Royal Caribbean 2025-26: 9.4M Vacations, FY26 EPS $17.70-$18.10
FY25 revenue $17.94B (+9%); Op income $4.91B (+20%); NI $4.27B (+49%); EPS $15.61 (+43%). Record 9.4M passengers; ~$18B revenue; 33% earnings growth. Celebrity River Cruises announced (10 ships by 2031); Royal Caribbean Discovery class new ships launching. FY26 guide: capacity +6.7%, yield +1.5-3.5%, EPS $17.70-$18.10 (+14%).
Key takeaways
- Record year on every metric. 9.4M passengers; revenue +9% to $17.9B; EPS +43% to $15.61. The post-pandemic recovery is decisively complete; FY25 is now the new high-water benchmark.
- Operating margin 27.4% — best ever for cruise. OI $4.91B vs $4.11B FY24 (+20%). Pricing + occupancy + cost discipline + new ship leverage all driving.
- Multi-format expansion strategy. Royal Caribbean Discovery class (mass-market + younger demographics) + Celebrity River Cruises (premium river product, 10 ships by 2031) + existing Celebrity ocean + Silversea ultra-luxury. Format diversification adding new TAM.
- Loyalty + tech investments compounding. Points Choice loyalty program enhancements + onboard digital experience. Customer LTV expanding through repeat behavior.
- FY26 guide: capacity +6.7%, yield +1.5-3.5%, EPS $17.70-$18.10. Revenue $19-20B implied. Implied EPS growth +14% on capacity + yield + operating leverage. $7B+ operating cash flow + $5B strategic investment.
Business
Royal Caribbean Group operates four cruise brands across multiple price points + experiences:
- Royal Caribbean International (~70% of revenue): Mass-market mainstream cruises. Largest fleet (24+ ships). Innovation focus on Wonder/Star/Icon class megaships with onboard activities differentiating vs Carnival + Norwegian. Discovery class new ships launching FY26-29.
- Celebrity Cruises (~20% of revenue): Premium ocean cruise. Edge class flagship. Adults-focused with food/wellness emphasis.
- Silversea Cruises (~7% of revenue): Ultra-luxury (all-inclusive small ship). Highest-margin segment.
- Celebrity River Cruises (newly-announced expansion): 10 ships by 2031 in European inland river market. Targets the growing premium river cruise demographic.
Strategic positioning vs peers (Carnival, Norwegian Cruise Line):
- RCL has the strongest balance sheet repair post-COVID (debt schedule normalized + ratings upgrades)
- Higher-end brand mix (Celebrity + Silversea) providing margin uplift
- Aggressive new-ship build pipeline + private island Perfect Day at CocoCay differentiating
- Strong customer loyalty + repeat behavior
FY25 financial performance
| Metric (FY) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue ($B) | 13.90 | 16.49 | 17.94 |
| Gross profit ($B) | 6.13 | 7.83 | 8.40 |
| Op income ($B) | 2.88 | 4.11 | 4.91 |
| Op margin | 20.7% | 24.9% | 27.4% |
| EBITDA ($B) | 4.56 | 6.09 | 6.91 |
| Net income ($B) | 1.70 | 2.88 | 4.27 |
| Diluted EPS ($) | 6.31 | 10.94 | 15.61 |
| FCF ($B) | 0.58 | 2.00 | 1.24 |
| Capex ($B) | -3.90 | -3.27 | -5.23 |
| Total debt ($B) | 22.13 | 20.82 | 22.64 |
| Dividends ($M) | 0 | -107 | -264 |
| Buyback ($M) | 0 | 0 | -1,159 |
The post-pandemic compounding pattern: FY23 EPS $6.31 → FY24 $10.94 → FY25 $15.61. Each year more than doubling pre-COVID pace.
Capex stepped up sharply to $-5.23B FY25 — new ship deliveries (Star of the Seas, Utopia of the Seas, Celebrity Xcel) + Discovery class build commencement + Celebrity River + private island infrastructure. Total debt slightly up to $22.6B reflecting capex; net leverage profile improving on EBITDA growth.
Buyback resumed at $-1.16B FY25 — first material buyback since pre-COVID. Dividend resumed at $-264M (+147%).
Capital allocation
- Capex: $-5.23B FY25 (29.2% of revenue). Heavy new ship + private island + tech investment.
- Dividends: $-264M FY25 (+147% YoY) on resumption of regular dividend post-pandemic.
- Buybacks: $-1.16B FY25 — first major capital return since 2019.
- M&A / Investments: Celebrity River Cruises announcement (10 ships by 2031); Discovery class build.
- Debt: $22.64B (+$1.82B YoY) on capex; net leverage moderating on EBITDA growth.
FY26 outlook (per Q4 2025 call, 2026-01-29)
| FY26 guide | Range |
|---|---|
| Capacity (passenger-cruise-days) | +6.7% YoY |
| Yield growth | +1.5% to +3.5% |
| Adjusted EPS | $17.70 to $18.10 (midpoint +14%) |
| Operating cash flow | >$7B |
| Strategic investment | $5B |
The capacity +6.7% reflects new ship deliveries (Star of the Seas full-year, Utopia of the Seas, Celebrity Xcel). Yield +1.5-3.5% on continued pricing power + onboard spend.
EPS $17.70-$18.10 implies revenue ~$19-20B. Operating margin holding 27%+ on capacity-led leverage.
Key risks
- Cruise demand cyclicality: Recession would compress booking pace + onboard spend. RCL holds up better than peers but not immune.
- Fuel cost: Bunker fuel cost cyclicality. Hedge program partially offsets but lag.
- Geopolitical: Suez/Red Sea + Mediterranean region disruption affects itineraries; can compress yield.
- Customer concentration: US originating ~55% of revenue. Dollar strength + US consumer behavior swing.
- Capital intensity: Order book + private island + technology investment requires sustained FCF.
- Health / outbreak: Pandemic-style events historically catastrophic for cruise. Industry-level risk.
Bottom line
RCL FY25 is the post-pandemic recovery completion + record year. 9.4M vacations + EPS +43% to $15.61 + op margin 27.4% best-ever. FY26 guide $17.70-$18.10 (+14%) on capacity + yield + operating leverage. Capital return resumed materially ($1.16B buyback + $264M dividend). The structural read: highest-quality cruise operator with format diversification (mass + premium + luxury + river) + capex pipeline + balance sheet flexibility. Risks are recession + geopolitical + capital intensity; mitigated by diversified brand mix + customer loyalty + strong post-COVID balance sheet repair.
Citations
- Royal Caribbean Group FY25 Form 10-K (filed February 2026, SEC EDGAR).
- RCL Q4 2025 earnings call, 2026-01-29 — record 9.4M vacations, $17.94B revenue, 33% earnings growth, EPS +43% to $15.61, Celebrity River Cruises (10 ships by 2031) announcement, Discovery class new ships, Points Choice loyalty enhancements; FY26 guide (capacity +6.7%, yield +1.5-3.5%, adj EPS $17.70-$18.10, OCF >$7B, $5B strategic investment).
- Internal financial_statements view (consolidated annual + cash flow + capital structure).