Carnival Corporation announced financial results for the first quarter 2025 and provided an updated outlook for the full year and an outlook for the second quarter 2025.
Key Highlights:
- Record first quarter revenues of $5.8 billion, up over $400 million compared to the prior year.
- Record net yields1 significantly outperformed December guidance due to strong close in demand and continued strength in onboard revenue.
- Record first quarter operating income of $543 million, nearly double the prior year.
- Cumulative advanced booked position for the remainder of the year is in line with the prior year’s record levels with pricing (in constant currency) at historical highs. Booking volumes taken during the first quarter for 2026 and beyond reached record levels.
- Accelerated efforts to manage the debt profile during the first quarter, opportunistically refinancing $5.5 billion of debt, delivering $145 million in annualized interest savings while reducing the debt balance by another $0.5 billion.
- Adjusted net income guidance for 2025 expected to be up over 30 percent compared to 2024 and better than December guidance by $185 million on improved revenue and interest expense expectations.
- Expecting to achieve both 2026 SEA Change financial targets one year in advance, with adjusted return on invested capital (“ROIC”) and adjusted EBITDA per available lower berth (“ALBD”) for 2025 reaching the highest levels in nearly two decades.
“Our first quarter was truly characterized by outperformance. This was across the board and led by incredibly strong demand throughout our portfolio including exceptional close-in demand that exceeded expectations for both ticket prices and onboard spending,” commented Carnival Corporation & plc’s Chief Executive Officer Josh Weinstein.
“While we are not completely immune from the heightened macroeconomic and geopolitical volatility since providing our December guidance, we are still taking up our earnings expectations for the year and we remain on track to have another stellar year across our cruise brands. This raise incorporates our increased first quarter yield results and reduced interest expense thanks to our recent successful refinancings. We are also affirming our December yield guidance for the remainder of 2025, as our booking curve continues to be the farthest out on record, at record prices (in constant currency), onboard spending is robust and we have proven to be incredibly resilient,” Weinstein continued.
“We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with family and friends. Our value for money is truly a strength when people look to make their vacation dollars go further,” said Weinstein.
First Quarter 2025 Results
- Record first quarter revenues of $5.8 billion, with record net yields (in constant currency)
- Gross margin yields were 25 percent higher than 2024.
- Net yields (in constant currency) were 7.3 percent higher than 2024 and significantly outperformed December guidance by 270 basis points.
- Cruise costs per ALBD decreased 0.3 percent compared to 2024. Adjusted cruise costs excluding fuel per ALBD1 (in constant currency) increased 1.0 percent compared to 2024 and were also better than December guidance, mainly due to the timing of expenses between the quarters.
- Record first quarter operating income of $543 million exceeded 2024 by $267 million, nearly doubling that of the prior year.
- Net loss was $78 million, or $(0.06) diluted EPS, an improvement of $136 million compared to 2024. Net loss included $252 million of debt extinguishment costs associated with the company’s refinancing transactions which will be highly accretive to future earnings.
- Adjusted net income1 of $174 million, or $0.13 adjusted EPS1, outperformed December guidance by $173 million led by strong net yield improvement.
- Record first quarter adjusted EBITDA1 of $1.2 billion increased 38 percent compared to 2024 and outperformed December guidance by $165 million.
- Operating margins and adjusted EBITDA margins1 both exceeded 2019 levels.
- Total customer deposits reached a first quarter record of $7.3 billion, surpassing the previous first quarter record at February 29, 2024, reflecting continued growth in both ticket prices and pre-cruise onboard sales.
Bookings
The company experienced another early start to a successful wave season, continuing to execute on its proven yield management strategy. Having entered the year with less 2025 inventory available for sale, the company achieved higher prices (in constant currency) than last year on bookings taken during the first quarter for the remainder of 2025.
“Our brands are continuing to deliver on our strategy to generate sustained demand, even for further out sailings. With the vast majority of 2025 booked, we continue to drive strong pricing for the remainder of the year in both North America and Europe, while also building demand for future years,” Weinstein commented. “In fact, booking volumes for 2026 sailings and beyond reached an all-time high and at higher prices (in constant currency),” Weinstein added.
The company’s cumulative advanced booked position for the remainder of the year remains strong, with pricing (in constant currency) at historical highs for each quarter, and occupancy in line with the prior year’s record levels. The company’s booking curve continues to be the furthest out on record.
2025 Outlook
For the full year 2025, the company expects:
- Net yields (in constant currency) approximately 4.7 percent higher than 2024, 0.5 percentage points better than December guidance.
- Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 3.8 percent compared to 2024, in line with December guidance.
- Adjusted net income up over 30 percent compared to 2024 and better than December guidance by $185 million.
- Adjusted EBITDA of approximately $6.7 billion, up nearly 10 percent compared to 2024 and better than December guidance.
- Adjusted ROIC of approximately 12 percent is now expected to reach the 2026 SEA Change target one year in advance, alongside exceeding the company’s 2026 SEA Change EBITDA per ALBD target.
For the second quarter of 2025, the company expects:
- Net yields (in constant currency) up approximately 4.4 percent compared to strong 2024 levels.
- Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 5.5 percent compared to the second quarter of 2024 primarily due to higher dry-dock days.
- Adjusted EBITDA of approximately $1.3 billion, up 10 percent compared to the second quarter of 2024.
Financing
“During the quarter we stepped up our refinancing efforts, tackling $5.5 billion of debt, which included our highest coupon debt instruments and delivered an incremental $145 million in annualized interest expense savings. We have been opportunistically reducing interest expense while simplifying our capital structure and managing our future debt maturities. Through all our efforts, we have reduced our average cash interest rate to 4.6 percent,” commented Carnival Corporation & plc’s Chief Financial Officer David Bernstein.
The company continued its efforts to proactively manage its debt profile. Since November 30, 2024, the company has:
- Repriced approximately $2.45 billion of its first-priority senior secured term loan facilities maturing in 2027 and 2028, which will result in interest expense savings of approximately $18 million on an annualized basis.
- Refinanced its $2.03 billion 10.375% senior priority notes due 2028 with $2.0 billion 6.125% senior unsecured notes due 2033, which will result in interest expense savings of approximately $80 million on an annualized basis. In addition, this refinancing simplified the company’s capital structure and managed its future debt maturities.
- Refinanced its $1.0 billion 10.5% senior unsecured notes due 2030 with $1.0 billion 5.75% senior unsecured notes due 2030, which will result in interest expense savings of approximately $45 million on an annualized basis.
- Reduced its debt balance by another $0.5 billion, ending the quarter with $27.0 billion of total debt.
During the quarter, Moody’s upgraded the company’s credit rating and maintained a positive outlook. The company believes this is a reflection of its improved leverage metrics and continuing journey to investment grade ratings.
As of February 28, 2025, the company’s debt maturities for the remainder of 2025 and full year 2026 are $1.1 billion and $2.7 billion.