Viking Cruises: Viking Holdings Ltd (VIK) Q4 2024 Earnings Call Highlights: Record Revenue and Strategic Growth ...

In This Article: Total Revenue: Increased 20.5% year-over-year to almost $1.4 billion for Q4 2024. Adjusted Gross Margin: Increased 19.5% year-over-year to almost $870 million for Q4 2024. Net Yield: $507, up 7.4% from Q4 2023. Adjusted EBITDA: $306 million for Q4 2024, up 39.7% from Q4 2023. Net Income: $104 million for Q4 2024, compared to a loss of $594 million in Q4 2023. Adjusted Net Income: $200 million for Q4 2024. Adjusted EPS: $0.45 for Q4 2024; $1.86 for full year 2024. River Segment Capacity PCDs: Increased 3.7% year-over-year. River Segment Adjusted Gross Margin: Grew 15.8% year-over-year to $1.6 billion. River Segment Net Yield: $533, up 11.7% year-over-year. Ocean Segment Capacity PCDs: Increased 6.2% year-over-year. Ocean Segment Adjusted Gross Margin: Increased 12.1% year-over-year to $1.5 billion. Ocean Segment Net Yield: $522, up 5% year-over-year. Total Cash and Cash Equivalents: $2.5 billion as of December 31, 2024. Net Debt: $3.2 billion as of December 31, 2024. Net Leverage Ratio: 2.4 times as of December 31, 2024. Deferred Revenue: $4.1 billion as of December 31, 2024. Advance Bookings for 2025: $5.3 billion, 26% higher than 2024 at the same point in time. 2025 Capacity Growth: 12% increase with the delivery of 10 river ships and one ocean ship. 2025 Booking Rates: $744 per day for ocean cruises; $839 per day for river cruises. Warning! GuruFocus has detected 2 Warning Signs with VIK. Release Date: March 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript . Positive Points Viking Holdings Ltd ( NYSE:VIK ) reported a 14% year-over-year increase in adjusted gross margin, reaching over $3.5 billion. The company achieved an adjusted EBITDA of $1.3 billion, up 23.7% from the previous year. Viking Holdings Ltd ( NYSE:VIK ) ended the year with a strong balance sheet, including a 40.8% return on invested capital and a net leverage of 2.4 times. The company experienced record guest satisfaction scores and a repeat guest rate of 53%, demonstrating strong customer loyalty. Viking Holdings Ltd ( NYSE:VIK ) successfully completed its IPO and received the 2024 North America IPO of the Year award, highlighting its strong market position. Negative Points Vessel expenses, excluding fuel per capacity PCD, increased by 0.4% compared to the previous year. The company reported a net income loss of $96 million due to the revaluation of warrants issued by the company. February bookings showed a slowdown compared to January, reflecting uncertainties in the global market. The company faces potential competition from new entrants like Royal Caribbean in the river cruise market. Despite strong bookings, there is concern about the impact of macroeconomic uncertainties on future booking trends. Q & A Highlights Q : Why haven't you added 2026 into your booking curve charts yet, and how are 2026 bookings looking? A : Leah Talactac, President & Chief Financial Officer, explained that the focus is currently on the 2024 performance and closing out the 2025 season. However, she noted that 2026 is ahead of 2025 at the same point in time, indicating strong early bookings. Q : How will Viking Holdings respond to new competition from Royal Caribbean entering the river market? A : Torstein Hagen, Chairman & CEO, stated that Viking is in a strong position with a 52% market share and a large order book. He emphasized Viking's unique design and extensive portfolio of river destinations as competitive advantages. Q : Could you elaborate on current demand trends by region across both river and ocean? A : Linh Banh, Executive Vice President of Finance, reported that Viking is 88% sold for 2025, with strong capacity and yield increases. The company feels positive about the current demand trends. Q : Are there any barriers to entry for new competitors in terms of docking rights at key cities? A : Torstein Hagen highlighted Viking's strong position with premier docking rights, such as exclusive rights outside the Eiffel Tower in Paris and the Karnak temple in Egypt, which serve as significant barriers to entry for new competitors. Q : How does Viking manage booking curves in uncertain macroeconomic environments? A : Torstein Hagen noted that being ahead in bookings for 2025 allows Viking to take necessary actions for 2026. He emphasized the strength of Viking's database and marketing capabilities to generate demand, even in uncertain times. Q : What are Viking's priorities for capital allocation and potential M&A opportunities? A : Torstein Hagen stated that Viking prioritizes reinvesting cash into the business and maintaining a strong cash reserve for stability and flexibility. He mentioned that M&A opportunities would need to fit Viking's brand and focus. Q : How is Viking leveraging technology to enhance customer interaction and booking processes? A : Torstein Hagen mentioned that Viking is investing in technology to improve online booking and customer interaction, emphasizing the importance of staying ahead of technological advancements in marketing and customer service. Q : What are Viking's plans for geographic expansion over the next three to five years? A : Torstein Hagen indicated that while Europe remains a core market, Viking sees growth opportunities in regions like Egypt and Vietnam. He also highlighted the potential of the Chinese market, where Viking is marketing directly to consumers. For the complete transcript of the earnings call, please refer to the full earnings call transcript . This article first appeared on GuruFocus .