RCL Financial Analysis

Analysis Date: 1/29/2025

Business Model

Royal Caribbean generates revenue through passenger ticket sales and onboard/other revenue across its cruise brands

Revenue Sources

• Passenger ticket revenues (69.8% of 2024 revenue)
• Onboard and other revenues (30.2% of 2024 revenue)

Income Statement Analysis

• Revenue increased 12.9% YoY driven by higher pricing and strong onboard revenue
• Operating income grew 9.5% YoY despite higher expenses
• Net income nearly doubled YoY due to stronger operational performance and lower interest expense

Balance Sheet Analysis

• Total assets increased 5.5% YoY primarily due to fleet expansion
• Total liabilities decreased 3.0% YoY reflecting debt reduction efforts
• Shareholders' equity increased 57.9% YoY due to strong earnings retention

Cash Flow Analysis

• Operating cash flow increased 17.6% to $5.3B driven by strong earnings growth
• Investing cash flow of -$3.4B primarily reflects capital expenditures on new ships

Capital Allocation

Company reinitiated quarterly dividend at $0.55 per share, investing $5B in capital expenditures for 2025 including new ship deliveries and destination development. Focused on achieving investment grade balance sheet metrics.

Management Commentary

2024 was exceptional with flawless execution driving elevated demand across brands

2025 shaping up for another great year with expected 23% adjusted earnings growth

Announcing entry into river cruise market through Celebrity Cruises brand

Overall Sentiment: Very positive with strong execution, growth initiatives, and continued momentum into 2025

Recommendation

Rating: Buy

Reason for Rating: Strong operational execution, expanding margins, and growth initiatives support positive outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/29/2025, 8:34:53 AM