Royal Caribbean Q2 Earnings Beat Estimates, Revenues Miss, Stock Down

Royal Caribbean Cruises Ltd. RCL reported mixed second-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. Post the results, the cruise stock declined 5.4% in the pre-market trading session.

RCL’s Q2 Earnings & Revenues

In the second quarter, the company reported adjusted earnings per share (EPS) of $4.38, which beat the Zacks Consensus Estimate of $4.10. In the prior-year quarter, RCL recorded an adjusted EPS of $3.21. 

Quarterly revenues of $4,538 million missed the consensus estimate of $4,550 million. However, the reported value was up 10.4% year over year from $4.11 billion.

Royal Caribbean’s Quarterly Highlights

Passenger ticket revenues amounted to $3.2 billion, up from $2.9 billion in the prior-year quarter. Our estimate for Passenger ticket revenues was $3.2 billion.

Onboard and other revenues increased to $1.34 billion from $1.22 billion reported in the year-ago quarter. Our estimate for the metric was $1.3 billion.

Total cruise operating expenses amounted to $2.28 billion, up 6.1% year over year. Our estimate for the metric was $2.28 billion.

Net yields rose 5.2% on a constant currency basis (cc) and 5.3% on a reported basis compared with the second-quarter 2024 level. Net cruise costs, excluding fuel, per Available Passenger Cruise Day (“APCD”) increased 2.5% on a reported basis and 2.1% at cc from last year's quarter figure.

Other Financial Information of RCL

As of June 30, 2025, Royal Caribbean reported cash and cash equivalents of $735 million compared with $388 million in 2024-end. As of the end of the second quarter of 2025, long-term debt decreased to $17.61 billion from $18.47 billion reported in 2024-end. The current portion of long-term debt at the end of the quarter was $1.4 billion, down from $1.6 billion recorded in 2024-end.

Booking Update of Royal Caribbean

Royal Caribbean is experiencing strong booking momentum, with load factors for 2025 and 2026 tracking ahead of previous years and at higher pricing levels. The company noted an acceleration in bookings since its last earnings update, especially for close-in sailings, which contributed to second-quarter outperformance. Demand remains healthy across all product categories and source markets, supported by strong performance through digital and commercial channels. Both onboard spending and pre-cruise purchases continue to outpace prior-year levels, as guests engage more and spend at elevated price points.

Bookings for upcoming ship launches, including Star of the Seas and Celebrity Xcel, are also seeing exceptional traction, building on the popularity of their respective ship classes. Additionally, early sales for the newly announced Royal Beach Club on Paradise Island have been met with robust interest. According to CEO Jason Liberty, consumer travel preferences are shifting toward shorter booking windows and more experience-driven vacations. Royal Caribbean is positioning its offerings to meet these evolving trends, supporting the goal to gain share in the expanding global vacation market.

RCL’s Q3 Outlook

In the third quarter of 2025, Royal Caribbean expects depreciation and amortization expenses to be in the range of $425-$435 million. Net interest expenses (excluding loss on extinguishment of debt) are projected to be between $235 million and $245 million. Management estimates adjusted EPS to be in the band of $5.55-$5.65.

The company expects net yields to increase in the band of 2.3-2.8% on a reported basis and 2-2.5% at cc year over year. Net cruise costs, excluding fuel, per APCD are expected to increase between 6.4% and 6.9% on a reported basis and in the range of 6-6.5% at cc.

2025 View by RCL

For 2025, the company expects depreciation and amortization expenses to be in the range of $1.70-$1.71 billion. Net interest expenses (excluding loss on extinguishment of debt) are expected to be between $930 million and $940 million. Adjusted EPS is anticipated to be between $15.41 and $15.55 compared with the previous expectation of $14.55-$15.55.

The company expects net yields to increase in the band of 3.5-4% on a reported basis and 3.5-4% at cc year over year.

RCL’s Zacks Rank

Royal Caribbean currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Carnival Corporation & plc CCL, Monarch Casino & Resort, Inc. MCRI and Planet Fitness, Inc. PLNT.

Carnival presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carnival delivered a trailing four-quarter earnings surprise of 169.9%, on average. The stock has gained 19.3% in the year-to-date period. The Zacks Consensus Estimate for Carnival’s 2025 sales and EPS implies growth of 5.8% and 40.9%, respectively, from the year-ago levels.

Monarch Casino presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter earnings surprise of 11.1%, on average. The stock has rallied 32.3% in the year-to-date period.

The Zacks Consensus Estimate for Monarch Casino’s 2025 sales and EPS indicates an increase of 4.5% and 9.9%, respectively, from the year-ago levels.

Planet Fitness currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 12.5% in the year-to-date period.

The Zacks Consensus Estimate for Planet Fitness’ 2025 sales and EPS indicates growth of 10.4% and 12.4%, respectively, from the year-ago period’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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