Cruise vacation company Royal Caribbean (NYSE: RCL) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 6.5% year on year to $4.83 billion. Its non-GAAP profit of $4.21 per share was 5.7% above analysts’ consensus estimates.
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Royal Caribbean (RCL) Q2 CY2026 Highlights:
- Revenue: $4.83 billion vs analyst estimates of $4.81 billion (6.5% year-on-year growth, in line)
- Adjusted EPS: $4.21 vs analyst estimates of $3.98 (5.7% beat)
- Adjusted EBITDA: $1.83 billion vs analyst estimates of $1.81 billion (37.9% margin, 1.2% beat)
- Management raised its full-year Adjusted EPS guidance to $17.80 at the midpoint, a 2.9% increase
- Operating Margin: 27%, down from 29.3% in the same quarter last year
- Free Cash Flow was -$877 million, down from $910 million in the same quarter last year
- Passenger Cruise Days: up 684,317 year on year
- Market Capitalization: $81.81 billion
"The strong second quarter performance demonstrates the continued strength of our brands, the appeal of our vacation experiences, and the momentum in our business," said Jason Liberty, Chairman and CEO, Royal Caribbean Group.
Company Overview
Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Royal Caribbean’s 189% annualized revenue growth over the last five years was incredible. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Royal Caribbean’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 10.4% over the last two years was well below its five-year trend. 
Royal Caribbean also discloses its number of passenger cruise days, which reached 14.96 million in the latest quarter. Over the last two years, Royal Caribbean’s passenger cruise days averaged 6.6% year-on-year growth. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Royal Caribbean grew its revenue by 6.5% year on year, and its $4.83 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will face some demand challenges.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Royal Caribbean’s operating margin has more or less stayed the same over the last 12 months , and we generally like to see margin increases due to economies of scale and cost efficiency over time.
This quarter, Royal Caribbean generated an operating margin profit margin of 27%, down 2.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Royal Caribbean’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q2, Royal Caribbean reported adjusted EPS of $4.21, down from $4.38 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 5.7%. Over the next 12 months, Wall Street expects Royal Caribbean’s full-year EPS to grow 13.6% from $16.36 to $18.58.
Key Takeaways from Royal Caribbean’s Q2 Results
It was encouraging to see Royal Caribbean’s full-year EPS guidance beat analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 4.5% to $293.17 immediately after reporting.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
