Lindblad Expeditions Holdings Inc.

Thank you for standing by. My name is Amy, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Lindblad Expeditions Holdings, Inc. First Quarter 2026 Earnings Call. All participants have been placed in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. If you would like to join the queue to ask a question, simply press star followed by the number 1 on your telephone keypad. It is now my pleasure to turn the call over to Rick Goldberg, Chief Financial Officer with Lindblad. You may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us for Lindblad's first quarter 2026 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 Q1 results and expectations for the full year 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. And here we are again. Good morning, everyone, and welcome to our first quarter earnings call. In a complex macro and geopolitical environment, our team delivered another record quarter. We achieved record first quarter occupancy of 93% on a 6% increase in capacity and increased net yield by 7% to a record of $1,631 per guest night. For the quarter, revenues increased 16% with the Lindblad segment growing 16% and the land segment growing 14%. We delivered 14% EBITDA growth and generated $6 million in net income available to shareholders compared to a slightly negative net income last year. These results reflect the strength of our strategy and, importantly, the discipline of our execution. We remain confident in our ability to drive long-term value as we continue to navigate external dynamics. We deliver these results in a challenging and complex operating environment, including some of the most difficult weather conditions in Antarctica in over a decade. As a result, we experienced increased cancellations in our Antarctica flight program, in addition to several Egyptian river cruises. These cancellations not only impacted revenue from some of our most profitable voyages, but also led to higher land costs as some guests were already in transit or on the ground when disruptions occurred. We increased demand generation spending to mitigate the risks of volatile external environment, and I'm pleased to share that we delivered a historically strong wave season, maintained booking pace for 2026, and further accelerated bookings momentum for 2027. Let me also address fuel. We are closely monitoring the rapidly evolving situation. Due to our diversified portfolio, fuel costs have historically averaged around 3% to 4% of our total revenues. We have doubled down on initiatives to reduce fuel consumption while maintaining an exceptional guest experience. As I mentioned during Q&A of our last earnings call, our guidance reflects a range of potential outcomes, and we are reforming our full-year outlook. This is supported by continued execution across our three strategic pillars. Number one, maximizing revenue generation through occupancy pricing and deployment optimization. Number two, optimizing financial performance through cost innovation and fixed assets utilization. Number three, capitalizing on accretive growth opportunities, including expanding our portfolio brands. Starting with our first pillar, maximizing revenue. Our Disney and National Geographic relationships continue to strengthen. In the first quarter, bookings from Disney earmarked travel agents increased 67% compared to prior year, demonstrating the meaningful value of this partnership in reaching new audiences through new channels. Building on this momentum, We recently signed our first-ever charter agreement with Club 33, Disney's most exclusive private membership club, and the voyage literally sold within a couple of hours. We will continue to explore additional opportunities with Club 33 members. Our onboard sales program continues to deliver exceptional results. On vessels with dedicated expedition sales consultants, More than a quarter of our guests are booking their next voyage before disembarking. This conversion rate reflects both the strength of our guest experience and the effectiveness of our approach to driving repeat engagement. Our outbound sales program is also gaining significant traction, increasing 64% versus prior year, supported by a meaningful increase in lead generation. We believe we are still in the early stages of unlocking the full potential of this high-value channel. We continue to see strong momentum in the UK market launched last year. This year, we are also deepening our presence in Australia, one of our key international growth markets. In fact, our Chief Sales Officer Kathy and I will be in Australia later this month and very much looking forward for a major market engagement. While our expedition segment continues to perform well, our land experiences segment is equally positioned for growth. We recently completed highly productive strategic planning session with our land company leaders to develop a long-term plan for accelerated growth. A key element of our success in land acquisitions is our ability to partner closely with founders of these businesses, combining the deep understanding of the guests, passion for the business, with the scale and capabilities of our global platform. I'm pleased to share that all of the founders of our land companies have extended their relationships with us, ensuring leadership continuity. Turning to our second pillar, cost innovation and success of utilization. We continue to build a strong pipeline of cost initiatives across the organization. As mentioned earlier, we have launched comprehensive programmatic fuel consumption efforts. We have also enhanced ship maintenance protocols, including more frequent propeller polishing and hull cleaning, which will support improved fuel efficiency over time. Complementing these operational improvements, our chief supply chain officer and his team have made significant progress renegotiating key contracts, delivering both immediate and long-term savings across both our cost and capital. We are also re-evaluating elements of our operating model to drive greater efficiencies. For example, we have outsourced certain warehouse functions, to improve performance and scalability. In addition, we have made meaningful progress in optimizing crew travel through better planning and rotations, with strong results already visible this quarter. Collectively, all these initiatives will deliver long-term structural benefits to our business. Turning to our third pillar, accretive growth. We recently launched our partnership with Earthwatch, expanding into the citizen science travel segment and reinforcing our commitment to conservation and education. At the same time, we continue to evaluate opportunities across fleet and portfolio expansion. The sustained strength in demand for our products presents compelling opportunities to grow in a disciplined and strategic way. Throughout all of this, we remain grounded in what makes Lindblad unique, our why. Our commitment to responsible exploration is central to who we are and a defining differentiator. For us, it is more than a trip. It is a mission. And I will continue to highlight this as it is fundamental to our business and experience that we deliver to our guests. This quarter, I would like to highlight our continued progress in food waste reduction, which delivers positive impact on environment, but also saves costs. We have made significant strides through a combination of discipline execution and innovative practices. Our guest dinner sign-up program has reduced prep waste by up to 75%. Local provisioning has reduced excess inventory and associated waste. Our culinary teams continue to adopt zero-waste techniques and food preservation methods, particularly in remote environments. We have also begun installing food dehydrators on our ships, which convert food waste into reusable by-products. In addition, we published our 2025 Windblad Expedition National Geographic Fund Traveler Impact Report, detailing our efforts to protect oceans, wildlife, and communities. We are also honored to be named by Time as one of the 10 most influential travel and tourism companies of 2026. We believe this recognition reflects our pioneering heritage and leadership in purpose-driven expedition travel and strength of our brand and expertise built over nearly 60 years. Again, our quarterly results reflect the strength of our strategy and disciplined execution. Our focus on our three strategic pillars positions us to drive long-term shareholders' value. In closing, I want to express my sincere appreciation to our teams across the organizations, for navigating a complex environment with focus, resilience, and unwavering commitment to our guests, our shareholders, and each other. Thank you for your continuous confidence in Ringblad Expeditions. We look forward to updating you on our progress in the quarters ahead.