Detailed Narrative
Record Performance & Financial Milestones
Carnival achieved record revenues, yields, operating income, EBITDA, and customer deposits in Q3 FY25. Net income reached an all-time high of $2 billion, surpassing 2019 levels despite a significant increase in net interest expense. Unit operating income and EBITDA were at their highest in nearly 20 years, contributing to a 13% ROIC for the trailing 12 months.
Strong Booking Trends & Future Outlook
Booking trends have continued to improve, outpacing capacity growth at higher prices. Nearly half of 2026 is already booked at higher prices, and 2027 bookings are at an unprecedented🌐 level for the period. The company expects continued demand for its restrained capacity growth, with only a 0.8% capacity increase forecasted for 2026.
Destination Development Strategy
Celebration Key, which opened in July 2025, has received overwhelmingly positive feedback and media coverage, generating 1.5 billion media impressions. It is expected to host 2.8 million guests in 2026. The pier expansion at RelaxAway, Half Moon Cay, will open mid-2026, further enhancing the Caribbean offerings. These strategic assets are designed to drive consumer consideration and conversion, taking share from land-based alternatives, with exclusive Caribbean destinations expected to capture over 8 million guest visits next year.
Balance Sheet Improvement & Capital Allocation
The company continued its deleveraging efforts, reducing secured debt by nearly $2.5 billion and refinancing over $11 billion of debt. Net debt-to-EBITDA improved to 3.6x, with a target of under 3x. The company is now pivoting towards returning capital to shareholders, with a redemption notice for outstanding convertible notes using $500 million cash and equity, which will improve net debt by $600 million and reduce share count by 13 million shares.
Brand & Fleet Optimization
The Star Princess joined the fleet, representing over 15% of the Princess fleet. The AIDA Evolutions program is modernizing the AIDA fleet, with AIDAluna entering dry dock next month. Carnival Cruise Line will launch a new marketing campaign and an enhanced loyalty program in mid-2026. The company is focused on maximizing existing assets and investing in midlife ship refurbishments for brands without new builds on order, with several brands showing significant improvement and roadmaps for further progress.
Cost Management & Efficiency
Unit costs beat guidance by 1.5 points due to cost-saving initiatives and improved fuel consumption/mix. While 2026 will see some cost headwinds from the loyalty program, destination operating expenses, and dry dock work, the company is actively seeking further efficiencies and leveraging its scale to mitigate these, aiming for long-term margin improvement where yields grow faster than costs.