Carnival reported a strong QQ2 2024, delivering revenue of $5.781 billion with a gross margin of 34.3% and EBITDA of $1.18 billion, reflecting robust yield growth and favorable operating leverage. Management highlighted record quarterly performance across revenues, operating income, deposits, and bookings, driven by mid-to-high single-digit per diem improvements and double-digit yield gains on both North American and European brands. Notably, yields rose by more than 12% year over year, European yields surged over 20%, and North American yields rose around 7%, underscoring broad-based demand resurgence across the portfolio.
Concurrently, Carnival advanced its balance sheet and capital allocation plans, prepaying $1.6 billion of secured term debt, repricing $2.75 billion of secured facilities, and issuing $535 million of 2030 unsecured notes. These actions reduced net interest expense and are expected to propel leverage toward multi-year targets (with June guidance implying a mid-4x range for net debt to EBITDA by year-end). Free cash flow remained robust at $720 million for QQ2, supported by operating cash flow of $2.04 billion and capex of $1.32 billion, signaling strong liquidity as the company pursues a multi-year SEA Change initiative aimed at 12%+ ROIC and carbon intensity reductions.
Strategically, Carnival continued portfolio optimization, including sunsetting P&O Cruises Australia and consolidating capacity into Carnival Cruise Line, while expanding Celebration Key as a multi-brand platform to boost incremental revenue and fuel efficiency. The management team signaled continued confidence in late-2024 and 2025 pricing power, with expectations of mid-single-digit price improvements and a pathway to investment-grade credit. Management also emphasized ongoing efficiency programs and a measured approach to growth via ship deliveries and capital allocation. Overall, the QQ2 2024 results reinforce Carnival's ability to generate durable cash flow, reduce debt, and improve ROIC while navigating industry cyclicality and regulatory headwinds.