CCL · Q3 2025 Earnings

Bullish

Carnival Corporation

Reported December 19, 2025

30-second summary

Carnival closed FY2025 with Q4 adjusted EPS of $0.34 (+143% YoY) vs. the ~$0.23 guide issued in September — a $0.11 beat that took FY adjusted EPS to $2.25 vs. the implied $2.14, the fourth consecutive quarterly raise. Two structural milestones land alongside the print: the quarterly dividend is reinstated at $0.15/share (record Feb 13, 2026; payable Feb 27, 2026) — the first payout since the 2020 suspension — and Fitch has rated Carnival investment grade at 3.4x net debt/adjusted EBITDA, a nearly one-turn improvement from 2024. The forward guide reinforces both: FY2026 adjusted net income of ~$3.45B (+12% YoY) on less than 1% capacity growth, ROIC expected to exceed 13.5%, and 2026 already two-thirds booked at higher prices. Pricing — not capacity — is funding another double-digit earnings year, and the balance sheet has finally caught up.

Headline numbers

EPS

Q3 FY2025

$0.34

Revenue

Q3 FY2025

$6.33B

+6.6% YoY

Gross margin

Q3 FY2025

26.8%

Free cash flow

Q3 FY2025

$0.01B

Operating margin

Q3 FY2025

11.6%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$6.33B	+6.6%	$8.15B	-22.4%
EPS	$0.34	—	$1.43	-76.2%
Gross margin	26.8%	—	—	—
Operating margin	11.6%	—	27.8%	-1623bps
Free cash flow	$0.01B	—	$0.73B	-98.4%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS (non-GAAP)	Q4 FY2025	Approx. $0.23	$0.34	+$0.11 above guide	Missed
Revenue	FY 2025	Not explicitly stated	$26.622 billion	6.4% YoY growth	Met
Net Yields YoY Growth (constant currency)	FY 2025	Approx. +5.3%	Approx. +5.4% (per gross margin yields metric)	+0.1 pts above guidance	Beat
Adjusted Cruise Costs Excluding Fuel per ALBD YoY Growth (constant currency)	FY 2025	Approx. +3.3%	Approx. +0.5% (Q3 metric suggests full-year near or below low end)	-2.8 pts below guidance (beat)	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS (non-GAAP)	Q1 FY2026	Approx. $0.17	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS (non-GAAP)	FY 2025	$2.14	$2.25	+$0.11	Raised
Adjusted EBITDA	FY 2025	Approx. $7.05 billion	Approx. $7.63 billion	+$0.58 billion (+8.2%)	Raised

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Passenger ticket revenue	$4.053B	+5.2%
Onboard and other revenue	$2.277B	+9.3%

Platform metrics

Q3 FY2025

Segment	Q3 FY2025
Available Lower Berth Days (ALBDs)	24.1 million
Occupancy percentage	102%
Net yields per ALBD (constant currency)	$200.84
Gross margin yields per ALBD	$70.20
Adjusted cruise costs excluding fuel per ALBD (constant currency)	$121.83
Customer deposits	$7.2 billion

Profitability

Q3 FY2025

Segment	Q3 FY2025
Adjusted EBITDA	$1.477 billion
Adjusted EBITDA margin	23.3%

Management tone

Q2 2025 ("SEA Change cleared 18 months early") → Q3 2025 ("nearly half of 2026 booked, 2027 setting records") → Q4 2025 ("2026 will surpass 2025, double-digit earnings growth ahead, ROIC closing in on 20-year high, dividend reinstated").

No transcript was available for this filing; tone analysis is constrained to press-release language. The arc across three quarterly releases is one of expanding forward visibility paired with tightening capacity. Last quarter the strongest forward line was "nearly half of 2026 booked at historical high prices." This quarter the disclosure is materially upgraded: "We remain at our highest booked occupancy for the upcoming year at about two-thirds booked at higher prices… well positioned to top 2025's record yields." Between September and December, the booked share of 2026 moved from ~50% to ~67% while pricing held — that is the cleanest possible bull signal a cruise operator can deliver on a Q4 print.

The second shift is the explicit return of a long-term framework. Q2 disclosed that the SEA Change targets had been cleared; Q3 had no successor; this release frames FY2026 ROIC ">13.5%, closing in on our 20-year high" as the working anchor. It is not yet a new multi-year framework with named targets, but it is the first time since SEA Change cleared that management has put a forward ROIC figure on the page.

The third — and loudest — shift is the capital-return restart. Bernstein frames the dividend reinstatement as the byproduct of clearing the investment-grade leverage threshold and completing $19B of refinancing in under a year, with $10B+ of debt reduced since the peak. After six years of suspension, the $0.15/share quarterly payout is small in absolute dollars but enormous as a signal: management believes cash generation is now sustainably sufficient to fund a dividend through a cycle.

The fourth tonal note is the new "normalized" framing on yields and costs. The release explicitly differentiates headline yield growth (~+2.5%) from normalized (~+3.0%), and headline cost growth (~+3.25%) from normalized (~+2.5%). Introducing a normalization adjustment in the FY2026 framework is a soft signal that management wants investors comparing 2026 to a cleaner 2025 baseline — worth watching whether the Q1 call quantifies the adjustment in detail.

Answers to last quarter's watch list

Q4 adjusted EPS vs. ~$0.23 guide and FY landing vs. ~$2.14 — Q4 adjusted EPS came in at $0.34, a $0.11 (48%) beat. FY adjusted EPS closed at $2.25, $0.11 above the implied $2.14. The four-quarter beat-and-raise cadence held cleanly. Status: Resolved positively

FY2026 first guide on the Q4 call — Guide came in at ~$2.48 adjusted EPS, ~$3.45B adjusted net income (+12% YoY), and ~$7.63B adjusted EBITDA (~+6% headline vs FY2025's $7.18B; ~+8% normalized). The +12% net income growth comes on <1% capacity growth — pricing power is intact. Status: Resolved positively

Successor to SEA Change framework — Partial. Management put ROIC ">13.5%, closing in on our 20-year high" on the page as the forward anchor, but no multi-year named framework with leverage, capital-return, and ROIC targets has been disclosed. Status: Continue monitoring

Net debt / adjusted EBITDA progression from 3.6x — Net debt/adjusted EBITDA landed at 3.4x, a nearly one-turn improvement YoY, and Fitch rated the credit investment grade (S&P one notch away, positive outlook). The Board reinstated the quarterly dividend at $0.15/share (record Feb 13, 2026; payable Feb 27, 2026) — the first payout since 2020. Status: Resolved positively

2027 booking-curve language stickiness — The release noted "record booking volumes for 2026 and 2027 sailings" over the last three months, but the explicit "2027 setting records" disclosure from Q3 was not repeated as a standalone forward line. Forward language consolidated around 2026 ("two-thirds booked at higher prices"). Status: Partially resolved

What to watch into next quarter

Q1 FY2026 adjusted EPS vs. ~$0.17 guide and net yields cc vs. +1.6% guide — the +1.6% yield guide is materially below the +5.4% FY2025 yield level. Either it is a conservative anchor that gets beaten (continuing the cadence), or Q1 is genuinely the trough of the 2026 yield curve. The Q1 print is the cleanest test of whether the FY2026 +2.5% yield guide is sandbagged.

Q1 adj. cost ex-fuel cc vs. +5.9% guide — the +5.9% Q1 cost growth is the highest quarterly cost growth Carnival has guided in recent memory. If it lands at +5.9% with yields at +1.6%, Q1 margin per ALBD compresses meaningfully. Management attributes the spike to expense timing between quarters; watch whether the FY +3.25% headline holds as the year progresses.

2026 booked-share progression past two-thirds and pricing posture — at 67% booked entering FY2026, the back half of the booking curve fills in Q1/Q2 2026. Watch whether Q1 release language sustains "higher prices" or softens to "in line with."

Capital-return cadence post-reinstatement — with the initial $0.15/share dividend declared, watch whether management signals a dividend growth path, a buyback authorization, or a leverage floor at which incremental return accelerates. The first post-reinstatement quarter is the natural venue for a fuller capital-allocation framework.

DLC unification / Bermuda redomiciliation execution — February shareholder materials, April shareholder votes, Q2 2026 targeted close. Watch for any conditionality risk (UK court sanction, regulatory) and the index-inclusion implications once a single NYSE listing exists.

Whether the "normalized" yield/cost framing becomes the headline metric — the introduction of a normalization adjustment alongside FY2026 guidance is a disclosure shift. Watch whether Q1 reports against the headline or normalized number — that will signal which metric management wants the market to weight.

Sources

Carnival Corporation Q4 FY2025 earnings release (8-K), filed 2025-12-19 — https://www.sec.gov/Archives/edgar/data/815097/000162828025058106/a20254qearningsrelease8-k.htm
Carnival Corporation Q3 FY2025 earnings release (8-K), filed 2025-09-29 — used for prior-guide reference points.

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