Carnival Lifts Outlook Again As Booking Momentum Outpaces Capacity Growth
Carnival reported a blockbuster third quarter with net income of $1.9 billion, or $1.33 per diluted share, up from $1.7 billion a year earlier. Adjusted net income landed at $2.0 billion, or $1.43 per diluted share, comfortably above analyst expectations. Revenue rose to $8.153 billion, outpacing last year and beating consensus estimates as adjusted EBITDA hit $3.0 billion.
Yields and margins showed healthy improvement, with net yields in constant currency up 4.6% year over year and gross margin yields improving 6.4%. Cruise costs per available lower berth day rose 4.6% from 2024, but adjusted cruise costs excluding fuel increased 5.5%, which was 1.5 points better than previous guidance. Fuel efficiency also improved, with fuel consumption per ALBD falling 5.2% thanks to recent investments in efficiency.
Passenger demand remains robust: passenger cruise days totaled 27.5 million and occupancy held steady at 112%. Customer deposits climbed to a record $7.1 billion as of August 31, signaling strong forward demand and healthy cash flows. Cash from operations was $1.38 billion for the quarter and $4.7 billion year-to-date, while capital expenditures were $648 million in the quarter.
On the balance sheet, liquidity stood at $6.26 billion and total debt was $26.5 billion at quarter end. Carnival improved its net debt-to-adjusted EBITDA ratio to 3.6x from 4.7x a year earlier, reflecting purposeful progress on leverage. The company also executed sizable refinancing moves and refinements in the quarter to manage maturities and cost of capital.
Chief Executive Officer Josh Weinstein summed up the quarter and noted operational strength. “This was a phenomenal quarter delivering all-time high net income and our tenth consecutive quarter of record revenues. Strong demand and onboard spending drove a 4.6% improvement in net yields (in constant currency), all of which was achieved on a same ship basis.”
Weinstein also highlighted the momentum in bookings and pricing that underpins the raised outlook. “Since May, booking trends have continued to strengthen with higher booking volumes than last year and far outpacing capacity growth. This momentum affirms the success of our brands’ demand generation efforts and the amazing experiences we continue to deliver, driving excess demand and ongoing pricing strength. With nearly half of 2026 booked, which is in line with 2025 record levels (at the same time last year) but now at historical high prices (in constant currency) for both our North America and Europe segments, we have built a strong base of business for next year. Looking further ahead, 2027 is already off to a great start, achieving record booking volumes during the third quarter,” Weinstein noted.
Operationally, the company is balancing strong demand with measured capacity growth, which is helping sustain pricing power. Advanced bookings for 2026 remain in line with 2025’s record levels and are happening at historically high prices in constant currency. Meanwhile, 2027 booking volumes set a new record during the quarter, underscoring multiyear momentum in consumer interest.
Outlook
Carnival raised its full-year 2025 outlook for the third time this year, reflecting the quarter’s strength and the forward booking cadence. The company now projects adjusted net income of about $2.93 billion, or $2.14 per diluted share, and adjusted EBITDA near $7.05 billion for the full year. Net yields are expected to increase roughly 5.3% year over year in constant currency while adjusted cruise costs excluding fuel per ALBD are forecast to rise about 3.3%.
For the fourth quarter, Carnival forecast adjusted EPS of about $0.23, higher than previous estimates, and adjusted EBITDA of $1.34 billion. Net yields for the quarter are expected to rise about 4.3% year over year in constant currency while adjusted cruise costs excluding fuel per ALBD are set to increase around 3.2%. Those projections reflect management’s confidence that demand and onboard revenue trends will remain favorable despite cost pressures.
Beyond operations, the company actively reshaped its debt profile during the quarter, refinancing $4.5 billion of debt and prepaying $700 million, while issuing new senior unsecured notes totaling $4.2 billion. Credit agencies took notice as Moody’s upgraded Carnival’s rating and maintained a positive outlook. Debt maturities are manageable in the near term, with roughly $0.3 billion in the fourth quarter and $1.4 billion in 2026.
Carnival also continued to focus on product and experience investments, opening Celebration Key in the Bahamas as an exclusive destination and earning recognition across major travel lists and awards. Those moves help differentiate the fleet and support higher pricing and repeat business. The combination of fleet investments, pricing power, and tighter capacity growth is central to management’s narrative.
Market reaction was mixed on the day of the release, with shares trading lower in the immediate session even as fundamentals showed momentum. The disconnect underscores how markets weigh near-term volatility against improving multi-year demand signals. For investors and travelers alike, Carnival’s results paint a picture of an industry that is finding firmer footing on both revenue and margin fronts.
This quarter illustrated a company moving from recovery to disciplined growth, using pricing, efficiencies, and targeted spending to convert record demand into better returns. Carnival’s improved leverage, robust deposits, and forward bookings create a sturdy base for 2026 and beyond. Management’s strengthened guidance reflects the belief that recent trends are sustainable and that the company is positioned to capture further upside as travel demand continues to rebound.
