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ROYAL CARIBBEAN CRUISES LTD

RCL
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Business Summary

Royal Caribbean Cruises Ltd. operates in the global vacation industry, which the filing describes as a large and expanding market of over $2 trillion . The company currently holds a small share of this market . The cruise industry is a well-established vacation sector in North American, European and Australian markets and a developing sector in several emerging markets . Industry market penetration rates grew from 3.36% to 3.89% for North America, from 1.25% to 1.41% for Europe, and from 0.08% to 0.20% for Asia/Pacific during the five year period from 2015 through 2019 . During 2025, industry market penetration rates were 5.96% for North America, 1.73% for Europe, and 0.09% for Asia/Pacific . The global cruise industry carried approximately 37 million guests in 2025, 35 million guests in 2024, and 32 million guests in 2023 . The cruise industry was served by a fleet with a weighted average of approximately 725,000 berths during 2025 with approximately 430 ships at the end of 2025 . As of December 31, 2025, there were approximately 47 ships on order with an estimated 113,000 berths that are expected to be placed in service in the global cruise market through 2029 .

The company's principal cruise competitors named in the filing are Carnival Corporation & plc, Disney Cruise Line, MSC Cruises, Norwegian Cruise Line Holdings Ltd, Viking, and Virgin Voyages . The company's competitive edge is grounded in its focus on innovation, best evidenced in the quality and variety of ships in its fleet, its exceptional product offerings and service provided by its dedicated crew, its growing portfolio of private destinations and experiences, the range of itineraries and global destinations tailored to meet diverse guest preferences, and its use and leveraging of technology . Together, the company's Global Brands and Partner Brands have a combined fleet of 69 ships in the cruise vacation industry with an aggregate capacity of approximately 179,720 berths as of December 31, 2025 . The company's ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents .

The company generates revenue primarily through the sale of cruise vacations, with passenger ticket revenues accounting for approximately 70% of total revenues in 2025, 2024 and 2023 . Onboard and other revenues accounted for approximately 30% of total revenues in 2025, 2024, and 2023 . The company's payment terms generally require an upfront deposit to confirm a reservation, with the balance due prior to sailing . The company's Global Brands have historically sourced passengers from similar markets around the world and operated in similar economic environments with a significant degree of commercial overlap . The company's loyalty programs collectively have over 28 million enrolled members worldwide .

Royal Caribbean is the world's largest cruise vacation brand and operates 29 ships with an aggregate capacity of approximately 111,000 berths . As of December 31, 2025, Royal Caribbean had four ships on order with an aggregate capacity of approximately 22,500 berths . Celebrity Cruises operates 15 ships with an aggregate capacity of approximately 38,900 berths . As of December 31, 2025, Celebrity Cruises had one Edge-class ship on order, Celebrity Xcite, with an aggregate capacity of approximately 3,250 berths, which is expected to be delivered in 2028 . In 2025, Celebrity Cruises announced the launch of Celebrity River Cruises, offering a premium river cruise vacation with a new fleet including agreements for the commitment of an initial order of 10 ships . Subsequently, in January 2026 we entered into additional commitments for 10 new ships that will expand the river cruise fleet to 20 vessels . The first four river cruise ships on order have an aggregate capacity of approximately 680 berths . Silversea operates 12 ships, with an aggregate capacity of approximately 5,500 berths . TUI Cruises operates eight ships, with an aggregate capacity of approximately 22,700 berths . As of December 31, 2025, TUI Cruises had three ships on order with an aggregate capacity of approximately 12,300 berths . Hapag-Lloyd Cruises operates two luxury liners and three smaller expedition ships, with an aggregate capacity of approximately 1,620 berths .

In 2025, Royal Caribbean introduced Star of the Seas, and Celebrity Cruises introduced Celebrity Xcel . In July 2025, the company closed on its acquisition of the Port of Costa Maya and adjacent land in Mahahual, Mexico for a final purchase price of $294 million . The first Royal Beach Club, Paradise Island, opened in December 2025 in Nassau, Bahamas . In December 2025, the company signed agreements with Chantiers de l'Atlantique to build two ships of a new generation for Royal Caribbean, known as Discovery-class ships, which are expected to enter service in 2029 and 2032, respectively . During the quarter ended December 31, 2025, the company entered into an agreement with Meyer Turku Oy to build a fifth Icon-class ship for delivery in 2028 . In May 2025, the company amended its two revolving credit facilities, bringing its aggregate revolving credit capacity to $6.4 billion, and extended the termination date of one of the revolving credit facilities from October 2026 to October 2030 . In October 2025, the company issued $1.5 billion aggregate principal amount of 5.375% senior notes due 2036 . In February 2025, the company announced a 12-month common stock repurchase program for up to $1.0 billion that was completed in November 2025 . On December 10, 2025, the company announced a common stock repurchase program for up to $2.0 billion . During the quarter ended December 31, 2025, the company repurchased 0.6 million of its common stock under this program, for a total of $159 million in open market transactions . As of December 31, 2025, the company has $1.8 billion that remains available for future common stock repurchase under the program . In 2025, the company returned $2.0 billion in capital to shareholders through dividends and share repurchases .

Total revenues in 2025 increased by $1.5 billion and were $17.9 billion, exceeding the previous record of $16.5 billion in 2024 . Net Income attributable to Royal Caribbean Cruises Ltd. was $4.3 billion, or $15.61 per diluted share, compared to the 2024 Net Income attributable to Royal Caribbean Cruises Ltd. of $2.9 billion, or $10.94 per diluted share . Adjusted EBITDA was $7.0 billion . Operating Income was $4.9 billion . ROIC was 18.0% . Gross Margin Yields increased 8.5% as-reported, and Net Yields increased 3.8% as-reported (3.7% in Constant-Currency), both compared to 2024 . In 2025 the company generated $6.5 billion in operating cash flow .

Business Outlook

The filing states that in 2026, the company expects its capacity to increase by 6.7% compared to 2025, with a full year of Star of the Seas and Celebrity Xcel, and delivery of Legend of the Seas in the summer . The company's portfolio of exclusive land-based destinations is expected to reach 8 by 2028, with additions of Silversea's Cormorant at 55 South, Royal Beach Club Santorini, and Royal Beach Club Cozumel on the horizon . The company will continue development of Perfect Day Mexico and Royal Beach Club Lelepa . The company's new ships, deployment, and enhanced product offerings are expected to drive growth in Net Yields, total revenues, and earnings .

The company's Destination Net Zero strategy focuses on achieving net zero emissions by 2050 and delivering a net zero capable ship by 2035 . This strategy also includes reducing the company's carbon intensity by 15% or greater as compared to 2024 by 2027 . The company's Destination Net Zero's four-pronged approach includes modernizing the fleet with new energy-efficient and alternatively fueled vessels, continued investment in energy efficiency programs, development of alternative fuel and alternative power solutions, and optimized deployment and integration of strategic shore-based supply chains .

The filing states that the company is focused on maintaining a strong liquidity position and a balanced debt maturity profile, while ensuring appropriate leverage, opportunistically reducing interest expense, and maintaining an unsecured balance sheet . The company believes these strategies together with its continued focus on increasing operating income and margin, as well as disciplined capital allocation, enhance its ability to achieve its overall goal of maximizing return on invested capital and long-term shareholder value .

As of December 31, 2025, the company anticipates overall full year capital expenditures, based on its existing ships on order, will be approximately $5 billion for 2026 . This amount does not include any ships on order by the company's Partner Brands . As of December 31, 2025, the aggregate cost of the company's ships on order, excluding any ships on order by its Partner Brands, was approximately $11.3 billion, of which the company had deposited $1.0 billion . Approximately 64.1% of the aggregate cost is exposed to fluctuations in the Euro exchange rate at December 31, 2025 . The company has committed financing arrangements in place covering approximately 80% of the cost of the ship for the five ships on order for its Global Brands, all of which include sovereign financing guarantees, excluding ships on order for Celebrity River Cruises . As of December 31, 2025, the company had approximately $10.4 billion of committed financing for its ships on order, which excludes ships on order for Celebrity River Cruises . As of December 31, 2025, the company had liquidity of $7.2 billion, including cash and cash equivalents of $0.8 billion and $6.4 billion of undrawn revolving credit facility capacity .

In February 2026, the company's Board declared a dividend of $1.50 per share, payable in April 2026 . During the fourth and third quarters of 2025, the company's Board declared dividends of $1.00 per share, which were paid in January 2026 and October 2025, respectively . During the second and first quarters of 2025 the Board declared dividends of $0.75 per share which were paid in July 2025 and April 2025, respectively .

The filing identifies several headwinds and constraints. Weak or uncertain economic conditions may impact consumer confidence and pose a risk as vacationers postpone or reduce discretionary spending . The company's operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, can be and have been subject to increases due to market forces and economic or geopolitical conditions or other factors beyond the company's control, including global inflationary pressures . Terrorist attacks, war, conflicts, civil unrest and other hostilities could have a material adverse impact on the company's business and results of operations . Disease outbreaks and increased concern related to illness when traveling to, from, and on the company's ships, could cause a decrease in demand for cruises, guest cancellations, travel restrictions, an unavailability of ports and/or destinations, cruise cancellations, ship redeployments and an inability to source crew, provisions or supplies from certain places . The company's reliance on shipyards, their subcontractors and suppliers to implement its newbuild and ship upgrade programs and to repair and maintain its ships exposes it to risks which could adversely impact its business . An increase in capacity worldwide or excess capacity in a particular market could adversely impact the company's cruise sales and/or pricing . As of December 31, 2025, a total of 47 new ships with approximately 113,000 berths were on order for delivery through 2029 in the cruise industry, including twelve ships currently scheduled to be delivered to the company's Global and Partner Brands .

Risk Factors

Adverse economic or other conditions could reduce the demand for cruises and passenger spending, adversely impacting the company's operating results, cash flows and financial condition including impairing the value of its goodwill, ships, trademarks and other assets . The company's operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, can be and have been subject to increases due to market forces and economic or geopolitical conditions or other factors beyond the company's control, including global inflationary pressures . Terrorist attacks, war, and other similar events could have a material adverse impact on the company's business and results of operations . Disease outbreaks or an increase in concern about the risk of illness could adversely impact the company's business and results of operations, and may cause significant disruptions, create new risks, and exacerbate existing risks . The company's reliance on shipyards, their subcontractors and suppliers to implement its newbuild and ship upgrade programs and to repair and maintain its ships exposes it to risks which could adversely impact its business . An increase in capacity worldwide or excess capacity in a particular market could adversely impact the company's cruise sales and/or pricing . As of December 31, 2025, a total of 47 new ships with approximately 113,000 berths were on order for delivery through 2029 in the cruise industry, including twelve ships currently scheduled to be delivered to the company's Global and Partner Brands . The company's sustainability activities, including initiatives to sustain the planet, energize communities and accelerate innovation, could result in reputational risks, increased costs and other risks .

Management Priorities

Management's message emphasizes that 2025 performance was exceptionally strong . The company took delivery of two ships (Star of the Seas and Celebrity Xcel) and continued to expand its vacation ecosystem with the opening of Royal Beach Club Paradise Island, closing on the acquisition of the port of Costa Maya in 2025, and the announcements of Celebrity River Cruises, launching in 2027, and the expansion of its private destination portfolio with Royal Beach Club Santorini . The company achieved strong financial performance, including 8.5% Gross Margin Yield growth as-reported, Net Yields increased 3.8% as-reported (3.7% in Constant-Currency), Net Income of $4.3 billion and Adjusted EBITDA of $7.0 billion, Operating Income of $4.9 billion, and ROIC of 18.0% . The company maintained a strong balance sheet and achieved investment-grade ratings across all three major credit rating agencies . In 2025 the company generated $6.5 billion in operating cash flow, maintained an unsecured balance sheet, managed debt maturities, and returned $2.0 billion in capital to shareholders through dividends and share repurchases . In 2026, the company expects its capacity to increase by 6.7% compared to 2025, with a full year of Star of the Seas and Celebrity Xcel, and delivery of Legend of the Seas in the summer . The company's portfolio of exclusive land-based destinations is expected to reach 8 by 2028, with additions of Silversea's Cormorant at 55 South, Royal Beach Club Santorini, and Royal Beach Club Cozumel on the horizon . The company's new ships, deployment, and enhanced product offerings are expected to drive growth in Net Yields, total revenues, and earnings .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Industry
  2. [2] Item 1, Business — Industry
  3. [3] Item 1, Business — Industry
  4. [4] Item 1, Business — Industry
  5. [5] Item 1, Business — Industry
  6. [6] Item 1, Business — Industry
  7. [7] Item 1, Business — Industry
  8. [8] Item 1, Business — Industry
  9. [9] Item 1, Business — Competition
  10. [10] Item 1, Business — General
  11. [11] Item 1, Business — General
  12. [12] Item 1, Business — General
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 1, Business — Cruise Pricing
  16. [16] Item 1, Business — Segment Reporting
  17. [17] Item 1, Business — Guest Services and Loyalty Programs
  18. [18] Item 1, Business — Our Global Brands, Royal Caribbean
  19. [19] Item 1, Business — Our Global Brands, Royal Caribbean
  20. [20] Item 1, Business — Our Global Brands, Celebrity Cruises
  21. [21] Item 1, Business — Our Global Brands, Celebrity Cruises
  22. [22] Item 1, Business — Our Global Brands, Celebrity Cruises
  23. [23] Item 1, Business — Our Global Brands, Celebrity Cruises
  24. [24] Item 1, Business — Our Global Brands, Celebrity Cruises
  25. [25] Item 1, Business — Our Global Brands, Silversea
  26. [26] Item 1, Business — Our Partner Brands
  27. [27] Item 1, Business — Our Partner Brands
  28. [28] Item 1, Business — Our Partner Brands
  29. [29] Item 1, Business — Delivery of state-of-the-art vessels, and fleet upgrade and maintenance
  30. [30] Item 7, MD&A — Executive Overview
  31. [31] Item 1, Business — Destination experiences and port facilities
  32. [32] Item 1, Business — Operations, Cruise Ships and Itineraries
  33. [33] Item 1, Business — Operations, Cruise Ships and Itineraries
  34. [34] Item 7, MD&A — Executive Overview
  35. [35] Item 7, MD&A — Executive Overview
  36. [36] Item 5, Market for Registrant's Common Equity — Share Repurchases
  37. [37] Item 5, Market for Registrant's Common Equity — Share Repurchases
  38. [38] Item 5, Market for Registrant's Common Equity — Share Repurchases
  39. [39] Item 5, Market for Registrant's Common Equity — Share Repurchases
  40. [40] Item 7, MD&A — Executive Overview
  41. [41] Item 7, MD&A — Executive Overview
  42. [42] Item 7, MD&A — Executive Overview
  43. [43] Item 7, MD&A — Executive Overview
  44. [44] Item 7, MD&A — Executive Overview
  45. [45] Item 7, MD&A — Executive Overview
  46. [46] Item 7, MD&A — Executive Overview
  47. [47] Item 7, MD&A — Executive Overview
  48. [48] Item 7, MD&A — Executive Overview
  49. [49] Item 7, MD&A — Executive Overview
  50. [50] Item 7, MD&A — Executive Overview
  51. [51] Item 7, MD&A — Executive Overview
  52. [52] Item 1, Business — Protect the environment and communities in which we operate
  53. [53] Item 1, Business — Protect the environment and communities in which we operate
  54. [54] Item 1, Business — Protect the environment and communities in which we operate
  55. [55] Item 1, Business — Focus on cost efficiency, capital allocation, and liquidity
  56. [56] Item 1, Business — Focus on cost efficiency, capital allocation, and liquidity
  57. [57] Item 7, MD&A — Liquidity and Capital Resources, Future Capital Commitments
  58. [58] Item 7, MD&A — Liquidity and Capital Resources, Future Capital Commitments
  59. [59] Item 7, MD&A — Liquidity and Capital Resources, Future Capital Commitments
  60. [60] Item 7, MD&A — Liquidity and Capital Resources, Future Capital Commitments
  61. [61] Item 7, MD&A — Liquidity and Capital Resources, Future Capital Commitments
  62. [62] Item 7, MD&A — Liquidity and Capital Resources, Funding Needs and Sources
  63. [63] Item 7, MD&A — Liquidity and Capital Resources, Funding Needs and Sources
  64. [64] Item 5, Market for Registrant's Common Equity — Dividends
  65. [65] Item 7, MD&A — Liquidity and Capital Resources, Dividends
  66. [66] Item 7, MD&A — Liquidity and Capital Resources, Dividends
  67. [67] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  68. [68] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  69. [69] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  70. [70] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  71. [71] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  72. [72] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  73. [73] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  74. [74] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  75. [75] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  76. [76] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  77. [77] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  78. [78] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  79. [79] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  80. [80] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  81. [81] Item 1A, Risk Factors — Macroeconomic, Business, Market and Operational Risks
  82. [82] Item 7, MD&A — Executive Overview
  83. [83] Item 7, MD&A — Executive Overview
  84. [84] Item 7, MD&A — Executive Overview
  85. [85] Item 7, MD&A — Executive Overview
  86. [86] Item 7, MD&A — Executive Overview
  87. [87] Item 7, MD&A — Executive Overview
  88. [88] Item 7, MD&A — Executive Overview
  89. [89] Item 7, MD&A — Executive Overview
  90. [90] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  91. [91] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  92. [92] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  93. [93] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  94. [94] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  95. [95] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  96. [96] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  97. [97] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income (Loss)
  98. [98] Item 7, MD&A — Results of Operations
  99. [99] Item 7, MD&A — Results of Operations
  100. [100] Item 8, Financial Statements — Consolidated Statements of Cash Flows
  101. [101] Item 8, Financial Statements — Consolidated Statements of Cash Flows
  102. [102] Item 8, Financial Statements — Consolidated Balance Sheets
  103. [103] Item 8, Financial Statements — Consolidated Balance Sheets
  104. [104] Item 7, MD&A — Results of Operations
  105. [105] Item 7, MD&A — Results of Operations, Adjusted Net Income
  106. [106] Item 7, MD&A — Results of Operations, Adjusted Net Income
  107. [107] Item 7, MD&A — Results of Operations, Adjusted Net Income
  108. [108] Item 7, MD&A — Results of Operations, Adjusted Net Income
  109. [109] Item 7, MD&A — Results of Operations

Analysis on 6/8/2026