Viking Holdings Reports Q1 2026 Results: Full Earnings Call Transcript

Viking Holdings (NYSE:VIK) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation. View the webcast at https://www.webcaster5.com/Webcast/Page/3049/53822 Summary Viking Holdings Ltd(Pembroke) reported a 17.5% increase in total revenue for Q1 2026, driven by increased capacity and higher revenue per PCDs. The company announced a leadership transition with Leah Talaktak assuming the role of CEO, and Lynn Ban stepping in as CFO. The 2026 season is 92% booked, and 38% of the 2027 season is already booked, showing strong demand and pricing discipline. Operational highlights include the introduction of new ships and itineraries, with a focus on expanding Chinese demand and environmental sustainability with the hydrogen-powered Viking Libra. Management expressed confidence in the resilience of their business model despite macroeconomic challenges, emphasizing strong bookings and the effectiveness of their marketing strategies. Full Transcript Paul (Operator) 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(Pembroke)'s first quarter 2026 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 speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, Please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, please press star two. Thank you. I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mangalini of Viking Holdings Ltd(Pembroke). Carola Mangalini (Vice President of Investor Relations) Good morning everyone and welcome to Viking Holdings Ltd(Pembroke)'s first quarter 2026 earnings conference call. I am joined by Tor Hagen, Executive Chairman, Leah Talaktak, President and Chief Executive Officer Aline Ban, Chair, 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. 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. 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. Tor Hagen (Executive Chairman) Thank you Carola and good morning everyone. Today I'm 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'm very proud of what we have accomplished together. After thoughtful consideration, I will be stepping into the role of Executive Chairman and Leah Talaktak, our current President and CFO will assume the role of CEO. You all know Leah; her appointment as CEO is a natural next step. Leah 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 her ability to lead Viking with the same continuity, discipline and vision on which a company 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'm also pleased to share that Aline Ban 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 while 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 Leo. Leah Talaktak (President and Chief Executive Officer) 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 4, we are already 92% booked for 2026 as of now 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, when 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 5, 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 Eldair joined our growing number of longships sailing their European rivers and we acquired the Viking Edune, 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 Edun. 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. The itineraries in Egypt consistently generate some of the highest yields in our river cruise 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 times 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 and 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 Bond 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. Lynn Ban (Chief Financial Officer) 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 Passenger Cruise Days (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 in 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, Passenger Cruise Days (PCDs) 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 materially favorable increase in net yield. While the overall capacity was lower than last year. With respect to ocean capacity, Passenger Cruise Days (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 1 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 of financing. With that, I will turn it back to TOR to review our business outlook including our booking curves. Tor Hagen (Executive Chairman) 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 92% booked, so we're mostly done selling. The current season Advanced bookings equal $6.2 billion which is 13% higher year over 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 equal $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 capacity for the core products will increase by 15% in 2027. The drivers of this increase are the full 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 1H27 than in the second half. Regarding rates and besides strong pricing, there are some high yield itineraries that are being sold earlier in the cycle due to reasons such as seasonality. Looking ahead, how the booking curve evolves for the remainder of 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 core products. Let's now talk about the advanced booking curves for the segment. 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 bookings for 2026. Overall, we have sold 92% of the capacity Passenger Cruise Days (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 gray line, you will see the booking trends for 2027 season. As of May 3rd we had sold about 46% of the 2027 capacity for Ocean 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 in 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 3, we have almost $3 billion in advance bookings which is 10% higher than last year. At the same point in time, the operating capacity of a 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 gray line shows advanced bookings for the 2027 season. As of May 3rd we had 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, then eight more scheduled for 2027, 26% of this capacity is already sold and regarding rates, these average $1,108 for 2027 up from $992 for 2026. As stated earlier, unlike 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's larger mix of itendras in Egypt and India which command higher than average yields. So Overall trends for 2027 are very good. A strong book position, increased capacity and very good rates which gives us confidence that our consumer demographic remains financially resilient, prioritizing traveling and choosing biking. At this point, Leah will add some color to our order, work and capacity. Leah Talaktak (President and Chief Executive Officer) 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 Eldair, a long ship for Europe. We acquired the Viking Edune, 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 new, 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. Paul (Operator) Thank you. At this time we will be conducting a question and answer session. In the interest of time, we ask that participants limit themselves to one question and one follow up on today's call. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two 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 Wyczynski from Stifel. Steve, your line is live. Steve Wyczynski (Equity Analyst) Hey guys, Good morning. First of all, congratulations Lee and Lyn on your appointments. My first question is around the 2027 booking curves which look incredibly strong with PCDs, I would say running well ahead of what I think anybody was expecting at this point. I assume a lot of that strength is just the booking curves going back to a more normalized pattern, meaning higher demand itineraries, cabin classes, those are being sold first, which is probably somewhat backwards versus this time last year. Wondering how we should think about those 2027 booking curves moving forward and how you guys think they eventually settle. I know Tor said you guys still think mid single digit ranges is still fair, but just 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 2027 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 previously stated, if macro conditions are stable, our target remains mid single digit yield growth across our core products. Okay, gotcha. Then the second question I want to ask about the cadence of bookings that you've seen recently. Leah, you noted you guys witnessed a short term softening in bookings which was mostly for the 2026 season. I guess wondering if you could walk us through maybe a little more detail about how long that lasted. Maybe what you've seen more recently in terms of any material changes for certain itineraries or lack of demand for certain itineraries. And also if you could touch on cancellations, which I think you noted that are in your normal expected range, but any other color there would be super helpful. Thanks guys. Leah Talaktak (President and Chief Executive Officer) Hi Steve. So thanks for the kind words. As Lynn said, as far as the demand from the consumer, since the conflict began, 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 curves 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. Paul (Operator) 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. Matthew Boss (Equity Analyst) Thanks. And congrats on a nice quarter. And congrats both Leah and Lynn on the promotions. Thank you. So Leah, maybe if we take a step back, double digit capacity growth, mid single digit yields, you're making the point is a clear baseline for the business. And that's despite macro backdrops if we think about from a multi year. So could you speak to the market share opportunity that you're taking across both river and ocean and how you see your product relative to peers as differentiated? Leah Talaktak (President and Chief Executive Officer) Sure. So as you're aware, we are the market leader in the river North American passenger outbound and our strategy for the rivers 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 10 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 what we perceive or what we see as additional tonnage and berths entering that market as we also continue our building growth, you know, we really see ourselves taking up to 30% market share in that very attractive segment. And I think we. What really sets us apart is what defines us like being 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. Matthew Boss (Equity Analyst) That's great. And then maybe Lynn, just to elaborate on 2027. So as we think about the advance 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 for 27? Lynn Ban (Chief Financial Officer) 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. So I wouldn't necessarily say compare to prior seasons, given every season does develop differently. Paul (Operator) It's helpful. Color. Best of luck. Thank you. Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live. Brandt Montour (Equity Analyst) Thanks, everybody for taking the question. And congratulations again to Leah and Lynn. I have a question on marketing. Obviously, it sounds like pulling the marketing lever or two ago worked pretty well. 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 SGA unit costs this year from what you're kind of having to do now for 27 bookings? Leah Talaktak (President and Chief Executive Officer) Hi. Thank you. As far as marketing, 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 will 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 that some efficiencies in SGA 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 searches and LLM tools, 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. Lynn Ban (Chief Financial Officer) Okay, that's great. We 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. Brandt Montour (Equity Analyst) Okay, that's great. Color. 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 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 reduce any chance of volatility between that gross and net line? Thank you. Paul (Operator) Yes. So, you know, given our customer demographic, as you can imagine, many of our guests do or want Viking to deliver an end to end experience. So historically a significant portion of our guests do purchase air with Viking. That being said, Viking maintains agreements with the major airline alliances to secure inventory for our guests. So when a guest does elect to book air with Viking, we try to book tickets promptly. However, you know, final roundings 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 promptly 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. Robin Farley (Equity Analyst) Great. Thank you very much. And congrats to Leah and Lynn. Wanted to ask, sort of going back to the 2027 curve, if we look at the last three years, you've basically ended up with net Yield within about 2 percentage points of where you first gave us this change in booked revenue 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 with product timing you have and mix 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. Lynn Ban (Chief Financial Officer) 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 season 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 as Matthew asked earlier, each season is different. It will behave differently. We are sitting here 38% booked, great position. But we still do have a little bit more than 60% of capacity left for 2027. Robin Farley (Equity Analyst) 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 bookings, that it was really kind of river, that maybe the growth rate ticked down more than ocean. 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 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, was it Egypt that downticked that river business and kind of what's happening in Eastern Med in ocean. Thanks. Paul (Operator) 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 we've said all along we expect we 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. And as it relates to the 2026 rivers, some of this is really just deployment mix. 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. Thank you. Trey Bowers (Equity Analyst) The next question will be from Trey Bowers from Wells Fargo. Trey, your line is live. Lynn Ban (Chief Financial Officer) Hey guys, thanks for the question and congrats to everyone. I guess I'll ask Brandt's Air question 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. Trey Bowers (Equity Analyst) Hi Trey. So I think at the end of the day, you know, we have agreements with our all the major airline alliances. When a guest does book with 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 or 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. 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 your crew rolls through payroll? Is that separate? Yes. So all crew related costs will roll through operating expenses. Perfect. And if I could just sneak one in the Q1 yields in river were just an incredibly impressive number. But is there any chance you could give us more of a kind of like 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. Lynn Ban (Chief Financial Officer) Thank you. So I think first quarter for rivers, their seasonality, our river business really doesn't start until March, April in Europe and it ends around October, November, December. Paul (Operator) 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 26 year to date. That being said, you know, I think we mentioned in this, 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. Lizzie Dove 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. Lizzy Your line is live. Leah Talaktak (President and Chief Executive Officer) 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 appreciate you've both been here 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 we are. 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 I think together we will continue to execute on the strategy that we've Lizzie Dove laid out for ourselves. It's really to ensure not just 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. Got it. And then to ask Trey's question for 2027, just on the like for like, I appreciate all the comments and color you've given so far in terms of the 27 booking curve and appreciate those mix considerations. I think more India, more 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, Lynn Ban (Chief Financial Officer) 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, Egypt has sold well for 27. 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. Lizzie Dove So we are quite pleased. But overall, you know, we maintain that our goal is mid single digit yield growth and that will be combined be a combination of pricing increases, ancillary revenue deployment 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, Lizzy. Thank you. Paul (Operator) The next question will be from David Katz from Jefferies. David, your line is live. Leah Talaktak (President and Chief Executive Officer) Good morning, everyone. Thanks for taking my question. Congrats all around and yes, tor, for building a strong team over a long period of time. I wanted to just double click on the capital allocation question. We obviously all eye $4 billion in our imaginations run in all different directions. How are you thinking about that philosophically? Do you look at circumstances where the world's visibility may be a little bit lower as an opportunity, or do you take a more conservative approach to that? And any boundaries you can give us or color you can give us on the kinds of things you'd like to add would be helpful. Thank you. 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 Viking 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, we, our preference is to own and operate because then you can control the experience from beginning to end, David Katz (Equity Analyst) 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 when and how that occurs, just so that we can sort of market 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 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, we don't feel this is 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 our, 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. Connor Cunningham (Equity Analyst) Thank you. The next question will be from Connor Cunningham from Melius Research. Connor, your line is live. Lynn Ban (Chief Financial Officer) Hi everyone. Thank you and congrats to everyone. It's great to hear. Just on Egypt, so last quarter you talked a little bit about the headwinds that you were facing there. And I know that you're back to sailing within that market. And can you just talk about how that's trended from, I assume the operational or the disruptions you talked about on the booking curve were there, but it seems like it snapped back even better on the demand and pricing side. So if you just talk about that a little bit, that would be helpful. Thank you. Connor Cunningham (Equity Analyst) I think, you know, for Egypt it is a great itinerary, high yielding, 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, we believe in the experience and you know, we have a strong order 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 as an opportunity to be pretty aggressive. And you know, I don't think that there's another 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 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 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. Lynn Ban (Chief Financial Officer) I'm being pointed out, I feel I Connor Cunningham (Equity Analyst) should earn my today too. I think we have looked at a couple of things, but we have to be 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 conglomerate of anything, least of all brands. So that's what I can say. And of course 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 the return on invested capital, 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 now in the future. But I think we're in good hands. Appreciate it. Thank you Tor. Paul (Operator) Thank you. The next question will be from Meredith Jensen from hsbc. Meredith, your line is live. Meredith Jensen (Equity Analyst) Yes, good morning and excited to watch the next few decades of the progression of Viking and quickly on China. I was really interested to hear about the reflagging of Viking Yi Dune and was hoping you could speak a little bit more about the brand building among Chinese travelers. Early 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. Thank you. Tor Hagen (Executive Chairman) Maybe I can make a couple of comments on that. You know, we started our China business, I think it was 2003, 4 about where we had ships on the, on the Yangtze. They were then owned by Chinese operators and the and child management services. And we marketed that to Western people. But then came prices in eight 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 river vessels as you might know on the rivers in Europe with the Chinese customers and the Chinese crew. And we've had the joint venture with design emergence with Viking Eden again that was initially operating in well, domestic China waters. But it's not so easy to do that and the price competition is fantastic. And you know, you got 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 have really we are in 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 operate that ship in the European waters and as a matter of fact even under Norwegian flag. Meredith Jensen (Equity Analyst) Thanks for the visibility on that Cora. That's super helpful. And just finally I know Viking has been very focused on minimizing environmental impact and I know that Libra is launching later this year and I was hoping you might speak a little bit more about the accessibility of propulsion technology sort of unit economics there and you know how un cincantieri might scale further as Australia comes and other ships come along. Thanks. Tor Hagen (Executive Chairman) The whole regulatory environment also in shipping is quite strange and unfortunately it is not always a science that could 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 carbon or weaken fjord about a third of the capacity of the propulsion. And 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. Meredith Jensen (Equity Analyst) 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 me wrong from in terms of suit and so forth that 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 diesel propulsion with scrubbers and our scrubbers are of course of the advanced sort. We do not. We do not. We have closed loops scrubbers so we don't send stuff back into the oceans. We are looking at other other methodologies too but that's in addition to China. That's going to be my, my other pet project to keep me out of the hairs of the of the executives of Viking. Well, I'm sure Viking will continue to be as contrarian as it has been in the past and and thanks very Paul (Operator) thank you. That concludes today's Q and A session. I will now turn the conference back over to Leah Talaktak, Vikings President and CEO for closing remarks. Leah Talaktak (President and Chief Executive Officer) I wish to thank everyone for joining us. Today's call is for additional context on our recent leadership transition. We encourage you to view a video which was beautifully narrated by Karina Hagen in the investor relations section of our website at ir.viking.com. Have a great day and see you next quarter. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.