Q4 2025 Norwegian Cruise Line Holdings Ltd Earnings Call

March 2, 2026

Speaker #1: Good morning, and welcome to Norwegian Cruise Line Holdings' fourth quarter and full year 2025 earnings conference call. My name is Rob, and I'll be your operator.

Operator: Good morning, welcome to Norwegian Cruise Line Holdings Q4 and Full Year 2025 Earnings Conference Call. My name is Rob, and I'll be your operator. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions for the session will follow at that time. If anyone should require operator assistance during the conference, please press star zero on your touch-tone telephone. As a reminder to all participants, this conference call is being recorded. I would now like to turn the conference over to your host, Sarah Inmon. Ms. Inmon, please proceed.

Speaker #1: At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions for the session will follow at that time.

Speaker #1: If anyone should require operator assistance during the conference, please press *0 on your touch-tone telephone. As a reminder to all participants, this conference call is being recorded.

Speaker #1: I would now like to turn the conference over to your host, Sarah Inmon. Ms. Inmon, please proceed.

Speaker #2: Good morning, everyone. Thank you for joining us for our fourth quarter and full year 2025 earnings call. I'm joined today by John Chidsey, President and CEO of Norwegian Cruise Line Holdings, and Mark Kempa, Executive Vice President and Chief Financial Officer.

Sarah Inmon: Good morning, everyone. Thank you for joining us for our Q4 and full year 2025 earnings call. I'm joined today by John Chidsey, President and CEO of Norwegian Cruise Line Holdings, and Mark Kempa, Executive Vice President and Chief Financial Officer. As a reminder, this conference call is being simultaneously webcast on the company's investor relations website. We will be referring to a slide presentation during this call, which can also be found on our website. Both the conference call and presentation will be available for replay for 30 days following today's event. Before we begin, I would like to cover a few items. Our press release with Q4 and full year 2025 results was issued this morning and is also available on our website.

Speaker #2: As a reminder, this conference call is being simultaneously webcast on the company's Investor Relations website. We will be referring to a slide presentation during this call, which can also be found on our website.

Speaker #2: Both the conference call and presentation will be available for replay for 30 days following today's event. Before we begin, I would like to cover a few items.

Speaker #2: Our press release with fourth quarter and full year 2025 results was issued this morning and is also available on our website. Statements that involve risks and uncertainties could cause our actual results to differ materially from such statements.

Sarah Inmon: This call includes forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from such statements. These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation. Unless otherwise noted, all references to 2025 and 2026 Net Yield and Adjusted Net Cruise Cost excluding Fuel per Capacity Day are on a constant currency basis, and comparisons are to the same period in the prior year. With that, I'd like to turn the call over to our CEO, John Chidsey. John?

Speaker #2: These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation.

Speaker #2: Unless otherwise noted, all references to 2025 and 2026 net yields and adjusted debt cruise costs, excluding fuel for capacity day, are on a constant currency basis, and comparisons are to the same period in the prior year.

Speaker #2: With that, I'd like to turn the call over to our CEO, John Chidsey. John?

Speaker #3: Thank you, Sarah, and good morning, everyone. It’s my pleasure to be here with you today, and I’d like to thank my Norwegian Cruise Line Holdings colleagues for their warm welcome, and Mark for his partnership.

John Chidsey: Thank you, Sarah, and good morning, everyone. It's my pleasure to be here with you today, and I'd like to thank my Norwegian Cruise Line Holdings colleagues for their warm welcome and Mark for his partnership. There are many reasons that I agreed to join the board last February and now become CEO. This is a special company. It founded the modern cruise industry. We have iconic brands, an extremely loyal guest base, and a dedicated team. At the same time, NCLH has clearly not been performing to its full potential. Over the past 2 weeks since becoming CEO, I have been moving quickly to immerse myself in all aspects of our business and culture. I've begun a deep review of operations, spending time with our leadership, and beginning to engage across the organization to better understand where we are performing well and where we are not.

Speaker #3: There are many reasons that I agreed to join the board last February and now become CEO. This is a special company. It founded the modern cruise industry.

Speaker #3: We have iconic brands, an extremely loyal guest base, and a dedicated team. At the same time, NCLH has clearly not been performing to its full potential.

Speaker #3: Over the past two weeks since becoming CEO, I have been moving quickly to immerse myself in all aspects of our business and culture. I've begun a deep review of operations, spending time with our leadership, and beginning to engage across the organization to better understand where we are performing well and where we are not.

Speaker #3: As someone who has built a career at consumer-focused companies, I share the team’s passion for delivering an unbeatable guest experience. I’ve seen our company at moments of real strength, as well as through some of its most challenging periods, including the pandemic.

John Chidsey: As someone who has built a career at consumer-focused companies, I share the team's passion for delivering an unbeatable guest experience. I've seen our company at moments of real strength as well as through some of its most challenging periods, including the pandemic. I've experienced firsthand the resilience of this company and its people. I bring deep familiarity with the cruise industry from my prior years on the NCLH board of directors. We span transportation, hospitality, entertainment, construction, logistics, revenue management, touring, and more. We do this while managing various distribution channels and regulatory frameworks around the world. Our industry relies on guests booking their voyages months, sometimes even years in advance. I've also successfully led a number of yield-driven asset-intensive businesses through periods of transformation and performance improvement.

Speaker #3: I've experienced firsthand the resilience of this company and its people. I bring deep familiarity with the cruise industry from my prior years on the NCLH Board of Directors.

Speaker #3: We span transportation, hospitality, entertainment, construction, logistics, revenue management, touring, and more. We do this while managing various distribution channels and regulatory frameworks around the world.

Speaker #3: Our industry relies on guests booking their voyages months—sometimes even years—in advance. I've also successfully led a number of yield-driven, asset-intensive businesses through periods of transformation and performance improvement.

Speaker #3: Those experiences have reinforced a simple lesson: Sustainable improvement comes from disciplined rigor and a clear focus on the fundamentals. This is the approach I intend to bring to NCLH.

John Chidsey: Those experiences have reinforced a simple lesson: sustainable improvement comes from disciplined execution, operational rigor, and a clear focus on the fundamentals. This is the approach I intend to bring to NCLH. We are operating a capital-intensive business with a balance sheet that is overly levered and a cost structure that must continue to be streamlined. Indeed, we have some challenges that need to be addressed immediately and others that will take more time. We also have strengths to leverage. My takeaway after these first two weeks: we have to create a burning platform sense of urgency balanced against optimism and excitement for the opportunities ahead of us. Let me be clear, our strategy is sound, our execution and coordination have not been, and a culture of accountability is essential and necessary going forward.

Speaker #3: We are operating a capital-intensive business with a balance sheet that is overly levered and a cost structure that must continue to be streamlined. Indeed, we have some challenges that need to be addressed immediately, and others that will take more time.

Speaker #3: We also have strengths to leverage, my takeaway after these first two weeks. We have to create a burning platform sense of urgency balanced against optimism and excitement for the opportunities ahead of us.

Speaker #3: Let me be clear: Our strategy is sound; our execution and coordination have not been. And a culture of accountability is essential and necessary going forward.

Speaker #3: The good news is that we have the assets, we have the brands, and we now have the right focus. Job one is fixing execution and driving accountability and urgency.

John Chidsey: The good news is that we have the assets, we have the brands, and we now have the right focus. Job one is fixing execution and driving accountability and urgency. This comes from optimizing the organization and eliminating bureaucracy. There were clear failures in the basics of developing coordinated plans and a clear operating cadence around key enterprise-wide initiatives. The culture was very siloed with the lack of a one-team mentality which fed into this lack of cohesion. I found that while there was work being done, the alignment and focus was not where it needed to be. Job two is improving efficiency and return on invested capital, ensuring that our capital allocation decisions are grounded in measurable returns. The company invested heavily in our ships, and as a result, our product is strong. However, we underinvested in technology, revenue management capabilities, and customer-facing systems.

Speaker #3: This comes from optimizing the organization and eliminating bureaucracy. There were clear failures in the basics of developing coordinated plans and a clear operating cadence around key enterprise-wide initiatives.

Speaker #3: The culture was very siloed, with a lack of a one-team mentality, which fed into this lack of cohesion. And I found that while there was work being done, the alignment and focus were not where they needed to be.

Speaker #3: Job two is improving efficiency and return on invested capital—ensuring that our capital allocation decisions are grounded in measurable returns. The company invested heavily in our ships, and as a result, our product is strong.

Speaker #3: However, we underinvested in technology, revenue management capabilities, and customer-facing systems. Correcting this imbalance is one of our top priorities. And job three is unlocking operational upside.

John Chidsey: Correcting this imbalance is one of our top priorities. Job three is unlocking operational upside in revenue management, itinerary optimization, and monetization of our private destinations. There is important work ahead to return our company to sustained growth and value creations. It is the combination of my turnaround experience and tenure leading consumer-focused companies and industry understanding that provides me with the confidence that we can deliver for our shareholders, guests, and team members. What will make this possible is our leadership team. As of the past few months, we have put in place essentially an all-new leadership team in most of our critical functions with a skill set and experience level that is well suited for the work ahead. Now, this group needs to bond, and we need to create a culture of accountability and empowerment.

Speaker #3: In revenue management, itinerary optimization, and monetization of our private destinations. There is important work ahead to return our company to sustained growth and value creations.

Speaker #3: It is the combination of my turnaround experience and tenure leading consumer-focused companies, along with my industry understanding, that provides me with the confidence that we can deliver for our shareholders, guests, and team members.

Speaker #3: What will make this possible is our leadership team. Over the past few months, we have put in place essentially an all-new leadership team in most of our critical functions, with a skill set and experience level that is well-suited for the work ahead.

Speaker #3: Now, this group needs to bond, and we need to create a culture of accountability and empowerment. The pieces are definitely here, and I'm already encouraged by the team's excitement and commitment to this turnaround.

John Chidsey: The pieces are definitely here. I'm already encouraged by the team's excitement and commitment to this turnaround. Some actions are already underway. You will see further announcements over coming quarters as we streamline and reorganize the business to better execute. To that end, I'm working closely with our brand and executive leadership teams to take a fresh look at how we can improve day-to-day execution and drive more consistent results. Marc Kazlauskas was named President of Norwegian Cruise Line in December, bringing more than three decades of experience across sales, operations, and innovation in the global travel industry. Mark has a strong track record of driving commercial performance and enhancing the guest experience. His leadership will be instrumental at the brand level.

Speaker #3: Some actions are already underway, and you will see further announcements over coming quarters as we streamline and reorganize the business to better execute. To that end, I'm working closely with our brand and executive leadership teams to take a fresh look at how we can improve day-to-day execution and drive more consistent results.

Speaker #3: Mark Kazlauskas was named president of Norwegian Cruise Line in December, bringing more than three decades of experience across sales, operations, and innovation in the global travel industry.

Speaker #3: Mark has a strong track record of driving commercial performance and enhancing the guest experience. And his leadership will be instrumental at the brand level.

Speaker #3: I'm also working closely with Jason Montagu, our Chief Luxury Officer, as he continues to lead Region 7C's cruises and oceanic cruises. Together, we are focused on ensuring that each of our brands continues to deliver distinctive, high-quality experiences that resonate with our guests.

John Chidsey: I'm also working closely with Jason Montague, our Chief Luxury Officer, as he continues to lead Regent Seven Seas Cruises and Oceania Cruises. Together, we are focused on ensuring that each of our brands continues to deliver distinctive, high-quality experiences that resonate with our guests. Our executive leadership team brings together experienced company and industry veterans alongside new seasoned leaders from outside the industry, particularly in areas like technology and strategy. At the Norwegian brand, we recently onboarded a seasoned industry veteran to lead that brand's revenue management function, along with a chief marketing officer that is honing our brand messaging and the way we engage with our guests. Going forward, our decisions will be driven with a focus on revenue management, which will work with and direct sales and marketing to better align our resources.

Speaker #3: Our executive leadership team brings together experienced company, an industry veteran, alongside new seasoned leaders from outside the industry particularly in areas like technology and strategy.

Speaker #3: At the Norwegian brand, we recently onboarded a seasoned industry veteran to lead that brand's revenue management function, along with a chief marketing officer that is honing our brand messaging and the way we engage with our guests.

Speaker #3: Going forward, our decisions will be driven with a focus on revenue management, which will work with and direct Sales and Marketing to better align our resources.

Speaker #3: This is just one example of our team’s coming together across the company around a common goal of improving performance. My priorities are straightforward: improve execution, strengthen financial discipline, reduce leverage, and focus the organization on the areas that will drive sustainable value creation over time.

John Chidsey: This is just one example of our teams coming together across the company around a common goal of improving performance. My priorities are straightforward: improve execution, strengthen financial discipline, reduce leverage, and focus the organization on the areas that will drive sustainable value creation over time. Once we complete our review and finalize our operating plan, progress will require patience, discipline, and consistent execution. I look forward to sharing more detail on these priorities as we progress. With that, I'll turn it over to Mark to walk through our Q4 results and our outlook for 2026. Mark?

Speaker #3: Once we complete our review and finalize our operating plan, progress will require patience, discipline, and consistent execution. I look forward to sharing more detail on these priorities as we progress.

Speaker #3: With that, I'll turn it over to Mark to walk through our fourth-quarter results and our outlook for 2026. Mark?

Speaker #4: Thank you, John, and good morning, everyone. I'll begin with our fourth quarter results on slide five, which were ahead of or in line with our expectations.

Mark Kempa: Thank you, John. Good morning, everyone. I'll begin with our Q4 results on slide 5, which we're ahead of or in line with our expectations. Net Yields in the Q4 grew 3.8%, while Adjusted Net Cruise Cost ex-fuel of $158 was below guidance, increasing only 0.2%, driven by strong cost controls, which ultimately drove Adjusted EBITDA of $564 million, exceeding our guidance. Adjusted Net Income for the quarter was $130 million, Adjusted EPS of $0.28, which excludes an approximately $95 million or $0.20 write-off related to certain information technology assets included in depreciation and amortization expense. Now moving to our full year 2025 results on slide 6. Starting with our top line performance, Net Yields rose 2.4% compared to the prior year as expected.

Speaker #4: Net yields in the fourth quarter grew 3.8%, while adjusted net cruise cost ex-fuel of $158 was below guidance, increasing only 0.2%, driven by strong cost controls which ultimately drove adjusted EBITDA of $564 million, exceeding our guidance.

Speaker #4: Adjusted net income for the quarter was $130 million, with adjusted EPS of $0.28, which excludes an approximately $95 million, or $0.20 per share, write-off related to certain information technology assets included in depreciation and amortization expense.

Speaker #4: Now, moving to our full-year '25 results on slide six. Starting with our top-line performance, net yields rose 2.4% compared to the prior year, as expected.

Speaker #4: We continue to have a disciplined cost management approach, and our adjusted net cruise cost ex-fuel per capacity day rose only 0.7%, slightly better than our guidance, and well below inflation.

Mark Kempa: We continued to have a disciplined cost management approach and our Adjusted Net Cruise Cost ex-fuel per Capacity Day rose only 0.7%, slightly better than our guidance and well below inflation. Overall, we made important strides in 2025. Our Adjusted EBITDA increased 11% to $2.73 billion. Our Adjusted Operational EBITDA Margin improved 160 basis points to 37.1%, and our Adjusted EPS increased 19% to $2.11. Moving to slide seven, I'll touch on a few operational highlights since our last earnings call. At the Norwegian brand, under the leadership of our new chief marketing officer, we launched a refreshed brand platform, reintroducing our iconic 1990s tagline, It's Different Out Here, and anchoring the brand in the values that have always set Norwegian apart, freedom and flexibility.

Speaker #4: Overall, we made important strides in 2025. Our adjusted EBITDA increased 11% to $2.73 billion, our adjusted operational EBITDA margin improved 160 basis points to 37.1%, and our adjusted EPS increased 19% to $2.11.

Speaker #4: Moving to slide seven, I'll touch on a few operational highlights since our last earnings brand. Under the leadership of our new Chief Marketing Officer, we launched a refreshed brand platform, reintroducing our iconic 1990s tagline: "It's different out here." And anchoring the brand in the values that have always set Norwegian apart.

Speaker #4: Freedom and flexibility. Norwegian also opened bookings for Norwegian Aura, the largest of our prima class ships, with her first voyages setting sail in 2027.

Mark Kempa: Norwegian also opened bookings for Norwegian Aura, the largest of our Prima Class ships, with her first voyages setting sail in 2027. At Oceania, we continued to sharpen the brand's positioning in the luxury space, announcing an adults-only policy fleet-wide. This shift is already yielding results. The sales of Oceania Sonata delivered a record-breaking opening day, with bookings surpassing the launch of Oceania Allura by 45%. Strength in our luxury portfolio was also evident at Regent Seven Seas, where January bookings were up 20% year-over-year, with robust demand across the destination portfolio. In addition, we recently announced new ship orders across all three brands, one for Norwegian Cruise Line, one Sonata Class ship for Oceania Cruises, and one Prestige-Class ship for Regent. We now have 17 ships on order through 2037, securing coveted shipyard building slots and locking in our long-term growth plan.

Speaker #4: At Oceania, we continue to sharpen the brand's positioning in the luxury space, announcing an adults-only policy fleet-wide. This shift is already yielding results—the sales of Oceania Sonata delivered a record-breaking opening day, with bookings surpassing the launch of Oceania Lura by 45%.

Speaker #4: Strength in our luxury portfolio was also evident at Region 7C's, where January bookings were up 20% year over year, with robust demand across the destination portfolio.

Speaker #4: In addition, we recently announced new ship orders across all three brands: one for Norwegian Cruise Line, one Sonata-class ship for Oceania Cruises, and one Prestige-class ship for Regent.

Speaker #4: We now have 17 ships on order through 2037, securing coveted shipyard building slots and locking in our long-term growth plan. Importantly, given the timing of the deliveries for these new ship orders, they require only modest initial capital outlays.

Mark Kempa: Importantly, given the timing of the deliveries for these new ship orders, they require only modest initial capital outlays, and we do not expect them to have a material impact on our near-term leverage. Turning to Great Stirrup Cay on slide eight, we are very encouraged by the early results following the opening of the pier, a new expansive pool, and enhanced guest amenities on the island. Initial guest feedback has been incredibly positive, with strong guest satisfaction scores across the board. The early feedback reinforces our confidence that our investments are improving the guest experience and will drive strong returns. Importantly, we remain on track to open the Great Tides Water Park later this summer, which will further elevate the island's offering and strengthen demand as we move into 2027. Great Stirrup Cay is a central pillar of our Caribbean strategy.

Speaker #4: And we do not expect them to have a material impact on our near-term leverage. Turning to Great Stirrup Cay on slide eight, we are very encouraged by the early results following the opening of the pier, a new expansive pool, and enhanced guest amenities on the island.

Speaker #4: Initial guest feedback has been incredibly positive, with strong guest satisfaction scores across the board. The early feedback reinforces our confidence that our investments are improving the guest experience and will drive strong returns.

Speaker #4: Importantly, we remain on track to open the Great Tides Waterpark later this summer, which will further elevate the island's offering and strengthen demand as we move into 2027.

Speaker #4: Great Stirrup K is a central pillar of our Caribbean strategy. We remain highly confident in the long-term opportunity in the region, which delivers strong financial returns, attracts a broad and growing guest base, provides a stable operating environment, and allows us to target more new-to-cruise and premium family guests.

Mark Kempa: We remain highly confident in the long-term opportunity in the region, which delivers strong financial returns, attracts a broad and growing guest base, provides a stable operating environment, and allows us to target more new-to-cruise and premium family guests. While our Caribbean strategy required a shift in deployment to the region, in hindsight, it is clear that this shift, which resulted in a 40% capacity increase in Q1, was executed without the necessary enterprise-wide coordination, as John referenced. The capacity increase was premature as the supporting infrastructure and commercial initiatives around Great Stirrup Cay were not yet ready to support and accommodate the additional capacity. While phase I of the enhancements opened at the tail end of 2025, we increased capacity into the region ahead of the full build-out at Great Stirrup Cay, which includes the Great Tides Water Park.

Speaker #4: While our Caribbean strategy required a shift in deployment to the region, in hindsight, it is clear that this shift—which resulted in a 40% capacity increase in Q1—was executed without the necessary enterprise-wide coordination, as John referenced.

Speaker #4: In addition, the capacity increase was premature, as the supporting infrastructure and commercial initiatives around Great Stirrup Cay were not yet ready to support and accommodate the additional capacity.

Speaker #4: While phase one of the enhancements opened at the tail end of 2025, we increased capacity into the region ahead of the full build-out at Great Stirrup Cay, which includes the Great Tides Waterpark.

Speaker #4: Importantly, we did not sufficiently align revenue management, sales, marketing, itinerary planning, and on-island monetization strategies to support that deployment shift. The individual components were moving forward, but they were not integrated under a single cohesive operating plan designed to absorb the capacity at the right yield.

Mark Kempa: Importantly, we did not sufficiently align revenue management, sales, marketing, itinerary planning, and on-island monetization strategies to support that deployment shift. The individual components were moving forward, but they were not integrated under a single cohesive operating plan designed to absorb the capacity at the right yield. As a result, the headwinds we are experiencing in Q1 are more pronounced than we anticipated last quarter, which I will address in more detail shortly. As we stepped back and evaluated our 2026 deployment, it became clear that our commercial strategy, including our sales, marketing, pricing strategy, and revenue management tools, were not aligned with our deployment. As a result, certain itineraries did not receive the coordinated commercial support required to maximize performance and yields, which is weighing on our expected performance for the full year.

Speaker #4: As a result, the headwinds we are experiencing in the first quarter are more pronounced than we anticipated last quarter. Which I will address in more detail shortly.

Speaker #4: As we stepped back and evaluated our 2026 deployment, it became clear that our commercial strategy—including our sales, marketing, pricing strategy, and revenue management tools—were not aligned with our deployment.

Speaker #4: As a result, certain itineraries did not receive the coordinated commercial support required to maximize performance and yields, which is weighing on our expected performance for the full year.

Speaker #4: We entered 2026 slightly behind our ideal booking curve in certain itineraries, creating near-term pressure on pricing and yield, which is evident in our guidance.

Mark Kempa: We entered 2026 slightly behind our ideal booking curve in certain itineraries, creating near-term pressure on pricing and yield, which is evident in our guidance. Moving forward, we expect that creating tight integration between deployment planning and commercial execution will ensure itineraries are fully supported by a cohesive plan around revenue management, pricing, and marketing from day one. We are embarking on a disciplined business review to ensure full alignment across our deployment, marketing, pricing, and look forward to sharing more with you on this process in the coming quarters. As John mentioned earlier, we are moving with a sense of urgency to overcome these challenges. However, given the booking lead times, the benefits will phase in over time. We are confident that these steps will position us for stronger, more sustainable performance over the long term. This leads me to our 2026 guidance on slide 10.

Speaker #4: Moving forward, we expect that creating tight integration between deployment planning and commercial execution will ensure itineraries are fully supported by a cohesive plan around revenue management, pricing, and marketing from day one.

Speaker #4: We are embarking on a disciplined business review to ensure full alignment across our deployment marketing, pricing, and look forward to sharing more with you on this process in the coming quarters.

Speaker #4: As John mentioned earlier, we are moving with a sense of urgency to overcome these challenges. However, given the booking lead times, the benefits will phase in over time.

Speaker #4: We are confident that these steps will position us for stronger, more sustainable performance over the long term. This leads me to our 2026 guidance on slide 10.

Speaker #4: Let's start with net yields. As a result of the headwinds I discussed earlier, we expect net yield growth in the first quarter to decline approximately 1.6% as higher occupancy was more than offset by pricing pressure.

Mark Kempa: Let's start with Net Yields. As a result of the headwinds I discussed earlier, we expect Net Yield growth in Q1 to decline approximately 1.6% as higher occupancy was more than offset by pricing pressure. Looking to the balance of the year, we expect Net Yields to stabilize and modestly improve, growing at approximately 0.6%, bringing our full year Net Yields to approximately flat. However, we do not expect this gradual improvement to be symmetrical across all three quarters. At our Norwegian brand, we are experiencing pricing headwinds in select markets as a result of certain execution missteps, including sailings in the Caribbean and Bahamas and itineraries out of our new home port of Philadelphia. In Europe, the tailwinds we had expected to occur in Q3 are not as strong as previously anticipated, given the aforementioned execution missteps.

Speaker #4: Looking to the balance of the year, we expect net yields to stabilize and modestly improve, growing at approximately 0.6%, bringing our full-year net yields to approximately flat.

Speaker #4: However, we do not expect this gradual improvement to be symmetrical across all three quarters. At our Norwegian brand, we are experiencing pricing headwinds in select markets as a result of certain execution missteps—including sailings in the Caribbean and Bahamas—and itineraries out of our new home port of Philadelphia.

Speaker #4: In Europe, the tailwinds we had expected to occur in Q3 are not as strong as previously anticipated, given the aforementioned execution missteps. Outside of these markets, we note that heightened competitive activity in Alaska has also pressured yields due to elevated industry capacity levels.

Mark Kempa: Outside of these markets, we note that heightened competitive activity in Alaska has also pressured yields due to elevated industry capacity levels. That said, we remain focused on improving our commercial strategy and expect these headwinds to fade as we better align our strategy with deployment. We recognize that this level of top-line performance falls short of our expectations and our long-term objectives. As I mentioned earlier, we are undertaking a disciplined business review to fully assess the drivers of this underperformance and to ensure we realign deployment, pricing, and marketing to restore sustainable Net Yield growth. Turning to costs, our discipline on the expense side remains firmly intact. This marks the third consecutive year of strong cost control. In Q1, we expect Adjusted Net Cruise Cost ex Fuel to decrease approximately 0.8%.

Speaker #4: That said, we remain focused on improving our commercial strategy and expect these headwinds to fade as we better align our strategy with deployment. We recognize that this level of top-line performance falls short of our expectations.

Speaker #4: And our long-term objectives. As I mentioned earlier, we are undertaking a disciplined business review to fully assess the drivers of this underperformance and to ensure we realign deployment pricing and marketing to restore sustainable net yield growth.

Speaker #4: Turning to costs, our discipline on the expense side remains firmly intact, and this marks the third consecutive year of strong cost control. In the first quarter, we expect adjusted net cruise costs ex-fuel to decrease approximately 0.8%.

Speaker #4: Looking to the remaining nine months of the year, we expect unit costs to grow approximately 1.4%, bringing full-year unit cost growth to approximately 0.9%, well below inflation.

Mark Kempa: Looking to the remaining 9 months of the year, we expect unit cost to grow approximately 1.4%, bringing full-year unit cost growth to approximately 0.9%, well below inflation. Our cost savings program represents a structural change in culture. We are building the muscle to continuously identify efficiencies, remove waste, and improve processes. That work will continue throughout 2026 and beyond as we remain focused on driving sustainable margin expansion. As a result, we expect Q1 Adjusted Operational EBITDA Margin to improve to approximately 29.1% compared to 28.4% in Q1 2025 and Adjusted EBITDA of $515 million. For the full year, we expect margins to remain essentially flat year-over-year at approximately 37%, while Adjusted EBITDA increases approximately 8% to $2.95 billion.

Speaker #4: Our cost savings program represents a structural change in culture. We are building the muscle to continuously identify efficiencies, remove waste, and improve processes. That work will continue throughout 2026 and beyond as we remain focused on driving sustainable margin expansion.

Speaker #4: As a result, we expect first quarter adjusted operational EBITDA margin to improve to approximately 29.1%, compared to 28.4% in the first quarter of '25, and adjusted EBITDA of $515 million.

Speaker #4: For the full year, we expect margins to remain essentially flat year over year at approximately 37%, while adjusted EBITDA increases approximately 8% to 2.95 billion.

Speaker #4: Adjusted EPS is expected to be approximately $0.16 in the first quarter, and for the full year, we expect adjusted EPS to increase approximately 13% to $2.38.

Mark Kempa: Adjusted EPS is expected to be approximately $0.16 in the first quarter. For the full year, we expect Adjusted EPS to increase approximately 13% to $2.38. Deleveraging remains a top financial priority. For the full year 2026, we expect net leverage to remain approximately flat at 5.2x. Keep in mind, this reflects the delivery of Norwegian Luna in March and Seven Seas Prestige in December, which temporarily increases reported leverage by approximately a quarter turn as the associated EBITDA contribution phases in. While we continue to grow capacity at a healthy pace, we are focused on driving stronger top-line performance and margin expansion to support further net leverage reduction over time. As these new ships ramp and contribute meaningful to EBITDA, we expect net leverage to resume its downward trajectory.

Speaker #4: D-leveraging remains a top financial priority and for the full year 2026, we expect net leverage to remain approximately flat at 5.2 times. Keep in mind this reflects the delivery of Norwegian Luna in March, and Seven Seas Prestige in December, which temporarily increases reported leverage by approximately a quarter turn as the associated EBITDA contribution phases in.

Speaker #4: While we continue to grow capacity at a healthy pace, we are focused on driving stronger top-line performance and margin expansion to support further net leverage reduction over time.

Speaker #4: As these new ships ramp and contribute meaningfully to EBITDA, we expect net leverage to resume its downward trajectory. At the holding company level, at the brand level, and within revenue management, we are taking an appropriately disciplined approach to guidance.

Mark Kempa: At the holding company level, at the brand level, and within revenue management, we are taking an appropriately disciplined approach to guidance. Rebuilding credibility with the market starts with setting clear, realistic expectations and delivering on them consistently. We are acting with urgency to strengthen the business, we are also realistic that meaningful improvement requires deliberate execution over time. Our focus is on building a stronger, more durable foundation and restoring performance in a way that is sustainable and credible. Before I turn the call back over to John, I want to take a moment to highlight the progress we've made on our cost savings initiatives over the past several years on slide 11. We expect 2026 to mark another year of sub-inflationary Adjusted Net Cruise Cost ex-fuel growth.

Speaker #4: Rebuilding credibility with the market starts with setting clear, realistic expectations and delivering on them consistently. We are acting with urgency to strengthen the business, but we are also realistic that meaningful improvement requires deliberate execution over time.

Speaker #4: Our focus is on building a stronger, more durable foundation and restoring performance in a way that is sustainable and credible. Before I turn the call back over to John, I want to take a moment to highlight the progress we've made on our cost savings initiatives over the past several years on slide 11.

Speaker #4: We expect 2026 to mark another year of sub-inflationary adjusted net cruise cost ex-fuel growth. That would represent nearly three consecutive years of essentially flat unit cost growth, while we deliver on our $300 million plus savings target.

Mark Kempa: That would represent nearly three consecutive years of essentially flat unit cost growth while we deliver on our $300 million-plus savings target. These results are the product of a disciplined work of our Transformation Office, which has methodically reviewed cost structures across the business, identifying efficiencies and removing waste, all without compromising the guest experience. While much of the early focus was on shipboard efficiencies, we are now expanding and accelerating the program to drive further operating leverage by optimizing SG&A. Importantly, this is not a one-time program. We have embedded cost discipline into our culture, and we intend to continue driving efficiencies and margin expansion well beyond 2026. With that, I'll turn it back to John for closing remarks.

Speaker #4: These results are the product of a disciplined work of our Transformation Office, which has methodically reviewed cost structures across the business, identifying efficiencies and removing waste, all without compromising the guest experience.

Speaker #4: While much of the early focus was on shipboard efficiencies, we are now expanding and accelerating the program to drive further operating leverage by optimizing SG&A.

Speaker #4: Importantly, this is not a one-time program. We have embedded cost discipline into our culture, and we intend to continue driving efficiencies and margin expansion well beyond 2026.

Speaker #4: With that, I'll turn it back to John for closing remarks.

Speaker #2: Thank you, Mark. Before opening the call to questions, I want to underscore our focus going forward. Together, with our Board and executive leadership team, we are focused on improving execution, strengthening financial performance, and reducing leverage over time.

John Chidsey: Thank you, Mark Kempa. Before opening the call to questions, I want to underscore our focus going forward. Together with our Board and executive leadership team, we are focused on improving execution, strengthening financial performance, and reducing leverage over time, while remaining firmly committed to delivering the exceptional vacation experiences our guests have come to expect across our three incredible brands. As I said before, we have the assets, we have the brands, we now have the focus. I recognize that our 2026 outlook is below the long-term aspirations we previously communicated. Closing that gap requires focus, rigor, and accountability, that is exactly what we are bringing to this next phase. We look forward to keeping you apprised of our progress. Before we move to Q&A, I want to briefly address the current conflict in the Middle East.

Speaker #2: While remaining firmly committed to delivering the exceptional vacation experiences our guests have come to expect across our three incredible brands, as I said before, we have the assets, we have the brands, we now have the focus. I recognize that our 2026 outlook is below the long-term aspirations we previously communicated.

Speaker #2: Closing that gap requires focus, and that is exactly what we are bringing to this next phase. We look forward to keeping you apprised of our progress.

Speaker #3: Before we move to Q&A, I want to briefly address the current conflict in the Middle East. We are closely monitoring the situation in Iran and the broader region.

John Chidsey: We are closely monitoring the situation in Iran and the broader region. The safety of our guests and crew is always our top priority. At this time, we are not operating in the affected areas, and there are no impacts to our scheduled itineraries. As it relates to fuel, the longer-term impact remains uncertain. However, we are currently approximately 51% hedged for 2026 and 27% hedged for 2027, which helps mitigate near-term volatility. We will continue to monitor developments closely and will adjust as necessary. With that, operator, please open the line for questions.

Speaker #3: The safety of our guests and crew is always our top priority. At this time, we are not operating in the affected areas and there are no impacts to our scheduled itineraries.

Speaker #3: As it relates to fuel, the longer-term impact remains uncertain. However, we are currently approximately 51% hedged for 2026 and 27% hedged for 2027, which helps mitigate near-term volatility.

Speaker #3: We will continue to monitor developments closely, and we'll adjust as necessary. With that, operator, please open the line for questions.

Speaker #2: Thank you. With this, we'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue.

Operator: Thank you. With this time, we'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad, and a confirmation tone indicate your line is in the question queue. You may 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 your handset before pressing the star keys. One moment please for our first question. Our first question comes from the line of Steven Wieczynski with Stifel. Please proceed with your questions.

Speaker #2: 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 your handset before pressing the star keys.

Speaker #2: One moment, please, for our first question. Our first question comes from the line of Steve Wozinski with Stifel. Please receive three questions.

Speaker #4: Yeah, thanks, guys. Good morning. John, welcome in and congratulations on the CEO appointment. So, I have two questions that I’m going to try to ask here in one.

Steven Wieczynski: Yeah, thanks, guys. Good morning. John, you know, welcome in and congratulations on the CEO appointment. I have two questions that I'm gonna try to ask here in one. John, obviously you've only been in your seat for a very short period of time, you know, but you noted, and Mark commented in his prepared remarks that, you know, there have been execution missteps with aligning your commercial strategy with your deployment. You know, I guess my first question is about, you know, these Caribbean deployments and maybe how you address these capacity overhangs moving forward. I mean, or if you start to, you know, pivot away from decisions that previous management implemented, you know, in the Caribbean.

Speaker #4: So John, obviously, you've only been in your seat for a very short period of time but you noted and Mark commented in his prepared remarks that there have been execution missteps with aligning your commercial strategy with your deployment.

Speaker #4: So I guess my first question is about these Caribbean deployments and maybe how you address these capacity overhangs moving forward. I mean, or if you start to pivot away from decisions that previous management implemented in the Caribbean.

Steven Wieczynski: Second question is probably for you, Mark, you know, if we look at slide 10 and look at the implied guidance for the, you know, for Q2 through Q4, you obviously have a negative yield cost spread. You know, from our seat, that seems somewhat conservative even with your deployment headwinds. Mark, not sure what you would say about that, but any comments, you know, would be helpful, especially, you know, given the fact Caribbean capacity starts to ease after Q1, and maybe it's, you know, more about Alaska and Europe that you called out in your prepared remarks, but any comments there would be super helpful. Thanks, guys.

Speaker #4: And then second question is probably for you, Mark, but if we look at slide 10 and look at the implied guidance for the 2Q through 4Q, you obviously have a negative yield cost spread.

Speaker #4: But from our seat, that seems somewhat conservative even with your deployment headwinds. So Mark, not sure what you would say about that, but any comments would be helpful, especially given the fact Caribbean capacity starts to ease after the first quarter and maybe it's more about Alaska and Europe that you called out in your prepared remarks.

Speaker #4: But any comments there would be super helpful. Thanks, guys.

Speaker #3: Yeah. So in terms of your question about Caribbean deployments, clearly, I think the Caribbean is the place to be. I think it really ties back to when I said it was a very siloed effort organization, not a cohesive plan.

John Chidsey: Yeah. In terms of your question about Caribbean deployments, you know, clearly, I think the Caribbean is the place to be. I think it really ties back to when I said it was a very siloed effort, organization, not a cohesive plan. I think clearly, as we said in our remarks, our timing was off. I think we got a little ahead of ourselves. Again, there wasn't a great cohesive plan. marketing was going in one direction, timing of the island was going in a different direction. I think in the intermediate to long term, we were very confident about the Caribbean. Again, I just think this is where we've got to do a better job of running a very well-coordinated, well-executed plan, and I think we'll be fine.

Speaker #3: So, I think clearly, as we said in our remarks, our timing was off. I think we got a little ahead of ourselves. Again, there wasn't a great, cohesive plan.

Speaker #3: Marketing was going in one direction; timing of the island was going in a different direction. So I think, in the intermediate to long term, we were very confident about the Caribbean.

Speaker #3: Again, I just think this is where we've got to do a better job of running a very well-coordinated, well-executed plan. And I think we'll be fine.

Speaker #3: It was just a lot of short-term misfires, if that's kind of how I think I would describe it.

John Chidsey: There's just a lot of, short-term misfires, if that's kinda how I think I would describe it.

Speaker #2: Yeah, Steve. So, the strategy around Caribbean is sound. We've said that our private island, Great Stirrup Cay, is a central pillar of that. I think that squarely reflects the pretty dramatic shift in capacity toward the region without the right commercial apparatus working in sync as a cohesive unit.

Mark Kempa: Yeah, Steve. The strategy around Caribbean is sound. We've said that our private island, Great Stirrup Cay, is a central pillar of that. I think this squarely reflects the pretty dramatic shift in capacity toward the region without the right commercial apparatus working in sync as a cohesive unit across the board. Hence why we've seen some changes over the last few months of our various leadership. I think going forward, as we correct those missteps and we align our strategies as one unit, I think we'll continue to see improved performance around that. I think, Steve, on your second, your second portion there was a mouthful, but I think you were referencing the implied guidance Q2 to Q4, as well as maybe a negative spread there.

Speaker #2: Across the board, hence why we've seen some changes over the last few months of our various leadership. So, I think going forward, as we correct those missteps and we align our strategies as one unit, I think we'll continue to see improved performance around that.

Speaker #2: I think, Steve, on your second portion, there was a mouthful, but I think you were referencing the implied guidance Q2 to Q4, as well as maybe a negative spread there.

Mark Kempa: You know, apart from the Caribbean and Bahamas, where we've had a significant capacity increase, I think, you know, when we reference some of the commercial missteps or execution, that is also affecting us in Europe. While Europe as a whole, the market is fine, we are not seeing the expected tailwinds that we expected to harvest over the summer as a result of some of our own missteps. We are in the process of, again, working on that and correcting that. Apart from that, I think we are seeing softness in Alaska. I think Alaska has seen mid-single digit increase in capacity across the industry, and I think that is putting pressure on the broader industry around that. That is a little bit of a drag for us this year.

Speaker #2: Apart from the Caribbean and Bahamas, where we've had a significant capacity increase, I think when we reference some of the commercial missteps or execution, that is also affecting us in Europe.

Speaker #2: While Europe as a whole, the market is fine, we are not seeing the expected tailwinds that we expected to harvest over the summer as a result of some of our own missteps.

Speaker #2: So, we are in the process of, again, working on that and correcting that. Apart from that, I think we are seeing softness in Alaska.

Speaker #2: I think Alaska has seen a mid-single-digit increase in capacity across the industry, and I think that is putting pressure on the broader industry around that.

Speaker #2: So that is a little bit of a drag for us this year.

Speaker #4: Okay. Thanks, guys. Appreciate it.

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

Speaker #2: Our next question comes from the line of Ben Jenkin with Mizuho. Please receive three questions.

Operator: Our next question comes from the line of Ben Chaiken with Mizuho. Please proceed with your question.

Speaker #5: Hey, thanks for taking my questions. Just to maybe follow up on Europe. So last year, you kind of did these long-duration immersive strategies into Europe in Q3, and you did that on the heels of April 2nd, which seems like an obvious formula for weakness.

Ben Chaiken: Hey, thanks for taking my questions. Just to maybe follow up on Europe. Last year, you kind of did these long-duration immersive strategies into Europe in Q3, and you did that on the heels of 2 April, which, you know, seems like an obvious formula for weakness. You know, as you were kind of suggesting in the previous comment that you were not expecting Q3 this year to be a tailwind, you know, as a result of your own missteps. Can we flush this out? Can we unpack that a little more? I believe Caribbean should be, you know, either your lowest or close to your lowest from a capacity mix standpoint.

Speaker #5: But as you were kind of suggesting in the previous comments, you were not expecting Q3 this year to be a tailwind as a result of your own missteps.

Speaker #5: I guess I'm just—can we flesh this out? Can we unpack that a little more? I believe the Caribbean should be either your lowest or close to your lowest from a capacity mix standpoint.

Ben Chaiken: Yeah, help us unpack like how the missteps in the Caribbean impact that Q3 kind of year-over-year comparison versus last year.

Speaker #5: Yeah. So help us unpack how the missteps in the Caribbean impact that 3Q kind of year-over-year comparison versus last year.

Ben Chaiken: Yeah, help us unpack like how the missteps in the Caribbean impact that Q3 kind of year-over-year comparison versus last year.

Speaker #3: Yeah. Thank you, Ben. Look, you're absolutely right. We did have a shift in itinerary or deployment that was already pre-planned for 2026 prior to any events last year in March, April.

Mark Kempa: Yeah. Thank you, Ben. Look, you're absolutely right. You know, we did have a shift in itinerary or deployment that was already preplanned for 2026 prior to any events last year in March, April. I think the issue around Europe is we, in fact, did decrease our longer deployment itineraries. In fact, you know, as a stat, I think we had about 160 voyages last year, which were 9 to 14 days. This year, those same voyages are down to the low 60s. You know, we did in fact reduce it by 50% to 60%.

Speaker #3: I think the issue around Europe is we, in fact, did decrease our longer deployment itineraries. In fact, as a stat, I think we had about 160 voyages last year, which were 9 to 14 days.

Speaker #3: This year, those same voyages are down to the low 60. So we did, in fact, reduce it by 50 to 60 percent. Where we're seeing some pressure is on a good portion of those sailings we do have quite a bit of open jaw itineraries.

Mark Kempa: Where we're seeing some pressure is on a good portion of those sailings, we do have a quite a bit of open jaw itineraries. As a result of that, we're seeing a little bit of pressure from our consumers around those open jaws. That's something, again, that goes back to what I would call commercial misalignment in terms of our deployment and commercial strategy. While we cannot correct that for 2026, it is something that we are focusing on in the future that we believe is very correctable. Of course, we will not see the fruits of that until 2027 and beyond.

Speaker #3: And as a result of that, we're seeing a little bit of pressure from our consumers around those open jaws. And that's something, again, that goes back to what I would call commercial misalignment in terms of our deployment and commercial strategy.

Speaker #3: So while we cannot correct that for 2026, it is something that we are focusing on in the future that we believe is very correctable.

Speaker #3: But of course, we will not see the fruits of that until 2027 and beyond.

Speaker #5: Okay. And then, John, in your prepared remarks, I believe you spoke about either a mix of my words and your words, but I believe you spoke about a culture of inefficiency and bureaucracy.

Ben Chaiken: Okay. Then John, in your prepared remarks, I believe you spoke about, these are a mix of my words and your words, but I believe you spoke about a culture of inefficiency and bureaucracy. Maybe you could expand on this. How did this manifest in results? Was this a cost headwind or more of a strategy and capacity allocation related? Then what are you doing specifically to change this culture? Thanks.

Speaker #5: Maybe you could expand on this. How did this manifest in results? Was this a cost headwind or more of a strategy and capacity allocation-related?

Speaker #5: And then, what are you doing specifically to change this culture? Thanks.

Speaker #3: Yeah, I think it was a little bit of both. I think, as I said, it was very siloed and not—I hate to keep using the word 'cohesive'—but cohesive strategy and cohesive execution, which allowed a lot of these sort of missteps. I find a culture that really has no sense—not no sense, but it needs a much greater sense of urgency and accountability.

John Chidsey: Yeah, I think it was a little bit of both. I think, as I said, it was very siloed and not, I hate to keep using the word cohesive, but cohesive strategy and cohesive execution, which allowed a lot of these sort of missteps. I find a culture that really has no sense, not no sense, but it needs a much greater sense of urgency and accountability. I think both of those were missing. Yes, there clearly, as we said in our remarks, I think the company's done a great job ship side in terms of looking at costs, but I think we have definite opportunities on the shore side to optimize the company. You know, what am I doing to get after it?

Speaker #3: I think both of those were missing. And yes, they're clearly, as we said in our remarks, I think the company's done a great job shipside in terms of looking at costs, but I think we have definite opportunities on the shore side to optimize the company.

Speaker #3: And so, what am I doing to get after it? Again, trying to create that culture of one, trying to create cohesive plans, trying to go after the cost.

John Chidsey: Again, trying to create that culture of one, trying to create cohesive plans, trying to go after the cost. I also think the other huge opportunity is revenue because it was so disjointed, underinvested, as I said, in technology, in revenue management, sales going in one direction, marketing in another, itinerary planning in another, lack of real focus on revenue management. I think pulling all that together, I actually think our biggest opportunity is revenue. While you might not see that one immediately, given the nature of our industry and, you know, people are already fairly well booked in 2026, you should definitely start to see the fruits of that in 2027. I kind of look at it as A Tale of Two Cities.

Speaker #3: But I also think the other huge opportunity is revenue because it was so disjointed underinvested, as I said, in technology, in revenue management. Sales going in one direction, marketing in another, itinerary planning in another, lack of real focus on revenue management.

Speaker #3: I think pulling all that together I actually think our biggest opportunity is revenue. And while you might not see that one immediately given the nature of our industry and people are already fairly well booked in '26, but you should definitely start to see the fruits of that '27.

Speaker #3: So I kind of look at it as a tale of two cities. I think both sides of the coin are opportunities for us. And the culture is what will drive both of those at the end of the day.

John Chidsey: I think both sides of the coin are opportunities for us, and the culture is what will drive both of those at the end of the day.

Speaker #2: Thanks. Our next question comes from the line of Connor Cunningham with Melius Research. Please receive three questions.

Ben Chaiken: Thanks.

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

Speaker #6: Hi, everyone. Thank you. John, maybe we could just stick with you on following up to Ben's comments a little bit there. You just mentioned that you're going through a full review process now.

Conor Cunningham: Hi, everyone. Thank you. John, maybe we could just stick with you on, maybe following up to Ben's comments a little bit there. Just you mentioned that you're going through a full review process now. Just curious on when that will actually be, you know, understand a lot of its culture and more of a broader strategy as you kind of take the reins.

Speaker #6: Just curious on when that will actually be complete. I understand a lot of it is culture and more of a broader strategy as you kind of take the reins.

Speaker #3: Well, as I said, I think our strategy is correct. I like, as Mark noted, we have as a company invested a lot in our ships.

John Chidsey: Well, as I said, I think our strategy is correct. As Mark noted, we have, as a company, invested a lot in our ships. I think our ships and our guest experience, you know, our sort of crew enthusiasm and crew dedication is good. You know, whether it takes three months, four months, five months to kind of really dig into where have we gotten a little bloated, where are we not efficient, where should we be looking to invest short term, I can't tell you exactly, but I mean, it's not a one-year process by any stretch of the imagination to kind of pull together, you know, what do we want to do immediately?

Speaker #3: So, I think our ships and our guest experience—sort of crew enthusiasm and crew dedication—is good. Whether it takes three months, four months, five months to kind of really dig into where have we gotten a little bloated, where are we not efficient?

Speaker #3: Where should we be looking to invest short term? I can't tell you exactly, but I mean, it's not a one-year process by any stretch of the imagination to kind of pull together what do we want to do immediately?

Speaker #3: What do we want to do? But for certain reasons, maybe we can't get after it until ’27—sort of racking and stacking those priorities. So, I would say in the next couple of quarters, we should have that pretty buttoned up.

John Chidsey: What do we want to do, but for certain reasons, maybe we can't get after until 2027, sort of racking and stacking those priorities. you know, I would say in the next couple quarters, we should have that pretty buttoned up. I don't know. I can't give you an exact date by any stretch. I've been here all of 2 weeks.

Speaker #3: But I don't know. I can't give you an exact date by any stretch. I've been here all two weeks, so.

Speaker #6: Yeah. No, I realize that you've been there for a short period of time. Okay. So just as a follow-up, maybe, have you guys actually been in contact with Elliott?

Conor Cunningham: Yeah. No, I realize that you've been there for a short period of time. Just, okay, so just as a follow-up, maybe have you guys actually been in contact with Elliott? When you, when you look at their presentation, what would you actually agree with, you know, as you kind of digested what they've?

Speaker #6: And then, when you look at their presentation, what would you actually agree with as you kind of digested what they've said?

John Chidsey: The answer is yes. We have been in touch with Elliott like we have with all of our shareholders. We're actually headed out for like a two-week roadshow, basically, with our investors, which we're literally hitting the road this week and next week. That was already set up. That's one of the first things I wanted to do when I stepped in is, you know, go talk to shareholders and get their, you know, perspective on what we've done well and clearly what we haven't done well. That's all underway. Obviously, you know, hearing from Elliott is just like any other shareholder, meaning we're very interested in what they have to say and their thoughts on how we better drive long-term shareholder value. Yeah, that's what I would say.

Speaker #3: The answer is yes. We have been in touch with Elliott, like we have with all of our shareholders. And we're actually headed out for, like, a two-week roadshow, basically, with our investors, which—we're literally hitting the road this week and next week.

Speaker #3: So, that was already set up. That's one of the first things I wanted to do when I stepped in—go talk to shareholders and get their perspective on what we've done well.

Speaker #3: And clearly, what we haven't done well. So that's all underway. And obviously, hearing from Elliott is just like any other shareholder, meaning we're very interested in what they have to say.

Speaker #3: And their thoughts on how we better drive long-term shareholder value. So yeah, that's what I would say.

Mark Kempa: Conor, I think as John had said, I think there's a huge opportunity here as we focus on the revenue side. We brought in a top-notch commercial revenue officer who has, who's an industry veteran, who has significant experience in other areas of the industry of correcting this issue. While that's gonna take some time to harvest, we believe that again, we're putting in the right structural components underneath that to really drive the top line as well.

Speaker #5: And Connor, I think as John had said, I think there's a huge opportunity here as we focus on the revenue side. We've brought in a top-notch commercial revenue officer who has who is an industry veteran who has significant experience in other areas of the industry of correcting this issue.

Speaker #5: And while that's going to take some time to harvest, we believe that, again, we're putting in the right structural components underneath that to really drive the top line as well.

Conor Cunningham: Appreciate it. Thank you.

Speaker #6: Appreciate it. Thank you.

Speaker #2: Our next question comes from the line of Matthew Boss with JPMorgan. Please proceed with your three questions.

Operator: Our next question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question.

Speaker #5: Great, thanks. So, John, as you enter '26 slightly below your optimal booking range, could you speak to actions—maybe more in the immediate term—to support improvement in booking trends, and maybe specifically your mindset on preserving price relative to load factors?

Ben Chaiken: Great, thanks. John, as you enter 2026 slightly below your optimal booking range, could you speak to actions maybe more in the immediate term to support improvement in booking trends, and maybe specifically your mindset on preserving price relative to load factors?

Speaker #3: Yeah, I think, again, having been here two weeks, I'm going to defer to Mark on that one. I'm not that deep in the weeds yet, to be honest.

John Chidsey: I think, again, having been here two weeks, I'm gonna defer to Marc on that one. I'm not that deep in the weeds yet, to be honest.

Speaker #5: Yeah, Matt, great question. So, yeah, we are slightly behind the optimal booking curve, as we mentioned. And, as a result, when you look at our guidance, I think that's reflective of both the first quarter as well as the remaining three quarters.

Mark Kempa: Yeah, Matthew, great question. Yeah, we are slightly behind the optimal booking curve as we mentioned. As a result, you know, when you look at our guidance, I think that's reflective of both Q1 as well as Q2, Q3, and Q4. It is always a delicate balance between price and load. I think when you step back and you think about our longer-term strategy of a central pillar around the Caribbean, getting more premium, families on board, monetizing our island, we will be continued to focus on load factor. In fact, I think, our load factor this year is increasing by over 200 basis points. The balance is gonna be finding that right price, together with the right yield and load factor.

Speaker #5: It is always a delicate balance between price and load. But I think when you step back and you think about our longer-term strategy of central pillar around the Caribbean getting more premium families on board, monetizing our island, we will be continuing to focus on load factor.

Speaker #5: And in fact, I think our load factor this year is increasing by over 200 basis points. So, the balance is going to be finding that right price together with the right yield and load factor.

Speaker #5: And I think, again, as we align all of our commercial departments rowing in one direction, I think you're naturally going to see increases in both.

Mark Kempa: I think, again, as we align all of our commercial departments rowing in one direction, I think you're naturally gonna see increases in both.

Speaker #5: Great. And then maybe Mark to that point, could you elaborate on your cost growth outlook for this year, meaning I know this has been a strong area of focus in particular for you personally over the last couple of years?

Matthew Boss: Great. Maybe Mark, to that point, could you elaborate on your cost growth outlook for this year? Meaning, I know this has been a strong area of focus in particular for you personally over the last couple years, but any areas of incremental low-hanging fruit that you see to further rationalize the cost structure? Maybe on the flip side, investments needed to drive yields multiyear in your view. Just what's the best way to think about the balance that we should consider here?

Speaker #5: But any areas of incremental low-hanging fruit that you see to further rationalize the cost structure, or maybe on the flip side, investments needed to drive yields multi-year in your view?

Speaker #5: Just what's the best way to think about the balance that we should consider here?

Speaker #3: Yeah. I think as John mentioned, one of the areas that we have not invested in enough is customer-facing systems. Technology. And both marketing and revenue management technology, I think, as you guys all recall, we did we started investing in a new revenue management system last year.

Mark Kempa: Yeah, I think, you know, as John mentioned, you know, one of the areas that we have not invested in enough is customer-facing systems, technology, and both marketing and revenue management technology. I think as you guys all recall, we did, we started investing in a new revenue management system last year. It is just started up and running, you know, over the last six to eight weeks, so that'll take some time. I think, you know, again, from when you step back and you look at where our cost culture over the last two to three years has been, yes, we've made good progress. We've always said this is a $300 million+ program, but a lot of that was focused on shipboard efficiencies.

Speaker #3: It has just started up and has been running over the last six to eight weeks, so that'll take some time. But I think, again, when you step back and you look at where our cost culture over the last two to three years has been, yes, we've made good progress.

Speaker #3: We've always said this is a $300 million-plus program. But a lot of that was focused on shipboard efficiencies. And now our eyes are squarely turning on the SG&A component using that same muscle.

Mark Kempa: Now our eyes are squarely turning on the SG&A component using that same muscle. While you know, while you dig down, you know, there's never any low-hanging fruit, but I think you're gonna see us taking much more methodical, urgent actions around that side of the equation going forward to rightsize that piece of the business.

Speaker #3: So while you dig down, there's never any low-hanging fruit, but I think you're going to see us taking much more methodical, urgent actions around that side of the equation going forward to right-size that piece of the business.

Speaker #5: Great, Connor. Best of luck.

Matthew Boss: Great color. Best of luck.

Speaker #2: Our next question is from the line of Brent Montour with Barclays. Please proceed with your three questions.

Operator: Our next question's from the line of Brandt Montour with Barclays. Please proceed with your questions.

Speaker #6: Good morning, everybody. Thanks for taking my questions. So John, I want to get your sense. I mean, in your prepared remarks, you touched on technology and revenue management, customer-facing systems.

Brandt Montour: Good morning, everybody. Thanks for taking my questions. John, I wanna get your sense. I mean, you know, in your prepared remarks, you touched on technology and revenue management, customer-facing systems. Do you putting these together, do you think that there is a disadvantage at Norwegian of scale? The reason I ask is, you know, you said that, you know, this would require patience. How long, in your experience, does it take to see these types of turnarounds start to come to fruition?

Speaker #6: Putting these together, do you think that there is a disadvantage at Norwegian of scale? And the reason I ask is you said that this would require patience.

Speaker #6: How long, in your experience, does it take to see these types of turnarounds start to come to fruition?

Speaker #3: Yeah. I do not think we're at a disadvantage at scale. I think, again, if we showed the same discipline on the shore side, the SG&A side, that we've done on the ship side, I think we can definitely see some improvements over the next 26 and 27 because cost, you can go after faster than the revenue side given, again, how far out people book.

Mark Kempa: I do not think we're at a disadvantage at scale. I think, again, you know, if we show the same discipline on the shore side, the SG&A side that we've done on the ship side, I think we can definitely, you know, see some improvements over the next, you know, 2026 and 2027 because cost, you know, you can go after faster than the revenue side, given again, how far out people book. I think our investments in revenue management, as Mark said, and some of our guest-facing technology, the island coming online, better monetization of that island. I think the revenue side, again, you're gonna see more 2027, 2028. They kind of go at slightly different paces just given how our industry sets up.

Speaker #3: But I think our investments in revenue management, as Mark said, and some of our guest-facing technology, the island coming online, better monetization of that island, I think the revenue side, again, you're going to see more at 27, 28.

Speaker #3: So they kind of go at slightly different paces just given how our industry sets up. But I think we're all kind of Mark might not say it's low-hanging fruit, but I would say there's lots of opportunity.

Mark Kempa: Marc might not say it's low-hanging fruit, but I would say there's lots of opportunities, so I'll quibble with him a little bit there. You know, that's our job to go after that and go get it and again, focus on it as much as we did on the ship side costs.

Speaker #3: So I'll quibble with him a little bit there. And that's our job—to go after that and go get it. And again, focus on it as much as we did on the ship-side costs, so.

Brandt Montour: Mm-hmm. Thanks for that. Just a follow-up question. You know, it's been all of one and a half days since the geopolitical events unfolded in the Middle East, understanding that you don't have direct exposure there. You know, have you seen or do you expect to see, near-term bookings pressure on other international itineraries, namely Europe, from Americans? Have you baked anything for that into your guidance?

Speaker #5: Thanks for that. And then just a follow-up question. It's been all of one and a half days since the geopolitical events unfolded. In the Middle East, understanding that you don't have direct exposure there.

Speaker #5: But have you seen or do you expect to see near-term bookings pressure on other international itineraries, namely Europe, from Americans? And have you baked anything for that into your guidance?

Speaker #3: Yeah. Good morning, Brent. So far, we're what, a day or two into this. And I cannot say that we've seen anything noticeable around that.

Mark Kempa: Yeah. Good morning, Brant. You know, so far we're a day or two into this, and you know, I cannot say that we've seen anything noticeable around that. In terms of, you know, in terms of the guidance, you know, our guidance is our best view of how we see the world. You know, I would certainly would not say we've baked anything in for the last 2 days of geopolitical issues. As I think John noted in his prepared remarks, obviously, we could see a little bit of pressure on fuel. The good news is that we're over 50% hedged for the year.

Speaker #3: In terms of in terms of the guidance, our guidance is our best view of what we how we see the world. But I would certainly would not say we've baked anything in for the last two days of geopolitical issues.

Speaker #3: As I think John noted and as prepared remarks, we will see obviously, we could see a little bit of pressure on fuel. The good news is that we're over 50% hedged for the year.

Speaker #3: And the one thing that we can control is fuel consumption. And I think when you look at this year where we're heading, our implied forecast implies that we're going to be down about 3% in fuel consumption per capacity day.

Mark Kempa: You know, the one thing that we can control is fuel consumption. I think when you look at this year, where we're heading, our implied forecast implies that we're gonna be down about 3% in fuel consumption per capacity day, and that comes off of 2025, where we were down 6% per capacity day. We're controlling what we can control and, you know, hopefully, we're hopeful that this unrest in the Middle East area settles soon.

Speaker #3: And that comes off of a 2025 where we were down 6% per capacity day. So we're controlling what we can control, and hopefully—we're hopeful—that this unrest in the Middle East area settles soon.

Speaker #5: Thanks, everyone.

Brandt Montour: Thanks, everyone.

Speaker #2: Our next question's from the line of James Hardiman with Citi. Please receive three questions.

Operator: Our next question's from the line of James Hardiman with Citi. Please proceed with your questions.

Speaker #6: Hey, good morning. Thanks for taking my questions and, John, welcome aboard and good luck. So we've talked a lot today about some of the missteps along the way that the misalignment.

Matthew Boss: Hey, good morning. Thanks for taking my questions. John, welcome aboard and good luck. We've talked a lot today about some of the missteps along the way, the misalignment, and I think

Speaker #6: And I think investors very much appreciate sort of the ownership on that front. I maybe wanted to dig into if there might be other factors also at play here, namely sort of the cyclicality piece, right, the strength of the consumer broadly, and then maybe the competitive piece, right, your relative positioning within the industry.

James Hardiman: You know, investors very much appreciate sort of the ownership on that front. I maybe wanted to dig into if there might be other factors also at play here, namely sort of the cyclicality piece, right? The strength of the consumer broadly and then, you know, maybe the competitive piece, right? Your relative positioning within the industry. Obviously, you guys have some really impressive peers. Just trying to dig in a little bit more, do you think the consumer is slowing? Do you think that, you know, you've lost any credibility with consumers, as we think about, you know, fixing this going forward? Just trying to make sure we understand all the pieces. Thanks.

Speaker #6: Obviously, you guys have some really impressive peers and so just trying to dig in a little bit more: do you think the consumer is slowing?

Speaker #6: Do you think that you've lost any credibility with consumers as we think about fixing this going forward, just trying to make sure we understand all the pieces?

Speaker #6: Thanks.

Speaker #3: Yeah. So I would start out by saying I'm going to let Mark get a little more granular. But I think the other thing besides our missteps, I think the other thing investors really need to focus on is that as we talked about, it really is a whole new team, which I was kind of lucky.

John Chidsey: Yeah. I would start out by saying I'm gonna let Mark Kempa get a little more granular. I think the other thing, besides our missteps, I think the other thing investors really need to focus on is that, you know, as we talked about, it really is a whole new team, which I was kind of lucky. I mean, a lot of people have been brought in, not just, you know, the head of Norwegian Cruise Line, but, you know, we have a new head of technology who came from 2 Fortune 500 companies, a new head of strategy, and a new revenue management. I would say just even having been on the board, got back on the board about a year ago, the quality of the team is infinitely better.

Speaker #3: I mean, a lot of people have been brought in—not just the head of Norwegian—but we have a new head of technology who came from two Fortune 500 companies.

Speaker #3: And a new head of strategy and a new revenue management. I would say just even having been on the board back on the board about a year ago, the quality of the team is instantly better, but the downside which turns into an opportunity is most of them have only been here three or four months.

John Chidsey: The downside, which turns into an opportunity, is, you know, most of them have only been here three or four months. Yes, we had missteps, but I think we have much higher caliber people in the key roles. Now we've just got to gel, as I said, and become one team, and I think they're equally excited about what we can accomplish. I would say, you know, yes, missteps, but also you don't in some of my previous turnarounds, you have to go in and kind of clear the field, spend three to four months going to find the right people to put in place. I think for the most part, we have that here. I think in terms of what Mark is seeing with the consumer, I think he can give you a little more color on that.

Speaker #3: So yes, we had missteps, but I think we have much higher-caliber people in the key roles. So now we've just got to gel, as I said, and become one team.

Speaker #3: And I think they're equally excited about what we can accomplish. So I would say yes, missteps, but also you don't in some of my previous turnarounds, you have to go in and kind of clear the field, spend three to four months going to find the right people to put in place.

Speaker #3: I think, for the most part, we have that here. I think, in terms of what Mark is seeing with the consumer, he can give you a little more color on that.

Speaker #3: So yeah, James, good morning. Look, I think overall we're not seeing issues with the consumer. The consumer continues to be strong relative to Cruise and relative to our space.

Mark Kempa: Yeah, James, good morning. Look, I think, overall, you know, we're not seeing issues with the consumer. The consumer continues to be strong relative to cruise and relative to our space. I think, what we're seeing in terms of our specific results throughout the areas are really as a result of some of the missteps that we've taken. You know, equally as important, our luxury brands continue to do very, very strong, and we're very happy with that. I think the big focus is really on our mass brand, Norwegian, aligning our commercial strategy and getting much, much sharper on our execution. I would say, you know, from our standpoint, a good portion of this is probably self-inflicted wounds that we can correct, course-correct over time.

Speaker #3: I think what we're seeing in terms of our specific results throughout the areas really is a result of some of the missteps that we've taken.

Speaker #3: Equally as important are luxury brands; they continue to do very, very strong, and we're very happy with that. I think the big focus is really on our mass brand, Norwegian, aligning our commercial strategy and getting much, much sharper on our execution.

Speaker #3: So, I would say from our standpoint, a good portion of this is probably self-inflicted wounds that we can correct. Of course, correct over time.

Speaker #6: Got it. That's really helpful color. And then maybe staying with you, Mark, you've touched on a little bit of this, but as we think about the phasing of the year, I guess particularly on the top line, I think most of us were bracing for a pretty rough first quarter.

James Hardiman: Got it. That's really helpful color. Maybe staying with you, Mark, you've touched on a little bit of this, but as we think about the phasing of the year, I guess particularly on the top line, I think most of us were bracing for a pretty rough Q1. We think about that sort of 0.6% yield growth in the back of the year, obviously Q2, you're still not gonna have the benefit of great tides. I'm assuming we should maybe still be modeling Q2 to be down in terms of yields before we get maybe some relief in the back half of the year. Really just trying to get an understanding as to what the exit rate looks like and how that might influence 2027.

Speaker #6: As we think about that sort of 0.6% yield growth in the back of the year, obviously, Q2, you're still not going to have the benefit of great tides.

Speaker #6: So, I'm assuming we should maybe still be modeling Q2 to be down in terms of yields before we get maybe some relief in the back half of the year.

Speaker #6: Also, just really trying to get an understanding as to what the exit rate looks like, and how that might influence 2027. And then, anything to call out in terms of cost phasing as well.

James Hardiman: Then anything to call out in terms of cost phasing as well. Thanks.

Speaker #6: Thanks.

Speaker #3: Yeah, James. So look, I think when you look at the balance of the year, as we've said, Q2 is for the most part pretty well sold.

Mark Kempa: Yeah, James. Look, I, you know, I think, you know, when you look at the balance of the year, you know, as we've said, you know, Q2 is for the most part, pretty well sold. As we did mention, we are seeing some pressure in Europe as a result of our own missteps. Alaska is seeing pressure from the broad industry. I think when you start to look toward Q4 and where we are, given that we will have our full island, amenities as well as the water park, we'll have about a third of our passengers touching the island in Q4. I think that's where we're gonna really start to see some of the turnaround starting to occur.

Speaker #3: As we did mention, we are seeing some pressure in Europe as a result of our own missteps. Alaska is seeing pressure from the broad industry.

Speaker #3: But I think when you start to look toward the fourth quarter, and where we are given that we will have our full island amenities as well as the water park, we'll have about a third of our passengers touching the island.

Speaker #3: In the fourth quarter, that's where I think that's where we're going to really start to see some of the turnaround starting to occur. So don't want to get too far ahead of our skis here, but we've got some work to do over the next couple of quarters.

Mark Kempa: Don't want to get too far ahead of our skis here, but we've got some work to do over the next couple quarters.

Speaker #6: Got it. Thanks, guys.

James Hardiman: Got it. Thanks, guys.

Speaker #2: The next questions are from the line of Vince Ciepel with Cleveland Research. Please receive three questions.

Operator: The next questions are from the line of Vince Shiel with Cleveland Research Company. Please proceed with your question.

Speaker #7: Hi. Thanks for taking my question. Obviously, the old target for low to mid-single-digit yield growth in '26 versus the flat today, there's been some degradation in the last 90-plus days and just trying to understand kind of the shape and pace of it.

Patrick Scholes: Hi. Thanks for taking my question. Obviously, you know, the old target for low to mid-single digit yield growth in 2026 versus the flat today, there's been some degradation in the last 90 plus days. Just trying to understand kind of the shape and pace of it. Is it, you know, when you, when you look at your bookings, is it just things overall have been a little bit worse versus plan? Or when you look at it by month, has there been anything encouraging, discouraging, that when you kind of look at the more recent trend line in bookings, how it has informed, kind of your perspective on the year?

Speaker #7: Is it when you look at your bookings? Is it just things overall have been a little bit worse versus plan, or when you look at it by month, has there been anything encouraging, discouraging when you kind of look at the more recent trendline and bookings?

Speaker #7: How it has informed kind of your perspective on the year? And when you think about kind of this starting negative and moving towards sounded like more positive yield growth in the fourth quarter, does that require an improvement in the bookings trajectory that you're seeing right now, or just kind of assume more of the same?

Patrick Scholes: When you think about kind of this starting negative and moving towards sounded like more positive yield growth in Q4, does that require an improvement in the bookings trajectory that you're seeing right now or just kind of assume more of the same?

Speaker #3: Hi, Vince. Good morning. So look, I think when you think about bookings, it all starts with momentum. And as you start to see some changes in the momentum and you start to get slightly behind the booking curve, that has as we all know, that has ramifications down the line over the next few quarters.

Mark Kempa: Hi, Vince. Good morning. You know, look, I think, you know, when you think about bookings, it all starts with momentum. You know, as you start to see some changes in the momentum and you start to get slightly behind the booking curve, that has, as we all know, that has ramifications down the line over the next few quarters. The positive news is, again, we've made some organizational changes, more of which you're going to see, I think over the course of the next few weeks. We're aligning our organization to ensure that they're operating as one cohesive unit, and we've got some good industry talent that are now running the key areas.

Speaker #3: The positive news is, again, we've made some organizational changes more of which you're going to see I think over the course of the next few weeks.

Speaker #3: We're aligning our organization to ensure that they're operating as one cohesive unit, and we've got some good industry talent that are now running the key areas.

Speaker #3: So yes, it's going to take some time, but it is it takes time to turn the ship, so to speak. But we are seeing some positive green shoots; it's just time is needed.

Mark Kempa: Yes, it's gonna take some time, but it is a, it takes time to turn a ship, so to speak, but we are seeing some positive green shoots. It's just that time is needed, and we've got a lot of opportunities on the horizon.

Speaker #3: And we've got a lot of opportunities on the horizon.

Speaker #5: And I think, Mark, as you noted on, I think, the last question, the luxury brands are performing very well. So I think, again, our missteps and our lack of cohesion is really with the Norwegian brand, but because that's the largest brand by far, that's where you're seeing it pull the overall NCLH down.

John Chidsey: I think, Mark, as you noted on, I think the last question, like the luxury brands are, you know, performing very well. I think again, our missteps and our lack of cohesion is really with the Norwegian brand. Because that's the largest brand by far, you know, that's where you're seeing it pull the overall NCLH down. I'm actually encouraged by the fact that we're executing well with two out of three. I think not I think, I know our opportunity is really around the Norwegian brand, as well as all the other things we talked about. We can do better on revenue management across all three brands. We can take SG&A, you know, optimize SG&A across all three. Specifically, I think our big opportunity on the revenue side is Norwegian.

Speaker #5: So I'm actually encouraged by the fact that we're executing well with two out of three. I think our not I think. I know our opportunity is really around the Norwegian brand as well as all the other things we talked about.

Speaker #5: We can do better on revenue management across all three brands. We can take SG&A optimize SG&A across all three, but specifically, I think our big opportunity on the revenue side is Norwegian.

Patrick Scholes: Great. Maybe digging in a little bit more there. Like when you step back and think about flat yield for the year, you know, Caribbean's 40% of the mix, it's probably safe to assume that's negative. Based on some of your other commentary, it doesn't sound like Europe and Alaska are kinda like hitting it out of the park for you. I don't know. I feel like going into this call, there was probably more concern that Caribbean would be even more negative than maybe what this overall guidance implies. Can you just talk about how you have managed price in the region, what you're seeing overall? You know, I think in years past you've talked about how, you know, price matters a lot more, it takes a lot longer to go earn it back.

Speaker #7: Great. And maybe digging in a little bit more there, when you step back and think about flat yield for the year, Caribbean's 40% of the mix, and it's probably safe to assume that's negative.

Speaker #7: But based on some of your other commentary, it doesn't sound like Europe and Alaska are kind of hitting it out of the park for you.

Speaker #7: So, I don't know. I feel like, going into this call, there was probably more concern that Caribbean would be even more negative than maybe what this overall guidance implies.

Speaker #7: So can you just talk about how you have managed price in the region, what you're seeing overall, and I think in years past, you've talked about how price matters a lot more and it takes a lot longer to go earn it back.

Speaker #7: So just how you're navigating the pricing side in the Caribbean through this reshuffling.

Patrick Scholes: Just how you're navigating the pricing side in the Caribbean, through this reshuffling.

Speaker #3: Yeah. Hi. So as I said earlier, it's always a delicate balance between price and load factor. And as we continue to build our presence in the Caribbean, we're going to continue to balance that.

Mark Kempa: Yeah. Hi. You know, as I said earlier, you know, it's always a delicate balance between price and load factor. As we continue to build our presence in the Caribbean, we're gonna continue to balance that. Obviously, we are seeing some pricing pressure as a result of our missteps, we're working on correcting that. When you think about Europe, you know, I thought I was clear earlier. Europe as a whole is not. We don't see issues with the market. We see issues with our execution in the market. Again, there's opportunities around the margin to fix that for 2026, but we certainly can fix that for 2027.

Speaker #3: Obviously, we are seeing some pricing pressure as a result of our missteps. And we're working on correcting that. When you think about Europe, I thought I was clear earlier.

Speaker #3: Europe as a whole is not we don't see issues with the market. We see issues with our execution in the market. And again, there's opportunities around the margin to fix that for 2026, but we certainly can fix that for '27.

Speaker #3: It's just a matter of we're not seeing the expected tailwinds that we would have thought year over year on that that we had expected earlier.

Mark Kempa: It's just a matter of we're not seeing the expected tailwinds that we would've thought year-over-year on that we had expected earlier. Alaska again is a little bit of soft spot. We are seeing some pressure there just from a broad industry standpoint. Again, these are all things that we believe are fixable and it's going to take time, but with the right alignment, the right leadership, I think we have a huge opportunity in front of us.

Speaker #3: And Alaska, again, is a little bit of soft spot. We are seeing some pressure there just from a broad industry standpoint. So again, these are all things that we believe are fixable.

Speaker #3: And it's going to take time, but with the right alignment, the right leadership, I think we have a huge opportunity in front of us.

Speaker #7: Thanks.

Patrick Scholes: Thanks.

Speaker #2: Our next questions come from the line of Lizzie Duff with Goldman Sachs. Please receive three questions.

Operator: Our next questions come from the line of Lizzie Lowery with Goldman Sachs. Please proceed with your questions.

Speaker #8: Hi. Thanks for taking the question. John, as you're stepping into this new role as CEO and taking a bit of a fresh look at things, I'm curious—as you think about the portfolio long term, how are you defining what is strategically core versus maybe non-core within the brand portfolio?

Lizzie Lowery: Hi. Thanks for taking the question. John, as you're stepping into this new role as CEO and taking a bit of a fresh look at things, I'm curious, as you think about the portfolio long term, how are you defining, like what is strategically core versus maybe non-core within the brand portfolio? I'll ask my second question at the same time, which is, you know, obviously Oceania and Regent have a different profile as Norwegian yield margins, et cetera. Any way that you can help us think about, you know, those relative margins or return profile of those brands versus the Norwegian brand?

[Analyst] (Goldman Sachs): Hi. Thanks for taking the question. John, as you're stepping into this new role as CEO and taking a bit of a fresh look at things, I'm curious, as you think about the portfolio long term, how are you defining, like what is strategically core versus maybe non-core within the brand portfolio? I'll ask my second question at the same time, which is, you know, obviously Oceania and Regent have a different profile as Norwegian yield margins, et cetera. Any way that you can help us think about, you know, those relative margins or return profile of those brands versus the Norwegian brand?

Speaker #8: And I'll ask my second question at the same time, which is, obviously, Oceana and Regent have a different profile as Norwegian. Yield, margins, etc.

Speaker #8: Any way that you can help us think about those relative margins or return profile of those brands versus the Norwegian brand?

Speaker #5: Yeah. So I think we absolutely, as I said, I like the strategy. I like the assets and the brands we have. I think the quickest and most predictable way to get back on the right track and deliver long-term shareholder value is, again, to execute, work on revenue management, work on making sure we have an aligned, cohesive plan going after where we need to optimize the business.

John Chidsey: Yeah. I think as I said, I like the strategy. I like the assets and the brands we have. I think the quickest and most predictable way, you know, to get back on the right track and deliver long-term shareholder value is again to execute work on revenue management, you know, work on making sure we have an aligned, cohesive plan going after where we need to optimize the business. I'm actually very pleased with the portfolio we have. I just think there's lots of work to do around all three brands. I couldn't begin to tell you about the margins on the three brands because I really haven't dug in that much. I don't really think we go into that kind of level of detail anyway.

Speaker #5: So I'm actually very pleased with the portfolio we have. I just think there's lots of work to do around all three brands. And I couldn't begin to tell you about the margins on the three brands because I really haven't dug in that much.

Speaker #5: I don't really think we go into that kind of level of detail anyway. But I look at them all as core, is my honest answer.

John Chidsey: I look at them all as core, is my honest answer.

Speaker #8: Thank you.

Lizzie Lowery: Thank you.

[Analyst] (Goldman Sachs): Thank you.

Speaker #2: Thank you. Our last question comes from the line of Trey Bowers with Wells Fargo. Please proceed with your three questions.

Operator: Thank you. Our last question comes from the line of Daniel Politzer with Wells Fargo. Please proceed with your question.

Speaker #6: Hey, guys. Thanks for the question. I guess just quickly, getting back to the Elliot question from before, they've obviously proposed one named new board member and would like to have a few more.

Mark Kempa: Hey, guys. Thanks for the question. I guess just quickly, getting back to the Elliott question from before. They've obviously proposed one named new board member and would like to have a few more. How open are you guys to some fresh set of eyes on the board? Yeah, I'll just stop there.

Speaker #6: How open are you guys to a fresh set of eyes on the board? And, yeah, I'll just stop there.

Speaker #3: Yeah. I would say, like any company, you would expect us to say, 'We're always looking at renewing our board.' I think we've added three or four board members over the last couple of years.

John Chidsey: Yeah, I would say like any company you would expect to say, you know, we're always looking at renewing our Board. I think we've added 3 or 4 Board members over the last couple years. I think that's a constant process the Government Committee goes over. I would just say, you know, all kinds of people throw us suggestions, and we will definitely look at those as a Board and go from there.

Speaker #3: So I think that's a constant process, the nominee government committee goes over. So I would just say all kinds of people throw us suggestions, and we will definitely look at those as a board.

Speaker #3: And go from there.

Speaker #6: And I guess, just following up on Lizzie's question: if someone was to approach you guys and were interested in one of the brands, would you explore that, or do you feel like everything's so devalued right now that that would not be an option?

Mark Kempa: I guess just following up on Lizzy's question. If someone was to approach you guys, and were interested in one of the brands, would you explore that or you feel like everything's so devalued right now that that would not be an option?

Speaker #3: Yeah, I think, again, I believe in these three brands. I think the best way to drive shareholder value is to go execute well, take out the excesses, and let this team coalesce because, again, it's pretty brand new.

John Chidsey: Yeah. I think again, I believe in these three brands, I think the best way to drive shareholder value is to go execute well, take out the excesses, and let this team coalesce because again, it's pretty brand new. To me, that's the best path to go down. Obviously, you always reevaluate things like any company over a longer time period, but I'm pretty confident in what our plan is here. Thanks, guys. I think you said, operator, that was the last question. I just, again, I wanna thank you all for joining us today, and for your continued engagement, and we look forward to updating you on our progress next quarter, as we move down the road and put some plans together here. Thank you very much. Thank you. This will conclude today's conference.

Speaker #3: And to me, that's the best path to go down. Obviously, you always reevaluate things like any company over a longer time period, but I'm pretty confident in what our plan is here.

Speaker #6: Thanks, guys.

Speaker #3: So, I think you said operator. That was the last question. So, I just, again, want to thank you all for joining us today.

Speaker #3: And for your continued engagement. And we look forward to updating you on our progress next quarter. As we move down the road and put some plans together here.

Speaker #3: Thank you very much.

John Chidsey: You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Q4 2025 Norwegian Cruise Line Holdings Ltd Earnings Call

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Norwegian Cruise Line

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