Norwegian Cruise Line Holdings Ltd. (NCLH) operates as a leading global cruise company, encompassing three distinct brands: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. As of December 31, 2025, the company managed a fleet of 34 ships with approximately 71,400 Berths ¹. The company's business model is centered on offering diverse itineraries to worldwide destinations, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, the Caribbean, Alaska, and Hawaii, with Norwegian's U.S.-flagged ship, Pride of America, providing the industry's only entirely inter-island itinerary in Hawaii. Revenue is generated through passenger ticket sales and onboard and other services, with a mix of recurring and transactional income. The company also operates two private destinations, Great Stirrup Cay in The Bahamas and Harvest Caye in Belize, which are integral to its product offering.

The company's core business model involves generating revenue from passenger ticket sales, which generally include cruise fare, onboard activities, meals, entertainment, and government taxes, fees, and port expenses. In some cases, cruise ticket prices are all-inclusive, covering round-trip airfare, complimentary beverages, unlimited shore excursions, internet, valet laundry service, and pre- or post-cruise hotel packages. Onboard and other revenue is generated from additional products and services not included in the cruise fare, such as casino operations, certain food and beverages, shore excursions, gift shop purchases, and spa and communication services. These onboard services are either managed directly by NCLH or through third-party concessionaires, from which the company receives a percentage of gross sales.

The Norwegian Cruise Line brand caters to a variety of travelers, offering up to 20 dining options on select ships, various attractions like the world's first hybrid rollercoaster and waterslide at sea, diverse entertainment, full-service spas, and a range of accommodations from luxury suites to studio staterooms. Oceania Cruises focuses on award-winning onboard dining and destination-focused itineraries, emphasizing immersive exploration. Effective January 7, 2026, Oceania Cruises will exclusively welcome guests aged 18 and older for new reservations. Regent Seven Seas Cruises offers an all-inclusive fare that covers unlimited shore excursions, a one-night pre-cruise hotel package for Concierge Suites and higher, specialty dining, unlimited premium beverages, pre-paid gratuities, unlimited Wi-Fi, and valet laundry service.

For the fiscal year ended December 31, 2025, NCLH reported total revenue of $9.827 billion ², an increase of 3.7% compared to $9.479 billion ³ in the prior year. Gross margin for 2025 was $3.286 billion ⁴, with an Adjusted Gross Margin of $7.356 billion ⁵. Operating income increased to $1.560 billion ⁶ in 2025 from $1.465 billion ⁷ in 2024. Net income for 2025 was $423.2 million ⁸, a decrease from $910.3 million ⁹ in 2024. Diluted EPS was $0.92 ¹⁰ in 2025, down from $1.89 ¹¹ in 2024. Adjusted Net Income was $1.0 billion ¹² and Adjusted EPS was $2.11 ¹³ in 2025, compared to Adjusted Net Income of $911.7 million ¹⁴ and Adjusted EPS of $1.77 ¹⁵ in 2024. Adjusted EBITDA increased by 11.4% to $2.7 billion ¹⁶ in 2025 from $2.5 billion ¹⁷ in 2024. Cash and cash equivalents stood at $209.9 million ¹⁸ as of December 31, 2025, with total long-term debt of $13.730 billion ¹⁹ and a working capital deficit of $4.3 billion ²⁰.

Comparing 2025 to 2024, total revenue increased by 3.7% ²¹, driven by a 4.2% ²² increase in Capacity Days and higher passenger ticket pricing and onboard spending. Passenger ticket revenue constituted 68.0% ²³ of total revenue in 2025, up from 67.7% ²⁴ in 2024, while onboard and other revenue was 32.0% ²⁵ in 2025, down from 32.3% ²⁶ in 2024. Total cruise operating expense decreased by 0.9% ²⁷ in 2025, primarily due to reduced air costs from itinerary mix changes and lower fuel costs, partially offset by the delivery of new ships. Operating income margin improved to 15.9% ²⁸ in 2025 from 15.5% ²⁹ in 2024. Net income decreased significantly due to higher interest expense, net, which included $272.5 million ³⁰ in losses from extinguishment and modification of debt in 2025, compared to $29.2 million ³¹ in 2024, and a lower income tax benefit.

During 2025, NCLH took delivery of Norwegian Aqua in March 2025 and Oceania Allura in July 2025. The company also completed several financing transactions, including the issuance of $1.8 billion ³² aggregate principal amount of 6.750% senior unsecured notes due 2032 in January 2025, and the increase of its Revolving Loan Facility from $1.2 billion ³³ to approximately $2.5 billion ³⁴ by June 2025. In April 2025, NCLC exchanged $353.9 million ³⁵ of 2025 Exchangeable Notes for 2030 0.875% Exchangeable Notes and a cash payment of $64.0 million ³⁶, funded partly by April Equity Offerings of 3,358,098 ³⁷ ordinary shares at $19.06 ³⁸ per share. In September 2025, NCLC issued approximately $1.4 billion ³⁹ of 2030 0.750% Exchangeable Notes, $1.2 billion ⁴⁰ of 2031 Notes, and $850.0 million ⁴¹ of 2033 Notes, and completed a September Equity Offering of 3,313,868 ⁴² ordinary shares at $24.53 ⁴³ per share. These proceeds were used for repurchases of 2027 1.125% Exchangeable Notes and 2027 2.50% Exchangeable Notes, and to redeem 2026, 2027, and 2029 Notes. The company also announced a second phase of expansion for Great Stirrup Cay, including a nearly six-acre Great Tides Waterpark expected to open in summer 2026.

NCLH anticipates needing additional equity and/or debt financing in the future to refinance existing debt and fund its newbuild program. The company expects to incur significant expenses related to evolving regulatory requirements and commitments concerning climate change, including GHG emissions reduction initiatives, ship modifications, and the purchase of emissions allowances and alternative fuels. During 2025, NCLH spent $36.1 million ⁴⁴ on capital expenditures for projects aimed at reducing carbon emissions from its existing fleet. The company recognized $34.2 million ⁴⁵ of expense related to compliance with the E.U. ETS in 2025, with the majority collected directly from passengers.

The company's strategic fleet expansion program includes the addition of 17 additional ships from 2026 through 2037. For the Norwegian brand, three Prima Class Ships are on order with scheduled delivery dates from 2026 through 2028. The fourth Prima Class Ship will be approximately 154,000 Gross Tons ⁴⁶ with 3,565 Berths ⁴⁷, and the fifth and sixth Prima Class Ships will each be approximately 170,000 Gross Tons ⁴⁸ with 3,880 Berths ⁴⁹. Additionally, five new Norwegian Cruise Line ships, each approximately 227,000 Gross Tons ⁵⁰ and 5,000 Berths ⁵¹, are scheduled for delivery from 2030 through 2037. For Oceania Cruises, five Sonata Class Ships, each approximately 86,000 Gross Tons ⁵² and 1,390 Berths ⁵³, are scheduled for delivery from 2027 through 2037. Regent Seven Seas Cruises has four Prestige Class Ships on order, each approximately 77,000 Gross Tons ⁵⁴ and 822 Berths ⁵⁵, with scheduled delivery dates from 2026 through 2036. The orders for Prestige Class Ships in 2033 and 2036, and the Sonata Class Ship and Norwegian Cruise Line ship in 2037, are contingent upon financing.

NCLH's operational outlook includes a strategic cost optimization effort focused on identifying efficiencies and optimizing costs across the organization to deliver sustainable savings without compromising guest experience or quality. This effort is intended to at least partially offset potential revenue pressures from macroeconomic headwinds or commercial strategy misalignment. The company is also evaluating the effects of global climate change-related requirements, which are still evolving, and its ability to mitigate future expenses through GHG emissions reduction initiatives.

Planned capital allocation for future capital commitments, including ship construction contracts and growth initiatives, is projected at $2.9 billion ⁵⁶ for 2026, $2.9 billion ⁵⁷ for 2027, and $1.8 billion ⁵⁸ for 2028. Export-credit backed financing is in place for anticipated ship construction expenditures of $1.6 billion ⁵⁹ in 2026, $2.0 billion ⁶⁰ in 2027, and $1.4 billion ⁶¹ in 2028, covering approximately 80% ⁶² of the contract price for effective ship construction contracts, with exceptions for certain Sonata Class and Norwegian Cruise Line ships. Anticipated other non-newbuild capital expenditures are $0.5 billion ⁶³ for 2026. The combined contract prices for the 13 effective ships on order totaled approximately €18.3 billion ⁶⁴, or $21.5 billion ⁶⁵ as of December 31, 2025.

The company enters 2026 slightly below its optimal booking range due to execution missteps in aligning its commercial strategy with deployment. First-quarter performance is expected to reflect the absorption of a material increase in capacity in the Caribbean. However, longer-term demand trends remain constructive, with particularly strong demand observed across the luxury brands, which benefit from longer booking curves. The company's deployment shift is expected to result in higher load factors.

NCLH has executed long-term charter agreements, each with purchase options, for Norwegian Sky beginning in 2026 and Norwegian Sun beginning in 2027, as part of its ship disposal strategy for older vessels. The company is also negotiating a bareboat charter with a purchase option for Seven Seas Navigator, expected to be completed before the end of the first quarter of 2026. These agreements are aimed at optimizing the fleet and managing older assets.

Management's message to shareholders emphasizes a corporate strategy built on people excellence, a guest-centric product offering, a scalable long-term growth platform, and a focus on exceptional performance, all underpinned by a commitment to sustainability. The company acknowledges entering 2026 against a pressured backdrop, being slightly below the optimal booking range due to execution missteps in aligning its commercial strategy with deployment. However, management notes that longer-term demand trends remain constructive, with particularly strong demand observed across the luxury brands, benefiting from longer booking curves. The deployment shift is expected to result in higher load factors. Management is committed to strategic cost optimization efforts to drive disciplined, company-wide efficiencies and cost savings without compromising the guest experience or quality, viewing this as an evolution in culture embedding cost awareness and continuous improvement. The focus remains on long-term business management, balancing disciplined pricing and cost control with guest experience and strategic investments for the future.

NCLH faces material risks including adverse general economic factors such as fluctuating interest rates, inflation, and fuel price volatility, which can decrease consumer disposable income and confidence. The company's substantial indebtedness and restrictive covenants in debt agreements limit operational flexibility, requiring minimum liquidity levels and compliance with maintenance covenants, with a significant portion of assets pledged as collateral. Future financing needs may not be available on favorable terms or at all, and outstanding exchangeable notes or future financing could dilute existing shareholders. Operational risks include the unavailability of ports of call due to health, safety, environmental concerns, or political instability, and reliance on scheduled commercial airline services for passenger and crew connections, which can be disrupted by price increases or service reductions. Global events like terrorist acts, geopolitical conflicts, and public health crises can significantly impact demand, profitability, and operations, leading to increased costs, itinerary changes, and potential litigation. Mechanical malfunctions, delays in shipbuilding, and consolidation of shipyard facilities could also adversely affect results. International operations expose the company to political risks, increased duties, taxes, and tariffs, and compliance with diverse legal and regulatory requirements, including economic substance laws in jurisdictions like Bermuda, Guernsey, Isle of Man, British Virgin Islands, The Bahamas, and Saint Lucia. Failure to comply with these economic substance requirements could lead to penalties and fines or necessitate redomiciling entities. Climate change regulations, such as the E.U. ETS and FuelEU Maritime Initiative, are expected to materially increase capital expenditures and operating costs, including the purchase of emissions allowances and alternative fuels. A 10% increase in weighted-average fuel price is estimated to increase anticipated 2026 fuel expense by $66.2 million ⁶⁶. Breaches in data security or other disturbances to information systems, exacerbated by AI technologies, could impair operations, subject the company to significant fines, and damage its reputation. The highly competitive vacation market, including other cruise lines and land-based alternatives, could adversely affect operating results through pricing pressure and capacity increases. Changes in tax laws, particularly the global minimum tax rate of at least 15% ⁶⁷ and the Bermuda Corporate Income Tax Act 2023, could negatively affect the company's aggregate tax liability and effective tax rate, especially if assumptions regarding the international shipping income exclusion prove incorrect.