Royal Caribbean Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $5.6 billion, a 9% increase year-over-year.
• Net Income was $1.7 billion ($6.45 per share), compared to $1.6 billion ($5.74 per share) in Q3 2025.
• Adjusted Net Income was $1.8 billion ($6.57 per share), compared to $1.6 billion ($5.75 per share) in Q3 2025.
• Adjusted EBITDA was $2.5 billion.
• Gross Margin Yields decreased 0.8% as-reported; Net Yields increased 0.9% as-reported (0.6% in Constant Currency).
• Gross Cruise Costs per APCD decreased 0.7% as-reported; Net Cruise Costs (excluding Fuel) per APCD decreased 1.9% as-reported (1.8% in Constant Currency).
• Liquidity position as of September 30, 2026, was $7.4 billion, including cash, cash equivalents, and undrawn revolving credit facility capacity.
• Cash and cash equivalents were $851 million as of September 30, 2026.
• Total debt as of September 30, 2026, was $22.355 billion ($2.239 billion current portion, $20.116 billion long-term).
• Customer deposits were $6.034 billion as of September 30, 2026.

Guidance and Future Outlook:

• Full year 2026 Adjusted EPS guidance raised to $17.85 to $17.95.
• Full year 2026 revenue is expected to grow 9% year-over-year.
• Full year 2026 Net Yields are expected to increase approximately 2.7% as-reported (2.1% Constant Currency).
• Full year 2026 Net Cruise Costs (excluding Fuel) per APCD are expected to increase approximately 0.4% as-reported (flat in Constant Currency).
• Q4 2026 Adjusted EPS guidance is $3.48 to $3.58.
• Q4 2026 Net Yields are expected to be 4.4% to 4.9% as-reported (4.2% to 4.7% Constant Currency).
• Q4 2026 Net Cruise Costs (excluding Fuel) per APCD are expected to decrease 1.5% to 1.0% as-reported (1.4% to 0.9% Constant Currency).
• 2027 bookings are pacing ahead of historical levels at higher rates.
• The company remains on track to achieve its "Perfecta" goals of delivering 20% Adjusted EPS CAGR from 2024 through 2027, targeting a $20-handle in 2027.
• Capital expenditures for full year 2026 are expected to be approximately $4.6 billion.
• Capacity changes for 2026 are expected to be 6.6% compared to 2025; 2027, 2028, and 2029 capacity changes are expected to be approximately 4.5%, 6.0%, and 6.5%, respectively.

Business Segments and Product Lines:

• The company announced an agreement in September to acquire a 50% interest in Sandals and Beaches Resorts, expanding into the all-inclusive resort category.
• The Sandals and Beaches portfolio includes 18 resorts across the Caribbean, three resorts under development, and over 1,000 acres of undeveloped land.
• The company will enter river cruising in 2027 with Celebrity River Cruises.
• The company operates 71 ships across three wholly owned brands (Royal Caribbean, Celebrity Cruises, Silversea) and a 50% joint venture interest in TUI Cruises.
• Capacity for Q3 2026 was up 8% year-over-year, delivering vacations to 2.7 million guests (9% increase year-over-year).
• Load factor in Q3 2026 was 112%.

Market and Competitive Landscape:

• Booking volumes have increased in the mid-teens across all major channels, with 2027 sailings up in the high teens.
• Third quarter pre-cruise and onboard revenue rates were ahead of the prior year; fourth quarter pre-cruise revenue rates are also booked ahead of last year.
• Approximately 30% of Royal Caribbean Group guests take all-inclusive vacations, while a similar percentage of Sandals and Beaches guests cruise, creating cross-selling opportunities.
• The company notes strong consumer demand for vacation experiences and accelerated momentum across its brands.

Risks and Challenges:

• Higher than anticipated fuel costs based on current at-the-pump rates partially offset the increase in earnings expectations.
• Currency exchange rates are a factor in the earnings outlook.
• The company does not forecast fuel prices; fuel cost calculations are based on current prices net of hedging impacts.
• Q3 bunker pricing, net of hedging, was $778 per metric ton with consumption of 446,000 metric tons.
• Q4 2026 fuel expense is included at $379 million, with 58% hedged via swaps at a forecasted consumption of 463,000 metric tons.
• Annual average hedge portfolio costs are approximately $471, $405, $424, and $451 per metric ton for 2026, 2027, 2028, and 2029, respectively.

Management Commentary and Tone:

• Jason Liberty, Chairman and CEO, stated that Q3 results reflect continued strong consumer demand and that the strategy to "turn the vacation of a lifetime into a lifetime of vacations" is propelling the business.
• Management expressed confidence in the underlying business performing well ahead of initial expectations and noted the company is already above its ROIC target.
• The partnership with Sandals and Beaches is intended to drive significant shareholder value by expanding the vacation ecosystem.
• The investment in Sandals and Beaches is expected to close in early 2027, subject to customary conditions and regulatory approvals.
• The company's share of earnings from Sandals and Beaches is expected to be immediately accretive, with 2027 contribution dependent on the closing timing.

Other Key Points:

• The company issued $1.25 billion of 5.550% senior unsecured notes due 2034 in Q3 2026, with proceeds used to repay a portion of floating-rate term loan facilities and debt maturing in 2027.
• In October, the company entered into a $400 million delayed-draw term loan with Export Development Canada (EDC).
• The company increased its revolving credit facility by $50 million, bringing total capacity to $6.65 billion.
• Scheduled debt maturities are $0.6 billion for 2026, $2.4 billion for 2027, $3.2 billion for 2028, $1.1 billion for 2029, and $1.1 billion for 2030.
• Non-new ship related capital expenditures are expected to be $1.5 billion for full year 2026.
• The Sandals and Beaches investment will be accounted for under the equity method, with results reported on a one-quarter lag.