Viking Holdings Q2 Revenue Up 19%, Adjusted Profits Rise 24% Amid EPS Miss

Viking Holdings' Q2 revenue increased 19% due to strong Ocean voyages, driving adjusted profits up 24% per share. However, shares are under pressure as the company's river segment missed expectations. Despite this, the overall results demonstrate the company's resilience in the face of economic uncertainty.

Viking Holdings (NYSE: VIK), a leading cruise operator with a market capitalization of $26.89 billion, reported its second-quarter (Q2) 2025 earnings, showcasing robust performance driven by its ocean voyages. The company's total revenue increased by 19%, while adjusted profits per share rose by 24%. However, the company's river segment missed expectations, leading to a premarket decline of 4.49% in share price.

The company's ocean segment performed exceptionally well, with total revenue increasing by 18.5% year-over-year (YoY) to $1.9 billion. This growth was primarily driven by an 8.8% capacity increase and an 8% net yield improvement. The strong demand for ocean cruises is evident, with 96% of the 2025 capacity already booked. The company also saw a 20.7% increase in consolidated adjusted gross margin, indicating effective cost management and revenue growth strategies.

Despite the impressive ocean performance, the river segment missed expectations, contributing to the stock's decline. The company's river revenue grew by 18.5% YoY, but this was not enough to meet market expectations. The river segment faces challenges such as rising operational costs and potential market saturation in established regions.

Viking Holdings maintains a positive outlook for the future, with 96% of 2025 capacity already booked and plans to expand into new markets like Egypt and India. The company projects mid-single-digit pricing growth and continues to explore opportunities in the Chinese market. However, the company acknowledges risks such as rising vessel expenses, potential market saturation, macroeconomic pressures, currency fluctuations, and high capital expenditure commitments for 2025 and 2026.

The stock currently trades at a P/E ratio of 86.68, with a PEG ratio of 0.8, suggesting a reasonable valuation relative to growth. Analyst price targets range from $46 to $82, with a consensus recommendation leaning towards Buy.

References:

[1] https://seekingalpha.com/news/4486903-viking-holdings-solid-q2-results-overshadowed-by-eps-miss-river-metrics
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-viking-holdings-q2-2025-beats-eps-expectations-stock-dips-93CH-4200218