Q2 2026 Viking Holdings Ltd Earnings Call

August 19, 2026

Speaker #1: Good morning. My name is Matthew, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Viking's second quarter 2026 earnings conference call.

Operator: Good morning. My name is Matthew, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Viking's Q2 2026 earnings conference call. 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'll be a question and answer session. If you'd like to ask a question at that time, please press star one on your telephone keypad. If you wish to remove yourself from the queue, press star two. Thank you. I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mengolini.

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'd 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, 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 Viking's second quarter 2026 earnings conference call. I am joined by Leah Talactac, President and Chief Executive Officer, and Lynn Bahn, Chief Financial Officer.

Carola Mengolini: Good morning, everyone, and welcome to Viking's Q2 2026 earnings conference call. I am joined by Leah Talactac, President and Chief Executive Officer, and Linh Banh, Chief Financial Officer. Also available during the Q&A session is Tor Hagen, Executive Chairman. Before we get started, please note our cautionary statement 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, and we assume no obligation to update or supplement these statements.

Speaker #2: Also available during the Q&A session is Tor Hagen, Executive Chairman. Before we get started, please note our cautionary statement regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks and 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. Leah and Linh will provide a strategic overview of the company, a recap of our Q2 results, and an update of the current booking environment. We will then open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is available on our investor relations website. With that, I'm pleased to turn the call over to Leah.

Speaker #2: Leah and Lynn will provide a strategic overview of the company, a recap of our second quarter 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 available on our Investor Relations website.

Speaker #2: With that, I'm pleased to turn the call over to Leah.

Speaker #3: Thank you, Carola. Good morning, everyone, and thank you for joining us. We are very pleased to have delivered another quarter of strong year-over-year performance.

Leah Talactac: Thank you, Carola. Good morning, everyone, and thank you for joining us. We are very pleased to have delivered another quarter of strong year-over-year performance. As we reported this morning, during the Q2, revenue increased 16.5%, driving an 18.2% growth in adjusted EBITDA. These results reflect the continued strong demand for our destination-focused travel experiences and the great execution of our teams across the organization. On slide 3, you can see that demand for Viking is strong. From an advanced booking perspective, our 2026 season is effectively sold out, with 96% of the capacity for our core products already booked. Looking further ahead, our focus is on continuing to build our book position for 2027. As of 9 August, 53% of the capacity for our core products for 2027 was booked, and this includes a 15% year-over-year increase in capacity.

Speaker #3: As we reported this morning, during the second quarter, revenue increased 16.5%, driving an 18.2% growth in adjusted EBITDA. These results reflect the continued strong demand for our destination-focused travel experiences and the great execution of our teams across the organization.

Speaker #3: On slide 3, you can see that demand for Viking is strong. From an advanced booking perspective, our 2026 season is effectively sold out, with 96% of the capacity for our core products already booked.

Speaker #3: Looking further ahead, our focus is on continuing to build our booked position for 2027. As of August 9, 53% of the capacity for our core products for 2027 was booked, and this includes a 15% year-over-year increase in capacity.

Speaker #3: Overall, we are very encouraged by the early booking trends for 2027. As you can tell from these trends, the visibility provided by our advance bookings gives us confidence in the demand for our product, allows us to manage pricing dynamically, and supports our thoughtful approach to capacity growth.

Leah Talactac: Overall, we are very encouraged by the early booking trends for 2027. As you can tell from these trends, the visibility provided by our advanced bookings gives us confidence in the demand for our product, allows us to manage pricing dynamically, and supports our thoughtful approach to capacity growth. As you can see on slide 4, since our last earnings call, we have continued to expand our fleet, adding four new river vessels and one ocean ship, consistent with our long-term growth strategy. During 2026, we expect to take delivery of 12 ships in total, 10 for river and two for ocean. As we grow the Viking fleet, we remain committed to the characteristics that make our ships unique and support the distinctive earnings profile of our business.

Speaker #3: As you can see on slide 4, and since our last earnings call, we have continued to expand our fleet, adding four new river vessels and one ocean ship, consistent with our long-term growth strategy.

Speaker #3: During 2026, we expect to take delivery of 12 ships in total—10 for river and 2 for ocean. As we grow the Viking fleet, we remain committed to the characteristics that make our ships unique and support the distinctive earnings profile of our business.

Speaker #3: First, we operate one of the youngest fleets in the industry, which contributes to lower maintenance costs, greater operational reliability, and strong earnings power. Second, our ships have been thoughtfully designed to maximize operational efficiency while providing the consistent and excellent experience our guests expect.

Leah Talactac: First, we operate one of the youngest fleets in the industry, which contributes to lower maintenance costs, greater operational reliability, and long earnings power. Second, our ships have been thoughtfully designed to maximize operational efficiency while providing the consistent and great experience that our guests expect. Third, within each of our product categories, our ships are designed to be almost identical and indistinguishable to our guests. Guests choose Viking because of the destinations and itineraries we offer, not because of a particular ship. As a result, when ships are deployed on similar itineraries, they are generally able to achieve comparable yields regardless of when they entered service. We believe this is a significant competitive advantage and an important driver of the long-term returns generated by our fleet. Moreover, our almost identical ships also create significant operational advantages.

Speaker #3: And third, within each of our product categories, our ships are designed to be almost identical and indistinguishable to our guests. Guests choose Viking because of the destinations and itineraries we offer, not because of a particular ship.

Speaker #3: As a result, when ships are deployed on similar itineraries, they are generally able to achieve comparable yields regardless of when they entered service. We believe this is a significant competitive advantage and an important driver of the long-term returns generated by our fleet.

Speaker #3: Moreover, our almost identical ships also create significant operational advantages. Because our ships are built to common specifications, we benefit from efficiencies across sales and marketing, operations, deployment, purchasing, and shipbuilding.

Leah Talactac: Because our ships are built to common specifications, we benefit from efficiencies across sales and marketing, operations, deployment, purchasing, and shipbuilding. This approach simplifies everything from crew training and maintenance to inventory management and fleet deployment. Taken together, we believe that these advantages reinforce the strength of our business model and the distinctive earnings power of the Viking fleet. While a thoughtful fleet expansion remains the engine of our growth, we are also focused on further enhancing the experiences we offer our guests. Moving to slide 5, you can see that we continue to increase our offering of land extensions and optional shore excursions, providing guests with more opportunities to explore the destinations they visit before, during, and after their voyage. One example is our new St. Moritz, Lombardy, and Alpine train extension, which takes guests through the Swiss Alps aboard the Bernina Express.

Speaker #3: This approach simplifies everything—from crew training and maintenance to inventory management and fleet deployment. Taken together, we believe these advantages reinforce the strength of our business model and the distinctive earnings power of the Viking fleet.

Speaker #3: Now, while a thoughtful fleet expansion remains the engine of our growth, we are also focused on further enhancing the experiences we offer our guests.

Speaker #3: Moving to slide 5, you can see that we continue to increase our offering of land extensions and optional shore excursions, providing guests with more opportunities to explore the destinations they visit before, during, and after their voyage.

Speaker #3: One example is our new St. Moritz, Lombardi, and Alpine Train Extension, which takes guests through the Swiss Alps aboard the Bernina Express. This four-night, fully guided trip can be added before or after the cruise.

Leah Talactac: This four-night fully guided trip can be added before or after the cruise. We have also expanded our shore excursion portfolio with experiences such as a Zeppelin flight over Cologne, which offers breathtaking aerial views of the city's most iconic landmarks. Additions such as these reinforce our commitment to providing meaningful and memorable ways for our guests to explore the world. We believe that they are an important differentiator for Viking. As our fleet continues to grow, so does the range of experiences available to our guests. Before turning the call over to Linh to discuss our financials, I would like to address the low water levels currently affecting some rivers in Europe. As we have discussed in the past, river cruising is inherently dependent on natural conditions, and no two seasons are alike.

Speaker #3: And we have also expanded our shore excursion portfolio with experiences such as a Zeppelin flight over Cologne, which offers breathtaking aerial views of the city's most iconic landmarks.

Speaker #3: Additions such as these reinforce our commitment to providing meaningful and memorable ways for our guests to explore the world. We believe that they are an important differentiator for Viking. As our fleet continues to grow, so does the range of experiences available to our guests.

Speaker #3: Now, before turning the call over to Lynn to discuss our financials, I would like to address the low water levels currently affecting some rivers in Europe.

Speaker #3: As we have discussed in the past, river cruising is inherently dependent on natural conditions, and no two seasons are alike. This year, portions of several European rivers, particularly the Danube and the Rhine, have experienced historically low water levels, creating operational challenges across the industry.

Leah Talactac: This year, portions of several European rivers, particularly the Danube and the Rhine, have experienced historically low water levels, creating operational challenges across the industry. Generally, Viking's purpose-built river fleet, deployment flexibility, and well-established ship swap capabilities are significant competitive advantages that enable us to minimize disruptions as much as possible. That said, the historically low water levels this year, combined with conditions that have deteriorated week by week, have impacted guests on some of our itineraries this season. Delivering a great guest experience is one of our highest priorities, and our teams are working tirelessly to ensure that any necessary adjustments are handled as smoothly as possible. With our guests at the center of every decision we make, we are also enhancing our communication protocols to ensure they understand what to expect on disrupted itineraries. We are doing this through more proactive outreach and more frequent operational updates.

Speaker #3: Generally, Viking's purpose-built river fleet deployment flexibility and well-established ship swap capabilities are significant competitive advantages that enable us to minimize disruptions as much as possible.

Speaker #3: That said, the historically low water levels this year, combined with conditions that have deteriorated week by week, have impacted guests on some of our itineraries this season.

Speaker #3: Delivering a great guest experience is one of our highest priorities, and our teams are working tirelessly to ensure that any necessary adjustments are handled as smoothly as possible.

Speaker #3: With our guests at the center of every decision we make, we are also enhancing our communication protocols to ensure they understand what to expect on disrupted itineraries.

Speaker #3: We are doing this through more proactive outreach and more frequent operational updates. We are also issuing future cruise vouchers to certain affected guests. While we believe this is the right approach from both a guest satisfaction and loyalty perspective, these vouchers will have a financial impact extending beyond 2026 and into 2027 and 2028 as they are redeemed.

Leah Talactac: We are also issuing future cruise vouchers to certain affected guests. While we believe this is the right approach from both a guest satisfaction and loyalty perspective, these vouchers will have a financial impact extending beyond 2026 and into 2027 and 2028 as they are redeemed. We believe this investment reinforces the trust that our guests place in Viking and supports the long-term loyalty that has been fundamental to Viking's success. Our focus remains on taking care of our guests, operating our European River fleet through these challenges, and continuing to deliver the exceptional experiences for which Viking is known. With that, I will turn it over to Linh to discuss our financials.

Speaker #3: We believe this investment reinforces the trust that our guests place in Viking and supports the long-term loyalty that has been fundamental to Viking's success.

Speaker #3: Our focus remains on taking care of our guests, operating our European river fleet through these challenges, and continuing to deliver the exceptional experiences for which Viking is known.

Speaker #3: With that, I'll turn it over to Lynn to discuss our financials.

Speaker #2: Thank you, Leah, and good morning, everyone. I will start by reviewing our very strong second quarter results. On a consolidated basis, total revenue for the quarter increased 16.5% year over year to $2.2 billion. The year-over-year increase was mainly driven by increased capacity and higher revenue per PCD.

Linh Banh: Thank you, Leah, and good morning, everyone. I will start by reviewing our very strong Q2 results. On a consolidated basis, total revenue for the quarter increased 16.5% year over year to USD 2.2 billion. The year over year increase was mainly driven by increased capacity and higher revenue per PCD. During Q2 2026, capacity PCDs increased 10.9% compared to the same period in 2025. This year over year growth was mainly driven by the expansion of our fleet, which included the addition of seven river vessels and two ocean ships. The growth also reflects additional capacity of the Viking Yi Dun, an ocean ship dedicated to our guests from Asia. It is now sailing in Europe, and we are pleased to be expanding our European itinerary offerings to this important and growing customer base.

Speaker #2: During the second quarter of 2026, capacity PCDs increased 10.9% compared to the same period in 2025. This year-over-year growth was mainly driven by the expansion of our fleet, which included the addition of seven river vessels and two ocean ships.

Speaker #2: The growth also reflects the additional capacity of the Viking Eden, an ocean ship dedicated to our guests from Asia. It is now sailing in Europe, and we are pleased to be expanding our European itinerary offerings to this important and growing customer base.

Speaker #2: Adjusted gross margin increased 16.3% year over year to $1.4 billion, resulting in a net yield of $645, 6.2% higher than the second quarter of 2025.

Linh Banh: Adjusted gross margin increased 16.3% year over year to USD 1.4 billion, resulting in a net yield of USD 645, 6.2% higher than Q2 2025. Vessel expenses, excluding fuel per capacity PCD, increased 2.7% this quarter compared to the same period last year. Regarding SG&A, expenses were slightly lower as a percentage of adjusted gross margin when compared to the same time last year. As we have mentioned in the past, our priority is to invest in our teams as well as in sales and marketing to support future growth and drive demand generation. Adjusted EBITDA for Q2 was USD 748 million, 18.2% higher than the same period last year. This significant year over year increase was mainly driven by higher capacity and higher net yields in both the ocean and river segments.

Speaker #2: Vessel expenses excluding fuel per capacity PCD increased 2.7% this quarter compared to the same period last year. Regarding SG&A, expenses were slightly lower as a percentage of adjusted gross margin when compared to the same time last year.

Speaker #2: As we have mentioned in the past, our priority is to invest in our teams, as well as in sales and marketing, to support future growth and drive demand generation.

Speaker #2: Adjusted EBITDA for the second quarter was $748 million, 18.2% higher than the same period last year. This significant year-over-year increase was mainly driven by higher capacity and higher net yields in both the ocean and river segments.

Speaker #2: As we have shared before, capacity growth coupled with net yield growth translates into strong EBITDA improvement and margin expansion. Net income was $588 million, an improvement of $148 million when compared to the same period in 2025.

Linh Banh: As we have shared before, capacity growth coupled with net yield growth translates into strong EBITDA improvement and margin expansion. Net income was $588 million, an improvement of $148 million when compared to the same period in 2025. Adjusted net income attributable to Viking Holdings Ltd was $587 million, 33.8% higher than the same period in 2025. Adjusted EPS was $1.31 for the Q2, 33% higher than the same period in 2025. Before moving to our reportable segments, which are on slide 8, I would like to highlight that for the H1 of the year, our consolidated adjusted gross margin increased 16.5% year over year to over $2.1 billion, and our adjusted EBITDA was $853 million, 20.9% higher than in the same period last year.

Speaker #2: Adjusted net income attributable to Viking Holdings Limited was 587 million dollars, 33.8% higher than the same period in 2025. Adjusted EPS was 1 dollar and 31 cents for the second quarter, 33% higher than the same period in 2025.

Speaker #2: Before moving to our reportable segments, which are on slide 8, I would like to highlight that for the first half of the year, our consolidated adjusted gross margin increased 16.5% year over year to over $2.1 billion, and our adjusted EBITDA was $853 million, 20.9% higher than in the same period last year.

Speaker #2: It is important to note that the prolonged low-water conditions we are experiencing across some of our European rivers are not yet reflected in our financial results.

Linh Banh: It is important to note that the prolonged low water conditions we are experiencing across some of our European rivers are not yet reflected in our financial results. As conditions evolve, we will see some impact in the periods ahead, although it is too early to determine the extent. Now, I will briefly discuss our two reportable segments, River and Ocean. Unless noted, I will be referring to the year-to-date metrics for 6 months ended 30 June 2026. For the River segment, capacity PCDs increased 3.2% year over year, and occupancy for the period was 94.8%. Adjusted gross margin grew 11.3% year over year, and net yield was $660, up 8.8% year over year, driven by strong demand across all regions and favorable itinerary mix. For Ocean, capacity PCDs increased 11.4% year over year, mainly due to the addition of the Viking Vesta in July of 2025.

Speaker #2: As conditions evolve, we will see some impact in the periods ahead, although it is too early to determine the extent. Now, I will briefly discuss our two reportable segments: River and Ocean.

Speaker #2: Unless noted, I will be referring to the year-to-date metrics, or six months ended June 30, 2026. For the river segment, capacity PCDs increased 3.2% year over year, and occupancy for the period was 94.8%.

Speaker #2: Adjusted gross margin grew 11.3% year over year, and net yield was $660, up 8.8% year over year, driven by strong demand across all regions and a favorable itinerary mix.

Speaker #2: For ocean, capacity PCDs increased 11.4% year over year, mainly due to the addition of the Viking Vesta in July 2025. Occupancy for the period was 95.4%.

Linh Banh: Occupancy for the period was 95.4%. Adjusted gross margin increased 20.3% year over year to $1.1 billion, while net yield increased 7.7% to $593. Similar to River, the year over year increase was driven by strong demand and favorable itinerary mix. Now moving to the balance sheet. On slide 9, you can see that as of 30 June 2026, we had total cash and cash equivalents of $4 billion, and we also have an undrawn revolver facility of $1 billion. Our net debt was $2.4 billion, and our net leverage was 1.2 times. As of 30 June 2026, deferred revenue was $5 billion. Also, on slide 9, we show our bond maturity outlook. As you can see, maturities are in 2028 and beyond. With this, I'd like to confirm our debt amortization for 2026 and 2027.

Speaker #2: Adjusted gross margin increased 20.3% year over year to $1.1 billion, while net yield increased 7.7% to $593. Similar to River, the year-over-year increase was driven by strong demand and favorable itinerary mix.

Speaker #2: Now, moving to the balance sheet. On slide 9, you can see that as of June 30, 2026, we had total cash and cash equivalents of $4 billion, and we also have an undrawn revolver facility of $1 billion.

Speaker #2: Our net debt was $2.4 billion, and our net leverage was 1.2 times. As of June 30, 2026, deferred revenue was $5 billion.

Speaker #2: Also, on slide 9, we show our bond maturity outlook. As you can see, maturities are in 2028 and beyond. With this, I'd like to confirm our debt amortization for 2026 and 2027.

Speaker #2: As of June 30, 2026, the scheduled principal payments for the remainder of 2026 were $117 million, and $234 million for the full year 2027.

Linh Banh: As of 30 June 2026, the scheduled principal payments for the remainder of 2026 were $117 million and $234 million for the full year 2027. From a committed capital expenditure perspective, and for the full year 2026, the total committed ship CapEx is about $1.9 billion, or $650 million net of financing. For the full year 2027, the total expected committed ship CapEx is about $1.0 billion, or $260 million net of financing. We will now dive into the booking curves, which are all as of 9 August 2026. On slide 11, we show our consolidated metrics for our core products. As you can see, we are in very good shape for both the 2026 and the 2027 seasons. The 2026 season already has 96% of the capacity PCDs booked.

Speaker #2: From a committed capital expenditure perspective, and for the full year 2026, the total committed ship capex is about $1.9 billion, or $650 million net of financing.

Speaker #2: And for the full year 2027, the total expected committed ship capex is about $1.0 billion, or $260 million net of financing. We will now dive into the booking curves, which are all as of August 9, 2026.

Speaker #2: On slide 11, we show our consolidated metrics for our core products. As you can see, we are in very good shape for both the 2026 and the 2027 seasons.

Speaker #2: The 2026 season already has 96% of the capacity PCDs booked. Advanced bookings equal $6.4 billion, which is 13% higher than the 2025 season at the same point in time, while capacity is increasing by 7%.

Linh Banh: Advanced bookings equal $6.4 billion, which is 13% higher than the 2025 season at the same point in time, while capacity is increasing by 7%. For 2027, we are already 53% booked, with capacity increasing by 15% year-over-year. We have $4.7 billion of advanced bookings, which are 21% higher than the 2026 season at the same point of time in 2025. I will now talk about the advanced bookings curves for the segments. On the next slide, you will see our curves for ocean cruises. This is slide 12. I will start with the yellow line, which shows the bookings for 2026. Overall, we have sold 96% of our capacity PCDs for the year and have $2.9 billion of advanced bookings, which is 17% higher than last year at this point in time. Capacity is increasing by 9%, and rates have remained strong as we finish selling the year.

Speaker #2: And for 2027, we are already 53% booked, with capacity increasing by 15% year over year. We have $4.7 billion of advanced bookings, which are 21% higher than the 2026 season at the same point in time in 2025.

Speaker #2: I will now talk about the advanced booking curves for the segments. On the next slide, you will see our curves for ocean cruises. This is slide 12.

Speaker #2: I will start with the yellow line, which shows the bookings for 2026. Overall, we have sold 96% of our capacity PCDs for the year, and have $2.9 billion of advanced bookings, which is 17% higher than last year at this point in time.

Speaker #2: Capacity is increasing by 9%, and rates have remained strong as we finished selling the year. If you look at the gray line, you will see the booking trend for the 2027 season, which is in very good shape, too.

Linh Banh: If you look at the gray line, you will see the booking trend for the 2027 season, which is in very good shape too. As of 9 August, we had sold about 62% of the 2027 capacity for ocean, which is quite notable since the capacity is increasing by 18% year-over-year. Advanced bookings are 29% higher than last year, with rates equal to $877 compared to $781 for the 2026 season at the same point in time. Now we move to slide 13. You will see the curves for the river segment. I will start with the advanced bookings for 2026, which is the yellow line. As you can see, we are having a very good year. With 96% of the 2026 capacity already sold, we have over $3 billion in advanced bookings, which is 11% higher than last year at this point in time.

Speaker #2: As of August 9, we had sold about 62% of the 2027 capacity for ocean, which is quite notable since the capacity is increasing by 18% year over year.

Speaker #2: Advanced bookings are 29% higher than last year, with rates equal to $877 compared to $781 for the 2026 season at the same point in time.

Speaker #2: Now, we move to slide 13. You will see the curves for the river segment. I will start with the advanced bookings for 2026, which is the yellow line.

Speaker #2: As you can see, we are having a very good year, with 96% of the 2026 capacity already sold. We have over $3 billion in advance bookings, which is 11% higher than last year at this point in time.

Speaker #2: Similarly to Ocean, we have continued to book our remaining inventory at very attractive rates. Capacity for the River segment is growing approximately 6% during 2026.

Linh Banh: Similarly to ocean, we have continued to book our remaining inventory at very attractive rates. Capacity for the river segment is growing approximately 6% during 2026. Now looking at the gray line, these are the advanced bookings for the 2027 season. As you can see, we have sold about $1.8 billion in advanced bookings, which is 11% higher than the 2026 season at the same point in time. Our operating capacity for river is up 13% year-over-year, and we are already 42% booked. These are good trends for 2027, with relatively high rates equal to $1,029, compared to $942 in 2026. Keep in mind that the river operation is seasonal as our core European product starts in March. Given this, the booking curve builds through the year. So recapping, demand for our product is strong, and we are very pleased with how the booking curves are developing.

Speaker #2: Now, looking at the gray line, these are the advanced bookings for the 2027 season. As you can see, we have sold about $1.8 billion in advanced bookings, which is 11% higher than the 2026 season at the same point in time.

Speaker #2: Our operating capacity for river is up 13% year over year, and we are already 42% booked. These are good trends for 2027, with relatively high rates equal to $1,029, compared to $942 in 2026.

Speaker #2: Keep in mind that the river operation is seasonal, as our core European product starts in March. Given this, the booking curve builds throughout the year.

Speaker #2: So, recapping, demand for our product is strong, and we are very pleased with how the booking curves are developing. Now, Leah will add some color to our order book and capacity.

Linh Banh: Now Leah will add some color to our order book and capacity.

Speaker #1: Thank you, Lynn. As we reported this morning, and since our last earnings call, we took delivery of four river vessels and one ocean ship, and exercised our options for two additional ocean ships scheduled for delivery in 2032.

Leah Talactac: Thank you, Linh. As we reported this morning and since our last earnings call, we took delivery of four river vessels and one ocean ship and exercised our options for two additional ocean ships scheduled for delivery in 2032. We are very pleased with our performance year-to-date, and our ongoing fleet expansion underscores confidence in the business, the resilience of demand, and the long-term growth opportunity before us. We look forward to updating you on our progress in the quarters to come. With that, operator, we are ready to open the line for questions.

Speaker #1: We are very pleased with our performance here to date, and our ongoing fleet expansion underscores confidence in the business, the resilience of demand, and the long-term growth opportunity before us.

Speaker #1: We look forward to updating you on our progress in the quarters to come. With that, operator, we are ready to open the line for questions.

Speaker #3: Certainly. At this time, we'll be conducting a question-and-answer session. In the interest of time, we ask that participants limit themselves to one question on today's call.

Operator: Certainly. At this time, we will be conducting a question-and-answer session. In the interest of time, we ask that participants limit themselves to one question on today's call. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *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. One moment please while we poll for questions. Your first question is coming from Steven Wieczynski from Stifel. Your line is live.

Speaker #3: If you'd 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.

Speaker #3: You may press star 2 if you'd 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 #3: One moment, please, while we pull up the questions. Your first question is coming from Steve Wysinski from Stifel. Your line is live.

Linh Banh: Steve, your line is not coming through clearly. Are you able to repeat your question?

Operator: Steve, your line is not coming through clearly. Are you able to repeat your question?

Speaker #4: Yeah, hey guys, good morning.

Speaker #3: Steve, your line is not coming through clearly. Are you able to repeat your question? And once again, Steve, your line is not coming through very clearly.

Operator: Once again, Steve, your line is not coming through very clearly. Are you able to repeat your question, please?

Speaker #3: Are you able to repeat your question, please?

Speaker #4: Yep, can you hear that?

Steven Wieczynski: Yep. Can you hear me now?

Speaker #3: Your next question is coming from Zian Su from BNP Paribas. Your line is live.

Operator: Your next question is coming from Zien Tzu from BNP Paribas. Your line is live.

Speaker #5: Hi, guys. Thanks for the question. Maybe on the low water levels, are you seeing any near-term indicators that suggest consumers might be avoiding river cruising at all?

Zien Tzu: Hi, guys. Thanks for the question. Maybe on the low water levels, are you seeing any near-term indicators that suggest consumers might be avoiding river cruising at all, just given the low water levels? Are you seeing any near-term impact on demand? Then maybe longer term, how do you think about how low water levels might impact guest experience and brand loyalty? I know in the past, instances of, I think it was in 2022, low water levels in the Rhine, guest ratings were similar for itineraries with ship swaps and to those without, and maybe it is a little bit more difficult this year. But anything you could share in terms of brand loyalty over time and guest satisfaction? Thank you.

Xian Siew: Hi, guys. Thanks for the question. Maybe on the low water levels, are you seeing any near-term indicators that suggest consumers might be avoiding river cruising at all, just given the low water levels? Are you seeing any near-term impact on demand? Then maybe longer term, how do you think about how low water levels might impact guest experience and brand loyalty? I know in the past, instances of, I think it was in 2022, low water levels in the Rhine, guest ratings were similar for itineraries with ship swaps and to those without, and maybe it is a little bit more difficult this year. But anything you could share in terms of brand loyalty over time and guest satisfaction? Thank you.

Speaker #5: Given the low water levels, are you seeing any near-term impact on demand? And then, maybe longer term, how do you think about how low water levels might impact guest experience and brand loyalty?

Speaker #5: I know in past instances, I think it was in 2022, with low water levels in the Rhine, guest ratings were similar for itineraries with ship swaps and those without, and maybe it's a little bit more difficult this year.

Speaker #5: But is there anything you could share in terms of brand loyalty over time and guest satisfaction? Thank you.

Speaker #2: Hi, thanks for the question. For nearly 30 years, Viking has successfully operated on Europe's rivers through a wide range of water conditions. River levels naturally fluctuate from year to year.

Leah Talactac: Hi. Thanks for the question. For nearly 30 years, Viking has successfully operated on Europe's rivers through a wide range of water conditions. River levels, they naturally fluctuate from year to year. Some seasons, we experience high water, other seasons, we experience low water. That is really the reason why our river fleet was designed with these realities in mind. We have, over the course of 30 years, have really worked on our operational expertise that allows us to minimize disruptions through proven solutions, including ship swaps when necessary, so that our guests continue to enjoy the itineraries that we offer. This year was exceptionally low water. We understand that it was not ideal conditions, but nevertheless, we continued to operate without any cancellations. I think our booking curves for the river segment speak for themselves.

Speaker #2: Some seasons we experience high water; other seasons we experience low water. So, that's really the reason why our river fleet was designed with these realities in mind.

Speaker #2: And we have, over the course of 30 years, really worked on our operational expertise that allows us to minimize disruptions through proven solutions, including ship swaps when necessary, so that our guests continue to enjoy the itineraries that we offer.

Speaker #2: This year was exceptionally low water. We understand that, you know, it was not ideal conditions, but nevertheless, you know, we continued to operate without any cancellations.

Speaker #2: I think our booking curves for the river segment speak for themselves. We have not seen any particular impact in terms of booking cadence, but I'll let Lynn expand on that.

Leah Talactac: We have not seen any particular impact in terms of booking cadence, but I will let Linh expand on that.

Linh Banh: Thanks, Leah. I concur with what Leah said. If you look at our 2027 curves, as of 9 August, we are already over 40% booked for rivers, and that is a great position to be in. Based on that, we do not believe low water is impacting our bookings, and we are pleased with how the curve is tracking.

Speaker #6: Thanks, Leah. I mean, I think I concur with what Leah said. If you look at our 2027 curves, as of August 9th, we are already over 40% booked for rivers.

Speaker #6: And that is a great position to be in. So, based on that, we don't believe low water is impacting our bookings, and we're pleased with how the curve is tracking.

Tor Hagen: Maybe could I add a point? It is Tor here, and I am in Europe. I am in Oslo, as a matter of fact, and my daughter, Karine, was on board the Viking Mira here in Oslo, and 100 guests there had been on the river cruises, on the combined river cruise down the Rhine, and then onto the Mira. Of course, we all are a little bit concerned of our guests' reactions. As you know, we try to go a bit overboard to treat our guests well. She said that the people she has spoken to said that they were very pleased with the way Viking handled the whole situation. Of course, we have the benefits that we can do the ship swaps and all that. Of course, it is not ideal, but I think we have been able to handle it very well.

Speaker #4: Maybe I could add a point? It's Tor here, and I'm in Europe—I'm in Oslo, as a matter of fact. And my daughter, Karina, was on board the Viking Mira.

Speaker #4: Here in Oslo, and guests there have been 100 guests there have been on the river cruises. On the combined river cruise down the Rhine, and then onto the Mira.

Speaker #4: And of course, we all are a little bit concerned about how our guests react. As you know, we try to go a bit overboard to treat our guests well.

Speaker #4: She said that the people she had spoken to said that they were very pleased with the way Viking handled the whole situation. And of course, we have the benefits that we can do the ship swaps and all that.

Speaker #4: So, of course, it's not ideal, but I think we've been able to handle it very well. We were a little bit slow initially, but I think we have handled it very well.

Tor Hagen: We were a little bit slow initially, but I think we have handled it very well.

Speaker #3: Thank you. Your next question is coming from Matthew Boss from JP Morgan. Your line is live.

Operator: Thank you. Your next question is coming from Matthew Boss from J.P. Morgan. Your line is live.

Speaker #5: Great, thanks, and congrats on another nice quarter.

Matthew Boss: Great. Thanks, and congrats on another nice quarter.

Speaker #2: Thank you.

Leah Talactac: Thank you.

Speaker #5: So Leah, with your 2027 advanced bookings for PCD up 10%, more or less unchanged relative to a quarter ago, can you touch on recent pricing trends across river relative to cruise?

Matthew Boss: Leah, with your 2027 advanced bookings per PCD up 10%, more or less unchanged relative to a quarter ago, can you touch on recent pricing trends across river relative to cruise, or just any constraints to delivering at least the mid-single-digit historical yields in 2027, despite the impact that you cited from vouchers? Lynn, on expenses, and any transitory impact to expect in costs excluding fuel for this year, or just any constraints to your ability to manage costs below yields for this year and next year, as we think about the impact from the water levels?

Speaker #5: Or just any constraints to delivering at least the mid-single-digit historical yields in 2027, despite the impact that you cited from vouchers? And Lynn, on expenses, any transitory impact to expect in costs, excluding fuel, for this year? Or just any constraints to your ability to manage costs below yields for this year and next year?

Speaker #5: As we think about the impact from the water levels.

Leah Talactac: Hey, Matt. I think our booking curves show that our rates are actually pretty good. Also, the pacing is also good, with 40% of the river capacity and more than 60% of ocean capacity for 2027 already being booked as of this point in time. We do not see an impact on demand and in the bookings that are coming in. Based on recent events, we have seen our guests prove to be resilient and are continuing to book 2027 and future seasons. Lynn, do you want to add additional color?

Speaker #2: Hey, Matt. So I think our booking curves show that our rates are actually pretty good. Also, the pacing is good, with 40% of river capacity and more than 60% of ocean capacity for 2027 already being booked at this point in time.

Speaker #2: We don't see an impact on demand and in what the bookings that are coming in. Based on recent events, you know, we've seen our guests kind of prove to be resilient and are continuing to book 2027 and future seasons.

Speaker #2: Lynn, do you want to add additional color?

Speaker #6: Sure, thanks, Leah. So for 2027, you know, as Leah noted, our net yields are quite nice—about 10% higher compared to the same point in time in the prior season.

Linh Banh: Sure. Thanks, Leah. For 2027, as Leah noted, our net yields are quite nice, about 10% higher compared to the same point in time prior season. I think this goes to the same, our curve reflects some favorable product mix. We see that 10%. I think our goal remains mid-single digit yield growth for 2027. As it relates to expenses, as you know, we do not guide, but the H1 has shown where expenses have been. Cadence of expenses may differ from one period to the next. It is not always like for like. We would not say we should extrapolate, but our goal is always, obviously, to be prudent and diligent with cost management. We noted earlier that there may be some impact from low water. We will possibly see that in the Q3, and then also from the voucher issuances.

Speaker #6: And so I think this goes to the same—you know, our curve reflects some favorable product mix, and so we see that 10%. I think our goal remains mid-single-digit yield growth for 2027.

Speaker #6: As it relates to expenses, as you know, we don't provide guidance, but the first half has shown where expenses have been.

Speaker #6: The cadence of expenses may differ from one period to the next; it's not always like for like. So we wouldn't say we should extrapolate, but our goal is always obviously to be prudent and diligent with cost management.

Speaker #6: We noted earlier that there may be some impact from low water. We also possibly see that in the third quarter, and then also from the voucher issuances.

Speaker #6: So, as vouchers are issued and utilized for future periods, those future periods will reflect the voucher value.

Linh Banh: As vouchers are issued and utilized for future periods, those future periods will reflect the voucher value.

Speaker #3: Thank you. Your next question is coming from Robin Farley from UBS. Your line is live.

Operator: Thank you. Your next question is coming from Robin Farley from UBS. Your line is live.

Speaker #7: Great, thanks for taking the question. If you could help us quantify a little bit the vouchers issued, it's interesting that you're saying you've done that even though you haven't had any cancellations.

Robin Farley: Great. Thanks for taking the question. If you could help us quantify a little bit the vouchers issued. It is interesting that you are saying you have done that even though you have not had any cancellations. Just thinking about assuming if all those vouchers were to be used in 2027, what the total impact would be. I would assume it is relatively small across the base of your fleet, but if you could help us quantify the value that you have issued. Also on that 10% increase in 2027 booked revenue per day, you mentioned there is favorable product mix in there. Is it fair to assume there is also some benefit that that is a gross revenue number, that airfares are maybe higher in 2027 versus 2026?

Speaker #7: Just thinking about, you know, assuming if all those vouchers were to be used in 2027, what the total impact would be. I would assume it's relatively small across the base of your fleet, but if you can help us quantify the value that you've issued.

Speaker #7: And then also, on that 10% increase in 2027 booked revenue per day, you mentioned a favorable product mix in there. Is it fair to assume there's also some benefit—that that's a gross revenue number—and that airfares are maybe higher in 2027 versus 2026?

Speaker #7: And any color you could give us on how the cruise ticket price itself is trending if you didn't have that higher airfare in there, just even, you know, in whatever way you can help us quantify that?

Robin Farley: Any color you could give us on how the cruise ticket price itself is trending if you did not have that higher airfare in there, just in whatever way you can help us quantify that. Thanks.

Speaker #7: Thanks.

Speaker #2: Hi, Robin. This is Leah. So yeah, we did proactively issue future cruise vouchers as Tor mentioned earlier during the call. You know, we want to be we want to make sure that the guests feel that we understand that the, you know, nobody wants a disrupted cruise.

Leah Talactac: Hi, Robin. This is Leah. We did proactively issue future cruise vouchers, as Tor mentioned earlier during the call. We want to make sure that the guests feel that we understand that nobody wants a disrupted cruise. We understand that this was not what they had hoped for when they first initially booked. Really, that future cruise voucher generates the goodwill and in the hopes that they will return for future seasons so that they can experience the experience that Viking is known for. Based on conditions, they continue to evolve each week. At this stage, our focus is on the direct impact to our Q3. As of mid-August, more than 50% of the river capacity cruise days were affected, with about 10% to 12% ultimately canceling.

Speaker #2: We understand that this was not what they had hoped for when they initially booked. And so, really, that future cruise voucher generates goodwill in the hopes that they will return for future seasons so that they can experience the experience that Viking is known for.

Speaker #2: Based on conditions, they continue to evolve week to week. So, at this stage, our focus is on the direct impact to our third quarter.

Speaker #2: So, as of mid-August, more than 50% of the river capacity cruise days were affected, with about 10% to 12% ultimately canceling. So, we have proactively started to issue vouchers for these guests.

Leah Talactac: We have proactively started to issue vouchers for these guests to acknowledge that we understand what is going on. We understand that this is not what they had purchased, and hopefully, to Linh's point, these vouchers would encourage them to really come back to Viking and experience what we are known for, the experiences that we are known for. With that, I will turn it over to Linh for, you had some cost questions about airfare.

Speaker #2: To acknowledge that we understand what's going on, we understand that this is not what they had purchased, and, you know, hopefully to Lynn's point, you know, these vouchers would encourage them to really come back to Viking and experience the what we are known for, the experiences that we're known for.

Speaker #2: And with that, I'll turn it over to Lynn, as you had some cost questions about airfare.

Speaker #6: Thanks, Leah. So as it relates to 2027 and net yields, our curves show advanced bookings per PCD, which is revenue that we generate from our guests that have booked thus far.

Linh Banh: Thanks, Leah. As it relates to 2027 and net yields, our curves show advanced bookings per PCD, which is revenue that we generate from our guests that have booked thus far. It is favorable product mix. We price to demand is the reality, keeping in mind that we want to ensure that we have good pricing for our guests to ensure that they come back. What we would point to is net yields, if you want to look at airfare. Net yields will reflect costs, and as many of us know, airfare is something that most companies are seeing pressure with. That being said, our goal remains mid-single-digit yield growth year-over-year. That remains the same for 2026 and the same for 2027.

Speaker #6: So it is a favorable product mix. We price to demand—this is the reality. Keeping in mind that, you know, we want to ensure that our pricing is good for our guests to ensure that they come back.

Speaker #6: What we would point to is net yields if you want to look at airfare. So net yields will reflect costs and, you know, as many of us know, airfare is something that most companies are seeing pressure with.

Speaker #6: That being said, you know, our goal remains mid-single-digit yield growth year over year. That remains the same for 2026 and the same for 2027.

Speaker #3: Thank you. Your next question is coming from Trey Bowers from Wells Fargo. Your line is live.

Operator: Thank you. Your next question's coming from Trey Bowers from Wells Fargo. Your line is live.

Speaker #5: Hey guys, thanks for the question. I just want to confirm, when we look at the booking curves, is there any impact from the issued vouchers, or is that a totally clean number?

Trey Bowers: Hey, guys. Thanks for the question. Just want to confirm when we look at the booking curves, is there any impact of that from the issued vouchers, or is that a totally clean number? Then I guess as well, kind of unrelated, the sales and marketing spend was really solid this quarter. It was down year-over-year. If you guys could just talk about any efficiencies you're seeing in your marketing spend and where you see that heading over time. Thanks so much.

Speaker #5: And then I guess, as well—kind of unrelated—the sales and marketing spend was really solid this quarter. It was down year over year.

Speaker #5: Have you guys could just talk about any efficiencies you're seeing in kind of your marketing spend and where you see that heading over time?

Speaker #5: Thanks so much.

Speaker #2: Sure. So, the second quarter results do not include any impact from the low water. The low water really started in mid-July. The future cruise voucher is a credit that can be applied toward new future bookings.

Leah Talactac: Sure. The Q2 results do not include any impact for the low water. The low water really started in mid-July. The future cruise voucher is a credit that can be applied toward new future bookings, and they're used towards the cruise fare. So they're effectively providing a discount on the price of the future cruise. These can be applied for cruises later in 2026 and into 2027 and 2028 and future years.

Speaker #2: And they're used toward the cruise fare, so they're effectively providing a discount on the price of a future cruise. These can be applied for cruises later in 2026, and into 2027 and 2028, and future years.

Speaker #3: Thank you. Your next question is coming from James Hardyman from Citi. Your line is live.

Operator: Thank you. Your next question is coming from James Hardiman from Citi. Your line is live.

Speaker #5: Hey, good morning. I wanted to circle back to the discussion about mix and ultimately how that seems to benefit your advanced booking per PCD number.

James Hardiman: Hey, good morning. I wanted to circle back to the discussion about mix and ultimately how that seems to benefit your advanced bookings per PCD number. We spent a lot of time on the last call talking about that outsized 11% number and how it was not likely to stay where it is. Maybe speak to how much of that mix being released, so to speak, is responsible for going from the 11% to the 10%, and how much, as we think about what is left to be booked, should impact that number, or how much that 10% is likely to stay closer to where it is. Maybe as part of that, we did see River in particular decelerate a couple points versus the last advanced booking per PCD number. I think it went from about 12% to closer to 9%, whereas Ocean was pretty consistent.

Speaker #5: We spent a lot of time on the last call sort of talking about that outsized 11% number, and how it wasn't likely to stay where it is.

Speaker #5: Maybe speak to how much of that mix, being sort of "released," so to speak, is responsible for going from the 11 to the 10, and how much— as we think about what's left to be booked— should impact that number, or, you know, how much that 10% is likely to stay closer to where it is.

Speaker #5: And maybe as part of that, you know, we did see River in particular decelerate a couple of points versus the last advanced booking per PCD number.

Speaker #5: I think it went from about 12 to closer to 9, whereas ocean was pretty consistent. What's the narrative there? Is that really just about mix, or did river, in fact, sort of slow more so than ocean?

James Hardiman: What is the narrative there? Is that really just about mix or did River, in fact, slow more so than Ocean? Just help us understand those pieces. Thanks.

Speaker #5: Just help us understand those pieces. Thanks.

Speaker #6: Sure. So, we did speak about this in the last quarter call, which is that, you know, we do have a product mix benefit here for the year-to-date curves for 2027.

Linh Banh: Sure. We did speak about this in the last quarter call, which is that, we do have a product mix benefit here for the year-to-date curves for 2027. As we sell more, for example, Egypt, Vietnam, that does heavily weight the price. So that year-over-year it looks much stronger. I think as we continue to sell our bread and butter, which is Europe, as most of you are aware, the average price will start to come to a more reasonable or natural number. Our goal remains mid-single digit yields for both Rivers and Oceans. As it relates to Oceans, the price year-over-year for 2027 did stay around that 12% range. While there may be upside, I think we need to let the booking season develop before we extrapolate trends.

Speaker #6: So, as we sell more— for example, Egypt, Vietnam— that does heavily weigh on the price, so that year over year it looks much stronger. I think as we continue to sell our bread and butter, which is Europe, as most of you are aware, the average price will start to come to a more reasonable or natural number.

Speaker #6: And our goal remains mid-single-digit yields for both rivers and oceans. As it relates to oceans, you know, the price year-over-year for 2027 did stay around that 12% range.

Speaker #6: And while there may be upside, I think we need to let the booking season develop before we extrapolate trends. As we noted, mid-single digits is our goal for net yields, which includes costs such as transportation and air.

Linh Banh: As we noted, mid-single digit is our goal for net yields, which includes costs such as transportation and air. We still do have a good chunk of inventory left to sell. Overall, the current strength is driven by higher pricing and itinerary mix. Our goal remains mid-single digit yield growth.

Speaker #6: And we still do have, you know, a good chunk of inventory left to sell. So overall, I mean, the current strength is driven by higher pricing and itinerary mix.

Speaker #6: But our goal remains mid-single-digit yield growth.

Speaker #3: Thank you. Your next question is coming from Lizzie Dove from Goldman Sachs. Your line is live.

Operator: Thank you. Your next question is coming from Lizzie Dove from Goldman Sachs. Your line is live.

Speaker #2: Hey, good morning. Thanks for taking the question. You talked a bit more about, you know, the offering of more land extensions—your extensions and things like that.

Lizzie Dove: Hey, good morning. Thanks for taking the question. You talked a bit more about the offering of more land extensions, shore extensions, and things like that. Could you maybe share how you are thinking about that longer term and whether from an acquisition perspective, that is something that might fit into the overall portfolio and, especially within the context of, I think you still have about $4 billion of cash, how you think about the relative priorities of capital returns or capital allocation over time. Thanks.

Speaker #2: Could you maybe share how you're thinking about that longer term, and whether—whether from an acquisition perspective, that's something that might kind of fit into the overall portfolio? And, you know, especially within the context of, you know, I think you've still got about $4 billion of cash—how you think about the relative priorities of capital returns or just, yeah, capital allocation over time.

Speaker #2: Thanks.

Speaker #6: Hi, Lizzie. So yeah, we have been quite clear from the start that our focus is really about the destination and the experiences. So our teams have, with that top of mind, when we think about our future itinerary planning, as well as what offerings we have available for either optional shore excursions or pre- and post-excursions when they are in Europe.

Linh Banh: Hi, Lizzie. So yeah, we have been quite clear from the start that our focus is really about the destination and the experiences. Our teams have, with that top of mind, when we think about our future itinerary planning as well as what offerings we have available for either optional shore excursions or pre- and post-excursions when they are in Europe. Having said that, I think this one I will invite Tor into the call because he actually was quite keen on the Zeppelin that we announced. I think he went on it a couple of times. So Tor, do you want to just give a little bit of color on that and also on how we see extensions and other experiences enhancing our core products?

Speaker #6: Having said that, you know, I think with this one, I'll invite Tor into the call because he actually was quite keen on the Zeppelin that we announced.

Speaker #6: I think he went on it a couple of times. So, Tor, do you want to just give a little bit of color on that, and also on how we see extensions and other experiences enhancing our core products?

Speaker #3: Thank you. Your next question is coming from Connor Cunningham from Melius Research. Your line is live.

Operator: Thank you. Your next question is coming from Conor Cunningham from Melius Research. Your line is live.

Speaker #7: I didn't know if Tor wanted to respond there or not.

Conor Cunningham: I did not know if Tor wanted to respond there or not.

Speaker #2: Yeah. Tor, I think you might be on mute. Do you want to respond on the experiences? Anyway, so I'll wait for Tor to unmute, but—well, hang on one second.

Linh Banh: Yeah. Tor, I think you might be on mute. Do you want to respond on the experiences? Anyway, so I will-

Conor Cunningham: All right.

Conor Cunningham: Well, hang on one second. Let me just finish the second portion. On the capital allocation question, we do have a healthy cash balance of USD 4 billion. Our priority, as you can see from our order book, is really to reinvest the cash in the business to generate strong returns. We do have a framework in which we look at all acquisitions. First, it has to be scalable. It has to be able to move. When we think about acquisitions, it is like you have to compare it to our organic growth. It has to be able to generate the same, if not more returns than our ships. It has to be scalable, it has to be margin accretive, and then of course, complementary to the brand and fits within the brand ethos.

Linh Banh: Well, hang on one second. Let me just finish the second portion. On the capital allocation question, we do have a healthy cash balance of USD 4 billion. Our priority, as you can see from our order book, is really to reinvest the cash in the business to generate strong returns. We do have a framework in which we look at all acquisitions. First, it has to be scalable. It has to be able to move. When we think about acquisitions, it is like you have to compare it to our organic growth. It has to be able to generate the same, if not more returns than our ships. It has to be scalable, it has to be margin accretive, and then of course, complementary to the brand and fits within the brand ethos.

Speaker #2: Let me just finish the second portion. So, on the capital allocation question, we do have a healthy cash balance of $4 billion. Our priority, as you can see from our order book, is really to reinvest the cash in the business to generate strong returns.

Speaker #2: This we do have a framework in which we look at all acquisitions. So first, it has to be scalable. So it has to be able to move you know, when we think about acquisitions, it's like you have to compare it to our organic growth.

Speaker #2: So, it has to be able to generate the same, if not more, returns than our ships. It has to be scalable. It has to be margin accretive.

Speaker #2: And then, of course, complementary to the brand and fits within the brand ethos. So, sorry to interrupt, but go ahead with your question.

Linh Banh: Sorry to interrupt, but go ahead in with your question.

Speaker #7: Okay, sorry. Thanks. So maybe just a point of clarification, and then piggybacking on the excursion stuff. But can you—so occupancy in the second quarter for river decelerated year over year, and you're saying there was no impact?

Conor Cunningham: Okay. Sorry. Thanks. Maybe just a point of clarification and then piggyback and just on the excursion stuff. Occupancy in Q2 for River decelerated year-over-year, and you are saying there was no impact. If you could just talk about that. I think it may just be in the context of the supply growth. That is one maybe easy one. Then just on the excursion and shore product, can you just talk about what is actually resonating and where attach rates are today and where you see the opportunity for attach rates, five years from now or so on, something like that? Thank you.

Speaker #7: So, if you could just talk about that. I think it may just be in the context of the supply growth. So that's one, maybe, easy one.

Speaker #7: And then just on the excursion and shore product, can you just talk about what's actually resonating and where attach rates are today, and where you see the opportunity for attach rates?

Speaker #7: You know, five years from now or so on, something like that. Thank you.

Speaker #3: Thank you. Your next question is coming from David Katz from Jefferies.

Operator: Thank you. Your next question is coming from David Katz from Jefferies.

Speaker #2: All right.

Leah Talactac: Sorry.

Leah Talactac: Go ahead, Leah.

David Katz: Go ahead, Leah.

Speaker #6: Sorry.

Leah Talactac: Sorry. Hold on.

Speaker #7: Go ahead, Leah.

Speaker #6: I think I still need to answer the question. Thank you. Apologies for that. For the second quarter of 2026, as we can see from the numbers, we performed quite well in the second quarter.

Leah Talactac: Go ahead. Yeah.

David Katz: Go ahead. Yeah.

Leah Talactac: I think I still need to answer the question. Thank you. Apologies for that. For Q2 2026, as we can see from the numbers, we performed quite well in Q2 for River occupancy. Occupancy was slightly lower than Q2 2025. There was some impact as related to our Egypt cruises, but that itinerary sells very well for us. Well-priced and has done quite well and is doing quite well. As it relates to excursions, we have mentioned this in the past, but I think it was a little lower than 40% of our guests opt to take a pre or post land extension. Obviously, that helps from a margin perspective. In addition to that, what we found is our guests that take a pre or post or optional shore excursions with us, they tend to rate their experience better.

Speaker #6: For river occupancy, occupancy was slightly lower than Q2 2025. There was some impact as it related to our Egypt cruises, but that itinerary sells very well for us.

Speaker #6: Well priced and has done quite well, and is doing quite well. As it relates to excursions, you know, we've mentioned this in the past.

Speaker #6: I think it was slightly, a little lower than 40% of our guests opt to take a pre- or post-land extension. And, obviously, you know, that helps from a margin perspective.

Speaker #6: But in addition to that, what we found is our guests that take a pre- or post- or optional shore excursion with us tend to rate their experience better.

Speaker #6: And so from that perspective, you know, that's really what we want. We want our guests to have a great time. And by adding additional different experiences that our guests can opt to purchase, what we've seen is quality scores for those guests are actually higher.

Leah Talactac: From that perspective, that's really what we want. We want our guests to have a great time. By adding additional different experiences that our guests can opt to purchase, what we've seen is quality scores for those guests are actually higher. Apologies for some of this disconnect, but please go ahead with your question.

Speaker #6: And apologies for some of this disconnect, but please go ahead with your question.

Speaker #7: No, we're going to Leah, we're going to take the cadence back right now, okay? I appreciate you taking my question. What I wanted to ask is, you know, within you know, some perspective on the portion of, you know, bookings that are repeat customers.

David Katz: No, Leah, we're going to take the cadence back right now. Okay?

Leah Talactac: All right.

Leah Talactac: I appreciate you taking my question. What I wanted to ask is within, some perspective on the portion of bookings that are repeat customers. The reason I ask the question is, the degree to which these customers have been on multiple Viking cruises in the past and are having a challenged experience at this time. It may be quite a bit easier to take, given that they've been a repeat customer. Any qualitative sense around what the current book is of repeat customers that have been with you multiple times before would be helpful. Thank you.

David Katz: I appreciate you taking my question. What I wanted to ask is within, some perspective on the portion of bookings that are repeat customers. The reason I ask the question is, the degree to which these customers have been on multiple Viking cruises in the past and are having a challenged experience at this time. It may be quite a bit easier to take, given that they've been a repeat customer. Any qualitative sense around what the current book is of repeat customers that have been with you multiple times before would be helpful. Thank you.

Speaker #7: And the reason I asked the question is, you know, the degree to which these customers have been on multiple Viking Cruises in the past and are, you know, having a challenging experience this time.

Speaker #7: And, you know, it may be quite a bit easier to take, you know, given that they've been a repeat customer. So any qualitative sense around, you know, what the current book is of repeat customers that have been with you multiple times before would be helpful.

Speaker #7: Thank you.

Speaker #2: Sure. So as of last year, so as of 2025—I'm going off memory now, so Lynn, correct me if I'm wrong—but I believe 52% of the guests who traveled with us in the 2025 season were repeat guests.

Leah Talactac: Sure. As of last year, as of 2025, I am going off memory now, so Linh Banh, correct me if I am wrong, but I believe 52% of the guests who traveled with us in the 2025 season were repeat guests. That is a number that we publish every year. That number is quite important to us as well as new to brand, of course. As you grow the fleet, a healthy mix of making sure that you are addressing your addressable market as well as making sure that your guests repeat, that mix is important to continue to grow the capacity. When we think about our product offerings, what would allow guests repeat? It is new itineraries. It is itinerary mixes, new destinations such as India. Egypt has proven very well for us in terms of repeat brand. Then also, these excursions.

Speaker #2: So that's a number that we publish every year, and that number is quite important to us, as well as new-to-brand, of course.

Speaker #2: As you grow the fleet, you know, a healthy mix of making sure that you're addressing your addressable market, as well as making sure that your guests repeat—that mix is important to continue to grow the capacity.

Speaker #2: So, when we think about our product offerings, you know, what would allow guests to repeat? So, it's new itineraries, it's itinerary mixes, new destinations such as India. You know, Egypt has proven very well for us in terms of repeat brand.

Speaker #2: And then also, you know, these excursions—some of our guests have already been on the itineraries and they already have the included excursions. And so when we have optional excursions that they can augment in their cruise, then that gives them something new to experience even though the itinerary is the same.

Leah Talactac: Some of our guests have already been on the itineraries, and they already have the included excursions. When we have optional excursions that they can augment in their cruise, then that gives them something new to experience, even though the itinerary is the same. I think a combination of that, when we think about the 520 unique destinations we go to, when we think about the 21 major rivers. We are in seven continents, we are in all oceans. That portfolio breadth really allows guests to go with us wherever they want to go in the world, to travel with Viking, wherever in the world they want to travel to.

Speaker #2: And I think a combination of that—when we think about, you know, the 520 unique destinations we go to, when we think about the 21 major rivers, we're in seven continents, we're in all oceans—you know, really, that portfolio breadth really allows guests to go with us wherever they want to go in the world, to travel with Viking wherever in the world they want to travel to.

Speaker #2: And that's also where we keep our focus on when we think about operationally what other areas would it be difficult for an individual traveler to go to that our guests, you know, 55 with lots of time, they have you know, they have the time, they have the opportunity, and they have the means to travel.

Leah Talactac: That is also where we keep our focus on when we think about operationally, what other areas would it be difficult for an individual traveler to go to that our guests, 55 with lots of time, they have the time, they have the opportunity, and they have the means to travel. Where else can we reduce the travel friction so that they can essentially travel the world in comfort? That is what we think about when we think about our destinations and our expanded product offerings.

Speaker #2: Where else can we reduce the travel friction so that they can, essentially, you know, travel the world in comfort? So that's what we think about when we think about our destinations and our expanded product offerings.

Speaker #3: Thank you. Your next question is coming from Andrew Gadora from Bank of America. Your line is live.

Operator: Thank you. Your next question is coming from Andrew Didora from Bank of America. Your line is live.

Speaker #8: Hey, good morning, everyone. Maybe just going back to the European rivers again. You have a question for maybe for Lynn. It's when you look back historically at times like this, you know, maybe 2022 or, you know, before that, what kind of impact did you see in future bookings?

Andrew Didora: Hey, good morning, everyone. Going back to the European rivers again, a question for Lynn. When you look back historically at times like this, maybe 2022 or before that, what kind of impact did you see in future bookings? Just trying to frame your commentary about we will be seeing an impact in 2027 and 2028. Just trying to get a sense of what that's looked like historically. Is the impact that you, I think that you said that 50% of cruises are impacted, is that of Q3 cruises? Just curious on how that compared to other times of low water levels. Is this the worst that you've seen? Just trying to put it all into perspective. Thank you.

Speaker #8: I'm just trying to frame your commentary about, you know, when we will be seeing, you know, an impact in 2027 and 2028. I'm just trying to get a sense of what that's looked like historically, and then is the impact that you—I think you said that 50% of cruises are impacted.

Speaker #8: Is that of 3Q Cruises and just curious on how that compared to, you know, other times of low water levels? Is this, you know, is this the worst that you've seen?

Speaker #8: Just trying to put it all into perspective. Thank you.

Speaker #6: Sure. Hi, Andrew. So, as of mid-August, more than 50% of our river capacity PCDs during the third quarter—so July—this really started in July and then into mid-August.

Linh Banh: Sure. Hi, Andrew. As of mid-August, more than 50% of our river capacity PCDs, during the Q3. This really started in July, and then into mid-August. More than 50% of that has been impacted. For those impacted cruises, Leah mentioned, we understand where our guests are coming from. We understand that this is not the experience that they initially purchased. There were some disruptions to their cruise experience. So we are giving vouchers, and that voucher will impact the next booking that they choose to book. Whatever is available or open for sale, which is later in 2026, and really mainly 2027, 2028. What we would say is this low water that's occurring right now is probably historically, I would say compared to other seasons, this is probably more low water than what we've seen in the past.

Speaker #6: So, more than 50% of that has been impacted. And so for those impacted cruises, we have, you know—Leah mentioned—we want our guests, you know, to... we understand where our guests are coming from.

Speaker #6: We understand that this is not the experience that they initially purchased, and so there were some disruptions to their cruise experience. So we are giving vouchers.

Speaker #6: And that voucher will impact the next booking that they choose to book. So whatever is available or open for sale, which is later in 2026 and, you know, really mainly 2027 and 2028.

Speaker #6: What we would say is, this low water that's occurring right now is probably, historically—you know, I would say compared to other seasons, this is probably more low water than what we've seen in the past.

Speaker #6: And so we want to be proactive. We want to ensure our guests, you know, feel good, and we want to at least try to deliver the best experience we can with these conditions.

Linh Banh: We want to be proactive. We want to ensure our guests feel good, and we want to at least try to deliver the best experience we can with these conditions. There will be some impact to the Q3 of 2026 and some impact into future years. That being said, as you can see from our curves, pricing to date has been quite healthy. With this in mind, we still will try to achieve our goal of mid-single-digit yield growth.

Speaker #6: And so, there will be some impact to the third quarter of 2026 and some impact into future years. That being said, as you can see from our curves, pricing to date has been quite healthy.

Speaker #6: And, you know, with this in mind, we still will try to achieve our goal of mid-single-digit yield growth.

Speaker #3: Thank you. Your next question is coming from Richard Clark from Bernstein. Your line is live.

Operator: Thank you. Your next question is coming from Richard Clarke from Bernstein. Your line is live.

Speaker #7: Hi, good morning. Thanks for taking my question. I guess just quickly on the booking curve—obviously, you cut it at the 9th of August.

Richard Clarke: Hi. Good morning. Thanks for taking my question. I guess just quickly on the booking curve. Obviously, you cut it on 9 August. Would you expect that to look meaningfully different if you had cut it today or yesterday? As you are planning going forward, are you happy to treat 2026 as a one-off year? Are you going to operationally change anything, ship capacity, ship in the Danube and Rhine, destinations going to more land-based excursions possible to mitigate if these conditions do repeat more often?

Speaker #7: Would you expect that to look meaningfully different if you'd cut it today or yesterday? And as you're sort of planning going forward, are you happy to treat 2026 as a one-off year, or are you going to sort of operationally change anything?

Speaker #7: Ship capacity—ships in the Danube and Rhine, you know, destinations—going to more land-based excursions. Is it possible to mitigate if these conditions do repeat more often?

Speaker #2: So, I'll address the operational and, you know, I think as I mentioned, river levels naturally fluctuate from year to year. So, some seasons there is high water, some seasons there is low water.

Linh Banh: I will address the operational. I think as I mentioned, river levels naturally fluctuate from year to year. Some seasons there are high water, some seasons there are low water. For the 30 years that we have operated in these rivers, we know this, and so our fleet is specifically designed to navigate through these seasonal variations of water flow. That is where having nearly identical ships actually makes for a better experience in times of whether it is high or low water because the ships are able to meet in the middle and then the guests can then ship swap on a normal variation in terms of water levels. This year has been particularly low. We have also seen this, I believe, in 2018 and 2022. We also did not cancel cruises during those times. This is just a part of operating in the rivers.

Leah Talactac: I will address the operational. I think as I mentioned, river levels naturally fluctuate from year to year. Some seasons there are high water, some seasons there are low water. For the 30 years that we have operated in these rivers, we know this, and so our fleet is specifically designed to navigate through these seasonal variations of water flow. That is where having nearly identical ships actually makes for a better experience in times of whether it is high or low water because the ships are able to meet in the middle and then the guests can then ship swap on a normal variation in terms of water levels. This year has been particularly low. We have also seen this, I believe, in 2018 and 2022. We also did not cancel cruises during those times. This is just a part of operating in the rivers.

Speaker #2: And for the 30 years that we've operated in these rivers, we know this. And so our fleet is specifically designed to navigate through these, you know, seasonal variations of water flow.

Speaker #2: That's where having nearly identical ships actually makes for a better experience in times of whether it's high or low water, because the ships are able to meet in the middle, and then the guests can then ship swap on a normal, you know, variation in terms of water levels.

Speaker #2: Now, this year has been particularly, particularly low. We've also seen this, I believe, in 2018 and 2022. We also did not cancel cruises during those times.

Speaker #2: This is just a part of operating in the rivers. We know that this happens. This is a reality of operating in the rivers. So because of that, our team has been really they have it down to a science of having a combination of operational flexibility, contingency planning, and itinerary adjustments to minimize disruption for our guests.

Linh Banh: We know that this happens. This is a reality of operating in the rivers. Because of that, our team has been really, they have it down to a science of having a combination of operational flexibility, contingency planning, and itinerary adjustments to minimize disruption for our guests.

Leah Talactac: We know that this happens. This is a reality of operating in the rivers. Because of that, our team has been really, they have it down to a science of having a combination of operational flexibility, contingency planning, and itinerary adjustments to minimize disruption for our guests.

Speaker #7: And maybe, Leah, if I can add, I'm finally back online. Of course, we have seen this before. And I think as long as we inform our guests what they can expect, then I think that solves most of the problem.

Tor Hagen: Maybe, Leah, if I can add, I am finally back online. Of course, we have seen this before. I think as long as we inform our guests what they can expect, then I think that solves most of the problem. Of course, we are in a unique position, as Leah said, by having our identical ships so that we can hopefully get away with only one ship swap. I think we are in a very unique position. I see no reason whatsoever for lowering ambitions in terms of what volume on the river should be. As a matter of fact, if one is a little bit contrarian, maybe such a situation as now can create some opportunity to do things that otherwise would have been difficult. Because we are in a very strong financial position, so we might be able to be contrarians, too.

Speaker #7: And of course, we are in a unique position, as Leah said, by having our identical ships, so that we can hopefully get away with only one ship swap.

Speaker #7: So I think we're in a very, very unique position. I see no reason whatsoever for lowering ambitions in terms of what the volume on the river should be.

Speaker #7: As a matter of fact, this one is a little bit contrarian. Maybe a situation like the one we have now can create some opportunities to do things that otherwise would have been difficult.

Speaker #7: Because, of course, we are in a very strong financial position, so we might be able to be contrarian too. But that may be wishful thinking.

Tor Hagen: But that may be wishful thinking.

Speaker #3: Thank you. Your next question is coming from Stephen Grambling from Morgan Stanley. Your line is live.

Operator: Thank you. Your next question is coming from Stephen Grambling from Morgan Stanley. Your line is live.

Speaker #5: Hey, thank you. Maybe two follow-ups. The first one's quick, which is just, on that comment on the cancellations in Q3—I think you said 10 to 12% cancellations?

Stephen Grambling: Hey, thank you. Maybe two follow-ups. The first one's quick, which is just that comment on the cancellations in Q3, I think you said 10% to 12% cancellations. Was that on just the 50% impacted or of the total river? Then second, another follow-up on excursions and extensions, just any sense for how the economics and operations of these extensions work as we try to think about incremental margins? Then just strategically, as we think about the opportunity to expand further that you mentioned, how do you balance that with staying true to the all-inclusive and no upsell associated with the brand? Thank you.

Speaker #5: Was that just on the 50% impacted, or of the total river? And then, second, another follow-up on excursions and extensions: do you have any sense for how the economics and operations of these extensions work, as we try to think about incremental margins?

Speaker #5: And then just strategically, as we think about the opportunity to expand further that you mentioned, how do you balance that with staying true to the all-inclusive and no upsell associated with the brand?

Speaker #5: Thank you.

Speaker #2: Yeah, thanks for the question. So, the clarifying point: the cancellation of 10 to 12% is on the affected 50% of river capacity PCDs. And when we think about the all-inclusive nature of our products, you know, it's still all-inclusive.

Leah Talactac: Yeah. Thanks for the questions. So the clarifying point, the cancellation of 10% to 12% is on the affected 50% of river capacity PCDs. When we think about the all-inclusive nature of our products, it's still all-inclusive. It is the guest's discretion whether or not they want to augment their cruises. But if they don't want to open their wallet again when they come on board, then they don't have to. So we believe that still, it's a balance between the all-inclusive nature, which it is, with all of the amenities that we have and all of the included beer, wine, included excursions. But it's also a balance of making sure that guests are able to experience what they want to experience.

Speaker #2: It is at the guests' discretion whether or not they want to augment their cruises. But if they don't want to open their wallet again when they come on board, then they don't have to.

Speaker #2: So that we believe that that's still it's a balance between you know, the all-inclusive nature, which it is, you know, with all of the amenities that we have and all of the included beer, wine, included excursions.

Speaker #2: But it's also a balance of making sure that guests are able to experience what they want to experience beyond what is included. And as Lynn mentioned, you know, when we do have these additional things that guests can choose from, it does increase the quality scores.

Leah Talactac: beyond what is included. As Linh mentioned, when we do have these additional things that guests can choose from, it does increase the quality scores. We also see that the guests also want to have a choice. I will turn it over to Linh on your question about extensions.

Speaker #2: So we also see that the guests want to have a choice. And then I'll turn it over to Lynn for your question about extensions.

Speaker #6: Sure. So, I mean, I think, you know, as mentioned earlier, plus or minus 40% of our guests do opt to purchase a pre- or post-extension.

Linh Banh: Sure. I think, as mentioned earlier, plus or minus 40% of our guests do opt to purchase our pre- or post-extension. A good amount of our guests do add an optional shore excursion. That is already reflected in our net yields that you see today. I think over time, it will contribute, and we will continue to provide different options for our guests. As you mentioned, we are all-inclusive, so this is up to the guests whether or not they would like to opt in for more. We are constantly looking at whether it is our deployment, our itineraries, and what it provides versus what we can also add incrementally. Overall, at the end of the day, what we want is our guests to have a great experience with Viking.

Speaker #6: And, you know, a good amount of our guests do add an optional shore excursion, so that's already reflected in our net yields that you see today.

Speaker #6: I think, over time, you know, it will contribute. And we will continue to provide different options for our guests. But as you mentioned, you know, we are all-inclusive.

Speaker #6: So, this is up to the guests whether or not they would like to opt in for more. We're constantly looking at whether it's our deployment or itinerary—or itineraries—and what it provides versus what we can also add incrementally.

Speaker #6: So, overall, at the end of the day, what we want is for our guests to have a great experience with Viking.

Operator: Thank you. Your next question is coming from Meredith Jensen from HSBC. Your line is live.

Speaker #3: Thank you. Your next question is coming from Meredith Jensen from HSBC. Your line is live.

Speaker #4: Good morning. Thank you. I was hoping you might speak a little bit more about the other portion of revenues, which is obviously also performing very well. Maybe you could sort of unpack some of the drivers there.

Meredith Jensen: Good morning. Thank you. I was hoping you might speak a little bit more about the other portion of revenues, which is obviously also performing very well. Maybe if you could just unpack some of the drivers there and including how the US product, Mississippi and Ohio Rivers are performing as well, given everything going on in the world. It would be great to hear about that as well. Thank you.

Speaker #4: And including, you know, how the U.S. product, you know, Mississippi and Ohio Rivers, are performing as well, given everything going on in the world.

Speaker #4: It would be great to hear about that as well. Thank you.

Speaker #6: Hi Meredith, hope you're well. So, in our other segment, it's a mix of a few things. As you noted, it is the Mississippi, it is our Expedition product.

Linh Banh: Hi, Meredith. Hope you are well. In our other segment is a mix of a few things. As you noted, it is the Mississippi, it is our Expedition product, and it is our China outbound effort. So taking our Chinese-speaking guests to Europe. In Q2, we did bring on the Viking Yi Dun. The Viking Yi Dun will start operating for our Chinese guests. Over the summer, we did take that ship to Europe, so we are quite excited about that opportunity. The growth there you see really is reflective of that. We have currently today four long ships operating in Europe for our Chinese-speaking guests and now the Viking Yi Dun for our ocean-going itineraries. I do not know, Tor, if you would like to add anything on that effort.

Speaker #6: And it is our China outbound effort—so taking our Chinese-speaking guests to Europe. And so, in the second quarter, we did bring on the Yiden.

Speaker #6: And the Yiden will start operating for our Chinese guests. Over the summer, we did take that ship to Europe, so we are quite excited about that opportunity.

Speaker #6: So the growth there you see really is reflective of that. You know, we currently have four Longships operating in Europe for our Chinese-speaking guests.

Speaker #6: And now the yield for our ocean-going itineraries. I don't know, Tora, if you would like to add anything on that effort.

Speaker #7: Sure. I've been spending a fair amount of time on our China outbound business, which, of course, we operate very differently from anybody else. We have the benefit that we can start with our Chinese-owned river ships in Europe.

Tor Hagen: Sure. I have been spending a fair amount of time on our China outbound business, which, of course, we operate very differently from anybody else. We have the benefit that we can start with our river ships in Europe, where we have all Chinese staff. The same model as we did when we started Americans on the rivers. They then come and feel at home on the Chinese-speaking and Chinese food ships in Europe. Our ratings are very, very high. As it turned out, we took the Viking Yi Dun, and now deploy that in Europe too. So we fly the Chinese across to here, and then out to Europe. I think the reactions have been very positive. I think that this ought to be a real opportunity for us in the medium term, I would say.

Speaker #7: Where we have all Chinese staff, and the same model as we did when we started Americans on the rivers. They then come and feel at home on the Chinese-speaking and Chinese-food ships in Europe.

Speaker #7: And our ratings are very, very high. As it turned out, we took the Viking Eden and now deploy that in Europe too. So we fly the Chinese across to here.

Speaker #7: And they now see Europe. I think it's the reactions have been very positive. And I think that that could be this ought to be an a real opportunity for us in the medium term, I would say.

Speaker #3: Thank you. Your next question is coming from Alex Bridgemall from Rothschild & Company. Your line is live.

Operator: Thank you. Your next question is coming from Alex Bridgeman from Rothschild & Co. Your line is live.

Speaker #5: Thank you so much. Maybe I'll try my luck and do a follow-on to the previous question, and then one original one. So, on China, there was also an opportunity for sort of domestic China business.

Alex Bridgeman: Thank you so much. Maybe I will try my luck and do a follow-on to the previous question and then one original one. On China, there was an opportunity for sort of domestic China business. Could you talk about any progress you have made on that, the opportunity? In terms of cruising domestically, also how the India itineraries have started, obviously not for domestic business, but how the demand for those is going and how the booking curves are looking for those. Just in terms of Q3, it is obviously very hard to model, but it feels like we can do a job on occupancy because we just take the 10 to 12 of the 50 of the proportion, which is river. Could you just help us to understand what happens with actual costs?

Alex Brignall: Thank you so much. Maybe I will try my luck and do a follow-on to the previous question and then one original one. On China, there was an opportunity for sort of domestic China business. Could you talk about any progress you have made on that, the opportunity? In terms of cruising domestically, also how the India itineraries have started, obviously not for domestic business, but how the demand for those is going and how the booking curves are looking for those. Just in terms of Q3, it is obviously very hard to model, but it feels like we can do a job on occupancy because we just take the 10 to 12 of the 50 of the proportion, which is river. Could you just help us to understand what happens with actual costs?

Speaker #5: Could you talk about any progress you've made on that, the opportunity? And then, in terms of cruising domestically, also how the India itineraries have started—obviously not a domestic business—but how the demand for those is going and how the booking curves are shaping up.

Speaker #5: Are you looking for those? And then just in terms of Q3, it's obviously very hard to model, but it feels like we can do a job on occupancy, because we just take the 10 to 12 of the 50 of the proportion, which is river.

Speaker #5: But could you just help us to understand what happens with actual costs? Obviously, you've built an incredibly resilient business for ship swaps, but are there other costs that we should think about within just Q3 specifically, outside of just the lower amount of people that will be on board if there's been a cancellation?

Alex Bridgeman: Obviously, you've built an incredibly resilient business for ship swaps, but are there other costs that we should think about within Q3 specifically, outside of the lower amount of people that will be on board if there's been a cancellation? Thank you so much.

Alex Brignall: Obviously, you've built an incredibly resilient business for ship swaps, but are there other costs that we should think about within Q3 specifically, outside of the lower amount of people that will be on board if there's been a cancellation? Thank you so much.

Speaker #5: Thank you so much.

Speaker #7: Could I take the China follow-up first?

Tor Hagen: Should I take the China follow-up first?

Speaker #2: Sure.

Linh Banh: Sure.

Tor Hagen: Again, we did operate in China for Chinese or in Chinese waters for Chinese. But the unfortunate thing is that the people who operate there locally, I'll not mention names, but it's a fiercely price-competitive market, and they, to a large extent, have been selling the American-style product to Chinese customers through wholesalers, where the wholesalers are the price setters, and the cruise lines really have to take whatever is left over. Our strategy has been very different and following what we did in the US. Because what we do in China is end up in YouTube. We market directly to the Chinese consumer, and that means that we own them and we set the price, and we're not subject to any of the shenanigans that tour operators implement. It means it takes us a bit longer time to get there.

Speaker #7: Again, we did operate in China for Chinese, or in Chinese waters for Chinese. But the unfortunate thing is that the people who operate there locally—I'll not mention names—but it's a fiercely price-competitive market.

Speaker #7: And they, to a large extent, have been selling the so-called American-style product to Chinese customers through wholesalers. But the wholesalers are the price setters.

Speaker #7: And the cruise lines really have to take whatever is left over. Our strategy has been very different, and follows what we did in the US.

Speaker #7: But what we're doing in China, this may not be new to you. We market directly to the Chinese consumer, and that means that we own them.

Speaker #7: And we set the price, and we're not subject to any of the shenanigans that tour operators implement. It means it takes us a bit longer to get there.

Speaker #7: But if we get—I say if, when we get there—then I think it’ll be a much more profitable business than competing in local waters with the big US guys.

Tor Hagen: But if, when we get there, then I think it'll be a much more profitable business than competing in local waters with the big US guys or for that matter, Chinese guys. We'll be the European cruise line for Chinese tourists. I think that could be very interesting.

Speaker #7: Or, for that matter, Chinese guests. So, we'll be the European cruise line for Chinese tourists. I think that could be very, very interesting.

Speaker #2: All right. And the other question was India. So, how is India itinerary tracking? We announced India for the first time in 2025, to start sailing in 2027.

Leah Talactac: All right. The other questions were India. How is India itinerary tracking? We announced India for the first time in 2025 to start sailing in 2027. We are pleased to report that for the 2027 and 2028 seasons, the India itinerary is completely sold out. They are full.

Speaker #2: So we are pleased to report that, for the 2027 and 2028 seasons, the India itinerary is completely sold out. So, they're full.

Speaker #7: Leah, Leah, this sounds like somebody trying to get into the river cruise business. I'm talking about how quickly—how quickly they sold out their stuff.

Tor Hagen: Leah, this sounds like somebody trying to get into the river cruise business and talking about how quickly they sold out their stuff. Be careful.

Speaker #2: It's part of our part of the course for us, Tor. So no need for a for a press release on it.

Leah Talactac: It is par for the course for us, Tor, so no need for a press release on it.

Tor Hagen: Okay. I am sorry.

Speaker #7: Okay, I'm sorry.

Speaker #2: And then 2029, well, you know, we haven't released any figures on that. 2029 is also selling quite well. And as far as the expenses for low water, you know, the situation is ongoing.

Leah Talactac: And then 2029, while we haven't released any figures on that, 2029 is also selling quite well. As far as the expenses for low water, the situation is ongoing. It started in mid-July, it's now mid-August. I am happy to say, and Tor verified it, that it is raining in Europe. We are optimistic that we will turn the corner. Having said that, it is a bit premature to provide any figures. We will see some incremental expenses from transportation impacting adjusted gross margin, then some operational expenses impacting vessel expenses. But we'll have an update for that in Q3.

Speaker #2: So we are, you know, it started mid-July. It's now mid-August. So I'm happy to say—and Tor verified it—that it is raining in Europe.

Speaker #2: So, we are optimistic that we will turn the corner. But having said that, it is a bit premature to provide any figures. We will see some incremental expenses from transportation impacting adjusted gross margin.

Speaker #2: And then some operational expenses are impacting vessel expenses. But we'll have an update on that in Q3.

Speaker #3: Thank you. I'll now turn the conference back over to Leah Talactac, Viking's President and CEO, for closing remarks.

Operator: Thank you. I'll now turn the conference back over to Leah Talactac, Viking's President and CEO, for closing remarks.

Speaker #8: Maybe, Leah, I could make a couple of comments before you close the books?

Tor Hagen: Maybe, Leah, I could make a couple of comments before you close the books.

Speaker #2: Sure.

Leah Talactac: Sure.

Speaker #8: Because of course, if you're looking at our presentation, we see or your presentation rather, we see the we see the phenomenal order book we have.

Tor Hagen: Because, of course, if you look at our presentation, or your presentation rather, we see the phenomenal order book we have on slide 14, I think it is. I think when we talk about water levels and all that, it's sometimes counterintuitive to talk about the value of having such an order book. But I'm so sure that this order book will be very good for us. As long as we make sure we spend enough on marketing, treat our guests well, and we have very good contract prices with the yards, then I think this will be one of the main assets of Viking, if I may say so.

Speaker #8: On slide 14, I think it is. And I think it's, you know, when we talk about water levels and all that, it's sometimes counterintuitive to talk about the value of having such an order book.

Speaker #8: But I'm so sure that this order book will be very good for us. And as long as we make sure we spend enough on marketing, treat our guests well, and we have very good contract prices with the yards, then I think this will be one of the main assets of Viking, if I may say so.

Speaker #2: Yes. Thank you, Tor. That that sums up how our position and again, you know, these are historically low water levels. But this is something that we are experts at at dealing with.

Leah Talactac: Yes. Thank you, Tor. That sums up our position. Again, these are historically low water levels, but this is something that we are experts at dealing with. It is something that we deal with from time to time, whether it is low or high water. Fortunately, our operations team is quite excellent at handling it. Having said that, thank you, everyone, for joining us today. We apologize for the various hiccups we have had throughout this call. We appreciate you bearing with us. Thank you, and we will speak to you next quarter. Thanks, and have a great day.

Speaker #2: You know, it's something that we deal with from time to time, whether it's low or high water. Fortunately, our operations team is quite excellent at handling it.

Speaker #2: Having said that, thank you, everyone, for joining us today. We apologize for the various hiccups we've had throughout this call. We appreciate you bearing with us.

Speaker #2: And thank you. We will speak to you next quarter. Thanks, and have a great day.

Tor Hagen: Thank you.