NCLH Q4 2025 Earnings Call Summary

Q4 Results:
- Net yields increased by 3.8%.
- Adjusted net cruise cost (excluding fuel) was $158, a 0.2% increase, below guidance.
- Adjusted EBITDA reached $564 million, exceeding expectations.
- Adjusted net income for the quarter was $130 million, with adjusted EPS of $0.28 (excluding a $95 million write-off related to IT assets).
Full Year 2025 Results:
- Net yields rose by 2.4% year-over-year.
- Adjusted net cruise costs increased by 0.7%, below inflation.
- Adjusted EBITDA grew by 11% to $2.73 billion, with an operational EBITDA margin improvement of 160 basis points to 37.1%.
- Adjusted EPS increased by 19% to $2.11.

New CEO John Chidze emphasized a need for improved execution and accountability within the organization, addressing operational inefficiencies and a siloed culture.
A new leadership team has been established across critical functions, focusing on enhancing guest experiences and operational performance.
Investments in technology, revenue management, and customer-facing systems are prioritized to optimize performance.
The company launched a refreshed brand platform for Norwegian and reported strong early results from enhancements at Great Stirrup Cay, a key asset in their Caribbean strategy.
New ship orders across all brands were announced, securing long-term growth without significant near-term capital impacts.

2026 Guidance:
- Expected net yield growth in Q1 to decline by approximately 1.6%, with full-year net yields projected to be flat.
- Adjusted net cruise costs are anticipated to decrease by 0.8% in Q1, with a full-year growth of approximately 0.9%.
- Adjusted EBITDA for 2026 is expected to increase by 8% to $2.95 billion, with adjusted EPS projected at $2.38.
- Net leverage is expected to remain flat at 5.2 times, factoring in new ship deliveries.

The company faces execution missteps related to Caribbean deployments, leading to a lack of cohesive planning and coordination, which has negatively impacted performance.
There are pricing pressures in select markets, particularly in the Caribbean and Alaska, due to increased competition and capacity.
The company is entering 2026 below its optimal booking curve, creating near-term pressure on pricing and yields.
The geopolitical situation in the Middle East is being monitored, although no immediate impacts on operations were reported.

CEO John Chidze acknowledged the need for a cohesive strategy and operational alignment to address recent missteps, particularly in the Caribbean.
CFO Mark Kempa highlighted that while the consumer remains strong, the company's specific challenges stem from execution issues rather than overall market weakness.
There is a focus on improving revenue management and aligning commercial strategies with deployment to enhance performance.
The leadership team is actively engaging with shareholders, including Elliott, to gather insights and improve long-term shareholder value.
Both executives expressed optimism about correcting current challenges but acknowledged that improvements would take time, particularly on the revenue side, which is expected to show results in 2027 and beyond.

NCLH — Norwegian Cruise Line Holdings Ltd.