Royal Caribbean Cruises Ltd.

Good morning. My name is Morgan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Group fourth quarter and full year 2025 earnings call. All participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then the number one on your telephone. I would like to introduce Mr. Blake Vanier, Vice President of Investor Relations. Mr. Vanier, the floor is yours.

Good morning, everyone, and thank you for joining us today for our fourth quarter 2025 earnings call. Joining me here in Miami are Jason Liberty, our Chairman and Chief Executive Officer, Naftali Holtz, our Chief Financial Officer, and Michael Bailey, President and CEO of the Royal Caribbean Brands. Before we get started, I'd like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release issued this morning as well as our filings with the SEC for a description of these factors. We do not undertake to update any forward-looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures which are adjusted as defined and a reconciliation of all non-GAAP items can be found on our investor website and in our earnings release. Unless we state otherwise, all metrics are on a constant currency adjusted basis. Jason will begin the call by providing a strategic overview and update on the business. Naftali will follow with a recap of our fourth quarter, the current booking environment, and our outlook for 2026. We will then open the call for your questions. With that, I'm pleased to turn the call over to Jason.

Thank you, Blake, and good morning, everyone. I'm very pleased to share our fourth quarter and full year 2025 results, our outlook for 2026, and our exciting strategic investments that will continue to shape and accelerate World Caribbean Group's future success. 2025 was an outstanding year. defined by strong demand for our brands and vacation experiences, disciplined execution of our strategies, strong balance sheet management, and robust financial performance. We delivered a record 9.4 million memorable vacations at a very high customer satisfaction score, achieved nearly 18 billion of total revenue, and 33% earnings growth, all while expanding our margins, increasing return on invested capital, and reducing leverage. We generated nearly $6.5 billion of operating cash flow and returned $2 billion to shareholders through dividends and share buybacks. Meanwhile, our scale, profitability, and consistent execution enable continued investments in the differentiated experiences and innovations that delight guests and fuel the next chapter of long-term growth. I want to thank our team members worldwide for their passion and unwavering dedication to providing outstanding vacation experiences every day. Their efforts made our guest vacations memorable and contributed to a successful year for our shareholders. As a global vacation leader, we continue to broaden our vacation ecosystem across ocean, river, and land with unique experiences, giving guests more ways to experience the world with our family of brands. Today, we are announcing a further expansion of Celebrity River Cruises with a commitment for 10 additional ships. This will expand Celebrity's river cruise fleet to 20 vessels by 2031. The expansion will make Celebrity River Cruises one of the largest European river cruise operators, offering more itineraries and destinations than ever before. We are also announcing the launch of the Royal Caribbean brand's new Discovery-class ship, that will redefine how Royal's guests experience the world. The agreement with the shipyard includes two firm-order ships and options for four additional ships. And we recently shared the next evolution of our loyalty program with Points Choice, which gives consumers the freedom to earn points on any of our three vacation brands and apply them where they matter most, regardless of the ship they're sailing. The expansion of our ocean and river fleets loyalty enhancements, and our growing exclusive destination portfolio strengthens the integrated ecosystem we are building. These investments broaden our appeal to new guests while deepening the connection with those who already vacation with us, supported by technology and AI that make the experience more seamless and more personal. This approach expands the way guests can vacation with our family of brands and reinforces our vacation of a lifetime strategy. Now, turning to our results. I am very proud of what we have accomplished in 2025. Flawless execution of our incredible teams propelled our strong performance in 2025, elevating demand across our brands and driving durable margin expansion. This resulted in a 33% year-over-year increase in adjusted earnings per share and ROIC in the high team. We also invested in key strategic priorities while strengthening the balance sheet and returning capital to shareholders. The year ended on a great note. Fourth quarter net yields grew 2.5% and adjusted EPS was $2.80, higher than our guidance. We also generated strong profitability and margin expansion as we continued to execute on both commercial and cost priorities. With this strong performance, we are on track to achieve our perfected financial targets in 2027. As we said before, perfected is an important milestone on our growth journey, but our ambitions go well beyond it. 2025 was another year of remarkable milestones on our journey to expand the way our guests can experience our brands across ship and shore. We welcomed World Caribbean Star of the Seas, took delivery of Celebrity Excel, launched Celebrity River Cruises, and finally, in late December, opened the Royal Beach Club Paradise Island. Our joint venture with TUI Cruises also added to this momentum with the delivery of Mineship Relax, the first vessel in its new class and the largest ship in its fleet. We also continue to invest in technology and innovation that makes our vacations easier to discover, easier to plan, and more personalized, while making our business smarter and more efficient. Over the past year, we further embedded disruptive technologies like AI across all commercial and operational areas. I'll provide more detail on our tech investments later in the call. 2025 demonstrated the power of our model and the strength of our platform, and it sets us up well for 2026 and future years. Our momentum continues into 2026. The wave is off to a record start. we experienced the best seven booking weeks in the company's history since the last earnings call. As a result, we were already about two-thirds booked for the year, with book load factors well within historical ranges at record rates. This sets us up to optimize pricing and yield growth as we continue to build the book of business for the balance of the year. All commercial channels are delivering quality demand, with direct-to-consumer performing particularly well. Last year, we added hundreds of new digital capabilities as consumers' preference for digital engagement continues to grow. Our increasingly connected ecosystem aims to make vacation planning straightforward and seamless. Travel partners are also delivering meaningful more bookings than last year and at higher rates. Our spectacular new ships continue to generate strong, high-quality demand Star of the Seas and Celebrity Excel are exceeding expectations, and Legend of the Seas, our first icon class ship debut in Europe later this year, is experiencing very strong booking trends. Our latest research shows that our consumers feel financially secure and continue to prioritize experiences, with 40% planning to increase leisure travel spending in the next year. The cruise value proposition continues to resonate due to quality amenities value, and convenience. Looking ahead for 2026, our proven formula will continue to generate strong financial results. Moderate capacity growth, although 2026 will be a bit higher at mid-single digits, moderate yield growth, and strong cost control. Combination of those three things create meaningful margin expansion, increased cash flow, and drives a stronger balance sheet. That's the model we planned for. and it's the model we're executing today, while also funding future growth and expanding capital return to shareholders. Revenue is expected to increase double-digit year-over-year, resulting in full-year net yield growth in the range of 1.5% to 3.5%. We expect positive yield growth for our key products, including the Caribbean, as our investments continue to differentiate us and strengthen our leadership position, even in a period of elevated capacity growth in the region. Full-year adjusted earnings per share is expected to be in the range of $17.70 to $18.10, a 14% year-over-year increase. We also expect to deliver over $7 billion of operating cash flow this year, and we continue to prioritize strategic investments into our future while enhancing capital returns to shareholders through competitive dividends and opportunistic share repurchase programs. At Royal Caribbean Group, our strategy is centered on creating a lifetime of vacations for our guests by continually strengthening the ecosystem that makes those experiences possible. We are extending our competitive moat through differentiated experiences, world-class brands, exclusive destinations, an industry-leading loyalty program, and technological investments that remove friction and make every interaction more personalized. Together, these elements reinforce our lifetime of vacation ecosystem, attracting new guests, driving more frequency, and long-term loyalty that translates into sustainable growth and shareholder value. A cornerstone of that strategy is our exclusive destination portfolio. We're especially excited about Royal Beach Club Paradise Island, which opened in December and is off to an incredible start. Guest response has been exceptionally positive, reinforcing our confidence in the role these experiences play as we continue to expand our destination platform. Innovation on the ship side remains a key differentiator. New ships do more than add capacity. They expand the experience, broaden the guest base, and raise guest satisfaction, all while driving and enabling better financial results. And today's announcement of the new Discovery class of ships on our Royal Caribbean brand is the next step in our innovation roadmap, designed to continue to raise the bar for our guest experience and to extend our leadership in the vacation space. We'll share more details as we go, but it will follow our disciplined approach, investing in product leadership and high return growth that compounds over time. As I shared at the beginning of the call, we are expanding our river business with the commitment for 10 additional ships that will expand the Celebrity River cruise fleet to 20 vessels by 2031. We see river cruising as an exciting growth opportunity that adds an incremental vacation choice and expands the moments and occasions guests can experience with us, all while deepening loyalty across our family of brands. Finally, AI and disruptive technology are becoming a foundational advantage for us, representing a core capability that improves the guest experience, strengthens our commercial engine, and helps us run the business more intelligently. Our digital channels are increasing the gateway to long-term guest value, highlighted by a 25% year-over-year increase in active users on the app in the fourth quarter. E-commerce traffic was up 10% year-over-year in 2025, with conversions improving throughout the year. As it relates to disruptive technology, including AI and GenAI, we're scaling in two complementary ways. First, We're investing in enterprise programs that deliver better guest satisfaction and experience while improving revenue and margin, helping us to fundamentally change how we run the business. And second, we're infusing these technologies across the organization through smaller practical use cases that create momentum, productivity, and confidence at the individual and team level. We are improving our ability to curate and personalize what guests see while increasing pre-cruise engagement, because a vacation is better when it's easier to plan and easier to personalize. The goal is to reduce friction, improve the experience, and present relevant options that add value to the guests. We are also using AI to improve efficiency and execution from supply chain forecasting to energy management and marine operations. These are the types of capabilities that build durable operating leverage over time and reinforce our focus on margin expansion and returns. Disruptive technology is not just a tool, it's a capability that we have been building for more than five years. It helps us deliver a better experience, run a smarter operation, and strengthen the ecosystem we're building for long-term growth. In closing, 2025 was an exceptional year. We entered 2026 from a position of strength, a differentiated vacation platform, a strong balance sheet, and a disciplined approach to growth and returns. And with that, I will turn it over to Naftali. Naft?