After impressive results last year, Lindblad Expeditions (LIND 2.18%) is now looking to take further advantage of pent-up demand for adventure travel. Lindblad CEO Dolf Berle expects 2023 to be a record year for both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA). Based on Lindblad's recent track record and outlook, here's why I'm bullish on this cruise line stock.
1. Lindblad offers more than just cruise adventures
Best known for carrying travelers to remote and rugged parts of the world via cruise ships, Lindblad Expeditions also owns and operates a growing portfolio of land-based adventure companies. Over the past seven years, Lindblad has balanced its ocean journeys with adventures on land. During the company's Q4 earnings call in late February, Berle recounted:
Starting with the acquisition of Natural Habitat in 2016 and more recently with the purchase of Off the Beaten Path, DuVine Cycling and Classic Journeys over the last two years, we've been building a platform company, centered around best-in-class adventure travel companies.
Complementing Lindblad's expanded and refurbished fleet of expedition cruise ships, the company's land-based offerings have bolstered revenue in recent quarters. For example, compared to 2019's full-year land revenue of $71 million, 2022 delivered land-experiences revenue of more than double that -- reaching $143 million.
Lindblad owned just one land-based company in 2019. It now generates revenue from four subsidiaries on land, diversifying its revenue streams and presenting a more balanced investment.
2. Revenue growth observed across all segments
In 2022, Lindblad drove nearly $422 million in revenue, marking a 187% improvement over 2021 and a 23% increase over pre-pandemic 2019. A combination of higher pricing and an enhanced selection of trips and cruises fueled the robust revenue growth, according to Chief Financial Officer Craig Felenstein.
Lindblad finished Q4 with $118 million in revenue, 80% higher year over year and 56% above the same period in 2019. However, alongside soaring revenue came sky-high operating expenses. The cost to do business for Lindblad jumped 88% year over year in 2022, led by fuel, labor, and land experiences operating costs. Digital marketing initiatives and fleet improvements also contributed to expenses.
Despite 2022 revenue that exceeded 2019's figure by 23%, Lindblad ultimately took a non-GAAP adjusted EBITDA loss of $11.5 million for the year. Compared to 2019's adjusted EBITDA income of $66 million, 2022 wasn't so stellar from a profitability standpoint. But in a year-over-year context, 2022's loss of $11.5 million looks a whole lot better than 2021's $64 million loss.
3. 2023 bookings outpace 2019 levels
While occupancy actually dropped to 75% in 2022 from 81% in 2021, bookings (future travel reservations) for 2023 have been promising. In fact, as of Lindblad's earnings call in late February, bookings for 2023 surpassed those of 2019 by 47%, on the same date that year.
And as of February's earnings call, Lindblad had already booked more than 80% of full-year projected ticket revenues. As a result of such robust demand, the company guided for a 2023 EBITDA income of $70 million to $80 million on $550 million to $575 million in revenues.
With an expanded fleet and broader travel options, Lindblad has positioned itself to capitalize on the persistent demand for thrilling travel experiences. Although the company has clearly progressed over the past year, Lindblad Expeditions stock trades roughly 57% below its March 2021 all-time high. If the company can fulfill its earnings expectations this year, the stock could rise accordingly.
