RCL Royal Caribbean Group 10-Q 2026-09-30 section summaries

Royal Caribbean (RCL) — Part I, Item 1

Results and revenue mix

Royal Caribbean delivered year-over-year revenue and earnings growth in Q3 and the first nine months of 2026. Higher cruise operating expenses and interest expense partly offset revenue growth.

• Q3 2026: Revenue was $5.591B, up from $5.139B. Passenger-ticket revenue was $3.885B from $3.637B; onboard and other revenue was $1.706B from $1.502B. Cruise operating expenses were $2.711B from $2.479B, including fuel expense of $347M from $297M and payroll of $399M from $342M. Marketing, selling and administrative expense was $519M from $522M; depreciation and amortization was $490M from $435M. Operating income was $1.871B from $1.702B. Net interest expense increased to $291M from $248M; equity investment income was $176M from $158M. Net income attributable to RCL was $1.728B from $1.575B, and diluted EPS was $6.45 from $5.74.
• 9M 2026: Revenue was $14.876B from $13.676B. Passenger-ticket revenue was $10.250B from $9.579B; onboard and other revenue was $4.625B from $4.097B. Cruise operating expenses were $7.506B from $6.841B, including fuel expense of $966M from $854M and payroll of $1.204B from $1.010B. Marketing, selling and administrative expense was $1.615B from $1.593B; depreciation and amortization was $1.415B from $1.265B. Operating income was $4.340B from $3.977B. Net interest expense was $805M from $725M; equity investment income was $328M from $313M. Net income attributable to RCL was $3.798B from $3.514B, and diluted EPS was $14.12 from $12.83.

Q3 revenue by itinerary was North America $3.220B from $3.030B, Europe $1.796B from $1.520B, Asia/Pacific $198M from $212M, and other regions $89M from $111M; other revenues were $288M from $266M. The United States accounted for 72% of passenger-ticket revenue, versus 73% a year earlier; no other country exceeded 10%.

Diluted weighted-average shares declined to 268M in Q3 from 274M, and to 269M for 9M from 275M. Common shares outstanding fell from approximately 270.423M at the start of 2026 to 267.471M at September 30. The 9M 2025 diluted-earnings numerator included $16M of convertible-note interest and inducement expense; there was no corresponding 2026 addition.

Balance sheet, cash generation and capital returns

At September 30, 2026, total assets were $44.813B, versus $41.619B at December 31, 2025. Total shareholders’ equity was $11.913B, including $200M of noncontrolling interest; equity attributable to RCL was $11.713B. Goodwill was $808M at both dates. The balance sheet did not separately identify intangible assets other than goodwill. Cash was $851M versus $825M.

Debt net of unamortized issuance costs was $22.355B, versus $21.345B at year-end; this total includes current and long-term debt and excludes finance leases. Total debt including finance leases was $22.872B, versus $21.902B. Customer deposits were $6.034B from $5.739B, providing significant advance customer funding. Of these, contract liabilities were $3.0B, versus $3.1B.

9M operating cash flow increased to $5.274B from $4.842B; property and equipment purchases (capital expenditures) were $3.880B from $3.722B. Operating cash flow less capex was $1.394B, versus $1.120B. Cash dividends paid were $1.075B from $552M. RCL repurchased 3.7M shares for $1.0B under its $2B authorization, with $805M remaining. Dividends declared were $1.50 per share in each of Q1, Q2 and Q3.

Financing, fleet investment and strategic plans

RCL issued $2.5B of senior notes in February, primarily to refinance 2026 maturities, and $1.25B of 5.550% notes in August, funding repayment of $1.0B of floating-rate term loans and $250M of notes due 2027. Total-debt weighted-average interest was 4.71%. Effectively fixed-rate debt, including swaps, rose to 97% from 93% at year-end. RCL had $6.6B of undrawn revolving capacity; it reported covenant compliance and expected to remain compliant over the next 12 months. Scheduled maturities include $2.371B in 2027 and $3.211B in 2028.

The ship order book totaled 48,830 berths, with deliveries scheduled from 2027 through 2032. The aggregate cost of ships on order, excluding Partner Brands, was approximately $19.4B, with $1.5B deposited. Export-credit-backed financing can cover up to approximately 80% of specified ship costs, generally with 95% agency guarantees and 12-year amortization—supporting the build program while adding long-term obligations. In September, RCL announced a planned acquisition of a 50% interest in Sandals and Beaches Resorts, expected to close in early 2027, and arranged a $3B, 364-day term-loan facility available only at closing.

Investments, hedging and material exposures

RCL’s 50%-owned TUI Cruises joint venture had a $1.0B carrying value. Its 9M equity-method investment income was $328M from $313M; 2026 dividends received were $308M from $262M. Contract assets for service-concession construction obligations were $241M, versus $187M.

Fuel swaps covered 59% of projected 2026 fuel purchases, 53% for 2027, 29% for 2028 and 14% for 2029. The estimated unrealized net gain on fuel cash-flow hedges was $159M, compared with a $66M net loss at year-end, and was expected to be reclassified to earnings as fuel is consumed. Construction-cost exposure to euro fluctuations declined to 49.9% from 64.1%, while outstanding foreign-exchange contracts increased to $6.3B from $2.0B.

The Havana Docks litigation remains uncertain: after a prior judgment of approximately $112M and RCL’s 2022 charge of $130M, the company released approximately $124M of its loss contingency in 2024. In May 2026, the Supreme Court vacated the appeals-court ruling and remanded the case; plaintiffs seek statutory remedies including treble damages. AOCI was a $384M loss at September 30, improving from a $528M loss a year earlier.

Royal Caribbean Cruises Ltd. (RCL) — Part I, Item 2

Operating performance

Revenue grew 8.8% in both periods, supported by added capacity and stronger onboard spending. In Q3 2026, revenue was $5.591B, up from $5.139B; passenger ticket revenue was $3.885B from $3.637B, and onboard and other revenue was $1.706B from $1.502B. Capacity increased 8.4%, reflecting new ships and a full quarter of Star of the Seas. In 9M 2026, revenue reached $14.876B from $13.676B; passenger ticket revenue was $10.250B from $9.579B, and onboard and other revenue was $4.625B from $4.097B. Capacity grew 7.2%, and higher onboard spending per passenger contributed $235M of the increase in onboard revenue.

Cruise operating expenses rose with capacity. Q3 costs were $2.711B versus $2.479B, including $207M of capacity-related costs. For 9M, they were $7.506B versus $6.841B, reflecting $491M from capacity growth and $112M from higher fuel rates. Expense increases included payroll ($399M vs. $342M in Q3; $1.204B vs. $1.010B in 9M) and fuel ($347M vs. $297M; $966M vs. $854M). Depreciation and amortization, principally higher due to new ships, was $490M vs. $435M in Q3 and $1.415B vs. $1.265B in 9M. Marketing, selling and administrative expense was $519M vs. $522M in Q3 and $1.615B vs. $1.593B in 9M.

Profitability increased alongside revenue. Q3 operating income was $1.871B from $1.702B, and net income attributable to RCL was $1.728B from $1.575B. For 9M, operating income was $4.340B from $3.977B, and RCL-attributable net income was $3.798B from $3.514B. Adjusted net income attributable to RCL was $1.760B vs. $1.577B in Q3 and $3.865B vs. $3.523B in 9M. Diluted EPS was $6.45 vs. $5.74 in Q3 and $14.12 vs. $12.83 in 9M; adjusted diluted EPS was $6.57 vs. $5.75 and $14.36 vs. $12.83, respectively. Adjusted results included debt-extinguishment losses of $21M in Q3 and $50M in 9M. Net interest expense increased to $291M from $248M in Q3 and $805M from $725M in 9M, with the 9M increase primarily reflecting the debt-extinguishment loss.

Adjusted EBITDA was $2.539B vs. $2.293B in Q3 and $6.071B vs. $5.545B in 9M. Adjusted EBITDA margin improved to 45.4% from 44.6% in Q3 and 40.8% from 40.5% in 9M. Adjusted EBITDA per available passenger cruise day (APCD) was $171.01 vs. $167.35 in Q3 and $144.13 vs. $141.09 in 9M. APCDs increased to 14.845M from 13.699M in Q3 and 42.120M from 39.299M in 9M. While gross margin yield declined—to $161.03 from $162.39 in Q3 and $141.38 from $141.73 in 9M—net yield increased to $304.41 from $301.58 and $287.66 from $281.87, respectively. Net cruise costs excluding fuel per APCD fell to $121.38 from $123.75 in Q3 but rose to $127.81 from $126.61 for 9M, leaving fuel and capacity costs as important margin sensitivities.

Cash flow, liquidity and commitments

9M operating cash flow was $5.3B versus $4.8B. Investing cash outflow was $3.8B versus $3.5B, including a $158M increase in capital expenditures; the filing expects approximately $4.6B of capital expenditures for 2026. Financing cash outflow was $1.4B versus $1.3B. At September 30, 2026, liquidity totaled $7.4B—$0.9B in cash and cash equivalents and $6.6B of undrawn revolver capacity—and RCL said it had sufficient resources for at least 12 months.

Ship orders represent substantial future funding needs: approximately 48,830 berths across listed Global and Partner Brand orders. Global Brand orders (excluding Partner Brands) had an estimated cost of $19.4B, with $1.5B deposited; 49.9% of aggregate cost was exposed to euro exchange-rate fluctuations. Contractual ship-purchase obligations totaled $14.950B. About $12.9B of final installments had committed financing covering approximately 80% of Global Brand ship costs; RCL disclosed approximately $17B of committed ship financing overall, excluding Celebrity River Cruises. Total disclosed material cash requirements were $23.673B, including $6.438B of debt interest and $1.214B of operating lease obligations. Obligations due through September 30, 2027 included $2.2B of debt maturities, $1.1B of interest and $2.7B of ship-order progress payments.

RCL agreed in September 2026 to acquire a 50% equity interest in Sandals and Beaches Resorts for approximately $3.0B, subject to customary conditions and expected to close in early 2027. A $3.0B, 364-day term loan facility is available as interim acquisition funding. The company also issued senior notes: $1.25B due 2033 and $1.25B due 2038 in February, generating approximately $2.5B net proceeds, and $1.25B due 2034 in August, generating approximately $1.24B net proceeds.

Other developments and exposures

Q3 other comprehensive income was $133M versus a $9M loss, principally as fuel-swap fair values increased. 9M OCI was $220M versus $274M, including cash-flow hedge gains of $215M versus $304M. Debt has fixed- and variable-rate exposure, with maturities through 2042; RCL was compliant with financial covenants at September 30, 2026. Change-of-control provisions could require repayment of certain credit facilities. The board declared a $1.50-per-share Q3 dividend, paid in October. Legend of the Seas and TUI Cruises’ Mein Schiff Flow were delivered in June 2026.

RCL reported no material changes in its exposure to market risks since its 2025 Annual Report. For further discussion, it refers readers to Part II, Item 7A of that report.

Controls and Procedures

As of September 30, 2026, management assessed disclosure controls and procedures as effective, providing reasonable assurance that required information is recorded, processed, summarized, and reported on time and that it is communicated to management for timely disclosure decisions. The controls provide reasonable, not absolute, assurance.

The company implemented a new ERP system during the quarter ended March 31, 2026. Related changes to business processes, accounting systems, and internal controls remain subject to post-implementation monitoring and enhancements. During the quarter ended September 30, 2026, no other changes were identified that materially affected, or were reasonably likely to materially affect, internal control over financial reporting. No financial metrics were reported in this section.

The company reported no material changes to the risk factors disclosed in its Form 10-K for the fiscal year ended December 31, 2025. It refers readers to Part I, Item 1A of that filing for the full risk-factor discussion; this section provides no new risk details or financial metrics.

For the quarter ended September 30, 2026, no directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. The section reports no financial metrics, business developments, or other material changes.