marketing component from the credit card? Just any details there I think would be really helpful. Thank you.

Conor Cunningham: They talk I mean, the numbers there are huge and so just like how many people actually have the card what percentage of marketing revenue.

Speaker Change: Of your overall revenue you get from the marketing component from the credit card just any details there I think would be really helpful. Thank you.

Josh Weinstein: Okay, got it. I'd rather not give specifics just from a competitive standpoint, but I would say that the existing program that we have for loyalty is disassociated with our co-branded credit card from Carnival, and several of our other brands have the same thing, and that's a very successful program in and of itself. The benefit of the new program, one of the benefits, is there's a distinct tie between the two, which does not mean you need a Carnival credit card to be able to enjoy being part of the loyalty program. Having the card will supercharge your ability to generate points, generate status, and we'll be talking more about that by the time we get to the end of the year, just from a consumer standpoint, about exactly how all of it will work.

Speaker Change: Okay got it so I'd, rather not give specifics just from a competitive standpoint, but I would say that.

Speaker Change: The existing program that we have.

Speaker Change: For loyalty is this associated with our co branded credit card from Carnival and several of our other brands have the same thing and that's a very successful program in and of itself. The benefit of the new program. One of the benefits is there is there is a distinct tie between the two which does not mean you need a credit card a carnival credit cards.

Josh Weinstein: And that's a very successful program in and of itself. The benefit of the new program, one of the benefits is there's a distinct tie between the two, which does not mean you need a credit card, a Carnival credit card, to be able to enjoy being part of the loyalty program, but having the card will supercharge your ability to generate points, generate status, and we'll be talking more about that by the time we get to the end of the year, just from a consumer standpoint, about exactly how all of it will work. But the card is a great part of this, and so the card will be part of this for the foreseeable Okay.

Speaker Change: To be able to enjoy being part of the loyalty program, but having the card will supercharge your ability to generate points generate status.

Speaker Change: And we'll be talking more about that by the time, we get to the end of the year just from a consumer standpoint about exactly how all of it will work, but we can.

Josh Weinstein: The card is a great part of this, and so the card will be part of this for the foreseeable future.

Speaker Change: Card is.

Speaker Change: Great Great part of this and so the card will be part of this for the foreseeable future.

Conor Cunningham: Okay. Appreciate it. Thank you.

Conor Cunningham: I appreciate it. Thank you.

Speaker Change: Okay I appreciate it thank you.

Speaker Change: Okay.

David Katz: The next questions are from the line of David Katz with Jeffreys. Pleasure to see you. Hi, good morning everybody. Thanks for taking my question.

Operator: The next question is from the line of David Katz with Jefferies. Please proceed with your questions.

Speaker Change: The next question is from the line of David Katz with Jefferies. Please proceed with your questions.

David Katz: Hi, good morning, everybody. Thanks for taking my question. I wanted to just dig a little deeper on the ship sale, if you don't mind. I think you've given us the gain, but not what the amount or any color around a multiple on what that would be. Any thoughts around that strategically and do you look at these as sort of a recycling exercise that could potentially grow over time?

David Katz: Hi, Good morning, everybody. Thanks for taking my question I wanted to just dig a little deeper on the ship shale.

Josh Weinstein: I wanted to just dig a little deeper on the ship sale, if you don't mind. I see, I think you've given us the gain but not sort of what the amount or any color around a multiple on what that would be and you know any thoughts around that strategically and you know to use as sort of a recycling exercise you know that could potentially grow over time. So we had sold the Costa Fortuna and we announced that in the second quarter and in the first quarter. ship that was sold. We talked about both, you know, previously.

David Katz: If you don't mind.

Speaker Change: I see I think you've given us the gain but not sort of what the amount or any color around a multiple.

Speaker Change: And what that would be.

Speaker Change: And any thoughts around that strategically.

David Katz: Do you look at the use is sort of a recycling exercise that could potentially grow over time.

David Bernstein: We had sold the Costa Fortuna, and we announced that in Q2.

David Katz: So we had so the cost per collector.

David Katz: And we announced that in the second quarter and then the first quarter.

Micky Arison: Okay

Micky Arison: was the ship that was sold. We talked about both previously. In the case of the Costa Fortuna, we have sold many ships over time, and this is really just in the normal course of revitalization of our fleet as we move forward over time. As ships do get older, we will sell them to other parties. We do not feel that those parties come back to compete against us because they are generally in different marketplaces with different brands.

David Katz: I'm sure that one so.

David Katz: We talked about both.

David Katz: Previously.

Josh Weinstein: In the case of the Costa Fortuna, we have sold many ships over time, and this is really just in the normal course of revitalization of our fleet. forward over time. As ships do get older, we will sell them to other parties. We do not feel that those parties come back to compete again. It was opportunistic. People came to us looking for ships and gave us prices that we thought is the best long-term interest of the company, and so we made the decision. It doesn't impact Costa's capacity when it comes to its main markets of Europe because it's going to be taking the one ship that it had that was doing a lot of charter business in Asia and Korea and Taiwan and Japan, and we're going to be moving that back to Europe, which is slightly bigger.

David Katz: In the case of the cost of approaching that.

David Katz: We have so many ships over time.

David Katz: This is really just in the normal course revitalization of our fleet as we move forward overtime shifts.

David Katz: Chips, you'll get older we will sell them to other parties.

David Katz: We do not feel that those parties come back to compete against us because they are.

David Katz: Generally and in different marketplaces.

David Katz: Great.

David Katz: Understood.

David Katz: Understood.

Josh Weinstein: These are opportunistic.

David Katz: These are opportunities for <unk>.

David Katz: Please.

Josh Weinstein: Yeah, I'm sorry. It was opportunistic. People came to us looking for ships and gave us prices that we thought were in the best long-term interest of the company. We made the decision. It doesn't impact Costa's capacity when it comes to its main markets of Europe because it's going to be taking the one ship that it had that was doing a lot of charter business in Asia and Korea and Taiwan and Japan. We're going to be moving that back to Europe, which is slightly bigger. It's actually going to be increasing its capacity in Europe, which is a great sign for Costa as well.

David Katz: Yes, it was.

David Katz: Our domestic people came to us looking for ships and gave us prices that we thought it was the best long term interest of the company and.

David Katz: And so we've made the decision that doesn't impact cost us.

David Katz: <unk> when it comes to its main markets of Europe, because it is going to be taking the one chip that it had that was doing a lot of charter business in Asia, and Korea, and Taiwan and a.

David Katz: We're going to be moving that back to Europe, which is slightly bigger so it's actually going to be increasing its capacity in Europe, which is a great time for costa as well.

David Katz: It's actually going to be increasing its capacity in Europe, which is a great sign for Costa. Understood.

David Katz: Understood. Sorry for cutting in, but I wanted to see if we might be able to get some color on the multiples or valuations or any perspective at all on what those ships sold for. Thanks.

David Katz: Sorry for cutting in, but I wanted to see if we might be able to get some color on the multiples or valuations or, you know, any perspective at all on what those ships sold for. Well, it was it was nicely overbooked value and we'll just leave it at that. Okey-doke. Thanks. Nice quarter. Thanks, David.

David Katz: And just sorry for cutting in but I wanted to see if we might be able to get some color on the multiples.

David Katz: Or evaluations or any perspective at all on what those ships sold for X.

Josh Weinstein: Well, it was nicely over book value, and we'll just leave it at that.

David Katz: Well it was it was nicely over book value.

David Katz: Just leave it at that.

David Katz: Okie doke. Thanks. Nice quarter.

David Katz: Okay.

David Katz: Thanks nice quarter.

Josh Weinstein: Thanks, David.

David Katz: Thanks, Dave.

Sharon Zachfieh: Our next question is from the line of Sharon Zachfieh with William Blair. Hi, good morning, thanks for taking the question. I wanted to ask more about the loyalty program. So I understand the deferral of revenue, but I'm also curious, it seems as if this would also kind of goose onboard spending quite a bit if passengers are getting rewarded for total spend. So how do we think about kind of a partial offset there in terms of onboard spend potentially accelerating? And will passengers actually have kind of real-time tracking of their spending onboard towards points? And how are you going to use data to kind of facilitate all of that onboard?

Operator: Our next question is from the line of Sharon Zackfia with William Blair. Please proceed with your questions.

Speaker Change: Our next question is from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Sharon Zackfia: Hi, good morning. Thanks for taking the question. I wanted to ask more about the loyalty program. I understand the deferral of revenue, but I'm also curious, it seems as if this would also kind of goose onboard spending quite a bit if passengers are getting rewarded for total spend. How do we think about a partial offset there in terms of onboard spend potentially accelerating, and will passengers actually have real-time tracking of their spending on board towards points? How are you going to use data to facilitate all of that on board?

Speaker Change: Hi, good morning, and thanks for taking the question I wanted to ask more about the loyalty program. So I understand the deferral of revenue, but I'm also curious it seems as if this would also kind of goes onboard spending quite a bit of passengers are getting rewarded for total spend so how do we think about kind of a parcel.

Speaker Change: It's out there in terms of onboard spend potentially accelerating and will passengers actually have kind of real time tracking of their spending on board towards planes and how are you going to use data to kind of facilitate all of that on board.

Sharon Zachfieh: Yeah, so that's a great question. So as far as will it cannibalize on-board spending, no, the answer is no, we do not believe that that will. Oh, no, I thought maybe it would boost on-board spending. Yeah, so, you know, we think the engagement and the ability to earn points through spend is a great thing. So, you know, it's kind of like Celebration Key. This doesn't start for a year, so we'll talk a lot more once the program is in place and we can talk about, you know, what it is that we're seeing, but the whole goal is, look, at the end of the day, Carnival Cruise Line is an incredibly successful brand that's got a great base of loyal guests, and so much so that it's just hard.

Josh Weinstein: Yeah. That's a great question. As far as will it cannibalize onboard spending? No. The answer is no, we do not believe that that will be the case.

Speaker Change: Yeah. So.

Speaker Change: Good question.

Speaker Change: So as far as will it cannibalize onboard spending.

Speaker Change: The answer is no we do not believe that the Ono I thought I thought maybe it would boost onboard spending.

Sharon Zackfia: Oh, no, I thought maybe it would boost onboard spending.

Josh Weinstein: Yeah. We think the engagement and the ability to earn points through spend is a great thing. It's kind of like Celebration Key. This doesn't start for a year. We'll talk a lot more once the program is in place and we can talk about what it is that we're seeing. The whole goal of this. At the end of the day, Carnival Cruise Line is an incredibly successful brand that's got a great base of loyal guests. So much so that it's just hard. It's hard to be able to provide operationally all the things that we'd like to provide because there's just too many folks with the loyalty tiers on our ships. That's a good problem to have, but it is a problem. We want to make sure that we're delivering great experiences for our loyal guests.

Speaker Change: Yeah, So we think the engagement and the ability to earn points.

Speaker Change: <unk> is a great thing so.

Speaker Change: It's kind of like celebration. This doesn't start for a year. So we'll talk a lot more once the program is in place and we can talk about what it is that we're seeing but the whole the whole Gulf is like at the end of the day.

Speaker Change: Carnival cruise line isn't incredibly successful brand that's got a great base of loyal guests and so much. So that it's just hard it's hard to be able to provide operationally all the things that we'd like to provide because there's just too many folks with the royalty tiers.

Josh Weinstein: It's hard to be able to provide operationally all the things that we'd like to provide, because there's just too many folks with the loyalty tiers on our ships, and that's a good problem to have, but it is a problem. We want to make sure that we're delivering great experiences for our loyal guests.

Speaker Change: On our ships.

Speaker Change: That's a good problem to have but it is a problem we want to make sure that we're delivering great experiences.

Josh Weinstein: So this is a way to be able to address that, stay engaged with our guests, and hopefully they'll see the benefits as the program gets rolled out and really leaning in.

Speaker Change: For our loyal guests. So so this is a way to be able to address that stay engaged with our guests and hopefully they will see the benefits.

Josh Weinstein: This is a way to be able to address that, stay engaged with our guests, and hopefully they'll see the benefits as the program gets rolled out and really lean into it.

Speaker Change: As the program gets rolled out and really lean into it.

Josh Weinstein: Can I ask a follow-up, Josh? I think about a year ago, you talked about about 35% of onboard being pre-booked. Can you give us an update on where that stands today? Yeah, it's more or less the same. It's a little bit higher, but it's more or less there. We don't, you know, and I've said this before, we don't have a particular target in mind. What we're looking to do is provide our guests with lots of different ways and alternatives to be able to spend on their vacation with us. And we're doing that through bundles. We're doing that through packages.

Sharon Zackfia: Can I ask a follow-up, Josh? I think about a year ago, you talked about 35% of onboard being pre-booked. Can you give us an update on where that stands today?

Speaker Change: Can I ask a follow up Josh I think about a year ago, you talked about about 35% of onboard being pre booked can you give us an update on where that stands today.

Josh Weinstein: Yeah, it's more or less the same. It's a little bit higher, but it's more or less there. I've said this before, we don't have a particular target in mind. What we're looking to do is provide our guests with lots of different ways and alternatives to be able to spend on their vacation with us. We're doing that through bundles, we're doing that through packages, we're doing that through targeted offers. Of course, spending on board in real time while you're there. As long as we keep seeing progress, it's obviously all flowing into the onboard spending numbers that we talk about and report on, which are consistently going up quarter-over-quarter, and we expect that to continue.

Speaker Change: Yes, it's more or less the same little bit higher, but it's more or less.

Speaker Change: And I've said this before we don't have we don't have a particular target in mind, but we're looking to do is to provide our guests with lots of different ways and alternatives to be able to.

Speaker Change: Spend on their vacation with us.

Speaker Change: We're doing that through bundles, we're doing that through packages, we're doing that through targeted offers.

Josh Weinstein: We're doing that through targeted offers. And, of course, spending on board in real time while you're there. So as long as we keep seeing progress, it's obviously all flowing into the onboard spending numbers that we talk about and report on, which are consistently going up quarter over quarter. And we expect that to continue. Okay, great.

Speaker Change: Of course spending on board in real time, while Youre there so.

Speaker Change: So long as we keep seeing progress. It's obviously all flowing into the onboard spending numbers that we talked about and report on which are consistently growing up quarter over quarter, and we expect that to continue.

Sharon Zackfia: Okay, great. Thank you.

Sharon Zachfieh: Thank you.

Speaker Change: Great. Thank you.

Speaker Change: Yeah.

Jian Xu: The next questions are from the line of Jian Xu with BNP Paribas. Please proceed with your questions. Hi, thanks for the question.

Operator: The next question is from the line of Jian Xu with BNP Paribas. Please proceed with your question.

Speaker Change: The next question is from the line of Xi'an <unk> with BNP Parva. Please proceed with your question.

Jian Xu: Hi. Thanks for the question. I wanted to ask a little bit more about RelaxAway and Isla Tropicale. I think Half Moon had about 900,000 visitors, and Mahogany Bay about 500,000 previously. Can you talk about maybe the opportunity you see for those islands and how big they could get with the expansion?

Speaker Change: Alright. Thanks for the question I wanted to ask a little bit more about relaxed when Tropicana I.

Jian Xu: I wanted to ask a little bit more about Relax-A-Way and Gila Tropicale. I think Half Moon had about 900,000 visitors in Mahogany Bay, about 500,000 previously. Can you talk about maybe the opportunity you see for those islands and how big they could get? With respect to Relax-A-Way, the output can be significantly higher than the $900,000, can certainly double and more, because in today's world, there's one ship that tenders, and that's pretty much the extent of the operations, and we're going to be able to birth two ships and still have the ability to tender in the existing location, and because we're building up the infrastructure on the island, we feel good that we can still accommodate all those folks and have them enjoy an amazing experience, as you heard me talk about in my notes at the beginning of this call.

Speaker Change: I think halfmoon and about 900000 visitors in mahogany Bay about 500000 previously can you talk about maybe the opportunity you see.

Speaker Change: For those islands, and how big that could get.

Josh Weinstein: Sure. With respect to RelaxAway, the output can be significantly higher than the 900,000. It can certainly double and more, because in today's world, there's 1 ship that tenders, and that's pretty much the extent of the operations, and we're going to be able to berth 2 ships and still have the ability to tender in the existing location. Because we're building up the infrastructure on the island, we feel good that we can still accommodate all those folks and have them enjoy an amazing experience, as you heard me talk about in my notes at the beginning of this call. With respect to Isla Tropicale, we're going to be able to enhance the experience there. We're not talking about doing anything on the marine side to be able to accommodate more ships, but we can accommodate 2 ships at a time.

Speaker Change: With the expansion sure well with respect to share with respect to relax away.

Speaker Change: The output can be significantly higher.

Speaker Change: 900000 can certainly double.

Speaker Change: More because in today's world, there's one shift of tenders and Thats pretty much the extent of the operations and we're going to be able to berth two shifts and still have the ability to tender and the existing location because we're building up the infrastructure on the island, we feel good that we can still accommodate all of those folks and have them enjoying amazing.

Speaker Change: So as you've heard me talk about it.

Speaker Change: In my notes at the beginning of this call with respect to easily traffic, how we're going to be able to enhance the experience.

Josh Weinstein: With respect to Isla Tropical, we're going to be able to enhance the experience there. We're not talking about doing anything on the marine side to be able to accommodate more ships, but we can accommodate two ships at a time, so we feel real good that we'll have the ability to maximize that destination as well over time.

Speaker Change: We're not talking about doing anything on the marine side to be able to accommodate more shifts, but we cannot accommodate two shifts at a time. So we feel real good that we'll have the ability to maximize.

Josh Weinstein: We feel real good that we'll have the ability to maximize that destination as well over time. I don't have a number for you on Isla Tropicale, but I'm sure we'll be able to talk more about that as we get those developments where we want them to be.

Speaker Change: That brought destination as well over time I don't have the number for you on Easter chocolate cow, but we'll I'm sure we'll be able to talk more about that as we get those developments, where we would want them to be.

Josh Weinstein: I don't have the number for you on Isla Tropical, but I'm sure we'll be able to talk more about that as we get those developments where we want them. Great. Thanks so much and good luck. Thank you. We have time for one more, Robert. Thank you.

Jian Xu: Great. Thanks so much, and good luck.

Speaker Change: Great. Thanks, so much and good luck.

Josh Weinstein: Thank you. We have time for one more, operator.

Speaker Change: Thank you.

Speaker Change: We have time for one more Robert I think that that will be coming from the line of Chris <unk> with Susquehanna. Please proceed with your question.

Operator: Thank you. That'll be coming from the line of Christopher Stathoulopoulos with Susquehanna. Please proceed with your questions.

Operator: That will be coming from the line of Chris Sesopoulos with Susquehanna.

Operator: Good morning, everyone. Thanks for getting me in here. I'll keep it to one. Josh, you know, we've spoken in the past on the loyalty program. Obviously, it is a big piece of the story with respect to airlines, but want to understand why the change now, you know, is this contemplated back at your. Investor Day, I think it was two years ago, and feedback so far. And then part B, David, the half point impact for next year, any color that you can give with respect to what's assumed with acquisitions and examples? So with respect to the loyalty program, no, it wasn't something that we, you know, two years ago were kind of, you know, focused on.

Christopher Stathoulopoulos: Good morning, everyone. Thanks for getting me in here. I'll keep it to one. Josh, we've spoken in the past on the loyalty program. Obviously, it is a big piece of the story with respect to airlines, but I want to understand why the change now. Was this contemplated back at your Investor Day, I think it was 2 years ago? Feedback so far. Part B, David, the half-point impact for next year, any color that you can give with respect to what's assumed with acquisitions and existing users? Thanks.

Speaker Change: Good morning, everyone. Thanks for getting me in here I'll keep it to one Josh we've spoken in the past on the loyalty program obviously.

Speaker Change: It is.

Speaker Change: A big piece of the story with respect to airlines.

Speaker Change: One understand why the change now was this contemplated back at your <unk>.

Speaker Change: Investor Day, I think it was two years ago and feedback so far and then part B, David the half point impact for next year.

Speaker Change: Any color that you can give with respect to what's assumed with acquisitions and existing users.

Speaker Change: <unk>.

Josh Weinstein: With respect to the loyalty program, no, it wasn't something that we, 2 years ago, were focused on. At least I wasn't focused on it. I guess that's the answer to the question.

Speaker Change: So with respect to the loyalty program no. It wasn't something that we you know two years ago were kind of focused on hurwitz I wasn't focused on it.

Chris Sesopoulos: I wasn't focused on it.

Josh Weinstein: So I guess that's the answer to the question. Yeah, and the half a point really just comes from the fact that once the program starts, We do have to initially defer a portion of the ticket price that's associated with the benefits that people will earn from the program. So, you know, as I said, we don't expect incremental costs associated with the new program. program and it's just a deferral because you know initially when this first starts you're not going to see the redemption of any benefits immediately and therefore you're not getting revenue from the redemption so it'll take some time for it to normalize itself.

Speaker Change: So I guess that's to answer the question.

David Bernstein: The half a point really just comes from the fact that once the program starts, we do have to initially defer a portion of the ticket price that's associated with the benefits that people will earn from the program. As I said, we don't expect incremental costs associated with the new program versus the existing program. It's just a deferral because initially when this first starts, you're not going to see the redemption of any benefits immediately, and therefore you're not getting revenue from the redemption. It'll take some time for it to normalize itself, as I indicated.

Speaker Change: Yes.

Speaker Change: A point really just comes from.

Speaker Change: Fact that once the program starts we do have two English really defer a portion of the ticket price that's associated with the benefits that people will current problems.

Speaker Change: From the program so.

Speaker Change: We don't expect incremental costs associated with the new program versus the existing program.

Speaker Change: Just the deferral because initially when this first started I'm not going to see the reduction of Andy benefits immediately and therefore youre not getting revenue from the redemption. So it will take some time for it to normalize itself as I indicated.

Christopher Stathoulopoulos: Okay. Thank you.

David Bernstein: Okay, thank you.

Speaker Change: Okay. Thank you.

Josh Weinstein: Okay, so I'll just say thank you everybody for joining us for another earnings call and from my team I'd say take a bow. Congratulations on exceeding sea change targets 18 months in advance. That is an amazing job. Well done.

Josh Weinstein: Okay, I'll just say thank you, everybody, for joining us for another earnings call. From my team, I'd say take a bow. Congratulations on exceeding SEA Change targets 18 months in advance. That is an amazing job. Well done.

Speaker Change: Okay. So I'll just say.

Speaker Change: Thank you everybody for joining us for another earnings call for my team I'd say think about congratulations on exceeding sea change targets 18 months in advance how does an amazing job well done.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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