Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

RCL · Q1 2026 Earnings

Royal Caribbean Group

Reported April 30, 2026

30-second summary

Royal Caribbean delivered Q1 non-GAAP EPS of $3.60, $0.37 above the midpoint of the $3.18–$3.28 guide, on revenue of $4.45B (+11.3% YoY) and load factor of 109%. But the headline is the FY2026 cut: adjusted EPS guidance trimmed to $17.10–$17.50 from $17.70–$18.10 (–$0.60 midpoint), with ~$0.62/share of fuel headwind and a $0.12/share TUI Cruises JV headwind, partially offset by lower non-fuel costs and buybacks. The "$17 handle" survives, but the Q4 anchor of $17.90 midpoint is gone, and the net yield CC ceiling has been trimmed by Mediterranean disruption.

Headline numbers

EPS

Q1 FY2026

$3.60

Revenue

Q1 FY2026

$4.45B

+11.3% YoY

Gross margin

Q1 FY2026

39.2%

Free cash flow

Q1 FY2026

$1.33B

Operating margin

Q1 FY2026

26.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$4.45B	+11.3%	$4.26B	+4.5%
EPS	$3.60	—	$2.80	+28.6%
Gross margin	39.2%	—	36.7%	+252bps
Operating margin	26.1%	—	21.9%	+421bps
Free cash flow	$1.33B	—	—	—

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	Q1 FY2026	$3.18 to $3.28	$3.60	+$0.32–$0.42 above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	Q2 FY2026	$3.83 to $3.93	—
Net Yields growth vs. 2025 (as-reported)	Q2 FY2026	Approximately 0.9%	—
Net Yields growth vs. 2025 (Constant Currency)	Q2 FY2026	Approximately 0.2%	—
Net Cruise Costs per APCD ex. Fuel growth (as-reported)	Q2 FY2026	4.9% to 5.4%	—
Net Cruise Costs per APCD ex. Fuel growth (Constant Currency)	Q2 FY2026	4.6% to 5.1%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$17.70 to $18.10 (midpoint $17.90)	$17.10 to $17.50 (midpoint $17.30)	–$0.60 at midpoint (–$0.30 low / –$0.60 high)	Lowered
Net Yields growth (Constant Currency)	FY2026	1.5% to 3.5%	1.5% to 2.5%	–1.0 percentage point at high end	Lowered
Net Cruise Costs per APCD ex. Fuel growth (Constant Currency)	FY2026	0.0% to 1.0%	Approximately flat	Narrowed to flat from 0.0%–1.0% (lower midpoint and range)	Raised

Reaffirmed unchanged this quarter: Revenue growth (Roughly 10% year over year)

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Net Yields	$268.23 per APCD
Net Yields Growth YoY	3.6% as-reported (2.0% constant currency)
Gross Margin Yields Growth	6.9% as-reported
Load Factor	109%
Capacity Growth YoY	8% (full year guidance 6.7%)

Profitability

Q1 FY2026

Segment	Q1 FY2026
Net Cruise Costs per APCD ex. Fuel Growth	0.6% as-reported (down 0.5% constant currency)
Adjusted EBITDA	$1.702 billion
Adjusted EBITDA Margin	38.2%

Management tone

Q2-2025: close-in demand acceleration → Q3-2025: "$17 handle" and "anemic cost growth" → Q4-2025: record wave, formal $17.90 midpoint → Q1-2026: "we have turned the corner" but fuel, TUI, and Mediterranean force a cut.

Three quarters ago Mediterranean was embedded strength; this quarter it's the reason for the yield ceiling trim. On Q2-2025 Liberty was citing close-in booking acceleration with no caveats; on Q4-2025 management said "approximately two-thirds of 2026 capacity booked at record rates." This quarter the same Mediterranean exposure is reframed: "we saw a strong demand for Europe... that strength was embedded in the outlook we provided in January. Due to the geopolitical events affecting itineraries in the Mediterranean... we've adjusted our full-year net yield expectations." The shift from "embedded strength" to "geopolitical events forcing downward revision" within a single quarter is the most significant tone change in the brief. The FY yield CC range coming down by 100bps at the high end (to +1.5–2.5% from +1.5–3.5%) is the financial expression of that reframe.

The "turning the corner" phrasing is now past-tense — and Liberty corrected the framing on the call. When James Hardiman framed it as "we're turning the corner," Liberty corrected the framing: "Yeah, sure. So, James, just so we're clear on tenses, we are not turning the corner. We have turned the corner." The grammatical specificity is unusual and deliberate — Liberty wants the demand narrative read as completed, not in-progress. This sits in tension with the simultaneous Mediterranean cut and the Q2 yield guide of +0.2% CC, which suggests Q2 is the trough of the moderation rather than the recovery. The market should read this as: management is asserting H2-2026 recovery in advance of the data.

AI shifted from cost lever (Q3) to structural moat (Q4) to compounding flywheel (Q1). Last quarter's framing was that AI delivers "anemic cost growth" — a margin lever. This quarter Liberty elevated it further: "That level of integration creates conditions where disruptive technology and AI enhance our moat in ways that are very difficult to replicate... it reinforces a flywheel that compounds over time." The escalation from operational efficiency → competitive moat → compounding advantage across three quarters is consistent with a management team trying to anchor the multiple on durability of margin expansion as near-term yield guidance gets trimmed.

Perfect Day Mexico moved from launch announcement (Q2) to "massive accelerator" with declarative Texas market ownership. Two quarters ago this destination was on a list of growth initiatives; this quarter Michael Bailey, President & CEO of the Royal Caribbean brand, said outright: "we're expecting to own the Texas market as it relates to cruising into the Caribbean... The combination of the hardware, the brand, and the destination, we believe is going to be a massive accelerator for overall financial performance." The "own the market" language from Bailey is unusual and reads as compensating for the FY2026 cut with a longer-dated bull narrative.

Loyalty mix has moved structurally, and management quantified it. Q2-2025 was the first mention of "40% of bookings from loyalty members." This quarter Liberty was more explicit: "At this point, about 40% of our customers are coming from our current customer base. And historically, that was a third, a third, a third." The shift from one-third to 40% repeat customers is the structural underpinning management is using to argue that the FY2026 yield trim is itinerary-driven, not demand-driven.

Recurring themes management leaned on this quarter:

Demand durability despite geopolitical headwinds and capacity growthRepeat customer loyalty and lifetime value as structural yield driverTechnology and AI as moat-reinforcing and compounding advantageDestination experiences (Perfect Day, Beach Clubs) as yield accretive differentiatorsDouble-digit earnings growth with margin expansion through cost disciplineMediterranean/West Mexico as temporary near-term impacts, not structural

Risks management surfaced:

Fuel price volatility (62 cents per share headwind baked into 2026 guidance)Geopolitical developments affecting Mediterranean and West Coast Mexico itinerariesAir travel disruption and elevated airfare costs impacting transatlantic demandIndustry capacity growth in Caribbean requiring differentiation to maintain yieldsJoint venture earnings headwinds from TUI Cruises weakness

Answers to last quarter's watch list

Does Q1 FY2026 net yield print above the +1.0–1.5% CC guide? Yes — net yields came in at +2.0% CC, 50bps above the high end of the guide. This is consistent with the Q4 "best seven booking weeks in history" framing and validates the upside-to-guide pattern that has held all year. However, the simultaneous trim of the FY2026 CC yield range to +1.5–2.5% (from +1.5–3.5%) cuts the upper bound by 100bps, meaning the Q1 beat did NOT pull the full-year midpoint higher — Mediterranean drag offsets close-in strength. Status: Resolved positively (Q1 beat) but offset by FY ceiling cut

Caribbean pricing data in Q1. Holtz stated Caribbean yields are expected to be positive for the year despite elevated industry capacity, and the Caribbean represents 57% of FY deployment / 50% of Q2 capacity. Liberty's response to Boss reinforced this: industry overcapacity is more "outside looking in" than real for RCL given Perfect Day and Royal Beach Club differentiation. Quantitative decomposition (rate vs. mix) still not provided. Status: Qualitatively resolved positive; quantitative decomposition pending

Discovery class disclosure timing and specifications. No Discovery class disclosure in the Q1 release or call. The promotional campaign Liberty embargoed in Q4 has not materialized. New ship orders this quarter were Icon VI and Icon VII, not Discovery. Status: Continue monitoring

Q2/H1 dry-dock yield drag magnitude. The Q1 release and call now quantify Q2 drag explicitly: Q2 Net Yields guided to ~+0.9% AR / ~+0.2% CC — a sharp step-down from Q1's +2.0% CC print. Holtz attributed ~200bps of yield headwind to dry docks plus geopolitical, with similar impact expected in Q3. NCC ex-fuel for Q2 of +4.6–5.1% CC includes ~400bps from dry docks, year-over-year comparisons, and crew travel disruption. The disclosure is sharper than Q4 provided. Status: Resolved (negatively for Q2 yields, structurally consistent with prior framing)

EBITDA margin trajectory disclosure. Management did not put a bps figure on FY2026 margin expansion. Q1 Adjusted EBITDA margin of 38.2% (+310bps YoY) is the data point, but full-year framing is absent. The lowered EPS guide and stable revenue guide imply margin expansion has been compressed by fuel and TUI, but the explicit bps disclosure investors wanted is not there. Status: Continue monitoring

What to watch into next quarter

Does Q2 net yield print above the +0.2% CC guide? Q2 is the trough quarter for yields per the Mediterranean/West Mexico framing. A material beat (above +1.0% CC) would suggest the "turned the corner" claim is data-supported; a print at or below guide would suggest the cut isn't done.

Is fuel guidance for FY2026 stable, or does it move again? The $0.62/share fuel headwind was the largest piece of the EPS cut. Watch whether the $1.35B FY fuel number holds, or whether spot-price volatility forces another revision in either direction. Forward curve would imply ~4% lower per the press release.

TUI Cruises JV trajectory. The $0.12/share TUI headwind is a new line item investors must now track. Both impacted Middle East ships have repositioned to the Mediterranean for a mid-May restart; watch whether Q2 results validate or extend the TUI cut.

H2-2026 booking visibility. Management has telegraphed H2 recovery — the "smiley face" yield curve requires mid-single-digit Q4 yield growth. The Q2 call needs to quantify the booked position for H2 to make this credible.

Caribbean rate decomposition. With +8% Q1 capacity (FY +6.7%) and industry capacity additions in the Caribbean, the Q2 call should disclose Caribbean APD/rate movement explicitly to support Holtz's "positive Caribbean yields for the year" framing.

Adjusted EBITDA margin bps disclosure for FY2026. Q1 delivered +310bps YoY; the absence of an equivalent FY bps target — through two consecutive prints — is increasingly conspicuous. Watch whether Q2 finally puts a bps figure on the margin trajectory.

Sources

Royal Caribbean Group Q1 2026 Earnings Release (Form 8-K), filed April 30, 2026. https://www.sec.gov/Archives/edgar/data/884887/000088488726000024/a2026q1earningsrelease.htm
Royal Caribbean Group Q1 2026 Earnings Call transcript, April 30, 2026.

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