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01/11 15:41
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate strong demand, with advanced bookings increasing significantly and higher pricing for both ocean and river cruises. The company showcases confidence in its market position and strategic growth plans, including new ship deliveries and capacity expansion. Despite some unclear responses, the overall sentiment is positive, supported by strong booking trends and pricing power. The lack of guidance changes or negative financial results further supports a positive outlook.
Net Yield Net yield increased 7.1% year-over-year to $617, the highest in Viking's history. This increase was driven by strong demand and a favorable booking environment.
Adjusted Gross Margin Adjusted gross margin increased 21.4% year-over-year. This was due to an 11% growth in capacity and a 7.1% rise in net yields.
Vessel Expenses Vessel expenses, excluding fuel per capacity PCD, increased 9.6% year-over-year. The increase was attributed to changes in itinerary mix, higher port charges, and slightly higher repair and maintenance costs.
Adjusted EBITDA Adjusted EBITDA reached $704 million, up 26.9% year-over-year, marking the highest quarterly adjusted EBITDA in the company's history. This was driven by capacity and yield growth.
Net Income Net income was $514 million, an improvement of almost $135 million compared to the same period in 2024. The increase was partially offset by nonrecurring charges of $19.7 million related to debt refinancing.
Adjusted EPS Adjusted EPS was $1.20, up 33.2% year-over-year, reflecting strong financial performance.
River Segment Metrics Capacity PCDs increased 5.2% year-over-year due to the addition of 4 new ships. Net yield for the river segment was $589, up 7.8% year-over-year, driven by strong demand for Egypt and European itineraries.
Ocean Segment Metrics Capacity PCDs increased 15.3% year-over-year due to the addition of new ships. Net yield for the ocean segment was $591, up 10.9% year-over-year, driven by strong demand and higher occupancy.
Cash and Cash Equivalents Total cash and cash equivalents were $3 billion as of September 30, 2025. Net debt was $2.8 billion, and the net leverage ratio improved to 1.6x from 2.1x in the previous quarter.
Fleet Expansion: Viking now operates a fleet of 103 ships, including 89 river vessels, 12 ocean ships, and purpose-built expedition ships. This expansion reflects disciplined execution and innovation.
New Itineraries: Viking offers itineraries spanning 85 countries, all 7 continents, 5 oceans, 21 rivers, and 5 lakes, calling on over 500 ports.
Recognition: Viking was rated #1 for both oceans and rivers by Conde Nast Traveler for the fifth consecutive year and honored as a World's Best by Travel + Leisure.
Booking Momentum: 96% of 2025 capacity and 70% of 2026 capacity are already booked, reflecting strong demand and brand strength.
Advanced Bookings: Advanced bookings for 2025 are $5.6 billion, up 21% year-over-year, while 2026 bookings are $4.9 billion, up 14% year-over-year.
Financial Performance: Net yield increased 7.1% year-over-year to $617, the highest in Viking's history. Adjusted EBITDA reached $704 million, up 26.9% year-over-year.
Cost Management: SG&A expenses remained flat as a percentage of adjusted gross margin, and disciplined cost management continues despite capacity growth.
Docking Locations: Viking controls or has priority access to 113 premier docking locations worldwide, enhancing guest experience and reinforcing leadership in river cruising.
Sustainability and Exploration: Expedition ships are designed with safety, comfort, and sustainability in mind, focusing on meaningful discovery rather than tourism.
Vessel Expenses: Vessel expenses, excluding fuel per capacity PCD, increased 9.6% year-over-year due to changes in itinerary mix, higher port charges, and slightly higher repair and maintenance costs. These costs can vary depending on operational needs, potentially impacting financial performance.
Debt Refinancing Costs: Nonrecurring charges of $19.7 million were incurred in connection with debt refinancing, which are included in interest expense. This could affect net income and financial flexibility.
Cancellations: As the calendar year ends, there might be a few cancellations, which is considered normal but could impact advanced bookings and revenue projections.
Capacity Growth and Costs: Capacity growth of 11% year-over-year has led to increased operational costs, including higher repair and maintenance expenses. Managing these costs is critical to maintaining profitability.
Economic Sensitivity: The company's performance is tied to advanced bookings and customer demand, which could be impacted by broader economic uncertainties or downturns.
Regulatory and Compliance Risks: The company operates in multiple regions and must comply with various regulatory requirements, which could pose challenges or increase operational costs.
Booking Curves for 2025 and 2026: 96% of 2025 capacity is already booked, with advanced bookings totaling $5.6 billion, a 21% increase compared to 2024. For 2026, 70% of capacity is booked, with $4.9 billion in advanced bookings, a 14% increase compared to 2025.
Ocean Cruises Advanced Bookings: For 2025, 95% of capacity is sold, with advanced bookings 29% higher than the previous year and rates at $717 compared to $661 last year. For 2026, 77% of capacity is sold, with advanced bookings at $2.4 billion and rates at $783 compared to $749 for 2025.
River Cruises Advanced Bookings: For 2025, 96% of capacity is sold, with advanced bookings 16% higher than the previous year and rates at $820 compared to $758 last year. For 2026, 62% of capacity is sold, with advanced bookings at $2.2 billion and rates at $920 compared to $853 for 2025.
Capacity Growth and Expansion: Ocean capacity is projected to increase by 9% in 2026, while river operating capacity is expected to grow by 10%. Option agreements for 8 additional river vessels have been added, with potential deliveries in 2031 and 2032.
Capital Expenditures: Expected committed ship CapEx for 2025 is $910 million ($480 million net of financing), and for 2026, it is $1.2 billion ($320 million net of financing).
Financial Projections: Average rates for the 2026 season are projected to be 5.5% higher than 2025, alongside a 9% increase in capacity.
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The earnings call summary and Q&A indicate strong demand, with advanced bookings increasing significantly and higher pricing for both ocean and river cruises. The company showcases confidence in its market position and strategic growth plans, including new ship deliveries and capacity expansion. Despite some unclear responses, the overall sentiment is positive, supported by strong booking trends and pricing power. The lack of guidance changes or negative financial results further supports a positive outlook.
The earnings call indicates strong revenue growth, with a 24.9% increase YoY, and a significant portion of future capacity already booked. The introduction of a hydrogen-powered ship and strategic expansion into new markets like Egypt and India are positive catalysts. Despite some expense upticks, the management's confidence in maintaining mid-single-digit growth and high-quality product offerings suggests a positive outlook. The lack of clear guidance on yield growth and capital returns is a slight concern, but overall, the company's strong market position and innovative strategies are likely to drive a positive stock price movement.
The earnings call highlights strong financial performance with a 24.9% revenue increase and improved adjusted EBITDA. The Q&A section reveals confidence in pricing strategies and demand stability. Despite a net loss, there is a significant improvement YoY. The lack of a share repurchase program is a minor negative, but overall, the company's growth plans and financial health suggest a positive outlook. The management's vague responses on macroeconomic impacts are a concern, but not enough to outweigh the positives.
While Viking reported strong financial metrics with increased revenue and EBITDA, the absence of a share repurchase program and concerns about debt management and future booking trends pose risks. The Q&A revealed no immediate pricing pressures but highlighted uncertainties in macroeconomic impacts and booking patterns. The lack of a shareholder return plan and net losses also temper positive sentiments. Overall, the mixed signals from financial performance and strategic planning suggest a neutral stock price movement in the short term.
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