Jewel of the Seas visiting the Historic port of Liverpool, photo credit Spacejunkie2 Flickr

Royal Caribbean Group today reported first quarter Earnings per Share (“EPS”) of $2.70 and Adjusted EPS of $2.71, according to a press release.

These results were better than the company’s guidance due to stronger-than-expected pricing on close-in demand and lower costs, mainly due to timing. The company is increasing its full year 2025 Adjusted EPS guidance to $14.55 to $15.55. The increase in earnings expectations is driven by the better-than-expected revenue performance in the first quarter and the benefit of currency exchange rates and lower fuel costs for the remainder of the year.

“Our strong first quarter results are a testament to the enduring appeal and attractive value proposition of our leading brands and the incredible vacations they deliver,” said Jason Liberty, president and CEO, Royal Caribbean Group. “As we navigate the complexities of the current macroeconomic landscape, we remain focused on what we can control — delivering the best vacation experiences, optimising revenue, and managing costs, while continuing to invest in our future and drive further differentiation. With our industry-leading brands, state-of-the-art ships, exclusive destinations, and a fortified balance sheet, we will continue dreaming and innovating to win a greater share of the growing $2 trillion global vacation market.”

First Quarter 2025:

• Load factor in the first quarter was 109%.
• Gross Margin Yields were up 13.9% as-reported. Net Yields were up 4.7% as-reported and 5.6% in Constant Currency.
• Gross Cruise Costs per Available Passenger Cruise Days (“APCD”) decreased 1.1% as-reported. Net Cruise Costs (“NCC”), excluding Fuel, per APCD decreased 0.3% as-reported and increased 0.1% in Constant Currency.
• Total revenues were $4.0 billion, Net Income was $0.7 billion or $2.70 per share, Adjusted Net Income was $0.7 billion or $2.71 per share, and Adjusted EBITDA was $1.4 billion.

Full Year 2025 Outlook:

• Net Yields are expected to increase 2.5% to 4.5% as-reported (2.6% to 4.6% in Constant Currency).
• NCC, excluding Fuel, per APCD are expected to be 0.1% to 1.1% as-reported and (0.1%) to 0.9% in Constant Currency.
• Adjusted EPS is expected to grow approximately 28% year-over-year and be in the range of $14.55 to $15.55.

First Quarter 2025 Results

Net Income for the first quarter of 2025 was $0.7 billion or $2.70 per share, compared to Net Income of $0.4 billion or $1.35 per share for the same period in the prior year. Adjusted Net Income was $0.7 billion or $2.71 per share for the first quarter of 2025, compared to Adjusted Net Income of $0.5 billion or $1.77 per share for the same period in the prior year. The company also reported total revenues of $4.0 billion and Adjusted EBITDA of $1.4 billion.

Capacity for the first quarter was up 3% year over year, and the company delivered memorable vacations to 2.2 million guests, a 9% increase year over year. Gross Margin Yields increased 13.9% as-reported, and Net Yields increased 4.7% as-reported (5.6% in Constant Currency), when compared to the first quarter of 2024. Load factor for the quarter was 109%. Net Yield growth exceeded the company’s guidance mainly due to higher pricing across key products driven by strong close-in demand.

Gross Cruise Costs per APCD decreased 1.1%  as-reported, compared to the first quarter of 2024. NCC, excluding Fuel, per APCD decreased 0.3% as-reported (and increased 0.1% in Constant Currency), when compared to the first quarter of 2024.

Update on Bookings

During the first quarter, the company took record bookings during the WAVE season. Additionally, during April, the company’s bookings were greater than the same period last year, including continued strength in close-in bookings. Booked load factors remain in line with prior years and at higher rates. Guest spending onboard and pre-cruise purchases continue to exceed prior years, driven by greater participation at higher prices. To account for broader external factors, the company has expanded its guidance ranges in response to the complexity of the current macroeconomic landscape.

“Bookings for 2025 have remained on track, cancellation levels are normal, and we continue to see excellent close-in demand”, said Jason Liberty, president and CEO, Royal Caribbean Group. “This year continues our guest experience innovation with the debut of Star of the Seas, Celebrity Xcel, and the opening of Royal Beach Club Paradise Island by year-end – all of which continue to generate consumer excitement and strengthen our competitive moat.”

The cadence of yield growth throughout the year, as expected, is driven by the timing of new hardware entering service, with the arrival of Star of the Seas in late summer and the related ramp-up of load factors, as is typical for new ship launches.

Second Quarter 2025

Capacity in the quarter is expected to increase 6%, driven by lower dry dock days and a full year of Utopia of the Seas, compared to the second quarter 2024. Net Yields are expected to increase 4.4% to 4.9% as-reported and 4.3% to 4.8% in Constant Currency as compared to the same period in the prior year. The expected growth in yield is driven by healthy demand across all key products and onboard spend, both from new and like-for-like hardware.

NCC, excluding Fuel, per APCD, is expected to increase 4.1% to 4.6% as reported and 3.7% to 4.2% in Constant Currency compared to the same period in the prior year. Approximately 140 bps of cost growth is attributable to the timing shift from the first quarter.

Based on current fuel pricing, interest rates, currency exchange rates, and the factors detailed above, the company expects second quarter Adjusted EPS to be between $4.00 and $4.10.

Fuel Expense

Bunker pricing, net of hedging, for the first quarter was $655 per metric ton, and consumption was 423,000 metric tons.

The company does not forecast fuel prices, and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on current fuel prices, the company has included $286 million of fuel expense in its second quarter guidance at a forecasted consumption of 428,000 metric tons, which is 59% hedged via swaps. Forecasted consumption is 59%, 55%, 45%, and 15% hedged via swaps for 2025, 2026, 2027, and 2028, respectively. The annual average cost per metric ton of the hedge portfolio is approximately $487, $476, $393, and $426 for 2025, 2026, 2027, and 2028, respectively.