Yahoo Finance

Jason Liberty

Thank you, Blake, and good morning, everyone. I am pleased to share our strong first-quarter results and updated outlook for the year. During the first quarter, we delivered over 2 million unforgettable vacations at exceptional guest satisfaction scores and achieved financial results that exceeded our expectations.
Likewise, WAVE season was the best in our company's history, putting us in a strong book position for the remainder of the year and for 2026. Clearly, consumers continue to use our vacations because we consistently deliver the best experiences and provide value to our guests.
As we look across the current macro landscape, we recognize that there is heightened uncertainty. However, research, including the direct surveying of our customers continue to show that the propensity to crews remains encouraging.
The combination of the world-class experiences we deliver, continued strong secular tailwinds and the persistent value gap land-based vacation positions us well to navigate the current environment. I'll touch more on this in a little bit.
We are certainly not immune to macro volatility, but what we're seeing on the ground, in our bookings and the real-time spending occurring on our ships is that consumers are still prioritizing experiences, planning to spend more on them this year and are seeking value that we are well positioned to offer.
At this point, it's still too early to determine how exactly the current macro environment could impact the broader economy or consumer behavior. What I want to emphasize is that we are focused on what we can control, delivering the best vacation experiences for our guests, optimizing revenue, managing costs and executing on our long-term strategies.
Over the past several years, we have taken decisive steps to strengthen our balance sheet, and we continue to do so. We are in a very strong financial position, investment-grade balance sheet, strong cash flow generation, robust liquidity and minimal near-term maturities, and we remain focused on maintaining financial flexibility.
We are confident in our growth strategy and the incredible opportunity ahead of us, continuing to win a greater share of the growing $2 trillion vacation market, as we further progress from delivering the vacation of a lifetime into a lifetime of vacations.
We also continue to invest in the future of fleet, our private destination portfolio and the guest experience. We do this all with the best talent, and I want to thank the entire Royal Caribbean Group team for their passion, dedication and commitment to delivering the best vacation experiences responsibly after driving strong financial results.
Now moving to our results and outlook. We are very pleased with our first-quarter results which exceeded our expectations. Yields grew 5.6% and we saw better-than-expected close-in bookings across all itineraries.
Adjusted earnings per share of $2.71 in the first quarter was $0.23 higher than our guidance. Better revenue and favorable timing of expenses contributed to the better-than-expected earnings performance. Naftali will elaborate more on the first quarter results shortly.
Now I'll provide some insight into the demand environment and WAVE season. During the first quarter, bookings outpaced last year across all products, resulting in the best WAVE season in the company's history. In the month of April, bookings for 2025 are outpacing last year, with close-in bookings trending particularly well. Our book position is in line with prior years at higher APDs.
Onboard spending and pre-cruise purchases continue to exceed prior years, driven by increased participation in onboard activities and experiences at higher prices. All commercial channels are generating quality demand with particular strength in our direct-to-consumer channels. As always, we continue to possess a nimble and flexible sourcing model, both geographically and demographically, with the ability to source quality demand all over the globe.
We continue to be thrilled by the reception of our spectacular new ships, the enthusiasm for Star of the Seas, our second icon class ship; and Celebrity Xcel, the latest addition to the Edge class lineup, have exceeded expectations, driving strong pricing and low factors.
As we look at our current and potential consumers, we remain encouraged. While broader consumer spending moderated, vacation spend continued to grow as consumer sentiment around leisure vacations remains positive. Our customers continue to be engaged and excited about vacations.
In a research fielded in April, 7 out of 10 consumers told us that they intend to spend the same or more on leisure travel over the next 12 months, with spend on travel continuing to outpace major material purchases. And for 9 out of 10 consumers surveyed, value for money is crucial when making vacation plans, and this is where we continue to excel.
Furthermore, when financial concerns impact lifestyle or spending, travel is not the first place consumers indicate they will pull back. Cruisers are more financially secure and more likely to protect their travel budgets during times of uncertainty.
We are very well positioned to deliver great vacations from multiple occasion, close to home for millions of people in the US, offering them extraordinary value through a range of itinerary options from 3 to 10 days from Florida, Texas, California, the Northeast and the Northwest. Our vacation experiences remain in an attractive value proposition and leading guest satisfaction compared to other vacation alternatives.
Consumers recognize that our brands are superior value for money versus alternative options. That value is made up of unique ability to give guests the opportunity to visit a variety of destinations in one trip, the convenience of having everything in one place, plus our high-quality onboard amenities and services, and pricing that includes meals, accommodations and entertainment.
Now let me provide an update on our outlook for 2025. Let me note that our guidance ranges are expanded compared to those we would typically provide and are based on current demand trends, while also considering the complexity of the macro environment based on what we know today.
Capacity is expected to grow 5.5% in 2025, driven by the introduction of Star of the Seas and Celebrity Xcel, as well as the full-year benefit of Icon, Utopia and Silver Ray. Yield growth is expected to be in the range of 2.6% to 4.6%, supported by the incredible appeal of our new ships, the performance across our existing fleet and the continued success of our private destinations.
Full-year adjusted earnings per share guidance is now expected to grow approximately 28% and be in the range of $14.55 to $15.55. We are benefiting from better-than-expected first-quarter performance and favorable foreign exchange and fuel rates.
While we remain cognizant of macroeconomic uncertainties, recent booking trends, disciplined cost management and strong balance sheet positions us well to deliver another year of strong earnings growth and cash generation.
Our formula of moderate capacity growth, moderate yield growth and strong cost control continue to drive superior financial performance. And we remain focused on executing our Perfecta performance program, targeting a 20% compound annual growth rate in adjusted earnings per share through 2027, and return on invested capital in the high teens.
We are relentlessly focused on delivering and innovating the best vacation experiences on the planet. And a key differentiator for us is our powerful commercial flywheel where, each guest experience fuel deeper loyalty and more engagement, which enables us to give guests the vacation experiences they want so they keep coming back.
It starts with our exceptional portfolio of brands, the category leader designed to cater to the diverse needs of our global guest base. We amplified strength with industry-leading ships, exclusive private destinations and continuous innovation that elevates every aspect of the guest journey.
Over the next three years, we will introduce seven game-changing new ships, including Star the Seas and Celebrity Xcel in 2025. We'll launch Celebrity River in 2027, and expand from two to seven exclusive destinations.
We deepen customer relationships through data, personalization and a frictionless experience that makes planning and enjoying a vacation seamless. Our unified and loyal programs connect all our brands under one ecosystem, encouraging repeat travel and unlocking more opportunities to engage across ocean and river cruising, along with our exclusive destinations.
The ecosystem is working. Members of our loyalty programs accounted for nearly 40% of our bookings last year, with cross-brand bookings increasing. Loyalty members are more likely to book direct and spend 25% more per trip than non-members. On the digital front, bookings in our app doubled so far this year, and loyalty members are more likely to book in app than non-loyalty members.
Over the last 10 years, we've improved the rate at which guests rebook within three months by 1.7 times and increase Net Promoter Score by 15 points. These results have translated into 50%-plus net yield growth over that time period, and we're just getting started.
Looking ahead, we are incredibly energized by the momentum we're building. These ambitious initiatives reinforce our flywheel and strengthening our ecosystem as we turn the vacation of a lifetime into a lifetime of vacations.
I'm incredibly proud of the teams at the Royal Caribbean Group for their passion and relentless focus on delivering great vacation experiences for our guests. We are executing from a position of strength, and I remain optimistic about our ability to capitalize on the many opportunities that lie ahead.
And with that, I will turn the call over to Naftali. Naf?

Naftali Holtz

Thank you, Jason, and good morning, everyone. I will start by reviewing first-quarter results, which were above our expectations.
Adjusted earnings per share were $2.71, 9% higher than the midpoint of our guidance. We had a great first quarter that was driven by better-than-expected pricing on close-in demand and $0.08 per share of favorable timing of expenses.
We finished the quarter with a net yield increase of 5.6% in constant currency compared to the first quarter of 2024, 60 basis points above the midpoint of our initial guidance in late January. Most of our yield growth was driven by strength in ticket pricing versus '24.
Net cruise costs, excluding fuel, increased 0.1% in constant currency, 175 basis points lower than our initial guidance, driven entirely by timing of expenses that will roll into the second quarter and some of the rest of the year. Adjusted EBITDA margin was 35%, 360 basis points better than last year. And operating cash flow was $1.6 billion.
As Jason said, we had a record WAVE season and our book load factor is in line with prior years and at higher APDs. Bookings since the beginning of April continued at a higher pace than last year, including strength in close-in demand and cancellation levels remain normal.
The Caribbean represents 57% of our deployment this year and 49% of capacity in the second quarter. In 2025, we offered Caribbean sailings from 9 US home ports, Miami, Fort Lauderdale, Tampa, Port Canaveral, Galveston, Baltimore, Cape Liberty, San Juan and New Orleans, and a variety of sailing length.
Our leading hardware and destinations strengthen our competitive position in this market, with the introduction of Star of the Seas in late August, Celebrity Xcel in November and the opening of Royal Beach Club Paradise Island by the end of this year.
Europe will account for 15% of capacity for the year and 20% of capacity in the second quarter. Alaska is expected to account for 6% of total capacity, and 9% in the second quarter. We have also some of the best hardware in the region with Celebrity Edge, two Quantum class ships and Silver Nova.
Now let me talk about our guidance for 2025. Our proven formula for success, moderate capacity growth, moderate yield growth and strong cost discipline, is expected to drive significant earnings growth and higher cash flow generation this year.
Moving to the revenue guidance. We are increasing our guidance for the year compared to our prior one in January. We did expand our typical guidance ranges to account for the broader external factors and the complexity of the current macroeconomic environment.
For the full year, we expect yield growth of 2.6% to 4.6%. As a reminder, first-quarter yield growth disproportionately benefited from both the timing of drydocks and new hardware, a full quarter of Icon, in addition to Utopia and Silver Ray. The cadence of yield growth throughout the year, as expected, is driven by the introduction of Star of the Seas and Celebrity Xcel into third and fourth quarters, respectively.
The impact of the timing of new ship deliveries on yield growth in the second half of this year is a headwind of approximately 140 basis points.
Full-year net cruise costs, excluding fuel, are expected to be negative 0.1% to up 0.9%, 10 basis points lower than our prior guidance, as we remain focused on efficiency, enhancing margins and maximizing cash flow. While we manage our costs more on the yearly basis, the cadence of our cost growth varies throughout the year. This is driven by timing of dry docks, ship deliveries and the ramp-up of costs related to our acquisition of the Costa Maya Port and other destinations.
Second and third-quarter cost growth is expected to be higher than the first and the fourth quarter, with the third quarter being most impacted by 280 basis points from these headwinds. We anticipate a fuel expense of $1.14 billion for the year, and we are 59% hedged at below market rates. We are benefiting from the current low rates and have capitalized on this opportunity by executing hedges for the upcoming years at very favorable rates.
Based on current fuel prices, currency exchange rates and interest expense, we expect adjusted earnings per share between $14.55 and $15.55. The $0.55 increase compared to our prior guidance is driven by a $0.37 benefit from FX and fuel rates for the remaining of the year, a $0.05 benefit from a lower share count due to share repurchases, with the remainder attributed to the outperformance in the first quarter.
We also expect 15% growth in adjusted EBITDA and 210 basis points growth in gross EBITDA margin. This positions us to accelerate our cash flow generation, which allows us to continue investing in our strategic initiatives, maintaining investment-grade balance sheet metrics and expanding capital return to shareholders.
Now let me comment on second quarter guidance. In the second quarter, we expect capacity will be up 6% year over year and a net yield growth of 4.3% to 4.8%. Roughly half of the yield increase is driven by new hardware and the rest is driven by higher rates and load factors on like-for-like hardware.
Net cruise costs, excluding fuel, are expected to be up 3.7% to 4.2%. This includes higher dry dock days in the first half of the year compared to last year, and 140 basis points impact from first quarter cost timing shifts. Taking all this into account, we expect adjusted earnings per share for the quarter to be $4 to $4.10.
Turning to our balance sheet. We ended the quarter with a strong $4.5 billion in liquidity. We're in a very strong financial position, and we'll continue to further strengthen the balance sheet.
During the quarter, S&P Global Ratings upgraded our credit rating to investment grade, reflecting the strength of our financial position, consistent performance and disciplined capital allocation strategy. We are very pleased with this acknowledgment of the strong trajectory of the business and our commitment to strengthening the balance sheet.
Also during the quarter, we exchanged $213 million of our outstanding convertible notes for cash and stock. This transaction reduced our fully diluted share count by 1 million shares. We have $110 million left outstanding that we plan to settle at maturity.
During the quarter, we also repurchased 1 million shares under our 1 billion share repurchase program. As of March 31, we have $759 million available for repurchases under the current authorization. We will continue to opportunistically buy back shares while ensuring a strong balance sheet.
We have very limited maturities left this year, all related to ship amortization payments that we plan to repay with cash flow. We also expect to further reduce leverage to below 3 times by the end of 2025.
In closing, we remain committed and focused on our mission to deliver the best vacation experiences responsibly as we work to deliver another year of solid returns.
With that, I will ask our operator to open the call for a question-and-answer session.

Question and Answer Session

Operator

(Operator Instructions) Matthew Boss, JPMorgan.

Matthew Boss

Thanks and congrats on a nice quarter. So Jason, could you speak to drivers of the better-than-planned performance in the first quarter? Maybe elaborate on business in April, and just walk through the company-specific initiatives and continued investments that you have that you think could insulate results and win multiyear market share.

Jason Liberty

Sure, Matt. So I think just starting off in the first quarter. We have seen this kind of continuous trend that -- inside of a quarter, we see kind of an uplift in demand as we get very close in. And not only do we see an uplift in demand, we're also able to raise our pricing during that period of time. And there are also high-quality customers that are also spending well in the ship.
So the driver in Q1 is really just really strong close-in demand that we've seen. And you've heard us talk about in April and in the second quarter, we're seeing that continuous trend. The interesting thing about the trend is, of course, our revenue management tools take those things into account and then try to predict the next quarter that it's going to be in the same level and it keeps elevating, which I know it's probably counterintuitive to some of the reporting around consumer confidence and so forth that's out there.
I think the reason for that is several factors, one of which is we're obviously incredibly focused on our flywheel. We had -- how do we get our guests to come with us more frequently. So the investments we've made in loyalty, the investments we've made even in our app and online, so that it makes it easier and easier, whether it's through us or through our travel partners, to do business with us gets easier and easier. And then we're getting more and more reps out of those that we're making.
I think behind that is also -- and we've seen this for a while, it's just a flight to quality. When you're delivering an exceptional vacation experience with Net Promoter Scores that are above 70, you get a very strong advocacy and you get customers that continue to sail with you.
And I think that's why we're seeing, again, another -- we saw an outperformance quarter in Q1, and while I also think we're bucking some of the trends that are very intuitive when you look at consumer confidence and so forth.
The combination, I think, of what we're delivering, combined value gap to land-based vacation, which as you everyone on this call has heard me over time, is frustrating to have that gap in times like this. And we've seen this in other markets when there's economic concerns, that value gap is actually a pretty good buffer for -- across our vacation experiences and our guests willing to pay for those experiences and for us to meet our financial expectations.
I also think when we think about the longer-term opportunity and the investments we're making, obviously, our destination portfolio has been exceptionally successful. But we're going to basically be adding a destination or two over the next several years.
That's going to drive tremendous value for our shareholders. It's a great margin business for us and it also enhances the guest experience. We have a lot of great ships coming online that are very, very well received as are very focused and designed to who the customer of today and the customer of tomorrow is.
We've got a lot of investments on the technology side. So obviously, our yield management program is -- has a tremendous amount of AI inside of it, and that gets smarter and smarter. We're -- a new travel platform that will be centered around the customer instead of being centered around the cabin. And then we have a lot of other, I would say, modernization activities and so forth that are taking some of the great learnings from the newer ships and rolling them back on to some of our legacy fleet.
So we're really excited. I think we all appreciate that there is something in the environment. But we are seeing, I think all things considered, very strong on consumer trends for our business.

Matthew Boss

That's really great color. And then maybe, Naftali, if you could just walk through the areas of this year's guidance where you embedded expand assumption ranges tied to the current macro backdrop. And just multiyear, any change in thinking to your outlined 20% earnings growth CAGR based on anything that you've seen to date?

Naftali Holtz

Yeah, hi Matt. So really, if you look historically at this time of the year, we actually narrowed the range. So we started roughly around 50 -- sorry, 100 basis points on yield. In the beginning of the year and this point, we were around 50%. So we kept it at 100. So that's really where the difference is.
Obviously, cost is something that we feel we can control. Also that hasn't changed. And obviously, the earnings we've expanded that range.
No -- obviously, we just announced Perfecta just a couple of weeks ago, and so we feel very good about -- as Jason said, about the long-term opportunity to continue to win share for a very, very large and exciting $2 trillion vacation market. We continue to invest in our strategies. We believe our strategies work. And so we feel that we are also in a great financial position to continue to capitalize on that opportunity.

Matthew Boss

Best of luck.

Operator

Ben Chaiken, Mizuho.

Ben Chaiken

Hey, good morning. Thanks for taking my questions. You've -- in December, Naftali, I think on the last call, you said this is greatest weekend in the history of cruise. Any updated thoughts on the pricing of that day pass? Thanks.

Michael Bayley

Hey Ben, it's Michael. Yes, the greatest weekend in the world is, of course, Utopia of the Seas, sailing out of Port Canaveral to Perfect Day and soon to be the Royal Beach Club. So, and we are absolutely delighted with the performance of that product. It has been outstanding. So we said that, and it truly is the greatest weekend in the world.
The Beach Club pricing strategy, we have a big event that we're hosting in New York City in a couple of weeks, and we'll be talking about the destination portfolio and sharing some of the images and concepts that will be coming alive in the coming years.
And particularly, we'll be talking about the Royal Beach Club in Nasssau. And we'll be talking during that presentation about how we're thinking about pricing. We're very -- as Jason mentioned and Naf, we're super excited about this portfolio that we've got coming online over the next few years, and the first one out of the gate is the Royal Beach Club Nasssau.

Ben Chaiken

Understood. I appreciate that. And then one maybe clarification. Why the new ships a headwind in 3Q and 4Q? I think you mentioned 140 basis points in (inaudible) yield. I guess, simplistically, I would have thought the ships are positive. Is this just basically like test cruises ramping up APCDs without the associated full revenue ramp?

Naftali Holtz

Yeah, let me just clarify. So it's really about timing of when the ships enter into the service. And we broadly say second -- sorry, third quarter, but really there's timing into it. So if you think about Utopia, it entered pretty early in July. Star is actually entering towards very late in August.
And so you have both lower APCDs as well as less of an impact from the load factors ramping up. So that's really the headwind that is mostly on Q3. Now Q3 also, on an absolute dollar, is the highest in the second half. So it weighs a little bit more on the second half of the year.

Ben Chaiken

Understood. Thank you very much.

Jason Liberty

Sure.

Operator

Steven Wieczynski, Stifel.

Steven Wieczynsk

Hey guys, good morning. So Jason, if we go back to revised guidance for the rest of the year. I guess, I would say, I'm probably a little surprised you guys didn't take up a more conservative view around onboard spending and/or close-in pricing. And I know you mentioned the feedback that you from -- in your data your customer base is it does remain positive. But clearly, onboarding close-in can change very quickly.
So I guess my question is, if there was going to be pressure from your customer base, do you think the low end of your guidance is now set low enough, that even if there was going to be some pressure, it would capture that? And look, I know that's kind of a tough question because we have no clue how that spending levels would have to be before it goes outside that range. But I want to get your kind of feedback there or take on that.

Jason Liberty

Yes. I think obviously, there's a lot of companies that are doing different things with -- there's a heightened level of uncertainty that's out there. When we're guiding, Steve, the best that we can do is look at how we're trading each and every day and also how our customers are spending, and where we see resistance and where we don't resistance in what we're doing. I think that when we look at how we've guided for the balance of the year, obviously, we need an update for Q1, we needed to update for FX and fuel, but we did not update for the back half.
And so typically, what you would see is when we see trends that we saw in the first quarter, you would start to think about how that's going to impact the balance of the year. So I think we've try to take a little bit more of a conservative position that's by how we see our guests trading with us each and every day. And then we've tried to extend that range to think about how we look at maybe a softer side and maybe a more optimistic side to help kind of investors understand how we see the range of it.
As you mentioned, there is uncertainty and so things could change, obviously. But I think we feel we're over -- we're 86% booked for the year. So I think we have pretty good visibility. We see really no change in cancellation rates. We see no real change in how consumers are acting.
Outside of that, they are a little bit more short-term focused, and we see that in the elevation of bookings for the second quarter.

Steven Wieczynsk

Okay. Got you. That's good color, Jason. And then second question. One of the questions we get a lot from investors is around discounting, and what we call kind of promotional work in order to drive demand.
So as we think about bookings -- and maybe not so much for this year, but as we think into 2026, and beyond, can you maybe help us think about how you would attack using -- lowering pricing versus other tools in order to stimulate the -- there was going to be a slowdown in bookings?
And then, Jason, I'm not sure you mentioned this in your prepared remarks, but can you give us some color around what you're seeing so far for '26, and maybe how you're booked for next year versus what you would call your optimal booked position?

Jason Liberty

Sure. So first and foremost, we are very religious about price integrity. We've been through different cycles before and ensuring that the level of price integrity, we think, is very important. And I think the combination of all the tools that we have in place, having that kind of global yield management platform and being able to sail to different parts of the world -- different parts of the US on a dime, I think, positions us really, really well.
But I would say, Steve, is that what we generally view is that we have a pretty good holster of different promotional tools and so forth that we use and we engage all the time in the marketplace. But I think we would lead with product integrity, and we would obviously want to focus on making whatever we're putting into in place does not have something we believe will impact the integrity of our brands or how we're managing into the future.
I did comment on 2026 that -- so the window is about a week shorter, but that's really being driven by close-in demand. And our book position for 2026, I said at this point, is in line with same time last year on a volume standpoint. And of course, obviously, we have -- and that's on a percent. So obviously, we have more capacity next year and at higher prices.

Steven Wieczynsk

Okay. Got you. Thanks guys. Appreciate it.

Operator

Lizzie Dove, Goldman Sachs.

Lizzie Dove

Hi there, thanks for taking the question. Congrats on good set of --. I'm just curious, in terms of the inventory you still have to fill for 4Q and to 2026, has there been any difference in terms of like the type of bookings without that like Europe versus US itineraries or different brands, strengthened contemporary versus premium, short duration, drive-through? Anything like that, that you would call out that's kind of different than usual trends?

Jason Liberty

There's really nothing specific, Lizzie, that I would call out, what we're seeing by market. Obviously, some of the things that you read out there about things a little bit softer for markets like Canada, that's there, but it's very, very -- for us, it's very immaterial to our business. But when we look at whether it's sourcing from whether it's North America, Europe or Asia, for the products that they source to, we feel very good in terms of their booking activity.
And I think we've also been studying obviously, we have brands that are in different segments. And so we're looking at is there any behavioral change in the family market, is there any behavioral change in the longer market, because there are different consumers, they have different balance sheets and they do tend to act and behave differently.
But from what we can see so far -- and so far, meaning as of an hour ago, they continue to be focused on their vacation experiences, making sure that they planned and then getting the vacation experience that they want.
I think there's just a recognition that there is this value gap. And potentially, they're trading more for a more known all-inclusive experience, which is why I think we're seeing trends that are more favorable than what we might see with other travel peers.

Lizzie Dove

Got it. That makes sense. And then I guess just thinking about the makeup of the yield outlook for this year. Obviously, you've been getting such great premiums on the new ships. It's been a big driver.
I'm curious, any color you can share of like the contribution of new ship premiums versus like-for-like pricing, whether you distil a bit of private island maybe less so this year? But in that -- is like-for-like pricing still up year on year? Or just any way to kind of think about the relative contribution of each of those kind of blocks, I suppose.

Naftali Holtz

Yeah. So Lizzie, so I said that in the first quarter it was roughly half and half between like-for-like and new hardware. It's pretty consistent throughout the year, except for the third quarter, as I mentioned, because of the timing of the new ship, Star of the Seas, that obviously is a little bit low and mostly like-for-like. So it's pretty consistent, excluding that piece in the third quarter.

Lizzie Dove

Got it. Thank you.

Operator

Brandt Montour, Barclays.

Brandt Montour

Good morning, everybody. Thanks for taking my question. Just a follow-up on the near-term demand commentary. You guys see a lot of data from your loyalty program, now that your loyalty program is 40% of your business, you see you can track customers and where they're going in the system. Are you seeing any one trade down between ships, between brands, just looking for more value within the system?

Jason Liberty

I'll just be crisp about it. No, Brandt, they're continuing to behave how they normally behave. We have even been watching the -- even as they -- it's not just about the booking in itself, it's also the journey they go through and they're researching and so forth, are they looking for alternatives that are less, and not seeing that either occurring at this point.

Brandt Montour

Okay, thanks for that, Jason. And then another question sort of recession scenario type of question. But your load factors are in line with prior years for this year, for next year. One of your larger peers is running their booked position ahead of prior years.
And so the question is, if you go into a slower bookings environment, would you be willing to -- how much would you be willing to flex your load factors in order to protect price? And if that's something that you'd even need to do or if there's other levers you could pull?

Jason Liberty

Well, I don't think -- I mean, it's tough to deal with hypotheticals. I think that we're obviously focused on optimizing our revenue, and -- but at the same time, maintaining price increases. I don't have an answer on how much load factor give up. I think what we've been trying to do is actually increase our load factor. We've outfitting our legacy ships with more capabilities to take on more load factor, our new ships are able to take on more load factor. And so we're trying to maximize that.
And it's not about load factor to get more people in, it's actually to bring more value to the vacation experience for our guests, especially our families and multigenerational. And instead of having to buy two cabins, they're able to maybe get their family members into one because we've been able to increase the load factor inside that cabin. And of course, because of the demand that we have and the flywheel that we have, the -- system we have, we're able to kind of maintain that momentum and get more and more reps out of our loyalty guests.
And so that's -- I don't really know what the hypothetical answer to it is, but I'd lean into that we do look to obviously maximize our load factor, but also not at the sacrifice of price integrity.

Brandt Montour

Got it. Makes sense. Thanks everyone.

Operator

Vince Ciepiel, Cleveland Research.

Vince Ciepiel

Thanks. Maybe as a follow-up to Brandt. It sounds like your April bookings were quite strong. There has been some reports out there of a little choppier April. So just be curious what you see out in the marketplace. You have new leadership across all three major cruise lines going through, what potentially might be, some choppy waters.
The jury still out. But up to this point in time, how do you think the industry has been navigating through the last 30 to 60 days from a price perspective?

Jason Liberty

Yes. Well, I'm 3.5 years into this, I don't know how -- if you can call me young, that would be great as well. I mean, first of all, you're also dealing, I think, with a set of industry leaders that, while they might be relative -- if 3.5 years is new, then I guess the dens might be a little bit newer. But we've been in this industry for a long time, and I continue to see the pretty rational behavior. Everyone generally meeting with price integrity.
And I think that's -- it's tough to get a read on it because I think there's been a lot of high-quality demand that the industry is continuing to see. And I think it goes back to what we keep pressing on, is that this isn't about share or I think volume in the cruise industry, this is about where -- how small cruise is to the broader travel and the leisure industry.
And the focus -- and I think we're all collectively focused, though I can't speak for the others, is how do we close that gap to land-based vacation and how do we get that extra rep from land onto our ships. And I think that's kind of what the vision and the focus is, most about stealing share from each other on the cruise industry.
I think that's -- that combined with the value gap, I think, is why you're seeing a difference in behavior. I just want to comment on the -- what you referred to on the choppiness. I mean somebody gets their sources from different places, but I think you should -- the commentary around April to describe what we're seeing, and that may be seen differently by different channels as well. But I just wanted to make that point.

Vince Ciepiel

Yeah. That's really helpful clarification. And then maybe for Naf, just around capital allocation. You recently announced the share repurchase plan. Just thoughts as you get a sense of what you're seeing on the macro front with returning capital versus showing up the balance sheet, how are you thinking about that? And any change to the CapEx plans in light of what you're seeing out there?

Naftali Holtz

Yes. So first, I'll start by saying that we feel very good about financially and this balance sheet and where we are. We have made, as you know, a lot of effort over the last couple of years to make sure that we get to the place where the balance sheet is strong. So investment grade now rated. We have a very strong liquidity.
We're generating very healthy cash flows. And so we feel pretty good about where we are. And so as we look at the opportunity, we feel that there's so much opportunity to kind of win the share of $2 trillion market, and we do want to continue to invest.
We are very confident with our strategies. And we have a very well-articulated and defined capital management over the next couple of years. And obviously, it's articulated in Perfecta. So that we will continue to do, and the balance sheet is very good to support that.
We do acknowledge that also there is supplemental to the investment because we are focused on growth and we are a growth company, but we do appreciate that there is excess cash flow. So we've restarted the dividend. We've increased it 3 times since the summer of 2024. We feel we're in a very good spot right now, offering competitive dividend, and we'll continue to evaluate as things come by.
And then the share repurchases are optimistic. And so we did feel that, this quarter, we had an opportunity to recapture some shares and we've done that, and we'll continue to evaluate it opportunistically.
And of course, it's important to note that we are very focused on the sheet. So we will not compromise the balance sheet for that. But we feel we're in a very good position, and we'll continue to evaluate those share repurchases.

Vince Ciepiel

Helpful. Thanks.

Operator

Robin Farley, UBS.

Robin Farley

Great, thank you. Just circling back to your comment that the month of April, you said bookings for 2025 are outpacing year over year. And just thinking about what that might imply about '26 bookings, I know you said the load factor for '26 is in line with the same time last year.
But is it fair to say it's still above sort of historic ranges, right? So even if maybe the focus of bookings from the consumer today is on the close-in more than 2026, is it fair to say there's still room for that load factor to come down or just you can sort of wait out a little bit of uncertainty here if the consumer is waiting a little bit to be more aggressive in 2026? Thanks.

Jason Liberty

Yeah, sure. So our commentary around April represents our future bookings. So I'll leave it there as it relates to whether it's '26 or '27, because we are booking some things for '27 at this point in time. And I think on the load factor or the booked position for 2026, Robin, the way that I would look at this is -- you heard me say this in the beginning of this year, I said it, towards the end of last year and also towards the end of 2023, is I think we always have some level of regret that we're too booked going into the calendar year, and we leave revenue on the table. So I think we feel very good being booked in line with same time last year.
Our revenue management models say that's where we should be booked. And of course, we're booked at higher rates. So I think -- and load factors are a little bit lower, that's okay because it is substantially higher on a book position than if you were to look back in the 2015 and 10 years ago, the position is much higher. But we typically do have a level of regret that we would have had an opportunity to grab more revenue or optimize more revenue if we wait a little bit longer.

Robin Farley

Great. No, it totally makes sense. And then maybe just one quick follow-up. I just noticed the capacity in 2026 is just like slightly lower growth rate than it was previously. Is that just sort of dry dock scheduling or like a chip delivery changing by a few weeks, something like that?

Naftali Holtz

Yeah, Robin, it's really rounding. So it's -- and this is exactly what you said, some of the refinement of dry docks, some of the specific entry of the new hardware. And it's not 100 basis points, it's much smaller. It's close to 30 basis points.

Robin Farley

Okay. Great. Yeah, it shows up as like a point in the release. No, that's right. Thank you.

Operator

Conor Cunningham, Melius Research.

Conor Cunningham

Hi everyone, thank you. You shared some great survey stats, I thought, at the beginning of the call. And I think you mentioned that 9 in 10 people that you surveyed cite the relative value of cruising in general. So I was curious, we're early days in the potential downturn here from an economic standpoint.
Like how has moved up your consumers' priorities like other secular opportunities that you see within this space? I'm just trying to understand how much more insulated your outcomes could be relative to other forms of travel that are out there (inaudible) more difficult backdrop in general. Thank you.

Jason Liberty

Yeah. I mean value is always an important consideration. It is at a higher level than what we have historically seen, but it's only moved up a position or two on that list. I think that one of the things that we've been trying to close that value gap to land-based vacation and the appreciation of so much more you get out of this experience than you do by land base.
And I think it's -- but it does serve in times like this when there's maybe a greater level of uncertainty, it does help us navigate some of -- maybe some of those concerns that might be out there from the consumer.
Because they know much value they get out of it, they have a sense on the bookends on what it will cost them and their family or friends to be able to do it, and they know they're going to get a great experience out of it.
And I think those are the combination of them being able to build memories and experiences with their friends and family, which are very high on that list. Visiting locations that they haven't been before is very high on this. And value for money is very high on that list. And it's a little bit elevated versus what we've seen in the past.

Conor Cunningham

Okay. And then maybe just going back to the capital allocation commentary, I'm just trying to -- I know it's early days on the buybacks. And you guys' conviction level continues to improve basically every quarter and you have a pretty robust outlook for the next couple of years.
So why wouldn't we be leaning in really hard on the buyback in general? Just like there's a mismatch in what you're communicating at times as to what the market is doing. So just any thoughts there on why we wouldn't leaning in or maybe it would. Thank you.

Jason Liberty

Yeah. So I think the main driver of it. I think just to -- I think to be clear about it, is that we're still (inaudible) a little bit with some of the covenants from -- during COVID because we lost a lot of equity in the balance sheet and the P&L that's still being built up.
And so they're net worth covenants that we have to manage around. And so it's -- that $1 billion announcement for the year is based -- meant to be kind of smoothed out, not because of the opportunity that might lay in front of us on the stock side, but some of it has to do with just the timing of that net worth calculation and the cushion that's on top of that to make sure that we don't take on some type of an issue. Just really the driver on why we would not have lot more, as an example.
And then we take advantage of opportunities that we did with the converts, that Naf's team did, that allowed us to grab some more of those shares. What I will tell you is all the dilution that we had to incur which again, is a fraction of others is very personal to us, and we're focused on how do we recapture it as soon as we can.

Conor Cunningham

Okay. I appreciate the detail. Thank you.

Operator

James Hardiman, Citi.

Sean Wagner

Hey, this is Sean Wagner on for James. The growth in occupancy is increasingly noteworthy. How should we be thinking about occupancy in the context of the 2025 guide, and I guess that opportunity going forward as you add the icon class ship every year with what we know about the load factors on those ships.

Naftali Holtz

Yeah, so I think we've articulated in the past that, we feel that there's a great opportunity for both for existing ships, right? So retrofitting some of the rooms with some higher ability to take a bigger occupancy and capacity, and then also with the newer ships there are accretive to our overall average load factor, and so we have icons, we have utopia, and these are much higher than the average. So as we continue to add those shifts, that will inch up the load factor. And, at the end of the day, we're trying to maximize yield, right? And that's a, both load factor and price.

Sean Wagner

Okay, and for the 2025 guidance, what is your assumed occupancy for the year?

Naftali Holtz

Yeah, we don't really kind of guide on occupancy just on yield, but it's consistent with kind of how we're trending here.

Sean Wagner

Okay, fair enough. And I guess what are you assuming for your equity income line in the context of the full-year guide? Do you expect that growth to keep up with the EBIT growth or, as far as variability going from here forward, do you expect that to flex up and down, commensurate with your full-year guidance?

Naftali Holtz

Yeah, I think it's really consistent throughout the year, so there's nothing specific to call out.

Sean Wagner

Okay. Thank you very much.

Operator

Xian Siew, BNP Paribas.

Xian Siew

Hi guys, thanks for the question. On 1Q, you kind of beat the net yield guidance, and then 2Q looks like a nice guidance as well on net yield, but the full-year net yield guidance on constant currency may be up just a little bit. I'm just curious how you're thinking about 2H, and if that's changed at all versus 90 days ago?

Naftali Holtz

Yeah. No, as you can see, we haven't really changed our yield guidance for the year, it was up slightly, basically going into account the outperformance in the first quarter. And so we made the comments around the first quarter where we disproportionately benefited from timing of new hardware. If you remember last year Icon came in during the first quarter. And as its ramping its load factors, we did not have Utopia.
So it's a lot of contribution from that timing in the first quarter. And then on the third quarter, I made these comments earlier that there's also a headwind this year from the timing of Star entering into service and just the year-over-year comp, both from APCDs as well as just the load factor ramp-up.
And so there's kind of that cadence throughout the year, and there are the things that we're trying to point out of how they are trying to impact. But if you kind of normalize for that, it's pretty consistent throughout the year.
And our formula is very clear, right, moderate capacity growth, moderate yield growth, strong cost control. That's our formula for success. That's how we're managing the business. And so that's pretty consistent this year.

Xian Siew

Great. Thanks. And then maybe just another follow-up on the booking trend. Any kind of change differences between returning customers versus new customers? Are you seeing any differences there? You mentioned kind of strong loyalty, but, yeah, any curious, any other thoughts?

Jason Liberty

No. I think the only thing that we would -- the reason why we pointed out the point on the royalty side is we have way more reps out of our loyalty customers. And some of that is also just cross-sell opportunities that are being enabled by our loyalty program. But demand from new-to-cruise and first-to-brand is exceptionally high. We're just -- there just a creation of greater competition for inventory because of the successful activities that are coming from our loyalty program.

Xian Siew

Great. Thanks guys. Good luck.

Operator

And I'll now turn the conference back over to Naftali Holtz, CFO for closing remarks.

Naftali Holtz

Thank you. We thank everyone for your participation, and interest in the company. Blake will be available for any follow-ups. We wish you all a great day.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.