Danaos (DAC) Q1 2025 earnings summary

Executive summary

• Operating revenues for Q1 2025 were $253.3 million, nearly flat year-over-year, with adjusted net income of $113.4 million ($6.04 per diluted share), down from $140.0 million ($7.15 per diluted share) in Q1 2024.

• The company maintains a highly efficient, diversified fleet, with a $3.7 billion charter backlog through 2033 and 99% contract coverage for 2025, providing strong cash flow visibility.

• Recently re-entered the dry bulk segment with 10 Capesize bulk carriers and expanded the containership orderbook with 15 new methanol-ready vessels.

• Pioneers in digitalization and ESG, achieving IMO 2030 carbon intensity targets 11 years ahead of schedule.

• Robust capital structure with significant share repurchases and a conservative financial strategy.

Financial highlights

• Adjusted EBITDA for Q1 2025 was $171.7 million, down 3.1% from $177.2 million in Q1 2024.

• Operating expenses increased by $19.8 million year-over-year, mainly due to higher vessel operating, depreciation, and amortization costs.

• Interest expense rose to $10.0 million from $3.1 million, reflecting higher average indebtedness.

• Cash and cash equivalents at March 31, 2025, were $480.5 million, with total liquidity of $825 million.

• Net debt to adjusted EBITDA was 0.42x at quarter-end.

Outlook and guidance

• Charter coverage is at 99% for 2025 and 85% for 2026, with a contracted revenue backlog of $3.7 billion and an average charter duration of 3.9 years.

• Orderbook includes 15 newbuilding container vessels (128,220 TEU) for delivery through 2028, all with multi-year charters averaging 5.3 years.

• No new vessel investments planned until there is clarity on future fuel regulations; focus is on energy-saving upgrades for the existing fleet.

• Expectation of continued cash generation and ongoing evaluation of capital deployment opportunities.

• CEO expects trade flows to rebound as inventories are replenished, but highlights ongoing global disruptions and regulatory uncertainty.