Norwegian Cruise Line Holdings Ltd. Q2 FY2025 earnings call

• Achieved a record quarter, meeting or exceeding guidance across all metrics and reiterating full-year guidance. - Highlights include the successful delivery of Oceania Cruises Allura, confirmation of 2 additional Sonata Class Ships for Oceania, and the announcement of the Great Tides Waterpark at Great Stirrup Cay. - Transformation of Great Stirrup Cay with new pier, welcome center, 28,000 square foot pool area, etc. - Development of a new revenue management system, with Kiran Smith joining as Chief Marketing Officer at Norwegian and Daniel Henry as Chief Digital and Technology Officer. - Highlighted sustainability efforts in the 2024 Sale and Sustain report, including fuel efficiency and shore power usage across the fleet.

In the second quarter of 2025, Norwegian Cruise Line Holdings achieved record results. Net yield grew 3.1% due to strong close-in demand and onboard spend, driving adjusted EBITDA to $694 million, which was $24 million above guidance. The trailing 12-month margin stood at 36.3%, a year-over-year improvement of over 300 basis points. For Oceania Cruises, the delivery of Oceania Allura and confirmation of 2 additional Sonata Class Ships were key highlights. Regent's Seven Seas Prestige saw a record-breaking booking day. Revenue contribution details: The overall revenue was driven by strong performance across all brands, with Norwegian Cruise Line being a major contributor, followed by Oceania and Regent.

• Reiterated full-year guidance on the back of solid customer demand and record bookings. - Expect net yield growth in the low to mid-single-digit range. - Adjusted net cruise cost excluding fuel is expected to be flat for the full year 2025 and flat in Q3 and Q4. - Anticipate 2025 margin to reach approximately 37% and aim for a 39% margin target by the end of 2026. - Net leverage is expected to end 2025 at around 5.2x, down from 2023.

• Foreign exchange rates can impact adjusted EBITDA, as seen with an $0.08 headwind in the quarter. - Uncertainty in the onboard revenue component can affect guidance. - Macroeconomic factors and the competitive landscape pose potential risks to performance.

Q: About European deployments for 2026, response to changes, pricing for 2026 A: Harry discussed that for 2026, Norwegian and other brands have shorter itineraries and reduced deployment in Europe. There has been a positive response to the changes, and the focus is on balancing profitability against yield. Pricing is part of a disciplined approach to maintain solid growth.

Q: Puts and takes for 2026 on yield and cost A: Mark mentioned a tailwind from the Q3 dip in 2025, and the halo effect from the Great Stirrup Cay announcement. The focus is on low to mid-single-digit yield growth, with a balanced approach to cost management.

Q: Cost side, key cost buckets A: Mark stated that cost management is across the board, with a disciplined approach, and efforts are made to protect the guest experience while harvesting savings and efficiencies.

Q: Close-in booking opportunity, earnings power A: Mark and Harry discussed revenue management strategies, and emphasized that earnings growth expectations remain confident with the company's strategy intact.

Q: Demand rebound in July, Great Stirrup Cay demand, premium yield A: Harry said July was a record month, and early signs for Great Stirrup Cay show increased website visits and leads. Premium yield is part of the overall strategy to drive profitability.

Q: Booking momentum, tactical tools, GSC competitive positioning A: Harry noted a macroeconomic improvement and a shift to making brands more compelling. Great Stirrup Cay's features, like being family-focused, differentiate it from competitors.

Q: Acceleration since last guidance, price vs volume, CapEx A: Mark said guidance is based on current visibility, price has been consistent, and CapEx for the Great Tides Waterpark was already in the plans.

Q: New-to-cruise and new-to-brand travelers A: Harry said there are stable trends, with new-to-cruise and new-to-brand balanced by record repeat rates.