Carnival Corp. (CCL 3.54%) reported fiscal 2025 second-quarter results on June 24, 2025, delivering its eighth consecutive quarter of record revenue. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 26% year over year, and net income of $565 million exceeded management's March guidance by $185 million. The company surpassed all three of its 2026 strategic targets (measured on a non-GAAP basis) 18 months early, upgraded full-year guidance, and shared key updates on its loyalty and destination expansion strategies.
2026 Profitability and Sustainability Targets Delivered Early
In the trailing 12 months, EBITDA per available lower berth day (ALBD) was 52% above a baseline rate set in 2023, and return on invested capital (ROIC) surpassed 12.5%, both the highest marks in nearly two decades. Carnival reported that unit net yields (a measure of revenue per occupied berth after discounts) expanded by over 6.4% versus the prior year on an adjusted basis, building on last year's comparable 12% gain.
"We were able to deliver trailing 12-month EBITDA per birthday 52% above our 2023 baseline, and our ROIC surpassed 12.5% more than doubling in less than two years. Now this was no small feat given these are both the highest levels this company has seen in nearly 20 years."
— Josh Weinstein, CEO
These achievements signal Carnival’s enhanced earnings power and capital efficiency, providing a structurally improved foundation for shareholder returns and competitive positioning well beyond pre-pandemic levels.
Strategic Caribbean Investments Create New Revenue Engines
Capital deployment toward exclusive destinations, including the imminent launch of Celebration Key and expansion at Half Moon Cay and Mahogany Bay (Isla Tropical), is central to Carnival’s effort to capture greater price premiums and boost market share versus land-based vacation alternatives. Celebration Key’s 275,000 square feet of lagoon space and capacity to drive substantial incremental volumes represent a material expansion of the company’s owned destination footprint.
"We are seeing a premium. It's in line with what our expectations were. So everything's proceeding exactly as we had anticipated, it to be with respect to marketing dollars, you know, we have been. We have been putting marketing dollars and shifting marketing dollars, to really lean into Celebration Key, and I think that's why it's one of the most sought-after destinations even though it doesn't take people yet."
— Josh Weinstein, CEO
Early pricing premiums on Celebration Key itineraries, along with targeted marketing investments, are in line with expectations, visibly supporting the company’s portfolio yield management strategy.
Financial Flexibility and Ratings Momentum Support Shareholder Value Creation
During the second quarter, Carnival prepaid $350 million in senior notes due in 2026, refinanced the remainder to 2031 at improved terms, and increased its revolving credit capacity by 50% to $4.5 billion in June 2025. The company’s net-debt-to-EBITDA ratio improved from 4.1x to 3.7x over the quarter, and rating upgrades have brought the company just one notch below investment-grade status at both S&P Global and Fitch.
"In fact, we now have only one notch to go to reach our investment-grade rating with both S&P and Fitch. Over the last three months, we saw a marked improvement in our net-debt-to-EBITDA ratio going from 4.1 times at the end of the first quarter to 3.7x as of the end of the second quarter."
— David Bernstein, CFO
Ongoing deleveraging, successful refinancing activity, and strengthened liquidity position enable Carnival to reduce interest costs, accelerate its path back to investment-grade, and unlock options for future shareholder distributions as excess cash generation continues.
Looking Ahead
Full-year 2025 net income guidance was increased by $200 million to approximately $2.7 billion, and net yield growth guidance was raised to 5% for FY2025, atop the nearly 11% yield growth it saw in 2024. Management confirmed virtually all 2025 EBITDA growth will come from same-store revenue gains, with capacity up only 1% year over year.
Carnival's strategic focus will be on setting new post-2026 financial and environmental targets. It will also focus on the launch of Celebration Key in July 2025 and the ramp-up of the new Carnival Rewards loyalty program in the second half of 2026. The rewards program is expected to be accretive to yields after two years, with moderate initial accounting impacts offset by positive customer engagement and lifetime value.
