Q4 2025 Viking Holdings Ltd Earnings Call

March 3, 2026

Speaker #1: Good morning. My name is Paul, and I will be your conference operator today. At this time, I would like to welcome everyone to Viking's fourth quarter 2025 earnings conference call.

Speaker #1: As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

Speaker #1: If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, please press star 2.

Speaker #1: Thank you. I would now like to turn the program over to your host for today's conference, Vice President of Investor Relations, Carola Mengolini.

Speaker #2: Good morning, everyone, and welcome to Vikings' fourth quarter of full year 2025 earnings conference call. I am joined by Tor Hagen, Chairman and Chief Executive Officer, and Leah Talactac, President and Chief Financial Officer.

Carola Mengolini: Good morning, everyone, and welcome to Viking's Q4 of full year 2025 Earnings Conference Call. I am joined by Torstein Hagen, Chairman and Chief Executive Officer, and Leah Talactac, President and Chief Financial Officer. Also available during the Q&A session is Lynn Bahn, Executive Vice President of Finance. Before we get started, please note our cautionary statements regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release as well as in our filings with the SEC. The forward-looking statements are as of today. We assume no obligation to update or supplement these statements.

Speaker #2: Also available during the Q&A session is Lynn Bahn, Executive Vice President of Finance. Before we get started, please note our cautionary statements regarding forward-looking information.

Speaker #2: During the call, management may discuss information that is forward-looking, and involves known and unknown risks, uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied.

Speaker #2: Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release as well as in our filings with the SEC.

Speaker #2: The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We may also refer to certain non-IFRS financial metrics, which are reconciled and described in our press release posted on our Investor Relations website, at ir.viking.com.

Carola Mengolini: We may also refer to certain non-IFRS financial metrics, which are reconciled and described in our press release posted on our investor relations website at ir.viking.com. Tor and Leah will provide a strategic overview of the company. A recap of our Q4 and full year results and an update of the current booking environment. We will open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is also available on our investor relations website. With that, I am pleased to turn the call over to Tor.

Speaker #2: Tor and Leah will provide a strategic overview of the company, a recap of our fourth quarter and full year results, and an update of the current booking environment.

Speaker #2: We will then open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is also available on our Investor Relations website.

Speaker #2: With that, I am pleased to turn the call over to Tor.

Speaker #3: Thank you, Carola. Good morning, everyone, and thank you for joining us today. In our first full year as a public company, we've delivered very strong financial results.

Torstein Hagen: Thank you, Carola. Good morning, everyone, and thank you for joining us today. In our first full year as a public company, we've delivered very strong financial results, and I think we accomplished a great deal as our business continues to grow. If you turn to slide 3, I'll begin by highlighting our fleet, which remains at the center of our strategy. 2025 was marked by significant milestone, surpassing 100 ships. I believe that this accomplishment reflects our innovative approach and decades of thoughtful growth. From our humble beginnings in 1997, with just 4 river ships and 2 cell phones, we have steadily built a global business that now operates on all 7 continents, spanning river, ocean, and expedition cruising. Today, our fleet consists of 89 river vessels, 12 ocean ships, and 2 expedition ships.

Tor Hagen: Thank you, Carola. Good morning, everyone, and thank you for joining us today. In our first full year as a public company, we've delivered very strong financial results, and I think we accomplished a great deal as our business continues to grow. If you turn to slide 3, I'll begin by highlighting our fleet, which remains at the center of our strategy. 2025 was marked by significant milestone, surpassing 100 ships. I believe that this accomplishment reflects our innovative approach and decades of thoughtful growth. From our humble beginnings in 1997, with just 4 river ships and 2 cell phones, we have steadily built a global business that now operates on all 7 continents, spanning river, ocean, and expedition cruising. Today, our fleet consists of 89 river vessels, 12 ocean ships, and 2 expedition ships.

Speaker #3: And I think we accomplished a great deal as the business continues to grow. If we turn to slide three, I'll begin by highlighting our fleet, which remains at the center of our strategy.

Speaker #3: 2025 was marked by significant milestones surpassing 100 ships. I believe that this accomplishment reflects our innovative approach and decades of thoughtful growth. From our humble beginnings in 1997, we're just four river ships and two cell phones.

Speaker #3: We have steadily built a global business that now operates on all seven continents, spanning river, ocean, and expedition cruising. Today, our fleet consists of 89 river vessels, 12 ocean ships, and two expedition ships.

Speaker #3: All share the unique Scandinavian design and deliver the consistency and quality that our guests expect from Viking. As part of our ongoing fleet expansion, we will soon operate the world's first hydrogen-powered ed cruise ship.

Torstein Hagen: All share the unique Scandinavian design and deliver the consistency and quality that our guests expect from Viking. As part of our ongoing fleet expansion, we will soon operate the world's first hydrogen-powered cruise ship, capable of operating part of the time with zero emissions, something I'm particularly proud of. We believe that innovation should be practical and thoughtfully implemented. Also, during the year, we continued to expand into new and exciting destinations. A highlight was the announcement of our new river itineraries on India, a region rich in history and cultural depth. At the same time, we increased our river fleet on the Nile and on the Mekong Rivers. In parallel to all this, we strengthened and expanded partnerships across the arts, culture, and scientific institutions. These partnerships support brand awareness and local engagement among our target demographic.

Tor Hagen: All share the unique Scandinavian design and deliver the consistency and quality that our guests expect from Viking. As part of our ongoing fleet expansion, we will soon operate the world's first hydrogen-powered cruise ship, capable of operating part of the time with zero emissions, something I'm particularly proud of. We believe that innovation should be practical and thoughtfully implemented. Also, during the year, we continued to expand into new and exciting destinations. A highlight was the announcement of our new river itineraries on India, a region rich in history and cultural depth. At the same time, we increased our river fleet on the Nile and on the Mekong Rivers. In parallel to all this, we strengthened and expanded partnerships across the arts, culture, and scientific institutions. These partnerships support brand awareness and local engagement among our target demographic.

Speaker #3: Capable of operating part of the time with zero emissions, something I'm particularly proud of. We believe that innovation should be practical and thoughtfully implemented.

Speaker #3: Also, during the year, we continue to expand into new and exciting destinations. A highlight was the announcement of our new river itineraries in India, a region rich in history and cultural depth.

Speaker #3: At the same time, we increased our river fleet on the Nile and on the Mekong rivers. In parallel to all this, we strengthen and expanded partnerships across the arts, culture, and scientific institutions.

Speaker #3: These partnerships support brand awareness and local engagement, among our target demographic. Moreover, in many cases, they also introduce opportunities to enhance the guest experience.

Torstein Hagen: Moreover, in many cases, they also introduce opportunities to enhance the guest experience via unique privileged access unavailable through other travel providers. As you can see, we pursue growth with intention, expanding access, increasing choice, and enriching the cultural experiences that set Viking product apart. I'm very pleased that the milestones we achieved in 2025 supported an exceptional fleet and with it an exceptional financial performance. Regarding our fleet, you can see on the next two slides some of the features that make our ships such a strong driver of our results. I will start with Ocean on slide four. As it pertains to our Ocean fleet, we have one of the youngest fleets in the cruise industry. Our state-of-the-art efficient design eliminates wasted space and extra weight on board while maximizing guest comfort and optimizing fuel consumption.

Tor Hagen: Moreover, in many cases, they also introduce opportunities to enhance the guest experience via unique privileged access unavailable through other travel providers. As you can see, we pursue growth with intention, expanding access, increasing choice, and enriching the cultural experiences that set Viking product apart. I'm very pleased that the milestones we achieved in 2025 supported an exceptional fleet and with it an exceptional financial performance. Regarding our fleet, you can see on the next two slides some of the features that make our ships such a strong driver of our results. I will start with Ocean on slide four. As it pertains to our Ocean fleet, we have one of the youngest fleets in the cruise industry. Our state-of-the-art efficient design eliminates wasted space and extra weight on board while maximizing guest comfort and optimizing fuel consumption.

Speaker #3: We are unique, offer privileged access, and are available through other travel providers. As you can see, we pursue growth with intention—expanding access, increasing choice, and enriching the cultural experiences that set Viking product apart.

Speaker #3: I'm very pleased that the milestones we achieved in 2025 supported an exceptional fleet, and with it, an exceptional financial performance. Regarding our fleet, you can see on the next two slides some of the features that make our ships such a strong driver of our results.

Speaker #3: I will start with ocean on slide four. As it pertains to our ocean fleet, we have one of the youngest fleets in the cruise industry.

Speaker #3: Our state-of-the-art, efficient design eliminates wasted space and extra weight on board, while maximizing guest comfort and optimizing fuel consumption. Moreover, our ocean ships, with their sleek hull design and closed-loop scrubbers, allow us to use more cost-efficient fuel.

Torstein Hagen: Moreover, our Ocean ships with a sleek hull design and closed-loop scrubbers allow us to use more cost-efficient fuel. These attributes help us manage fuel costs in times of adversity. The layout and onboard offering of our Ocean ships also allow us to operate with fewer crew without diminishing our high level of service. All these elements improve ship profitability. If you now focus on the river on slide five, most of our river vessels are Viking Longships, a unique type of ship designed for European rivers. These ships include design features such as patented asymmetrical corridors and a square bow that allows for three full decks. With this design, we can accommodate up to 190 guests, which is more than the average European river vessel, improving the Longship profitability.

Tor Hagen: Moreover, our Ocean ships with a sleek hull design and closed-loop scrubbers allow us to use more cost-efficient fuel. These attributes help us manage fuel costs in times of adversity. The layout and onboard offering of our Ocean ships also allow us to operate with fewer crew without diminishing our high level of service. All these elements improve ship profitability. If you now focus on the river on slide five, most of our river vessels are Viking Longships, a unique type of ship designed for European rivers. These ships include design features such as patented asymmetrical corridors and a square bow that allows for three full decks. With this design, we can accommodate up to 190 guests, which is more than the average European river vessel, improving the Longship profitability.

Speaker #3: These attributes help us manage fuel costs in times of adversity. The layout and onboard offering of our ocean ships also allow us to operate with fewer crew, without diminishing our high level of service.

Speaker #3: All these elements improve ship profitability. If we now focus on the river on slide five, most of our river vessels are long ships. A unique type of ship designed for European rivers.

Speaker #3: These ships include design features such as patented asymmetrical corridors, and a square bow that allows for three full decks. With this design, we can accommodate up to 190 guests, which is more than the average European river vessel, improving the long ship profitability.

Speaker #3: As it pertains to fuel costs, the river operation has a fixed price contract for a significant portion of the 2026 season. Within each product, our ships are indistinguishable to our guests.

Torstein Hagen: As it pertains to fuel cost, the river operation has fixed price contract for a significant portion of the 2026 season. Within each product, our ships are indistinguishable to our guests. Potential guests shop by itinerary rather than a specific ship or age of ship. It allows older ships to achieve similar yields even when introducing new ships. On average, based on contribution to operations, the payback period for an Ocean ship is about five to six years. The payback period for a Longship is about four to five years. Taken together, these characteristics show how the design, efficiency, and consistency of our ships translate directly into very good financial performance, which was particularly strong in 2025. Now turning to Slide 6, you can see that we increased the capacity by 12% year-over-year.

Tor Hagen: As it pertains to fuel cost, the river operation has fixed price contract for a significant portion of the 2026 season. Within each product, our ships are indistinguishable to our guests. Potential guests shop by itinerary rather than a specific ship or age of ship. It allows older ships to achieve similar yields even when introducing new ships. On average, based on contribution to operations, the payback period for an Ocean ship is about five to six years. The payback period for a Longship is about four to five years. Taken together, these characteristics show how the design, efficiency, and consistency of our ships translate directly into very good financial performance, which was particularly strong in 2025. Now turning to Slide 6, you can see that we increased the capacity by 12% year-over-year.

Speaker #3: Potential guests shop by itinerary that are on a specific ship or by the age of the ship, and it allows older ships to achieve similar yields even when introducing new ships.

Speaker #3: On average, and based on contribution to operations, the payback period for an ocean ship is about five to six years, and the payback period for a long ship is about four to five years.

Speaker #3: Taken together, these characteristics show how the design, efficiency, and consistency of our ships translate directly into very good financial performance, which was particularly strong in 2025.

Speaker #3: Now, turning to slide six, you can see that we increased the capacity by 12% year over year. This reflects both the expansion of our fleet and the continued demand for our product.

Torstein Hagen: This reflects both the expansion of our fleet and the continued demand for our product. At the same time, our net yields grew 7.4%, demonstrating our ability to attract high-quality demand and to maintain pricing power. Together, these factors drove a 21.9% increase in total revenue, which reached a record of $6.5 billion in 2025. This strong top-line momentum translated into meaningful profitability. Our adjusted EBITDA reached almost $1.9 billion, an increase of 38.8% year-over-year, reflecting not only higher revenues but also the benefits of scale, operational efficiency, and disciplined cost management. Lastly, our adjusted net income was $1.2 billion, 43.9% higher than last year. We are very proud of this performance given the continued investments we are making to support our long-term growth.

Tor Hagen: This reflects both the expansion of our fleet and the continued demand for our product. At the same time, our net yields grew 7.4%, demonstrating our ability to attract high-quality demand and to maintain pricing power. Together, these factors drove a 21.9% increase in total revenue, which reached a record of $6.5 billion in 2025. This strong top-line momentum translated into meaningful profitability. Our adjusted EBITDA reached almost $1.9 billion, an increase of 38.8% year-over-year, reflecting not only higher revenues but also the benefits of scale, operational efficiency, and disciplined cost management. Lastly, our adjusted net income was $1.2 billion, 43.9% higher than last year. We are very proud of this performance given the continued investments we are making to support our long-term growth.

Speaker #3: At the same time, our net yields grew 7.4%, demonstrating our ability to attract high-quality demand and to maintain pricing power. Together, these factors drove a 21.9% increase in total revenue, which reached a record of $6.5 billion in 2025.

Speaker #3: This strong top-line momentum translated into meaningful profitability. Our adjusted EBITDA reached almost $1.9 billion, an increase of 38.8% year over year, reflecting not only higher revenues but also the benefits of scale, operational efficiency, and disciplined cost management.

Speaker #3: And lastly, our adjusted net income was $1.2 billion, 43.9% higher than last year. We are very proud of this performance, given the continued investments we are making to support our long-term growth.

Speaker #3: Now, our 2025 performance is best understood and appreciated in the context of our long-standing track record of strong consistent results. As you can see on slide seven, for 2025, every major financial metric outperformed the compound annual growth rates shown on the slide, which are all very good.

Torstein Hagen: Now, our 2025 performance is best understood and appreciated in the context of our long-standing track record of strong, consistent results. As you can see on slide 7, for 2025, every major financial metric outperformed the compound annual growth rates shown on the slide, which are all very good. I believe that these trends reinforce that our 2025 results were not driven by a single good year, but by sustained demand, long-term planning, disciplined execution, and a strong business model. Additionally, on the next slide, number 8, you can see in a measurable way the strength of our demand. Viking has consistently increased capacity while increasing yields, and maintaining high occupancy levels. Together, these trends reflect the long-term resilience of our business and our ability to execute consistently. In this context, a strong financial performance is part of the story.

Tor Hagen: Now, our 2025 performance is best understood and appreciated in the context of our long-standing track record of strong, consistent results. As you can see on slide 7, for 2025, every major financial metric outperformed the compound annual growth rates shown on the slide, which are all very good. I believe that these trends reinforce that our 2025 results were not driven by a single good year, but by sustained demand, long-term planning, disciplined execution, and a strong business model. Additionally, on the next slide, number 8, you can see in a measurable way the strength of our demand. Viking has consistently increased capacity while increasing yields, and maintaining high occupancy levels. Together, these trends reflect the long-term resilience of our business and our ability to execute consistently. In this context, a strong financial performance is part of the story.

Speaker #3: I believe that these trends reinforce that our 2025 results were not driven by a single good year, but by sustained demand long-term planning, disciplined execution, and a strong business model.

Speaker #3: Additionally, on the next slide, number eight, you can see in a measurable way the strength of our demand. Viking has consistently increased capacity while increasing yields and maintaining a high occupancy level.

Speaker #3: Together, these trends reflect a long-term resilience of our business and our ability to execute consistently. In this context, a strong financial performance is part of the story.

Speaker #3: It's also important to review additional metrics that validate our growth trajectory. These are on slide nine, and highlight the depth of our guest loyalty, our market position, and our strength of our balance sheet.

Torstein Hagen: It's also important to review additional metrics that validate our growth trajectory. These are on slide nine and highlight the depth of our guest loyalty, our market position, and the strength of our balance sheet. In 2025, 54% of our guests sailed with Viking as repeat travelers, a number that continues to grow and that is a clear sign of the trust they placed in our brand. Moreover, more than half our bookings were made directly through Viking. This provides a meaningful long-term advantage in how we manage demand and engage with our guests. On top of this, we continue to hold a leading market share position with a 52% share of the North American outbound river market and a 27% share of the luxury ocean market. In addition to all this, we managed our balance sheet well.

Tor Hagen: It's also important to review additional metrics that validate our growth trajectory. These are on slide nine and highlight the depth of our guest loyalty, our market position, and the strength of our balance sheet. In 2025, 54% of our guests sailed with Viking as repeat travelers, a number that continues to grow and that is a clear sign of the trust they placed in our brand. Moreover, more than half our bookings were made directly through Viking. This provides a meaningful long-term advantage in how we manage demand and engage with our guests. On top of this, we continue to hold a leading market share position with a 52% share of the North American outbound river market and a 27% share of the luxury ocean market. In addition to all this, we managed our balance sheet well.

Speaker #3: In 2025, 54% of our guests sailed with Viking as repeat travelers, a number that continues to grow and that is a clear sign of the trust they've placed in our brand.

Speaker #3: Moreover, more than half our bookings were made directly through Viking, which provides a meaningful long-term advantage in how we manage demand and engage with our guests.

Speaker #3: On top of this, we continue to hold a leading market share position with a 52% share of the North American outbound river market and a 27% share of the luxury ocean market.

Speaker #3: In addition to all this, we managed our balance sheet well. We ended the year with a 45.8% return on invested capital and a net leverage ratio of 1.1 times.

Torstein Hagen: We ended the year with 45.8% return on invested capital and a net leverage ratio of 1.1x. Overall, these results reflect our ability to achieve profitable growth while staying true to our principles of financial discipline and long-term value creation. Beyond the financial results, this consistency is also reflected in the recognition we continue to receive from our guests and the industry. On the next slide, number 10, we have highlighted some of the many accolades we have received during the year. These awards are particularly meaningful because they're based on guest feedback, reinforcing that our differentiated approach continues to resonate with our core demographic. In closing, I would like to highlight that even as business continues to evolve, the principles that define Viking and guide every decision we make are unchanged. These principles are shown on slide 11.

Tor Hagen: We ended the year with 45.8% return on invested capital and a net leverage ratio of 1.1x. Overall, these results reflect our ability to achieve profitable growth while staying true to our principles of financial discipline and long-term value creation. Beyond the financial results, this consistency is also reflected in the recognition we continue to receive from our guests and the industry. On the next slide, number 10, we have highlighted some of the many accolades we have received during the year. These awards are particularly meaningful because they're based on guest feedback, reinforcing that our differentiated approach continues to resonate with our core demographic. In closing, I would like to highlight that even as business continues to evolve, the principles that define Viking and guide every decision we make are unchanged. These principles are shown on slide 11.

Speaker #3: Overall, these results reflect our ability to achieve profitable growth while staying true to our principles of financial discipline, long-term value creation. Beyond the financial results, this consistency is also reflected in the recognition we continue to receive from our guests and the industry.

Speaker #3: On the next slide, number 10, we have highlighted some of the many accolades we have received during the year. These awards are particularly meaningful because they're based on guest feedback, reinforcing that our differentiated approach continues to resonate with our core demographic.

Speaker #3: In closing, I would like to highlight that even as business continues to evolve, the principles that define Viking and guide every decision we make are unchanged.

Speaker #3: And these principles are shown on slide 11. First, we remain unwavering in our commitment to obsess over our guests, making sure that we deliver an excellent travel experience at good value.

Torstein Hagen: First, we remain unwavering in our commitment to obsess over our guests, making sure that we deliver an excellent travel experience at good value. Second, we continue to treat our employees as part of our extended family, recognizing that their dedication and care are central to everything we do. Third, we will continue to take a contrarian approach when we believe it serves the long-term interest of the business. Finally, we continue to do what we believe is right for the environment. With that, I will return to Leah to discuss our financials.

Tor Hagen: First, we remain unwavering in our commitment to obsess over our guests, making sure that we deliver an excellent travel experience at good value. Second, we continue to treat our employees as part of our extended family, recognizing that their dedication and care are central to everything we do. Third, we will continue to take a contrarian approach when we believe it serves the long-term interest of the business. Finally, we continue to do what we believe is right for the environment. With that, I will return to Leah to discuss our financials.

Speaker #3: Second, we continue to treat our employees as part of our extended family, recognizing that their dedication and care are central to everything we do.

Speaker #3: Third, we will continue to take a contrarian approach when we believe it serves the long-term interest of the business. And finally, we will continue to do what we believe is right for the environment.

Speaker #3: With that, I will return to Leah to discuss our financials.

Leah Talactac: Thank you, Tor, and good morning, everyone. We are very pleased to report a strong Q4, capping a year of exceptional financial performance. On slide 13, you can see our key financial metrics. On a consolidated basis and for Q4, total revenue was $1.7 billion, increasing 27.8% year-over-year, driven by higher capacity, higher occupancy, and higher revenue per PCD. Adjusted gross margin was $1.1 billion, up 27.3% year-over-year, resulting in a net yield of $546, 7.7% higher than Q4 of 2024. Vessel operating expenses, excluding fuel per Capacity PCDs, increased 2.6% this quarter compared to the same time last year.

Speaker #1: Thank you, Thor, and good morning, everyone. We are very pleased to report a strong fourth quarter, capping a year of exceptional financial performance. On slide 13, you can see our key financial metrics.

Speaker #1: On a consolidated basis and for the fourth quarter, total revenue was 1.7 billion dollars, increasing 27.8% year over year driven by higher capacity, higher occupancy, and higher revenue per PCD.

Speaker #1: Adjusted gross margin was $1.1 billion, up 27.3% year over year, resulting in a net yield of $546, 7.7% higher than the fourth quarter of 2024.

Speaker #1: Vessel operating expenses excluding fuel per capacity PCD increased 2.6% this quarter compared to the same time last year. Adjusted EBITDA totaled 463 million dollars, an improvement of 157 million dollars, or 51.3% over the fourth quarter of 2024.

Leah Talactac: adjusted EBITDA totaled $463 million, an improvement of $157 million or 51.3% over Q4 2024. I will highlight that our adjusted EBITDA margin reached 41.8% this quarter, representing an increase of 663 basis points compared to the same period last year. Net income for Q4 2025 was $300 million compared to $104 million for the same period in 2024. The net income for Q4 2024 includes a loss of $96 million from the revaluation of warrants issued by the company due to stock price appreciation. The Q4 2024 was the final quarter impacted by the warrant revaluation.

Speaker #1: I will highlight that our adjusted EBITDA margin reached 41.8% this quarter, representing an increase of 663 basis points compared to the same period last year.

Speaker #1: Net income for the fourth quarter of 2025 was 300 million dollars, compared to 104 million dollars for the same period in 2024. The net income for the fourth quarter of 2024 includes a loss of 96 million dollars from the revaluation of warrants issued by the company due to stock price appreciation.

Speaker #1: The fourth quarter of 2024 was the final quarter impacted by the warrant revaluation. And lastly, adjusted net income attributable to Viking Holdings Limited was 298 million dollars, and adjusted EPS was 67 cents, 48.3% higher than the fourth quarter of 2024.

Leah Talactac: Lastly, adjusted net income attributable to Viking Holdings Ltd was $298 million, and adjusted EPS was $0.67, 48.3% higher than Q4 2024. Overall, we are very pleased and proud to close the year with a great Q4, delivering strong revenue growth and meaningful margin expansion. Now, I will briefly discuss our two reportable segments, River and Ocean, which are on slide 14. Unless noted, I will be referring to metrics for the full year ending 31 December. For the River segment, our capacity PCDs increased 6.5% year-over-year. The increase was driven by the addition of two vessels delivered in 2024 and six vessels delivered in 2025. During the 2025 season, these vessels operated across multiple regions of the world, including Europe, Egypt, Vietnam, and Cambodia.

Speaker #1: Overall, we are very pleased and proud to close the year with a great fourth quarter, delivering strong revenue growth and meaningful margin expansion. Now, I will briefly discuss our two reportable segments, River and Ocean, which are on slide 14.

Speaker #1: Unless noted, I will be referring to metrics for the full year ending December 31. For the river segment, our capacity PCDs increased 6.5% year over year.

Speaker #1: The increase was driven by the addition of two vessels delivered in 2024 and six vessels delivered in 2025. During the 2025 season, these vessels operated across multiple regions of the world, including Europe, Egypt, Vietnam, and Cambodia.

Leah Talactac: Adjusted gross margin grew 16.2% year-over-year to $1.9 billion, and net yield was $578, up 8.4% year-over-year. Occupancy was 96% for the year. For Ocean, capacity PCDs increased 17.9% year-over-year, driven by the delivery of the Viking Vela in December 2024 and the addition of the Viking Vesta in July 2025. Adjusted gross margin increased 30.9% year-over-year to almost $2 billion, and net yield was $572, up 9.7% compared to the previous year. Occupancy for the period was 95%.

Speaker #1: Adjusted gross margin grew 16.2% year over year, to $1.9 billion, and net yield was $578, up 8.4% year over year. Occupancy was 96% for the year.

Speaker #1: For ocean, capacity PCDs increased 17.9% year over year, driven by the delivery of the Viking Vela in December 2024, and the addition of the Viking Vesta in July 2025.

Speaker #1: Adjusted gross margin increased 30.9% year over year to almost $2 billion, and net yield was $572, up 9.7% compared to the previous year.

Speaker #1: Occupancy for the period was 95%. As Torstein mentioned, these great results reflect the strong demand from our core consumer, the loyalty of our guests, the value of our premium products, and the dedication of our employees to deliver exceptional experiences across all seven continents.

Leah Talactac: As Tor mentioned, these great results reflect the strong demand from our core consumer, the loyalty of our guests, the value of our premium products, and the dedication of our employees to deliver exceptional experiences across all seven continents. I will now shift our focus to some metrics related to the balance sheet. On slide 15, you can see that we have a strong liquidity position. As of 31 December 2025, we had total cash and cash equivalents of $3.8 billion and an undrawn revolver of $1 billion. Our net debt was $2.1 billion, and we finished the year with a net leverage ratio of 1.1x. Also on slide 15, you will see our current bond maturity profile, with all maturities falling in 2028 and beyond.

Speaker #1: I will now shift our focus to some metrics related to the balance sheet. On slide 15, you can see that we have a strong liquidity position.

Speaker #1: As of December 31, 2025, we had total cash and cash equivalents of $3.8 billion, and an undrawn revolver of $1 billion. Our net debt was $2.1 billion, and we finished the year with a net leverage ratio of 1.1 times.

Speaker #1: Also on slide 15, you will see our current bond maturity profile with all maturities falling in 2028 and beyond. In addition, as of December 31, 2025, deferred revenue totaled 4.6 billion dollars.

Leah Talactac: In addition, as of 31 December 2025, deferred revenue totaled $4.6 billion. Taking these factors together, we believe that our liquidity position remains a clear source of strength, supported by ample balance sheet flexibility and a long-dated bond maturity profile. This position gives us the confidence in our ability to support operations, invest in our growth, and pursue strategic opportunities as they arise. With this, I'd like to confirm our debt amortization for 2026. As of 31 December 2025, the scheduled principal payments were $397 million. From a committed capital expenditure perspective and for the full year 2026, the total expected committed ship CapEx is about $1.4 billion or $500 million net of financing. With that, I will hand it back to Tor to discuss our business outlook, including our booking curves.

Speaker #1: Taking these factors together, we believe that our liquidity position remains a clear source of strength, supported by ample balance sheet flexibility and a long-dated bond maturity profile.

Speaker #1: This position gives us the confidence in our ability to support operations, invest in our growth, and pursue strategic opportunities as they arise. With this, I'd like to confirm our debt amortization for 2026.

Speaker #1: As of December 31, 2025, the scheduled principal payments were 397 million dollars. From a committed capital expenditure perspective, and for the full year 2026, the total expected committed ship capex is about 1.4 billion dollars, or 500 million dollars net of financing.

Speaker #1: With that, I will hand it back to Tor to discuss our business outlook, including our booking curves.

Torstein Hagen: Thanks, Leah. If we move to slide 17, you will see that 2026 is shaping up to be another great year as the demand for our core products continues to be very strong. As of 15 February, we were already 86% booked for the 2026 season. This is in line with the same time last year, while our capacity is increasing by 7%. We have $6 billion of advance bookings, which is 13% higher than the 2025 season at the same point in time. Let's now review the booking curves, which are all as of 15 February 2026. On the next slide, you will see our curves for ocean cruises. This is slide 18. The yellow line shows the bookings for 2026.

Tor Hagen: Thanks, Leah. If we move to slide 17, you will see that 2026 is shaping up to be another great year as the demand for our core products continues to be very strong. As of 15 February, we were already 86% booked for the 2026 season. This is in line with the same time last year, while our capacity is increasing by 7%. We have $6 billion of advance bookings, which is 13% higher than the 2025 season at the same point in time. Let's now review the booking curves, which are all as of 15 February 2026. On the next slide, you will see our curves for ocean cruises. This is slide 18. The yellow line shows the bookings for 2026.

Speaker #2: Thanks, Leah. If we move to slide 17, you will see that 2026 is shaping up to be another great year as the demand for our core products continues to be very strong.

Speaker #2: As of February 15th, we were already 86% booked for the 2026 season. This is in line with the same time last year while our capacity is increasing by 7%.

Speaker #2: We have $6 billion of advance bookings, which is 13% higher than the 2025 season at the same point in time. Let's now review the booking curves.

Speaker #2: Which are all as of February 15th, 2026. On the next slide, you will see our curves for ocean cruises. This is slide 18. The yellow line shows the bookings for 2026.

Torstein Hagen: As you can see, we have sold $2.7 billion of advance bookings, which is 16% higher than last year at the same point in time. Our operating capacity is up 9% in 2026. We have already sold 87% of this capacity at very good rates. As of 15 February, advance bookings per PCD were $787 compared to $746 at the same point in 2025. Our fleet expansion for ocean continues to advance in a prudent and strategic manner. This year, we expect 2 new ocean ships to join the fleet, the Viking Mira during Q2 and Viking Libra in Q4. It is important to note that this year's capacity growth comes on top of an 18% capacity increase in 2025.

Tor Hagen: As you can see, we have sold $2.7 billion of advance bookings, which is 16% higher than last year at the same point in time. Our operating capacity is up 9% in 2026. We have already sold 87% of this capacity at very good rates. As of 15 February, advance bookings per PCD were $787 compared to $746 at the same point in 2025. Our fleet expansion for ocean continues to advance in a prudent and strategic manner. This year, we expect 2 new ocean ships to join the fleet, the Viking Mira during Q2 and Viking Libra in Q4. It is important to note that this year's capacity growth comes on top of an 18% capacity increase in 2025.

Speaker #2: As you can see, we have sold 2.7 billion dollars of advance bookings, which is 16% higher than last year at the same point in time.

Speaker #2: Our operating capacity is up 9% in 2026, and we have already sold 87% of this capacity at very good rates. As of February 15th, advance bookings per PCD were $787, compared to $746 at the same point in 2025.

Speaker #2: Our fleet expansion for ocean continues to advance in a prudent and strategic manner. This year, we expect two new ocean ships to join the fleet.

Speaker #2: The Viking Mira, during the second quarter, and Viking Libra in the fourth quarter. It is important to note that this year's capacity growth comes on top of an 18% capacity increase in 2025.

Torstein Hagen: Taken together, the momentum underscores another strong year of demand for our ocean business. If we move to slide 19, you will see the curves for river cruises. Now before we move on, I'd like to provide an update regarding our river new build program. One of our shipyards informed us that they experienced temporary technological disruptions and resource availability issues which affected certain production lines. As a result, the delivery timelines for 8 of our Viking Longships have been adjusted. The 2 vessels originally scheduled for December 2025 will now be delivered in 2026. Additionally, as the yard works through the impacted workflow sequence, 6 ships originally scheduled for delivery in the first half of 2026 will now be delivered later in that year. As a result, we have adjusted our 2026 capacity for river, which is now 6% higher than 2025.

Tor Hagen: Taken together, the momentum underscores another strong year of demand for our ocean business. If we move to slide 19, you will see the curves for river cruises. Now before we move on, I'd like to provide an update regarding our river new build program. One of our shipyards informed us that they experienced temporary technological disruptions and resource availability issues which affected certain production lines. As a result, the delivery timelines for 8 of our Viking Longships have been adjusted. The 2 vessels originally scheduled for December 2025 will now be delivered in 2026. Additionally, as the yard works through the impacted workflow sequence, 6 ships originally scheduled for delivery in the first half of 2026 will now be delivered later in that year. As a result, we have adjusted our 2026 capacity for river, which is now 6% higher than 2025.

Speaker #2: Taken together, the momentum underscores another strong year of demand for our ocean business. If we move to slide 19, you will see the curves for river cruises.

Speaker #2: Now, before we move on, I'd like to provide an update regarding our river new build program. One of our shipyards informed us that they experienced temporary technological disruptions and resource availability issues, which affected certain production lines.

Speaker #2: As a result, the delivery timelines for eight of our long ships have been adjusted. The two vessels originally scheduled for December 2025 will now be delivered in 2026.

Speaker #2: Additionally, as the yard works through the impacted workflow sequence, six ships originally scheduled for delivery in the first half of 2026 will now be delivered later in that year.

Speaker #2: As a result, we have adjusted our 2026 capacity for river, which is now 6% higher than 2025. Last quarter, we reported a 10% increase.

Torstein Hagen: Last quarter, we reported a 10% increase. Importantly, the yard has assured us that these disruptions are temporary, and they've already implemented corrective measures. Their teams are working to restore full technological functionality and are allocating resources to return to their regular scheduling cadence. We are in continuous communication with them, and we remain confident in their ability to deliver the vessels within the updated timeline. We believe that the impact of these changes to the advance booking curves and our financial metrics for 2026 are immaterial. Moreover, while these adjustments shift certain delivery dates, they do not affect our long-term growth plans. We will now turn again attention to the booking curves. Advance bookings for 2026 are shown by the yellow line, which follows a great trajectory.

Tor Hagen: Last quarter, we reported a 10% increase. Importantly, the yard has assured us that these disruptions are temporary, and they've already implemented corrective measures. Their teams are working to restore full technological functionality and are allocating resources to return to their regular scheduling cadence. We are in continuous communication with them, and we remain confident in their ability to deliver the vessels within the updated timeline. We believe that the impact of these changes to the advance booking curves and our financial metrics for 2026 are immaterial. Moreover, while these adjustments shift certain delivery dates, they do not affect our long-term growth plans. We will now turn again attention to the booking curves. Advance bookings for 2026 are shown by the yellow line, which follows a great trajectory.

Speaker #2: Importantly, the yard has assured us that these disruptions are temporary, and they've already implemented corrective measures. Their teams are working to restore full technological functionality and are allocating resources to return to their regular scheduling cadence.

Speaker #2: We aren't continuous communication with them, and we remain confident in their ability to deliver the vessels within the updated timeline. We believe that the impact of these changes to the advanced booking curves and our financial.

Speaker #2: Metrics for 2026 are immaterial. Moreover, while these adjustments shift certain delivery dates, they do not affect our long-term growth plans. We will now turn attention again to the booking curves.

Speaker #2: Advanced bookings for 2026 are shown by the yellow line, which follows a great trajectory. For rivers, we have already sold $2.8 billion, which is a very good number—10% higher than last year.

Torstein Hagen: For rivers, we have already sold $2.8 billion, which is a very good number, 10% higher than last year. Overall, we have sold 85% of our operating capacity at very strong rates, averaging $906 per day, compared with $841 last year. These are very good trends for 2026. They offer a clear illustration of the strength of our demand. Our focus at this time is on selling the remaining capacity for the 2026 season while preparing for the start of the primary river cruising season, which begins in April. We will not be sharing information on future season yet. However, please note that both the 2027 and the 2028 seasons are open for sale. Now, Leah will add some color to our order book and capacity.

Tor Hagen: For rivers, we have already sold $2.8 billion, which is a very good number, 10% higher than last year. Overall, we have sold 85% of our operating capacity at very strong rates, averaging $906 per day, compared with $841 last year. These are very good trends for 2026. They offer a clear illustration of the strength of our demand. Our focus at this time is on selling the remaining capacity for the 2026 season while preparing for the start of the primary river cruising season, which begins in April. We will not be sharing information on future season yet. However, please note that both the 2027 and the 2028 seasons are open for sale. Now, Leah will add some color to our order book and capacity.

Speaker #2: Overall, we have sold 85% of our operating capacity at very strong rates, averaging 906 dollars per day, compared with 841 dollars last year. These are very good trends for 2026, and they offer a clear illustration of the strength of our demand.

Speaker #2: Our focus at this time is on selling the remaining capacity for the 2026 season, while preparing for the start of the primary river cruising season, which begins in April.

Speaker #2: We will not be sharing information on future seasons yet. However, please note that both the 2027 and the 2028 seasons are open for sale.

Speaker #2: Now, Leah will add some color to our order book and capacity.

Leah Talactac: Thank you, Tor. Moving to slide 20. Since our last earnings release, we entered into option agreements for 2 additional ocean ships to be delivered in 2034, bringing our total planned additions, including the options, to 16 new ocean ships over the next 9 years. We also entered into shipbuilding commitments for 2 additional expedition ships scheduled to be delivered in 2030 and 2031. We are very pleased to add these ships to our order book as demand for the Viking expedition product remains very strong. This is a product that truly resonates with our loyal guests who are eager to explore new destinations with Viking. By adding 2 more ships, we can thoughtfully scale a category where our brand has been recognized for delivering exceptional travel experiences.

Speaker #1: Thank you, Thor. Moving to slide 20, since our last earnings release, we entered into option agreements for two additional ocean ships to be delivered in 2034, bringing our total planned additions, including the options, to 16 new ocean ships over the next nine years.

Speaker #1: And we also entered into shipbuilding commitments for two additional expedition ships, scheduled to be delivered in 2030 and 2031. We are very pleased to add these ships to our order book, as demand for the Viking expedition product remains very strong.

Speaker #1: This is a product that truly resonates with our loyal guests, who are eager to explore new destinations with Viking. By adding two more ships, we can thoughtfully scale a category, where our brand has been recognized for delivering exceptional travel experiences.

Leah Talactac: As it pertains to our 2026 capacity, similar to past seasons, more than 70% of the capacity from our core products in 2026 will be in Europe. Before we close our prepared remarks and move into the questions, I want to bring you up to date on the current developments in the Middle East. We are monitoring developments closely, particularly as they relate to our operations in Egypt, which represent roughly 2% of our overall capacity. We are prepared to make adjustments in operations if this should become necessary from the point of view of the safety and comfort of our guests and crew. I will also highlight, as Tor already mentioned, that as it pertains to fuel, our river operation has fixed-price contracts for a significant portion of the 2026 season, and our ocean fleet is designed with fuel efficiency in mind.

Speaker #1: As it pertains to our 2026 capacity, similar to past seasons, more than 70% of the capacity from our core products in 2026 will be in Europe.

Speaker #1: Before we close our prepared remarks and move into the questions, I want to bring you up to date on the current developments in the Middle East.

Speaker #1: We are monitoring developments closely, particularly as they relate to our operations in Egypt, which represent roughly 2% of our overall capacity, we are prepared to make adjustments in operations, if this should become necessary, from the point of view of the safety and comfort of our guests and crew.

Speaker #1: I will also highlight, as Tor already mentioned, that as it pertains to fuel, our river operation has fixed-price contracts for a significant portion of the 2026 season, and our ocean fleet is designed with fuel efficiency in mind.

Leah Talactac: While we continue to monitor these developments and their potential implications for our business, our thoughts are with all those impacted, and we hope for a swift de-escalation and a path towards lasting peace. With this, I conclude our prepared remarks. I'll now turn it back to the operator to take questions.

Speaker #1: While we continue to monitor these developments and their potential implications for our business, our thoughts are with all those impacted, and we hope for a swift de-escalation and a path towards lasting peace.

Speaker #1: With this, I conclude our prepared remarks on now turn it back to the operator to take questions.

Operator: Thank you. At this time, we will be conducting a question-and-answer session. In the interest of time, we ask that participants on today's call limit themselves to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please hold while we pull for questions. The first question today is coming from Steven Wieczynski from Stifel. Steve, your line is live. Steven Wieczynski, your line is live. Please check your mute button.

Speaker #2: Thank you. At this time, we will be conducting a question-and-answer session. In the interest of time, we ask that participants on today's call limit themselves to one question and one follow-up.

Speaker #2: If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #2: You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: Please hold while we pull for questions. And the first question today is coming from Steve Wojcicki from Stifel. Steve, your line is live. Steve Wojcicki, your line is live.

Steven Wieczynski: Oh, sorry about that. Can you hear me now? All good?

Steve Wieczynski: Oh, sorry about that. Can you hear me now? All good?

Speaker #2: Please check your mute button.

Operator: Yes, go ahead.

Speaker #3: Oh, sorry about that. Can you hear me now? All good?

Steven Wieczynski: Okay, thanks. Good morning, guys. Tor or Leah, you know, if we think about 2026, we can clearly see the curves, and we can see that the curves have essentially normalized versus, you know, where we were at this point last year. You know, you're now coming off, you know, I think it's 4 straight years of yield growth north of 7%. You know, I guess my question is, you know, if we think about 2026 and look, I fully understand you don't give firm guidance, but, you know, based on the curves and advance bookings and the fact you're, you know, you're almost 90% sold, it seems like, you know, yield growth will still be very solid this year, somewhere, you know, in that 5% to, let's call it 7% range.

Steve Wieczynski: Okay, thanks. Good morning, guys. Tor or Leah, you know, if we think about 2026, we can clearly see the curves, and we can see that the curves have essentially normalized versus, you know, where we were at this point last year. You know, you're now coming off, you know, I think it's 4 straight years of yield growth north of 7%. You know, I guess my question is, you know, if we think about 2026 and look, I fully understand you don't give firm guidance, but, you know, based on the curves and advance bookings and the fact you're, you know, you're almost 90% sold, it seems like, you know, yield growth will still be very solid this year, somewhere, you know, in that 5% to, let's call it 7% range.

Speaker #2: Yes, go ahead.

Speaker #3: Okay. Thanks. Good morning, guys. So Thor or Leah, if we think about 2026, we can clearly see the curves, and we can see that the curves have essentially normalized versus where we were at this point last year.

Speaker #3: You're now coming off, I think, four straight years of yield growth north of 7%. So I guess my question is, if we think about 2026—and look, I fully understand you don't give firm guidance—but based on the curves and advanced bookings, and the fact you're almost 90% sold, it seems like yield growth will still be very solid this year, somewhere in that 5% to, let's call it, 7% range.

Steven Wieczynski: Am I, you know, am I kind of thinking about it the right way?

Steve Wieczynski: Am I, you know, am I kind of thinking about it the right way?

Speaker #3: Am I kind of thinking about it the right way?

Leah Talactac: Hi, Steve. Good morning. I think we'll point you back to the curves, which is what you've referenced. As of what we see today, you know, we do have 86% of our bookings currently sold with a 13% advance booking growth with a 7% capacity TCD increase. What you can also see is that we have been able to maintain that cadence, you know, from 2017 through 2025. I think the curves speak for themselves and, you know, I don't know that we can say much more than that, but I think that your extrapolation, you know, makes sense from this, from our point of view today.

Speaker #1: Hi, Steve. Good morning. I think we will point you back to the curves, which is what you've referenced. So as of what we see today, we do have 86% of our bookings currently sold with a 13% advanced booking growth, with a 7% capacity PCD increase.

Speaker #1: And what you can also see is that we have been able to maintain that cadence from 2017 through 2025. So, I think the curves speak for themselves.

Speaker #1: And I don't know that we can say much more than that, but I think that your extrapolation makes sense from our point of view today.

Steven Wieczynski: Okay. Gotcha. Then second question. Wanna go back to the current, you know, the uncertain geopolitical backdrop. You know, obviously a lot going on around the world, especially, you know, in the Middle East, which, you know, Leah, you know, you touched on in your prepared remarks. Maybe, maybe for Tor, you know, wondering if you could give us a reminder of how your business, you know, especially on the river side, has, you know, has performed when there has been uncertainty, you know, in that, you know, in that region? You know, trying to understand if we should be expecting any, you know, any material change in demand, you know, in the near term until there is more clarity around what's going on in the, in the Middle East. Thanks.

Steve Wieczynski: Okay. Gotcha. Then second question. Wanna go back to the current, you know, the uncertain geopolitical backdrop. You know, obviously a lot going on around the world, especially, you know, in the Middle East, which, you know, Leah, you know, you touched on in your prepared remarks. Maybe, maybe for Tor, you know, wondering if you could give us a reminder of how your business, you know, especially on the river side, has, you know, has performed when there has been uncertainty, you know, in that, you know, in that region? You know, trying to understand if we should be expecting any, you know, any material change in demand, you know, in the near term until there is more clarity around what's going on in the, in the Middle East. Thanks.

Speaker #3: Okay. Gotcha. And then second question, I want to go back to the current, the uncertain geopolitical backdrop. Obviously, a lot going on around the world, especially in the Middle East, which Leah, you touched on in your prepared remarks.

Speaker #3: But maybe for Thor, wondering if you could give us a reminder of how your business, especially on the river side, has performed when there has been uncertainty in that region.

Speaker #3: Trying to understand if we should be expecting any material change in demand in the near term until there is more clarity around what's going on in the Middle East.

Torstein Hagen: Maybe I could give a long-term perspective on this, but as you know, I've been in this business for a long time. Many, many years ago, events like this would have been creating tremors in many boardrooms. I think American customers, and particularly the type of customers that we have, are well educated in the world, and they know where are different places. I think what we have seen in the past is that we haven't really been significantly impacted. You have a little blip when things happen, and then they go back to normal. You can say here things happen very rapidly in the Middle East situation, of course. For example, you know, we had a group in Jordan earlier in the week.

Tor Hagen: Maybe I could give a long-term perspective on this, but as you know, I've been in this business for a long time. Many, many years ago, events like this would have been creating tremors in many boardrooms. I think American customers, and particularly the type of customers that we have, are well educated in the world, and they know where are different places. I think what we have seen in the past is that we haven't really been significantly impacted. You have a little blip when things happen, and then they go back to normal. You can say here things happen very rapidly in the Middle East situation, of course. For example, you know, we had a group in Jordan earlier in the week.

Speaker #3: Thanks.

Speaker #4: Maybe I could give a long-term perspective on this. But as you know, I've been in this business for a long time. And many, many years ago, events like this would have been creating tremors in many boardrooms.

Speaker #4: But I think American customers and particularly the type of customers that we have are well-educated in the world and they know where our different places are.

Speaker #4: So I think what we're seeing in the past is that we haven't really been significantly impacted; you have a little blip when things happen, and then they go back to normal.

Speaker #4: And you can here things happen very rapidly in the Middle East situation, of course. But I can have an, for example, we had a group in Jordan earlier in the week, or there were 107 people, and we said, "Does anyone want to go home?" And two of them said, "We would like to go home." So people are very fairly relaxed about all this.

Torstein Hagen: There were 107 people, we said, Does anyone want to go home? Two of them said, We would like to go home. People are very fairly relaxed about all this. Of course, the travel warning that came out last night after this was recorded, changes things a bit. Hopefully that goes away too. Of course, it's very limited part of our inventory, which is related to Egypt. Egypt is far away from where the troubles are. You know, of course, travel warnings are never nice and maybe they're based off of something real. I think our guests are really quite well-versed in where do bad things happen.

Tor Hagen: There were 107 people, we said, Does anyone want to go home? Two of them said, We would like to go home. People are very fairly relaxed about all this. Of course, the travel warning that came out last night after this was recorded, changes things a bit. Hopefully that goes away too. Of course, it's very limited part of our inventory, which is related to Egypt. Egypt is far away from where the troubles are. You know, of course, travel warnings are never nice and maybe they're based off of something real. I think our guests are really quite well-versed in where do bad things happen.

Speaker #4: Of course, the travel warning that came out last night after this was recorded changes things a bit. Hopefully, that goes away too. But of course, it's very limited part of our inventory, which is related to Egypt and Egypt is far away from where the troubles are.

Speaker #4: So of course, travel warnings are never nice, and maybe they're basically something real. But people are not, I think our guests are really quite well versed in where do bad things happen.

Torstein Hagen: We don't minimize it, but I think things come and things go, and we will deal with it. Of course, always taking care of our guests.

Tor Hagen: We don't minimize it, but I think things come and things go, and we will deal with it. Of course, always taking care of our guests.

Speaker #4: We don't minimize it, but I think things come and things go, and we will deal with it. Of course, all this is taken care of for our guests.

Leah Talactac: Steve, I'd also like to add that, you know, as Tor mentioned, our guests are fairly well-educated. They know where areas of conflict are in relative to where they will be traveling to. Also, we are 86% sold for the 2026 season, and that's another benefit of the curves that we have the ability to kind of wait out or wait for consumer reaction to catch up. For 2026, we're still solidly booked, and then we have time to address any reactions that the booking curve may have to current geopolitical events.

Speaker #1: So, Steve, I'd also like to add that, as Thor mentioned, our guests are fairly well-educated. They know where areas of conflict are in relation to where they will be traveling to.

Speaker #1: But also, we are 86% sold for the 2026 season, and that's another benefit of the curves—that we have the ability to kind of wait out or wait for consumer reaction to catch up.

Speaker #1: And so for '26, we're still solidly booked. And then we have time to address any reactions that the booking curve may have to current geopolitical events.

Steven Wieczynski: Okay. Gotcha. Thanks for the color. Thanks, Tor. Thanks, Leah.

Steve Wieczynski: Okay. Gotcha. Thanks for the color. Thanks, Tor. Thanks, Leah.

Speaker #3: Okay, gotcha. Thanks for the color. Thanks, Tor. Thanks, Leah.

Operator: Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live.

Speaker #2: Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live.

Robin Farley: Great. Thank you. Just looking at your what low leverage you have ending the year, can you talk a little bit about, you know, whether at this point you might think about a dividend or something which, you know, one could argue is not, you know, the most efficient capital structure given how low your leverage is? Thanks.

Speaker #5: Great, thank you. Just looking at what low leverage you have ending the year, can you talk a little bit about whether at this point you might think about a dividend, or something, with what one could argue is not the most efficient capital structure given how low your leverage is?

Leah Talactac: Hi, Robin. Good morning. You know, I think events that are happening currently remind us why the company likes to have strong cash balances and why we like to be prudent with our balance sheet. Having said that, I think it's still a little bit premature for us to think about share repurchases or dividends. It's not something that we would necessarily rule out, but we do have a strong order book, we do have options that are quite far out. I think for the time being, that's not something that we would entertain, but not to be ruled out for the future.

Speaker #5: Thanks.

Speaker #1: Hi, Robin. Good morning. Yeah. So I think events that are happening currently remind us why the company likes to have strong cash balances. And why we like to be prudent with our balance sheet.

Speaker #1: But having said that, I think it's still a little bit premature for us to think about surely purchases or dividends. It's not something that we would necessarily rule out, but we do have a strong order book.

Speaker #1: And we do have options that are quite far out. And so, I think for the time being, that's not something that we would entertain, but not to be ruled out for the future.

Robin Farley: Okay. Thank you. For my follow-up, just on the addition of two more expedition ship orders, I feel like in the past, I maybe remember Tor saying that, you know, expedition, while it's much higher priced than a lot of the other river and ocean product you have, that maybe there wasn't as much growth and demand there just because there's a lot of expedition capacity that's out there. I'm just wondering if these two expedition ship orders kind of signal that maybe there's been an increase in demand on the expedition side that you're seeing over the long term, or maybe these ships are going somewhere that is different than where your current expedition ships are. Thanks.

Speaker #5: Okay. Thank you. And then for my follow-up, just on the addition of two more expedition ship orders, I feel like in the past, I maybe remember Thor saying that expedition, while it's much higher priced than a lot of the other river and ocean product you have, that maybe there wasn't as much growth in demand there just because there's a lot of expedition capacity that's out there.

Speaker #5: So, I'm just wondering if these two expedition ship orders kind of signal that maybe there's been an increase in demand on the expedition side that you're seeing over the long term, or maybe these ships are going somewhere that is different than where your current expedition ships are.

Speaker #5: Thanks.

Torstein Hagen: I think we'd plan to deploy these vessels pretty much in the same itineraries as the current vessels. Of course, it has been a while since the first two were built. When we look at booking curves, which we have also for expedition, and we don't share it with you at this time, but you'll see that relatively, the bookings there are very strong. Of course, since our supply has been limited. You can almost read out that something needs to be done, and that's why I placed the order.

Tor Hagen: I think we'd plan to deploy these vessels pretty much in the same itineraries as the current vessels. Of course, it has been a while since the first two were built. When we look at booking curves, which we have also for expedition, and we don't share it with you at this time, but you'll see that relatively, the bookings there are very strong. Of course, since our supply has been limited. You can almost read out that something needs to be done, and that's why I placed the order.

Speaker #4: I think with the plan to deploy these vessels, pretty much in the same itineraries as the current vessels. Of course, it has been a while since the first two were built.

Speaker #4: And when we look at booking curves, which we have also for expedition, we don't share it with you. This time. But you'll see that relatively the bookings there are very strong.

Speaker #4: Of course, since our supply has been limited, you can almost read out that something needs to be done. And that's why we place the order.

Leah Talactac: Great. Thank you.

Operator: Thank you. The next question will be from Matthew Boss, from J.P. Morgan. Matthew, your line is live.

Speaker #5: Great. Thank you.

Speaker #2: Thank you. The next question will be from Matthew Boss from JPMorgan. Matthew, your line is live.

Matthew Boss: Thanks and congrats on another nice quarter.

Leah Talactac: Thank you.

Matthew Boss: Could you elaborate on the acceleration in advance bookings per PCD to 6% growth relative to 5.5%, 3 months back? Maybe just within that, what are you seeing from repeat guests relative to new-to-brand customers?

Speaker #6: Thanks and congrats on another nice quarter.

Speaker #1: Thank you.

Speaker #6: So could you elaborate on the acceleration in advanced bookings per PCD to 6% growth relative to 5.5 three months back? Maybe just within that, what are you seeing from repeat guests relative to new-to-brand customers?

Leah Talactac: Hi, Matt. I hope you're doing well. I think, you know, obviously the price, you know, going from 5.5% to 6% is a good indication of how demand is looking for us. We are 86% sold, so we have a little bit more to go. I mean, our goal is always to balance both price and our guest experience, feeling like they got, you know, good value for the experience they received. I think we still aim for that mid-single digit yield growth. That's something that, you know, is still a focus for us for 2026. As it relates to new-to-brand and past passengers, we do have a slide in the deck. Our past guest repeat rate for 2025 season slightly ticked up, it was about 1%.

Speaker #1: Hi, Matt. I hope you're doing well. I think obviously, the price going from 5.5 to 6% is a good indication of how demand is looking for us.

Speaker #1: We are 86% sold, so we have a little bit more to go. And our goal is always to balance both price and our guest experience, feeling like they got good value for the experience they received.

Speaker #1: So, I think we still aim for that mid-single-digit yield growth. That's something that is still a focus for us for 2026. As it relates to new-to-brand and passengers, we do have a slide in the deck.

Speaker #1: Our past guest repeat rate for 2025 season slightly ticked up. It was about 1%. So we're still seeing a good balance between the two.

Leah Talactac: We're still seeing a good balance between the two, so we're pleased with that.

Matthew Boss: Great. Maybe, Leah, could you speak to the strength in ocean pricing that you're seeing, advance bookings per PCD accelerated by 100 basis points versus 3 months ago? Just any change in demand momentum at all that you're seeing for your European sailings today?

Speaker #1: So we're pleased with that.

Speaker #6: Great. And then maybe, Leah, could you speak to the strength in ocean pricing that you're seeing? Advanced bookings per PCD accelerated by 100 basis points versus three months ago?

Speaker #6: And just any change in demand momentum at all that you're seeing for your European sailings today?

Leah Talactac: Sure. For the ocean bookings, I think, you know, we do have dynamic pricing. We react to what the demand and the consumer interest is. What you see there is in response to that. It remains the same answer, which is that we wanna be thoughtful about pricing increases. Our goal is the mid-single digit increases in yields year-over-year. Really it's about having the value proposition for our guests because of that repeat. The importance for us to make sure that the guests don't see this as a one-off travel experience for them, but rather it's something that they wanna continue to do as they think about their future journeys.

Speaker #1: Sure. So for the ocean bookings, I think we do have dynamic pricing. We react to what the demand and the consumer interest is. So what you see there is in response to that.

Speaker #1: But it remains the same answer, which is that we want to be thoughtful about pricing increases our goal is the mid-single-digit increases in yields year over year.

Speaker #1: And really, it's about having the value proposition for our guests. Because of that, we repeat the importance for us to make sure that the guests don't see this as a one-off travel experience for them, but rather it's something that they want to continue to do as they think about their future journeys.

Matthew Boss: It's a great color. Best of luck.

Leah Talactac: Thank you.

Speaker #6: That's a great color. Best of luck.

Operator: Thank you. The next question will be from Conor Cunningham from Melius Research. Conor, your line is live.

Speaker #1: Thank you.

Speaker #2: Thank you. The next question will be from Connor Cunningham from Melius Research. Connor, your line is live.

Conor Cunningham: Hi, everyone. Thank you. Maybe to keep along that line of questioning. I was hoping to get your perspective on occupancy versus pricing going forward. I mean, your occupancy is basically at all-time highs, I think now. Just how do you approach the strategy going forward in general? You know, do you still see upside to occupancy overall? I mean, I think 100% is pretty difficult. Just any thoughts there would be helpful. Thank you.

Speaker #7: Hi, everyone. Thank you. Maybe to keep along that line of questioning, I was hoping to get your perspective on occupancy versus pricing going forward.

Speaker #7: I mean, your occupancy is basically at all-time highs. I think now. So just how do you approach the strategy going forward in general? And do you still see upside to occupancy overall?

Speaker #7: Or I mean, I think 100% is pretty difficult. But just any thoughts there would be helpful. Thank you.

Leah Talactac: Yeah. That's exactly right. Unlike the other ocean cruises where they have triples or more than two people, we only have two people per cabin. Our occupancy will never be more than 100%. With, you know, single supplements or people who travel singly, that kind of brings down our occupancy, you know, one to two percentage points. I think with our goal, where you see 95% occupancy, that's essentially sold out. Our strategy is to sell out the ships and manage the price increases, as we've discussed, which is really creating value for guests, making sure that they find the value proposition attractive.

Speaker #1: Yeah, that's exactly right. So, unlike the other ocean cruises where they have triples or more than two people, we only have two people per cabin.

Speaker #1: So our occupancy will never be more than 100%. And with single supplements, or people who travel singly, that kind of brings down our occupancy 1 to 2 percentage points.

Speaker #1: So I think with our goal, what you see 95% occupancy, that's essentially sold out. So our strategy is to sell out the ships and manage the price increases as we've discussed, which is really creating value for guests, making sure that they find the value proposition attractive.

Conor Cunningham: Okay, helpful. I just want to ring-fence the two issues that you flagged a little bit here. Just on the delivery delays from, on the river ships, is there any reaccommodation expenses associated with that we need to be aware of? Just on the 2% Egypt exposure that you talked about, is that a good proxy for its overall contribution from, to profitability as well? Thank you.

Speaker #7: Okay. Helpful. And then I just want to ring-fence the two issues that you flagged a little bit here. Just on the delivery delays from the river ships, is there any reaccommodation expenses associated with that that we need to be aware of?

Speaker #7: And just on the 2% Egypt exposure that you talked about, is that a good proxy for its overall contribution from profitability as well? Thank you.

Torstein Hagen: Yeah. On the... I'm not entirely sure I understand your question on the river ships, but let me try. Of course, it's a delay, so the revenue will be impacted this year, not so much, but it will be impacted. Of course, the operating costs to offset that. There may be some other offsets we can have. It should not happen, but things happen. I think we are very pleased to say that from all we can see, it's now entirely under control, and the ships should be delivered as now indicated, and the 2027 deliveries should not be impacted at all. I don't know whether that deals with your question at all or not.

Tor Hagen: Yeah. On the... I'm not entirely sure I understand your question on the river ships, but let me try. Of course, it's a delay, so the revenue will be impacted this year, not so much, but it will be impacted. Of course, the operating costs to offset that. There may be some other offsets we can have. It should not happen, but things happen. I think we are very pleased to say that from all we can see, it's now entirely under control, and the ships should be delivered as now indicated, and the 2027 deliveries should not be impacted at all. I don't know whether that deals with your question at all or not.

Speaker #4: Yeah. I'm not entirely sure I understand your question on the river ships, but let me try. Of course, it's a delay, so the revenue will be impacted this year—not so much.

Speaker #4: It will be impacted. And, of course, the operating costs to offset that. There may be some other offsets we can have. It shouldn't have happened, but things happen.

Speaker #4: And I think we are very pleased to say that, from all we can see, it's now entirely under control. And the ships should be delivered as now indicated.

Speaker #4: And the 2027 delivery should not be impacted at all. And whether that deals with your question at all or not.

Leah Talactac: Can I also say?

Torstein Hagen: The second. Yeah.

Tor Hagen: The second. Yeah.

Leah Talactac: Sorry. On the delay, I'll turn it back over to you, Tor, on Egypt. On the delay, you know, that's one of the benefits of our identical vessels, particularly in river. Our guests book based on itinerary, not necessarily what's new and coming online. We were able to accommodate some of them to other ships that are traveling in the same itinerary that they had originally booked. There are minimal, if any, reaccommodation expenses. Tor, I'll turn it back to you for Egypt commentary.

Speaker #1: Can I also say that.

Speaker #4: Yeah. Yeah.

Speaker #1: Sorry on the delay. And then I'll turn it back over to you, Tor, on Egypt. But on the delay, that's one of the benefits of our identical vessels.

Speaker #1: Particularly in river. So our guests book based on itinerary, not necessarily what's new and coming online. And so we were able to accommodate some of them to other ships that are traveling in the same itinerary that they had originally booked.

Speaker #1: So there are minimal if any reaccommodation expenses. And then, Tor, I'll turn it back to you for Egypt commentary.

Lynn Bahn: No, you handled it so well. Why don't you continue?

Speaker #4: No, you handled it so well. Why don't you continue?

Leah Talactac: Okay. With respect to Egypt, you know, in the prepared remarks, we did say that we were ready to make any adjustments in case there were, you know, things like this updated travel advisory. With respect to Egypt, we're in the process of notifying guests that we are temporarily pausing Egypt itineraries through 31 March 2026. It's really important for us that our guests feel safe and our crew feel safe. I think that's the basis from which the brand loyalty really, that's the foundation of it. This represents about 40 voyages with less than 3,000 guests impacted. As a reminder, Egypt is only 3% of our total capacity. We do not see this as a material impact to the business.

Speaker #1: Okay. So for with respect to Egypt, in the prepared remarks, we did say that we were ready to make any adjustments in case there were things like this updated travel advisory.

Speaker #1: So with respect to Egypt, we're in the process of notifying guests that we are temporarily pausing Egypt itineraries through March 31, 2026. It's really important for us that our guests feel safe and our crew feel safe.

Speaker #1: And I think that's the basis from which the brand loyalty really that's the foundation of it. This represents about 40 voyages with less than 3,000 guests impacted.

Speaker #1: So, as a reminder, Egypt is only 3% of our total capacity, so we do not see this as a material impact to the business.

Stephen Grambling: Very helpful. Thank you.

Leah Talactac: Sure.

Operator: Thank you. The next question will be from James Hardiman from Citi. James, your line is live.

Speaker #7: Very helpful. Thank you.

Speaker #1: Sure.

Speaker #2: Thank you. The next question will be from James Hardeman from City. James, your line is live.

James Hardiman: Hey, good morning. Just as a clarification, I think you already answered this effectively, the river yard issues doesn't seem like that's impacting the booking curves at all. If so, let me know. Anything that you'd be willing to share in terms of the monthly booking trends past 25, right? Past the end of the quarter. I think it was a year ago where you first spoke to some softness in February. We've now lapped that, any update there would be great.

Speaker #8: Hey. Good morning. Just as a clarification, I think you already answered this effectively, but the river yard issues doesn't seem like that's impacting the booking curves at all.

Speaker #8: If so, let me know. But then anything that you'd be willing to share in terms of the monthly booking trends past '25, right? Past the end of the quarter.

Speaker #8: I think it was a year ago where you first spoke to some softness in February. We've now lapped that maybe any update there would be great.

Leah Talactac: Okay. As far as the booking curves. You know, I think we point back to the curves. We had a strong, first couple of months of the Wave Season, and you see that with the 86% sold and also, the pricing increases, that we've presented today. Sorry, there was a second part to your question that I think I might have missed. Can you repeat it?

Speaker #1: Okay. So as far as the booking curves that you I think we point back to the curves we had a strong first couple of months of the wave season.

Speaker #1: And you see that with the 86% sold and also the pricing increases that we've presented today. And sorry, there was a second part to your question that I think I might have missed.

James Hardiman: just the river, yard delays, if that impacted-

Speaker #1: Can you repeat it?

Speaker #8: Just the river yard delays, if that impacted that curve in any meaningful way.

Leah Talactac: Oh, yeah.

James Hardiman: that curve in any meaningful way.

Leah Talactac: Yeah. Yeah. I point back to the answer, which is it does not really affect the curves in the sense that because the ships are identical, we were able to re-accommodate most of the guests who were impacted to continue sailing in the itineraries they had originally booked. They're not really... You know, they're shopping based on itinerary and not necessarily vintage of ship.

Speaker #1: Yeah. Yeah. Yeah. And so I point back to the answer which is it does not really affect the curves in the sense that because the ships are identical, we were able to reaccommodate most of the guests who were impacted to continue sailing in the itineraries they had originally booked.

Speaker #1: So they're not really they're shopping based on itinerary and not necessarily vintage of ship.

James Hardiman: Got it. You know, obviously it's too early to have any quantification on 2027, but I just wanted to hear any color on those Indian River itineraries, just given that they are what's gonna be new for next year. You know, any thoughts on initial demand trends there? How should we be thinking about that market? How does that pricing compare? I know when you got into Egypt, that was a nice, I think it was a nice pricing sort of benefit that showed up in some of these curves. Any thoughts on India as we look to next year?

Speaker #8: Got it. And then obviously, it's too early to have any quantification on 2027. But I just wanted to hear any color on those Indian river itineraries just given that they are what's going to be new for next year.

Speaker #8: Any thoughts on initial demand trends there? How should we be thinking about that market? How does that pricing compare? I know when you got into Egypt, that was a nice I think it was a nice pricing sort of benefit that showed up in some of these curves.

Speaker #8: But any thoughts on India as we look to next year?

Leah Talactac: Sure. India, it was first open to our past passengers, and it was overwhelmingly supported by them. We were sold out, you know, a few weeks, couple weeks, three weeks, as soon as it opened. It is yielding at higher rates, similar to how Egypt is pricing also is higher. Lynn, do you have any additional color you'd like to share?

Speaker #1: Sure. So India, it was first open to our past passengers. And it was overwhelmingly supported by them. So we were sold out in a few weeks, a couple of weeks, three weeks as soon as it opened.

Speaker #1: And it is yielding at higher rates similar to how Egypt is pricing also is higher. Lynn, do you have any additional color you'd like to share?

Lynn Bahn: No, I agree. I mean, I think, you know, our past guest support, and loyalty is great. It's reflected in new itineraries when we open for sale, and that was no different with India.

Speaker #9: No, I agree. I mean, I think our past guest support and loyalty is great. It's reflected in new itineraries when we open for sale, and that was no different with India.

James Hardiman: That's really helpful. Thank you.

Leah Talactac: Thanks.

Operator: Thank you. The next question will be from Andrew Didora from Bank of America. Andrew, your line is live.

Speaker #8: It's really helpful. Thank you.

Speaker #1: Thanks.

Speaker #2: Thank you. The next question will be from Andrew Dedora from Bank of America. Andrew, your line is live.

Andrew Didora: Hey, good morning, everyone. The 86% book for this year, you know, obviously, you know, very strong. Seems fairly consistent with where you've been the last several years. Maybe if I nitpick, maybe ask about the 14% that is not sold. Just curious of what's not sold. What, you know, what's the type of product or type of itinerary that is left to sell? Just kind of want to get a sense of what makes up that remaining 14%. You know, is that a typically come at a premium, at a discount, kind of yield neutral? Just curious what's left out there.

Speaker #10: Good morning, everyone. So, the 86% booked for this year is obviously very strong and seems fairly consistent with where you’ve been the last several years.

Speaker #10: Maybe if I nitpick, maybe ask about the 14% that is not sold. Just curious of what's not sold. What's the type of product or type of itinerary that is left to sell?

Speaker #10: Just kind of want to get a sense of what makes up that remaining 14%. Is that a typically come at a premium at a discount kind of yield neutral?

Lynn Bahn: Sure. Hi, Andrew. I think, you know, given we're sitting here in early March or the close routes of mid-February, what is generally remaining to sell is the Q4. That is our quote-unquote low season. Those guests do book closer in. I mean, we do have probably some remaining cabins in the Q3, et cetera. A majority of that 14% is the Q4, and that's similar year-over-year.

Speaker #10: Just curious what's left out there.

Speaker #9: Sure. Hi, Andrew. I think, given we're sitting here in early March, or the curves are as of mid-February, what is generally remaining to sell is the fourth quarter.

Speaker #9: So that is our "low season." Those guests do book closer in. I mean, we do have probably some remaining cabins in the third quarter, etc.

Speaker #9: But a majority of that 14% is the fourth quarter, and that's similar year-over-year.

Andrew Didora: Got it. Appreciate the commentary on fuel. I know it's a small part of your cost structure. I guess, you know, Brent is up, you know, 35% or so this year. Just your fuel costs in 2025 versus 2024 were pretty flattish. I think that I would expect that to change this year. Anything, any color you can give just in terms of that $20-plus move in crude, what kind of the like for like EBITDA impact could be on the business? Just wanna hone in on that a little bit more. Thanks.

Speaker #10: Got it. And then, I appreciate the commentary on fuel. I know it's a small part of your cost structure, but I guess Brent is up 35% or so this year.

Speaker #10: Just your fuel costs in '25 versus '24 were pretty flattish. I think that I would expect that to change this year. Anything any color you can give just in terms of that 20-plus dollar moving crude, what kind of the like-for-like EBITDA impact could be on the business?

Lynn Bahn: Sure. I mean, I think at the end of the day, we took a lot of time to design our ships to.

Speaker #10: Just want to hone in on that a little bit more. Thanks.

Speaker #9: Sure. So I mean, I think at the end of the day, we took a lot of time to design our ships to be fuel efficient.

Leah Talactac: To be fuel efficient. For oceans, we do use heavy fuel. Obviously right now, you know, the market is where it is. I think the team has done a really good job of managing through times like this. We are monitoring, you know, where fuel prices are, and we will act accordingly. For rivers, we have entered into fixed price contracts for a significant portion of the 2026 season.

Speaker #9: And so for oceans, we do use heavy fuel. Obviously, right now, the market is where it is. But I think the team has done a really good job of managing through times like this.

Speaker #9: We are monitoring where fuel prices are. And we will act accordingly. For rivers, we have entered into fixed price contracts for a significant portion of the 2026 season.

Stephen Grambling: Okay. Thank you.

Operator: Thank you. The next question will be from David Katz from Jefferies. David, your line is live.

Speaker #10: Okay. Thank you.

Speaker #2: Thank you. The next question will be from David Katz from Jefferies. David, your line is live.

David Katz: Hi. Good morning, everyone. Thanks for taking my question. Congrats on the quarter, and appreciate all the details so far. What I wanted to ask is, you know, that you obviously continue to, you know, put up outsized growth and project outsized growth with further capacity. How do you think about the depth of the market that you are, you know, growing into, right? Are there, you know, new to cruise customers that you're getting to explore? Are your existing customers sailing more? You know, how do you think about a, say, total addressable market, I suppose, is the essence of the question.

Speaker #8: Hi. Good morning, everyone. Thanks for taking my question. Congrats on the quarter, and I appreciate all the detail so far. What I wanted to ask is that you obviously continue to put up outsized growth and project outsized growth with further capacity.

Speaker #8: How do you think about the depth of the market that you are growing into? Right? Are there new to cruise customers that you're getting to explore?

Speaker #8: Are your existing customers sailing more? How do you think about a, say, total addressable market? I suppose the essence of the question.

Torstein Hagen: Yeah, I think maybe Toru can handle that here. I think maybe even we have been a bit surprised with the fantastic demand we've had for our product, both the rivers and the ocean. I think when we analyze it and look at where our guests come from, we see that many of our new to brand guests, both on the rivers and on the oceans, come from the established ocean cruise lines. They are really guests who are not so happy with being on huge ships with lots of screaming kids, you know, our policy on kids and casinos and the like. They graduated from being on noisy entertainment palaces to being on more calm, peaceful places where they can enjoy their books and themselves. I think we really found.

Tor Hagen: Yeah, I think maybe Toru can handle that here. I think maybe even we have been a bit surprised with the fantastic demand we've had for our product, both the rivers and the ocean. I think when we analyze it and look at where our guests come from, we see that many of our new to brand guests, both on the rivers and on the oceans, come from the established ocean cruise lines. They are really guests who are not so happy with being on huge ships with lots of screaming kids, you know, our policy on kids and casinos and the like. They graduated from being on noisy entertainment palaces to being on more calm, peaceful places where they can enjoy their books and themselves. I think we really found.

Speaker #11: Yeah, I think maybe at Oregon Handler here, I think maybe even we have been a bit surprised with the fantastic demand we've had for our product.

Speaker #11: Both the rivers and the ocean. But I think when we analyze it and look at where our guests come from, we see that many of our new-to-brand guests, both on the rivers and on the oceans, come from the established ocean cruise lines.

Speaker #11: And there are really guests who are not so happy with being on huge ships with lots of screaming kids. Our policy on kids and casinos and the like.

Speaker #11: So they've graduated from being on noisy entertainment palaces to being on more calm, peaceful places. Where they can enjoy their books and themselves. So I think we really found a I know what we knew what we did when we designed it.

Torstein Hagen: We knew what we did when we designed it. I think we underestimated people's reluctance to being on these other ships. Of course, they're great for kids, and they're great for money-making and so forth. Don't get me wrong. I think it's a good source of business for us. Of course, you have seen that some of the other people have started to come in our slipstream to see what they can do in the same field too. I think we haven't tried to quantify the total addressable market. We have all confidence that the order book will be relatively easy to fill. That's all I can say.

Tor Hagen: We knew what we did when we designed it. I think we underestimated people's reluctance to being on these other ships. Of course, they're great for kids, and they're great for money-making and so forth. Don't get me wrong. I think it's a good source of business for us. Of course, you have seen that some of the other people have started to come in our slipstream to see what they can do in the same field too. I think we haven't tried to quantify the total addressable market. We have all confidence that the order book will be relatively easy to fill. That's all I can say.

Speaker #11: But I think we underestimated people's reluctance to being on these other ships. Of course, they're great for kids. And they'd be great for money-making and so forth.

Speaker #11: Don't get me wrong, but I think it's a good source of business for us. And, of course, you have seen that some of the other people have started to come in our slipstream to see what they can do in the same field, too.

Speaker #11: So I think we haven't tried to qualify it, quantify the total addressable market. But we have all confidence that the order book will be relatively easy to fill.

David Katz: I-

Leah Talactac: Yeah. I'd like to add to that.

David Katz: Please go ahead.

Speaker #11: So that's all I can say.

Leah Talactac: Yeah. You know, we have a huge brand awareness when it comes to river cruising, and that is also another avenue through which we expand into the total addressable market of people who would not ordinarily contemplate a cruise. When they join Viking River Cruises, they see that there is a different way to travel, that creates a feeder into that addressable market for the other products that we have in our portfolio. It's a combination of our well, thoughtfully planned ocean expedition, but also this enormous brand value that we have by being over half the market share in river.

Speaker #9: Yeah, and I’d like to add to that.

Speaker #8: Please. Go ahead.

Speaker #9: Yeah. And we have a huge brand awareness when it comes to river cruising. And that is also another avenue through which we expand into the total addressable market of people who would not ordinarily contemplate a cruise.

Speaker #9: And when they join Viking River Cruise, then they see that there is a different way to travel. And that then creates a feeder into that addressable market for the other products that we have in our portfolio.

Speaker #9: So it's a combination of our thoughtfully planned ocean expedition, but also this enormous brand value that we have by being over half the market share in river.

David Katz: Un-understood. If I may just follow up quickly, and I am past it, I appreciate the screaming kid comment. With respect to other, you know, entries into the river cruising market, are you comfortable, and how should we, you know, be comfortable that there's enough room in that marketplace, you know, for some new entrants to add some ships and that that's not going to have an impact on you?

Speaker #8: Understood. And if I may just follow up quickly—I'm past it, but I appreciate the screaming kid comment. With respect to other entries into the river cruising market, are you comfortable?

Speaker #8: And how should we be comfortable that there's enough room in that marketplace for some new entrants to add some ships and that that's not going to have an impact on you?

Torstein Hagen: I suspect all entrants into markets will have some impact, but the question: will it be a negative impact or a positive impact? You know, the negatives, we all know about. The positive, you know, it creates even more buzz around the whole river cruise concept. I look forward to seeing the advertising when they say, "Are you tired of being on our big oceangoing ships? Try one of our river ships." I say, Wonderful. You know, we'll see what the advertising will sell. Of course, we have a 29-year-old, 29-year head start on them, so we shouldn't really be unduly worried about it, I would say. I think it's similar.

Tor Hagen: I suspect all entrants into markets will have some impact, but the question: will it be a negative impact or a positive impact? You know, the negatives, we all know about. The positive, you know, it creates even more buzz around the whole river cruise concept. I look forward to seeing the advertising when they say, "Are you tired of being on our big oceangoing ships? Try one of our river ships." I say, Wonderful. You know, we'll see what the advertising will sell. Of course, we have a 29-year-old, 29-year head start on them, so we shouldn't really be unduly worried about it, I would say. I think it's similar.

Speaker #11: I suspect all entrants into markets will have some impact. But the question will be a negative impact or a positive impact. The negative we all know about.

Speaker #11: The positive is, it creates even more buzz around the whole river cruise concept. So I'd look forward to seeing the advertising when they say, "Are you tired of being on our big ocean-going ships?"

Speaker #11: Try one of our river ships." That's a wonderful I'll see what their advertising will sell. So I think we are and of course, we have a 29-year-old 29-year head start on them.

Speaker #11: So we shouldn't really be unduly worried about it. I would say. And I think it's similar on the ocean side. Ocean side, where you see that others are starting to copy us there too, even though they've been in the business for 50 years.

David Katz: Thank you.

Torstein Hagen: On the ocean side, where you see that others are starting to copy us there too, even though they've been in the business for 50 years. I think we've done something right, but it means we shouldn't rest on our laurels. We should build on them for sure.

Tor Hagen: On the ocean side, where you see that others are starting to copy us there too, even though they've been in the business for 50 years. I think we've done something right, but it means we shouldn't rest on our laurels. We should build on them for sure.

Speaker #11: So I think we’ve done something right. But it means we shouldn’t rest on our laurels. We should build on them, for sure.

David Katz: Thank you very much. Appreciate it.

Operator: Thank you. The next question will be from Stephen Grambling from Morgan Stanley. Steven, your line is live.

Speaker #8: Thank you very much. Appreciate it.

Speaker #2: Thank you. The next question will be from Stephen Grambling from Morgan Stanley. Stephen, your line is live.

Stephen Grambling: Hey. Thank you. Over the past 3 years, you've had gross margin expansion. Would love to just get your thoughts on some of the drivers of that and any considerations on how that may evolve, not only in 2026, but beyond. Thank you.

Speaker #12: Hey. Thank you. Over the past three years, you've had gross margin expansion would love to just get your thoughts on some of the drivers of that and any considerations on how that may evolve not only in 2026 but beyond.

Leah Talactac: Sure. I mean, I think, you know, we have approached the business with the guest first and, you know, what Tor has mentioned even in his early remarks. With that, you know, we've been able to build our brand, deliver an excellent product, which has led to capacity increases, yield increases, and then we've been prudent with operating expense. All those things combined have led to the margin expansion you see today. I mean, of course, our hope is that we continue that into the future. You know, the management team has done a great job, the goal is to continue that.

Speaker #12: Thank you.

Speaker #9: Sure. I mean, I think we have approached the business with a guest first. And what all tours has mentioned even in his earlier remarks.

Speaker #9: And with that, we've been able to build our brand, deliver an excellent product, which has led to capacity increases, yield increases, and then we've been prudent with our expenses. These things combined have led to the margin expansion you see today.

Speaker #9: I mean, of course, our hope is that we continue that into the future. The management team has done a great job. And so the goal is to continue that.

Stephen Grambling: Sorry, I just wanna make sure I zoom in on specifically gross margin rate. Thinking about the difference between net yield and gross pricing, right? Your net yield or your net pricing has been above gross pricing. You know, normally, we would think of that as being things like commissions, transportation, other. Anything in there that's, you know, permanent that should be driving it and any impact from fuel prices going up that could influence how that flow-through could look in the year ahead?

Speaker #12: And sorry, I just want to make sure I zoom in on specifically gross margin rate. So thinking about the difference between net yield and gross pricing, right?

Speaker #12: Your net yield or your net pricing has been above gross pricing. Normally, we would think of that as being things like commissions, transportation, other.

Speaker #12: Anything in there that's permanent that should be driving it. And any impact from fuel prices going up that could influence how that flow-through could look in the year ahead.

Leah Talactac: Sure. I mean, I think, you know, obviously, we try to be, we try to be balanced when we approach pricing and cost. As the team, you know, works through those things, we do our best to ensure there is margin expansion. Obviously, you know, historical performance is no promise for the future, but that's something that we focus on. I think at the end of the day, you know, we are getting the benefit of both price and being prudent with cost.

Speaker #9: Sure. I mean, I think obviously we try to be balanced when we approach pricing and cost. And so as the team works through those things, we do our best to ensure there is margin expansion.

Speaker #9: Obviously, historical performance is no promise for the future. But that's something that we focus on. I think at the end of the day, we are getting the benefit of both price and being prudent with cost.

Stephen Grambling: Okay. I'll jump back in the queue.

Operator: Thank you. The next question will be from Brandt Montour from Barclays. Brant, your line is live.

Speaker #12: Okay. I'll jump back in the queue.

Speaker #2: Thank you. The next question will be from Brand Montour from Barclays. Brand, your line is live.

Brandt Montour: Hi. Thanks, everybody. A question on another question on costs. You know, in the marketing and sales line, you guys did get a lot of leverage on that line in 25. You didn't get a lot of leverage on that line in 24. You know, another year of substantial capacity growth, and you guys are now gonna be spending, I assume, well over $1 billion on marketing sales. Maybe you could take us a bit under the hood here and just sort of talk through, you know, the leverage and that you think you can get if you can get that this year and what channels you might be expanding to sort of scale with this growing business. Thank you.

Speaker #13: Hi. Thanks, everybody. So, a question—another question on cost. The marketing and sales line, you guys did get a lot of leverage on that line in '25.

Speaker #13: You didn't get a lot of leverage on that line in '24. Another year of substantial capacity growth. And you guys are now going to be spending, I assume, well over a billion dollars on marketing and sales.

Speaker #13: Maybe you could take us a bit under the hood here and just sort of talk through the leverage that you think you can get, if you can get that this year, and what channels you might be expanding to in order to scale with this growing business.

Speaker #13: Thank you.

Leah Talactac: I think I understood the question, but I'll give it a try. You know, we do feel that we can leverage and scale SG&A. We have, you know, we see ourselves not just a cruise operator, but also as a marketing company. As we think about the tools available in the market now with respect to AI and machine learning, you know, there are certainly multiple areas of the business that we can have a broader digital transformation strategy that would help with the cost. You know, we feel that there could be some scaling or leverage off of our SG&A as capacity increases.

Speaker #9: I'm going—I think I understood the question, but I'll give it a try. So, we do feel that we can leverage and scale SG&A.

Speaker #9: We have we are we see ourselves not just a cruise operator, but also as a marketing company. And as we think about the tools available in the market now with respect to AI and machine learning, there are certainly multiple areas of the business that we can have a broader digital transformation strategy that would help with the cost.

Speaker #9: So, we feel that there could be some scaling or leverage off of our SG&A as capacity increases.

Torstein Hagen: Leo, could I make a comment?

Tor Hagen: Leo, could I make a comment?

Stephen Grambling: Go ahead. Go ahead, Tor, please.

Torstein Hagen: Maybe I can make another comment in that regard. You know, the way the accounting work, the marketing expenses are expense as incurred. Of course, we are booking so far in advance. As we grow, it means I know a large portion of our marketing expense this year is related to 2027 operations. As we grow, you can say a disproportionate amount of the expenses are charged to the current year rather than to the next year, but to which they really are attributed. So that is something one should take into account when one evaluates these expenses too. Just a comment.

Tor Hagen: Maybe I can make another comment in that regard. You know, the way the accounting work, the marketing expenses are expense as incurred. Of course, we are booking so far in advance. As we grow, it means I know a large portion of our marketing expense this year is related to 2027 operations. As we grow, you can say a disproportionate amount of the expenses are charged to the current year rather than to the next year, but to which they really are attributed. So that is something one should take into account when one evaluates these expenses too. Just a comment.

Speaker #11: Now, could I make a comment?

Speaker #2: Go ahead. Go ahead, Torstein, please.

Speaker #11: Maybe I can make another comment in that regard. The way the accounting work the marketing expenses are expense as incurred. But of course, we are booking so far in advance.

Speaker #11: So as we grow, it means I know some a large portion of our marketing expense. This year, is related to 2027 operations. So as we grow, you can say and disproportionate amount of the expenses are charged to the current year, rather than to the next year, but to which I really are attributed.

Speaker #11: So that is something one should take into account. When one evaluates these expenses. Too. Just a comment.

Brandt Montour: No, that's great color. Thank you. I think what I was trying to get to is the G&A per per capacity unit. That's the line that I think a lot of us focus on. You know, that was down year-over-year in 25, which is great. The question is can you keep that line, that metric, muted or sort of well below yield growth for the next year or 2 years?

Speaker #13: No, that's great color. Thank you. I think what I was trying to get to is the G&A per capacity unit. That's the line that I think a lot of us focus on.

Speaker #13: That was down year over year in '25, which is great. And so the question is, can you keep that line that metric muted or sort of well below yield growth for the next year or two years?

Leah Talactac: We don't guide, but that is something that is certainly in our consideration set, and we will try to leverage SG&A.

Speaker #9: We don't guide. But that is something that is certainly in our consideration set. And we will try to leverage SG&A.

Brandt Montour: Thanks, everyone.

Speaker #13: Thanks, everyone.

Operator: Thank you. The final question today will be from Patrick Scholes from Truist Securities. Patrick, your line is live.

Speaker #2: Thank you. And the final question today will be from Patrick Scholes from Trua Securities. Patrick, your line is live.

Patrick Scholes: Hi. Thank you for taking my question. You talked about 86% sold for this year. My question around that is how much of that is we would say lock-tight, non-refundable at this point? Thank you.

Speaker #12: Hi. Thank you for taking my question. You talked about 86% sold for this year. My question around that is, how much of that is we would say lock-tight non-refundable at this point?

Leah Talactac: Generally speaking, our guests not only book in advance, but they also pay in advance. What we've found is that once they are booked and paid, there's generally very low cancellation rates. We also encourage that by the fact that we engage them prior to their trip. We will send them language lessons, things to look forward to really make sure that they're looking forward to the trip. I would say that, you know, and you can see this in prior bookings as well, and how it developed into results, that once they are booked and paid, the booking becomes generally very sticky. That is why we feel that showing these booking curves are the best factual indication of what the current season looks like.

Speaker #12: Thank you.

Speaker #9: So generally speaking, our guests not only book in advance, but they also pay in advance. And what we've found is that once they are booked and paid, there's generally very low cancellation rates.

Speaker #9: And we also encourage that by the fact that we engage them prior to their trip. So we will send them language lessons, things to look forward to, to really make sure that they're looking forward to the trip.

Speaker #9: So I would say that, and you can see this in prior bookings as well and how it developed into results, that once they are booked and paid, the booking becomes generally very sticky.

Speaker #9: And that is why we feel that showing these booking curves are the best factual indication of what the current season looks like.

Patrick Scholes: My follow-up on that would be let's just hypothetically and hope it doesn't happen, that things did really continue to escalate. There would be, you know, hypothetically fear of travel, but your ships were or your vessels were still sailing. Could those who have booked still, or what percent could still cancel with refund at this point down the road? Thank you.

Speaker #12: Okay. My follow-up on that. Would be let's just hypothetically and hope it doesn't happen that things did really continue to escalate there would be hypothetically fear of travel.

Speaker #12: But your ships were or your vessels were still sailing. Could those who have booked still or what percent could still cancel with refund at this point down the road?

Leah Talactac: Sure. Our cancellation policy is generally starts to kick in around 90 days prior to sailing. Having said that, you know, what we've seen in historical patterns is that our guests are quite versed in reading a map, so they can see where the areas of conflicts are and where they're planning to travel. They also trust the brand, meaning that we will not operate if we feel that it would be unsafe for our guests and our crew. We've seen that in prior where they will either hold and wait for Viking to make announcements, or they will maybe just push it out a little bit later. Generally speaking, the booking curves are pretty sticky.

Speaker #12: Thank you.

Speaker #9: Sure. So our cancellation policy is generally starts to kick in around 90 days prior to sailing. But having said that, what we've seen in historical patterns is that our guests are quite versed in reading a map.

Speaker #9: And so they can see where the areas of conflicts are and where they're planning to travel. And they also trust the brand. Meaning that we will not operate if we feel that it would be unsafe for our guests and our crew.

Speaker #9: And we've seen that in prior where they will either hold and wait to for Viking to make announcements or they will maybe just push it out a little bit later.

Speaker #9: But generally speaking, the booking curves are pretty sticky. And so another part of the equation here also is that with being 86% sold, any cancellations—we still have time to resell that inventory.

Leah Talactac: Another part of the equation here also is that, you know, with being 86% sold, any cancellations, we still have time to resell that inventory.

Patrick Scholes: Okay. Thank you for the detail on that, Moset.

Leah Talactac: Sure.

Speaker #12: Okay. Thank you for the detail on that. Well said.

Operator: Thank you. This does conclude today's Q&A session. I will now turn the conference back over to Torstein Hagen, Viking's Chairman and CEO, for closing remarks.

Speaker #9: Sure.

Speaker #2: Thank you. This does conclude today's Q&A session. I will now turn the conference back over to Torstein Hagen, Viking's Chairman and CEO, for closing remarks.

Torstein Hagen: All right. Well, I want to thank everyone for joining us today on this call. I also thank you for your support and interest in Viking, and I wish you a great day. Have a nice one.

Tor Hagen: All right. Well, I want to thank everyone for joining us today on this call. I also thank you for your support and interest in Viking, and I wish you a great day. Have a nice one.

Speaker #11: All right. Well, I want to thank everyone for joining us today. On this call. I also thank you for your support and interest in Viking.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker #11: And I wish you a great day. Have a nice one.

Q4 2025 Viking Holdings Ltd Earnings Call

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