Viking Q2 Earnings Call Highlights

Key Points

• Strong second-quarter results: Revenue rose 16.5% year over year to $2.2 billion, adjusted EBITDA increased 18.2% to $748 million, and adjusted EPS climbed 33% to $1.31. Fleet expansion, higher capacity and a 6.2% increase in net yield supported performance.
• Demand remains robust: Viking had booked 96% of its 2026 core capacity and 53% of 2027 capacity, with advance bookings up 13% and 21%, respectively. Ocean and river segments both posted higher yields, while capacity is planned to expand substantially in 2027.
• Low water levels pose near-term risks: Historically low conditions on parts of the Rhine and Danube affected more than half of third-quarter river capacity cruise days, with 10%–12% of impacted cruises canceled. Viking expects higher transportation and operating costs in the third quarter, with future cruise vouchers creating additional financial effects in 2027 and 2028.

Viking NYSE: VIK reported higher second-quarter revenue, adjusted EBITDA and earnings as strong demand, fleet expansion and higher net yields supported results, while management said historically low water levels on parts of Europe’s rivers are expected to affect operations and financial results in coming periods.

Second-quarter revenue rose 16.5% year over year to $2.2 billion, while adjusted EBITDA increased 18.2% to $748 million. Net income totaled $588 million, up $148 million from the prior-year quarter. Adjusted earnings per share were $1.31, a 33% increase from the second quarter of 2025.

President and CEO Leah Talactac said the results reflected continued demand for the company’s destination-focused travel products and execution across its operations. Capacity passenger cruise days, or PCDs, increased 10.9% in the quarter, driven primarily by fleet additions, including seven river vessels and two ocean ships.

Yield Growth and Segment Performance

Adjusted gross margin increased 16.3% to $1.4 billion during the quarter. Net Yield rose 6.2% to $645, while vessel expenses excluding fuel per capacity PCD increased 2.7%. The company said SG&A expenses were slightly lower as a percentage of adjusted gross margin than a year earlier.

For the first half of 2026, Viking’s adjusted gross margin rose 16.5% year over year to more than $2.1 billion, and adjusted EBITDA increased 20.9% to $853 million.

• River: For the first six months of 2026, capacity PCDs increased 3.2%, occupancy was 94.8%, and adjusted gross margin rose 11.3%. Net Yield increased 8.8% to $660, supported by demand across regions and favorable itinerary mix.
• Ocean: Capacity PCDs increased 11.4% in the first half, aided by the July 2025 addition of Viking Vesta. Occupancy was 95.4%, adjusted gross margin increased 20.3% to $1.1 billion, and Net Yield rose 7.7% to $593.

Chief Financial Officer Linh Banh said Viking’s goal remains mid-single-digit year-over-year Net Yield growth for both 2026 and 2027. She noted that current 2027 booking metrics benefit from itinerary mix, including higher-priced products, and that the mix could normalize as more of the company’s core European inventory is sold.

Bookings Point to Strong 2026 and 2027 Demand

As of Aug. 9, Viking had booked 96% of capacity for its 2026 core products, with $6.4 billion of advance bookings. That represented a 13% increase from the comparable point for the 2025 season, while 2026 capacity is set to increase 7%.

The company had also booked 53% of 2027 core-product capacity, despite a planned 15% increase in capacity. Advance bookings for 2027 totaled $4.7 billion, up 21% from the comparable point in the prior booking cycle.

Ocean cruises were 62% booked for 2027, with capacity expected to rise 18% year over year. Advance bookings were 29% higher than the comparable prior-year point, and booked revenue per PCD was $877, compared with $781 for the 2026 season at the same point in time.

River cruises were 42% booked for 2027, with operating capacity up 13%. River advance bookings totaled about $1.8 billion, up 11%, while booked revenue per PCD was $1,029 compared with $942 for the prior season at the same point.

Talactac said the company had not seen evidence that low-water conditions were reducing future river-cruise booking demand. Banh said the 2027 river booking curve, with more than 40% of capacity booked as of Aug. 9, supported that conclusion.

Low Water Conditions Create Operational Challenges

Management said portions of the Danube and Rhine have experienced historically low water levels this year, creating challenges for European river cruise operations. Viking said it continued to operate without cancellations, using purpose-built ships, deployment flexibility and ship swaps to minimize disruption.

However, the company acknowledged that conditions have affected guest experiences and will have financial consequences. As of mid-August, more than 50% of Viking’s river capacity cruise days in the third quarter had been affected by low-water conditions, and 10% to 12% of those affected cruises were ultimately canceled, according to management.

The second-quarter financial results did not include an impact from low water because the conditions began in mid-July. Banh said the company expects third-quarter effects from incremental transportation costs, which would affect adjusted gross margin, and operational expenses that would affect vessel expenses.

Viking has issued future cruise vouchers to certain affected guests, which can be applied to cruises later in 2026 and in future years. Management said the vouchers are intended to support guest satisfaction and loyalty, but their redemption will create a financial impact in 2027 and 2028.

Executive Chairman Tor Hagen said guests he had spoken with were pleased with how Viking handled disruptions, while acknowledging that the company was initially “a little bit slow.” He said Viking’s fleet design and ability to conduct ship swaps provided an advantage during such conditions.

Fleet Investment and Product Expansion

Since its previous earnings call, Viking took delivery of four river vessels and one ocean ship. The company expects to take delivery of 12 ships in 2026, including 10 river ships and two ocean ships, and exercised options for two additional ocean ships scheduled for delivery in 2032.

As of June 30, Viking had $4 billion in cash and cash equivalents, a $1 billion undrawn revolver facility, net debt of $2.4 billion and net leverage of 1.2 times. Deferred revenue totaled $5 billion. The company expects committed ship capital expenditures of about $1.9 billion in 2026, or $650 million net of financing, and about $1 billion in 2027, or $260 million net of financing.

Management also highlighted expanded land extensions and optional excursions, saying about 40% of guests purchase a pre- or post-cruise land extension. Talactac said guests who use extensions or optional shore excursions tend to provide higher quality scores. Viking’s India itinerary, announced in 2025 for 2027 departures, is sold out for both 2027 and 2028, she said.

About Viking (NYSE:VIK)

Viking Holdings Ltd engages in the passenger shipping and other forms of passenger transport in North America, the United Kingdom, and internationally. It operates through River and Ocean segments. The company also operates as a tour entrepreneur for passengers and related activities in tourism. As of December 31, 2023, it operated a fleet of 92 ships, including 81 river vessels comprising 58 Longships, 10 smaller classes based on the Longship design, 11 other river vessels, and 1 river vessel charter and the Viking Mississippi; 9 ocean ships; and 2 expedition ships.

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