Norwegian Cruise Line (NCLH) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $2.8B, up ~11% year-over-year, with GAAP net income of $474.9M, a 37% increase, and EPS up 34% to $0.95, surpassing guidance across all key metrics and raising full-year guidance for the fourth time due to strong demand and cost control.

• Adjusted EBITDA reached a record $931M, up 24% year-over-year, and Adjusted EPS rose 31% to $0.99, both exceeding guidance.

• Net yield grew 9% year-over-year, outperforming guidance by 260 basis points, driven by strong demand and pricing, especially in Alaska and Canada/New England.

• Advance ticket sales rose 6% year-over-year to a record $3.3B, outpacing capacity growth, with robust pricing and increased pre-sale packages.

• Booking trends for 2025 remain strong across all brands and geographies, with pricing and load in line or above 2024 levels.

Financial highlights

• Adjusted EPS increased 31% to $0.99, exceeding guidance despite a $0.06 FX headwind; Adjusted Net Income for Q3 was $511.9M.

• Adjusted EBITDA for Q3 reached $931M, up 24% year-over-year and $60M above guidance.

• Net leverage ended the quarter at 5.58x, a 1.75x improvement from year-end 2023.

• Full-year net yield growth now expected at 9.4%, a 120 bps increase from prior guidance and a company record.

• Full-year adjusted EPS guidance raised to $1.65, a 136% increase over 2023.

Outlook and guidance

• Q4 net yield expected to grow 6.9%, 190 bps above prior implied guidance.

• Full-year adjusted operational EBITDA margin expected at 35.3%, up 4.6 percentage points from 2023.

• Net leverage projected to decrease to 5.4x by year-end, progressing toward a mid-4x target by 2026.

• 2025 net yield growth expected to align with the low to mid-single-digit algorithm, with sub-inflationary unit cost increases.

• On track to achieve 2026 targets: Adj. EPS ~$2.45, Adj. ROIC 12%, Net Leverage mid-4x.