Good morning. My name is Paul, and I will be your conference operator today. At this time, I would like to welcome everyone to Viking's Second Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded. 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 2025 Earnings Conference Call. I am joined by Tor Hagen, Chairman and Chief Executive Officer; and Leah Talactac, President and Chief Financial Officer. Also available during the Q&A session is Linh Banh, Executive Vice President of Finance. 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 implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release as well as in our filings with the SEC. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We may also refer to certain non-IFRS financial metrics, which are reconciled and described in our press release posted on our Investor Relations website. Tor and Leah will begin today's call with a strategic overview of the business, including a recap of our second quarter results and an update on the current booking environment. Following their remarks, we will open the call for your questions. To supplement today's discussion, an earnings presentation is available on our Investor Relations website. With that, I'm pleased to turn the call over to Tor.

Thank you, Carola, and good morning, everyone. We are pleased to have delivered another quarter of great results, which reaffirm once again the strength of our business model, brand and our guest demographic. As you can see on Slide 3, in the second quarter of 2025, net yield increased 8%, which combined with an 8.8% capacity growth resulted in revenue increases of 18.5% year-over-year. I believe this is the result of disciplined execution and great demand for our cruises. In terms of the overall booking environment, we are seeing sustained strength in demand. 96% of the 2025 capacity for our core product is already booked, effectively selling out this year. Our attention remains on 2026 bookings, where we are seeing a very strong start. As of August 10, 55% of the capacity of our core products for the 2026 season was already sold, which is in line with our booked position at the same point last year and at higher rates. Since we last spoke, we have been quite busy, both expanding our fleet and strengthening our global presence. First, the Viking Vesta joined our ocean fleet in June and is spending her inaugural season in the Mediterranean. On the River side, we continue to thoughtfully strengthen our presence with the addition of the Viking Amun on the Nile. This past July, we announced our first delivery voyages in India starting in 2027. This region offers stunning scenery and rich cultural heritage. We look forward to taking our guests to exclusive itineraries delivered the Viking way, that is with a great level of comfort and cultural enrichment. The early response to this new product has been phenomenal, with all available itineraries already sold out. Earlier during the second quarter, we completed a secondary offering of 30.5 million ordinary shares priced at $44.20 per share. When you consider that we started with just 4 river ships in 1997, our growth over the years has been a remarkable achievement and one we are very proud of. A key reason behind our sustained success is that our vision has remained consistent. Travel should focus on the destination. We are also fortunate to have very loyal guests, travelers who return to Viking time and time again. Overall, our river fleet consists of 85 vessels operating on rivers across the globe. Through years of strategic investments and partnerships, we now control or have priority access to 110 docking locations, giving us logical flexibility and the ability to deliver a consistent high-quality guest experience. On the oceans, we now operate 12 small modern ships, all with 100% balcony staterooms and designed to be nearly identical. The same philosophy guides our 2 expedition vessels, which serve guests seeking deeper exploration in remote regions of the world. Our recent ship deliveries and new itinerary offerings in India are a testament to the fact that our River business remains fundamental to our identity and continues to be a key growth engine and brand differentiator. Overall, we now operate 21 rivers worldwide with an expanding footprint that reflects both demand from our loyal guests and the cultural richness of the regions we serve. In Egypt, the Nile continues to be a strong performer. We now have 7 ships in operation and plan to deliver 5 more by 2027, underscoring our confidence in the long-term demand for this iconic destination.

Thank you, Tor, and good morning, everyone. I will start by reviewing our very strong second quarter results. On a consolidated basis, total revenue for the quarter increased 18.5% year-over-year to $1.9 billion. The year-over-year increase was mainly driven by increased capacity, higher occupancy and higher revenue per PCD. Capacity increased 8.8% this quarter. Adjusted gross margin increased 19.2% year-over-year to $1.2 billion, resulting in a net yield of $607, 8% higher than the second quarter of 2024. Vessel expenses, excluding fuel, per capacity PCD increased 8.2% this quarter compared to the same period last year. This year-over-year increase was driven by several factors. These include changes in itinerary mix that resulted in both higher yields and some higher expenses such as port charges. We remain committed to optimizing our cost structure while continuously refining our deployment and itinerary planning. Regarding SG&A, following the year-over-year step-up in expenses in the second quarter, we continue to invest in our teams as well as in sales and marketing to support future growth and drive demand generation. Adjusted EBITDA for the second quarter was $633 million, 28.5% higher than the same period last year. This significant year-over-year increase was mainly driven by higher capacity, occupancy and net yields in both the Ocean and River segments. Net income was $439 million, an improvement of almost $280 million relative to the same period in 2024. Adjusted net income attributable to Viking Holdings Limited was $439 million, 25.8% higher than the same period in 2024. The net income is also impacted by fluctuations in currency. For 2025 and 2026, we have hedged a significant portion of our euro exposure for operating expenses. We have EUR 470 million hedged for 2025 and EUR 500 million hedged for 2026 at a weighted rate of $1.10 per euro.

Thank you, Leah. Let's now dive into the booking curves. As you can see, we are in very good shape for 2025 and the 2026 seasons. The 2025 season already has 96% of our capacity booked. Advanced bookings equal $5.6 billion, which is 21% higher than the 2024 season at the same point in time. For 2026, we are already 55% booked with $3.9 billion of advanced bookings. Let us now talk about the advanced booking curves for the segments. Overall, we have sold 95% of our capacity PCDs for the year and have $2.5 billion of advanced bookings, which is 29% higher than last year at this point in time. Capacity is also increasing where we finished selling the last quarter of the year at strong rates. For 2026, we had sold about 64% of the 2026 capacity of Ocean, which is increasing by 9%. Advanced bookings are 19% higher than last year, with rates equal to $780 compared to $752 for the 2025 season at the same point in time. For the River segment, we have continued to book our remaining inventory at very attractive rates, with capacity growth expected to grow approximately 6%. So overall, advanced bookings for our core products are doing very well.

It's a great question. Since we last spoke, we have continued to see really strong demand from our consumers. In fact, we had an outstanding June and July, and we continue to see that booking strength continue into August, which is reflected in the fact that we're 55% sold for 2026. From our perspective, consumer behavior is pretty consistent with what we have seen in the past. We've seen our guests start to really engage and start to book their holidays for the 2026 season.

Congratulations on a solid quarter. Tor or Leah, could you provide an update on the booking progress for 2026 over the last couple of months? I'm trying to understand the impact of the slowdown in bookings during February and March, particularly around Liberation Day and the general macro uncertainty. Last April and May, it seemed like bookings improved. Can you share your observations for June, July, and so far in August regarding booking trends for both River and Ocean? Also, has your core customer become more selective about when and how they book?

Yes, sure. So, in the past, we have spoken to the fact that if we see a little bit of softening in demand that our first lever that we pull is marketing, not necessarily pricing. We've spoken to this a little bit of a softer demand around Liberation Day, and so that's where we turned on our marketing machine and just promoted more, not necessarily discount, but just got the word out and the consumers focusing on Viking and stimulating that demand.

Congrats on a nice quarter. So Tor, with 2026 bookings off to a very strong start, how do you see the current '26 booked position at over 50% today allowing you to optimize pricing on capacity for '26 at this point?

Yes. This is always a tricky game. At the prices we get, we have a reasonably good return. We also want to ensure that our guests get good value for their money. So we should be careful that we don't get overly excited also. But it's a balance we strike. I think we are in a good spot now. We might possibly, when you look at things backwards, might have pushed the price a little higher. But I think we're quite satisfied with where we are.

Sure. So I think we don't provide guidance, but we have that as our goal of mid-single digits price growth. Our pricing increase in addition to our capacity increase will lead to great revenue and EBITDA growth, not just in '25, but also in 2026. Overall, the consumer is showing signs that it's healthy. They're engaged, they're booking, and we are demonstrating that our goals of mid-single-digit price increases are achievable.

We're fortunate because we believe we are somewhat contrarian. We have been able to contract ships at very good prices. We are also good negotiators when it comes to shipyards. The ships that we now have on the books have been acquired at fairly attractive prices, which gives us an advantage over anyone wanting to expand their position or enter this market.

Just looking at your booked revenue per crew day for 2026 and that up 4%. It sounded last quarter like you had maybe expected that would tick up over the course of this year. Is maybe the expectation that it won't tick up, that it will sort of stay at this level? So maybe a little bit of a different view than you had last quarter?

Yes, I can start. We have said mid-single digits, and we didn't give guidance that we thought it would tick up. I just wanted to clarify that.

I agree with what Leah just said. I think in our last call, we mentioned that if market conditions remain, we do feel that we would get to our mid-single-digit goal. We'll reiterate that we feel our capacity increase plus our yield increase would lead to good, healthy EBITDA growth.

Tor, Leah, I just wanted to ask one more just on 2026 pricing. Obviously, across the portfolio, it held steady from your last update. I guess, are there any mix offsets that we should be aware of?

We've talked a lot about how we operate as one brand, and we feel that really differentiates us. Year-over-year price changes will always be dependent on what is sold. We price to demand, and with $800 to $900 per day in revenue achieved across all our products, we feel well-positioned in how our curves look for 2026.

I wanted to follow up on that last question about 2026 advanced bookings per PCB. It seems that river bookings are accelerating slightly while ocean bookings are slowing down a bit. Should we expect these trends to continue?

I wouldn't say that the growth has much to do with the pricing on the Ocean segment. The growth we see in our Ocean business is a clear manifestation of the outstanding products we have on the Oceans. I think we see good growth opportunities on the Ocean. The River business is also in very good shape. We are in an excellent position on both of the products.

So I wanted to ask about some of the puts and takes to gross margins associated with thinking about the gross pricing you have in your advanced bookings versus what we're seeing in net yields, which look like they've been a little bit better.

What we provide in our booking curves are what generally would be booked, cruise, land, air, etc. In our net yields, we do include costs, onboard spend, and ancillary revenue. There will be a difference, but we have done a good job of keeping rates up.

I just wanted to go back bigger picture to the capacity growth piece. Looking at long-term, even beyond '26 and '27, what gives you confidence in filling that capacity at the right price?

When we move to new destinations, we typically go with smaller vessels, and smaller vessels do need higher prices. We cannot do anything stupid. Our market research has shown that people want to go to interesting places, and we believe we have more expansion opportunities.

On new markets like Egypt and India, you talked about how you have seen a lot of demand already. I'm curious if those new markets are dilutive to your overall pricing strategy. And how do you assess new markets in general?

I think in Egypt, nobody comes near the vessels we are building there in quality. Similarly, India has also demonstrated high demand. We conduct extensive market research and feel that we know what our guests want. There are expansion opportunities, especially in China, which is a significant potential market.

As mentioned, we do not expect unrealized currency losses to recur throughout the rest of the year. We have hedged for a portion of our '25 and '26 results which allows us to navigate currency exposure effectively.

Our philosophy has always been to finance our vessels in dollars, but on this occasion, we had to do it in euro. We should not take unnecessary currency risks.

Thank you. And I will now turn the conference back over to Tor Hagen, Viking's Chairman and CEO for closing remarks.

Thank you everybody for joining today's call. I appreciate the support and interest in Viking, and we will see what the future brings. Thank you very much.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.