Inching closer to profitability each quarter, Carnival Corporation's (CCL 0.55%) (CUK 0.53%) impressive recovery is due to a "phenomenal" booking season that started in November of last year. During the company's earnings call in late June, CEO Josh Weinstein marveled at how this year's wave season was still "going strong midway through the year."

While the company celebrates recent successes, its stock trades more than 75% below its January 2019 all-time high. Here are three reasons why I'm still bullish on this cruise line stock.

1. Record revenue earned in the second quarter

Weinstein explained how "strengthened demand delivered outperformance in the second quarter for revenue, adjusted EBITDA, and the bottom line." Carnival's revenue landed at a new all-time second-quarter record of $4.9 billion.

Helping to drive the record revenue were net per diems, or net cruise revenue per-passenger cruise day, that surpassed 2019 levels by 7.5%. Onboard passenger revenues exceeded the midpoint of company guidance by 4.5 points last quarter, and as a result, Carnival raised its per-diem expectation for the second half of 2023 by 2.5 points.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) finished toward the high end of company guidance at $681 million. Despite a net loss of $407 million in Q2 under generally accepted accounting principles (GAAP), the damage was actually less than expected for Carnival. Management had anticipated a bigger loss between $425 million and $525 million for the period.

In other words, although Carnival still operates at a loss, Q2 marked significant progress toward profitability. After hitting 59% of 2019's EBITDA in Q1 and 73% of it in Q2, Carnival projects reaching up to 85% of it in Q3. By year's end, the company expects a full return to 2019 levels in terms of EBITDA. 

A Carnival cruise ship floats gently through Glacier Bay, Alaska.

Image source: Carnival Corporation.

2. Net yields crossed into positive territory vs. pre-pandemic levels

In another "significant milestone," as CFO David Bernstein described, Carnival's net yields turned positive as compared to 2019 levels. The company projects higher net yields for the remainder of the year -- the result of fleet optimization efforts, capacity expansion, and a healthy demand outlook.

In addition to Q2 net yields finishing on the plus side compared to pre-pandemic levels, operating income, cash from operations, and adjusted free cash flow all ended in positive territory. However, higher fuel prices and other expenses took a toll on the bottom line, and full-year cruise costs are anticipated to rise 10% to 11% as a result -- 1.5 points higher than March guidance figures.

Much of the cruise costs can be attributed to "a slower-than-expected ramp-down in inflationary pressures than previously anticipated," Bernstein pointed out. Despite lingering inflation, he asserted that the 2.5 point jump in net per diems would more than offset the cost-guidance increase. 

3. Booking volumes stand at all-time highs

In what's been a historic booking season for Carnival, reservation volumes climbed to an all-time high in Q2 2023, beating the previous record from Q1 2023. While Q1 normally takes the top booking spot, 2023's booking season has extended further into the year than ever before, and Q2 bookings eclipsed 2019 levels by 17%.

Peeking ahead to 2024, Carnival's booked position has never looked better. Customer deposits have crested to a new record of $7.2 billion, eclipsing the previous record of $6 billion. Weinstein highlighted how customer deposits grew by 26% last quarter as the cruise line pushes to increase "onboard spend through bundled packages and pre-cruise sales."