Q2 2026 Viking Holdings Ltd Earnings Call Transcript
Key Points
- Revenue increased 16.5% year-over-year, with adjusted EBITDA growing 18.2% in Q2 2026.
- 2026 season is effectively sold out at 96% of core product capacity booked, with 2027 already 53% booked despite a 15% capacity increase.
- Advanced bookings for 2027 are 21% higher year-over-year, with strong pricing (Ocean rates up to $877 vs. $781; River rates up to $1,029 vs. $942).
- Net yield grew 6.2% in Q2, driven by strong demand and favorable itinerary mix across both River and Ocean segments.
- Fleet expansion continues with 12 new ships expected in 2026, and the company exercised options for two additional ocean ships for 2032, reflecting confidence in long-term growth.
- Strong balance sheet with $4 billion cash, $1 billion undrawn revolver, and net leverage of 1.2x, providing financial flexibility.
- New experiences like the St. Moritz extension and Zeppelin flight over Cologne enhance guest offerings and drive higher quality scores.
- India itineraries for 2027 and 2028 are completely sold out, indicating strong demand for new destinations.
- China outbound business is expanding with the Viking Eden now operating in Europe, showing positive early results.
- Operational expertise in handling low water levels, with no cruise cancellations and proactive guest communication, supports brand loyalty.
- Historically low water levels on European rivers (Danube and Rhine) have disrupted itineraries, impacting guest experience and requiring future cruise vouchers.
- Financial impact of low water and vouchers will extend into 2027 and 2028, affecting future revenue and yields.
- More than 50% of River capacity PCDs in Q3 2026 have been impacted, with 10-12% of those cruises canceled, leading to incremental costs and revenue loss.
- River occupancy in Q2 2026 was slightly lower year-over-year, partly due to Egypt itinerary impacts.
- Airfare cost pressures are expected to impact net yields, with management maintaining a conservative mid-single-digit yield growth goal for 2027.
- The company faces uncertainty in quantifying the full financial impact of low water conditions, with costs expected to hit Q3 results.
- Vouchers issued to affected guests will create a discount on future cruises, potentially reducing pricing power in 2027 and 2028.
- SG&A expenses, while lower as a percentage of gross margin, still reflect ongoing investment in sales and marketing to support growth.
- The low water situation has required enhanced communication protocols and proactive outreach, adding operational complexity.
- Despite strong bookings, the company acknowledges that the 10% increase in 2027 advanced bookings per PCD may not be sustainable due to product mix, with a goal of only mid-single-digit yield growth.
Good morning. My name is Matthew, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Viking's second quarter 2026 earnings conference call. As a reminder, this call is being recorded. (Operator Instructions)
I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mengolini.
Good morning, everyone, and welcome to Viking's second quarter 2026 earnings conference call. I am joined by Leah Talactac, President and Chief Executive Officer; and Linh Banh, Chief Financial Officer. Also available during the Q&A session is Tor Hagen, Executive Chairman.
Before we get started, please note our cautionary statement regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties and other factors, which may cause the actual results to be different than those expressed or
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