Royal Caribbean Cruises Ltd.
RCL · NYSE
Dec 2026
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $3.58 EPS for Dec 2026 across 6 estimates, ranging $3.54 to $3.62.
RCL Sep 2026
- 2.98%
- $6.38
- $6.57
- —
- $5.59B
Reported results
- $5.59B
- 51.51%
- $1.87B
- 33.46%
- $1.73B
- $6.45
Highlights
- Adjusted EPS: Third-quarter adjusted EPS of $6.57 beat the $6.38 consensus by 3.0% and company guidance by $0.26; GAAP diluted EPS was $6.45.
- Revenue and earnings: Revenue rose 9% year over year to $5.59 billion, while operating income increased 10% to $1.87 billion and net income attributable to RCL reached $1.73 billion, up 10%.
- Demand and capacity: Capacity grew 8.4% and RCL carried 2.68 million guests at 112.4% occupancy; net yields rose 0.6% in constant currency, about 60 basis points above guidance.
- Cost timing: Net cruise costs excluding fuel per available passenger cruise day fell 1.8% in constant currency, around 40 basis points better than expected, as expenses shifted into Q4.
- Bookings: Since the prior earnings call, booking volumes increased in the mid-teens year over year, with 2027 sailings up in the high teens; booked positions for 2026 and 2027 are ahead of prior years at record rates.
- 2026 outlook: Adjusted EPS guidance is now $17.85–$17.95, with revenue growth of 9% and net-yield growth of approximately 2.1% in constant currency; higher fuel costs and unfavorable currency partly offset the Q3 beat.
- Sandals investment: RCL agreed to buy a 50% stake in Sandals and Beaches Resorts for approximately $3.0 billion; the deal is expected to close in early 2027 and management sees several hundred million dollars of synergies over time.
- Liquidity and spending: RCL ended September with $7.4 billion of liquidity and leverage below 3x; full-year capital expenditures are expected to be approximately $4.6 billion.
Analysis
Royal Caribbean delivered a stronger-than-expected summer quarter, with adjusted EPS of $6.57 above the $6.38 consensus and $0.26 above management’s guidance midpoint. Revenue of $5.59 billion increased 9% year over year, operating income rose 10% to $1.87 billion, and adjusted EBITDA reached $2.54 billion. Versus Q2, revenue increased from $4.83 billion and operating income from $1.31 billion, consistent with the company’s seasonal pattern. GAAP diluted EPS was $6.45, compared with $5.74 a year earlier and $4.20 in Q2.
The print reflected higher capacity and strong guest spending, with 2.68 million passengers carried, occupancy at 112.4%, and onboard and other revenue up 14% year over year. Net yields grew 0.6% in constant currency, led by close-in demand in Europe and the Caribbean; lower-than-expected costs also helped, though some expense benefit was timing-related and shifted into Q4. RCL raised full-year adjusted EPS guidance to $17.85–$17.95 despite fuel and currency headwinds, while flagging high-teens growth in 2027 bookings. The other major development was its planned $3.0 billion investment for a 50% interest in Sandals and Beaches, extending the vacation platform into all-inclusive resorts. Management reiterated its goal of a $20-plus adjusted EPS level in 2027, subject to the forward fuel curve.
Third-quarter performance
- Revenue growth: Total revenue was $5.591 billion, up 8.8% year over year. Passenger ticket revenue increased 6.8% to $3.885 billion, while onboard and other revenue rose 14% to $1.706 billion, reflecting both additional capacity and higher per-passenger onboard spending.
- Earnings and margins: Net income attributable to RCL was $1.728 billion versus $1.575 billion a year ago; adjusted net income was $1.760 billion versus $1.577 billion. Adjusted EBITDA increased to $2.539 billion from $2.293 billion, and its margin expanded to 45.4% from 44.6%.
- Seasonal comparison: Revenue was $4.83 billion and operating income $1.31 billion in Q2 FY2026, compared with $5.59 billion and $1.87 billion in Q3. Diluted EPS increased from $4.20 to $6.45 quarter over quarter.
Demand and cost timing
- Guest volumes: Capacity increased 8.4% year over year; the company carried 2,676,480 passengers, up from 2,466,039. Occupancy was 112.4%, compared with 112.1% a year earlier.
- Yields: Net yields increased 0.9% as reported and 0.6% in constant currency, exceeding guidance by about 60 basis points in constant currency. Management attributed the outperformance to stronger close-in demand, particularly in Europe and the Caribbean. Gross margin yields declined 0.8% as reported.
- Costs: Net cruise costs excluding fuel per available passenger cruise day declined 1.9% as reported and 1.8% in constant currency. Management said the better-than-expected performance—about 40 basis points, or $0.05 per share, better than expected—was driven by the timing of expenses moving into Q4.
Bookings and outlook
- Booking trends: Booking volumes since the last call were up in the mid-teens year over year, with 2027 sailings up in the high teens. Book positions for both 2026 and 2027 are ahead of prior years at record rates; Q3 pre-cruise and onboard revenue rates and Q4 pre-cruise bookings were also ahead of last year.
- Full-year guidance: Adjusted EPS is expected at $17.85–$17.95, representing 14% year-over-year growth. Revenue is expected to rise 9%; net yields are forecast up approximately 2.1% in constant currency (2.7% as reported), while costs excluding fuel per available passenger cruise day are expected to be approximately flat in constant currency.
- Fourth quarter: Capacity is expected to increase 5% year over year. Net yields are forecast to rise 4.2%–4.7% in constant currency, and adjusted EPS is expected at $3.48–$3.58. Management cited a more favorable comparison, deployment mix, and dry-dock timing as yield supports, while noting higher projected fuel costs and unfavorable currency as offsets to the full-year increase.
- Perfecta target: With 2027 the final year of the program, management said it remains on track for 20% adjusted EPS CAGR from 2024 through 2027, or a $20-plus adjusted EPS level, based on the current forward fuel curve. RCL said it has already exceeded its ROIC target.
Sandals partnership
- Transaction: RCL agreed to acquire a 50% interest in Sandals and Beaches Resorts for approximately $3.0 billion, or 10 times forward EBITDA, with closing expected in early 2027 subject to customary approvals. Results are expected to be accounted for under the equity method and reported on a one-quarter lag.
- Portfolio and growth: The resort portfolio includes 18 resorts, three under development, and more than 1,000 acres of undeveloped Caribbean land. Management described plans for new resorts and room expansions, with the resort business expected to fund its development plan from its own cash flow.
- Strategic rationale: Management cited guest crossover between cruises and all-inclusive vacations as an opportunity to retain more guest spending within RCL’s ecosystem. It sees several hundred million dollars of potential synergies over time across areas including revenue management, loyalty, technology, data, distribution, and procurement. The deal’s 2027 earnings contribution is expected to be immaterial and dependent on closing timing.
Liquidity and investment
- Liquidity and debt: Liquidity was $7.4 billion at September 30, including $851 million of cash and $6.6 billion of undrawn revolving capacity; management reported leverage below 3x. RCL issued $1.25 billion of 5.55% senior notes due 2034, using proceeds to repay floating-rate term loans and debt maturing in 2027.
- Funding capacity: RCL entered into a $400 million delayed-draw term loan with Export Development Canada in October and increased its revolving credit facility by $50 million to $6.65 billion. A separate $3.0 billion 364-day facility is available to fund the planned Sandals transaction at closing if needed.
- Capital commitments: Full-year 2026 capital expenditures are expected to be approximately $4.6 billion, predominantly for new ships and destination initiatives. The company reported $5.3 billion of operating cash flow for the first nine months of 2026.
