Lindblad Expeditions Holdings Inc.

Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Lindblad Expeditions Holdings, Inc., 2025 fourth quarter and full year financial results. All lines have been placed on mute to prevent any backward noise. After the speaker's remarks, there will be a question and answer session. We do request for today's session that you please limit to two questions. If you would like to ask a question during this time, Simply press star, then the number one on your telephone keypad. To withdraw your questions, press star one again. I would now like to turn the conference over to Rick Goldberg, Chief Financial Officer. You may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us for Lindblad's fourth quarter 2025 earnings call. With me on today's call is Natalia Leahy, our Chief Executive Officer. Natalia will begin with some opening comments, and I will follow with details on our 2025 results and 2026 expectations before we open the call for Q&A. As always, you can find our latest earnings release in the investor relations section of our website. But before we get to all of that, I'd like to remind everyone that the company's comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties, that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings. In addition, our comments may reference non-GAAP financial measures. a reconciliation of the most directly comparable GAAP financial measures, and other associated disclosures are contained in the company's earnings release. With that out of the way, I'll turn the call over to Natalia.

Thank you, Rick. Good morning, everyone. Well, we are very excited to share our progress and results today. As we begin this call, I'd like to start with the words from our founder, Sven Lindblad. We have always had a very distinct North Star. If we can provide people with extraordinary experiences in the world's most charismatic places, they form a connection with the natural world that is truly profound. This year, as we celebrate the 60th anniversary of the very first non-scientific expedition to Antarctica led by Sven's father, This North Star feels as relevant as ever. It guides us in every decision, every day. Rick and I recently marked our first year in the company aboard National Geographic Resolution in Antarctica. And standing on the bridge, as Captain Martin noted, that we were the southernmost passenger ship in the world for days. and later skiing with expedition leader Stefano towards a glacier with emperor penguins nearby. It's moments like this that remind us what truly sets Lindblad expeditions apart. Unmatched expertise, intimate shifts, and deeply authentic experiences. That commitment is not only philosophical, it drives results. In 2025, we delivered record guest satisfaction scores and record financial performance, while strengthening our operating discipline and accelerating progress across all three strategic pillars. To that end, we've also rounded up our strong leadership team with the recent addition of a new chief marketing officer, Mike Fulkerson, who brings extensive experience across hospitality, luxury, expedition, and cruising sectors. Turning to our results, full year revenues reached a record 771 million, representing 20% growth year over year. We achieved record growth in yields to 1,335 per guest night, the highest in the company's history. Our adjusted EBITDA increased 38% to another record of 126.2 million, with margins expanding 220 basis points to 16.4%, reflecting our operational discipline and the scalability of our business model. We also strengthened our balance sheet position, improving our net leverage from 4.6 times at the end of 2024 to approximately 3.1 times by year-end 2025. These full-year achievements were punctuated by our strong fourth-quarter results with revenues increasing 23% to $183.2 million. The lean blood segment delivered 28% revenue growth driven by an 11% increase in net yields to 1,279 per guest night, while occupancy rose to 87% from 78% in Q4 2024. Our land experiences segment maintained its momentum with 16% revenue growth, underscoring strengths across our entire portfolio. Let me walk you through how we achieve these results across our three strategic pillars. Our first pillar focuses on maximizing revenue generation through occupancy pricing and deployment optimization. I'm proud to update you on our progress across multiple initiatives in this area. Our relationships with Disney continues to expand our reach through broader distribution to broader audiences. contributing to strong performance across key channels. As an example, bookings from earmarked Disney travel agents increased 35% for the full year. Our onboard expedition sales program rollout resulted in nearly three times as many bookings in 2025 compared to 2024. Importantly, the percentage of guests booking within 30 days from a voyage has doubled since the launch of the program, leading to expanded booking course and higher repeat rate. Our outbound sales program gained significant traction with sales increasing 97% for the full year. We continue to see this as a high potential channel that is in its early stages. Our online bookings increased 52% year over year fueled by strong demand generation through our National Geographic Partnership, as well as significant enhancements to our web platform. Our extension revenues increased 45% for the year. We are pleased that we are seeing customers take full advantage of our full range of expedition offerings as they travel with us. I just returned from London, where our team hosted a series of travel advisors and journalists. We are very encouraged by the progress in the UK market and the momentum we've been building. In just the first six weeks of the year, we already booked half of our 2025 revenue. Our second pillar focuses on optimizing financial performance through cost innovation and fixed asset utilization. During the year, we made significant strides in building cost innovation pipelines throughout our organization. A key highlight in our 2026 capacity growth strategy is that we are now realizing the benefits from last year's fleet optimization walk. We expect meet single-digit capacity growth in 2026 driven almost entirely by our dry dock and deployment optimization that reduced non-revenue days by over 100, enabling us to release additional voyages and drive incremental sales. We've extended this walk into our 2027 deployment and beyond and are pleased to see that we expect future efficiencies to be unlocked. Looking ahead, We've also built another strong pipeline of cost innovation initiatives for 2026 and beyond, positioning us to realize continued operational efficiencies over the long term. Our last strategic pillar focuses on exploring and capitalizing on accretive growth opportunities. Last January, we acquired two Galapagos ships, as you know, expanding our presence in the core market reinforcing our leadership position there. We also expanded charter portfolio, including a new three-year agreement with Greg Mortimer, increasing and modernizing our Alaska capacity through a capital light approach. Additionally, we completed the small token acquisition of Earth's Watch on the natural habitat, adding a respected citizen science brand to our portfolio. As we look ahead, a key focus of 2026 will be on identifying accretive growth opportunities both across the fleet and by adding to our portfolio of brands. As always, I want to reiterate our purpose, our why. Our commitment to responsible exploration remains central to who we are and a defining differentiator for our company. For us, it's more than a trip. It's a mission. In 2025, we made a record $3 million investment through the Lindblad Expeditions National Geographic Fund, the largest in its 18-year history, supporting critical conservation, research, and education initiatives worldwide. We supported 46 scientist education and storytelling projects including hosting visiting scientists on 25 voyages and welcoming 45 teacher fellows. I'm especially proud of our teams whose grassroots efforts raised over $50,000 to support gray whale research, a powerful reflection of our culture in action. Turning to our outlook for 2026. our booking momentum remains very strong. We had a record weight season and booked revenue for 26 has already exceeded revenue for 2025. We're seeing similar positive trends for 2027 bookings, both across land and expedition segments. We are guiding full year revenues and adjusted EBITDA in the range of 800 to 850 million and 140 to 140 million, respectively. Rick will provide more details on the pacing of our earnings bill this year, but we are excited by our momentum and are optimistic about the opportunities ahead of us. In closing, 2025 was a foundational year, laying the groundwork for sustained profitable growth in years ahead. We delivered record revenue, record yields, and a record EBITDA, alongside a significantly strengthened balance sheet, clear evidence that our strategy is working. These results reflect our team's discipline, execution, and longstanding commitment to our North Star. Thank you for your continued confidence in Lean Blood Expeditions. I'll now turn the call over to Rick for the financial results.

Thank you, Natalia. It's been a privilege to partner with you and the entire leadership team at Lindblad Expeditions over the past year. And traveling with you to Antarctica aboard the National Geographic Resolution and to Churchill, Canada to see the polar bears with natural habitat were two personal highlights. 2025 was a record-setting year for Lindblad Expeditions. We achieved the highest guest satisfaction scores in our history, the highest net yield, and the highest EBITDA. a testament to the strength of our brand, our strategy, and our team. Total company revenues for 2025 were $771 million, an increase of $126.3 million, or 19.6% versus 2024. Lindblad segment revenues were $495.6 million, an increase of $72.3 million, or 17.1% compared to the prior year. Occupancy increased 10 percentage points from 78% to 88%, and net yield for an available guest night increased 14.1% to $1,335, the highest in company history. Land experience segment revenues were $275.4 million, an increase of $54 million, or 24.4% compared to 2024, driven by a 16% increase in guests and a 7% increase in revenue per guest. Turning now to the cost side of a business, operating expenses before stock-based compensation, transaction-related expenses, depreciation and amortization, interest and taxes increased 91.3 million, or 16.5% versus 2024. Specifically, cost of tours increased 55.4 million, or 15.3%, driven by operating additional voyages and trips, and the inclusion of a full year of the results for Thompson Group. Fuel costs were 4.8% of Lindblad's segment revenue, which was down 150 basis points versus 2024. Sales and marketing costs increased 27.7 million, or 31.8%, primarily due to higher royalties and commission expenses and investments in demand generation efforts. General and administrative costs excluding stock-based compensation and transaction-related expenses, increased 8.2 million or 7.8% versus a year ago, driven by higher personnel costs and the inclusion of a full year of results for Thompson Group, partially offset by 5.3 million of employee retention tax credits. 2025 adjusted EBITDA was 126.2 million, the highest result in our history, and an increase of 35 million, or 38.4%, versus the prior year. This was driven by a 20.4 million, or 34.3% increase in the Lindblad segment, and a 14.6 million, or 46% increase in the land experiences segment. EBITDA margin improved 220 basis points from 14.2% in 2024 to 16.4% in 2025. Net loss available to stockholders, was 34.6 million or 63 cents per diluted share versus 67 cents per diluted share in 2024, driven by improved operating income offset by a 23.5 million loss on extinguishment of debt related to our August refinancing and higher depreciation and amortization, primarily from the addition of the National Geographic Gemini and Delfina to our fleet. Looking quickly at the fourth quarter of 2025, Revenues increased $34.6 million, or 23.4%, compared to the same period in 2024. Lindblad segment revenues increased to $25.2 million, or 27.8%, driven by a 9 percentage point increase in occupancy to 87%, and an 11.2% increase in net yield per available guest night. Land experiences revenues increased $9.3 million, or 16.1%. Adjusted EBITDA for the fourth quarter was $14.2 million, an increase of approximately 700,000 or 5.4% from the fourth quarter a year ago. This was driven by a $2.5 million increase in the land experiences EBITDA, partially offset by a $1.8 million decline in windblad segment EBITDA. As we previously shared, Q4 EBITDA was impacted by an increased number of dry and wet docks, and a shift in the timing of our marketing spend to set the stage for wave season. Turning to the balance sheet, we ended the year with total cash of $289.7 million, an increase of $73.6 million versus the end of 2024. The increase reflects $111.6 million in cash from operations due primarily to the strong results of the business and increased bookings for future travel. We used $67.3 million of cash for investing activities, which includes the acquisition and refurbishment of two Galapagos vessels. For the full year, we generated $63.8 million in free cash flow. On January 20th, we announced the mandatory conversion of our 6% Series A convertible preferred stock. Following the refinancing of our debt in August, this transaction further simplified our capital structure and strengthened our balance sheet by eliminating our interest obligation and removing the risk of needing to repay the preferred stock in cash at maturity. With this conversion behind us, we remain focused on pursuing accretive growth opportunities, including fleet expansion through charters, acquisitions, and potential new builds, as well as continuing to expand our portfolio of world-class land-based experiences. Turning to full-year guidance, I'm pleased to share our outlook for 2026. Available guest nights are expected to increase 4.5% to 5%, about half of which is driven by optimizing our deployment and minimizing our non-revenue days. We also benefited from the full-year contribution of our two new Galapagos vessels and additional charter offerings. This capacity growth will be weighted toward the first half of the year. As Natalia mentioned, booking momentum remains strong. we delivered a record wave season and book revenue for 2026 has already surpassed full year 2025 revenue. We are also seeing encouraging trends in 2027 with bookings pacing ahead of 2026 at the same point last year. Net yield per available guest night is expected to increase 4% to 5%. As a result of heavier capacity growth in the first half, mainly outside of our core most profitable geographies, we anticipate a more modest net yield growth early in the year with stronger performance in the second half. For 2026, we expect total company tour revenue in a range of $800 million to $850 million. We remain focused on cost innovation with more than 20 targeted initiatives designed to enhance efficiency while preserving our commitment to a world-class guest experience and responsible exploration. At the same time, effective January 1st, we reached the final step up to the run rate royalty under our National Geographic Agreement. Taking these factors together, we expect adjusted EBITDA in the range of 130 million to 140 million. We expect EBITDA growth to be slightly stronger in the second half, supported by a more favorable deployment mix, and the first half impact of lapping the majority of the employee retention tax credits. We also anticipate approximately 10 million lower capital expenditures year over year, reflecting our work to optimize capital spend and the one-time impact in 2025 of refurbishing the National Geographic Gemini and Delfina. After one year at Lindblad Expeditions, Natalia and I are even more confident in the long-term potential of this business and remain firmly committed to executing against the strategic pillars we outlined a year ago. First, maximizing revenue generation to occupancy pricing and deployment. Second, optimizing financial performance through cost innovation and fixed asset utilization, and third, exploring and capitalizing on accretive growth opportunities. Now, we would be happy to answer any questions you may have.

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We do request for today's session that you please limit to two questions only. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Steve Wisinski with CIFOL. Please go ahead. Your line is now open.

Yeah, thanks, guys. Good morning. So, Natalia or Rick, if we think about your guidance for the year, and Rick, you gave us a lot of good cover in terms of what you're expecting from a yield perspective. Um, you know, but just maybe if you could walk us through what, you know, what would get you more towards, you know, whether it's, we think about the high end of that range or the low end of that range, um, just trying to get a feel for what is embedded in there. Because if I, if I think just about occupancy, um, you know, you guys ended 25, right around 87, 87 and a half percent. And I think you guys were still kind of thinking that could get into the low nineties this year. It seems like getting to the midpoint of your guidance range, I mean, seems very you know very realistic um and that would be even before assuming any kind of you know uh material price increases so just just try to understand what you know what would get you more towards the high end versus the low end yeah hey steve uh good to hear from you so um we ended the year with 88 occupancy and and that's been a significant improvement as um

we are seeing a great momentum we are very confident to get to historical occupancy levels of 90 percent uh and also as we've been um talking about for a while now and i think that we are on track to do that and yields of course will be mid-digits as as we talked about uh in the past it's very much dependent on the booking course we feel strong momentum and if always dependent on absence of any geopolitical situation or unexpected events that can impact the demand. And Rick, anything else you want to add?

Yeah, I think, you know, specifically to your question, Steve, around what would it take for us to hit the high end of our range? I think it really comes down to, you know, one, no major geopolitical disruptions. And secondly, continuing to execute well against our strategic pillars of maximizing revenue growth and cost innovations.

Okay. Gotcha. Thanks for that. And then second question, I guess, is we kind of, you always kind of helped us a lot with the revenue side of the equation, but, you know, Rick, maybe if you could kind of walk us through how we, you know, how you're thinking about kind of costs for this year, anything from a, you know, from a cadence standpoint in terms of where costs would hit through the quarters, you know, obviously I think you said, you know, EBITDA growth would be, you know, higher in the second half of the year, but just maybe, you know, maybe how you guys are, what you're targeting from a,

know from a from a cost per head perspective as we think about uh you know 2026. yeah i think there are a few major pieces moving around the first is the employee retention tax credits that we are lapping year over year the majority of which hit in q2 of 2025. obviously we have the step up in national geographic royalties as well as the cost innovation initiatives The other big thing for us always is dry docks and wet docks and where those fall in the year. And we're never trying to optimize necessarily just to hit certain quarters. What we're trying to do is thinking holistically about where is the best place and time for us to take those dry and wet docks in order to maximize revenue and EBITDA for the year. But those dry and wet docks costs will be weighted toward Q1 and Q4 in this year. Okay, gotcha. Thanks, guys. Really appreciate it. Thanks so much, Steve.

Your next question comes from the line of Eric Wald with the Texas Capital Securities. Please go ahead.

Thanks. Good morning, both of you. Appreciate you taking the time. Two questions. So I guess first, as you think about the guidance for 2026, you're going to give great color on on bookings or how much has been booked relative to 25 at this point. Give us a sense of how pricing is looking within kind of the 2026 bookings. And similarly, as you kind of talk about 27, you know, any kind of embedded price increases or how pricing is shaping up in 27 versus 26 as well.

Eric, great question. We continue to see, as we mentioned, we continue to see momentum both in 26 and 27 across both segments, land and expedition. If you look at the market in general, we very much maintain strong price integrity across all our products. Our demand all-time highs for core destinations like Galapagos, Antarctica, Alaska, we are very much expanding the booking curves. And if any message to the guests, we say book earlier. Our 27 booking curbs is ahead of 26 by literally months. So that allows us to drive price elasticity and maintain pricing momentum on both years.

Perfect. And then follow-up question, I guess, or second question. Any plans to expand the fleet with new builds at this point? I think as you get closer to pre-pandemic, close above 90% occupancy on a larger fleet than you had pre-pandemic and kind of get more visibility to that, obviously you're seeing strength in the 27 or 26. When does it become the right time to start thinking about ordering a new ship? And what does the backlog look like if you were to place an order today for a ship that you would want? What is the timeframe for delivery?

Yeah, I mean, the right time to grow capacity for us is now. That's a short answer. And by the way, we've been doing it. So in 25, as you know, we added two more ships than Galapagos, as we talked about. We also have been growing capacity through additional charters. For example, 27 Alaska capacities is increased by 12% by both optimizing our deployment, but also adding rank more tomorrow because we see strong demand. This year, as you know, we added European river charters. We expanded our charters in Asia. So we continue to do that now in addition to optimizing our deployment and reducing non-revenue days. We are looking at acquisitions of the ships or new builds actively. There is nothing to announce yet. But pipeline, if we were to go new build route, is approximately four years.

Perfect. Thank you, Sally.

Question comes from the line of Mike Albanese with StoneX. Please go ahead.

Yeah. Hey, good morning, guys. Thanks for taking my questions. It's a couple of quick ones. First, regarding bookings, you know, you provided nice color there. I'm just trying to get a sense of seasonal cadence. You know, is booking activity usually pretty stacked here in Q1? I guess I'm trying to get a sense on, you know, whether we can kind of expect that momentum to continue to build throughout the year or is it generally kind of tail off as the year goes?

Well, we did just complete the record wave, and this is a time where there are a lot of bookings done, and that's just coming to completion. I think we had to extend it by a week or so. But generally, our business is booking throughout the year at a pretty consistent level because we operate in destinations like Galapagos year-round, So we're completing the wave now, but people are still booking for the summer vacation and start really planning next winter and spring. There is not a significant booking seasonality in a business. There is obviously seasonality in revenue stream, as you know, and Q3, Q4 are generally very, very accretive because of Antarctica and Alaska seasons. but bookings are relatively consistent throughout the year. We do see an expanded booking curve, which is a great thing for us to see, and we've been intentionally driving it. So 27 bookings ahead of 26, 26 bookings ahead of 25, and that allows us to drive pricing elasticity and booking momentum.

Awesome. That's great context. Thank you. Nice job. And then Secondly, I just wanted to touch on some of the momentum you're seeing in online bookings here. You obviously have a few initiatives, you know, marketing, expansion of the National Geographic relationship. Could you just talk about kind of the key drivers through the 50% plus growth? And then second to that is, you know, the initiative you have to basically grow international bookings and you just came back from the UK. I mean, are we seeing a lift from that yet in these numbers or is that still kind of, you know, yet to come?

So there are two good questions. The web platform is obviously a very, very creative platform for us. So we're very pleased with the progress there. And I think it's like Rick mentioned, it's driven by, two major initiatives. One is we actually did a number of updates of our web platform. We completely changed our platform, but we also enhanced our search engine capabilities there, the booking capabilities, the way the web platform flows and allows higher lead generation. And then, of course, our partnership with National Geographic Disney is driving more leads to our website. So those are the two major drivers of increase web platform bookings. Question on international markets. We launched our brand in UK market last May. We are very committed to that market and we are finally seeing a very real booking momentum. As I mentioned, in the first six weeks of this year, we already booked almost half of total 2025 annual revenue. We will continue to be committed to that market, and we also plan to expand our efforts in Australia.

Awesome. Thanks for the time, Beth.

All right. Bella, before you go to the next question, I did want to clarify, I think, a question from Eric before on the new build. If we were to go a new build pipeline, I mentioned it's four years, pipeline approximately. But just a reminder, in this industry, as you know, you start publishing destinations around three years ahead. And so you start selling cycle about three, two and a half years ahead of actually delivering the ship, which drives an increased deposit before you pay for the new build. So I think it's just an important clarification I thought to share. Bella, back to you.

Thank you. Your last question comes from the line of Eric DeLears with Craig Halliam. Please go ahead.

Great. Thanks for taking my question. Congrats on a very strong year. As you look to add capacity, you just brought up some nice color on new builds. In terms of You know, acquiring vessels or signing charter partnerships, acquiring new land-based experiences. Can you kind of talk about the competitive environment around those right now? Are you seeing the number or quality of bidders either increase or decrease? Just any kind of commentary on the overall competitive landscape when it comes to acquiring new vessels and experiences.

i mean i think that when it comes to acquiring new vessels and experiences it's less about competition and just what's available in the marketplace and so you know we're constantly looking for opportunities to acquire vessels that meet our standards for our guest experiences but the reality is you know there aren't a lot of vessels that meet those criteria and certainly not available in the marketplace today and then similarly in terms of land experiences I think that for many of these founder-led businesses, we are the preferred buyer given our commitment in terms of what we believe in, responsible exploration, as well as how we've worked so effectively with the founders who have come on board as part of the broader Lindblad family over the course of the last decade. However, it's really about sourcing opportunities that are unique to us more so than competing with other folks who are out there who are trying to buy similar businesses.

That's helpful. Thanks for taking my question. Congrats again.

That concludes our Q&A session. I will now turn the call back over to Rick Goldberg, Chief Financial Officer, for closing remarks.

Just want to thank everyone for your continued support and interest in Lindblad Expeditions and to our team on a really strong 2025. And we remain very excited about the year ahead. Thanks so much, everyone. Bye.

Ladies and gentlemen, that concludes today's call. Thank you all for joining and do now disconnect. Everyone have a great day.