Viking Holdings Ltd Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Results: Consolidated total revenue for the quarter increased 18.5% year-over-year to $1.9 billion. Adjusted EBITDA was $633 million, 28.5% higher than the same period last year. Net income was $439 million.
• Fleet Expansion: Viking Vesta joined ocean fleet in June; Viking Amun added on Nile; first deliver voyages in India starting 2027 with early bookings sold out.
• Booking Environment: 96% of 2025 core product capacity booked; 55% of 2026 core product capacity sold as of August 10. Advanced bookings for 2025 core products were $5.6 billion (21% higher than 2024), and for 2026, $3.9 billion (13% higher than 2025 at same point).

Segment Performance

• River Segment: Capacity PCDs increased 7.5% year-over-year, mainly due to addition of new ships and Viking Nerthus operating on Seine River. Occupancy was 95.6%, up almost 100 basis points. Adjusted gross margin grew 15.8% year-over-year, and net yield was $607, up 6.9% year-over-year.
• Ocean Segment: Capacity PCDs increased 11.2% year-over-year from addition of Viking Vela. Occupancy was 95.2%, about 25 basis points higher than last year. Adjusted gross margin increased 24.9% year-over-year to $888 million, while net yield increased 12% to $551.

Guidance

• 2025: 96% of core product capacity booked, with advanced bookings at $5.6 billion (21% higher than 2024).
• 2026: 55% of core product capacity sold as of August 10; Ocean segment 2026 capacity 64% sold, River segment 2025 capacity 97% sold, 2026 capacity 55% sold; mid-single-digit yield growth expected.

Risks

• Currency Fluctuations: Hedged EUR exposure for 2025 and 2026, but previous euro loans caused unrealized FX losses, mitigated by natural hedging.
• Competition: Potential new entrants in river cruise space, but confident in existing relationships and product uniqueness.

Question and Answer

Q: Walk through booking progress for 2026, especially June, July, Aug trends A: Strong demand in June, July, Aug; 55% of 2026 core capacity sold, consistent with past consumer behavior.

Q: Marketing spend uplift A: Increased marketing to stimulate demand during softer periods, not relying on discounts.

Q: 2026 booked position and pricing optimization A: 55% sold, balance between good return and guest value; mid-single-digit yield growth target.

Q: Expense trends A: Some onetime items like port charges and marketing, but long-term focus on balanced capital allocation.

Q: Capacity growth impact on pricing A: Ocean growth driven by strong product, no downward pressure on pricing; confident in Ocean and River products.

Q: Shipyard pricing and capital efficiency A: Efficient shipyard negotiations, better pricing than peers due to no brokers and efficient design.

Q: New markets and pricing strategy A: New markets use smaller vessels with higher prices, market research supports demand; China strategy focuses on direct consumer marketing.

Q: Currency exposure and future risks A: Hedged EUR exposure, mitigated unrealized FX losses from euro loans, no recurring currency risks.