- Record Financial Performance: Q4 2025 net income reached $454M, 2.5x prior year, with full-year 2025 net income exceeding $3B (+60% YoY).
- 2026 Guidance: EBITDA projected at $7.6B, with $350M+ bottom-line growth YoY and 2.5% yield growth ($0.35/share) from higher ticket prices/onboard spending.
- Debt Reduction & Refinancing: Net debt/EBITDA ratio at 3.4x (investment-grade), $10B debt reduction since 2023 peak, and $19B refinancing completed.
- Strategic Unification: Carnival plc to become wholly-owned UK subsidiary of Carnival Corporation by Q2 2026, streamlining governance and reducing costs.
- Cost & Yield Management: 3.25% cruise cost increase (3.5% normalized) in 2026, but 1.1% cost mitigation from efficiencies, alongside 3% normalized yield growth.
Guidance for 2026
The company is guiding for a 2.5% yield growth in 2026, worth over $0.35 per share, driven by an increase in ticket prices and higher onboard spending. Cruise costs without fuel per ALBD are expected to be up approximately 3.25%, or 2.5% normalized for certain items. The company expects to deliver over $350 million more to the bottom line year-over-year and generate over $7.6 billion of EBITDA in 2026. Analysts estimate next year's revenue growth at 4.2%, indicating a continued upward trend.
Deleveraging and Refinancing Progress
Carnival has reached an investment-grade net debt to adjusted EBITDA ratio of 3.4x as of the end of the fiscal year 2025 and successfully completed its $19 billion refinancing plan in less than a year. The company is resuming its dividend at an initial rate of $0.15 per quarter and targets a net debt-to-EBITDA ratio under 3x in the longer term. The company has also made significant progress in deleveraging and refinancing, reducing debt by over $10 billion since the peak less than 3 years ago.
Valuation Metrics
With a P/E Ratio of 14.8, P/B Ratio of 3.33, and EV/EBITDA of 10.63, Carnival Corporation's valuation metrics indicate a relatively stable position. The company's ROE of 25.45% and ROIC of 10.88% demonstrate its ability to generate returns on equity and invested capital. The Net Debt / EBITDA ratio of 4.14 is expected to decrease as the company continues to deleverage.
Operational Highlights
The company reported strong yield growth, driven by improved commercial execution, revenue management, and brand messaging. Carnival's focus on maximizing revenue per available berth day (REVPAR) rather than occupancy rates has contributed to its success. The company's new private island, Celebration Key, has hosted 1 million guests, with ticket premiums in line with expectations. As Josh Weinstein, CEO, noted, the company is seeing a net benefit from capacity moving from Europe to the Caribbean, which aligns with its strategic approach.
Cost Management
Carnival is working to optimize its expenses and find efficiencies through the use of AI and other tools. A recent listing and corporate simplification effort is expected to yield cost savings of a few million dollars upfront and ongoing. The company's cost mitigation initiatives are expected to contribute to its bottom line, with a 1.1% cost mitigation from efficiencies and other initiatives.