Norwegian Cruise Line Earnings: Demand for Sailings Remain Afloat, Improving Visibility into 2025

Shares of narrow-moat Norwegian traded flat on its second-quarter results and updated outlook despite its cruises remaining a bright spot in the consumer landscape. Second-quarter metrics were slightly ahead of our outlook—revenue of $2.37 billion versus our $2.36 billion; adjusted EBITDA of $588 million against our $561 million; and adjusted EPS of $0.40 versus our $0.33 forecast. Most impressive was the outperformance of pricing, with as reported net yields up 6.3%, 200 basis points ahead of guidance and our forecast, as close-in demand and onboard revenue outperformed. Both Norwegian and narrow-moat Royal Caribbean have recently noted that they are taking more bookings for 2025 than 2024, boosting our confidence that demand momentum is set to keep up into 2025. Both solid pricing growth over the rest of 2024 (undisclosed) and higher prebooked onboard revenue (up 15%) have resulted in advance ticket sales of $3.9 billion, 11% higher than last year.