Carnival Corp. (CCL) Q1 2025 Earnings Call Transcript

Carnival Corp. (CCL -0.67%)
Q1 2025 Earnings Call
Mar 21, 2025, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the Carnival Corporation & plc’s conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded.

It’s now my pleasure to introduce your host, Beth Roberts, senior vice president, investor relations. Thank you, Beth. You may begin.

Beth Roberts — Senior Vice President, Investor Relations

Thank you. Good morning and welcome to our first quarter 2025 earnings conference call. I’m joined today by our CEO, Josh Weinstein; our chief financial officer, David Bernstein; and our chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking.

Therefore, I will refer you to the forward-looking statement in today’s press release. All references to ticket prices, yields, and cruise costs without fuel will be in constant currency unless otherwise stated. References to yields will be on a net basis. References to cruise costs without fuel, EBITDA, net income, and ROIC will be on an adjusted basis unless otherwise stated.

All of these references are non-GAAP financial measures defined in our earnings press release. A reconciliation to the most directly comparable U.S. GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website, where our earnings press release and investor presentation can be found.

With that, I’d like to turn the call over to Josh.

Josh Weinstein — President, Chief Executive Officer, and Chief Climate Officer

Thanks, Beth. Once again, we delivered a fantastic quarter, this time hitting first quarter high-water marks for revenue, EBITDA, EBITDA per ALBD, operating income, and customer deposits. Net income came in more than $170 million better than guidance as we outperformed across the board, led by incredibly strong demand throughout our portfolio. We achieved a robust 7.3% yield increase, smashing our yield guidance, on top of last year’s 17% yield improvement.

Both ticket and onboard equally outperformed on very strong close-in demand, which speaks to the strength of our consumer. Unit costs also came in better than expected, mainly due to timing between the quarters. This resulted in a near doubling of operating income for the quarter and EBITDA that reached $1.2 billion, approaching a 40% year-over-year increase. Operating margins and EBITDA margins each improved over 400 basis points year over year, with both of these now surpassing 2019 levels.

For the full year and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by half a point to 4.7% based on our strong first quarter results while affirming yield expectations for the remainder of the year. In addition, David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone. Combined, this successful execution has enabled us to take up our earnings guidance for the year by $185 million. 2025 remains on track to be another very strong year for our brands, with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth, delivering approximately $600 million incrementally to the bottom line, more than a 30% improvement from 2024.

And that is essentially on flat capacity growth. Achieving our March guidance will also result in reaching both of our 2026 SEA Change financial targets one year early, with ROIC hitting 12% and EBITDA per ALBD more than 50% higher than just two years ago, taking each of these two metrics to levels not seen in the better part of 20 years. At the same time, we’re also closing in on our 2026 greenhouse gas target with an over 19% reduction in carbon intensity compared to 2019. We’re generating demand well in excess of our very limited inventory remaining, which has been driving strong pricing for the remainder of the year while also building demand for future years.

In fact, we’re at historical high prices across all core programs for 2025 and all quarters of the year, while booking volumes for 2026 sailings and beyond taken during the first quarter also reached an all-time high. We were very well positioned going into wave this year, and we exited with over 80% of the year on the books at higher prices and with a booking curve that is still the farthest out on record. We have no plans to let up anytime soon. As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during wave season to fuel more broad-based consideration for cruise travel and keep the strong momentum going.