Norwegian Cruise Line Holdings Ltd.

Good morning and welcome to the Norwegian Cruise Line Holdings first quarter 2025 earnings conference call. My name is Donna and I will be your operator. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions for the session will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone phone. As a reminder to all participants, this conference is being recorded. I would now like to turn the conference over to your host, Sarah Inman. Ms. Inman, please proceed.

Thank you, Donna, and good morning, everyone. Thanks for joining us for our first quarter 2025 earnings and business update call. I'm joined today by Harry Sommer, President and CEO of Norwegian Cruise Line Holdings, and Mark Kempa, Executive Vice President and Chief Financial Officer. As a reminder, this conference call is being simultaneously webcasted on the company's investor relations website. We will also make reference to a slide presentation during the call, which can also be found on our website. Both the conference call and presentation will be available for replay for 30 days following the call. Before we begin, I would like to cover a few items. Our press release of the first quarter 2025 results was issued this morning and is available on our website. This call includes forward-looking statements that invoke risks and uncertainties that could cause our actual results to differ material from such statements. These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation. Unless otherwise noted, all references to 2025 net yields and adjusted net cruise costs excluding fuel for capacity day are on a constant currency basis and comparisons are to the same period in 2024. With that, I'd like to turn the call over to our CEO, Harry Sommer. Harry?

Well, thank you, Sarah, and good morning, everyone. Welcome to our first quarter 2025 earnings call. Today, I'll begin my comments with highlights from our strong first quarter results, where we essentially met or exceeded guidance across all key metrics. And while we are quite pleased with our near-term results, we continue to keep our focus firmly on our longer-term charting the course targets So I'll discuss a number of initiatives we are undertaking to deliver long-term value to our shareholders through our proven strategy of balancing return on investment, or ROI, with return on experience, or ROX. Some of the more important initiatives include the delivery of our groundbreaking new ship, Norwegian Aqua, the recently announced enhancements for Great Star K, and multiple projects underpitting our strategic fleet optimization efforts. I'll wrap up with an update on booking trends and how we are navigating the current environment before turning the call back over to Mark who will provide more detailed commentary on our results and discuss our outlook for the second quarter and full year 2025. Starting on slide four, I'd like to highlight the strong start to the year. Our first quarter met or exceeded all key expectations we outlined in February. Most importantly, net yield increased 1.2% above our expectations and coupled with better-than-expected unit costs, drove adjusted EBITDA to $453 million, also above guidance. This brings our trailing 12-month margin to 35.5%, a 280 basis point improvement over last year, and well on our way to our long-term targets. Lastly, adjusted EPS ended the quarter at 7 cents, slightly below guidance, driven by a 5-cent FX headwind. Moving to slide five, let's take a look at one of our key initiatives for the quarter, the delivery of Norwegian Aqua, the first ship in Norwegian Cruise Line's new Prima Plus class. We took delivery of Aqua in March, on time and on budget, continuing our track record within Canterbury. That's now six ships in a row, all delivered as planned, thanks to their team and our incredible new build organization. After her delivery, we proudly showcased her in Europe before arriving in Miami just a few weeks ago for her christening by her godfather, Emmy Award-winning actor Eric Stonestreet. Aqua is the first ship shaped by our current management team, and it reflects our focus on balancing ROI and ROX. From design to amenities, each decision was made to improve the guest experience while also considering the impact on margin and return. Norwegian Aqua is 10% larger than our sister Prima-class ships and perfectly combines NCL's one-of-a-kind service and offerings with guest-first experiences that will make new waves at sea. On Aqua, we took the strong foundation of Prima and Viva and elevated it. We redesigned or reimagined nearly 30 spaces, everything from the layout and flow to enhancements in our dining venues and entirely new offerings. One standout example is replacing the go-kart racetrack with the Aqua slide coaster. This innovative offering not only adds a thrilling new signature experience, it also takes up less space in the racetrack, freeing up room to increase stay room capacity and add additional activities and amenities. And the Aqua slide coaster has been a huge hit, already garnering more than 270 million views across our traditional and social media platforms, a powerful early signal that Aqua is generating excitement and buzz. Norwegian Aqua is an example of what this team can accomplish when we stay true to our vision of having our guests vacation better and experience more, and keep our ROI and ROX philosophy at the center of our decision making. Guests are happy, and the company is optimizing its financial performance. Turning to slide six, I'd like to highlight the exciting new developments at Great Sturb K, our private island in the Bahamas, which we announced just a few weeks ago during Norwegian Aquas christening. As many of you know, Great Syrup Cay is already one of our highest rated ports of coral, and we're about to take the experience to the next level. Later this year, we'll complete construction on a new pier that will allow us to dock two ships simultaneously and eliminate the need for tendering, which can be particularly challenging during the winter months. With this new infrastructure in place and increased Caribbean capacity in the years ahead, we expect to welcome more than 1 million guests annually to the island starting in 2026. To support that growth and elevate the overall experience, we've announced a series of new enhancements which will open concurrently with the new pier. These include a large resort-style pool with swim bar and cabanas, a welcome center, and a new tram system for easier access across the island. We are also bringing the popular and exclusive adults-only Vibe Beach Club from several of NCL's vessels to the island, while also adding Horizon Lagoon, a dedicated family zone featuring a splash pad and interactive play area. These additions are thoughtfully designed to drive higher guest satisfaction, providing facilities for new experience and opportunities for stronger overall customer spend. We're confident these upgrades will further differentiate our Caribbean product and enhance our ability to drive incremental yields on itineraries that call on Great Sturb Gay. But this is just the beginning. As we bring more capacity into the region, we will continue to evaluate opportunities to continue improving the island experience. I'm excited to see these plans come to life and look forward to welcoming even more guests to the island in the years ahead. In addition to enhancing the real-life experiences on our vessels and islands, I want to highlight a major success story that demonstrates our ability to enhance our guest experience digitally with our revamped NCL app. We completed the full rollout across the Norwegian fleet in January, retiring all legacy platforms, and the response has been tremendous. Over 800,000 guests logged in during the quarter. The app does more than provide practical tools like ship maps and folio views, which reduce onboard service lines. proving to be a powerful pre-cruise revenue driver. A growing majority of our guests are logging in before the cruise, using the app to book things like shore excursions and specialty dining in advance. This provides us with consumer insights, which we can use to further personalize marketing and also lifts pre-booked onboard spend, which then creates a stickier guest in our customer ecosystem. We're incredibly excited about the progress we're making on the digital front and confident this platform will continue to enhance both upsell opportunities and the guest experience going forward. Turning to slide seven, during the quarter we also made significant progress on our broader fleet management strategy, which centers on three key pillars, bringing new ships online, investing in and modernizing our existing fleet, and thoughtfully repurposing older tonnage. While we already covered Aqua's delivery, I want to highlight the progress we have made modernizing our existing fleet. This quarter, we completed dry docks for Norwegian Bliss and Norwegian Breakaway, each introducing new guest focus enhancements. On Breakaway, we debuted the Silver Screen Bistro, the first immersive cinema and dining experience at sea. We also expanded stateroom capacity, including in the Haven, expanded our most popular specialty restaurants, and expanded both premium and free guest experiences on both ships. These investments reflect our commitment to enhancing what matters most to our guests, while continuing to focus on financial returns. Finally, on the final pier of our fleet management strategy, which is thoughtful repurposing of older tonnage, we had several important milestones during the quarter, signing agreements for two Norwegian cruise line vessels, Norwegian Sky and Norwegian Sun, to be chartered to Cordelia Cruises, a premium operator in India, beginning in 2026 and 2027, respectively. We also reached an agreement for Regions 17 Navigator and Oceanas Insignia to be chartered to Crescent Seas, a residential cruise line also beginning in 2026 and 2027. These agreements are a clear reflection of our disciplined, long-term approach to fleet optimization. By transitioning these ships into markets outside our core business, with established operators in their respective areas, we're able to unlock value from these assets while remaining focused on delivering a consistent, high-quality experience across the remainder of each fleet in our three brands. Importantly, these transactions allow us to simplify our operations, reduce the average age of our fleet, and drive further efficiencies, all while continuing to receive cash flow from these assets under charter. Our projected capacity CAGR from 2023 to 2028 now moves from 6% to 4% after factoring in the shifts exiting the fleet. This is a smart, strategic evolution of our fleet that supports our long-term financial operational goals and one that positions us well for the years ahead. Moving on to booking trends on slide eight, advanced ticket sales were up 3% as shown on slide nine, while other key indicators such as cancellation rate, and cruise next sales and onboard revenue remain steady during the quarter and in the first weeks of April. Looking at the remainder of the year, cruises for Q2 are nearly all sold and well within our final payment and cancellation window, so onboard revenue is the main remaining variable, which as I mentioned, continues strong. As macroeconomic uncertainty has increased, we have seen some choppiness in bookings on the remaining Q3 inventory, resulting in a headwind to occupancy, where we are prioritizing price over load factor, but leaves us the potential for upside if conditions improve. By protecting price, this allows us to garner higher yields on the remaining inventory if conditions improve, while also allowing us to protect price in the future. As we look into Q4, recall our Caribbean capacity is up 10% year over year, and represents 40% of our quarterly deployment. This results in a shorter booking curve, so our book position for the next 12 months has shifted slightly, but continues to be within our optimal range and above historical averages. Looking forward, we expect our strategic expansion of more close-to-home itineraries, especially coupled with our recent grade-serve K enhancements, to fundamentally improve our demand profile in the mid to long term. As a result, We see potential for pressure on our top line and are modifying our full-year net yield growth outlook to be a range of 2% to 3%. This guidance recognizes the reality of the situation as it exists today and also reflects our assumption that the consumer environment stabilizes as the year progresses. While we recognize potential pressures on the top line, we are maintaining our full-year 2025 adjusted EBITDA and adjusted EPS guidance. We believe continued execution of our cost savings initiatives should essentially offset any top-line headwinds. As part of our Charting the Course strategy, we have identified initiatives supporting $300 million of cost efficiencies across the organization, and we are using this as an opportunity to accelerate certain initiatives to capture benefits even sooner. This is a company-wide effort, fully supported by the entire leadership team. We will continue to monitor the consumer closely, but make no mistake, we are guided by a clear strategy. We remain focused on disciplined pricing and cost control and delivering an exceptional guest experience, all while managing the business for the long term. We are committed to optimizing every dollar of revenue, controlling every dollar of cost, and delivering exceptional financial and guest performance. And with that, I turn the call over to Mark to give more thoughts on our financial performance.