Viking Holdings Ltd Q4 FY2025 Earnings Call

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 Holdings Ltd's fourth quarter 2025 earnings conference call. As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press 1 on your telephone keypad. If you wish to remove yourself from the queue, please press 2. Thank you. 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 Holdings Ltd's fourth quarter and full year 2025 earnings conference call. I am joined by Torstein 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 statements 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 at ir.viking.com. Torstein and Leah will provide a strategic overview, a recap of our fourth quarter and full year results, and an update of the current booking environment. We will then open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is also available on our investor relations website. With that, I am pleased to turn the call over to Torstein.

Thank you, Carola. Good morning, everyone, and thank you for joining us today. In our first full year as a public company, we have delivered very strong financial results. I believe we accomplished a great deal as our business continues to grow. If you turn to slide 3, I will begin by highlighting our fleet, which remains at the center of our strategy. 2025 was marked by the significant milestone of surpassing 100 ships. I believe that this accomplishment reflects our innovative approach and decades of thoughtful growth. From our humble beginnings in 1997, with just four river ships and two cell phones, we have certainly built a global business that now operates on all seven continents, spanning river, ocean, and expedition cruising. Today, our fleet consists of 89 river vessels, 12 ocean ships, and two expedition ships. All share the unique Scandinavian design and deliver the consistency and quality that our guests expect from Viking Holdings Ltd. As part of our ongoing fleet expansion, we will soon operate the world's first hydrogen-powered cruise ship, capable of operating part of the time with zero emissions, something I am particularly proud of. We believe that innovation should be practical and thoughtfully implemented. Also during the year, we continued to expand into new and exciting destinations. A highlight was the announcement of our new river itineraries in India, a region rich in history and cultural depth. At the same time, we increased our footprint on the Nile and Mekong Rivers. In parallel to all this, we strengthened and expanded partnerships across the architectural and scientific institutions. These partnerships support brand awareness and local engagement among our target demographic. Moreover, in many cases, they also introduce opportunities to enhance our guest experience via unique privileged access unavailable through other travel providers. As you can see, we pursue growth with intention, expanding access, increasing choice, and enriching the cultural experiences that set Viking Holdings Ltd's product apart. I am very pleased that the milestones we achieved in 2025 supported an exceptional fleet and, with it, an exceptional financial performance. Regarding our fleet, you can see on the next two slides some of the features that make our ships such a strong driver of our results. I will start with ocean on slide 4. As it pertains to our ocean fleet, we are one of the youngest fleets in the cruise industry. Our state-of-the-art efficient design eliminates wasted space and extra weight onboard while maximizing guest comfort and optimizing fuel consumption. Moreover, our ocean ships, with a sleek hull design and closed-loop scrubbers, allow us to use more cost-efficient fuel. These attributes help us manage fuel costs in times of adversity. The layout and onboard offerings of our ocean ships also allow us to operate with fewer crew, without diminishing our high level of service. All these elements improve ship profitability. If we now focus on river on slide 5, most of our river vessels are Longships, a unique type of ship designed for European rivers. These ships include design features such as patented asymmetrical corridors and a square bow that allows for three full decks. With this design, we can accommodate up to 190 guests, which is more than the average European river vessel, improving the Longship profitability. As it pertains to fuel costs, the river operation has fixed-price contracts for a significant portion of the 2026 season. Within each product, our ships are indistinguishable to our guests. Potential guests shop by itinerary rather than a specific ship or age of ship, and it allows all the ships to achieve similar yields even when introducing new ships. On average, based on contribution to operations, the payback period for an ocean ship is about five to six years, and the payback period for a Longship is about four to five years. Taken together, these characteristics show how the design efficiency and consistency of our ships translate directly into very good financial performance, particularly strong in 2025. Now turning to slide 6, you can see that we increased capacity by 12% year over year. This reflects the expansion of our fleet and the continued demand for our product. At the same time, our net yields grew 7.4%, demonstrating our ability to attract high-quality demand and to maintain pricing power. Together, these factors drove a 21.9% increase in total revenue, which reached a record of $6.5 billion in 2025. This strong top-line momentum translated into meaningful profitability. Our adjusted EBITDA reached almost $1.9 billion, an increase of 38.8% year over year, reflecting not only higher revenues but also the benefits of scale, operational efficiency, and disciplined cost management. Finally, our adjusted net income was $1.2 billion, 43.9% higher than last year. We are very proud of this performance, given the continued investments we are making to support our long-term growth. Now our 2025 performance is best understood and appreciated in the context of our long-standing track record of strong, consistent results. On slide 7, for 2025, every major financial metric outperformed the compound annual growth rates shown on the slide, which are all very good. I believe that these trends reinforce that our 2025 results were not driven by a single good year but by sustained demand, long-term planning, disciplined execution, and a strong business model. Additionally, on slide 8, you can see in a measurable way the strength of our demand. Viking Holdings Ltd has consistently increased capacity by increasing yields and maintaining high occupancy levels. Together, these trends reflect the long-term resilience of our business and our ability to execute consistently. In this context, strong financial performance is part of the story. It is also important to review additional metrics that validate our growth trajectory. These are on slide 9 and highlight the depth of our guest loyalty, our market position, and the strength of our balance sheet. In 2025, 54% of our guests sailed with Viking Holdings Ltd as repeat travelers, a number that continues to grow—a clear sign of the trust they place in our brand. Moreover, more than half our bookings were made directly through Viking Holdings Ltd. This provides a meaningful long-term advantage in how we manage demand and engage with our guests. On top of this, we continue to hold a leading market share position, with a 52% share of the North American outbound river market and a 27% share of the luxury ocean market. In addition to all this, we managed our balance sheet well. We ended the year with a 45.8% return on invested capital and a net leverage ratio of 1.1x. Overall, these results reflect our ability to achieve profitable growth by staying true to our principles of financial discipline and long-term value creation. Beyond the financial results, this consistency is also reflected in the recognition we continue to receive from our guests and the industry. On slide 10, we have highlighted some of the many accolades we have received during the year. These awards are particularly meaningful because they are based on guest feedback, reinforcing that our differentiated approach continues to resonate with our core demographic. In closing, I would like to highlight that even as business continues to evolve, the principles that define Viking Holdings Ltd and guide every decision we make are unchanged. And these principles are shown on slide 11. First, we remain unwavering in our commitment to obsess over our guests, making sure that we deliver an excellent travel experience at good value. Second, we continue to treat our employees as part of our extended family, recognizing that their dedication and care are central to everything we do. Third, we will continue to take a contrarian approach when we believe it serves the long-term interests of the business. Finally, we continue to do what we believe is right for the environment. With that, I will return to Leah to discuss our financials.

Thank you, Torstein, and good morning, everyone. We are very pleased to report a strong fourth quarter, capping a year of exceptional financial performance. On slide 13, you can see our key financial metrics. On a consolidated basis and for the fourth quarter, total revenue was $1.7 billion, increasing 27.8% year over year, driven by higher capacity, higher occupancy, and higher revenue per PCD. Adjusted gross margin was $1.1 billion, up 27.3% year over year, resulting in a net yield of $546, 7.7% higher than 2024. Vessel operating expenses, excluding fuel per capacity PCD, increased 2.6% this quarter compared to the same time last year. Adjusted EBITDA totaled $463 million, an improvement of $157 million, or 51.3% over 2024. I will highlight that our adjusted EBITDA margin reached 41.8% this quarter, representing an increase of 663 basis points compared to the same period last year. Net income for 2025 was $300 million compared to $104 million for the same period in 2024. The net income for 2024 includes a loss of $96 million from the revaluation of warrants issued by the company due to stock price appreciation. 2024 was the final quarter impacted by the warrant revaluation. Lastly, adjusted net income attributable to Viking Holdings Ltd was $298 million, and adjusted EPS was $0.67, 48.3% higher than 2024. Overall, we are very pleased and proud to close the year with a great fourth quarter, delivering strong revenue growth and meaningful margin expansion. Now I will briefly discuss our two reportable segments on slide 14. Unless noted, I will be referring to metrics for the full year ending December 31. For the river segment, our capacity PCDs increased 6.5% year over year. The increase was driven by the addition of two vessels delivered in 2024 and six vessels delivered in 2025. During the 2025 season, these vessels operated across multiple regions of the world, including Europe, Egypt, Vietnam, and Cambodia. Adjusted gross margin grew 16.2% year over year to $1.9 billion and net yield was $578, up 8.4% year over year. Occupancy was 96% for the year. For ocean, capacity PCDs increased 17.9% year over year, driven by the delivery of the Viking Vela in December 2024 and the addition of the Viking Vesta in July 2025. Adjusted gross margin increased 30.9% year over year to almost $2.0 billion, and net yield was $572, up 9.7% compared to the previous year. Occupancy for the period was 95%. As Torstein mentioned, these great results reflect the strong demand from our core consumer, the loyalty of our guests, the value of our premium products, and the dedication of our employees to deliver exceptional experiences across all seven continents. I will now shift our focus to some metrics related to the balance sheet. On slide 15, you can see that we have a strong liquidity position. As of 12/31/2025, we had total cash and cash equivalents of $3.8 billion and an undrawn revolver of $1.0 billion. Our net debt was $2.1 billion, and we finished the year with a net leverage ratio of 1.1x. On slide 15, you will see our current bond maturity profile, with all maturities falling in 2028 and beyond. In addition, as of 12/31/2025, deferred revenue totaled $4.6 billion. Taking these factors together, we believe that our liquidity position remains a clear source of strength, supported by ample balance sheet flexibility and a long-dated bond maturity profile. This position gives us the confidence in our ability to support operations, invest in our growth, and pursue strategic opportunities as they arise. With this, I would like to confirm our debt amortization for 2026. As of 12/31/2025, the scheduled principal payments were $397 million. From a committed capital expenditure perspective and for the full year 2026, the total expected committed ship CapEx is about $1.4 billion, or $500 million net of financing. With that, I will hand it back to Torstein to discuss our business outlook, including our booking curves.

Thanks, Leah. If we move to slide 17, you will see that 2026 is shaping up to be another great year as the demand for our core products continues to be very strong. As of February 15, we were already 86% booked for the 2026 season. This is in line with the same time last year, while our capacity is increasing by 7%. We have $6.0 billion of advanced bookings, which is 13% higher than the 2025 season at the same point in time. Let's now review the booking curves, which are all as of 02/15/2026. On the next slide, you will see our curves for ocean cruises; this is slide 18. The yellow line shows the bookings for 2026. As you can see, we have sold $2.7 billion of advanced bookings, which is 16% higher than last year at the same point in time. Our operating capacity is up 9% in 2026, and we have already sold 87% of this capacity at very good rates. As of February 15, advanced bookings per PCD were $787, compared to $746 at the same point in 2025. Our fleet expansion for ocean continues to advance in a prudent and strategic manner. This year, we expect two new ocean ships to join the fleet: the Viking Mara during the second quarter and Viking Libra in the fourth quarter. It is important to note that this year's capacity growth comes on top of an 18% capacity increase in 2025. Taken together, the momentum underscores another strong year of demand for our ocean business. If we move to slide 19, you will see the curves at river cruises. Now before we move on, I would like to provide an update regarding our river build program. One of our shipyards informed us that they experienced temporary technological disruptions and resource availability issues, which affected certain production lines. As a result, delivery timelines for eight of our Longships have been adjusted. The two vessels originally scheduled for December 2025 will now be delivered in 2026. Additionally, as the yard works through the impact of workflow sequence, six ships originally scheduled for delivery in 2026 will now be delivered later in that year. As a result, we have adjusted our 2026 capacity for river, which is now 6% higher than 2025. Last quarter, we reported a 10% increase. Importantly, the yard has assured us that these disruptions are temporary, and they have already implemented corrective measures. Their teams are working to restore full technological functionality and are allocating resources to return to their regular scheduling cadence. We are in continuous communication with them, and we remain confident in their ability to deliver the vessels within the updated timeline. We believe that the impact of these changes to the advanced booking curves and our financial metrics for 2026 are immaterial. Moreover, while these adjustments shift certain delivery dates, they do not affect our long-term growth plans. We will now turn attention again to the booking curves. Advanced bookings for 2026 are shown by the yellow line, which follows a great trajectory. For river, we have already sold $2.8 billion, which is a very good number, 10% higher than last year. Overall, we sold 85% of our operating capacity at very strong rates, averaging $906 per day, compared with $841 last year. It is a very good trend for 2026, and they offer a clear illustration of the strength of demand. Our focus at this time is on selling the remaining capacity for the 2026 season, preparing for the start of the primary river cruising season, which begins in April. We will not be sharing information on future seasons yet; however, please note that both the 2027 and the 2028 seasons are open for sale. Now Leah will add some color to our order book and capacity.

Thank you, Torstein. Moving to slide 20. Since our last earnings release, we entered into option agreements for two additional ocean ships to be delivered in 2034, bringing our total planned additions, including the options, to 16 new ocean ships over the next nine years. We also entered into shipbuilding commitments for two additional expedition ships, scheduled to be delivered in 2030 and 2031. We are very pleased to add these ships to our order book as demand for the Viking Holdings Ltd expedition product remains very strong. This is a product that truly resonates with our loyal guests, who are eager to explore new destinations with Viking Holdings Ltd. By adding two more ships, we can thoughtfully scale a category where our brand has been recognized for delivering exceptional travel experiences. As it pertains to our 2026 capacity, similar to past seasons, more than 70% of the capacity from our core products in 2026 will be in Europe. Before we close our prepared remarks and move into the questions, I want to bring you up to date on the current developments in the Middle East. We are monitoring developments closely, particularly as they relate to our operations in Egypt, which represent roughly 2% of our overall capacity. We are prepared to make adjustments in operations if this should become necessary from the point of view of the safety and comfort of our guests and crew. I will also highlight, as Torstein already mentioned, that as it pertains to fuel, our river operation has fixed-price contracts for a significant portion of the 2026 season and our ocean fleet is designed with fuel efficiency in mind. While we continue to monitor these developments and their potential implications for our business, our thoughts are with all those impacted, and we hope for a swift de-escalation and a path towards lasting peace. With this, I conclude our prepared remarks. I will now turn it back to the operator to take questions.

Thank you. We will now open for questions. In the interest of time, we ask that participants on today's call limit themselves to one question and one follow-up. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset. Please hold while we poll for questions. The first question today is coming from Steven Wieczynski from Stifel. Steven, your line is live. Please check your mute button.

Sorry about that. Can you hear me now? All good? Okay. Thanks. Good morning, guys. So, Torstein or Leah, if we think about 2026, we can clearly see the curves, and we can see that the curves have essentially normalized versus where we were at this point last year. You are now coming off, you know, I think it is four straight years of yield growth north of 7%. So I guess my question is, if we think about 2026, and look, I fully understand you do not give firm guidance, but based on the curves and advanced bookings and the fact you are almost 90% sold, seems like yield growth will still be very solid this year, somewhere in that 5% to, let us call it, 7% range. Am I kind of thinking about it the right way?

Hi, Steven. Good morning. I think we will point you back to the curves, which is what you have referenced. So as of what we see today, we do have 86% of our bookings currently sold with a 13% advanced booking growth with a 7% capacity PCD increase. What you can also see is that we have been able to maintain that cadence from 2017 to 2025. I think the curves speak for themselves, and I do not know that we can say much more than that, but I think that your extrapolation makes sense from our point of view today.

Okay. Got it. And then second question, want to go back to the current, you know, the uncertain geopolitical backdrop. You know, obviously a lot going on around the world, especially in the Middle East, which, Leah, you touched on in your prepared remarks. But maybe for Torstein, wondering if you could give us a reminder of how your business, you know, especially on the river side has performed when there has been uncertainty in that region. Trying to understand if we should be expecting any material change in demand in the near term until there is more clarity around what is going on in the Middle East. Thanks.

Maybe I could give a long-term perspective on this. As you know, I have been in this business for a long time. Many, many years ago, events like this would have been creating tremors in many boardrooms. I think American customers, particularly the type of customers that we have, are well educated in the world, and they know where different places are. What we have seen in the past is that we have not really been significantly impacted. You have a little blip when things happen, and then they go back to normal. Things happen very rapidly in the Middle East situation, of course. For example, we had a group in Jordan earlier in the week, and there were 107 people. We asked them, does anyone want to go home? Two of them said they would like to go home. People are fairly relaxed about all this. Of course, the travel warning that came out last night after this was recorded changes things a bit. Hopefully, that goes away too. It is a very limited part of our inventory related to Egypt, and Egypt is far away from where the troubles are. Travel warnings are never nice, and maybe they are basically something real. But I think our guests are really quite well versed in where bad things happen. We do not minimize it, but I think things come and things go, and we will deal with it, of course, always taking care of our guests.

So, Steven, I would also like to add that, as Torstein mentioned, our guests are fairly well educated. They know where areas of conflict are relative to where they will be traveling to. But also, we are 86% sold for the 2026 season, and that is another benefit of the curves; that we have the ability to wait out or wait for consumer reaction to catch up. For 2026, we are still solidly booked, and then we have time to address any reactions that the booking curve may have to current geopolitical events.

Okay. Got it. Thanks for the color. Thanks, Torstein. Thanks, Leah.

Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live.

Great. Thank you. Just looking at your, what low you have ending the year, can you talk a little bit about whether at this point you might think about a dividend or something that, you know, one could argue is not, you know, the most efficient capital structure given how low your leverage is? Thanks.

Hi, Robin. Good morning. Yes. So I think events that are happening currently remind us why the company likes to have strong cash balances and why we like to be prudent with our balance sheet. But having said that, I think it is still a little bit premature for us to think about share repurchases or dividends—not something that we would necessarily rule out, but we do have a strong order book, and we do have options that are quite far out. So for the time being, that is not something that we would entertain but not to be ruled out for the future.

Okay. Thank you. And then for my follow-up, just on the addition of two more expedition ship orders, I feel like in the past, I maybe remember Torstein saying that expedition, while it is much higher priced than a lot of the other river and ocean product you have, that maybe there was not as much growth in demand there just because there is a lot of expedition capacity that is out there. So I am just wondering if these two expedition ship orders kind of signal that maybe there has been an increase in demand on the expedition side that you are seeing over the long term, or maybe these ships are going somewhere that is different than where your current expedition ships are? Thanks.

I think we plan to deploy these vessels pretty much in the same itineraries as the current vessels. Of course, it has been a while since the first two were built. When we look at booking curves, which we have also for expedition—we do not share it with you at this time—you will see that bookings there are very strong, since our supply has been limited. You can almost read out that something needs to be done, and that is why I placed the order.

Thank you. The next question will be from Matthew Boss from JPMorgan. Matthew, your line is live.

Thanks, and congrats on another nice quarter. So could you elaborate on the acceleration in advanced bookings per PCD to 6% growth relative to 5.5% three months back? Maybe just within that, what are you seeing from repeat guests relative to new-to-brand customers?

Hi, Matthew. I hope you are doing well. I think, obviously, the price going from 5.5% to 6% is a good indication of how demand is looking for us. We are 86% sold, so we have a little bit more to go. Our goal is always to balance both price and our guest experience, feeling like they got good value for the experience they received. I think we still aim for that mid-single-digit yield growth—that is something that is still a focus for us for 2026. As it relates to new-to-brand and past passengers, we do have a slide in the deck. Our past guest repeat rate for the 2025 season slightly ticked up between the two. We are pleased with that. It was about 1%, so we are still seeing a good balance.

Great. And then maybe, Leah, could you speak to the strength in ocean pricing that you are seeing? Advanced bookings per PCD accelerated by 100 basis points versus three months ago. Any change in demand momentum at all that you are seeing for your European sailings today?

Sure. So for the ocean bookings, I think we do have dynamic pricing. We react to what the demand or consumer interest is. What you see there is in response to that. But it remains the same answer; we want to be thoughtful about pricing increases. Our goal is the mid-single-digit increases in yields year over year, and really, it is about having the value proposition for our guests because of that repeat. The importance is for us to make sure that the guests do not see this as a one-off travel experience for them; rather, it is something that they want to continue to do as they think about their future journeys.

It is great color. Best of luck.

Thank you.

Thank you. The next question will be from Conor Cunningham from Melius Research. Conor, your line is live.

Hi, everyone. Thank you. Maybe to keep along that line of questioning, I was hoping to get your perspective on occupancy versus pricing going forward. I mean, your occupancy is basically at all-time highs, I think, now. So just how do you approach the strategy going forward in general? Do you still see upside to occupancy overall? I think 100% is pretty difficult. Just any thoughts there would be helpful. Thank you.

Yes, that is exactly right. Unlike other ocean cruises where they have triples or more than two people, we only have two people per cabin. Thus, our occupancy will never be more than 100%. With single supplements or people who travel singly, that brings down our occupancy one to two percentage points. I think with our goal, what you see, 95% occupancy, that is essentially sold out. Our strategy is to sell out the ships and manage the price increases as we have discussed, creating value for guests, making sure they find the value attractive.

Okay. Helpful. I just want to ring-fence the two issues that you flagged a little bit here. Just on the delivery delays from the river ships, is there any reaccommodation expenses associated with that that we need to be aware of? On the 2% Egypt exposure that you talked about, is that a good proxy for its overall contribution to profitability as well? Thank you.

Yes. I am not sure I understand your question on the dealerships, but let me try. Of course, it is a delay, so the revenue will be impacted this year; not so much; it will be impacted. The operating costs offset that. There may be some other offsets we can have. It has happened, but things happen. We are very pleased to say that from all we can see, it is now entirely under control, and the ships should be delivered as now indicated. The 2027 deliveries should not be impacted at all.

On the delay—you know, that is one of the benefits of our identical vessels, particularly in river. Our guests book based on itinerary, not necessarily what is new coming online, and so we were able to accommodate some of them to other ships that are traveling in the same itinerary that they had originally booked. So there are minimal, if any, reaccommodation expenses. Regarding Egypt, we are in the process of notifying guests that we are temporarily pausing Egypt itineraries through 03/31/2026. It is really important for us that our guests feel safe and our crew feel safe. This represents about 40 voyages with less than 3,000 guests impacted. Egypt is only 3% of our total capacity, so we do not see this as a material impact on the business.

Very helpful. Thank you.

Thank you. The next question will be from James Hardiman from Citi. James, your line is live.

Hey. Good morning. Just as a clarification, I think you already answered this effectively, but the river yard issues do not seem like that is impacting the booking curves at all. If so, let me know. But then anything that you would be willing to share in terms of the monthly booking trends past 2025, right, past the end of the quarter? I think it was a year ago where you both first spoke to some softness in February. We have now lapped that. Maybe any update there would be great.

As far as the booking curves, I think we point back to the curves. We had a strong first couple of months of the wave season, and you see that with the 86% sold and the pricing increases that we presented today. There was a second part to your question that I think I might have missed. Can you repeat it?

Just the river yard delays, if that impacted that curve in any meaningful way.

Yes, and so I point back to the answer, which is it does not really affect the curves in the sense that, because the ships are identical, we were able to reaccommodate most of the guests who were impacted to continue sailing in the itineraries they had originally booked. So they are shopping based on itinerary and not necessarily vintage of ship.

Got it. And then, you know, obviously, it is too early to have any quantification on 2027. But I just wanted to hear any color on those Indian river itineraries, just given that they are what is going to be new for next year. Any thoughts on initial demand trends there? How should we be thinking about that market? How does that pricing compare? I know when you got into Egypt, that was a nice pricing sort of benefit that showed up in some of these curves. But any thoughts on India as we look to next year?

Sure. So India was first open to our past passengers, and it was overwhelmingly supported by them. We were sold out in a few weeks as soon as it opened, and it is yielding at higher rates, similar to how Egypt is pricing. Linh, do you have any additional color you would like to share?

No, I agree. I mean, I think our past guest support and loyalty is great. It is reflected in new itineraries when we open for sale, and that was no different with India.

That is really helpful. Thank you.

Thanks.

Thank you. The next question will be from Andrew Didora from Bank of America. Andrew, your line is live.

Hi. Good morning, everyone. So the 86% booked for this year—obviously very strong—seems fairly consistent with where you have been the last several years. Maybe if I nitpick, maybe ask about the 14% that is not sold. Just curious of what is not sold—what is the type of product or type of itinerary that is left to sell? Just kind of want to get a sense of what makes up that remaining 14%. Does that typically come at a premium, at a discount, kind of yield neutral? Just curious what is left out there.

Sure. Hi, Andrew. I think, given we are sitting here in early March—our curves are as of mid-February—what is generally remaining to sell is the fourth quarter. That is our quote-unquote low season. Guests do book closer in. We have remaining cabins in the third quarter, etc. But the majority of that 14% is the fourth quarter, similar year over year.

Got it. And then appreciate the commentary on fuel. I know it is a small part of your cost structure, but I guess Brent is up 4%–5% or so this year. Just your fuel cost in 2025 versus 2024 were pretty flattish. I would expect that to change this year. Any color you can give just in terms of a $20-plus move in crude, what kind of the like-for-like EBITDA impact could be on the business? Just want to hone in on that a little bit. Thanks.

Sure. I think, at the end of the day, we took a lot of time to design our ships to be fuel efficient. For oceans, we do use heavy fuel. Obviously, right now, the market is what it is. But I think the team has done a really good job of managing through times like this. We are monitoring where fuel prices are, and we will act accordingly. For rivers, we have entered into fixed-price contracts for a significant portion of the 2026 season.

Okay.

Thank you. The next question will be from David Katz from Jefferies. David, your line is live.

Hi, good morning, everyone. Thanks for taking my question. Congrats on the quarter and appreciate all the details so far. What I wanted to ask is that you obviously continue to put up outsized growth and project outsized growth with further capacity. How do you think about the depth of the market that you are growing into? Are there new-to-cruise customers that you are getting to explore? Are your existing customers sailing more? How do you think about a, say, total addressable market?

Yes. I think maybe we have even been a bit surprised with the fantastic demand we have had for our product, both the rivers and the ocean. When we analyze it and look at where our guests come from, we see that many of our new-to-brand guests both on the rivers and on the oceans come from the established ocean cruise lines, and they are really guests who are not so happy with being on huge ships with lots of screaming kids. You know our policy on kids and casinos and the like. They graduated from being on the noisy entertainment palaces to being on calmer, peaceful places where they can enjoy their books and themselves. I think we found a—a well, we knew what we did when we designed it, but I think we underestimated people's reluctance to being on these other ships. There is a good source of business for us. Of course, you have seen that some of the other people have started to come in our slipstream to see what they can do in the same field. We have not tried to quantify the total addressable market, but we have all confidence that the order book will be relatively easy to fill. That is all I can say.

Yes, and I would like to add to that. We have a huge brand awareness when it comes to river cruising, and that is also another avenue through which we expand into the total addressable market of people who would not ordinarily contemplate a cruise. When they join a Viking Holdings Ltd river cruise, they see that there is a different way to travel, creating a feeder into that addressable market for the other products that we have in our portfolio. It is a combination of our well-thoughtfully planned ocean and expedition, but also this enormous brand value that we have by being over half the market share in river.

Understood. If I may, I am past it, but I appreciate the screaming kid comment. With respect to other entries into the river cruising market, are you comfortable—and how should we be comfortable—that there is enough room in that marketplace for some new entrants to add some ships and that that is not going to have an impact on you?

I suspect all entrants into markets will have some impact. The question will be whether it is a negative impact or a positive impact. The negatives we all know about; the positives, you know, create even more buzz around the whole river cruise concept. I look forward to seeing the advertising when they say, are you tired of being on our big ocean-going trips? Try one of our river ships. I say, wonderful. Now let us see what their advertising will sell. I think we have a 29-year head start on them, so we should not really be unduly worried about it, I would say. I think it is similar on the ocean side, where you see that others are starting to copy us there too. They have been in the business for 50 years. I think we have done something right. It means we should not rest on our laurels but should build on them, for sure.

Thank you. The next question will be from Stephen Grambling from Morgan Stanley. Stephen, your line is live.

Hey. Thank you. Over the past three years, you have had gross margin expansion. Would love to just get your thoughts on some of the drivers of that and any considerations on how that may evolve not only in 2026 but beyond? Thank you.

Sure. I think we have approached the business with the guest first, and what Torstein has mentioned even in his early remarks. With that, we have been able to build our brand, deliver an excellent product, which has led to capacity increases, yield increases, and then we have been prudent with our operating expense. All those things combined have led to the margin expansion you see today. Of course, our hope is that we continue that into the future. The management team has done a great job, and so the goal is to continue that.

And sorry. I just want to make sure I zoom in on specifically gross margin rate. So thinking about the difference between net yield and gross pricing, right, your net yield or your net pricing has been above gross pricing. Normally, we think of that as being things like commissions, transportation, and so on. Anything in there that is permanent that should be driving it, and any impact from fuel prices going up that could influence how that flow-through could look in the year ahead?

Sure. I think, obviously, we try to be balanced when we approach pricing and cost. As the team works through those things, we do our best to ensure there is margin expansion. Historical performance is no promise for the future, but that is something we focus on. At the end of the day, we are getting the benefit of both price and being prudent with cost.

Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live.

Hi, thanks, everybody. So a question on—another question on costs. The marketing and sales line, you guys did not get a lot of leverage on that line in 2024. You did get a lot of leverage on that line in 2025. Another year of substantial capacity growth and you guys are now going to be spending, I assume, well over a billion dollars on marketing and sales. Maybe you could take us a bit under the hood here and just sort of talk through the leverage that you can get this year and what channels you might be expanding to sort of scale with this growing business?

I am going to think I understood the question, but I will give it a try. We do feel that we can leverage and scale SG&A. We see ourselves not just as a cruise operator but as a marketing company. We think about the tools available in the market now with respect to AI and machine learning. There are certainly multiple areas of the business where we can have a broader digital transformation strategy that would help with the cost. We feel there could be some scaling or leverage off of our SG&A as capacity increases.

Could I make a comment? Maybe I can make another comment in that regard. The way the accounting works, the marketing expenses are expensed as incurred. Of course, we are booking so far in advance. As we grow, you can say a large portion of our marketing expense this year is related to 2027 operations. A disproportionate amount of the expenses are charged to the current year rather than to the next year, to which they really are attributed. That is something one should take into account when evaluating these expenses, too. Just a comment.

No, that is great color. Thank you. I think what I was trying to get to is the SG&A per capacity unit. That is the line that a lot of us focus on. That was down year over year in 2025, which is great. The question is, can you keep that metric muted or sort of well below yield growth for the next year or two years?

We do not guide, but that is something that is certainly in our consideration set. We will try to leverage SG&A.

And the final question today will be from Patrick Scholes from Truist Securities. Patrick, your line is live.

Hi. Thank you for taking my question. You talked about 86% sold for this year. My question around that is how much of that is, we would say, locked-tight nonrefundable at this point?

Generally speaking, our guests not only book in advance, but they also pay in advance. What we found is that once they are booked and paid, there are generally very low cancellation rates. We encourage that by engaging them prior to their trip. We send them language lessons, things to look forward to, to ensure they are looking forward to the trip. Once they are booked and paid, the booking becomes generally very sticky. That is why we feel that showing these booking curves is the best factual indication of what the current season looks like.

My follow-up on that would be, let us just hope it does not happen, that things did really continue to escalate. There would be, you know, hypothetically, fear of travel, but your ships or your vessels were still sailing. Could those who have booked still, or what percent could still, cancel with a refund at this point down the road? Thank you.

Sure. Our cancellation policy generally starts to kick in around 90 days prior to sailing. But having said that, what we have seen in historical patterns is that our guests are quite versed in reading a map. They can see where the areas of conflict are and where they are planning to travel. They trust the brand, meaning we will not operate if we feel that it would be unsafe for our guests and crew. We have seen that in prior seasons where they wait for Viking Holdings Ltd to make announcements, or they may just push it out a little bit later. Our booking curves are pretty sticky. And another part of the equation is that, with being 86% sold, any cancellations—we still have time to resell that inventory.

Thank you. This does conclude today's Q&A session. I will now turn the conference back over to Torstein Hagen, Chairman and CEO, for closing remarks.

I want to thank everyone for joining us today on this call. I also thank you for your support and interest in Viking Holdings Ltd, and I wish you a great day. Have a nice one.

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