Royal Caribbean Group showcased a strong financial performance in the fourth quarter of 2025, solidifying its position in the cruise industry with favorable demand dynamics and disciplined operational management. The company reported an adjusted earnings per share (EPS) of $2.80, closely aligning with market expectations, on total revenues of $4.259 billion—just slightly below the anticipated $4.262 billion consensus estimate. On a Generally Accepted Accounting Principles (GAAP) basis, EPS was $2.76 for the quarter, a notable increase from $2.02 in the same period the previous year.
Net income advanced to $800 million from $600 million year-over-year, reflecting underlying profitability improvements. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $1.5 billion in this quarter, underscoring operational efficiency.
The revenue growth from $3.761 billion in the prior-year quarter was supported by a strong load factor of 108%, signaling high capacity utilization on the company’s cruises. Yield metrics showed favorable trends, with Gross Margin Yields increasing by 9.2% and Net Yields rising 3.1% compared to the previous year.
Operational costs, a key focus in Royal Caribbean’s performance, demonstrated positive momentum. Net cruise costs, excluding fuel, per available passenger cruise day (APCD) declined by 5.8% year-over-year compared to the fourth quarter of 2024, indicating effective cost containment despite inflationary pressures.
Looking at full-year results for 2025, Royal Caribbean posted a GAAP EPS of $15.61 and an adjusted EPS of $15.64, both marking a strong financial year. Total revenue climbed to $17.935 billion from $16.484 billion in 2024, and net income rose to $4.3 billion. Adjusted EBITDA hit $7.0 billion, and operating cash flow stood at $6.465 billion, representing healthy cash generation to fund growth and shareholder returns.
The company carried 9.45 million passengers during the year with an occupancy ratio of 109.7%, an indicator of demand well above available capacity. Importantly, Gross Margin Yields improved by 8.5% and Net Yields by 3.8%, reflecting both pricing strength and operational leverage. Net cruise costs excluding fuel on a constant-currency basis showed a slight decrease, affirming disciplined expense management.
Booking trends remain robust, with the company citing its Cyber Sales period and the onset of the WAVE season as drivers behind the highest seven-week booking stretch in its history. Approximately two-thirds of the 2026 sailing capacity is already booked at record rates. There is also noted strength in last-minute demand.
Customer spending habits have improved, with onboard and pre-cruise expenditures exceeding those seen in prior years. Nearly half of the onboard revenue for 2025 was secured through pre-cruise bookings, enhancing revenue visibility and stability.
On the liquidity front, Royal Caribbean held $7.2 billion as of December 31, 2025, comprising cash and undrawn revolver capacity. Cash and cash equivalents accounted for $825 million of total liquidity. The company repurchased 1.8 million shares for $504 million during the fourth quarter, wrapping up a $1 billion buyback program and maintaining $1.8 billion in repurchase authority under the current authorization. The company also presented a clear schedule for debt maturities extending through 2030, underscoring prudent capital management.
Looking ahead, Royal Caribbean provided guidance for the first quarter of 2026 with adjusted EPS expected between $3.18 and $3.28, comfortably above the market estimate of $2.92. For the full year 2026, adjusted EPS is projected at $17.70 to $18.10 versus the consensus of $17.66. This forecast is underpinned by a planned capacity increase of 6.7% and growth in yields, although management noted a 30 basis point headwind from itinerary adjustments in China.
Risks identified by management include potential impacts from tariffs, fluctuating fuel prices, currency exchange volatility, and changing interest rates. Despite these challenges, Royal Caribbean’s leadership remains optimistic about the ongoing strength of its brand portfolio and vacation offerings, emphasizing the favorable start of the WAVE season.
“WAVE is off to a great start and we continue to see strong and growing preference for our leading brands and differentiated vacation experiences,” said Jason Liberty, Chairman and CEO of Royal Caribbean Group. “We expect another strong year of financial performance with both revenue and earnings growing double digits, and we remain on track to achieve our Perfecta goals by 2027.”
In terms of fleet and portfolio expansion, Celebrity River Cruises, a subsidiary of Royal Caribbean Group headquartered in Miami, announced the addition of 10 more river vessels. This expansion aims to double the current fleet to 20 ships by 2031. Celebrity also opened bookings for its 2028 European season, which will feature an 80% increase in destinations compared to its inaugural 2027 itinerary.
Moreover, Royal Caribbean secured agreements with the shipbuilder Chantiers de l’Atlantique to build new Discovery Class ships. The deal includes two firm orders with options for four additional vessels. The first Discovery Class ship is slated to launch in 2029, with a second following in 2032, giving a clear timeline for the company’s large-ship expansion.
Following these announcements, Royal Caribbean's stock price experienced significant growth, rising approximately 8.11% to $315.25 during premarket trading on the reported day, reflecting investor confidence in the firm’s strong operational results and strategic roadmap.
Summary of Key Figures and Metrics:
- Q4 2025 Adjusted EPS: $2.80 (in line with expectations)
- Q4 2025 Revenues: $4.259 billion (slightly below $4.262 billion consensus)
- Full-year 2025 Adjusted EPS: $15.64
- Full-year 2025 Revenue: $17.935 billion
- Full-year 2025 Net Income: $4.3 billion
- Passenger count in 2025: 9.45 million with 109.7% occupancy
- Liquidity: $7.2 billion (including $825 million cash)
- Share repurchases Q4: 1.8 million shares costing $504 million
- 2026 EPS Guidance: $17.70 to $18.10
- Increase in 2026 Capacity: 6.7%