Norwegian Cruise Line Profit Tops Forecasts as Yields Weaken

Norwegian Cruise Line Holdings reported second-quarter 2026 revenue of $2.6 billion on July 30, up 4.9% year over year, while GAAP net income rose to $223 million from $30 million a year earlier. Adjusted EBITDA was $666 million and adjusted EPS was $0.48, both ahead of company guidance, but Net Yield fell 2.6% on a constant-currency basis.

NCLH said it remains below its optimal booked position for the next 12 months, with softer demand at the Norwegian Cruise Line brand tied to company-specific execution challenges and the ongoing conflict in the Middle East.

Profitability beat guidance as yield stayed negative

Adjusted EBITDA declined 4.1% from $694 million in the prior-year quarter, though it exceeded NCLH’s guidance of $632 million. Adjusted EPS fell 6.6% year over year but came in above the company’s $0.38 forecast.

Gross margin per Capacity Day decreased 11.6% as reported and 12.3% on a constant-currency basis. Net Yield declined 2.1% as reported and 2.6% on a constant-currency basis, better than NCLH’s previous guidance for a 3.6% decline.

Gross Cruise Costs per Capacity Day were approximately $304, down from $306 a year earlier, while Adjusted Net Cruise Cost excluding Fuel per Capacity Day was essentially flat as reported and down 0.5% on a constant-currency basis.

“While we are confident in the strength of our brands and the long-term benefits of the actions underway, we are still in the early stages of our turnaround,” said John W. Chidsey, Chairperson and Chief Executive Officer of Norwegian Cruise Line Holdings.

Full-year outlook points to a weaker yield environment

NCLH now expects full-year 2026 Adjusted EBITDA of approximately $2.5 billion, Adjusted Net Income of about $700 million and Adjusted EPS of approximately $1.50. Full-year Net Yield is expected to decline about 5% on a constant-currency basis, while Adjusted Net Cruise Cost excluding Fuel per Capacity Day is expected to be down approximately 0.25%.

For the third quarter, the company guided to Adjusted EBITDA of $874 million, Adjusted EPS of $0.90 and a Net Yield decline of 8.9% on a constant-currency basis. NCLH expects third-quarter Capacity Days of 6.8 million and occupancy of 104%. NCLH did not provide GAAP equivalents for certain future guidance, citing uncertainty around foreign exchange movements and future gains or charges.

Cost savings deepen as bookings lag

The company identified another $100 million of expected annualized run-rate savings, mainly from technology vendor consolidation, capital expenditures, SG&A and salary and benefit efficiencies. The latest program follows $125 million of annualized savings announced last quarter and more than $300 million of shipboard savings identified from 2024 through 2026.

The $125 million SG&A program came after Elliott Management’s involvement as an activist investor. Taken together, NCLH said it has identified more than $500 million in savings over the past three years.

“While the demand environment remains pressured at our Norwegian Cruise Line brand, we continue to execute on disciplined cost and sourcing initiatives,” said Mark A. Kempa, Executive Vice President and Chief Financial Officer of Norwegian Cruise Line Holdings.

NCLH said the benefits from recent commercial and cost actions will be realized over time and will have limited impact on 2026 financial results. The company also cited leadership additions in marketing, revenue management and other areas at Norwegian Cruise Line, including the appointment of Lee Applbaum as chief marketing officer.

Asked whether more nine-figure cost actions could follow, Chidsey declined to size future rounds but said opportunities remain “not guest focused at all,” adding that they involve “ways we can use technology better.”

Debt, fuel and fleet actions

NCLH ended June 30 with total debt of $15.0 billion, net debt of $14.8 billion and liquidity of $1.5 billion, including approximately $218 million in cash and cash equivalents and $1.3 billion of availability under its revolving loan facility. Net debt was 5.3 times trailing Adjusted EBITDA at quarter-end.

Fuel remained a cost pressure. Fuel expense was $219 million in the quarter, with the price per metric ton, net of hedges, rising to $888 from $659 in 2025. NCLH had hedged approximately 52% of projected 2026 fuel consumption and 38% of projected 2027 consumption as of June 30.

The company also elected to settle its 1.125% and 2.50% exchangeable senior notes due 2027 in cash, a move it expects to reduce full-year 2026 diluted weighted-average shares outstanding by 4 million compared with guidance issued May 4.

In July, NCLH entered a memorandum of agreement to sell Oceania Sirena, the 1999-built, 30,277-gross-ton Oceania Cruises ship with capacity for about 670 guests at double occupancy. Oceania expects to continue operating the vessel under charter through spring 2028, and the transaction is expected to close in the third quarter of 2026.

The company expects approximately $2.9 billion of gross newbuild-and-growth capital expenditures in 2026, or about $1.4 billion net of export credit financing, with another roughly $2.9 billion of gross newbuild-and-growth spending expected in 2027.

Great Stirrup Cay enters the demand outlook

NCLH linked part of its Caribbean demand outlook to the completion of amenities at Great Stirrup Cay, Norwegian Cruise Line’s private Bahamian island in the Berry Islands. The destination has traditionally relied on tender boats, and NCLH said the island’s pier will be among the amenities available to guests beginning September 4.

The opening date also covers Great Tides Waterpark, Great Life Lagoon and Splash Harbor. Great Tides Waterpark spans nearly six acres, according to NCLH.