10-Q · April 30, 2026
Royal Caribbean Group's Q1 2026 results showed a solid performance with total revenues of $4.45 billion, representing an 11.3% increase year-over-year, although slightly below the consensus estimate. The company…
Earnings analysis · 10-Q
RCL earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Royal Caribbean delivered Q2 revenue growth of 6.5% to $4.832 billion, driven by 4.9% capacity growth, higher pricing, and 11.0% growth in onboard and other revenue. However, operating margin declined 230 basis points…
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Royal Caribbean delivered Q2 revenue growth of 6.5% to $4.832 billion, driven by 4.9% capacity growth, higher pricing, and 11.0% growth in onboard and other revenue. However, operating margin declined 230 basis points year over year to 27.0% and GAAP diluted EPS fell to $4.20 from $4.41 as fuel and payroll costs rose. Liquidity of $6.9 billion and $3.7 billion of first-half operating cash flow support a sizable growth program, although $16.5 billion of ship-order cost commitments and anticipated 2026 capex of $4.7 billion keep capital intensity elevated.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $4.2
What stood out
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Revenue growth remained solid
Q2 revenue increased $294 million, or 6.5%, year over year to $4.832 billion from $4.538 billion. Revenue also rose $382 million, or 8.6%, from $4.450 billion in Q1 2026.
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Onboard revenue outgrew ticket revenue
Passenger ticket revenue grew $145 million to $3.344 billion, while onboard and other revenue increased $149 million to $1.488 billion. Management attributed ticket growth primarily to 4.9% capacity growth and onboard growth partly to $83 million of higher per-passenger spending.
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Sequential EPS improved materially
Diluted GAAP EPS was $4.20 and adjusted diluted EPS was $4.21. EPS increased from $3.48 in Q1 2026, while adjusted net income was $1.130 billion.
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Operating cash flow and liquidity are strong
Operating cash flow for the first six months of 2026 was $3.7 billion, up from $3.4 billion in the prior-year period. June 30 liquidity was $6.9 billion, including $0.9 billion of cash and cash equivalents and $6.0 billion of undrawn revolver capacity.
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New capacity supported volume growth
Capacity increased 4.9% year over year, with APCD of 13.572 million, supported by the additions of Star of the Seas and Celebrity Xcel. Passenger cruise days increased to 14.962 million from 14.278 million, while occupancy remained high at 110.2%.
What to watch
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Margins contracted year over year
Operating income declined $22 million to $1.307 billion and operating margin fell 230 basis points to 27.0% from 29.3%, despite the $294 million revenue increase. Total cruise operating expenses rose $264 million, or 11.6%, to $2.547 billion, faster than revenue growth.
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Fuel and crew costs pressured profitability
Fuel expense increased $76 million to $355 million and payroll and related expense rose $76 million to $405 million. These two expense increases accounted for $152 million of the $264 million year-over-year rise in cruise operating expenses.
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Large shipbuilding and FX commitments
Ship commitments remain substantial: aggregate expected cost for ships on order was approximately $16.5 billion, with $1.3 billion deposited and 52.6% exposed to euro exchange-rate fluctuations. Total material cash requirements were $22.572 billion, including $12.822 billion of ship purchase obligations.
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Debt service and near-term funding needs
Obligations due through June 30, 2027 include $1.6 billion of debt maturities, $1.1 billion of interest, and $0.8 billion of ship-order progress payments. The company reported $14.3 billion of committed ship financing, but refinancing and operating cash flow remain important funding sources.
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No formal risk-factor update; litigation remains
Item 1A states there were no material changes to previously disclosed risk factors. Separately, the Havana Docks litigation remains unresolved after the Supreme Court's May 21, 2026 remand; a prior December 2022 judgment and fees had totaled approximately $112 million.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. Management anticipates approximately $4.7 billion of full-year 2026 capital expenditures based on existing ships on order.
Earlier filings 4
10-K · February 11, 2026
Royal Caribbean presents a fleet-led growth strategy with a combined fleet of 69 ships and aggregate capacity of approximately 179,720 berths as of December 31, 2025, and an active newbuild pipeline (12 ships on order).…
10-K · February 21, 2024
Royal Caribbean positions itself as a leading global cruise operator with 65 ships and approximately 157,575 berths as of December 31, 2023, emphasizing fleet renewal and innovation (three new vessels introduced in…
10-Q · May 4, 2023
Royal Caribbean reported a strong operational rebound in Q1 2023 with revenue of $2,885,146,000 and operating income of $271,613,000 versus an operating loss of $(859,208,000) in Q1 2022. Operating cash flow turned…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.