Royal Caribbean Q4 Earnings Lag, Stock Up on Robust 2026 View

Royal Caribbean Cruises Ltd. RCL reported fourth-quarter 2025 results, with adjusted earnings and revenues missing the Zacks Consensus Estimate. However, the top and bottom lines increased on a year-over-year basis. Post the results, the cruise stock rose 6.2% in the pre-market trading session, primarily due to strong 2026 guidance.

Royal Caribbean Group delivered a standout performance in 2025 and is carrying that strong momentum into 2026, according to chairman and CEO Jason Liberty. Early booking trends are encouraging, with demand rising for the company’s flagship brands and differentiated cruise experiences. Management expects another robust year ahead, with both revenues and earnings projected to grow at a double-digit pace, keeping the company firmly on track to meet its long-term “Perfecta” targets by 2027.

Looking ahead, Royal Caribbean is stepping up investments in next-generation vacation offerings to support sustained growth. Key initiatives include the launch of the new Discovery Class ships under the Royal Caribbean brand, the expansion of Celebrity River Cruises and the rollout of five new exclusive destinations by 2028. These moves are designed to deepen the company’s appeal and expand its addressable market over the long run.

RCL’s Q4 Earnings & Revenues

In the fourth quarter, the company reported adjusted earnings per share (EPS) of $2.80, which missed the Zacks Consensus Estimate of $2.81. In the prior-year quarter, RCL recorded an adjusted EPS of $1.63.

Quarterly revenues of $4,259 million missed the consensus estimate of $4,269 million. However, the reported value was up 13.2% year over year from $3.76 billion.

Royal Caribbean’s Quarterly Highlights

Passenger ticket revenues amounted to $2.94 billion, up from $2.6 billion in the prior-year quarter. Our estimate for Passenger ticket revenues was $2.96 billion.

Onboard and other revenues increased to $1.32 billion from $1.16 billion reported in the year-ago quarter. Our estimate for the metric was $1.3 billion.

Total cruise operating expenses amounted to $2.24 billion, up 9.3% year over year. Our estimate for the metric was $2.19 billion.

Net yields rose 2.5% on a constant currency basis (cc) and 3.1% on a reported basis compared with the fourth-quarter 2024 level. Net cruise costs, excluding fuel, per Available Passenger Cruise Day (“APCD”) decreased 5.8% on a reported basis and 6.3% at cc from last year's quarter figure.

Other Financial Information of RCL

As of Dec. 31, 2025, Royal Caribbean reported cash and cash equivalents of $825 million compared with $388 million in 2024-end. As of the end of the fourth quarter of 2025, long-term debt decreased to $18.17 billion from $18.47 billion reported in 2024-end.

Booking Update of Royal Caribbean

Royal Caribbean Group has seen a sharp acceleration in demand since its last earnings call, driven by strong Cyber Sales and a solid start to the WAVE season. These factors delivered the seven strongest booking weeks in the company’s history. Around two-thirds of 2026 sailings are already booked, in line with normal seasonal patterns but at record pricing levels, while late booking activity remains elevated.

Spending trends are also moving higher. Onboard and pre-cruise purchases continue to outpace prior years, supported by higher guest participation and pricing. In 2025, nearly half of onboard revenue was secured before guests even sailed, with the vast majority of those purchases completed through digital platforms. Early indicators for 2026 show further improvement, with a larger share of booked guests already committing to onboard spending ahead of their trips.

CFO Naftali Holtz noted that demand strength is broad-based, reflecting consumers’ continued preference for Royal Caribbean’s vacation offerings. Holtz added that net yields are rising across key itineraries, particularly in the Caribbean, as ongoing investments enhance the company’s differentiation and reinforce its leadership position in the region.

RCL’s Q1 Outlook

In the first quarter of 2026, Royal Caribbean expects depreciation and amortization expenses to be in the range of $455-$465 million. Net interest expenses (excluding loss on extinguishment of debt) are projected to be between $245 million and $255 million. Management estimates adjusted EPS to be in the band of $3.18-$3.28. The Zacks Consensus Estimate for the quarter is pegged at $3.00 per share.

The company expects net yields to increase in the band of 2.4-2.9% on a reported basis and 1-1.5% at cc year over year. Net cruise costs, excluding fuel, per APCD are expected to increase between 0.2% and 0.7% on a reported basis and in the range of down 0.5% to flat at cc.

2026 View by RCL

For 2026, the company expects depreciation and amortization expenses to be in the range of $1.89-$1.9 billion. Net interest expenses (excluding loss on extinguishment of debt) are expected to be between $990 million and $1,000 million. Adjusted EPS is anticipated to be between $15.41 and $15.55 compared with the previous expectation of $17.70-$18.10. The Zacks Consensus Estimate for 2026 earnings per share is pegged at $17.72.

The company expects net yields to increase in the band of 2.1% to 4.1% on a reported basis and 1.5-3.5% at cc year over year.

RCL’s Zacks Rank

Royal Caribbean currently carries a Zacks Rank #4 (Sell).

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

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