Skip to content
    CCL
    Earnings call· Nov 2025(Q4 FY25)

    Carnival Corp Ltd. CCL

    Dec 19, 2025 Source

    Executive summary

    Carnival Corporation Q4 FY25 — Record Performance and Dividend Reinstatement

    Carnival Corporation concluded FY25 with record financial results, driven by strong commercial execution and effective cost management, leading to an all-time high net income and ROIC. The company is well-positioned for continued growth in FY26, with strong booking volumes and high prices, enabling the resumption of its quarterly dividend and further deleveraging efforts. Despite macroeconomic headwinds and increased Caribbean capacity, demand for cruising remains resilient, supported by strategic destination developments and a diversified global portfolio.

    Highlights

    5

    • Delivered over $3 billion to the bottom line in FY25, a 60% increase over 2024, and an all-time high net income for the company.

    • Full year yields improved more than 5.5% over last year, topping initial guidance by almost 1.5 points.

    • Achieved ROIC in excess of 13% in FY25, the highest level in 19 years.

    • Customer deposits were up 7% year-over-year, hitting an all-time high for year-end FY25.

    • Formally resumed quarterly dividend at an initial rate of $0.15 per share.

    Concerns

    3

    • Forecasting a 3% normalized yield increase in 2026, absorbing a 14% increase in non-Carnival Corporation capacity growth in the Caribbean.

    • Unit cost growth of 3.25% for 2026, including partial year operating costs from new destination developments and timing of expenses.

    • First quarter 2026 yield improvement of 1.6% (2.4% normalized) faces difficult prior year comparison and double-digit industry-wide Caribbean growth.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 Yield increase
    approximately 2.5%
    high materiality
    High
    Full-year 2026 Net Cruise Costs ex-fuel per ALBD increase
    approximately 3.25%
    high materiality
    High
    Full-year 2026 Net Income
    over $3.45 billion
    high materiality
    High
    Full-year 2026 EBITDA
    $7.6 billion
    high materiality
    High
    Net Debt to EBITDA ratio
    under 3x
    high materiality
    High
    Quarterly Dividend Rate
    $0.15 per quarter
    high materiality
    High
    First Quarter 2026 Yield improvement
    approximately 1.6%
    medium materiality
    High
    First Quarter 2026 Adjusted Cruise Costs ex-fuel per ALBD increase
    approximately 5.9%
    medium materiality
    High
    Carnival Rewards program yield impact
    0.2%
    low materiality
    High
    Carnival Rewards program yield impact
    0.5%
    low materiality
    High
    Carnival Rewards program yield impact
    0.2%
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    North America
    Booking prices for 2026 are at historical highs.
    Booking prices: historical high
    		————
    Europe
    Booking prices for 2026 are at historical highs. 20% of Q1 FY26 Caribbean capacity is from European brands.
    Booking prices: historical high
    		————

    Operational metrics

    33
    Net income
    $454 millionnearly 2.5x prior year
    Q4 FY25

    Exceeded September guidance by $154 million or $0.11 per share.

    Net income
    over $3 billion60% increase over 2024
    FY25

    All-time high net income for the company, over 30% greater than initial guidance.

    Net income guidance
    over $3.45 billionmore than 12% versus 2025
    FY26

    Guidance for full year 2026.

    EBITDA per ALBD
    all-time high
    FY25

    EBITDA per ALBD reaching an all-time high.

    EBITDA guidance
    $7.6 billion
    FY26

    Guidance for full year 2026.

    ROIC
    in excess of 13%highest level in 19 years
    FY25

    Highest level the company has seen in 19 years.

    Net debt to adjusted EBITDA
    3.4x
    FY25

    Investment-grade leverage ratio as of the end of fiscal year 2025.

    Debt reduction
    over $10 billion
    since peak less than 3 years ago

    Total debt reduced since the peak.

    Net interest expense improvement
    over $700 million
    FY26 vs FY23

    Expected improvement in net interest expense, fully reflected in 2026 guidance.

    Dividend rate
    $0.15
    quarterly

    Initial rate, expected to grow responsibly over time.

    Shares taken out
    18 million
    recent

    Taken out by calling the last of convertible debt.

    Normalized cost increase driver
    3%
    FY26

    Component of the normalized 2.5% cost increase.

    Normalized cost increase driver
    0.6%
    FY26

    Component of the normalized 2.5% cost increase.

    Normalized cost increase driver
    1.1%
    FY26

    Offsetting inflation in the normalized cost increase.

    Regulatory costs impact
    $0.11
    FY26

    Cost impact from emission allowances and higher income taxes driven by Pillar 2.

    Emission allowance increase
    about $80 million
    FY26 vs FY25

    Increase due to full 100% vs 70% in 2025 and slight increase in projected cost of EU allowances.

    Fuel price and currency impact
    $0.20
    FY26

    Net favorable impact for 2026.

    Fuel prices impact
    $0.17
    FY26

    Favorable impact from fuel prices.

    Currency exchange rates impact
    $0.03
    FY26

    Favorable impact from currency exchange rates.

    Net Debt to EBITDA target
    ~2.75x
    long-term

    Targeting this range for a BBB rating.

    DLC unification payback
    less than 2 years
    ongoing

    Payback period for administrative cost savings from unification.

    Yield growth value
    $0.35compared to 2025
    FY26

    Value of the 2.5% yield growth.

    Cruise costs without fuel per ALBD cost
    $0.27for 2026 versus 2025
    FY26

    Cost of the 3.25% increase in cruise costs without fuel per ALBD.

    Normalized cruise costs without fuel per ALBD increase
    2.5%
    FY26

    Normalized for 0.5 point impact from Celebration Key/RelaxAway operating expenses and 0.3 point impact from cost timing from Q4 2025.

    Cruise costs without fuel per ALBD increase
    5.9%compared to prior year
    Q1 FY26

    Expected increase for Q1 FY26, higher than the full year due to greater impact of full year items in Q1.

    Carnival Rewards program yield impact
    0.2%
    FY26

    Expected impact on yields from Carnival Cruise Line's new loyalty program.

    Carnival Rewards program yield impact
    0.5%
    FY27

    Expected impact on yields from Carnival Cruise Line's new loyalty program.

    Carnival Rewards program yield impact
    0.2%
    FY28

    Expected impact on yields from Carnival Cruise Line's new loyalty program, turning positive thereafter.

    Cumulative yield increase
    approximately 20%
    since 2023

    Cumulative yield increase for Carnival since 2023.

    People served
    over 13.5 million
    2026

    Target for delivering happiness to people around the world.

    Dry dock days
    604
    FY26

    Expected dry dock days in 2026 after optimizing schedule.

    Caribbean capacity mix
    20%
    Q1 FY26

    20% of Q1 Caribbean capacity is from European brands.

    Marketing as % of sales
    about 3.5%
    ongoing

    Metric looked at for advertising spend.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps5.4%%
    Net unit growth development pipeline0ships

    Orderbook & backlog

    3
    Booked positionabout 2/3Q4 FY25

    in line with a year ago

    at historical high prices for both North America and Europe

    Booking volumesrecord levelslast 3 months

    for both 2026 and 2027

    Customer depositsup 7%year-end FY25

    up 7% YoY

    hitting an all-time high for year-end

    Product announcements

    4
    ProductTypeDetails
    Celebration Key, Grand Bahamamilestone
    RelaxAway, Half Moon Cayexpansion
    Isla Tropicale, Roatánroadmap
    Ensenada, Mexico destinationroadmap

    Deals & partnerships

    1
    Carnival plc shareholdersUnification of dual-listed company (DLC) framework into a single company listed solely on the New York Stock Exchange.one-for-one share exchange for Carnival plc shareholders

    Carnival plc shareholders would receive Carnival Corporation shares on a one-for-one basis. Carnival plc shares and ADSs would be delisted, and Carnival plc would become a wholly owned U.K. subsidiary of Carnival Corporation. Shareholder meetings are intended to be held in April to consider the recommendation.

    Risks & headwinds

    6
    Low U.S. consumer sentiment2025

    dipping quite low for several months throughout 2025, last month dropping pretty close to its lowest level in recorded history

    Mitigation: Strength of product offering, guests prioritizing spending with Carnival, demand proving more resilient than macro indicators.

    Increased non-Carnival Corporation capacity in the Caribbean2026

    14% increase in 2026, taking it to a 27% increase in 2 years

    Mitigation: Diversified global portfolio, effective cost management, Carnival's own 4% growth over the same period.

    Geopolitical uncertainties2025-2026

    necessitated late-stage deployment changes in the Arabian Gulf

    Mitigation: Diversified global portfolio.

    Inflation2026

    3% attributable to inflation in normalized 2.5% cost increase

    Mitigation: Cost mitigation of approximately 1.1% from efficiency initiatives and leveraging industry-leading scale.

    Higher dry dock expenses2026

    0.6 point from dry dock expense on income statement in 2026

    Mitigation: Optimizing dry dock schedule, total actual spending roughly in line with 2025 but more classified as operating expense.

    Regulatory costs2026

    $0.11 per share for emission allowances and higher income taxes driven by Pillar 2

    What to watch in Q1 FY26

    5

    Booking momentum for 2026/2027

    next quarter
    Currentrecord levels for both 2026 and 2027
    Targetcontinued strong momentum

    Why it matters

    Indicates sustained demand and pricing power for future periods.

    And over the last 3 months, we achieved booking volumes that were at record levels for both 2026 and 2027.

    Q&A highlights

    9

    Are the strong close-in demand and onboard spend acceleration factored into the 2026 guidance, or would they represent upside?

    The guidance represents the company's best estimate based on current bookings and momentum, acknowledging daily changes. While they always aim to exceed expectations, it's too early in the wave season to definitively say if current momentum is fully baked in or if it's upside.

    “this is our guidance based on what we expect to happen at this point in time when we look into 2026, taking into account the business we've got on the books, the momentum we've got and the fact that the world changes on a pretty daily basis.”

    asked by Robin Farley · answered by Josh Weinstein

    2 min read5 chapters

    Detailed Narrative

    01

    FY25 Performance Highlights

    Carnival Corporation achieved record revenues, yields, operating income, and EBITDA for Q4 and the full year 2025. Net income reached an all-time high of over $3 billion, a 60% increase over 2024, exceeding initial guidance by over 30%. Full year yields improved more than 5.5%, and unit costs were 1 point better than initial guidance at a 2.6% increase. Operating margins and EBITDA margins increased by over 250 basis points, leading to the highest operating income per ALBD in almost 20 years and all-time high EBITDA per ALBD.

    02

    Balance Sheet and Capital Allocation

    The company reached an investment-grade leverage ratio of 3.4x at year-end, ahead of schedule. This enabled the formal resumption of a quarterly dividend at $0.15 per share, with expectations for responsible growth. The company also reduced debt by over $10 billion since its peak less than three years ago and completed a $19 billion refinancing plan, resulting in an expected $700 million improvement in net interest expense in 2026 compared to 2023.

    03

    Strategic Destination Development

    Carnival is transitioning its destination strategy from utilitarian assets to marketable growth drivers. Celebration Key is a key differentiator, complemented by the expansion at RelaxAway, Half Moon Cay later in 2026. Future developments include Isla Tropicale, Roatán, and a new guest experience in Ensenada, Mexico, benefiting West Coast deployments. The company also highlighted its competitive advantage in the Alaska trade.

    04

    Market Positioning and Demand Resilience

    Despite low U.S. consumer sentiment readings throughout 2025, booking volumes for 2026 and 2027 reached record levels. The company emphasizes the resilience of demand for its cruise lines, which is proving stronger than traditional macro indicators suggest. Carnival holds the #1 or #2 brand in every major cruising market and focuses on yield management, AI for marketing effectiveness, and enhanced personalization.

    05

    DLC Unification

    Carnival is recommending to shareholders to unify its dual-listed company (DLC) framework into a single company listed solely on the New York Stock Exchange. This aims to create a single global share price, streamline governance and reporting, reduce administrative costs, increase stock liquidity, and enhance weighting in major U.S. stock indices. The unification is expected to be completed in Q2 2026, subject to shareholder approval in April.

    AI-generated summary of the company’s earnings call. Not investment advice.