Royal Caribbean raises 2026 guidance after strong Q2 earnings beat

Royal Caribbean Group (NYSE: RCL) today reported second quarter Earnings per Share ("EPS") of $4.20 and Adjusted EPS of $4.21.

These results were better than the company's guidance, driven by strong close-in demand, lower costs, and favorable performance from joint ventures, the company said in a press release.

The company now expects full year Adjusted EPS to be in the range of $17.73 to $17.87.

The increase in earnings expectations reflects the stronger-than-expected second quarter performance and an improved outlook for the remainder of the year. This outlook incorporates a modest booking impact for select itineraries primarily due to prolonged geopolitical activity.

"The strong second quarter performance demonstrates the continued strength of our brands, the appeal of our vacation experiences, and the momentum in our business," said Jason Liberty, Chairman and CEO, Royal Caribbean Group. "We expect another year of approximately double-digit growth in revenue and earnings, driven by consumers' preference for our leading brands and supported by our strong booked position, leading margin profile, and fortified balance sheet."

"We continue to expand, elevate and differentiate our portfolio of vacation experiences," Liberty added. "Legend of the Seas, which launched earlier this month as the third ship in our Icon class, is part of a platform that is reshaping the cruising experience and delivering exceptional returns. Its successful debut represents another important milestone in the execution of our innovation pipeline as we continue to redefine the vacation experience. At the same time, we are deepening guest engagement through our loyalty and technology platforms – strengthening our relationships with guests, increasing repeat rates, and positioning us to capture a greater share of the growing $2 trillion global vacation market."

Second Quarter 2026:

• Total revenue was $4.8 billion, a 6% increase year over year. Load factor in the second quarter was 110%.

• Gross Margin Yields decreased 5.6% as-reported. Net Yields increased 1.9% as-reported and 1.2% in Constant Currency.

• Gross Cruise Costs per Available Passenger Cruise Days ("APCD") increased 4.5% as-reported. Net Cruise Costs ("NCC"), excluding Fuel, per APCD increased 4.4% as-reported and 3.9% in Constant Currency.

• Net Income was $1.1 billion or $4.20 per share, Adjusted Net Income was $1.1 billion or $4.21 per share, and Adjusted EBITDA was $1.8 billion.

Full Year 2026 Outlook:

• Revenue is expected to grow 9% year over year. Net Yields are expected to increase 2.35% to 2.85% as-reported and 1.75% to 2.25% in Constant Currency.

• NCC, excluding Fuel, per APCD are expected to increase approximately 0.4% as-reported and be approximately flat in Constant Currency.

• Adjusted EPS is expected to be in the range of $17.73 to $17.87, representing 14% year over year growth, and a 23% CAGR over the first two years of the company's Perfecta program, which targets a 20% earnings CAGR from 2024 to 2027 and ROIC in the high teens by 2027.

Second Quarter 2026 Results

Net Income for the second quarter of 2026 was $1.1 billion or $4.20 per share compared to Net Income of $1.2 billion or $4.41 per share for the same period in the prior year. Adjusted Net Income was $1.1 billion or $4.21 per share for the second quarter of 2026 compared to Adjusted Net Income of $1.2 billion or $4.38 per share for the same period in the prior year. The company also reported total revenues of $4.8 billion and Adjusted EBITDA of $1.8 billion.

Capacity for the second quarter was up 5% year over year and the company delivered memorable vacations to 2.4 million guests, a 6% increase year over year. Total revenue increased 6% year over year. Gross Margin Yields decreased 5.6% as-reported, and Net Yields increased 1.9% as-reported (1.2% in Constant Currency), when compared to the second quarter of 2025. Load factor for the quarter was 110%. Net Yield growth exceeded the company's guidance primarily driven by better than expected close-in demand.

Gross Cruise Costs per APCD increased 4.5% as-reported, compared to the second quarter of 2025. NCC, excluding Fuel, per APCD increased 4.4% as-reported (and 3.9% in Constant Currency), when compared to the second quarter of 2025. The better-than-expected cost performance in the second quarter was primarily driven by favorable timing of expenses.

Update on Bookings and Onboard Revenue

The overall demand environment remains strong, supported by consumers' continued preference for the company's differentiated experiences. Since the last earnings call, the company has experienced a modest, near-term impact on bookings for select itineraries, primarily due to prolonged geopolitical activity. The company remains booked at record prices, booking volumes are above last year's levels, and load factors remain robust across its vacation portfolio. The company continues to benefit from strong guest engagement and demand for onboard and destination experiences, supported by ongoing enhancements to its product offerings and more targeted pre-cruise engagement.

"Consumer demand for our vacation experiences is strong, and guests continue to demonstrate a desire to spend on memorable experiences with us," said Naftali Holtz, Chief Financial Officer, Royal Caribbean Group. "As we build a broader vacation platform, we are giving guests more reasons to vacation with Royal Caribbean across more occasions, while reinforcing our ability to drive higher engagement and spend over time. While still very early, booking trends for 2027 are encouraging and pacing ahead of historical levels, including for itineraries where demand was impacted by geopolitical developments this year."

Third Quarter 2026

Net Yields are expected to be approximately flat as-reported and in Constant Currency as compared to 2025, reflecting continued healthy demand and pricing at record levels leading to expected total revenue growth of 8%.

NCC, excluding Fuel, per APCD, is expected to decrease 1.7% to 1.2% as-reported and 1.6% to 1.1% in Constant Currency as compared to 2025.

Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects third quarter Adjusted EPS to be in the range of $6.26 to $6.36.