Carnival 2025 Q2 Earnings Beats Expectations with 514.1% Net Income Surge

Carnival (CCL) reported its fiscal 2025 Q2 earnings on Jun 26th, 2025. The company delivered impressive results with revenue of $6.33 billion, surpassing expectations. Carnival also exceeded its guidance, raising its full-year yield outlook. This strong performance was driven by robust consumer demand and effective commercial execution, positioning the company well for future growth.

Revenue

Carnival saw a notable increase in revenue, reaching $6.33 billion in Q2 2025, up from $5.78 billion in the same quarter of the previous year. The North America segment contributed significantly with $4.21 billion, while the Europe segment added $2.01 billion. Passenger ticket sales accounted for $4.10 billion, and onboard and other revenues amounted to $2.22 billion. Additional contributions came from Cruise Support and Tour and Other segments, with $73 million and $31 million, respectively.

Earnings/Net Income

Carnival's earnings per share (EPS) rose substantially by 514.3% to $0.43 in Q2 2025, compared to $0.07 in the previous year. Net income also showed remarkable growth, reaching $565 million, up 514.1% from $92 million in Q2 2024. The EPS performance indicates a strong financial outcome for the quarter.

Price Action

The stock price of Carnival increased by 1.81% during the latest trading day, surged 10.84% over the past trading week, and climbed 17.62% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Carnival shares when revenues surpass expectations and holding them for 30 days returned 18.58%, which underperformed the benchmark by 74.53%. This approach faced significant volatility and risk, evidenced by a maximum drawdown of -81.29% and a Sharpe ratio of 0.06. These metrics underscore the challenges of implementing this strategy in actual market conditions, highlighting the potential for substantial fluctuations and the need for careful risk management.

CEO Commentary

Joshua Ian Weinstein, CEO & Director, highlighted Carnival's exceptional performance with record revenues and EBITDA for eight consecutive quarters. Net income tripled year-over-year, driven by strong commercial execution and consumer demand, especially in ticket and onboard spending. Weinstein emphasized strategic priorities, including launching Celebration Key and enhancing guest experiences at private destinations, further positioning Carnival as a leading cruise industry player. He expressed optimism, noting the company exceeded its 2026 targets 18 months early, signaling potential for future growth.

Guidance

Carnival raised its full-year yield guidance to 5%, reflecting strong Q2 results and a cumulative yield increase of 16% across 2024 and 2025. The company forecasts $6.9 billion in EBITDA for the year, a 13% improvement over 2024, with cruise costs expected to rise by 3.6% year-over-year. For Q3, Carnival anticipates a 7% increase in cruise costs per ALBD, driven by the launch of Celebration Key and other factors, while focusing on optimizing costs and enhancing the onboard experience.

Additional News

In recent developments, Carnival Corporation has expanded its revolver capacity to $4.5 billion, representing a 50% increase, which strengthens its financial flexibility. The company is also launching new destinations like Celebration Key and expanding existing ones to enhance guest experiences and drive future revenue. Additionally, Carnival has experienced a significant increase in customer deposits, reaching an all-time high of $8.5 billion, indicating strong future demand. These strategic moves are expected to support Carnival's continued growth and market leadership in the cruise industry.