Q2 2025 Lindblad Expeditions Holdings Inc Earnings Call

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator. Today, at this time, I would like to welcome everyone to the Lindblad Expeditions second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, press star 1 again. We kindly ask that you please limit your initial questions to 2. I would now like to turn the conference over to Rick Goldberg. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Lindblad's second quarter 2025 earnings call. With me on today's call is Natalya Leahy, our Chief Executive Officer. Natalya will begin with some opening comments, and I'll follow with details on our Q2 financial results and updated expectations for the full year before we open the call for Q&A. As always, you can find our latest earnings release in the Investor Relations section of our website. But before we get to all of that, I'd like to remind everyone that the company's comments today may include forward-looking statements.

Those expectations are subject to risks and uncertainties, that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecasts or estimates and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings. In addition, our comments May reference non-gaap Financial measures a Reconciliation of the most directly comparable gaap Financial, measures and other Associated. Disclosures are contained in the company's earnings release with that. Out of the way. I'll turn the call over to Natalia.

Good morning, everyone, and thank you for joining us to review Lindblad Expeditions' second quarter results.

I will start by saying how incredibly proud I am of our team and a very strong performance. We delivered this quarter, we're seeing a clear momentum from the Strategic initiatives. We've implemented to increase occupancy. And innovate across our course structure, while we are focused on value creation opportunities ahead. The meaningful progress we've made with the team in a relatively short period gives me and all of our great conferences in the past. We are on

Before diving into the quarterly results, I'd like to take a step back and highlight some key Milestones from the past 6 months that have positioned us for continued success. First, we introduced more strategic Revenue, management capabilities,

Through thoughtful pricing architecture, aligned with a strategic and systemic commercial calendar.

Second, we are executing impactful strategic and tactical initiatives with our Disney partners, allowing us access to new channels and audiences, which are already yielding positive outcomes.

Third, we've implemented robust cost Innovation process across the business.

Goals and made several key additions to our leadership team, bringing deep and diverse expertise.

Krista Sousa, joined us as Chief Revenue management. Officer bringing extensive experience across Revenue management sales and marketing in the cruise industry and across multiple brands.

Rare Admiral, Keith Taylor US Coast Guard. Retired now serving as Chief Maritime officer. He brings more than 40 years of experience in the Coast Guard Maritime and cruise industry and is already delivering meaningful results in maintenance optimization and dry dog planning.

Janelle Finley was appointed senior vice president of planning, and operations, with her, strong operational and financial background. She's leading, Diplomat optimization and robust cost, Innovation efforts.

Sean Choy came aboard as Senior Vice President of Strategy and Corporate Development, where he will be advancing our programmatic M&A strategy. Sean brings valuable experience from both private equity and industry. These leaders, together with our very talented existing team, reinforce a culture rooted in purpose and performance, giving us full confidence in our ability to capitalize on opportunity.

Is that why I have?

Turning to our second quarter performance, I am pleased to report another outstanding quarter. Revenue increased by 23%, including a 19% increase in our Coraline blood expedition segment and a 41% increase in our land segment. Occupancy rose to 86%, an 11 point gain despite a 5% capacity increase.

Net yields grew 13% to $1,241, a historic high for second quarter adjusted. EBITDA increased 149%, with margins expanding 720 basis points to 14.8%.

Our bookings remain strong and tracking ahead of last year, both in 2025 and 2026 across both segments, setting us up well for continued success, throughout the year, and Beyond, and reflecting the strength of our brand, differentiated experiences and exceptional service, our guests, enjoy.

Let me now walk you through the progress. We've made across our 3, long-term strategic pillars.

Number 1 maximizing Revenue generation through higher occupancy, pricing and deployment optimization. Number 2, optimizing financial performance through cost Innovations and fixed assets. Optimization number 3, exploring and capitalizing on a creative growth opportunities, including additions to our brand portfolio.

Let me begin with our first pillar, which focuses on maximizing Revenue generation. We are optimizing deployment by focusing, on most profitable destinations across both Expedition and land segments and reducing non-revenue days as a result. We have added 4 voyages in 2026 up from 3. We announced last quarter and thanks to improved dry dog. And transition Voyage planning, we've reduced non-revenue Days by 38% between 2025 and 2027.

Our own board sales program pilot that I mentioned during the last call will be fully rolled out by the end of August. This initiative allows guests to book their next Journey while still immersed in their current Expedition, and it's already driving meaningful results in repeat bookings and expanding booking curves.

Our partnership with Disney continues to build momentum Following last quarter's engagement with Disney earmarked travel. Advisors, we've contacted multiple follow-up, webinars and presentations as a result, bookings from this group have increased 45%.

Club members can now redeem points for expedition cruises, introducing our brand to more than 2,500 members globally. This is a major milestone and a significant cross-lever. National Geographic's reframe travel campaign was launched across digital and social media, resulting in search volumes increasing by 122%. We plan to further expand this activation. We also recently relaunched our youth travel program under the new name "Explorers in Training," reinforcing our commitment to multi-generational travel. We believe that offering family-friendly options for our most popular itineraries presents a sizable cross opportunity.

I had a pleasure of attending a meaningful naming ceremony of Our National Geographic, Delfina and National Geographic, Gemini in the galopago, 60 years of partnership. With the local community, this event attracted extensive media coverage and Amplified our brand presence in 1 of our top destinations.

Outbound sales also remain a key priority. We nearly doubled quarter to outbound sales, delivering strong return on investments. Thanks to our dedicated Focus.

Charters also remain a strategic focus. Our small ships provide ideal settings for Affinity groups High net worth individuals and institutional clients as a result Charters now make up a double digit, percentage of 2026. Bookings, last not least in our land segment. We are leveraging Innovation to align with key consumer Trends. The tribe growth across our portfolio. For instance, natural habitat has expanded its women's Journeys program to tap into the rising demand for female focused Group Travel.

Similarly, the wine has enhanced. Its chefs on wheels offer premium chef-led cycling tours that combine two passions shared by many: food and cycling. Each tour offers stylish, immersive lodging that complements the region's character and cuisine. This premium-priced, experience-driven product continues to demonstrate exceptional demand.

Moving to our second strategic dealer, which focuses on operational, excellence and productivity improvements.

We now have more than 20 cost innovation initiatives underway targeting fourth, fourth cost optimization, procurement, and crew planning, as mentioned earlier. Our improved tried-and-true planning has already added 4 additional voyages to 2026, enhancing fixed asset utilization and productivity.

Our source strategic pillar centers on creative growth initiatives. Our newly launched European river cruise program has been very well received, with 2026 departures already over 50% booked and some voyages sold out. I'm pleased to announce our acquisition of four safari camps in East Africa, which enables vertical integration in our key region for natural habitat adventures and deepens our footprint in Africa.

Sustainability remains Central to our mission and we will continue to share meaningful highlights in this area. We are currently preparing our first ever ESG report to be released next quarter highlighting our environmental and social impact efforts.

Natural habitat expanded on the electrification of its vehicle Fleet by introducing the first ever electrical vehicle, officially permitted for tourism and Peril. It was a meaningful undertaking to build out on the infrastructure and it is symbolic example of the company's commitment to greenhouse gas emissions.

In each region, we operate.

Excellence and sustainable growth will drive long-term shareholder value in closing. I want to express my sincere appreciation to our incredible shipboard, shore site, and field teams. Their passion, dedication, and commitment to delivering extraordinary guest experiences while upholding the highest standards of responsibility are truly inspiring. As we move forward, we will remain focused on our three strategic pillars to drive meaningful, long-term value. With that, I'll now turn the call over to Rick for a deeper dive into our financial results. Rick.

thank you Natalia. I'm pleased to report another strong quarter of performance reflecting our continued progress in driving both occupancy and net yield growth innovating. Our cost structure to enhance margins. And most importantly staying true to our commitment, to delivering an exceptional guest experience.

Total company revenues for Q2 2025 were $167 million, an increase of $31 million, or 23%, versus Q2 2024.

Lindblad segment revenues were $111 million, an increase of $18 million, or 19%, compared to the prior year.

Occupancy increased 8 percentage points from 78% to 86%, in spite of a 5% increase in available guest nights.

And net yield per available, guest night, increased 13% to 1,241, which is the highest Q2 net yield in company history.

Planet experienced segment, Revenue was 57 million and increase of 13 million or 31% compared to 22 2024, driven by increased trips higher Revenue per guest, and the inclusion of Wineland Thompson, adventures and Adventure Travel Group that primarily operates African safaris, which was acquired in July 2024.

Q2 2025 adjusted EBITDA was $24.8 million, an increase of $14.5 million or 139% versus the prior year. This was driven by a $9.8 million or 150% increase in the Lindblad segment and a $4.7 million or 121% increase in the Land Experiences segment.

This included the impact of $3.4 million of employee retention tax credits. Realized in Q2 2025, excluding these, Q2 adjusted EVA increased by $11.1 million, or 106% year-over-year.

With the cost side of our business, please report that we delivered significant margin improvement this quarter, with adjusted EBITDA margins expanding 720 basis points year-over-year to 14.8%.

Operating expenses before stock-based compensation, transaction-related expenses, depreciation and amortization, interest, and taxes increased by $17.0 million, or 13.5%, versus Q2 2024 specifically.

Tours increased by 8.4 million, or 10.2%, driven by operating additional voyages and trips, and the inclusion of Wineland Thompson Adventures.

Fuel costs were 3.8% of Lindblad segment revenues, which is down 230 basis points versus a year ago.

Sales and marketing costs, increased 8.1 million or 444.4%, primarily due to higher royalties and commission, expense, and investments in demand generation efforts, including building out our sales team.

General and administrative costs, excluding stock-based compensation and transaction-related expenses, increased $0.4 million, or 1.8%, versus a year ago. This was driven by higher personnel costs, partially offset by the employee retention tax credits.

Total Company net loss available to stockholders improved by $16.1 million year-over-year to $9.7 million, or $0.18 per diluted share. This result reflects the significant improvements in operations driven by our continued execution on our strategic pillars.

turning to the balance sheet, we ended the quarter with total cache of 247.3 million, an increase of 31.2 million, versus the end of 2024,

This increase reflects 77.6 million in cash from operations, due primarily to the strong results of the business.

And increase. Bookings for Future travel.

The timing of dry docks compared to last year, as Natalya shared earlier, and in light of our robust balance sheet, the company is actively exploring creative growth opportunities, including expanding our fleet and further diversifying our portfolio of land-based brands to capitalize on continued growth in the demand for adventure travel.

Turning to full-year guidance, I'm pleased to share our updated outlook for 2025. Our booking curves continue to pace well ahead of prior year levels for both 2025 and 2026.

We also recently opened our 2027 itineraries for sale. Last week, we recorded the highest weekly sales in the history of National Geographic Lindblad Expeditions. This reflects continued strong demand for meaningful, immersive travel experiences and the strength of our brand.

We are building on this momentum. As we prepare to launch Q3 2024, we delivered the highest quarterly IBA in our history at $46 million, with occupancy reaching 82%.

We now expect net yield per and available guest night to increase, 9% to 11% year-over-year up from prior guidance of 7% to 10%.

based on this momentum, we are narrowing our full year Revenue guidance from a range of 700 million, to 750 million to a range of 725 million to 750 million

We are also raising our full year ebit. Dog guidance to a range of 108 million to 115 million. From prior guidance of 100 million to 112 million. Our Outlook, reflects our strong business performance, and continued confidence. Executing against our 3, strategic pillars. Thank you for your continued interest in lindblad Expeditions Natalia, and I would now be happy to take your questions.

At this time, I'd like to remind everyone in order to ask a question simply press star. Followed by the number 1 on your telephone keypad, we kindly ask that you please limit your initial questions to 2. Our first question will come from the line of Steven wisinski with stifel. Please go ahead.

Yeah hey guys good morning. Um so going to tell you ah ah ah Rick um you know obviously very you know very very strong quarterly results here uh in the second quarter. So congratulations. Um

If we do some simple math here you know you guys have done about 55 million in IBA does so far in the the first half of this year and and kind of based on your revised debited guidance, it's going to imply about 57 million. There should be a bit done for the second half of the year, you know, at the midpoint. So that that's actually lower than the you guys did last year, did about 59 million in the in the second half of the year. So, you know, I

I'm just trying to understand, um,

Something we need to think about in terms of cost, I don't know if it's.

Tax credits, um, or what the difference is. In terms of this second half of the year versus the last half, just given, you know how strong demand load factors, you know, all that stuff. Seems to be at this point.

Thanks so much, Steve. What I would say is that, while we remain optimistic about the opportunities in the back half of this year, as we've mentioned on previous calls, 2025 is an investment year for our organization. Many of those investments will occur in the second half of 2025.

Okay, so just to dig in that a little bit more, I guess we, we need to be thinking more about, you know, a little bit higher cost and a little bit less flow through in the second half of the year. But that's kind of the way we needed to be thinking about it.

Yeah, that that's exactly right, Steve and I think that we mentioned before that, we are really focused on investing in the future growth and international expansions. And as you know, with booking curves, the Investments come ahead of of booking results. And uh, we are very confident and hopefully you are seeing by our uh, progress that we're going to be in our occupancy levels ahead.

Oh, at least consistent with historical levels in 2026, and so a lot of these investments are coming in the second half of '25.

Okay, gotcha. And then, um, second question. Another actual guidance question. So I apologize. But, um, I guess I guess I'm trying to figure out is it normally, when, when you guys in lindblad gives historically is, you know, given guidance back in February, um, you know, that guidance typically hasn't changed during the year, just given the long booking times and strong book position, you guys are are normally in at that point. So get guess the question is maybe, as you look back at the original guidance, that you gave back in in February versus, you know, the updated guidance guidance today know what, you know, I don't want to say, what did you guys get wrong? I'm just trying to figure out what, you know, what has been kind of the biggest surprise, um, to kind of get that guidance moved higher in the middle of the year.

February. We set out this road map of driving occupancy, and net yield growth with a focus on near in bookings for 2025, as well as driving cost Innovation. And I think many of those initiatives are ahead of schedule in terms of delivering on their results, which you've seen in the performance in q1 and Q2.

Okay. Gotcha. Thanks guys. Appreciate it.

Our next question comes from the line of Eric Door.

Please go ahead.

Great. Thank you for taking my question, and congrats on the very strong quarter here.

Um, first 1 for me, just wondering if you could expand a bit more um on the increase in sales and marketing, um, this quarter and just kind of how to think about that going forward. You're obviously called out some increase Investments for the second half, um, in terms of sales and marketing for this quarter, you know, obviously there were some, uh, commissions related to the higher revenues but kind of stripping that out, you know, how to think of the sales and marketing build out, um, our investments that you guys are making now. Um, and over the next few Quarters here.

So we're continuing to invest in new sales channels, our partnership with Disney International expansion, all of the goal of driving occupancy and net yield growth. I'd also note that there was a step up in royalties associated with our agreement with National Geographic, that happened in 2025 and there will be a subsequent step up to the, uh, long-term run rate in 2026 as that was designed to match the

Impact of the initiatives, um, that we have in place with National Geographic and Disney to help us drive sales and marketing.

All right, that's very helpful. Um and then uh you mentioned, believe it was a a 38% reduction in uh non-revenue days from 2025 to 2027 mostly on Dry Dock optimization. Just wonder if you could expand a bit more on that, um, you know, how should we think about the timing or the pace of that 38% reduction? Um, is that kind of steady from now till 2027? Is there any, um, you know, periods of more or less?

Um, reduction, um to call out. Thank you.

Yeah. Thank thank you, Eric. Um, I it's it's a great question. I think, first of all, we are looking at the deployment kind of a generally, 12 months ahead. So we just recently deployed our 27, uh, plan and that plan reflects about 38% reduction in non-revenue days compared to our current 25 deployment. So that's kind of static year over 25 comparisons and that was done by optimizing college, right? Of scheduling transition voyages. And and, um,

Uh, planning ahead. We also, in addition to that, as I mentioned on a call found additional optimization opportunities in 26. So we added now Community lead for wages to 26. Increasing Revenue Days, Inn 26 as well. And I'm pleased to see that this voyages are booking really, really well already. Um, despite a shorter window for deployment

All right. I appreciate the clarity. Thanks for taking my questions.

Again to ask a question simply press star 1. Our next question will come from the line of Eric Wald with Texas Capitol Securities. Please go ahead

Hey, thank you. Uh, good morning. A couple questions as well. Um, I guess first off, I know it might be a little bit early. Uh, we talked to kind of some of the benefits. You're you're already seeing from, you know, Disney relationship and um um kind of working with the, the Disney sales Channel. Any any way to talk about kind of the average demographic

Profile of the customers you received booking through. Um, you did the sales Channel versus, um, what you may have seen from the hours, you know, profile, previously kind of, you know, that customer you're tapping into now that you may not have been able to tap into before and kind of the difference between the 2,

Yeah, I think that this is a great question. Like you said, I think we continue to Monitor and we'll report, um, on how the demographic changes, our core guests demographic Remains the Same because these are very curious, sophisticated Travelers, who are looking for, in reaching authentic experiences. And so, I think our brand serves so well to the Democratic and the focus of the brand will continue to remain the same. What we are obviously seeing with stopping into Disney, uh, Democratic is more increase in multi-generational travel and our brand is very well positioned to serve multi-generations

Um do the press release on our newly um, expanded explorers and training program, which is targeted to serve younger Travelers. And through again, providing very enriching educational experience, it's not a kids club. It's really, uh, educational programs that is very much on our brand, um, and have frankly been developing over a year, we just expanding and naming it. So what we are seeing is is an increase in multi-generation travel, for sure. Uh, in some of our popular destinations, especially during the holidays time, like summer, in Iceland and GAP as we are seeing almost quarter of our Travelers, 16 years and and below, and the product is very well received by families.

Perfect, thank you. And then and then the the follow-up question,

you obviously there was some issues with kind of, you know, kind of over capacity coming, you know, immediately out of the pandemic but is is the cruise industry continues to

Strengthen and, and General in recent years and and the hope is that that continues to do. So does that does that diminish, your your opportunity to find, um, used boats in the market, to acquire if, if you wanted to? And if, if that is the case, you, when do you serve needing to consider, um, ordering new vessels, um, for future delivery. And, and if that, if you do start looking at new vessels cons,

Construction, you know what are you hearing in terms of backlog? Um, for what you would want in terms of timing for delivery um uh into the future.

Uh so couple couple answers to your question. 1 is yes. We continue to see expanded demand in our product and generally experiential travel both across our Expedition segment as well as land segment. So uh, we can continue to look for growth opportunities. This growth opportunities don't have to necessarily come through, new builds. Uh, as you have seen, we just added capacity through adding National Geographic germani National Geographic, Dina to our Gap because those are ships. We Acquired and rebranded and their, uh, launched and serving our brand. Now, we also expanding, uh, quite rapidly through chartering different ships, last quarter. Uh, uh, I talked about launching River Cruises Charter, which is a long-term 3 Charter that helps us expand into European river cruising. That's been a very uh, successful expansion and we're getting credit to deploy, 27 River.

Lance's, which will be again an expansion on 26 capacity. So we're very excited about that. We're looking across multiple different opportunities. Yes, we are. Considering potentially a new build options as well, but that's just 1 of many options. We are considering to expand

Thank you for calling.

And that will conclude our question and answer session. I'll hand the call back to Rick for an enclosing remarks.

Just want to thank everybody for your interest in windblade Expeditions and we hope that you have a great week.

This concludes today's call, thank you all for joining. You may now disconnect