Carnival (CCL) Financials

Carnival’s financial recovery continued in the second quarter of fiscal 2026, although profitability growth is becoming less consistent. Revenue increased 5.3% year over year to $6.66 billion, while operating cash flow rose 10.0% to $2.63 billion. The company also reported $537 million of net income attributable to common shareholders, or $0.39 per diluted share. However, net income declined from $565 million in the restated Q2 2025 period, and operating income fell from $934 million to $851 million.

Over the broader period, Carnival has moved from substantial losses in 2023 to recurring profitability in 2025 and 2026. Its balance sheet has also improved as long-term debt declined from $31.92 billion in Q2 2023 to $23.42 billion in Q2 2026. Still, Carnival remains highly leveraged, with total liabilities of $39.24 billion compared with $12.98 billion of equity. The company’s financial performance also remains seasonal, and several historical periods were restated, so investors should emphasize comparable year-over-year periods.

• Revenue continues to expand. Q2 2026 revenue reached $6.66 billion, up from $6.33 billion in Q2 2025 and $4.91 billion in Q2 2023, indicating sustained demand recovery.
• Operating cash flow is strengthening. Cash generated from operations increased to $2.63 billion in Q2 2026 from $2.39 billion in the comparable 2025 quarter and $1.14 billion in Q2 2023.
• Cash generation exceeded capital spending. Q2 operating cash flow of $2.63 billion more than covered $875 million of capital expenditures, producing approximate quarterly free cash flow of $1.76 billion before financing costs and other adjustments.
• Debt has declined materially over the multi-year period. Total short- and long-term debt fell to approximately $24.9 billion in Q2 2026 from roughly $27.3 billion in Q2 2025 and $33.7 billion in Q2 2023.
• Customer deposits are rising. Customer deposits increased to $8.46 billion from $8.08 billion a year earlier and $6.89 billion in Q2 2023. This can provide favorable working capital and suggests continued advance bookings, although the deposits represent an obligation to deliver future cruises.
• Profitability has improved significantly from 2023. Carnival recorded a $537 million profit attributable to common shareholders in Q2 2026, compared with a $407 million loss in Q2 2023 and a $214 million loss in Q1 2024.
• Liquidity improved sequentially but remains tight. Cash and equivalents rose to $2.24 billion at the end of Q2 2026 from $1.42 billion in Q1, but current liabilities of $13.43 billion remained substantially higher than current assets of $4.49 billion.
• Capital investment remains elevated. Quarterly spending on ships and other property, plant and equipment increased to $875 million from $566 million in Q1 2026, supporting fleet growth and upgrades but consuming cash.
• Profit margins weakened year over year. Operating income declined 8.9% from Q2 2025 despite higher revenue, while interest expense remained substantial at $285 million.
• Leverage and interest costs remain major risks. Carnival’s total liabilities were approximately three times shareholders’ equity at quarter-end, and financing costs continue to reduce the benefit of improving operating performance.