Royal Caribbean’s fourth quarter results met Wall Street expectations, and the market responded with a significant rally. Management attributed performance to robust guest demand across its brands, disciplined execution on both commercial initiatives and cost efficiencies, and the successful rollout of new ships and exclusive destinations. CEO Jason Liberty highlighted the company’s “record 9.4 million vacations delivered” and noted that Royal Caribbean’s investments in technology and differentiated experiences helped drive strong customer satisfaction and margin expansion.
Is now the time to buy RCL? Find out in our full research report (it’s free for active Edge members).
Royal Caribbean (RCL) Q4 CY2025 Highlights:
- Revenue: $4.26 billion vs analyst estimates of $4.26 billion (13.3% year-on-year growth, in line)
- Adjusted EPS: $2.80 vs analyst estimates of $2.80 (in line)
- Adjusted EBITDA: $1.48 billion vs analyst estimates of $1.45 billion (34.8% margin, 2.1% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $17.90 at the midpoint, beating analyst estimates by 1.3%
- Operating Margin: 21.9%, up from 16.6% in the same quarter last year
- Passenger Cruise Days: 15.12 million, up 1.44 million year on year
- Market Capitalization: $88.87 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Royal Caribbean’s Q4 Earnings Call
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Matthew Boss (JPMorgan) asked about the acceleration in 2026 demand and how Royal Caribbean aims to differentiate in the broader vacation market. CEO Jason Liberty pointed to increased loyalist participation, new ship launches, and expanding the vacation ecosystem across oceans and rivers.
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Steve Wieczynski (Stifel) questioned Caribbean pricing given industry capacity growth, and whether yield guidance reflected market conditions. Liberty responded that demand and pricing remain strong across all brands in the Caribbean, with yield growth supported by both volume and higher guest spending.
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James Hardiman (Citi) inquired about the breakdown between organic and inorganic business growth. Liberty explained that about half of yield growth is expected from new hardware, with the rest driven by like-for-like improvements, while Michael Bayley added that private destinations like Royal Beach Club are ramping up gradually.
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Lizzie Dove (Goldman Sachs) sought more detail on the cadence of net yield growth and the impact of dry dock schedules. CFO Naftali Holtz explained that yield growth will be higher in the second half of the year, shaped by dry dock timing, new product ramps, and deployment mix.
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David Katz (Jefferies) asked about the strategic rationale behind expanding river cruises and customer overlap. Liberty noted strong demand from existing customers who had not previously cruised on rivers, with Holtz adding that early bookings indicate significant cross-brand appeal.
Catalysts in Upcoming Quarters
In upcoming quarters, our team will monitor (1) the pace and quality of bookings for new ocean and river ships, (2) guest satisfaction and yield trends as exclusive destinations like Royal Beach Club Paradise Island ramp up, and (3) the impact of digital and AI investments on customer engagement and operational efficiency. Execution on product launches and management of cost headwinds will be critical for sustained outperformance.
Royal Caribbean currently trades at $328.75, up from $291.60 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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