Royal Caribbean Cruises (RCL) Q3 2024 earnings summary

Executive summary

• Q3 2024 results exceeded expectations, with Adjusted EPS of $5.20, robust demand, higher pricing, and onboard spend significantly above 2023 levels; net income reached $1.1 billion, and occupancy hit 111%.

• Achieved a fully unsecured capital structure and reduced diluted share count by 5.1 million through convertible note exchanges, supporting growth ambitions and capital allocation.

• Major expansions announced for private destinations, including Perfect Day Mexico (2027), Silversea’s hotel in Chile (2025), and new Royal Beach Clubs.

• Achieved Trifecta financial goals 18 months ahead of schedule and resumed dividends, with continued focus on capturing a greater share of the $1.9 trillion vacation market.

• Major ship deliveries included Silver Ray and Utopia of the Seas, with Utopia exceeding expectations in ticket prices and onboard revenue.

Financial highlights

• Q3 2024 net income was $1.11 billion, up from $1.01 billion in Q3 2023; Adjusted EPS was $5.20, up from $3.85; Adjusted EBITDA reached $2.15 billion with a 44% margin.

• Net yields up 7.9% year-over-year in Q3 2024, reaching $293.46 per APCD; gross margin yield was $156.52 per APCD.

• Full-year 2024 yield growth expected at 10.8%-11.3%; Adjusted EPS guidance raised to $11.57-$11.62, reflecting 71% year-over-year growth.

• Net cruise costs excluding fuel increased 4% in Q3 2024; full-year expected up 6.2%-6.7%.

• Operating cash flow YTD was $3.9 billion; liquidity at quarter-end was $3.9 billion.

Outlook and guidance

• Q4 2024 net yield growth expected at 5.1%-5.6%, with Adjusted EPS guidance of $1.40-$1.45, including a $0.24 impact from Hurricane Milton and higher stock compensation.

• Full-year 2024 capital expenditures expected at $3.4 billion, mainly for new ships.

• 2025 capacity to increase 5% with new ships and private destinations; Adjusted EPS expected to start with a $14 handle.

• Caribbean capacity to grow 5% in 2025, representing 57% of deployment.

• Management expects to remain in compliance with debt covenants and to fund obligations for at least the next twelve months.