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The call presented a broadly positive operational and financial picture: strong Q1 results (11% revenue growth, adjusted EPS beat, higher EBITDA margins and cash generation), record demand and digital engagement, active capital returns and continued strategic investments (new ships, destinations, loyalty, and tech/AI). Near-term headwinds include higher fuel costs (~$0.62/shr fuel impact, ~$0.74 total with JV impact), moderation in Mediterranean and West Coast Mexico bookings affecting Q2/Q3 yields, and some incremental dry-dock and crew travel cost pressure. Management expects these issues to be largely near-term and reiterated double-digit revenue and EPS growth for 2026, supported by a strong balance sheet and robust booking trends, so positive operational momentum outweighs the highlighted challenges.
Royal Caribbean guided to another year of strong growth, forecasting full‑year revenue up roughly double digits with capacity +6.7% and net yield growth of +1.5% to +2.5%; full‑year adjusted EPS of $17.10–$17.50 (double‑digit EPS growth) which reflects a combined $0.74 headwind (≈$0.62 from higher fuel and $0.12 from lower TUI Cruises contribution). They expect fuel expense of about $1.35 billion with roughly 59–60% of remaining 2026 consumption hedged (fuel would be ≈4% lower on the forward curve), full‑year net cruise costs ex‑fuel roughly flat (about 50 bps better than prior guidance), and a continued focus on margin and cash‑flow expansion via the Perfecta targets (20% CAGR in adjusted EPS through 2027 and high‑teens ROIC). For Q2 specifically, capacity is guided +4.9%, net yield ≈+0.2% cc, net cruise costs ex‑fuel +4.6%–5.1% cc, and adjusted EPS $3.83–$3.93 (quarter hit by nearly $1 of phasing/headwinds).
Revenue grew 11% year-over-year in Q1 and adjusted EPS was $3.60, $0.37 above the midpoint of guidance and up 33% versus prior year; Q1 adjusted EPS outperformance driven by better-than-expected revenue, lower costs and stronger JV performance.
Adjusted EBITDA was approximately $1.7 billion with a 38% margin (up >300 basis points YoY); operating cash was $1.8 billion (up 13%); liquidity ended the quarter at $6.9 billion and leverage remained below 3x.
Delivered over 2.5 million vacations (12% more vacations YoY), record WAVE season, booked load factors within historical ranges at record APDs and record prices; onboard spending remains well above prior years.
Digital penetration of bookings has more than doubled since 2019; monthly active app users are 5x 2019 levels and app adoption is >90%; over 70% penetration in pre-cruise booking engines with >5 items purchased per booking and more than half of onboard revenue booked before embarkation.
Company expects roughly double-digit revenue growth for 2026 and net yield growth of 1.5%–2.5%; full-year adjusted EPS guidance of $17.10 to $17.50, targeting another year of double-digit EPS growth and continued cash flow generation.
Returned $1.1 billion of capital through dividends and share buybacks in the period; repurchased 2.9 million shares for $836 million with $1.0 billion remaining authorization; completed $2.5 billion investment-grade bond offering (oversubscribed) and used proceeds to refinance near-term maturities.
Progress on strategic initiatives: Icon VI & VII orders placed; Legend of the Seas (third Icon) delivering and in strong book position; Royal Beach Club Santorini opened and demand strong; Perfect Day Mexico on track for soft opening late 2027 and ramp in 2028; loyalty enhancements and Royal ONE co-branded card launched (cardholder accounts more than doubled since 2019).
Net cruise costs excluding fuel performed better than expected in Q1 and full-year net cruise costs excluding fuel are expected to be approximately flat (~50 bps better than prior guidance), reflecting ongoing efficiency initiatives and technology deployment.
Good morning. At this time, I would like to welcome everyone to the Royal Caribbean Group First Quarter 2026 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Blake Vanier, Vice President, Investor Relations. The floor is yours.
Good morning, everyone, and thank you for joining us today for our first quarter 2026 earnings call. Joining me here in Miami are Jason Liberty, our Chairman and Chief Executive Officer; Naftali Holtz, our Chief Financial Officer; and Michael Bayley, President and CEO of the Royal Caribbean brand. Before we get started, I would like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release issued this morning as well as our filings with the SEC for a description of these factors, we do not undertake to update any forward-looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of all non-GAAP items can be found on our investor website and in our earnings release. Unless we state otherwise, all metrics are on a constant currency adjusted basis.
Jason will begin the call by providing a strategic overview and update on the business. Naftali will follow with a recap of our first quarter, the current booking environment and our outlook for 2026. We will t...