Norwegian Cruise Line Holdings sells cruise vacations and onboard services through Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. In the quarter ended June 30, 2026, net profit reached $222.6 million, but operating profit fell 14.3%. Currency gains and the absence of last year’s debt refinancing charges explain the different directions. The larger fleet brought more sales, yet the company still needed stronger bookings and additional borrowing to support its investment program.
Analysis period: second quarter and first half of 2026. Research cutoff: October 18, 2026, New York date; material subsequent financing verified through October 15, with the latest operating update reviewed dated September 30.
1. More passenger space increased sales, but ticket revenue lagged
Norwegian added capacity faster than it increased revenue. New ships gave the company more accommodation to sell. Revenue rose 4.9%, while capacity—the standard passenger places available on ships, multiplied by sailing days—rose 8.9%. That difference matters because a bigger fleet also brings more crew, fuel, upkeep and depreciation costs.
Norwegian operated 35 ships with approximately 75,000 berths at June 30. Norwegian Luna joined the fleet in March 2026. Management attributes the quarter’s revenue increase primarily to new ships.
| Consolidated measure | Second quarter 2025 | Second quarter 2026 |
|---|---|---|
| Total revenue, USD millions | 2,517.5 | 2,640.5 |
| Passenger ticket revenue, USD millions | 1,709.0 | 1,729.8 |
| Onboard and other revenue, USD millions | 808.5 | 910.7 |
| Available passenger berth-days, millions | 6.052 | 6.590 |
| Occupancy | 103.9% | 102.4% |
| Net Yield, USD per available berth-day, company non-GAAP measure | 304.34 | 298.10 |
Source: June 2026 Form 10-Q, consolidated statements of operations, p. 3; Note 1, p. 9; operating statistics and Net Yield reconciliation, pp. 31–32; revenue discussion, p. 35. Occupancy assumes two passengers per cabin, or one per studio cabin, so cabins with additional passengers can lift it above 100%.
Ticket revenue grew only 1.2%, while onboard and other revenue grew 12.6%. The latter includes drinks, casinos, excursions, specialty dining and other services. Across actual passenger cruise days, ticket revenue fell from a calculated $271.75 to $256.43 per day. Onboard and other revenue rose from $128.56 to $135.00 per day. The increase in revenue from these services was smaller than the decline in ticket revenue. These averages also reflect changes in itineraries and package contents; they are not a measure of identical cabin prices.
Net Yield helps separate sales growth from fleet growth. It deducts commissions, transportation and other direct ticket costs, plus direct onboard costs, from revenue, then divides the remainder by available berth-days. It still has to cover crew, fuel, administration and ship costs. Its 2.1% reported decline shows that each unit of capacity contributed less toward those expenses.
Source: June 2026 Form 10-Q, financial presentation, p. 29, and operating statistics and reconciliations, pp. 31–33. Per-passenger-day figures are calculated from reported revenue and Passenger Cruise Days; calculation inputs appear below.
The longer comparison is less severe, but still revealing. Second-quarter Net Yield was $296.31 in 2024, rose to $304.34 in 2025, and slipped to $298.10 in 2026. The latest figure was only 0.6% above the level two years earlier. The company has expanded its selling capacity more clearly than the contribution from each berth toward operating costs.
Source: June 2025 Form 10-Q, “Adjusted Gross Margin and Net Yield” reconciliation, second-quarter 2024 and 2025 columns; June 2026 Form 10-Q, p. 32. All three figures use reported exchange rates, rather than a common currency rate across the three years.
Destination mix also changed. Second-quarter revenue from North American destinations rose from $1.291 billion to $1.553 billion, while European revenue fell from $963.8 million to $815.0 million. These are destinations visited, not the home countries of customers. Approximately 84% of total revenue over the preceding three fiscal years came from U.S.-sourced guests. Moving ships between regions can change sales mix, but it does not remove dependence on American travelers.
Source: June 2026 Form 10-Q, Note 3, “Disaggregation of Revenue” and “Geographic Concentration,” p. 13.
2. Fuel and ship costs squeezed operations; financing effects lifted net profit
The cruise business kept less operating profit from each dollar of sales. Second-quarter operating margin fell from 16.8% to 13.8%. The first-half comparison points in the same direction: revenue rose 7.0%, but operating profit fell 4.6%.
| Consolidated reported result, USD millions unless stated | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Operating profit | 423.8 | 363.3 | 624.8 | 596.3 |
| Operating margin, calculated | 16.8% | 13.8% | 13.5% | 12.0% |
| Net profit or loss | 30.0 | 222.6 | −10.3 | 327.2 |
| Diluted earnings per share, USD | 0.07 | 0.48 | −0.02 | 0.71 |
Source: June 2026 Form 10-Q, consolidated statements of operations, p. 3, and Note 2, EPS reconciliation, p. 10. First-half figures cover January through June; they are not second-quarter results.
Fuel was a major pressure. The quarterly fuel bill rose from $157.4 million to $219.4 million. The company reported that fuel cost per metric ton, after price-protection contracts, rose from $659 to $888. This was therefore more than the cost of operating additional ships: the fuel used also became more expensive.
Sources: June 2026 Form 10-Q, p. 3; July 30, 2026 earnings release, “Fuel.”
Other costs rose with the fleet and restructuring. Quarterly shipboard payroll and related costs increased from $346.1 million to $394.6 million. Depreciation and amortization—the expense that spreads the cost of ships and other assets over their useful lives—rose from $243.8 million to $271.2 million. Marketing and administration increased from $393.1 million to $419.2 million, with management identifying higher severance payments as a contributor. Altogether, the $123.0 million revenue increase was smaller than the $183.6 million increase in operating expenses.
Selected non-fuel costs were better controlled. The company’s adjusted cruise cost per available berth-day, excluding fuel, was almost unchanged at $163.82 versus $163.67. This measure removes direct selling costs, stock compensation and specified restructuring and advisory charges. It shows control over selected non-fuel costs, but excludes the fuel and depreciation pressures that reduced reported profit.
Source: June 2026 Form 10-Q, p. 3; adjusted cost reconciliation, p. 33; expense discussion, pp. 35–36.
Net profit rose because the items below operating profit changed sharply. Other income and expense improved by $189.9 million, primarily reflecting currency movements on euro-denominated debt. Net interest expense fell by $65.9 million, but the prior-year quarter included $68.4 million of debt extinguishment and modification costs. Removing only those charges leaves quarterly net interest expense of $168.3 million in 2025 versus $170.9 million in 2026. The reported reduction therefore does not establish a lower ongoing financing bill.
Management’s adjusted net income also gives a different picture from reported net profit: it fell from $257.3 million to $222.0 million. Its reconciliation removes the euro-debt currency effects and specified expenses, and also adds back some interest when calculating earnings as if certain exchangeable notes had become shares. The exact bridge is in the calculation notes. Stock compensation is a repeated employee cost, and restructuring can require cash, so this adjusted figure is not automatically recurring cash profit.
Source: June 2026 Form 10-Q, Adjusted Net Income reconciliation, p. 34; interest and other income discussion, pp. 35–36; market-risk discussion, p. 40.
3. Advance customer payments supported cash, but did not cover ship investment
Operating cash flow covered about three-quarters of first-half capital spending. Norwegian generated $1.414 billion from operations and spent $1.894 billion on net additions to property and equipment. The resulting $480.3 million shortfall explains why a profitable first half still required financing.
| Consolidated cash measure, USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Net profit or loss | −10.3 | 327.2 |
| Noncash and other profit-to-cash adjustments | 817.3 | 564.8 |
| Cash from changes in operating assets and liabilities | 587.1 | 522.0 |
| Operating cash flow | 1,394.1 | 1,414.0 |
| Capital spending: net additions to property and equipment | 1,858.9 | 1,894.4 |
| Free cash flow, calculated as operating cash flow less that capital spending | −464.8 | −480.3 |
Source: June 2026 Form 10-Q, consolidated cash-flow statements, p. 6. Capital spending is shown as a positive use of cash. Grouped adjustments and the complete cash reconciliation are explained below; this definition of free cash flow is a calculation, not a GAAP subtotal.
Customers normally pay before they sail. Norwegian records those receipts as advance ticket sales until it provides the voyage. In the first half, this timing added $482.0 million to operating cash flow, down from $708.1 million a year earlier. That smaller contribution helps explain why operating cash flow grew only 1.4% despite the large rise in reported profit.
Meanwhile, accounts payable and accrued expenses together provided $140.7 million of cash, compared with $26.5 million in the first half of 2025. These amounts reflect bills and other expenses recorded before cash payment. Inventory and prepayments absorbed $110.2 million. The cash-flow statement thus shows funding from customer advances and payment timing alongside money generated by completed cruises.
Source: June 2026 Form 10-Q, p. 6 and “Sources and Uses of Cash,” p. 37.
Advance ticket sales stood at $3.651 billion at June 30, compared with $3.201 billion at year-end. Within that total, the narrower revenue-accounting category called contract liabilities was $2.8 billion; about 40% was refundable under cancellation policies. The filing separately says most deposits included in advance ticket sales are refundable. The 40% figure therefore should not be applied to the entire $3.651 billion balance. These customer payments finance operations, but also represent voyages still to be delivered and potential refund demands.
Credit-card processors could require Norwegian to put aside collateral against advance receipts under certain circumstances. No such reserve was required at June 30. If a reserve were required, some customer cash would become unavailable for ship payments and other uses.
Source: June 2026 Form 10-Q, balance sheet, p. 5; Note 3, p. 13; Note 10, pp. 22–23.
Borrowing closed the investment gap. Debt proceeds exceeded repayments by $543.3 million during the first half. After share-award settlements and financing fees, financing activities supplied $492.8 million. Cash rose by just $8.2 million to $218.1 million. The statements show no cash dividends or public share-repurchase spending; the $30.1 million payment was for net settlement of restricted share units. Management was using the available funding for the fleet and obligations rather than cash distributions.
Source: June 2026 Form 10-Q, cash-flow statement, p. 6, and equity statement, p. 7.
4. New ships enlarge the business and its future payment schedule
Ship investment dominates the balance sheet and the next stage of funding. Property and equipment increased by $1.369 billion to $20.438 billion, primarily because of Norwegian Luna’s delivery. Its associated approximately €1.0 billion shipbuilding loan carries a fixed 1.91% rate and matures in February 2038, with semiannual payments. Export-credit financing covered 80% of the ship’s contract price. This is a clear benefit of financing tied to ship construction: the company can spread much of the purchase cost over years of operation.
The rest of the balance sheet does not suggest a large buildup of unpaid passenger bills. Total receivables declined from $291.7 million to $277.0 million; customer receivables declined from $102.3 million to $98.6 million and were mainly card payments in transit. Inventory rose from $138.2 million to $161.3 million, while prepayments and other current assets rose from $498.8 million to $609.7 million. These operating assets require cash, but they are much smaller than the fleet investment.
Equity—the recorded asset value left after liabilities—increased by $363.0 million, mainly because first-half profit reduced past accumulated losses. Those losses still totaled $5.239 billion. Borrowings rose by $428.6 million, so the improvement in equity did not represent a reduction in debt. The filing reports unchanged goodwill and trade-name assets; their balances appear in the notes below.
Source: June 2026 Form 10-Q, balance sheet and equity statement, pp. 5 and 7; Notes 3, 6 and 7, pp. 13–15. Borrowings here combine amounts due within a year and longer-term debt at their recorded values. The equity reconciliation is in the calculation notes.
The company listed 16 future ships through 2037, but four orders were conditional on financing. The 12 effective orders had total contract prices of approximately $19.5 billion, of which $18.648 billion remained payable. Norwegian had $10.9 billion of committed, undrawn export-credit facilities. The statement that such financing covers approximately 80% applies to eligible individual ships; four of the 12 effective orders did not yet have that financing. It would overstate available funding to apply 80% to the entire order book.
For the remainder of 2026, management expected $1.3 billion of newbuild and growth spending, including private-island projects, plus approximately $0.2 billion of other capital spending. Planned ship-financing draws covered $0.7 billion. That left about $0.8 billion to fund before existing debt principal and interest payments of $792.1 million. Future operating receipts, available credit and other funding must meet those needs; the combined requirement is about $1.6 billion, before those operating receipts, rather than a forecast of additional borrowing.
Source: June 2026 Form 10-Q, Note 10, p. 21; future capital commitments, p. 37; material cash requirements, p. 39. Estimates use the filing’s exchange rates and precede October’s refinancing.
Long-lived commitments extend beyond ships. June operating-lease liabilities totaled $944.0 million. The latest detailed annual schedule, dated December 31, 2025, showed $2.161 billion of undiscounted operating-lease payments, including $90.9 million due in 2026 and $81.3 million in 2027. These leases primarily cover ports, offices, warehouses and equipment. Their cash payments sit alongside debt service, although the recorded lease balance is discounted to today’s dollars.
Sources: June 2026 Form 10-Q, Note 4, p. 13; 2025 Form 10-K, Note 6, pp. F-17–F-18. The annual lease-payment schedule is not a new June 2026 schedule.
5. October’s financing increased flexibility, with a near-term condition
October’s financing added credit capacity while retaining a substantial interest bill. On October 15, Norwegian’s operating subsidiary issued $950 million of 8.75% notes due in 2031. Proceeds helped redeem $525 million of 6.125% notes due in 2028, repay $376.3 million on the revolving credit facility and prepay $42.2 million of ship loans. The new notes carry $83.1 million of annual coupon interest; that is their gross interest cost, not the net increase after retiring other debt.
The revolving facility’s commitments increased from $2.486 billion to $2.801 billion. Together with the repayment, this mechanically added approximately $691.3 million of borrowing room before other movements and conditions. It is not an updated cash balance. The transaction moved one maturity later and restored credit capacity.
Source: October 15, 2026 Form 8-K, Items 1.01–1.02. Calculated in USD millions: annual coupon = 950 × 8.75%; added borrowing room = 2,801 − 2,486 + 376.3.
The facility’s January 2030 maturity has conditions that could make repayment due earlier. A specific test falls on November 17, 2026. If the relevant 2027 exchangeable notes have not been repaid or refinanced with debt maturing after April 23, 2030, and defined “Free Liquidity” is below $800 million, the facility would become due then. Free Liquidity includes unrestricted cash and qualifying unused credit, not cash alone. At June 30, the two note series had combined principal of $216.2 million. This is a concrete funding checkpoint, not a statement that a default has occurred.
The credit agreement also requires at least $250 million of Free Liquidity, subject to its stated lender-protection provisions. Other tests limit debt relative to defined capital and borrowing relative to collateral. These contractual calculations have special definitions; the ordinary balance sheet is not sufficient to calculate compliance headroom. Norwegian reported compliance with all debt covenants at June 30 and approximately $15 billion of assets pledged as collateral.
Sources: October 15 credit-agreement amendment, amended agreement definitions of “Free Liquidity” and “Revolving Facility Maturity Date,” and Sections 6.12–6.15; October 15 Form 8-K, Item 1.01, November 17 date; June 2026 Form 10-Q, Note 7, pp. 15–16, and funding sources, p. 39.
Before these transactions, June liquidity was approximately $1.5 billion, consisting of $218.1 million of cash and $1.3 billion of unused revolving credit. Management expected sufficient resources for at least the following 12 months. Nevertheless, the June debt schedule concentrated $3.950 billion of principal repayments in 2030. Moving payments into later years leaves those later maturities to be funded.
Source: June 2026 Form 10-Q, Note 2, p. 9; Note 7, p. 15; liquidity discussion, pp. 36–37. The complete June debt-payment schedule appears below and is not presented as an October pro forma schedule.
6. The turnaround must improve demand as well as cut costs
Norwegian’s own disclosures identify a commercial execution problem, while September provides encouraging counterevidence. At the time of the 10-Q, the company said it had fewer bookings for the next 12 months than it considered optimal. It attributed pressure at the Norwegian Cruise Line brand to its own execution challenges and the Middle East conflict. Management also described a mismatch between its commercial strategy and ship deployment. Having more capacity helps only when the company attracts enough customers at rates that cover the extra cost.
A competitor’s results help distinguish company execution from industry conditions. Royal Caribbean reported 1.2% growth in its second-quarter 2026 Net Yield at constant exchange rates and cited stronger demand close to sailing dates. Different brands and itineraries prevent a direct ranking of their dollar yields, but the direction of the peer’s result is useful: another large operator increased this measure during the same quarter. Norwegian’s own demand generation and deployment choices therefore remain central to the explanation.
Sources: June 2026 Form 10-Q, booking update and strategic discussion, pp. 29–30; Royal Caribbean’s July 28, 2026 earnings release, “Second Quarter 2026 Results” and “Update on Bookings and Onboard Revenue.” The competitive conclusion is an inference from the companies’ separate disclosures.
Norwegian’s response combines selling changes, cost reductions and destination investment. Management targeted $125 million of annualized marketing and administrative savings, then identified another approximately $100 million from technology-vendor consolidation and salary and benefit savings, primarily across capital spending and administration. Annualized savings describe the intended yearly pace after implementation; they are not all savings already earned in 2026. Because part relates to capital spending, the combined amount cannot be treated as an equal increase in operating profit. Management expected the latest actions to have limited impact in 2026.
Great Stirrup Cay gives the demand plan a tangible product. A September 2 announcement documented a preview of the new Great Tides Waterpark and scheduled the public opening for September 4. Waterpark passes, villas and other paid options can add revenue, while the expanded attractions can make Caribbean itineraries more appealing. The likely benefit depends on attracting additional paid visits and cruise bookings; no project profit contribution was disclosed.
Sources: June 2026 Form 10-Q, strategic cost optimization, p. 30; September 2 Great Stirrup Cay announcement, preview event, planned guest opening and paid amenities. The opening date is reported as announced, rather than independently verified operating attendance.
Management is also changing how it uses older ships. Long-term charters for Norwegian Sky, Norwegian Sun and Seven Seas Navigator transfer vessel use to other operators, with purchase options. The stated purpose is to improve fleet efficiency and competitiveness. July’s agreement to sell Oceania Sirena contemplated leasing it back through spring 2028, which would release ownership capital while temporarily preserving its cruises. The reviewed evidence establishes the agreement and expected timing, not completed sale proceeds. These transactions should be judged by cash released and obligations retained, not simply by a lower ship count.
Source: June 2026 Form 10-Q, Note 4, p. 14; Note 13, p. 23; fleet optimization strategy, p. 30.
The July outlook remained demanding: management forecast a roughly 5% full-year decline in Net Yield at constant currency, approximately $2.5 billion of adjusted EBITDA and approximately $700 million of adjusted net income. Adjusted EBITDA excludes interest, tax, depreciation and amortization, along with further company adjustments; it does not measure cash available after ship investment. On September 30, Norwegian said third-quarter results were expected to exceed July guidance, primarily because revenue performed better, while reaffirming the full-year outlook. That is evidence of improvement relative to the plan, not yet a reported third-quarter result or proof of sustained recovery.
The same September update projected 2027 net interest expense of $860 million to $880 million after the announced financing transactions. Stronger sales therefore need to produce enough operating earnings to carry a substantial financing bill, as well as the fleet’s operating costs.
Sources: July 30 earnings release, “2026 Full Year Outlook” and non-GAAP definitions; September 30, 2026 Form 8-K, Item 7.01. All outlook figures are management forecasts as of their stated dates.
7. Currency exposure and litigation can compete with shipbuilding for cash
The company’s cash needs can change for reasons outside passenger bookings. At June 30, €13.3 billion of ship-construction payments remained unprotected by currency hedges—contracts used to limit exchange-rate changes. Norwegian estimated that a 10% change in the euro would change their dollar value by approximately $1.5 billion. A stronger euro would increase the dollar cost. This exposure is especially relevant because most customers are sourced from the United States while ships are contracted in euros.
Fuel protection is also partial. The company had hedged approximately 52% of projected fuel purchases for the remainder of 2026 and 38% for 2027. Those contracts reduce some price exposure but do not fix the entire fuel bill. On existing debt, 90% was fixed-rate at June 30; a one-percentage-point increase in the benchmark rate would increase annual interest expense by approximately $15.3 million before allowing for interest added to ship-construction costs instead of immediately charged against profit. Fixed rates limit immediate sensitivity to market interest rates, while currency and fuel remain significant sources of variation.
Source: June 2026 Form 10-Q, market-risk disclosures, pp. 40–41. These are June sensitivities, not forecasts, and are not added together as a combined loss scenario.
The Havana Docks lawsuit remains a material contingent exposure. A 2022 judgment against Norwegian was approximately $112.9 million. The Supreme Court vacated the appellate decision that had dismissed the case and sent it back for further proceedings on May 21, 2026; its judgment issued June 22. At the 10-Q date, Norwegian considered a loss reasonably possible but not probable and recorded no liability. The historical judgment is not a new estimate of the eventual payment, but its size shows why the case matters to a company with $218.1 million of June cash.
Sources: June 2026 Form 10-Q, Note 10, p. 22; Supreme Court opinion, May 21, 2026, opinion pp. 1–2; Supreme Court docket 24-983, May 21, June 22 and August 5 entries. The company’s loss assessment is dated to the filing, not restated as a newly verified October assessment.
Taxes were a small reported cost: $6.4 million in the first half against $333.6 million of pretax income. The annual filing explains the importance of international-shipping tax exclusions in Bermuda and the United States. It also maintains a full allowance against Bermuda deferred tax assets, meaning those potential future tax benefits are not recognized as usable assets. Continued eligibility for the exclusions matters more to the business than assuming that all carried-forward tax losses will produce cash savings.
Sources: June 2026 Form 10-Q, p. 3; 2025 Form 10-K, Note 12, “Income Taxes,” including shipping-income exclusions and valuation allowances, pp. F-34–F-38.
8. The business can recover, but more capacity alone is insufficient
Norwegian has funding options and a credible operating response, but the second quarter did not yet demonstrate a commercial turnaround. New ships increased revenue, selected non-fuel costs were controlled, and September’s revenue update improved on management’s earlier expectations. October’s financing gives the company more room to execute.
The unresolved task is to earn more from the capacity it has added while controlling the full cost of operating and financing that fleet. Better bookings at profitable rates would improve both cruise earnings and advance cash receipts. Continued pressure on revenue per berth would make ship commitments and financing costs harder to absorb, even if reported net income benefits from currency movements. The next decisive evidence is stronger booking performance translated into reported operating margins and cash generation, together with satisfaction of the November funding condition.
Sources: June 2026 Form 10-Q, operating results and liquidity, pp. 31–39; September 30 operating update, Item 7.01; October 15 financing filing, Item 1.01. The overall business assessment is an inference from this evidence.
Reporting basis: company, periods and evidence
This analysis uses Norwegian Cruise Line Holdings Ltd.’s consolidated, unaudited Form 10-Q prepared under U.S. generally accepted accounting principles (GAAP) for June 30, 2026, filed August 3, 2026: CIK 0001513761, accession 0001104659-26-089657. The three brands are combined in one reportable segment; separate brand profit is not reconstructed. The second-quarter comparison is April–June 2026 against April–June 2025; first-half cash flows cover January–June. Balance sheets compare June 30, 2026 with December 31, 2025. Amounts originally reported in thousands are converted to millions or billions as labelled.
The supplied complete filing text is the main evidence. Relevant SEC XBRL facts were checked against the same accession, USD units and the actual start and end dates; a fact labelled “Q2” can still cover six months. Historical and subsequent documents are identified beside their claims. The October 18 research cutoff does not imply that third-quarter accounts or every development through that date have been verified.
Sources: SEC filing index and acceptance record; SEC company facts; 2025 Form 10-K, Note 2, segment-reporting policy.
Calculation notes: sales, margins and the profit bridge
Growth is current-period amount divided by the same prior-year period, minus one. Operating margin is operating profit divided by revenue. Using USD millions, second-quarter margins are 363.327 ÷ 2,640.544 = 13.76% and 423.836 ÷ 2,517.497 = 16.84%; the decline is 3.08 percentage points. First-half margins are 596.270 ÷ 4,971.765 = 11.99% and 624.778 ÷ 4,645.050 = 13.45%.
For per-day calculations, revenue in millions is first multiplied by 1,000,000 to obtain dollars. Ticket revenue per passenger day uses $1,729.838 million ÷ 6,745,954 days in 2026 and $1,708.985 million ÷ 6,288,800 days in 2025. Onboard revenue uses $910.706 million and $808.512 million with those same respective denominators. For Net Yield, revenue less commissions/transportation/other and direct onboard costs gives $1,964.430 million in 2026 and $1,841.978 million in 2025. Dividing by 6,589,740 and 6,052,273 capacity days produces the reported $298.10 and $304.34.
The reported second-quarter net-profit change reconciles as follows. All amounts are USD millions; positive changes increase profit.
| Step from second quarter 2025 to second quarter 2026 | USD millions |
|---|---|
| Starting net profit, 2025 | 29.992 |
| Change in operating profit | −60.509 |
| Lower net interest expense | +65.895 |
| Improvement in other income and expense | +189.942 |
| Higher income-tax expense | −2.767 |
| Ending net profit, 2026 | 222.553 |
The euro-debt principal remeasurement alone changed from a $121.909 million loss to a $32.660 million gain. It is only part of the $189.942 million change in other income and expense; the entire change is not labelled as that specific currency item.
Source: June 2026 Form 10-Q, pp. 3, 31–35 and 40.
Calculation notes: management’s adjusted earnings and share counts
The table reproduces management’s second-quarter adjusted-net-income calculation. Amounts are USD millions, except the stated share and EPS rows. It begins with consolidated GAAP profit after tax. Expense add-backs and the currency reversal are used exactly as disclosed; the filing supplies no separate tax-effect adjustment for them. No assumed tax rate is imposed. Some debt can be exchanged for shares. EPS rules sometimes assume that exchange has happened, adding back the related interest and adding potential shares. Those interest adjustments do not change operating profit.
| Bridge to company-defined adjusted earnings | Second quarter 2025 | Second quarter 2026 |
|---|---|---|
| Reported net profit | 29.992 | 222.553 |
| GAAP assumed-conversion interest adjustment | 0.000 | 0.624 |
| Noncash deferred compensation | 0.987 | 1.104 |
| Share-based compensation | 25.899 | 22.734 |
| Activist-related professional advisory fees | 0.000 | 0.175 |
| Restructuring costs | 0.000 | 7.460 |
| Debt extinguishment and modification costs | 68.435 | 0.000 |
| Reverse euro-debt principal currency loss or gain | 121.909 | −32.660 |
| Additional assumed-conversion interest adjustment for non-GAAP EPS | 10.049 | 0.000 |
| Company-defined Adjusted Net Income | 257.271 | 221.990 |
| Diluted shares used for adjusted EPS, millions | 502.252 | 463.932 |
| Adjusted EPS, USD | 0.51 | 0.48 |
Adjusted net income declined 13.7%, while the smaller adjusted share denominator softened the EPS decline. The GAAP share comparison moves in the opposite direction: diluted weighted-average shares increased from 448.033 million to 463.932 million. Potential shares enter the calculation only when they reduce the applicable EPS. Different GAAP and adjusted profits can therefore produce different share counts.
Actual shares issued and outstanding increased from 455.257 million at year-end to 459.159 million at June 30. The equity statement attributes the first-half share issuance to employee plans. The reduction in the adjusted EPS denominator is therefore not evidence of a public buyback. In May, the company committed to cash settlement of exchanges of the two remaining 2027 note series, exchanging potential future share issuance for a cash obligation.
Source: June 2026 Form 10-Q, balance sheet, p. 5; equity statement, p. 7; EPS, p. 10; exchangeable notes, p. 15; Adjusted Net Income and EPS reconciliation, p. 34.
Calculation notes: how profit becomes cash
This bridge separates profit from receipts and payments. Positive amounts add to operating cash; negative amounts reduce it. All amounts are USD millions.
| Profit-to-cash bridge | First half 2025 | First half 2026 |
|---|---|---|
| Reported net profit or loss | −10.303 | 327.219 |
| Add back depreciation and amortization | 514.972 | 575.435 |
| Add back debt-extinguishment loss | 117.938 | 0.000 |
| Add back share compensation | 46.180 | 46.099 |
| Reverse euro-debt currency loss or gain | 137.922 | −70.298 |
| Other adjustments | 0.254 | 13.600 |
| Change in receivables | −46.754 | 9.550 |
| Increase in inventory | −11.319 | −26.749 |
| Change in prepayments and other assets | −89.441 | −83.481 |
| Change in unpaid supplier bills | 12.415 | 50.741 |
| Change in accrued expenses and other liabilities | 14.073 | 89.925 |
| Change in advance ticket sales | 708.135 | 481.997 |
| Operating cash flow | 1,394.072 | 1,414.038 |
Cash-flow depreciation and amortization includes financing-cost amortization. That explains why the 2026 amount exceeds the 531.921 expense included in operating profit. The currency adjustment removes the gain or loss from translating debt into dollars; it is not a customer payment.
Norwegian’s first-half 2026 financing cash consists of borrowing proceeds of 1,755.848, less debt repayments of 1,212.597, restricted-share settlements of 30.122, and financing fees and other payments of 20.373. These items leave 492.756. Investing used 1,898.587, comprising property/equipment additions of 1,894.361 and other investing payments of 4.226.
| Reconciliation of cash and cash equivalents, USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Opening balance | 190.765 | 209.893 |
| Operating inflow | 1,394.072 | 1,414.038 |
| Investing outflow | −1,868.062 | −1,898.587 |
| Financing inflow | 467.240 | 492.756 |
| Closing balance | 184.015 | 218.100 |
Neither statement presents a separate restricted-cash component in this reconciliation. Balance-sheet changes can differ from cash-flow changes because cash-flow lines exclude noncash movements. For example, advance ticket sales rose by 450.608 on the balance sheet but contributed 481.997 in the cash-flow reconciliation. The analysis uses each amount only for its stated purpose.
Sources: June 2026 Form 10-Q, pp. 5–6 and Note 12, p. 23; 2025 Form 10-K, Note 2, “Debt Issuance Costs.”
Calculation notes: equity and contractual payments
The balance sheet balances in both periods. All values below are USD millions.
| Assets equal liabilities plus equity | December 31, 2025 | June 30, 2026 |
|---|---|---|
| Assets | 22,541.401 | 24,011.710 |
| Liabilities | 20,331.513 | 21,438.844 |
| Equity | 2,209.888 | 2,572.866 |
Two acquisition-related assets were unchanged: goodwill, the amount paid above the identified net assets acquired, was 135.764; trade names, the recorded value of acquired brands, were 500.525. Their unchanged values did not contribute to the increase in total assets.
| First-half 2026 change in equity | USD millions |
|---|---|
| Opening equity | 2,209.888 |
| Net profit | +327.219 |
| Share compensation | +46.099 |
| Restricted-share settlements | −30.122 |
| Other changes | −0.011 |
| Other comprehensive income, mainly hedge accounting | +19.793 |
| Closing equity | 2,572.866 |
Employee share issuance moved 0.004 from paid-in capital into ordinary share capital without changing total equity. Paid-in capital ended at 8,243.394 and ordinary share capital at 0.459. Profit reduced the accumulated deficit to −5,239.415. Other comprehensive income reduced accumulated losses recorded outside net profit to −431.572. No separate treasury-share account appears in the balance sheet.
Source: June 2026 Form 10-Q, balance sheet and equity statement, pp. 5 and 7; Note 5, p. 14.
The following schedule shows the June 30 contractual funding burden, in USD millions. Interest is calculated as disclosed debt-service payments less scheduled principal. It assumes the filing’s unchanged benchmark interest rates and excludes later refinancing and future draws on undrawn ship facilities.
| Payment period | Debt principal, including finance leases | Estimated interest on existing debt | Remaining ship-construction payments |
|---|---|---|---|
| Remainder of 2026 | 477.842 | 314.215 | 1,004.238 |
| 2027 | 1,105.695 | 596.358 | 2,473.240 |
| 2028 | 1,340.922 | 553.551 | 1,467.973 |
| 2029 | 1,364.816 | 490.859 | 1,276.800 |
| 2030 | 3,949.587 | 374.138 | 3,238.843 |
| 2031 | 1,865.359 | 293.812 | 203.123 |
| Thereafter | 5,363.524 | 368.026 | 8,984.137 |
| Total | 15,467.745 | 2,990.959 | 18,648.354 |
The principal schedule and the balance sheet use different measurement bases: scheduled repayments total 15,467.745, while the reported debt carrying amount is 1,141.370 current + 13,893.415 non-current = 15,034.785. The 432.960 difference is not an additional borrowing inflow. Debt carrying amounts incorporate accounting adjustments, including unamortized financing costs; funding analysis uses the contractual repayment schedule.
Current liabilities exceeded current assets by 5,054.871 at June 30. Advance ticket sales of 3,651.201 account for much of that gap: they largely require delivery of cruises rather than immediate repayment of a bank loan, subject to the refund rights discussed above. This is why liquidity is assessed through cash, available facilities, future receipts and commitments together, rather than through the current-asset ratio alone.
Sources: June 2026 Form 10-Q, pp. 5 and 7; Note 5, p. 14; Note 7, p. 15; Note 10, p. 21; material cash requirements, p. 39; 2025 Form 10-K, Note 2, debt-issuance-cost policy.
This report is for general information and business analysis. It is not investment advice.