Q3 2025 Lindblad Expeditions Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator. Today at this time I would like to welcome everyone to the lind plant Expeditions third quarter earnings 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 followed by the number 1 on your telephone keypad,

If you would like to draw your question, again, press to Star 1.

I would now like to turn the conference over to Rick Goldberg CFO. You may begin.

Thank you, operator. Good morning, everyone. And thank you for joining us for wind blades. Third quarter 2025 earnings call with me. On today's call is Natalya, Ley our chief executive officer Natalya will begin with some opening comments. And I'll follow with details on our Q3 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 companies

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 the Natalia.

We do and I want to share a remarkable highlight from this quarter, we achieved our highest guest, net promoter scores, ever both for quarter 3 and yet to date since we began measuring them.

That Milestone made me pause and reflect on where we came from on the history and Legacy, that make us who we are today, and differentiate us, and set us up for Success, going forward.

In January 1966, large area, clean blood LEDs, the very first non-scientific expedition to Antarctica followed a year later by the first citizen Voyage to the Galapagos.

This where the Expeditions that started, it all the beginning of expedition travel and in many ways the birth of echo tourism. Now 1 of the fastest growing segments in Global Travel,

That Legacy is still defines us in our industry experience and expertise truly matter and those take decades to build its this Foundation built over nearly 60 years of pioneering exploration, that continues to drive the exceptional, guest experiences and results we're seeing today.

Talking about results, were pleased to report another quarter of very strong performance with revenue and adjusted ebita, both exceeding expectations.

Consolidated revenues increased 16.6% with our lean blood and length, segments growing 13.4%, and 21.1% respectively.

Within our Ling. Blood segment occupancy reached, 88% 6 points higher than last year on a 5% increase in capacity in the quarter, resulting in a record label of available, guest nights of any quarter of our company's history.

Net yields increased 9% to 1,314. The highest third quarter yields in the company's history. We were a particularly pleased to see our core Alaska trade perform exceptionally. Well achieving almost 16% yield cross this results. Demonstrate that Travelers, truly appreciate the unique intimate and highly differentiated experiences. We provide thanks to our unparalleled Expedition expertise, we will continue to look for opportunities to increase capacity to meet demand in popular, destinations like Alaska.

From a profitability perspective, we produced the highest level of adjusted ebita in a company history with just the DBA, increasing 25% to 57.3 million and margins expanding 160 basis points to 23.8%.

This results are proof that our commercial strategy to drive occupancy, and maximize revenue is working, and gives us a strong confidence that we are on our way to achieve historical, occupancy, levels in 2026 and Beyond.

Looking ahead, our net booking course, remains strong for 2026 in both segments and are tracking significantly ahead of Prior year. We've seen a very encouraging uptick in 2027, bookings as well as we just launched our 2027 deployment.

Optimist marking conditions in the luxury travel segments, remain. Highly favorable. According to a recent McKenzie, study demand for luxury tourism is expected to grow faster than any other travel segment with a projected 10% kegger through 2028. This industry Tailwinds reinforce our confidence in our positioning for sustained growth.

Focusing on our 3, strategic dealers continues to be essential in our path. Forward number 1, maximizing Revenue generation through occupancy, pricing and deployment optimization. Number 2, optimizing financial performance through cost Innovation and fixed asset optimization. And number 3, exploring and capitalizing on a creative growth opportunities, including growing our portfolio.

On maximizing Revenue generation. Our Disney relationships continues to introduce the National Geographic, lean blood brand to new audiences and expanded distribution channels in partnership. With National Geographic, we successfully relaunched Our Youth Travel program called explorers and training. Targeting core family-friendly. Destinations this program combined with other marketing initiatives, to drive multi-generational travel has generated encouraging early results with Travelers, 18 years and younger increasing 24%, this summer versus prior summer. Our efforts will drive occupancy and yield optimization in family-friendly destinations such as the galopa and Iceland.

Our Disney Vacation Club, activation continues, gaining momentum as DVC members. Can now redeem points for National Geographic link, blood Expedition cruises

Our Expedition team had an opportunity to sail with and present our brand to guests of the 4,000 passenger Disney Dream generating, not only immediate bookings for members but also significant interests and leads.

This represents the beginning of a significant opportunity to introduce Expedition cruising to dvcs, most loyal and engaged member base.

We continue to see strong momentum from ear, Mark, Disney Travel advisors with bookings, increasing 42% year to date.

We are seeing higher adoption from this distribution Channel as we educate and Market our brand to this highly productive advisors representing a larger opportunity to deepen our penetration

regarding our sales initiatives. In August, we fully rolled out on board dedicated Expedition sales specialists.

For the quarter, our on board sales, program performed exceptionally well with bookings as a percentage of total.

More than triple year-over-year as our Expedition experts, effectively introduce guests to new destinations converting them into the repeat. Customers at the height of the excitement this program. Not only drives higher Retreat rates but also expands booking Windows, which is so important for pricing optimization.

Similarly, our recently expanded outbound sales program is gaining significant traction with year-to-date sales increasing Approximately 80% versus the prior year, we believe we're still in the early stages of optimizing. This high potential distribution Channel.

In our land segment, we delivered strong quarter 3 Performance with our portfolio of Premium Adventure, destinations continuing to exceeding guests expectations.

We pointed a dedicated sales leader to capitalize on cross-selling opportunities between our land segment and Expedition Cruise offerings creating additional Revenue synergies across our platform.

Moving to our second pillar which focuses on optimizing financial performance through cost Innovation, we can continue to build cost Innovation capabilities throughout the organization.

This ongoing initiative has us well on our way to meeting our cost efficiency Targets this year, while kicking off the next round of cost Innovation projects among our accomplishments. This quarter, we renegotiated corporate, leases and Port agreements to generating hundreds of thousands in cost savings.

We also, recently hired a senior vice president of supply chain and procurement, who brings years of world-class experience across multiple Industries, including Cruise operations.

Additionally, we successfully refinanced, our debt, extending maturities, and lowering our interest rates by approximately 75 basis points. A very meaningful achievement that strengthens our balance sheet flexibility and enables us to continue investing strategically across both our wind blood and land experiences. Segments, Rick will share more details on this in his section.

Our capacity including through new builds and Charter Partnerships to that end. We've continued to strategically expand our Charter offerings.

Our inaugural European river, cruising program exceeded expectations, prompting us to increase the number of wages for 2027.

We've added spring and summary departures as well as new in demand Christmas Market and holiday sailing offerings.

In fact, we just announced our 2027 River collections this morning, including European Egypt, India, and Vietnam itineraries Charters provide a very efficient Capital light approach to enter high demand markets for the right season.

We also actively evaluating a creative Acquisitions pause with lean blood and land segments.

As always, I want to briefly highlight our why. Because while these three strategic pillars drive our operational excellence and growth, our success is equally rooted in our unwavering commitment to our purpose of responsible exploration.

During the quarter, we held our Arctic visiting scientists program in collaboration with National Geographic Society. Our ships hosted 10 projects 6 of which were led by National Geographic explorers and funded by the lindblad Expedition National Geographic fund.

Participating scientists surveyed glaciers to study their stability and structure monitor changes in sea temperature and collected sea water to understand how small microbes survive in Dynamic and extreme environments.

Get traveled alongside this scientist and learn about their work in real time exemplifying how our collaborative impact programs with National Geographic Society differentiate Us in the marketplace.

Turning to guidance given the strength of our performance. We are raising full year guidance for net, yields revenue and ebita. Rick will take you through the specifics of our Outlook in his remarks. This results, reinforce our confidence that we are executing successfully on our strategic plan and our, well positions to capitalize on the significant opportunities ahead in closing. I want to express my sincere appreciation to our crew, our field experts, the incredible founders of our land companies, and the entire team,

Who work tirelessly to deliver extraordinary, guest experiences at the highest standards, this unwavering commitment to Excellence is reflected in our result and is built into our DNA. As we look ahead, we remain committed to building on this momentum continuing to invest in our people and operations and delivering the transformative travel experiences that sets lingua apart in the marketplace. Thank you for your continued confidence. We look forward to updating you on our progress. In quarters ahead and now I'm turning the call over to Rick for his remarks.

Thank you so much, Natalia. This was an outstanding quarter with strong topline growth as we continue to drive occupancy back to historical levels and achieve solid bottom-line performance. As we advance our cost innovation initiatives to improve margins, total company revenues for Q3 2025 were $240 million, an increase of $34 million, or 16.6%, versus Q3 2024. Segment revenues were $1,308 million, an increase of $16 million, or 13.4%, compared to the prior year. Occupancy increased 6 percentage points from 82% to 88%, despite a 5% increase in available guest nights, and yet yield for an available guest night increased.

9% to 1 314 the

highest third quarter yield in company history.

Land Experience, segment. Revenues were 103 million in increase of 18 million or 21.1% compared to Q3 2024 driven by a 12%, increase in guests and an 8% increase in Revenue per guest.

Turning now to the cost side of the business.

2024 specifically cost of Tours increased 14.6 million or 13% driven by operating additional voyages. And trips fuel costs were 4.5% of lindblad segment Revenue, which was flat to Q3 2024.

Sales and marketing costs increased 5.1 million or 20% primarily due to higher royalties and commission. Expense, and investments in demand generation efforts, we expect marketing expenses to remain elevated in Q4, reflecting investments. In initiatives, designed to drive growth into 2026 and 2027

General and administrative costs excluding stock-based compensation and transaction related expenses. Increase 1.7 million or 7% versus a year ago. Driven by higher Personnel costs partially offset by 1.8 million of employee retention. Tax credits realized in Q3 2025.

Adjusted Evita for the quarter was 57.3 Million. The highest quarterly result in our history and an increase of 11.5 million or 25% versus the prior year.

This was driven by a 6.5 million and a 4.9 million increase in the lindblad and Land Experience, segments, respectively, with both segments growing ibida by 25% year-over-year. This includes the impact of 1.8 million of employee retention. Tax credits realized in Q3 2025, which brings the year-to-date impact of this program to find

5.3 million.

We also continue to deliver margin Improvement, this quarter driven by greater leveraging of our fixed cost infrastructure and our cost Innovation initiatives with adjusted ebaa. Margins expanding 160 basis points year-over-year to 23.8%.

Net income available to stockholders for the third quarter was roughly Break Even or 0 cents per diluted share reflecting 23.5 million in debt refinancing expenses.

Turning to the balance sheet, we ended the quarter with total cache of 290.1 million, an increase of 74 million versus the end of 2024. The increase reflects 97.1 million in cash from operations, due primarily to the strong result of the business and increase. Bookings for Future travel. We use 54.1 million of cash for investing activities, which includes the acquisition and refurbishment of 2 goes vessels year to date. We've generated 60.4 million in free cash flow.

During a quarter, we completed a comprehensive refinancing of our debt, a significant Milestone that strengthens our balance sheet and enhances our financial flexibility to support strategic growth initiatives. As part of the refinancing, we issued 675 million of new, senior secured notes to replace our 2027 and 2028 notes.

This transaction, simplifies our capital structure extends, our maturities and lowers our cost of debt. The new notes were priced at 7% approximately 75 basis points lower than our prior Blended rate, reflecting strong investor confidence in our business. In conjunction we upsize and extended our revolving credit facility to $60 million with a new 5-year term further, improving our liquidity position.

We've now delivered 10 consecutive quarters of D leveraging. Driven by continued, EBA growth and our net leverage stands at 3.1 times reflecting this progress. S&P Global recently upgraded. Our corporate credit rating, citing limbad, strong, operating performance and healthy forward book position.

With a stronger balance sheet and ample liquidity where well positioned to aggressively pursue a creative growth opportunities, including Fleet expansion through Charters Acquisitions, Andor new builds, and adding to our portfolio of world-class land-based experiences.

Turning your full year outlook and pleased to share updated guidance for 2025. Our demand generation efforts, continue to drive. Strong booking momentum across 2025 and 2026 as well as for our recently launched 2027 itineraries as a result. We now expect net yield per available guest night to increase 12 and 1/2% to 14% year-over-year up from our prior range of 9% to 11%.

In line with this performance, we are raising our full year Revenue guidance to a range of 745 million to 760 million up from prior guidance of 725 million, to 750 million.

We are also raising our full year IBA dog. Guidance to a range of 119 million to 123 million up from our previous range of 108 to 115 million. This increase reflects the continued strength of our business, and our disciplined execution against our 3, strategic pillars,

Closing Natalie. And I have now been on board for 10 months and we couldn't be more encouraged by the progress. Our teams have made in such a short time, we remain confident in our ability to deliver sustained growth and long-term value for our shareholders with that, we would now be happy to take your questions.

Thank you. We will now begin the question and answer session.

If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the cube. If you would like to read your question, simply press star 1. Again, if you are called upon to ask your question and are listening via speaker phone in your device, please pick up your handset to ensure that your phone is not on mute. When asking your question, we do request for today's session that you please limit to 2 questions. Only. Thank you.

And our first question comes from the line of Steve wysynski with stifle. Your line is open.

Yeah. Hey guys, good morning. Um don't to tell you or or or Rick uh you know you give some high level color uh you know around 26 bookings and I think you noted bookings for

You know, for next year in 2027, we are running. Uh, I don't remember what your adjectives were, but it sounds like we are ahead of this point last year. So,

Just wondering if you could give a little more color around, you know, those booking Trends maybe where demand is right now across maybe some of your different itineraries. Maybe you're more important itineraries in next year. And then maybe also some color uh a little bit more color around your commentary about the uptick in bookings from um, you know, your Disney Travel Partners which I think is which, which is obviously pretty important.

Hi, Steve.

This guy don't see yet. It's coming next time but I will give you a little bit more of a commentary. So uh as I mentioned our booking course, I had on 26th in both segments and it's important to notice quite um quite significantly. And actually seeing some um recent uptakes which I encouraging um on Ling blood segment. As we mentioned, several times, we are working with all the commercial initiatives as you know, we just implemented them throughout this year so they have a lot of run rate uh to deliver results. We are working towards delivering, um, historical occupancy levels, which have around 90% And we are, I would say well on track for that, which will result definitely into yield cross, um, combined with managing pricing

As of decently relationships, we are just starting to see the, the fruits of all the initiatives that were implementing there. So you are seeing some results that are coming this year and I certainly expect more to come, uh, in forward years,

Okay. Gotcha. Second question is also going to be kind of a, a 26 question, so you might not answer this 1 but I'm going to ask it in a way that hopefully you give some kind of answer. Um, so so based on, you know, where you guys are booked today. Um, you know, obviously as we as we kind of think about yields in pricing next year, you're going to, you're going to be coming off of a

Uh you know what, a Rick's a 12 to 14% um, you know, kind of growth Year from a yield perspective. So not sure if you can kind of help us think a little bit more about you know maybe how pricing how yields potentially could look into next year just, you know, I guess, you know, coming off 12 to 14% growth, you know, what could that potentially look like?

Yeah. So well it

You all mentioned we are coming out of double-digit yield growth year to date, which is very large, largely driven by a step change increase in our occupancy in addition to pricing integrity. Obviously, in reversing, it will normalize yield growth. Um, as I will continue to increase occupancy, but it's not going to be double-digit increases that we've seen this year.

Um, so hopefully it gives you some um, some confidence in terms of pricing. We continue to maintain price Integrity as we increase occupancy.

Okay, that's a good color. Thanks guys. And congrats on that very strong.

Thank you.

Our next question comes from the line of

with Texas Capitol Securities. Your line is open.

Um, the avoidance of discounting As you move into next year, or do you think you actually have a pricing power, um, as you move into next year and the ability to actually take price up, um, in both the the the limb blad and the land-based segments. Um as you're looking at your I guess as you as your price as you think about what you've been booking um and how things are priced um into next year you maybe talk about you know what the price has been looking like next year versus this year.

so, uh, like

again, we will be, uh, guiding for 26 during next. Um, earnings call. I think Eric, we are clearly communicating that we are seeing an uptick in demand. Uh, we've been increasing our capacity through Charter editions, uh, through new ships, where that this year, we have been communicating that we're actively looking to expand our capacity whether it's through, adding more Charters or new bills, or buying ships. And that's because we are seeing a demand, particularly for some of our very popular destinations such as Alaska. Um, we've had a giant weight list in Alaska, this year. Um, and delivered, exceptional pricing power, uh, out of like

Truth and Antarctica have been doing extremely well and pretty much selling out the moment. We deploy it and we continue to take price increases their uh galopus is doing very well and we now have 4 ships operating there with basically increased capacity by 40%.

Uh, this quarter versus last quarter, we continue to see this momentum. So, we sell to over 100 destinations. Of course, there is a variable demand for each one of them, but overall, I think there is exceptional demand for our products. Yeah. And if I can just add a couple quick things, I mean, we're also continuing to build out our revenue management function, which is going to be critical to.

Building out our our price growth over time on the Expedition Cruise side and then our land experiences segment experience in 8% increase in Revenue per a guest here in Q3. And so we feel really good about our continued ability to take price in that segment as well.

Thank you. And this is my my second question, you know, Rick on on the guidance, simply go to the to the updated. Um, you know, ibida guidance still doesn't apply. Um, you know, a decline in, in, in Q4, um, evida, um, you know, compared to last year's Q4 even with Revenue up, you know? Materially I know the last call you noted expectation. For some pressure in second half.

We obviously didn't see that in Q3. So maybe help us Bridge kind of what you expect in Q4, what may be causing that the expectation for Q4. Um, even on pressure

Yeah, so I think there's 2 important Dynamics happening. In Q4 the first is a shift in the timing of our marketing, spend in order to set the stage for wave season. And the second is an increase in the number of dry and wet docks in Q4. We have 6 happening in Q4 2025 versus only 2 in Q4 of 2024.

Got it. Thank you. Just a quick. Should we assume that the recurring schedule going forward or is that more of a 25?

Specific.

What I would say is the timing of Brian wet docks is variable every year based on our decisions around deployment as well as shipyard availability.

Okay, perfect. Thank you. I appreciate it.

Next question comes from the line of Eric de Loi with Greg Halo. Your line is open

Great. Thank you for taking my questions and congrats on the strong results. Um, so the increase in occupancy and guest nights, um, obviously very impressive here. Uh it's clear that you know all the changes you've made since joining um and the expanded net Geo, Disney partnership are providing some nice Tailwind here. Um,

On the flip side, are you guys seeing any headwinds at this point from the macro environment? Um you know, obviously your customers are typically higher in net worth. So

Less sensitive to the macro, but just wondering if you're seeing, uh, sort of, you know, any offsetting, um, headwinds to call out, uh, amid all the, um, sort of positive, um, positive news. Otherwise.

I think that, uh, from I mean, we are always, uh, very mindful of geopolitical environment and, and always watching that our guests are a bit more resilient to economic. Um, you know, vulnerabilities and and we've seen that this year, as, as the economy kind of, uh, changed to that, the, the demand remained, pretty stable. Uh, so we hope that it will continue moving forward. Um, we always watch for macroeconomic environments. The only headwinds I will remind everyone is. As Rick mentioned several times, we do expect a step up in royalties in 26.

Yep. No, that's clear. And I think, um, I mean, if 26 is anything like, what we've seen, uh, very early on from this expanded partnership? Those were out to be, um, well worth it.

Um best question for me. Um so you mentioned the benefit from increasing the mix of charters for, you know, a few quarters now. Um, you also stated uh Rick that you expect to aggressively pursue a creative growth opportunities including land experiences. So just kind of a bit of a higher level question here, but how do you view your current mix of revenues? And is there anything that you would like to sort of increase or decrease, uh, from a mixed perspective as you look out over the next 5 years? Or so, whether that's different, um, channels or Charters or what have you

So I just start by saying we're very comfortable with the mix that we have. Today we currently have 10 Charter ships that will operate in 2026. These are a great way for us to deliver our product in unique destinations at attractive margins without Capital intensity. There are natural limitations of expanding capacity through this channel as there are just a limited number of ships. Available that satisfy Our Guest experience criteria. However, along with new builds and Acquisitions, this is an important tool in our toolbox as we think about growing capacity and we're especially excited to launch a handful of innovative Charter voyages. This morning for our 2027 season, including on European rivers Egypt, India, and Vietnam.

That's helpful. Thank you.

Next question, comes from the line of David Hargreaves, with Bartley's your line is open.

Hi. Congrats on getting your bond refinancing done, uh, in thinking about, uh, growth opportunities. I'm just wondering, uh, how you're thinking of of, uh, financing Alternatives and where you feel comfortable with, uh, Leverage.

So I I say we're we're very uh we're very pleased with the results of our recent financing. And as you know, as we sit here with a strength and balance sheet, we feel like that positions us well to aggressively pursue expansion opportunities, whether that's on the Expedition Cruise side through Charters Acquisitions Andor, new builds, or expanding on our portfolio of world-class Land Experience companies.

I I guess I'm wondering.

if you're thinking more bite-size type of expansion opportunities like the last couple of ships, you acquired or

I think you mentioned, possibly new builds. Um,

Which way are you leaning?

David. I think that this is our we we are evaluating and considering, uh, various different types of opportunities. Again, it is, um, Charter businesses, which are very great way to, as Rick mentioned to expand capacity in specific destinations,

but there are some limitations to that, uh, we are definitely looking at the, um, buying existing tonnage. If we find something that is a creative as a return on investment, and

Are satisfied. Our brand criteria and we are evaluating new bills opportunities as well. So I would say stay tuned.

Um and sorry Rick. I kind of cut you off. Were were you going to say something on Leverage sort of where your comfort zone is and would you would you consider taking leverage higher?

I would say, you know, we now have delivered 10 consecutive quarters of deleveraging and we're confident in our ability to continue to to deal ever. As we drive Eva, dog growth,

Okay, thank you very much.

again, if you would like to ask a question, press star, then the number 1 on your telephone keypad,

Further questions at this time, I would like to turn the call back over to Rick Goldberg for closing remarks.

Just want to thank everyone for your continued interest and support of Lynn blad. Expeditions have a great day. Bye now.

ladies and gentlemen, that concludes today's call, thank you all for joining and you may now disconnect