Norwegian Cruise Line Holdings today reported financial results for the third quarter ended September 30, 2024 and provided guidance for the fourth quarter and full year 2024.

Third Quarter 2024 Highlights

Generated record third quarter total revenue of $2.8 billion, an ~11% increase compared to the same period in 2023 on 4% capacity growth. GAAP net income was $474.9 million, a 37% increase compared to third quarter 2023, with EPS increasing $0.24, or 34%, to $0.95. Performance was driven by strong revenue growth and continued execution on cost reductions and efficiencies, which offset a $0.06 per share negative impact from foreign exchange rates in the quarter.
The Company’s sustained focus on margin enhancement drove another quarter of improvement in operating costs. Gross Cruise Costs per Capacity Day was approximately $314 for the quarter. Adjusted Net Cruise Cost excluding Fuel per Capacity Day was approximately $155 on an as reported and Constant Currency basis, and was better than guidance of $156 due to timing differences of costs which will now shift to the fourth quarter.¹
Adjusted EBITDA grew 24% to $931.0 million, a quarterly record high, compared to $752.1 million for the same period of 2023 and above guidance of approximately $870 million. Adjusted EPS grew $0.24, or 31%, to $0.99, exceeding guidance of $0.92.
Gross margin per Capacity Day was up 19% versus 2023 on an as reported and up 20% on a Constant Currency basis. Net Yield growth beat guidance by 260 basis points, increasing over prior year by approximately 8.7% on an as reported and 9.0% on a Constant Currency basis due to strong demand and pricing across our deployment, particularly in Alaska and Canada-New England, as well as onboard spend.
Total debt was $13.4 billion. Net Leverage was 5.58x for the 12-months ended September 30, 2024, an ~1.75x reduction from December 31, 2023.
Successfully issued $315 million of 6.250% senior notes due 2030. The net proceeds, together with cash on hand, were used to redeem $315 million aggregate principal amount of the 3.625% senior notes due 2024.

2024 Outlook

2024 full year Net Yield guidance on a Constant Currency basis increased 120 basis points from the prior guidance to approximately 9.4% from 8.2%. The increase in guidance is driven by strong demand across all three brands and itineraries in the second half of 2024.
2024 full year Adjusted EBITDA guidance increased $75 million from the prior guidance to approximately $2.425 billion from $2.350 billion. This raise is due to better than expected third quarter results and increased guidance for the fourth quarter of 2024.
Adjusted Operational EBITDA Margin for the full year 2024 increased to 35.3%, up from previous guidance of 34.5%.
Full year 2024 Adjusted Net Cruise Cost excluding Fuel per Capacity Day guidance remained unchanged at flat to prior year excluding the impact of Dry-docks, as cost savings measures fully offset inflation and increased variable compensation due to strong performance of the business.
Full year Adjusted Net Income guidance increased $65 million from prior guidance to approximately $855 million from $790 million, and Adjusted EPS guidance increased approximately 8%, or $0.12 to $1.65 from $1.53.
Net Leverage is expected to end the year at ~5.4 times, a reduction of almost two turns compared to 2023.
On track to achieve double-digit Adjusted ROIC by year-end.
Remain committed to Charting the Course targets; progressing towards achieving 2026 goals.

“Our exceptional third quarter results, with record revenue, net income and Adjusted EBITDA, surpassed guidance across all key metrics, underscoring the strength of our business, the attractiveness of our product offering across all brands and the superior execution and delivery by our teams both shoreside and shipboard,” said Harry Sommer, President and chief executive officer of Norwegian Cruise Line Holdings.

“Fueled by robust demand and our relentless focus on cost control and margin enhancement, we’re raising our full-year guidance for a fourth time and expect 2024 to be our best year² for revenue, Net Yield growth and Adjusted EBITDA. We now project Adjusted EBITDA to be $225 million above our initial guidance, growing 30% year-over-year, and Adjusted EPS to be $0.42 above initial guidance, growing approximately 136% year-over-year, reflecting our ability to capitalize on market opportunities while delivering outstanding experiences across our brands.”

The company said it expects 2024 to result in record revenue, Adjusted EBITDA and Net Yield growth as compared to each full year since the company’s initial public offering when normalizing yearly Net Yield growth for acquisitions such as the acquisition of Prestige Cruise Holdings in 2014.

Booking Environment Update

With the majority of the new bookings now being made for voyages in 2025 and beyond, the Company continues to experience strong consumer demand for its offerings across itineraries and brands. As a result, the Company remains at the upper range of its optimal booked position on a 12-month forward basis. Occupancy was 108.1% for the third quarter of 2024, in line with guidance. Full year 2024 Occupancy is expected to average approximately 105.0%. The Company’s advance ticket sales balance, including the long-term portion, ended the third quarter of 2024 at $3.3 billion, a quarterly record high and approximately 6% higher than the same period of 2023.

Liquidity and Financial Position

The Company is committed to prioritizing efforts to optimize its balance sheet and reduce leverage. As of September 30, 2024, the Company had total debt of $13.4 billion and Net Debt of $13.1 billion. Net Leverage improved by approximately 1.75 turns compared to December 31, 2023, ending the third quarter of 2024 at 5.58x.

At quarter-end, liquidity was $2.4 billion including approximately $332.5 million of cash and cash equivalents, $1.2 billion of availability under our undrawn Revolving Loan Facility, and a $650 million undrawn backstop commitment.

“This quarter, we made significant strides in strengthening our financial position. We successfully refinanced $315 million of notes coming due in 2024 with 6.250% unsecured notes due 2030 with the remaining balance of $250 million to be paid at maturity. This transaction represents another key step in our ongoing efforts to optimize our capital structure and de-risk the business. Furthermore, our robust Adjusted EBITDA growth drove further reduction in our Net Leverage, which decreased to 5.58 times, an ~1.75x reduction from year-end 2023. As we look ahead, we remain committed to our disciplined approach to financial management. The combination of our successful cost optimization initiatives and the strong demand environment positions us well to further reduce our Net Leverage, which is expected to end the year at ~5.4 times.” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.