Norwegian Cruise Line (NCLH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $2.4B, up 8% year-over-year, with Adjusted EBITDA up 14% to $588M and Adjusted EPS up 33% to $0.40, both exceeding guidance.

• Net income for Q2 was $163.4M, up from $86.1M in Q2 2023; operating income grew to $341.6M.

• Record advance ticket sales reached $3.9B, up 11% year-over-year, with bookings at the upper range of optimal levels for the next 12 months.

• Net Leverage improved to 5.9x, achieving the year-end target six months early.

• Full-year guidance for Net Yield, Adjusted EBITDA, and Adjusted EPS was raised for the third time, supported by robust demand and strong execution.

Financial highlights

• Adjusted EBITDA grew 14% year-over-year to $588M; Adjusted Net Income was $204M; Adjusted EPS was $0.40.

• Net Yield rose 6.3% in Q2, beating guidance by 200bps; Adjusted Gross Margin per Capacity Day was $296.31.

• Occupancy for Q2 was 105.9%, up from 104.9% in Q2 2023.

• Adjusted Net Cruise Cost Excluding Fuel per Capacity Day was $163, flat year-over-year excluding dry-dock impact.

• Liquidity at quarter-end was $2.7B, including $594M cash and $1.2B undrawn revolver.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance raised to ~$2.35B; Adjusted EPS to $1.53, up 120% over 2023.

• Net Yield growth guidance for 2024 increased to 8.2%; full-year occupancy expected to average 105.2%.

• Q3 2024 guidance: Occupancy ~108.2%, Net Yield growth ~6.4%, Adjusted EBITDA ~$870M.

• Double-digit Adjusted ROIC targeted by year-end, progressing toward 12% by 2026.

• Management expects to maintain sufficient liquidity and remain in compliance with financial covenants for at least the next 12 months.