Cruise company Norwegian Cruise Line (NYSE:NCLH) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 6.1% year on year to $2.52 billion. Its non-GAAP profit of $0.51 per share was in line with analysts’ consensus estimates.
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Norwegian Cruise Line (NCLH) Q2 CY2025 Highlights:
- Revenue: $2.52 billion vs analyst estimates of $2.56 billion (6.1% year-on-year growth, 1.7% miss)
- Adjusted EPS: $0.51 vs analyst estimates of $0.52 (in line)
- Adjusted EBITDA: $694 million vs analyst estimates of $675.1 million (27.6% margin, 2.8% beat)
- Management reiterated its full-year Adjusted EPS guidance of $2.05 at the midpoint
- EBITDA guidance for the full year is $2.72 billion at the midpoint, in line with analyst expectations
- Operating Margin: 16.8%, up from 14.4% in the same quarter last year
- Free Cash Flow Margin: 15.1%, up from 13.9% in the same quarter last year
- Passenger Cruise Days: 6.29 million, up 211,226 year on year
- Market Capitalization: $10.46 billion
“We are pleased to have expanded our Revolving Loan Facility, further strengthening our liquidity position and enhancing financial flexibility,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.
Company Overview
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Norwegian Cruise Line grew its sales at a decent 15.5% compounded annual growth rate. Its growth was slightly above the average consumer discretionary company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Norwegian Cruise Line’s annualized revenue growth of 15.5% over the last two years aligns with its five-year trend, suggesting its demand was stable. 
We can better understand the company’s revenue dynamics by analyzing its number of passenger cruise days, which reached 6.29 million in the latest quarter. Over the last two years, Norwegian Cruise Line’s passenger cruise days were flat. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Norwegian Cruise Line’s revenue grew by 6.1% year on year to $2.52 billion, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 10.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.
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Operating Margin
Norwegian Cruise Line’s operating margin has risen over the last 12 months and averaged 14.7% over the last two years. Its solid profitability for a consumer discretionary business shows it’s an efficient company that manages its expenses effectively.
In Q2, Norwegian Cruise Line generated an operating margin profit margin of 16.8%, up 2.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Norwegian Cruise Line’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q2, Norwegian Cruise Line reported adjusted EPS at $0.51, up from $0.40 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Norwegian Cruise Line’s full-year EPS of $1.83 to grow 22.1%.
Key Takeaways from Norwegian Cruise Line’s Q2 Results
While revenue missed, Norwegian Cruise Line beat analysts’ EBITDA expectations this quarter. Looking ahead, the company's EBITDA guidance for next quarter was in line, showing that the business is on track. Overall, this was a decent quarter likely combined with low expectations to power shares higher. The stock traded up 7.7% to $25.23 immediately after reporting.
Is Norwegian Cruise Line an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.