Viking Holdings Q2 FY26 earnings call VIK

Viking reported robust booking trends, with the 2026 season effectively sold out at 96% capacity booked. Advanced bookings for 2026 totaled $6.4 billion, a 13% increase year-over-year despite a 7% capacity increase. Looking ahead, the 2027 season is 53% booked, with $4.7 billion in advanced bookings, representing a 21% increase year-over-year on a 15% capacity increase. These strong trends provide confidence in demand and support dynamic pricing.

The company continues its fleet expansion, adding 4 new river vessels and 1 ocean ship in Q2 FY26, consistent with its long-term growth strategy. Viking expects to take delivery of 12 ships in total during 2026 (10 River, 2 Ocean). The strategy of operating nearly identical ships provides significant competitive advantages, including lower maintenance costs, greater operational reliability, and efficiencies across sales, marketing, operations, and purchasing.

Viking is focused on further enhancing guest experiences by increasing its offering of land extensions and optional shore excursions. Examples include a new St. Moritz, Lombardy and Alpine Train extension and a Zeppelin flight over Cologne. These additions aim to provide more opportunities for guests to explore destinations and differentiate Viking's offerings, contributing to higher guest satisfaction scores.

Portions of European rivers, particularly the Danube and Rhine, experienced historically low water levels in Q3 FY26, creating operational challenges. Viking utilized its purpose-built river fleet, deployment flexibility, and ship swap capabilities to minimize disruptions. The company proactively issued future cruise vouchers to affected guests to ensure satisfaction and loyalty, acknowledging the impact on their experience.

For Q2 FY26, total revenue increased 16.5% to $2.2 billion, driven by increased capacity and higher revenue per Passenger Cruise Day (PCD). Adjusted EBITDA rose 18.2% to $748 million, with net yield increasing 6.2% to $645. For the first half of 2026, consolidated adjusted gross margin grew 16.5% to over $2.1 billion, and adjusted EBITDA was $853 million, up 20.9% year-over-year.

As of June 30, 2026, Viking held $4 billion in cash and cash equivalents and had an undrawn revolver facility of $1 billion. Net debt stood at $2.4 billion, resulting in a net leverage of 1.2x. Deferred revenue was $5 billion. The company's capital allocation priority is to reinvest cash in the business for strong returns, with committed ship CapEx of $1.9 billion ($650 million net of financing) for FY26 and $1.0 billion ($260 million net of financing) for FY27.

Viking is expanding its China outbound efforts, deploying the Viking Eden ocean ship in Europe for Chinese-speaking guests, in addition to four river longships. This strategy focuses on direct marketing to Chinese consumers for a more profitable business model. The newly announced India itinerary for the 2027 and 2028 seasons is completely sold out, demonstrating strong demand for new destinations.