Norwegian Cruise 2025 Q1 Earnings Misses Targets with Net Income Down 332.2%

Norwegian Cruise (NCLH) reported its fiscal 2025 Q1 earnings on May 05th, 2025. Norwegian Cruise's earnings fell short of expectations, with a notable decline in net income compared to the previous year. The company reported a decrease in earnings per share and revenue, missing analyst estimates. Despite this, Norwegian Cruise maintained its full-year guidance, reflecting confidence in its long-term strategy. The company anticipates an improvement in adjusted EBITDA and adjusted EPS for the full year, aligning closely with previous forecasts. Overall, the guidance remains in line with expectations, signaling management’s focus on strategic investments and cost management to navigate the current economic landscape.

Revenue

Norwegian Cruise experienced a 2.9% decline in total revenue, amounting to $2.13 billion in Q1 2025, compared to $2.19 billion in Q1 2024. The passenger ticket segment recorded revenue of $1.42 billion, while onboard and other activities generated $708.87 million. These figures contributed to the total revenue of $2.13 billion.

Earnings/Net Income

Norwegian Cruise posted a loss of $0.09 per share in Q1 2025, a significant decline from the previous year's profit of $0.04 per share, marking a negative change of 325%. The company reported a net loss of $40.30 million in Q1 2025, a stark contrast to the net income of $17.35 million in Q1 2024, showing a deterioration of 332.2%. The EPS results were disappointing given the substantial decline from the previous year.

Post-Earnings Price Action Review

Historically, Norwegian Cruise Line's stock tends to perform positively in the short-to-medium term following earnings reports. Backtest data indicates that post-earnings, the stock achieves a 3-day win rate of 51.16%, a 10-day win rate of 53.15%, and a 30-day win rate of 53.55%. This suggests that the stock often experiences gains in the immediate aftermath of earnings releases. The maximum return observed over 30 days was 8.62%, highlighting the potential for significant price appreciation. Investors may find optimism in these historical trends, though caution is advised due to the current earnings miss and broader market volatility impacting the stock's immediate outlook.

CEO Commentary

"We kicked off 2025 with solid first quarter results, demonstrating the continued momentum of our Charting the Course strategy in building a strong foundation for long-term success and delivering on our vision for guests to Vacation Better | Experience More," said Harry Sommer, NCLH President and CEO. He noted that while the company faced challenges such as a GAAP net loss of $40.3 million and a 3% revenue decrease, they welcomed the delivery of ‘Norwegian Aqua’ and completed refurbishments on existing vessels. Sommer expressed confidence in future performance driven by long-term net yield growth, effective cost control, and record guest satisfaction scores, stating, "Our focus remains on managing the business for the long term."

Guidance

Norwegian Cruise Line anticipates a full-year 2025 adjusted EBITDA of approximately $2.72 billion, which represents an 11% increase year-on-year. The company expects adjusted EPS to be around $2.05, reflecting a 13% annual growth. Additionally, net yield is projected to increase between 2.0% and 3.0% on a constant currency basis, while adjusted net cruise cost excluding fuel per capacity day is expected to grow between 0% and 1.25%.

Additional News

Norwegian Cruise Line Holdings recently announced plans to remove over 5,000 berths from its fleet by 2027. This decision includes withdrawing the Seven Seas Navigator, the first ship to leave the fleet in over 15 years. The Navigator is scheduled to exit the fleet in late 2026 and will join Crescent Seas, a startup focused on luxury residential cruising. Additionally, Norwegian Cruise Line announced the delivery of Norwegian Aqua, marking a new chapter in their fleet evolution as the first ship in the cutting-edge Prima Plus Class. The company also plans to expand amenities at Great Stirrup Cay, enhancing guest experiences with new pools, cabanas, and recreational areas expected to open later this year.