tapebrief
RCL · Q3 2025

RCL · Q4 2025 Earnings

Bullish

Royal Caribbean Group

Reported January 29, 2026

30-second summary

Royal Caribbean closed FY2025 with Q4 non-GAAP EPS of $2.80 (top of the $2.74–$2.79 guide) on revenue of $4.26B (+13.3% YoY), and delivered the FY2026 EPS guide investors were waiting for: $17.70–$18.10, midpoint $17.90, ~14% above FY2025's $15.64 — comfortably above Liberty's verbal "$17 handle" and tilted toward the upper end of the implied range. The 2026 setup is built on ~two-thirds of capacity already booked at record rates, +6.7% capacity growth, and an EBITDA target "just shy of $8B" (+13% YoY), with Celebrity River doubling its committed fleet to 20 ships by 2031.

Headline numbers

EPS

Q4 FY2025

$2.80

Revenue

Q4 FY2025

$4.26B

+13.3% YoY

Gross margin

Q4 FY2025

36.7%

Operating margin

Q4 FY2025

21.9%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$4.26B+13.3%$5.14B-17.1%
EPS$2.80—$5.75-51.3%
Gross margin36.7%———
Operating margin21.9%—33.1%-1121bps

Guidance

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

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Adjusted EPSQ4 FY2025$2.74 to $2.79$2.80+0.01 above high end of guideBeat
Adjusted EPSFY2025$15.58 to $15.63$15.64+0.01 above high end of guideMet
Net Yields GrowthQ4 FY20252.6% to 3.1% (as-reported); 2.2% to 2.7% (constant currency)Q4 net yields ($250.09) reflect strong pricing powerActual results suggest yields in the upper range or above prior guidanceBeat
Net Cruise Costs per APCD ex. Fuel GrowthQ4 FY2025(6.2%) to (5.7%) as-reported; (6.6%) to (6.1%) constant currency$130.27Cost discipline exceeded expectation; likely in the positive range vs. prior-year Q4Beat

New guidance

MetricPeriodGuideYoY
Adjusted EPSQ1 FY2026$3.18 to $3.28—
Adjusted EPSFY2026$17.70 to $18.10+13% (implied midpoint vs FY2025 actual of $15.64)
Net Yields GrowthFY20261.5% to 3.5% (constant currency)—
Net Cruise Costs per APCD ex. Fuel GrowthFY20260.0% to 1.0% (constant currency)—
Net Yields GrowthQ1 FY20261.0% to 1.5% (constant currency)—
Net Cruise Costs per APCD ex. Fuel GrowthQ1 FY20260.9% to 1.4% (constant currency)—
Capacity GrowthFY20266.7%—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Passenger ticket revenues$2.937B+13.0%
Onboard and other revenues$1.323B+13.9%

Platform metrics

Q4 FY2025
SegmentQ4 FY2025
Available Passenger Cruise Days (APCD)14,025,949
Net Yields$250.09
Load Factor (Occupancy)107.8%
Net Cruise Costs per APCD excl. Fuel$130.27
Passengers Carried2,484,241
Gross Margin Yields$111.49

Profitability

Q4 FY2025
SegmentQ4 FY2025
Adjusted EBITDA$1,481 million
Adjusted EBITDA Margin34.8%

Management tone

Q2 2025: close-in demand acceleration → Q3 2025: "$17 handle" verbal anchor and "anemic cost growth" → Q4 2025: record wave, formal $17.90 midpoint, river doubles to 20 ships.

The verbal "$17 handle" became a formal $17.90 midpoint — at the upper end of what that phrasing implied. Last quarter Liberty committed to "2026 earnings per share to have a $17 handle" without ranges; this quarter the formal guide of $17.70–$18.10 lands $0.40–$0.90 above the floor of that commitment. The anchor sentence on the call: "demand remains strong and the company expects Adjusted EPS to be in the range of $17.70 to $18.10 per share in 2026." Management not only delivered on the verbal commitment but pitched it toward the high end — consistent with the "guidance is conservative" subtext Naftali Holtz has been seeding since Q2.

Wave-season language escalated from "record APDs at the high end of historical ranges" to "best seven booking weeks in company history." Q3 framing was forward-leaning but bounded by historical ranges. This quarter Liberty went further: "The wave is off to a record start with approximately two-thirds of 2026 capacity booked at record rates" and "the best seven booking weeks in the company's history since the last earnings call." The shift from "high end of historical" to "best ever" is a meaningful step up in the superlative ladder — and it lands while management is guiding FY net yields to +1.5–3.5%, a range that looks conservative against this booking pattern.

River cruising's framing has moved twice in two quarters — from "exploratory" (Q2) to "substantial player" (Q3) to "one of the largest European operators." This quarter's announcement of 10 additional Celebrity River ships, doubling the committed fleet to 20 vessels by 2031, makes the trajectory explicit: "This will expand Celebrity's river cruise fleet to 20 vessels by 2031. The expansion will make Celebrity River Cruises one of the largest European river cruise operators." Two quarters ago river was a 2027 launch on a list. Today it is a scaled growth platform with APDs targeted ~15% above ocean.

AI/technology has been elevated from cost lever to structural moat. Q3 framed AI as the source of "anemic cost growth." This quarter it became something more permanent: "Disruptive technology is not just a tool, it's a capability that we have been building for more than five years. It helps us deliver a better experience, run a smarter operation, and strengthen the ecosystem we're building for long-term growth." The FY2026 NCC guide of 0.0–1.0% CC against +6.7% capacity growth is the financial expression of that claim — incremental capacity arriving at near-flat unit costs.

Perfecta is now explicitly a milestone rather than a destination. Last quarter Liberty said 2028 would be "a significant step up" past Perfecta. This quarter he sharpened it: "perfected is an important milestone on our growth journey, but our ambitions go well beyond it." Management is telegraphing that the 2027 financial framework should not be read as a ceiling.

Recurring themes management leaned on this quarter:

Record booking momentum and pricing power heading into 2026AI and disruptive technology as foundational competitive moatEcosystem expansion across ocean, river, and exclusive destinationsCaribbean resilience and yield growth despite capacity increasesMargin expansion and cash generation enabling capital returnsPremium hardware deployment driving higher-yielding itineraries

Risks management surfaced:

Dry dock timing and ramp-up impact on yields in first half 2026EU Emissions Trading System scope expansion to 100% coverage in 2026Deployment shifts and itinerary modifications creating yield headwindsPremium hardware in dry dock hurting yield comparisons, especially Q2Fuel price and currency exchange rate fluctuations

Q&A highlights

Matthew Voss · J.P. Morgan

How does management see acceleration into 2026, and how is the portfolio differentiated relative to the $2 trillion vacation market?

Management highlighted 6.7% capacity growth, acceleration in demand exceeding capacity additions, strengthening loyalty programs (especially with Point Choice), and strategic focus on capturing share from the broader $2 trillion leisure market rather than just cruise competitors. Emphasis on personalization, product innovation on new ships, destination enhancement (e.g., Santorini), and expansion into river cruises to capture higher-yielding vacation experiences.

Capacity growing 6.7% in 2026Total revenue growing double digits (nearly 88% vs. 19)Caribbean total revenue growing double digitsRiver cruises targeting APDs 15% higher than ocean cruise offerings

Steve Wisinski · Stifel

What is management seeing in Caribbean demand by brand/itinerary/product? Is pricing holding? Does 2.5% yield guidance align with 'moderate' yield growth language?

Management asserted strong Caribbean demand across all three brands with pricing higher YoY despite industry supply concerns. Affirmed 2.5% yield guidance fits within 'moderate' range of 2-4%. Explained yield headwinds from China redeployments partially offset by strong volume growth exceeding capacity increases and higher guest onboard spending.

Caribbean pricing higher in 2026 vs. prior year2.5% yield guidance at midpoint (range 2-4% considered 'moderate')China redeployments creating temporary yield pressure but not margin pressureDouble-digit revenue growth despite 6.7% capacity growth

James Hardiman · Citi

How should investors decompose organic vs. inorganic yield growth, especially for Caribbean? How much does new hardware drive yield?

Management clarified that approximately 50% of 2026 yield growth comes from new hardware (Icon class, Celebrity shifts) and 50% from like-for-like improvements. Acknowledged new hardware has diminishing yield impact as denominator grows. Highlighted Royal Beach Club ramp (cautious at launch, now outperforming all competitive experiences in Nassau, 0.8% behind Perfect Day on satisfaction). Emphasized profitability and margin growth on both new and existing ships.

~50% of yield growth from new hardware, ~50% from like-for-likeRoyal Beach Club became #1 rated experience in Nassau within 4 weeksRoyal Beach Club already 0.8% below Perfect Day satisfaction levels (approaching parity)Margins growing on both new ships and modernized existing ships

Lizzie Dove · Goldman Sachs

Can you provide more detail on net yield cadence throughout 2026, particularly Q2 given dry dock timing?

Management declined to comment specifically on Q2 but outlined key yield cadence drivers: (1) dry dock timing concentrated more in Q2 and year-end, with larger ships driving higher yields in comparisons; (2) Royal Beach Club ramp-up; (3) deployment mix and new ship timing. Larger ships entering modernization create favorable year-over-year comparisons.

Dry docks concentrated in Q2 and year-end (vs. Q1 in 2025)Larger ships entering dry docks (higher-yield vessels)Significant increase in Silver Sea ships (high-yield)Royal Beach Club ramp-up creating Q2/H1 yield impact

Robin Farley · UBS Financial

Can you discuss Discovery class specifications (size/capacity) and trade-offs vs. Icon/Oasis? Is current low net cruise cost growth sustainable?

Management explicitly declined to discuss Discovery specifics, stating many social media assumptions about size/capacity are inaccurate and promotional campaign will launch in coming months. Emphasized Discovery will be a 'game changer' like Icon was. On net cruise costs: attributed low growth to formula approach (yield > cost growth), 6.7% capacity leveraging scale economies, and AI/Gen AI enabling efficiency without compromising guest experience. Cost control driven by smarter operations, supply chain optimization, and AI-enhanced yield management.

Discovery class details embargoed pending promotional campaignIndustry social media assumptions on Discovery 'probably inaccurate'Net cruise cost formula: yield growth > cost growth (intentional company approach)6.7% capacity growth enabling scale leverage

Answers to last quarter's watch list

Does the formal FY2026 EPS guide land at or above the "$17 handle"? Yes, and toward the upper end of what that phrasing implied. Formal guide of $17.70–$18.10, midpoint $17.90, vs. FY2025 actual of $15.64 (+14% YoY). The midpoint sits $0.40 above what a "$17 handle" minimally requires and the high end ($18.10) implies +15.7% YoY growth — supporting Naftali's "guidance is conservative" framing. Status: Resolved positively
Does Q4 NCC ex-fuel print inside the -5.7% to -6.2% guide? Yes — Q4 NCC ex-fuel came in at -5.8% as-reported (in line with guide) and -6.3% CC (modestly favorable to the CC range). The FY2025 EPS print of $15.64 at the top of the $15.58–$15.63 raised guide confirms cost discipline held through year-end. The FY2026 NCC guide of 0.0–1.0% CC against +6.7% capacity extends the "anemic cost growth" thesis. Status: Resolved positively
2026 booked APD trajectory. Management quantified the booking strength: ~two-thirds of FY2026 capacity already booked at record rates, plus the "best seven booking weeks in company history" between Q3 and Q4 calls. Caribbean pricing is higher YoY in 2026 across all three brands — explicitly refuting the promotional-pressure concern Liberty acknowledged last quarter. Status: Resolved positively
Celebrity River deployment scaling. Announced 10 additional ships, doubling Celebrity River's committed fleet to 20 vessels by 2031, positioning Celebrity to become "one of the largest European river cruise operators." This is the dollar-contribution signal the watch list was looking for — though specific 2027+ EBITDA contribution remains undisclosed. Status: Resolved positively
EBITDA margin runway beyond +290bps in 2025. FY2026 Adjusted EBITDA guided to "just shy of $8B" (+13% YoY vs. $7.0B in 2025 → ~$8B in 2026) on capacity +6.7% and revenue growing double digits — the math implies continued margin expansion, but management did not quantify the bps figure as explicitly as Q3. The +13% EBITDA growth on +6.7% capacity + low-single-digit yield + flat-to-up unit costs is consistent with another 100–150bps of margin expansion, though decelerating from the +290bps 2025 step-up. Status: Continue monitoring

What to watch into next quarter

Does Q1 FY2026 net yield print above the +1.0–1.5% CC guide? Management's "best seven booking weeks in history" + ~two-thirds booked at record rates set up a clear upside-to-guide pattern. A beat materially above the high end would confirm the "guidance embeds none of the close-in acceleration" subtext and pull the FY2026 EPS midpoint higher.

Caribbean pricing data in Q1. Liberty asserted higher YoY pricing across all three brands for 2026 — the Q1 actuals are the first hard read on whether industry capacity additions are pressuring rate. Watch net yield decomposition for any Caribbean-specific commentary.

Discovery class disclosure timing and specifications. Liberty embargoed details pending a promotional campaign "in coming months." Specifications (size, capacity, deployment) materially affect the 2028+ growth bridge beyond Perfecta.

Q2/H1 dry-dock yield drag magnitude. Management flagged Q2 and year-end as dry-dock-heavy with larger higher-yield ships entering modernization. Watch whether the Q1 release quantifies the Q2 yield headwind explicitly, or whether the H1/H2 cadence is left for investors to infer.

EBITDA margin trajectory disclosure. Management did not quantify FY2026 margin expansion in bps the way they did +290bps for 2025. Watch for a Q1-call disclosure putting a number on the implied expansion within the $8B EBITDA target.

Sources

  1. Royal Caribbean Group Q4 and Full Year 2025 Earnings Release (Form 8-K), filed January 29, 2026. https://www.sec.gov/Archives/edgar/data/884887/000088488726000003/a10k2025earningsrelease8-k.htm
  2. Royal Caribbean Group Q4 2025 earnings conference call commentary and Q&A, January 29, 2026.

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