Good morning, everyone, and welcome to Viking's First Quarter 2026 Earnings Conference Call. I am joined by Tor Hagen, Executive Chairman, Leah Talactac, President and Chief Executive Officer, and Lynn Vaughn, Chief Financial Officer. 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. This evaluates 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 this statement. 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. Tor, Leah and Lynn will provide a strategic overview of the company, a recap of our first quarter 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 available on our Investor Relations website. With that, I am pleased to turn the call over to Tor.

Thank you, Corolla, and good morning, everyone. Today I am pleased to share an important leadership update with you. I will start by saying that it has been two years since Viking became a public company, and almost 30 since we began operations. Whether it was perfecting ship designs or pushing through difficult moments, The Viking executive team always brought determination, drive and discipline to every challenge. Their leadership, institutional knowledge and day-to-day execution have been critical to our performance and our success. As you can tell, I am very proud of what we have accomplished together. After thoughtful consideration, I will be stepping into the role of Executive Chairman and Lea Talaktaq, a current President and CFO, will assume the role of CEO. You all know Lea. Her appointment as CEO is a natural next step. Lea has worked for the company for almost 20 years and has been instrumental to Viking's growth and success. The Board and I have full confidence in our ability to lead Viking with the same continuity, discipline, and vision on which a company has was founded. Leah brings deep experience, a strong understanding of our culture, and steady leadership that Viking needs as we enter our next phase of growth. I am also pleased to share that Lynn Bond will serve as Chief Financial Officer. Lynn is a trusted leader within Viking, and her financial stewardship will ensure a smooth transition. As Executive Chairman, I will focus on our long-term vision. By supporting Leah in her new role, I will continue to serve as Chairman of the Board. I believe that this planned leadership transition shows the strength and depth of our Executive Team. It also reflects the succession planning that we have built over the years. It is designed to ensure continuity and stability for our guests, our people, and our shareholders. And with that, I will hand things over to Leah.

Thank you, Tor. I am honored by the appointment and deeply grateful for the trust placed in me by the board and by you. That trust is meaningful because you, together with our executive team, have built a phenomenal company over the past three decades. I am very fortunate to work alongside a team that is highly experienced and deeply committed to Viking's future. Turning to our business, as you can see from our first quarter results, 2026 is off to a strong start. The metrics reflect great demand for our products and disciplined execution across the business. As you can see on slide four, we are already 92% booked for 2026, which positions us very well for the remainder of the year. With 2026 mostly booked, our sales and marketing focus has shifted towards 2027, which has great momentum. The season is already 38% booked, with the capacity for our core product increasing by 15% over 2026. As we think about demand more broadly, I will take a moment to address the current macroeconomic environment. Historically, with geopolitical events occur, we have seen a short-term softening in bookings as our guests take time to process the new developments. After the last earnings call, we experienced a temporary slowdown mostly in river bookings for the 2026 season. Demand has since rebounded, reflecting that travel remains a priority for our customers. With this context, I will highlight two of our core strengths that are especially relevant and position us well in this environment. First, our advanced booking curves and a long booking window provide exceptional visibility. With 2026 mostly sold out and 2027 already off to a strong start, we have a high degree of confidence in our forward outlook. This is supported by low cancellation rates within historical averages, reflecting the sticky nature of our bookings. Second, our direct marketing engine and well-defined loyal customer base allows us to proactively generate demand while maintaining pricing discipline. As a result, while we remain mindful of the broader macroeconomic backdrop, we are confident in the resilience of our business model. Our guests continue to prioritize travel supporting sustained demand. From an operational standpoint, recent developments have implications for fuel costs. Higher fuel prices did not impact our first quarter results due to timing, but we expect some effect as the year progresses. Having said that, our river operation benefits from fixed price contracts for a significant portion of the 2026 season contracted for in 2025. On the other hand, our ocean operation has greater sensitivity to market movements. Importantly, we are able to mitigate some of the impact of fuel cost volatility because our ocean fleet has been designed with fuel efficiency in mind. Fuel represented approximately 4% of our adjusted gross margin in 2025, providing helpful context for the overall exposure now moving to slide five i will highlight several updates related to our fleet where we continue to expand and support the growth of our global operation in march the viking eldr joined our growing number of longships sailing the european rivers and we acquired the viking yijun further strengthening our ocean lineup as part of our strategy to grow chinese demand we are increasing our itinerary offerings for example this year, we introduced new ocean voyages in Europe tailored for the Chinese travelers aboard the Viking Idun. We are expanding our offerings to include ocean voyages, enabling cross-selling, optimizing the use of our ships, and increasing our ability to deliver the Viking experience to more guests worldwide. We also made meaningful progress across our new build program for Egypt. This quarter, we celebrated the float-outs of two river vessels bound for the Nile and to be delivered later this year. We also announced two additional vessels, now in order for 2028. Nitinaries in Egypt consistently generate some of the highest yields in our river portfolio and deliver great guest satisfaction scores. This continued investment reinforces our position in one of the most iconic river destinations in the world. Another important milestone this quarter was the float-out of the Viking Libra. It will be the world's first hydrogen-powered ocean cruise ship capable of operating with zero emissions. This ship will be our most environmentally advanced to date, and a clear reflection of Viking's commitment to innovation and sustainability. And finally, I would like to highlight a meaningful recognition of our business. This past April, Viking was named among time's most influential companies. The company was recognized in the disruptors category and was also highlighted as one of the 10 most influential companies shaping the travel and tourism sector in 2026. We are proud that our contrarian approach continues to resonate as we stay true to what makes Viking different. Now, before we turn to our financials for the quarter, I want to take a moment to congratulate Lynn Vaughn on her appointment as CFO. Lynn is a trusted colleague and a great friend. Many of you are already familiar with her, as she has joined us in previous earnings calls. Since joining Viking almost 20 years ago, she has held multiple positions within the accounting and finance department and is very well versed on Viking's financial responsibilities. With that, I will turn it over to Lynn.

Thank you, Leah. I am very grateful for the opportunity to serve as CFO and for the trust placed in me. With that, good morning, everyone. I will begin by reviewing our first quarter consolidated results and walk you through some of the drivers behind our performance. Overall, we are very pleased to have reported another great first quarter. On a consolidated basis, total revenue for the quarter increased 17.5% year-over-year to over $1 billion, driven by increased capacity and higher revenue per PCDs. Capacity was up 6.6% this quarter, driven primarily by the delivery of one ocean ship in 2025. Overall, this revenue performance reflects healthy pricing, a favorable itinerary mix, and solid demand. Adjusted gross margin increased 16.9% year-over-year to $717 million, resulting in a net yield of $596, 9.5% higher than the first quarter of 2025. As expected, vessel expenses excluding fuel per capacity PCD increased 10.6% this quarter compared to the same time last year. This was mainly driven by repair and maintenance costs across the fleet. As we have mentioned in the past, these expenses can vary between quarters depending on maintenance schedules and other operational factors. It is important to emphasize that our repair and maintenance work is incurred against specific projects rather than being quarterly managed. Now, turning to SG&A, we continue to invest in our people and in our sales and marketing capabilities to support growth and drive high-quality demand. At this point in the year, we are already marketing for 2027 when capacity for our core products is expected to increase by 15%. As always, we scale marketing in line with demand, capacity growth, and our strategic priorities. Adjusted EBITDA for the quarter was $105 million, 43.9% higher in the same period last year. This significant year-over-year increase was mainly driven by higher revenues across all segments. Net loss was $54.2 million, which is an improvement of more than $51 million from the first quarter of 2025. As a reminder, the first quarter of the fiscal year has typically been negative due to the seasonality of our business. I will now briefly discuss our two reportable segments, river and ocean. These are on slide 8. For the river segment, capacity TCDs decreased 8.4% year-over-year, and occupancy for the period was 93.7%, in line with last year. Adjusted gross margin increased 17.2%, and net yield was $761, up 28.3% year-over-year. Please note that for River, our core season runs from April through October. To this end, metrics from the first quarter aren't indicative of the full-year performance. With that, I will share a few drivers of the year-over-year changes in capacity and net yield. This quarter, we added capacity through new builds in Egypt and Vietnam, both regions with high yield and strong pricing power. At the same time, we intentionally removed lower-yielding winter capacity in Europe during January and February. This shift toward higher-yielding itineraries combined with continued pricing strength drove a maturely favorable increase in net yield, while the overall capacity was lower than last year. With respect to Ocean, capacity PCDs increased 10% year-over-year due to the addition of the Viking Vesta, which began operating in July of 2025. Occupancy for the period was 95%, slightly higher than last year. Adjusted gross margin increased 16.9% year-over-year, and net yield was $527, up 5.6% compared to the previous year, driven by higher pricing amongst most itineraries. Now moving to the balance sheet and our liquidity position. On slide 9, you can see that as of March 31, 2026, we had total cash and cash equivalents of $4 billion and an undrawn revolver of $1 billion. Our net debt was $1.9 billion, and to this end, our net leverage improved from 1.1 times as of December 31, 2025, to one time as of March 31, 2026. As of March 31, 2026, deferred revenue was $5.4 billion. Also on slide 9, you can see our bond maturity outlook with all maturities falling in 2028 and beyond. I will now confirm our debt amortization for 2026 and 2027. As of March 31, 2026, the scheduled principal payments for the remainder of 2026 were $174.4 million and $197.4 million for full year 2027. From a committed capital expenditure perspective, and for the full year 2026, the total expected committed ship CapEx is about $1.9 billion or $650 million net of financing. And for the full year 2027, the total expected committed ship CapEx is about $1 billion or $260 million net-up financing. With that, I will turn it back to Tor to review our business outlook, including our booking curves.

Thank you, Lynn. As you can tell, I will continue to present the booking curves. I find them very insightful and relevant for the business. These are all as of May 3, 2026. on slide 11 we show our consolidated metrics for our core products as you can see we are in great shape both for 2026 and the 2027 seasons the 2026 season is already at 92 percent booked so we're mostly done selling the current season advanced bookings equal 6.2 billion dollars which is 13 percent higher year over a year, and the capacity is increasing 7%. So we're in a very good position for 2026. And 2027 is shaping up very well too. Capacity will increase 15% in 2027, and we're already 38% booked. Advanced bookings equals $3.4 billion, and are 31% higher than the 2026 season at the same point of time in 2025. I will note that the 2027 curve reflects some timing and product mix that at this stage are positively impacting both volume and rate. Regarding volume, I mentioned that the capacity for the core products will increase by 15% in 2027. The drivers of this increase are the fuel year impact of ships being introduced in 2026, plus the additional one ocean ship and eight river vessels in 2027. Because of the timing of these deliveries, capacity growth will be slightly higher in the first half of 2027 than in the second half. Regarding rates, and besides strong pricing, there are some high-yield attenderies that are being sold earlier in the cycle due to reasons such as seasonality. Looking ahead, how the booking curve develops for the remainder of the 2027 season will depend on the inventory we have available to sell and how we dynamically price the rest of the season. As we have previously communicated, if macro conditions are stable, our long-term targets remains mid-single-digit yield growth across our poor products. Let's now talk about the advanced booking curves for the segments. On the next slide, you will see our curves for ocean cruises. This is slide 12. I will start with a yellow line, which shows the booking store 2026. Overall, we are sold 92% of the capacity PCDs for the year, and have $2.8 billion of advanced bookings, which is 17% higher than last year at the same point in time. Capacity will increase 9%, so you can tell that we have been booking at attractive rates. They equal $777 compared to $737 in 2025. If you now look at the grey line, you will see the booking trends for 2027 season. As of May 3rd, we have sold about 46% of the 2027 capacity version, which is increasing by 18%. Advanced bookings are 38% higher than the 2026 season at the same point in time in 2025. Please note that the capacity is increasing due to the delivery of two ships in 2026 and one ship in 2027. Regarding the rates, they equal $882 compared to $786 for the 2026 season at the same point of time in 2025. Let's move to slide 13, where you see the curves for the river cruises. I will start with advanced bookings for 2026, which is the yellow line. As you can see, 93% of the capacity was already sold as of May 3rd. We have almost $3 billion in advanced bookings, which is 10% higher than last year at the same point in time. The operating capacity for River will increase 6% year-over-year, and rates are equal to $878 compared to $828 in 2025. Like Ocean, we have had very little to sell for 2026, and our sales and marketing teams are now mostly focused on 2027 and beyond. Now, the grey line shows advanced bookings for the 2027 season. As of May 3rd, we have sold about $1.2 billion, which is 21% higher than the 2026 season at the same point in time in 2025. Operating capacity for the river will increase 13% year-over-year. driven by the growth in the fleet with 10 vessels being delivered during 2026 and 8 more scheduled for 2027 26% of the capacities or result and regarding rates these average $1,108 for 2027 up from $992 for 2026 as stated earlier and like the ocean curve rates at this stage are driven by strong pricing as well as the mix of what is being sold. In the case of river, there is a larger mix of attenders in Egypt and India which command higher than average yields. So, overall trends for 2027 are very good. A strong booked position, increased capacity and very good rates which gives us confidence that our consumer demographic remains financially resilient, prioritizing traveling and choosing Viking. At this point, Lea will add some color to our order book and capacity.

Thank you, Tor. Now turning to our order book and capacity, I will recap the updates since our last earnings call. As noted in the opening remarks, we took delivery of the Viking Eldir, a long ship for Europe. We acquired the Viking Idun, an ocean ship dedicated to Chinese guests, and we announced plans to build two additional river vessels for Egypt, scheduled for delivery in 2028. As we close today's call, I want to thank our teams, guests, partners, and shareholders for their continued support. We are encouraged to have started the 2026 fiscal year with strong financial results and a solid book position for both the 2026 and 2027 seasons. I am very proud to lead Viking as we continue to deliver great travel experiences that reinforce our brand, drive repeat business, and create long-term value for our shareholders. With this, I conclude our prepared remarks. I will now turn it back to the operator to take questions.

Thank you. At this time, we will be conducting a question and answer session. In the interest of time, we ask the participants to limit themselves to one question and one follow-up on today's call. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 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 before pressing the star keys. One moment, please, while we poll for questions. And the first question today is coming from Steve Wojcinski from Stiefel. Steve, your line is live.

Hey, guys. First of all, congratulations, Leah and Lynn, on your appointments. So my first question is around the 27 booking curves, which, I mean, look incredibly strong. With PCDs, I would say, running well ahead of what I think anybody was expecting at this point. So, you know, look, I assume a lot of that strength is just the booking curves going back to a more normalized, you know, a pattern meeting higher demand itineraries, cabin classes, you know, those are being sold first, which is, you know, which is probably somewhat backward versus this time last year. So wondering how we should think about those 27 booking curves moving forward and how you guys think they eventually settle. I know Tor said, you know, you guys kind of still think mid-single-digit range is still fair, but just, you know, maybe wondering if they could eventually settle a little bit higher than that versus what you're seeing right now from a demand standpoint.

Hi, Steve. Thank you for your kind words. As it relates to 2027, I mean, I think at the end of the day, our booking curves are the best indicator of consumer health. And where we are is very good. To your point, and what Tor mentioned earlier, the 27 curve does reflect some timing and product mix, which is reflecting positively on both rate and volume. How the curve develops for the remainder of the 27th season, that will really depend on the inventory we have available to sell and how we dynamically price the rest of the season. As we've previously stated, if macro conditions are stable, our target remains mid-single-digit yield growth across our core products.

And then the second question I want to ask about the cadence of bookings that you've seen recently. And, Leah, you noted, you know, you guys witnessed the short-term softening in bookings, which was mostly for the 2060s. And I guess wondering if you could walk us through maybe a little more detail about how long, you know, that lasted, maybe what you've seen more recently in terms of any material changes for, you know, certain itineraries or lack of demand for certain itineraries. And also if you could touch on cancellations, which I think you noted that, you know, are in your normal expected range, but any other color there would, you know, would be super helpful.

Hi, Steve. so thanks for thanks for the kind words as Lynn said as far as the demand from the consumer since the conflict began you know we we saw a slight softening excuse me but we did find that our consumers are highly resilient they responded quite well to tactical promotional marketing pieces that we sent out which is as the first thing we do to generate demand is to really get the Viking message across through our direct mail campaign. So we did find that once we were able to generate demand, the consumer responded quite appropriately. And you can see that in our booking curbs where we are largely sold for 2026 and quite off to a good start for 2027. And as far as cancellations are concerned, they are in line with historical trends. We don't see any significant increases in cancellation rates related to the current macroeconomic events.

Okay. Gotcha. Appreciate the color. Thanks, guys.

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

Thank you.

Double-digit capacity growth, mid-single-digit yields, you're making the point, is a clear baseline for the business. and that's this market share opportunity that you're taking across both river and ocean and how you see your...

So as you're aware, you know, we are the market leader in the river, North American passenger outbound, and our strategy for the river is really to maintain our dominance and that's reflected in our order book where we have 24 committed ship orders through 2028 with an additional 16 between 29 and 2032 when we think about where our opportunities are for gaining market share we're really focusing on the ocean luxury segment where we have ten committed ships between 2026 and 2031 with an additional six to be delivered in 2032 and 2034 and we feel that with being 24% of the luxury ocean market with our current capacity taking into account the what we perceive or what we see as additional tonnage and births entering that market as we also continue our building growth, you know, we really see ourselves taking up to 30 percent market share in that very attractive segment. And I think what really sets us apart is, you know, what defines us, such as we are, you know, one brand. The guests know what to expect when they come on board our ships. It's understated luxury. We are immersive in terms of our experiences and in delivering a product that is really about the destination and not about the ship itself. It's more like a floating hotel that you can use to explore the world in comfort. It's about the fantastic service that our guests experience with our phenomenal crew. And, you know, and really that is what sets Viking apart and which enables us to continue the growth trajectory that we have outlined. Great.

And then maybe, Lynn, just to elaborate on 2027. So as we think about the advanced bookings to start the year and some timing dynamics, as you cited, should we look back to 2024's curve as a comparison to how to think about the progression throughout the year? It sounds like we should bridge at least to mid-single digits, but just what would be some of the puts and takes to consider as the year progresses?

Hi, Matthew. Thank you again for the congrats as well. I think as we look to 2027 and how it plays out, honestly, each season and each curve will develop differently. It really is dependent on what's sold to date and product mix and what's left to sell. I think we feel good about 2027. It's off to a wonderful start. And, you know, as we said, if macro conditions kind of remain stable, our goal remains mid-single digit. And as you can see from historical, that's where we've landed pretty well. So I wouldn't necessarily say compared to prior seasons, given every season does develop differently.

Helpful caller. Best of luck.

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

Thanks, everybody, for taking the question, and congratulations again to Leah and Lynn. I have a question on marketing. You know, obviously, it sounds like pulling the marketing lever a month or two ago worked pretty well. You know, is that something that has to sort of remain, like, do you feel like you're still keeping your foot on the pedal with marketing right now, and what are the implications for SG&A unit costs this year from what you're kind of having to do now for 27 bookings?

Hi, thank you. As far as marketing, you know, it does remain one of our levers in terms of generating demand. And we, even despite the current macroeconomic conditions, that is a tool that we use in order to fill the capacity of our growth. And we feel that that's really what separates us apart from others in the industry, our ability to interact with our consumers on a consistent basis to generate demand. So I think what you'll see is that, you know, we will manage it dynamically according to what we see both in the marketplace and according to how bookings come in, but marketing will always be our lever. Having said that, you know, we do anticipate having some efficiencies in SG&A related to marketing, especially as we start to leverage some of the tools that we've invested in that would allow us to optimize, for example, human and LLM searches, you know, tools that we may have put into place to increase conversions when we're able to personalize guest experiences on our website and able to really interact with that consumer and tighten the sales funnel. So there's certainly opportunity there.

Okay.

But, you know, you must keep in mind that we are generally marketing today for tomorrow. So we are expensing today expenses that are supporting the growth for next year. So for example, next year we have a 15% capacity growth.

Okay, that's great, Collar. I appreciate that. And then another question would be on flights and that sort of the ratio to which you kind of book flights in coordination with when you're selling tickets. And really the question is, you know, we don't really – we're not really concerned that your customer can't afford an increase in flight prices. But, you know, you guys, I don't think you book the flights out for your customers at the exact same time as they book tickets. So how much, you know, is left to book this year relative to how much you are booked on tickets? And is there any sort of plans to maybe for next year to book that closer to one-to-one just to sort of, you know, reduce any chance of volatility between that gross and net line? Thank you.

So, you know, given our customer demographic, as you can imagine, many of our guests do or want biking to deliver an end-to-end experience. So, historically, a significant portion of our guests do purchase air with biking. That being said, biking maintains agreements with the major airline alliances to secure inventory for our guests. So, when a guest does elect to book air with biking, we try to book tickets promptly. However, you know, final routings and schedules are determined by carriers, and they may affect availability and pricing. But that being said, we do try to book the air for our guests as properly as possible.

Okay. Super helpful. Congrats again. Thanks.

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

Great. Thank you very much, and congrats to Leah and Lynn. I wanted to ask, sort of going back to the 2027 curve, if we look at the last three years, you basically ended up with net yield within about two percentage points of where you first give us this change in book draft per day. And, you know, definitely understand every year that product mix and timing is different because sometimes it's been two points higher, Sometimes it's been two points lower. I guess would you say that what you have with product timing and NICS this year is much more unusual than those normal fluctuations? I guess I'm just trying to understand whether there's something that would cause you to end up with an outcome that's wider than that sort of two points that we've seen from your initial booked revenue.

Hi, Robin. Thank you for the congrats. I think as it relates to 2027, you know, it's off to a great start. Pricing looks good. We are 38% booked for the 27 seasons sitting here in May. I think we can all agree, you know, the curves are in a good position. As it relates to pricing, I think pricing will always be dependent on inventory mix, what's sold and what's left to sell. and obviously macro conditions. Our goal is generally mid-single digits. I think, you know, as Matthew asked earlier, each season is different. It will behave differently. We are sitting here, you know, 38% booked, great position, but we still do have a little bit more than 60% of capacity left for 2027. So I think we just reiterate that our goal is generally mid-single-digit yield growth, especially with our double-digit capacity growth and our order book.

Okay, great. Thank you. And maybe just as a follow-up, it was interesting that the change for sort of remaining 2026 booking, so it was really kind of river, that maybe the growth rate ticked down more than I think given other commentary out in the market about kind of eastern med being the issue, maybe we would have expected to see that in your ocean business more than your river business. So I wonder if you could just kind of characterize for us in Q3 and Q4 what kind of exposure you have to the eastern med or, you know, and in the river business, was that mostly the delta in Egypt bookings? Or if we can just sort of understand a little bit more about where the variability, kind of which itineraries where you were seeing it, was it Egypt that down-ticked that river business and kind of what's happening in eastern med and ocean? Sure.

So, I think at the end of the day, our overall book position for 2026 is great. We're 92% booked. Overall, pricing is 5.5% ahead of the same point in time prior year. So, this is well in line with our expectations. And I think, you know, we've said all along, our goal is still mid-single-digit yield growth for each year as it relates to the itineraries. So we are 92% booked, which is a reflection of all of our itineraries. At the end of the day, we mainly operate in Europe. So we are seeing both Eastern Europe and the Med, you know, booking similar to our other itineraries as well. As it relates to the 2026 rivers, some of this is really just a point at Nix. Egypt did impact it slightly. as we said in the last call we did cancel a couple weeks but Egypt is a great itinerary it is a high yielding itinerary that does very well for us and we still see strong occupancy and yields this year and next year for Egypt so I think at the end of the day we are pretty pleased with where we are for 26 Great, thank you very much Thank you The next question will be from Trey Bowers from Wells Fargo.

Trey, your line is live.

Hey, guys. Thanks for the question, and congrats to everyone. I guess I'll ask Brant's air question in a slightly different way. When we see a pretty significant increase in transatlantic pricing like we've seen of late, you know, when and how does that impact you guys? Or is this when you re-up your deals with the different carriers? Maybe there's a new price dynamic to that, or is it to some extent you're just passing some of that on to your customers when you're ultimately buying that air for them? So just would love to get a better feel for how this might impact numbers going forward.

Hi, Trey. So at the end of the day, you know, we have agreements with all the major airline alliances. When a guest does book the Viking and they choose to purchase air from Viking, we try to book that ticket as promptly as possible. So I think, you know, when you look to our financials, AGM, our adjusted gross margin, reflects the air purchased and the air cost. So you can see how yield moves through AGM. And historically speaking, you know, yields have increased, and the team that we have has managed through air cost fluctuations very well. So will it be a headwind to us? You know, I think we would anticipate that there is some of that for the year, given the current, you know, conditions.

That being said, we have long-term veterans in our air department, and they've done a good job managing through costs in the past. and am i right in assuming that the air costs for for your crew rolls through payroll is that separate yes so uh all crew related costs will roll through operating expenses perfect uh and if i could just sneak one in the the q1 yields in river were just an incredibly impressive number but is there any chance you could give us more of a a kind of like to light for like yield number that maybe you were seeing just in say your European itineraries just to get a feel for how strong the pricing is exiting the quarter on more of an apples-to-apples basis. And thanks so much, and congrats to all.

Thank you. So I think first quarter for rivers, there's seasonality. Our river business really doesn't start until March, April in Europe, and it ends around October, November, December. So the first quarter yields for rivers aren't really indicative of the full year, which is why we provide the booking curves From the booking curve perspective, you can see how pricing is trending for rivers for all of 26th year to date. That being said, you know, I think we mentioned in our earlier remarks for the first quarter for rivers, a majority of that is, you know, Egypt, Vietnam, and, you know, those itineraries are high-yielding itineraries for us.

Great. Thanks for all the questions.

Thank you. Thank you. And once again, we remind everybody to please ask one question and one follow-up in the interest of time today. The next question is coming from Lizzie Dove from Goldman Sachs. Lizzie, your line is live.

Hey, good morning, and congrats to Leah and Lynn and also Tor for an incredible 30 years as CEO. As we think about the next chapter for Viking under new leadership, and I appreciate you've both been here, you know, 20-plus years, the answer might just be no, But should investors expect any evolution in terms of strategy or capital allocation here under this new management team?

Hi, Lizzie. Thanks for that. Toro's wondering when someone was going to congratulate him. As far as strategy, I think this leadership transition is really about stability and continuity. As you know, our long-term plan is pretty well laid out in our order book and really It's, you know, I have been fortunate to have worked side by side with TOR for 20 years and also the executive committee who I am a part of. And, you know, I think together we will continue to execute on the strategy that we've laid out for ourselves. And it's really to ensure not just, you know, the investor community, but more importantly, our guests, that Viking will remain committed and true to who we are as a company. and to the guest experience.

Makes sense. And then to ask Terry's question for 2027, just on the like-for-like, you know, I appreciate all the comments and color you've given so far in terms of the 27 booking curve and, you know, appreciate the mix considerations, I think, or India, or Egypt. Is there a way to just think about on a like-for-like basis, whether that's, you know, Egypt versus Egypt a year prior, Europe versus Europe, of just how kind of that like-for-like pricing is tracking so far for 2027 specifically to normalize for that mix, I suppose?

I think for 2027, at the end of the day, what we have sold to date is some of our higher-yielding itineraries. And so, you know, to your point, each of us has sold well for 2027. So that is skewing our pricing up. But I don't think, you know, we can provide the like-for-like information at this time. We're 38% sold, so it's not really, you know, something that we should provide today. We have, like I said, 60-plus percent of capacity left that we still need to sell for 2027. We are in a great position. I think, you know, not many can say that for the 27 season, sitting here in May, that you're already 38% sold with pricing ahead year over year. So we are quite pleased. But overall, you know, we maintain that our goal is mid-single-digit yield growth, and that will be a combination of pricing increases, absolutely, revenue, the point mix. So, you know, we will approach each season with all three in mind, and not more, to try to get our – or try to reach our goal.

Thank you.

Thank you, Lizzie. 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 all around, and yes, Tor, for building, you know, a strong team over a long period of time. I wanted to just double-click on the capital allocation question. You know, we obviously all eye, you know, $4 billion in our imaginations, you know, run in all different directions. How are you thinking about that philosophically? You know, do you look at circumstances, you know, where the, you know, the world's visibility, you know, may be a little bit lower as an opportunity? You know, or do you, you know, take a more conservative approach to that? and any boundaries you can give us or color you can give us on, you know, the kinds of things you'd like to add would be helpful.

Sure. So, you know, one of the benefits of having been an executive team together for 20 years is we've seen things go up and things go down, particularly in the travel industry, And this cash really allows us to continue our growth plans with a measure of stability for biking and gives us an ability to make these long-term plans through 2032 or 2034. So our top priority is to reinvest cash in the business to generate strong returns. And this, of course, includes our strong order book. Our guiding principles when we think about how else we can deploy cash are really based on three things. Is it scalable? Is it margin accretive? And then is it also, will it add to the brand? Is it complementary to the brand and within the brand ethos? And we've also said that, you know, we, to the extent that we are able to, our preference is to own and operate because then you can control the experience from beginning to end, which is so important to us. As far as the cash, I think today, given what we're experiencing from the macroeconomic environment, you know, this cash allows us to behave responsibly with our guests. And I think that's all we can say about capital allocation.

Okay, fair enough. And just going back to the initial commentary, Leah, around fuel, any color you can provide on how we should think about your purchasing for 2027, and, you know, when and how that occurs, just so that we can sort of mark you to market as we go.

Sure. So from a fuel perspective, as Lynn mentioned, we enter into fixed-price contracts for rivers. So the 2026 is largely fixed price set in 2025. And from an ocean perspective, we do have fuel-efficient vessels. our operations team are highly experienced in managing through times where fuel prices may go up and down. Our ocean fleet is entirely equipped with closed loop scrubbers, which allow us to operate using heavy fuel oil. And then we are also able to avail ourselves of shore power. I think at this stage with fuel prices where they are, you know, we are, we don't feel this the right time to either enter into fuel contracts or into hedges. We can assess that as the year progresses. But, you know, to level set what the exposure is, because of the fuel-efficient designs of our ships, fuel as a percentage of adjusted gross margin is only 4%. So, our fuel expense exposure is quite manageable.

Yeah.

Thank you very much. sure thank you the next question will be from conor cunningham from mellius research conor your line is live hi everyone thank you and congrats to everyone uh so it's great to hear just on on egypt so last quarter you talked a little bit about um the headwinds that you were facing there and i know that that you're back to sailing within within that market and can you just talk about like how that's trended uh you know from i assume the operational or the disruptions you talked about on the booking curve board there, but it seems like it snapped back even better on the demand and pricing side. So, if you could just talk about that a little bit, that would be helpful. Thank you.

I think, you know, for Egypt, it is a great itinerary. High yielding, a wonderful experience.

One second. Lynn, I think your mic is – there you go.

Sorry. Thank you. Thank you, Connor. So, as it relates to Egypt, I think for Egypt, it is a great itinerary. It's a wonderful experience. Biking, you know, does it well. It's high-yielding. But as a reminder, it is a small percentage of our capacity. It's eight ships we're operating this year. Guest count is about 80 guests per ship on average.

So as it relates to how it's progressing, you know, obviously for 2026, you know, we did cancel a couple weeks. it is selling well for 2027 i think we believe in the product um we believe in the experience and you know we have a strong order book for egypt okay thank you and then maybe just following up on david's question around capital allocation so you know you've historically taken a shakier macro environment uh as an opportunity to be pretty aggressive and you know i don't think that there's another uh travel company out there that has you know current bookings for 27 like you guys do so is it just the fact like ignoring the the shareholder returns and

all that stuff but is it just the fact that there isn't you haven't seen an opportunity to really scale like the the shore side you know side of the business is it just the assets aren't available or the price points different just if you could talk a little bit about that a little bit more I think that would be helpful thank you I'm being pointed out I think we have looked at a couple of things but you know we are very very disciplined it has to be really the Viking brand and it's not many that fit the bill so I think it will take a rare opportunity for us to look at anything else than what we're doing so I think the opportunities we have for organic growth are significant and we'll just make sure we do that if something dramatic comes along we'll have a look at it, but it has to fit the brand, and I think that's one of the key strengths of us as a company that we don't, we are not a gold number of anything, least of all brands, so that's what I can say and we have good returns on our investments in the existing business and that is largely related to the way we design our ships and all that kind of stuff when you look at a return on invested capital and so forth So as long as we can have good returns there, I think that should be the priority. But I'll look at this more from higher up, though, in the future. But I think we're in good hands.

Appreciate it. Thank you, Tor.

Thank you. The next question will be from Meredith Jensen from HSBC. Meredith, your line is live.

Yes, good morning, and excited to watch the next few decades of the progression of biking. And quickly on China, I was really interested to hear about the re-flagging of Viking Ye Dune and was hoping you could speak a little bit more about the brand building among Chinese travelers, you know, earning learnings from the Experience Center and sort of a roadmap there, both for sort of Coastal River and maybe the Yangtze. That would be great.

Maybe I can make a couple of comments on that. But, you know, we started our China business, I think it was 2003, 2004, and about, where we had ships on the Yangtze. They were then owned by Chinese operators and the financial management services, and we marketed that to Western people. But then came pricing aid, and we said, let's do it differently. So we then said maybe our focus ought to be in the same way as we have the current business, where we focus on English-speaking people. Let's make a product for the Mandarin-speaking, for the Chinese. So I think it's taken us a few years to develop the business we have. We now have four liver vessels, as you might know, and the rivers in Europe with the Chinese customers and the Chinese crew. And we've had a joint venture with the China merchants, with Viking Eden. Again, that was initially operating in domestic China waters. But it's not so easy to do that. And the price competition is fantastic and, you know, it's difficult to differentiate ourselves. So I think what we are more aiming to be that when Chinese want to go to Europe, either by river or by ocean, they should go think Viking. And I think we are in the process of establishing a potentially well-recognizable brand. It will take time, but we are patient. And I think that's one of the areas where I'd like to do a little bit more thinking in the coming years. It's a big opportunity, as we all know. But we now will help operate that ship in the European waters, and as a matter of fact, even under Norwegian flag.

Thanks for the visibility on that floor. That's super helpful. And just finally, I know biking has been very focused on minimizing environmental impact, and I I know that Libra is launching later this year, and I was hoping you might speak a little bit more about, you know, the accessibility of, you know, propulsion technology, sort of unit economics there, and, you know, how you and Sincenziati might scale further, you know, as Australia comes and other ships come along. Thanks.

The whole regulatory environment also in shipping is quite strange, and unfortunately, it is not always a science that wins, but we have looked very carefully at this, so we said if we're going to be a true zero emission product, then that is hydrogen. so we have hydrogen fuel cells which will cover about a third of the capacity of the propulsion but of course hydrogen is a very expensive fuel too so we have to trade one off against the other and it's not easy to easily available but at least we feel that we are setting a direction of travel for the future of shipping and some of you know that I personally have not a very high affinity for liquefied natural gas which is the worst from a global warming point of view it's clean products, don't get it wrong in terms of soup and so forth, but global warming is bad, but it seems that people ignore that so it may be okay but we for the time being, we stand by what we have said and we continue the vessels we have have diesel propulsion with scrubbers and our scrubbers are of course of the advanced sort we do not we have closed loop scrubbers so we don't send stuff back into the oceans we are looking at other methodologies too but in addition to China that's going to be my other that project to keep me out of the hairs of the executives of Viking.

Well, I'm sure that will continue to be as contrarian as it has been in the past, and thanks very much for that.

Thank you. That concludes today's Q&A session. I will now turn the conference back over to Leah Talactak, Viking's President and CEO, for closing remarks.

I wish to thank everyone for joining us today's call. For additional context on our recent leadership transition, We encourage you to view a video which was beautifully narrated by Karina Hagan in the Investor Relations section of our website at ir.viking.com. Have a great day and see you next quarter.

Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.