Royal Caribbean Cruises Ltd ( RCL ) reported third-quarter revenue growth of 17.5% year-over-year to $4.89 billion, missing the consensus of $4.90 billion.

Passenger ticket revenues rose 18% YoY to $3.47 billion compared to last year. Total cruise operating expenses were $2.391 billion versus $2.137 billion a year ago.

Gross Cruise Costs per Available Passenger Cruise Days (APCD) increased by 1.3%. Gross margin yields increased by 13.4%, as reported, and net yields increased by 7.9% in constant currency.

Operating income for the quarter rose 29.2% to $1.634 billion, with an operating margin of 33.4%. The occupancy rate was 111% in the quarter, compared to 109.7% last year.

Adjusted EBITDA for the quarter was $2.148 billion, with a margin of 44%, up 242 bps. Adjusted EPS was $5.20 above the consensus of $5.03.

As of September 30, the group’s customer deposit balance was $5.324 billion. Royal Caribbean held $418 million in cash and equivalents at the end of the quarter.

Royal Caribbean Group is enhancing its vacation offerings with new destinations and experiences. It plans to open Perfect Day Mexico in 2027 and Silversea’s 150-room hotel in Puerto Williams, Chile, in 2025, which will support Antarctic expeditions.

“Our exceptional third quarter results and increased full year expectations reflect the robust demand for our differentiated vacation experiences,” said Jason Liberty, president and CEO.

“We see elevated demand patterns continuing as we build the business for 2025, and although the yield comparable will be a high bar, our proven formula of moderate capacity growth, moderate yield growth and strong cost discipline is expected to continue to deliver strong financial results. While we are still very early in the planning process, we anticipate earnings per share in 2025 to start with a $14 handle.”

2024 Outlook, raised: Royal Caribbean sees adjusted EPS of $11.57 – $11.62 (prior $11.35 – $11.45) versus $11.58 consensus, net yields expected to increase 10.8% – 11.3% in constant currency.

Q4 Outlook: The company sees fourth-quarter net yields increase 5.1% to 5.6% in constant currency. RCL sees adjusted EPS of $1.40 – $1.45 against the estimate of $2.28.

Price Action: RCL shares are trading higher by 1.41% at $206.39 at the last check Tuesday.