Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

CCL · Q1 2026 Earnings

Carnival Corporation

Reported March 27, 2026

30-second summary

SENTIMENT: Constructive Carnival beat its own Q1 guide on yields (+2.7% vs +1.6% guided) and costs (+5.3% vs +5.9% guided), delivered Q1 adjusted EPS of $0.20, and raised FY2026 adjusted net income by ~$145M to $3.07B on operational improvements that partially offset a $500M fuel headwind. The FY net yield guide was actually raised 25bps (from ~2.5% to ~2.75%) versus December, and FY EPS moves from $2.14 to $2.21. Alongside the print, the Board authorized an initial $2.5B share buyback program, and management introduced "Propel" — a 2029 framework targeting ROIC >16%, EPS +50% vs 2025, and ~$14B in shareholder distributions. The buyback and Propel are the bigger forward signals than this quarter's print.

Headline numbers

EPS

Q1 FY2026

$0.20

Revenue

Q1 FY2026

$6.20B

+6.1% YoY

Gross margin

Q1 FY2026

24.8%

Free cash flow

Q1 FY2026

$0.70B

Operating margin

Q1 FY2026

9.8%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$6.20B	+6.1%	$6.33B	-2.1%
EPS	$0.20	—	$0.34	-41.2%
Gross margin	24.8%	—	26.8%	-195bps
Operating margin	9.8%	—	11.6%	-176bps
Free cash flow	$0.70B	—	$0.01B	+5708.3%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS (non-GAAP)	Q1 FY2026	$0.23	$0.20	-$0.03 below guide	Beat
Adjusted Net Income	Q1 FY2026	Approx. $300 million	Not explicitly reported for Q1	—	Missed
Adjusted EBITDA	Q1 FY2026	Approx. $1.34 billion	$1.267 billion	-$0.073B below guide	Beat
Net Yields YoY Growth	Q1 FY2026	Approx. 4.3% (constant currency)	+2.7% YoY	-1.6pts below guide	Beat
Adjusted Cruise Costs Excluding Fuel per ALBD YoY Growth	Q1 FY2026	Approx. 3.2% (constant currency)	+5.3% YoY	+2.1pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS (non-GAAP)	Q2 FY2026	Approx. $0.34	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS (non-GAAP)	FY 2026	$2.14	$2.21	+$0.07	Raised
Adjusted Net Income	FY 2026	Approx. $2,925 million	Approx. $3,070 million	+$145 million	Raised
Adjusted EBITDA	FY 2026	Approx. $7.05 billion	Approx. $7.19 billion	+$0.14 billion	Raised
Net Yields YoY Growth	FY 2026	Approx. 5.3% (constant currency)	Approx. 2.75% (constant currency)	-2.55pts	Lowered

Reaffirmed unchanged this quarter: Adjusted Cruise Costs Excluding Fuel per ALBD YoY Growth (Approx. 3.1% (constant currency))

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Passenger ticket revenue	$4.023B	+5.0%
Onboard and other revenue	$2.142B	+8.3%

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Available Lower Berth Days (ALBDs)	23.7 million
Net yields (constant currency)	$197.44 per ALBD
Adjusted cruise costs excluding fuel per ALBD (constant currency)	$119.81
Occupancy	103%
Customer deposits	$7.923 billion
Fuel consumption per ALBD	28.9 metric tons per thousand ALBDs
Bookings for 2026	Up double digits YoY; ~85% of 2026 booked

Profitability

Q1 FY2026

Segment	Q1 FY2026
Adjusted EBITDA	$1.267 billion

Management tone

Customer optimization (Q2 FY2025) → SEA Change targets hit early (Q3 FY2025) → Investment grade and dividend reinstated (Q4 FY2025) → Propel framework with 2029 targets plus $2.5B buyback (Q1 FY2026)

Three quarters ago management was celebrating beating the 2026 SEA Change ROIC target 18 months early; this quarter it introduced an entirely new five-year framework ("Propel") with 2029 targets of ROIC >16%, EPS +50% from 2025, and >40% of operating cash returned to shareholders (~$14B aggregate), and the Board authorized an initial $2.5B share buyback. "By 2029, we are targeting return on invested capital above 16%, earnings per share growth of more than 50% versus 2025, and the distribution of more than 40% of our cash from operations to shareholders." This is no longer a recovery story — management is committing to specific multi-year capital-return math three months after reinstating the dividend.

Capacity discipline has hardened from a constraint into a stated competitive moat. Last quarter the message was less than 1% capacity growth for FY2026; this quarter management framed single-ship-per-year deliveries through 2029 as deliberate: "Our capacity growth remains intentionally measured with only three ships scheduled to enter service during the Propel period... What's going to lift us up is the 96 ships." The narrative has shifted from "we can't add capacity" (balance sheet repair era) to "we won't add capacity" (yield protection era).

Fuel hedging is now firmly off the table — a notable shift in tone given the $500M FY2026 fuel headwind. "I lost a bet. It took us until 1046 for someone to ask about fuel hedging... the focus for the health of the long-term business is to use less." Management is pointing to $650M of cumulative consumption savings since 2019 — including this year's savings alone exceeding the $500M fuel-price hit — as evidence the operational lever is more durable than financial hedging.

Geopolitical risk is being managed through asset flexibility rather than treated as a demand overhang. On the Middle East: "we entered into this period with a nice amount of headroom, which we've maintained overall." Last December's Arabian Gulf redeployment was framed as a one-off; this quarter management treats redeployment as a routine operational tool.

Destination monetization has been promoted from a sub-strategy to a Propel pillar. "Fourth, further monetizing our destination portfolio... Celebration Key, Grand Bahama, Relax Away Half Moon Key, and Isla Tropical Roatan, along with our unrivaled Alaska land footprint." This is the lever management is selling as the source of incremental margin in years 2-5 of Propel.

Recurring themes management leaned on this quarter:

Yield expansion through commercial excellence and earlier guest engagementDisciplined, measured capacity growth (one ship per year) as deliberate strategic choiceDestination portfolio monetization for incremental returns and fuel efficiencyConsumption reduction and operational efficiency as primary fuel-price mitigationRecord bookings penetration and customer deposits signaling robust demand resilienceOpportunistic shareholder returns ($14B+ over 2026-2029) enabled by predictable CapEx

Risks management surfaced:

Elevated fuel prices: $500M headwind in 2026 guidance; 10% change = $160M bottom-line impactGeopolitical volatility in Eastern Mediterranean affecting European sailing demand paceMacroeconomic unpredictability: 'unpredictable macroeconomic and geopolitical backdrop'Potential demand destruction if extended period of $100+ oil occursAI disruption to bundled pricing power and traditional revenue management

Answers to last quarter's watch list

Q1 FY2026 net yield landing at or above +1.6% guide — Resolved positively. Q1 net yields came in at +2.7% YoY constant FX, beating the December guide by 110bps. The FY net yield guide was also raised 25bps to ~2.75%.

Resolved positively

Q1 cost growth at +5.9% per ALBD — Resolved positively. Q1 adjusted cruise costs ex-fuel/ALBD grew +5.3% YoY constant FX, 60bps better than the December guide. FY cost guide improved to +3.1% (vs +3.3% prior).

Resolved positively

DLC unification milestones — Partial update. The press release notes the current open voting period for DLC unification, with shareholder meetings expected April 17, 2026; the buyback program will commence after those meetings. Status: On track, continue monitoring.

Customer deposit balance into wave season — Resolved positively. Q1 customer deposits hit $7.92B, a Q1 record and up ~10% YoY.

Resolved positively

Capital allocation cadence — Resolved positively. The new Propel framework targets distribution of >40% of cash from operations through 2029 (~$14B aggregate), and the Board authorized an initial $2.5B share buyback program (commencing after the April 17 shareholder meetings), formalizing capital-return cadence beyond the reinstated dividend.

Resolved positively

What to watch into next quarter

Q2 FY2026 net yield landing at or above +2.0% guide: the first data point on whether yield momentum sustains given the unchanged balance-of-year yield assumption.

Buyback execution post April 17: with $2.5B authorized but commencement deferred until after the DLC shareholder meetings, watch for pace and price discipline in the first quarter of execution.

Fuel sensitivity into Q2: management quantified 10% fuel-price change = $160M annual bottom-line impact (~$0.11/share). Watch whether the ~$150M operational offset cited this quarter sustains or whether the fuel headwind exceeds the consumption-savings buffer.

Propel framework first checkpoint: the 2029 targets imply specific 2026 and 2027 trajectories. Watch whether the Q2 call provides interim-year ROIC or EPS markers against the >16% / +50% goals.

DLC unification close and index inclusion: with April 17 shareholder votes targeted, watch for execution confirmation and any U.S. index-inclusion read-through.

Customer deposit trajectory into peak wave-season exit: Q1 hit a $7.92B record (+~10% YoY); a Q2 step-up at or above this growth rate would confirm the booking strength is durable.

Sources

Carnival Corporation Q1 FY2026 earnings press release (8-K), filed 2026-03-27. https://www.sec.gov/Archives/edgar/data/815097/000081509726000034/a20261qearningsrelease8-k.htm
Carnival Corporation Q4 FY2025 earnings press release (8-K), filed 2025-12-19 — prior-period guidance baseline.

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