Royal Caribbean Group reported first quarter Earnings per Share (“EPS”) of $2.70 and Adjusted EPS of $2.71. 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, optimizing 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 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 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 as 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 in the range of $4.00 to $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.
The company provided the following guidance for the second quarter and full year 2025:
| FUEL STATISTICS | Second Quarter 2025 | Full Year 2025 |
| Fuel Consumption (metric tons) | 428,000 | 1,726,000 |
| Fuel Expenses | $286 million | $1,140 million |
| Percent Hedged (fwd. consumption) | 59 % | 59 % |
| GUIDANCE | As-Reported | Constant Currency |
| Second Quarter 2025 | ||
| Net Yields vs. 2024 | 4.4% to 4.9% | 4.3% to 4.8% |
| Net Cruise Costs per APCD vs. 2024 | 2.8% to 3.3% | 2.4% to 2.9% |
| Net Cruise Costs per APCD ex. Fuel vs. 2024 | 4.1% to 4.6% | 3.7% to 4.2% |
| Full Year 2025 | ||
| Net Yields vs. 2024 | 2.5% to 4.5% | 2.6% to 4.6% |
| Net Cruise Costs per APCD vs. 2024 | (1.0%) to 0.0% | (1.2%) to (0.2%) |
| Net Cruise Costs per APCD ex. Fuel vs. 2024 | 0.1% to 1.1% | (0.1%) to 0.9% |
| GUIDANCE | Second Quarter 2025 | Full Year 2025 |
| APCDs | 12.9 million | 53.3 million |
| Capacity change vs. 2024 | 5.8 % | 5.5 % |
| Depreciation and amortization | $415 to $425 million | $1,710 to $1,720 million |
| Net Interest, excluding loss on extinguishment of debt | $220 to $230 million | $940 to $950 million |
| Adjusted EPS | $4.00 to $4.10 | $14.55 to $15.55 |
| SENSITIVITY | Second Quarter 2025 | Full Year 2025 |
| 1% Change in Net Yields | $35 million | $141 million |
| 1% Change in NCC excluding Fuel | $16 million | $68 million |
| Second Quarter 2025 | Remainder of Year 2025 | |
| 1% Change in Currency | $5 million | $16 million |
| 10% Change in Fuel prices | $14 million | $42 million |
| 100 basis pt. Change in SOFR | $1 million | $11 million |
| Exchange rates used in guidance calculations | ||
| GBP | $1.34 | |
| AUD | $0.64 | |
| CAD | $0.72 | |
| EUR | $1.15 | |
Liquidity and Financing Arrangements
As of March 31, 2025, the company’s liquidity position was $4.5 billion, which includes cash and cash equivalents and undrawn revolving credit facility capacity.
During the quarter, the company was upgraded to investment grade by S&P Global Ratings, reflecting the strength of its financial position, consistent performance, and disciplined capital allocation strategy.
Also during the quarter, the company entered into exchange agreements with holders of its 6.00% Convertible Senior Notes due 2025. In this transaction, the holders exchanged $213 million in aggregate principal amount of the 2025 Notes for 3.3 million shares of the company’s common stock and $214 million in cash, including accrued interest. This transaction reduced the Company’s outstanding shares and share equivalents on a fully diluted basis by 1.0 million shares. As of March 31, 2025, $110 million in aggregate principal amount of the 2025 Notes remain outstanding.
The company also repurchased approximately 1.0 million shares under its existing share repurchase program. As of March 31, 2025, approximately $759 million remained available for repurchases under the current authorization.
“This quarter, we continued to opportunistically reduce debt, while lowering cost of capital and recapturing a portion of our Covid-era share dilution,” said Naftali Holtz, chief financial officer, Royal Caribbean Group. “Our strong balance sheet allows us the flexibility to continue to expand capital return to shareholders, invest in growth and innovation, and maintain investment grade balance sheet metrics in a range of macroeconomic environments.”
The company noted that as of March 31, 2025, the scheduled debt maturities for the remainder of 2025, 2026, 2027, and 2028 were $1.2 billion, $2.9 billion, $2.6 billion and $3.1 billion, respectively.
Capital Expenditures and Capacity Guidance
Capital expenditures for the full year 2025 are expected to be approximately $5 billion, based on current foreign exchange rates, and are predominantly related to the new ship order book and land-based destination initiatives. Non-new ship related capital expenditures are expected to be $1.6 billion.
Capacity changes for 2025 are expected to be 5.5% compared to 2024. Capacity changes for 2026, 2027, and 2028 are expected to be 6%, 5%, and 6%, respectively. These figures do not include potential ship sales or additions that the company may elect in the future.