ROYAL CARIBBEAN GROUP REPORTS THIRD QUARTER RESULTS ABOVE EXPECTATIONS AND RAISES FULL YEAR GUIDANCE

Royal Caribbean reported a strong third quarter, with total revenues of $ 5,591 versus $ 5,139 in the prior-year period and diluted EPS of $ 6.45 versus $ 5.74. Adjusted Earnings per Share - Diluted increased to $ 6.57 from $ 5.75, while Adjusted EBITDA rose to $ 2,539 from $ 2,293 and Adjusted EBITDA Margin increased to 45.4 % from 44.6 %. The company characterized the quarter as above its guidance.

Demand indicators remained favorable. Passengers Carried increased to 2,676,480 from 2,466,039, APCD rose to 14,844,688 from 13,698,886, and occupancy was 112.4 % versus 112.1 %. Net Yields increased 0.9% as-reported and 0.6% in Constant Currency, with better-than-expected close-in demand in Europe and the Caribbean identified as the principal driver. Booking volumes increased in the mid-teens across all major channels since the last earnings call, and bookings for 2027 sailings were up in the high teens.

Margins benefited from revenue execution and cost timing. Gross Margin Yields decreased 0.8% as-reported, but Net Yields rose as variable costs were excluded from the latter measure. Net Cruise Costs excluding Fuel per APCD decreased 1.9% as-reported to $ 121.38 from $ 123.75. Management attributed this favorable cost outcome to expenses shifting into the fourth quarter, which is reflected in fourth-quarter guidance for NCC excluding Fuel per APCD to decrease (1.5%) to (1.0%) as-reported.

Capital allocation remained active. For the nine months ended September 30, the company generated 5,274 of net cash provided by operating activities, made purchases of property and equipment of (3,880), repurchased common stock of (1,035), and paid dividends of (1,075). Liquidity was $7.4 billion as of September 30, 2026. During the quarter, the company issued $1.25 billion of 5.550% senior unsecured notes due 2034 and used proceeds to repay portions of floating-rate term loan facilities and debt maturing in 2027.

The company raised full-year Adjusted EPS guidance to $17.85 to $17.95, while retaining expectations for 9% revenue growth. The higher outlook reflects stronger-than-expected third-quarter performance, partially offset by higher than anticipated fuel costs and currency exchange rates. Fourth-quarter Adjusted EPS guidance is $3.48 to $3.58. The proposed acquisition of a 50% interest in Sandals and Beaches Resorts is expected to close in early 2027, with 2027 contribution dependent on closing timing and reported under the equity method on a one-quarter lag.