$RCL

Royal Caribbean Cruises just held their Q4 2024 Earnings Call.

A recap for $RCL investors: 👇👇👇

1 Sentence Summary: 
Royal Caribbean reported strong Q4 2024 results with record bookings heading into 2025, announced a major strategic expansion into river cruising through Celebrity Cruises, and provided an optimistic 2025 outlook with 23% expected earnings growth despite some currency and fuel headwinds.

Financial Performance:
- Q4 EPS of $1.63, beating estimates by $0.13
- Revenue of $3.76B (up 12.91% Y/Y), slightly missing by $9.33M
- Q4 net yield growth of 7.3%, exceeding guidance by 200 basis points
- Strong cost control despite higher stock compensation expenses

Major Strategic Announcement:
- Launching "Celebrity River Cruises" starting in 2027
- Initial order of 10 river ships, with plans for more
- Ships will hold ~180 passengers each
- Targeting the premium river cruise market with Edge-class inspired design
- Will be an all-inclusive product unlike Celebrity's ocean cruises

2025 Outlook:
- Projecting 23% earnings growth
- Net yield growth guidance of 2.5-4.5%
- Expecting flat to 1% net cruise costs (excluding fuel)
- Adjusted EPS guidance of $14.35-14.65, including $0.65 headwind from FX and fuel
- 5.4% capacity growth planned

Booking Trends:
- Record booking levels - best five weeks in company's history
- Strong demand across all products and regions
- Book position in line with prior years at higher prices
- Particularly strong demand from North America (80% of sourcing)

Private Destinations:
- Nassau Beach Club opening Q4 2025, expected to host ~1 million guests annually
- Perfect Day CocoCay projected to host 3.5 million guests in 2025
- Perfect Day Mexico development progressing, expected to exceed CocoCay volumes

Capital Allocation:
- $5 billion total capital expenditure planned for 2025
- Maintaining investment grade balance sheet metrics
- Leverage expected to decrease to mid-to-high 2x by end of 2025

***A Few Quotes*** 🗣️🗣️🗣️

1. On record booking momentum (Jason Liberty, CEO):
"Momentum continues in 2025, with bookings accelerating since the last earnings call, resulting in the best five booking weeks in the company's history. Bookings have continued to outpace last year across all key products."

2. On entering the river cruise market (Jason Liberty, CEO):
"This is not a hobby for us... Our plan is to deliver a couple of ships in 2027, and then it's about four a year. I'd also point out, because we are very intentful in our words. The word put in front of it was initial order was 10 ships."

3. On financial outlook (Jason Liberty, CEO):
"2025 is shaping up to be another great year with 23% expected earnings growth and accelerated path towards robust cash flow generation... Our proven formula for success is working. Moderate capacity growth, moderate yield growth and strong cost control leads to enhanced margins, profitability and superior financial performance."

Tone Analysis:
Highly confident and assertive. Emphasized record bookings and strategic expansion plans, defended pricing power, zero hesitation about entering river cruise market despite questions.

Price Action: +12% today
Beat estimates and strong outlook.

Thanks for reading, and I hope you found this recap useful.
#RCL #RCL