Royal Caribbean ($RCL) Stock Hub: Dividend Confirmed, Refinancing Closed and Q3 Margin Test

01 What The Second Quarter Actually Showed

Royal Caribbean reported the three months to 30 June 2026 on 28 July 2026, filing the 8-K and the 10-Q the same day. The headline on the release was “Royal Caribbean Group reports second quarter results above expectations and raises full year guidance”, and both halves of that sentence are accurate. What the headline does not say is that earnings per share went down.

Q2 revenue rose 6.5% to $4.832 billion. Passenger tickets increased 4.5% to $3.344 billion and onboard/other revenue rose 11.1% to $1.488 billion, or 30.8% of total revenue. The filing does not allocate all shared operating costs between these streams, so a fully allocated segment margin cannot be inferred.

Operating income was $1.307 billion, down 1.7%, for a margin of 27.0% against 29.3%. Adjusted EBITDA was $1.830 billion against $1.851 billion, and the adjusted EBITDA margin fell 290 basis points to 37.9%. Net income attributable to the group was $1.128 billion, down 6.8%, and diluted earnings per share were $4.20 against $4.41. Adjusted diluted earnings per share were $4.21 against $4.38, down 3.9%. The only adjustment in the quarter was $2 million of Silversea intangible amortisation.

Below that, interest expense net of capitalised interest rose from $228 million to $236 million and interest income fell from $12 million to $5 million. The tax provision was $14 million on $1.150 billion of pre-tax income, an effective rate of about 1.2%.

Volumes were strong. The group carried 2,399,066 guests, up 6.4%, on 13,572,396 available passenger cruise days, up 4.9%, at a load factor of 110.2% against 110.3%. Net yields per APCD were $288.95, up 1.9% as reported and 1.2% in constant currency, which the company said “exceeded the company’s guidance primarily driven by better than expected close-in demand”.

02 Executive Summary

Royal Caribbean Cruises Ltd. is incorporated in Liberia, headquartered in Miami and listed on the NYSE as RCL. Royal Caribbean Group is its commercial identity; the SEC registrant remains Royal Caribbean Cruises Ltd.

The brands

Three wholly owned: Royal Caribbean International (29 ships, about 111,000 berths, contemporary and the volume engine), Celebrity Cruises (15 ships, about 38,900 berths, premium) and Silversea (12 ships, about 5,500 berths, ultra-luxury and expedition). Plus a 50% stake in TUI Cruises GmbH, which runs Mein Schiff and Hapag-Lloyd Cruises for the German market and is equity accounted; the carrying value was $990 million at the end of 2025 and it paid Royal Caribbean $258 million of dividends in 2025. Neither partner may fall below 37.55% until May 2033. Combined, 71 ships were in service at 30 June 2026.

The financial position

Total debt of $23.407 billion at a weighted average 4.66%, of which $2.762 billion floating, against cash of $875 million and $6.0 billion of undrawn revolving capacity for total stated liquidity of $6.9 billion. In July the accordion was exercised to lift revolver capacity by $250 million to $6.6 billion. Investment grade at all three agencies by the end of 2025. Net debt to trailing adjusted EBITDA works out at roughly 3.1x, though the company does not publish the ratio.

The capital return

First-half buybacks of $1.035 billion and dividends of $674 million totalled $1.709 billion, against operating cash flow less property/equipment purchases of $457 million. Debt principal increased $1.505 billion over the same period. The cash-flow statement shows financing supporting the combined capital programme; it does not earmark each borrowed dollar to a dividend or buyback.

The growth programme

Thirteen ships on order for 43,230 berths, plus a seventh Icon-class agreed in July and sixteen more river vessels. The aggregate cost of ships on order rose from $11.3 billion to $16.5 billion in six months, up 46%, with about $14.3 billion of committed financing covering roughly 80% of the ocean-going order book. Private destinations expand from three to eight by 2028, and Celebrity River Cruises launches in 2027. Capital expenditure this year is guided at approximately $4.7 billion.

03 The Guidance Round Trip

The most useful way to read Royal Caribbean’s 2026 is as a single number moving twice.

April was a cut of $0.60 at the midpoint. The company attributed it to “higher than anticipated fuel costs (based on current at-the-pump rates) and an impact on Middle Eastern itineraries of TUI Cruises from geopolitical events, as well as lower non-fuel costs and the benefit from recent share repurchases”. Fuel alone was $0.62 per share of headwind. Bookings for high-yielding Mediterranean itineraries had moderated late in the first quarter, partly on higher air fares, airline capacity cuts and flight disruption, and bookings for West Coast of Mexico itineraries also moderated.

July was a raise of $0.50 at the midpoint, driven by “the stronger-than-expected second quarter performance and an improved outlook for the remainder of the year”. Note where that leaves the year: the midpoint of $17.80 is still marginally below the $17.90 guided in January. The round trip has not quite closed.

Current guidance in full

Currency assumptions: sterling at 1.34, the Australian dollar at 0.70, the Canadian dollar at 0.71 and the euro at 1.14. Capacity growth is guided at 4% in 2027, 6% in 2028 and 7% in 2029. Royal Caribbean does not guide adjusted EBITDA, in either quarter of 2026.

The sensitivities

The Perfecta programme

The glossary in the second-quarter release defines it precisely: “the multi-year Adjusted EPS and ROIC goals we are seeking to achieve by end of 2027… targeting 20% compound annual growth rate in Adjusted EPS compared to 2024 and ROIC of 17% or higher by the end of 2027”. Against a 2024 base of $11.80, 2025 came in at $15.64 and 2026 is guided to $17.73–$17.87, a two-year compound rate of 23%. Return on invested capital reached 18.0% in 2025, already above the 2027 target. At a 20% compound rate from 2024, the implied 2027 figure is roughly $20.40 of adjusted earnings per share. No successor programme has been announced.

The release uses both high-teens ROIC and a minimum 17% target. These formulations are compatible; neither establishes a guaranteed future return.

04 Brands, Fleet And Where The Revenue Comes From

At 31 December 2025 the group operated 69 ships with about 179,720 berths; with Legend of the Seas and Mein Schiff Flow both delivered in June 2026, the 2026 fleet table totals 189,420 berths across 71 ships. Itineraries reach more than 1,000 destinations in over 120 countries on all seven continents. Loyalty membership exceeds 28 million, and a “Points Choice” programme launches in 2026 alongside the Royal ONE credit card. Headcount is about 108,000, of whom roughly 96,500 are shipboard and about 87% covered by collective agreements.

Revenue by itinerary

North America is 66.2% of itinerary revenue in the quarter and 71.1% in the half. Ticket revenue originating in the United States was 78%, up from 77% a year earlier — concentration on the American consumer is increasing, not decreasing. Europe grew 10.7% in the half while Asia and Pacific fell 1.2%, consistent with the “itinerary modifications in China” that the January guidance flagged as a 30 basis point headwind to full-year yields.

05 Unit Economics

Royal Caribbean measures per available passenger cruise day, APCD. It ran 13,572,396 of them in the quarter.

Management attributed the cost beat primarily to expense timing. Q3 guidance anticipates lower ex-fuel unit costs, but the release does not establish precisely when each deferred expense reverses.

Fuel and hedging

The group paid $839 per metric tonne net of hedging in the quarter and burned 422,000 tonnes for $355 million. Swap coverage as a percentage of projected consumption runs 58% in 2026, 53% in 2027, 29% in 2028 and 14% in 2029, at average portfolio costs of $474, $405, $424 and $451 a tonne respectively. At 30 June there was $41 million of net unrealised gains on fuel hedges expected to reach the income statement within twelve months, against a $66 million loss position at the end of 2025.

Customer deposits

Customer deposits were $6.736 billion at June 30, up 5.6% year over year and versus $5.739 billion at year-end. This is a balance at one date for future sailings. Comparing it with historical quarterly APCDs or full-year capacity guidance is not a valid calculation of deposits per berth; sailing mix, booking lead times and cancellation terms also matter.

06 Balance Sheet, Ratings And The Return Of Capital

Total debt was $23.407 billion at face, $22.836 billion net of $571 million of unamortised issuance costs, of which $1.573 billion current. The weighted average rate is 4.66%. The fixed-rate book is $20.486 billion — $12.041 billion of unsecured senior notes at 5.52% maturing 2027 to 2038, and $8.445 billion of unsecured term loans at 3.33%. Floating-rate debt is $2.762 billion, including $300 million drawn on the revolvers.

Contractual future interest adds $564 million in the rest of 2026, then $1,049 million, $872 million, $769 million and $723 million, and $2,606 million thereafter — $6,583 million in total. Obligations falling due by 30 June 2027 are $1.6 billion of principal, $1.1 billion of interest and $0.8 billion of ship progress payments.

Recent financing

February 2026 brought $2.5 billion in two tranches, 4.750% due 2033 and 5.250% due 2038, used to refinance 2026 maturities. June 2026 brought a $1.9 billion twelve-year term loan for the delivery of Legend of the Seas, 95% guaranteed by Finnvera, with a fixed portion at 3.41%. And on 6 August 2026 the group priced $1.25 billion of 5.550% senior notes due 20 January 2034 at 99.837%, a spread of 105 basis points over the 2033 Treasury, for net proceeds of $1,240,150,000, with closing completed on 20 August 2026. The stated use of proceeds is partial repayment of floating-rate term loans and refinancing of other existing debt.

Export-credit facilities support long-dated ship financing. New agreements cite floating Term SOFR plus 0.80–0.83%; that spread must be added to the reference rate before comparison with a fixed bond coupon. Sovereign guarantees protect lenders under specified terms and do not cancel Royal Caribbean’s repayment obligation.

Ratings

S&P Global upgraded the unsecured rating from BB+ to BBB− on 4 February 2025 and revised the outlook to positive in October 2025. Moody’s moved from Ba1 to Baa3 during the second quarter of 2025. Fitch upgraded to BBB with a stable outlook in the third quarter of 2025. The annual report states plainly that the group “achieved investment-grade ratings across all three major credit rating agencies”. One practical consequence: in January 2026 the collateral posting requirements were removed from six interest rate derivative hedges, which had been triggered by a fall below BBB−/Baa3.

Covenants

The 10-Q says the revolvers, most term loans and certain credit card processing agreements “contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, and limit our net debt-to-capital ratio”, and that the group was in compliance at 30 June and expects to remain so for twelve months. No numerical thresholds are disclosed anywhere, in the 10-Q or the annual report. In July 2024 the minimum stockholders’ equity requirement was removed from all export credit facilities. Change of control provisions can be triggered by an acquisition of more than 50% of the shares, or by a majority board turnover within 24 months; the public notes require a downgrade as well, and the new 2034 notes carry a 101% repurchase right.

Dividend, buyback and the funding gap

On September 1 the board declared a $1.50 quarterly dividend, payable October 8 to holders of record September 17. The $6 annualized run rate assumes future declarations. The December 2025 $2 billion buyback authorization had approximately $805 million remaining at June 30; a recent social reference to $2 billion is not evidence of a newly announced September programme. SEC shares outstanding were 267,452,084 at July 24.

September dividend · Financing completion

07 The Order Book And The Private Destinations

Thirteen ships, 43,230 berths. A seventh Icon-class became effective in July 2026 and is referred to in the text of note 8 but does not yet appear in the order book table at 30 June. Sixteen further river vessels are committed beyond the four in the table, taking the target river fleet to twenty.

The reported ship order cost rose from $11.3 billion to $16.5 billion, excluding partner-brand orders, with $1.3 billion deposited and 52.6% euro exposure. Separately, the filing reports $14.3 billion of committed financing excluding river ships. Different scopes and conditions mean that dividing those totals does not establish a simple funded percentage or freely available cash.

Ships delivered in 2025 and 2026

Star of the Seas, the second Icon, was delivered from Turku on 10 July 2025 with 5,600 berths, financed with a $1.6 billion Finnvera-backed term loan. Celebrity Xcel, the fifth Edge, was delivered from Saint-Nazaire in October 2025 with 3,250 berths and financed with 5.375% notes due 2036 rather than the export credit facility, because the notes were cheaper. Legend of the Seas, the third Icon, was delivered in June 2026 and entered service on 4 July on seven-night western Mediterranean itineraries from Barcelona and Rome, moving to Fort Lauderdale from November 2026; it carries a $1.9 billion term loan. TUI Cruises took delivery of Mein Schiff Flow in June 2026.

The private destinations

The July earnings release retained a group destination expansion ambition from three to eight by 2028. The September 1 release describes expansion without repeating that count. This wording change is not, by itself, a formal withdrawal of the earlier target. A destination-by-destination status check is more useful than reconstructing an unverified list of eight.

The current company destination page identifies CocoCay, Paradise Island and Santorini as available destinations; Santorini is explicitly open. Cozumel is labelled with further details to come, and Lelepa as coming in 2027. Do not retain an unverified exact Cozumel opening date. The Cormorant hotel is a separate land product and should not be assumed to reconcile the private-destination count.

Current company destination page

08 How Royal Caribbean Compares With Carnival And Norwegian

Carnival’s fiscal year ends 30 November, so its second quarter closed on 31 May, a month before Royal Caribbean’s and Norwegian’s. Carnival measures per ALBD, Royal Caribbean per APCD, Norwegian per Capacity Day, and the three definitions of adjusted EBITDA are not identical. Percentage changes compare reasonably; absolute per-unit levels do not.

Four things the table says

RCL has the highest reported margin and occupancy among these three operators for the displayed quarters. Occupancy depends on cabin configuration and passenger mix; it does not alone establish profitability per berth or investment quality.

Carnival’s displayed quarter had stronger constant-currency yield growth and lower ex-fuel unit-cost growth. This comparison does not establish that it was the first such quarter, and the reporting periods differ.

The leverage figures are approximately similar but not strictly equivalent: RCL’s ratio is an illustrative calculation, while peer ratios follow their own definitions. June balance sheets do not establish current September leverage after refinancing and other cash movements.

Norwegian is the divergent case, with yields down 2.6% in the quarter, full-year yields guided to roughly minus 5%, leverage of 5.3x, no dividend, no buyback and no quantified multi-year programme since the first quarter of 2026. It describes itself as being in the early stages of a turnaround.

09 What Actually Drives A Cruise Line’s Earnings

APCD and load factor

APCD represents double occupancy multiplied by available cruise days. A load factor of 110.2% means passenger-days exceed that two-person baseline by 10.2%; it does not mean that exactly one in ten berths or cabins holds an extra guest.

Net yields versus gross margin yields

Net yield adds back payroll, food, fuel, other operating costs and depreciation/amortization to gross margin, then divides by APCD. It measures a different stage of the income statement from GAAP gross margin yield.

Net cruise costs excluding fuel per APCD

The running cost of the ship per berth per day, with fuel removed. This is the discipline measure. Royal Caribbean’s rose 3.9% in constant currency this quarter, the highest of the three operators, and the company’s explanation for the beat against its own guidance — “favorable timing of expenses” — means some of that cost is deferred rather than avoided.

Customer deposits and the booking curve

Customer deposits help finance operations ahead of sailing but remain liabilities. A comparable forward sailing period, pricing and booking-window mix are needed before interpreting a deposit balance as evidence of demand per unit of capacity.

10 Risks And Red Flags

Perfect Day Mexico: initial application and revised-project risk

This is the most concrete unresolved item on the page. On 20 May 2026 Royal Caribbean furnished an 8-K responding to public statements by the head of Mexico’s environment ministry, SEMARNAT, on 19 May “indicating that SEMARNAT will deny approval of the Company’s initial application for the environmental permits needed to develop the Company’s Perfect Day Mexico project”. The company said it “respects the role of SEMARNAT” and would “re-engage stakeholders” over the coming weeks.

The May 20 SEC statement describes an announced denial of the initial environmental application, not automatic cancellation of every possible revised project. On July 22 Royal Caribbean announced the Mahahual K’iin Community Center, with construction itself conditional on permits. This is evidence of continued local engagement, not approval of Perfect Day Mexico. No final revised-project approval was verified in this review.

Costs, and payroll in particular

Payroll and related rose 23.1% year on year against 4.9% capacity growth. Nothing in the release explains it. Net cruise costs excluding fuel per APCD rose 3.9% in constant currency, the worst of the three operators, and the guidance beat was explicitly attributed to timing.

Fuel exposure opens up after 2027

Swap coverage declines to 29% in 2028 and 14% in 2029 in the July release. These are dated positions that can change as new hedges are entered. Lower coverage increases exposure if fuel rises; it does not predict fuel prices or mechanically determine earnings.

Emissions regulation is now fully phased in

Emissions rules add costs that depend on routes and allowance prices. EU ETS surrender obligations reach their fully phased percentage for covered 2026 emissions; this does not mean every global voyage is fully covered. UK ETS maritime scope began July 1, 2026 for qualifying domestic voyages and UK-port emissions; international voyages are not automatically included. FuelEU and shore-power requirements have their own scope and exemptions.

Geopolitics, twice

Mediterranean and West Coast of Mexico bookings moderated in the first quarter; the second quarter still carried a “modest, near-term impact on bookings for select itineraries, primarily due to prolonged geopolitical activity”. The joint venture took the visible hit: equity investment income fell 37.4%, and management had already attributed that to TUI’s Middle Eastern itineraries. China itinerary modifications cost 30 basis points of full-year yield.

Concentration

There is no dedicated Caribbean concentration risk factor in the annual report, but the numbers are what they are: 66.2% of itinerary revenue from North America in the quarter, 71.1% in the half, 78% of ticket revenue originating in the United States and rising, and five of the eight private destinations in the Caribbean, Bahamas or Mexico basin. The nearest risk factor is about anti-tourism sentiment and proposed limits on cruise ships and passengers at popular ports.

Havana Docks

The June 10-Q records the Supreme Court’s May 21 vacatur and remand for unresolved defenses in Havana Docks. It describes the approximately $112 million 2022 judgment, a $130 million charge including related costs, and the later release of about $124 million. The filing does not provide a new quantified final loss estimate. Do not add treble damages again mechanically to an existing judgment or treat the remand as a final payment order.

Execution on a much bigger order book

The order book cost rose 46% in six months, 52.6% of it exposed to the euro, across four yards in four countries. The river business is a new operating model for the group with the first delivery in the second quarter of 2027 and no export credit financing. And PortMiami Terminal G, on completion, raises minimum lease payments to about $55 million a year with 3% annual escalators.

Mahahual K’iin · 2026-07-22 · UK ETS · official scope

11 Management And Governance

Jason Liberty, 50, has been chief executive since January 2022 and added the chairmanship in November 2025, combining the two roles. Naftali Holtz, 48, has been chief financial officer since January 2022, having joined in 2019 from Goldman Sachs where he ran lodging and leisure investment banking. Richard Fain, chairman and chief executive from 1988 to 2022 and chairman until November 2025, remains on the board he joined in 1981. John F. Brock is lead independent director. The board has thirteen members, twelve of them independent.

There were no changes to the chief executive or chief financial officer in 2026. Two directors were added: Christopher Wiernicki, former chairman and chief executive of the American Bureau of Shipping, on 10 February 2026, and Tara Bunch, formerly global head of operations at Airbnb and before that at Apple and Hewlett-Packard, on 16 July 2026.

On capital allocation there is no formal published policy with numerical targets. What the company does is consistent: fund the ships first, mostly with sovereign-guaranteed export credit at SOFR plus 80 basis points; protect the investment grade rating, with the August 2026 notes explicitly earmarked to repay floating-rate term loans; and raise the shareholder return steadily, from a $0.40 quarterly dividend in 2024 to $1.50 in 2026 and from a $1.0 billion buyback to a $2.0 billion one. The discipline mechanism is the Perfecta return on invested capital target, already exceeded at 18.0% in 2025. The annual report is careful to state that there is no assurance dividends or buybacks continue at historical levels.

12 Tax: Section 883, UK Tonnage Tax And A 1.2% Rate

Royal Caribbean recorded a $14 million tax provision on $1.150 billion of pre-tax income in the quarter. That is an effective rate of roughly 1.2%, and it is not an anomaly. Understanding why is essential to understanding the equity.

The company holds an opinion from United States tax counsel that its income, to the extent derived from or incidental to the international operation of ships, is excluded from gross income under Section 883 of the Internal Revenue Code. The annual report is explicit about the fragility: “Our ability to rely on Section 883 could be challenged or could change in the future. The provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time.” Without it, the subsidiaries would face branch profits tax, taxation of interest, and a 4% special tax on United States source gross transportation income. Alaska already applies a 33% tax to adjusted income from onboard gambling in Alaskan waters.

Two other pillars: from 2026 onwards “substantially all of our ships will be operated by companies that are within the United Kingdom tonnage tax regime” — sixteen ships were in it in 2025 — and the OECD 15% global minimum tax applies to the majority of earnings from 2026, which the company does not expect to be material because of the international shipping income exclusion. Liberia, the place of incorporation, has announced no Pillar Two changes to its own corporate tax.

13 Scenarios

Descriptive framings of what the published numbers imply under different conditions. Not forecasts, not recommendations.

The base case

The July company outlook remains adjusted EPS $6.26–$6.36 for Q3 and $17.73–$17.87 for 2026. These are dated management ranges, subject to stated fuel, currency, demand and cost assumptions. No Q3 earnings release date was confirmed on the reviewed IR calendar.

14 Bottom Line

Royal Caribbean leads the displayed peers on reported margin and occupancy, while its own Q2 profitability weakened. Strong operating positioning and investment-grade access do not remove cyclicality, valuation risk or large capital obligations.

Revenue rose while EPS fell and adjusted EBITDA margin declined 290 basis points. The September dividend and completed August refinancing are concrete updates; neither is a fresh earnings upgrade. Payroll is one important cost line, not the largest operating category in the statement.

The next operating test is Q3 delivery against July guidance. Beyond it, fuel coverage, ship commitments and the actual permitting status of destination projects remain central. Community engagement, marketing language and an environmental authorization are different forms of evidence.

15 What To Watch Every Quarter

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