Royal Caribbean Cruises 2025 Q2 Earnings Beats Expectations with Net Income Up 41.5%

Royal Caribbean Cruises (RCL) reported a robust fiscal 2025 Q2 performance, surpassing Wall Street expectations with adjusted earnings per share of $4.38 against the forecasted $4.09. The company raised its full-year 2025 guidance, anticipating adjusted EPS in the range of $15.41 to $15.55, reflecting stronger-than-expected second-quarter results and favorable conditions for the remainder of the year. Despite strong demand and accelerated bookings, the company's profit outlook for the current quarter fell short of Wall Street forecasts, leading to a stock price dip.

Revenue
Royal Caribbean Cruises experienced a notable revenue increase of 10.4%, reaching $4.54 billion in fiscal 2025 Q2, compared to $4.11 billion in the previous year. Passenger ticket revenues contributed significantly, amounting to $3.20 billion, while onboard and other revenues added $1.34 billion. This growth highlights the company's ability to capture increased demand across its offerings.

Earnings/Net Income
The company's EPS climbed by 34.0% to $4.45 in 2025 Q2 from $3.32 in 2024 Q2, showcasing consistent earnings improvement. Net income reached a remarkable $1.21 billion in 2025 Q2, up 41.5% from $858 million in 2024 Q2, setting a new record for fiscal Q2 net income. This strong performance underscores the company's effective strategy and financial health.

Price Action
Royal Caribbean Cruises' stock saw a 2.77% uptick during the latest trading day, despite a 4.07% decline over the past week. Month-to-date, the stock has risen by 13.00%, reflecting investor confidence in the company's long-term growth prospects despite recent volatility.

Post Earnings Price Action Review
Investors have consistently reaped substantial returns by purchasing Royal Caribbean Cruises shares after quarters of revenue growth and holding for a month. This strategy has yielded a total return of 651.07% over the past three years, significantly outperforming the benchmark return of 87.35%. While the strategy's compound annual growth rate stood at a robust 50.01%, it was accompanied by notable market fluctuations, evidenced by a volatility rate of 49.69%. Despite these fluctuations, the strategy achieved a maximum drawdown of 0.00%, indicating no peak-to-valley loss. This impressive performance underscores the effectiveness of the strategy in capturing gains and surpassing market expectations.

CEO Commentary
Jason Liberty, President and CEO of Royal Caribbean Group, expressed optimism in the company's strategic direction, highlighting accelerating demand for its brands and experiences. He emphasized the company's focus on delivering exceptional value to guests and shareholders, while strategically positioning for future trends. Liberty remains confident in achieving financial targets by 2027, with plans for new ships, unique destinations, and technological investments.

Guidance
Royal Caribbean expects net yields to rise between 3.5% and 4.0%, as-reported and in constant currency, alongside a modest increase in net cruise costs per passenger cruise day—excluding fuel—by approximately 0.5% as-reported and 0.3% in constant currency. Adjusted EPS is projected to grow around 31% year-over-year, with guidance set between $15.41 and $15.55, reflecting favorable conditions and strong second-quarter performance.

Additional News
Royal Caribbean is gearing up for the debut of its new ship, Star of the Seas, set to launch with 7-night adventures to the Caribbean in August 2025. The company also unveiled bookings for its first Royal Beach Club, offering an all-inclusive beach experience in The Bahamas come December. Additionally, Royal Caribbean has achieved a record-breaking milestone with the installation of the AquaDome on the Legend of the Seas, marking a significant engineering feat ahead of its summer 2026 debut.