Good morning. Welcome to Norwegian Cruise Line Holdings Third Quarter 2025 Earnings Conference Call. My name is Sherry, and I will be your operator. [Operator Instructions]. As a reminder, all participants, this conference is being recorded. I would now like to turn the conference over to your host, Sarah Inmon. Ms. Inmon, please proceed.

Thank you, Sherry, and good morning, everyone. Thanks for joining us for our third quarter 2025 earnings call. I'm joined today by Harry Sommer, President and CEO of Norwegian Cruise Line Holdings; and Mark Kempa, Executive Vice President and Chief Financial Officer. As a reminder, this conference call is being simultaneously webcast on the company's Investor Relations website. We will be referring to a slide presentation during the call, which can also be found on our website. Both the conference call and presentation will be available for replay for 30 days following today's call. Before we begin, I would like to cover a few items. Our press release with third quarter 2025 results was issued this morning and is also available on our IR website. This call includes forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from such statements. These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation. Unless otherwise noted, all references to 2025 net yields and adjusted net cruise costs excluding fuel per capacity day are on a constant currency basis and comparisons are to the same period in 2024. With that, I'd like to turn the call over to our CEO, Harry Sommer. Harry?

Well, thank you, Sarah, and good morning, everyone. Welcome to our third quarter 2025 earnings call. I'll begin my remarks today with a discussion of the third quarter results and recent booking pace, and we'll then get into some recent highlights on our 3 brands and strategy. I'll then provide some brief comments on how 2026 is shaping up before handing the call over to Mark, who will provide a deeper dive into our financial performance and outlook. So to dive right in, I am pleased to report another record quarter with the results that met or exceeded guidance across all metrics. As a result, we are reiterating our full year adjusted EBITDA guidance and raising our guidance for adjusted EPS. Our performance this quarter was driven by solid customer demand which drove load factors higher, reflecting the continued strength of our brands and the execution of our charting the course strategy. As previously stated, we remain committed to balancing return on investment with return on experience, delivering exceptional vacations, driving sustainable financial performance and strengthening our balance sheet. Now delving a bit more into the details of our third quarter results shown on Slide 4, we achieved another quarter of strong performance and solid execution across the business. We met or exceeded guidance we provided in July and delivered the highest quarterly revenue in our company's history. Load Factor finished ahead of expectations at 106.4% driven by stronger-than-anticipated demand from families, particularly at the NCL brand, resulting in net yield growth of 1.5%. Costs were essentially flat year-over-year, which resulted in adjusted EBITDA of approximately $1 billion, a milestone achieved for the first time in company history. As a result, our trailing 12-month adjusted operational EBITDA margin reached 36.7%, an improvement of 220 basis points from last year and…

Thank you, Harry, and good morning, everyone. Let me start with our third quarter results highlighted on Slide 12. We delivered another strong quarter, exceeding or meeting guidance across all metrics. Occupancy came in at 106.4%, nearly 100 basis points above guidance, driven by strong family demand across all itineraries. Net yields grew 1.5%, in line with guidance, fueled by strong pricing growth of over 3%. On the cost side, adjusted net cruise cost ex fuel was down 0.1 point, coming in slightly better than expected as our cost control efforts continue to bear fruit. As a result of better-than-expected fuel consumption, adjusted EBITDA for the quarter was $1.019 billion, above our guidance of $1.015 billion. Adjusted net income came in at $596 million. Adjusted EPS came in $0.06 ahead of guidance at $1.20. Overall, this was a solid quarter, consistent with our expectations. Moving on to fourth quarter and full year guidance on Slide 13. We expect occupancy to be approximately 101.9% in the quarter, roughly 100 basis points above the prior year and our previous implied guidance. As Harry mentioned, we are very focused on Load Factor and brand visibility at the Norwegian brand, and we are encouraged by the progress we have made this quarter as family demand surpassed our initial expectations driving occupancy higher. I want to reiterate that we continue to balance Load Factor and price recognizing the natural give and take between the two. As we attract more families, we are seeing more third and fourth guests in a cabin. And naturally, those guests come in at a lower price point which has a modest impact on overall pricing. As a result of this dynamic in the fourth quarter, we expect net yield to grow approximately 3.5% to 4% reflecting our deliberate decision to…

Well, thank you, Mark. Now looking at Slide 18, I'd like to once again highlight the significant progress we're making towards our key charting the course financial targets. By year-end 2025, we expect adjusted operational EBITDA margin to expand by more than 600 basis points versus 2023. Adjusted EPS to grow nearly threefold, net leverage to decline by 2 full turns and adjusted ROIC to continue its upward trajectory. I'm incredibly proud of what we've accomplished so far in 2025. Looking ahead, 2026 is shaping up to be another outstanding year with capacity set to grow approximately 7% as the Regent Luna and Seven Seas Prestige join the fleet, we expect to see continued strength across all 3 brands. At Norwegian, we anticipate even more families sailing with us further lifting Load Factor and driving margin expansion. Our strong capacity growth, combined with low- to mid-single-digit yield gains and sub-inflationary cost growth is expected to drive meaningful margin expansion and continued deleveraging in 2026. I'm confident in our trajectory and excited about with the last months of 2025 and the year ahead will bring as we continue charting our course to our sustainable, long-term value creation. With that, I'll hand the call back to Sherry to begin the question-and-answer session.

[Operator Instructions] Our first question comes from Brandt Montour with Barclays.

So heard loud and clear '26 high-level targets are reiterated here. But guys, with a little bit of pressure from mix in the fourth quarter, based on the shift to families as well as it looks like incremental confidence in the occupancy lift for next year, can you give us some sort of additional insights into how that mix shift would affect yields for next year, all else equal?

Good morning, Brandt, this is Mark. So first and foremost, our job is to maximize yield margins and, of course, earnings growth. And I think that we've been telegraphing consistent with our strategy, we aim to grow yields next year in the low- to mid-single digits. But going back to in line with our strategy, we've been clear that we continue to expand the Norwegian brand into the family segment. As we do that, that obviously brings higher Load Factors, which we have clearly seen both in the third and more importantly, into the fourth quarter, we will see that a significant benefit from that in the first quarter of about a 200 to 300 basis point improvement year-over-year. With that, families and children often bring slightly lower pricing in the overall mix. But importantly, our core customer, that first and second customer, we are seeing meaningful growth in pricing. So we expect to continue to grow yields in that low- to mid-single-digit algorithm. And again, this is in line with our strategy, and we're executing as planned.

Really helpful color. A second question I have would be on the bookings comment. Harry, you said bookings were up 20%. And maybe clarify if that was in the quarter or the month, I think it was the quarter. But either way, and I don't think that was adjusted for capacity growth, but either way, that's still a really strong figure. Could you kind of square that with the commentary in the release that you're still within the optimal range? I would think that this would sort of push you up toward -- well, at least would push you up within that range, but also the mix is going more Caribbean, you -- that's more shorter in. So again, all else equal, I would think that you're moving away from longer lead time bookings, and it would be something that would be a counter for us there. So maybe square those -- sorry, that's a lot, but could you square those things and what you're kind of seeing with that with that bookings? What's driving that booking acceleration?

Sure, Brandt. So just to -- there's a lot there. I'll try to cover as much of it as I can, or at least as I can remember. So first off, bookings were up 20%. That was for the entire quarter, not for a specific month. And then I also mentioned that, that increase went into October as well. So both for the quarter, the third quarter, and for the month of October, and I'll just provide further color that it applied to all 3 brands, NCL, Oceania and Regent, all saw that growth. So the growth was broad-based. And of course, while Oceania and Regent don't play much in the Caribbean, the growth on the Oceania and Regent have nothing to do with the Caribbean, but more about the progress that the brand is making from a consumer demand perspective. So on NCL, yes, there are some unique tailwinds, if you will, on bookings. You mentioned capacity. There's also a shift to shorter cruises, which would require us to have more bookings. But fundamentally, we are just seeing a stronger consumer in this Q3 than we saw in last Q3.

Our next question is from Lizzie Dove with Goldman Sachs.

I appreciate what you've said about the kind of dilution from families totally get that. But at the same time, there has been a lot of focus on the Caribbean and whether there is kind of more of a promotional environment there with so much kind of competition, everybody kind of moving the ships there. So curious what you're seeing and whether that has kind of impacted you at all or you expect it to going forward?

So Lizzie thanks for the question. We're not really seeing anything unusual in the promotional landscape, at least within the competitive set that we play in. What we're seeing this year is normal from both a price and promotional perspective, which is one of the reasons that it will allow us to have this 3.5% to 4% yield increase in Q4 that we've discussed. So no, nothing unusual.

Okay. Got it. And then, I guess, thinking about longer term, your Caribbean capacity is growing, what is the kind of strategy to kind of absorb that capacity in Caribbean? I know you've got the GSC development, but I'm curious if you feel like there's a need to kind of push marketing or how we should think about costs from those kind of private island investments? Just anything like we should consider as we move to 2026.

So listen, I think it starts with consumer demand, right? And our goal is to create both a brand construct and specific marketing vehicles that will appeal to the demographics that we think would find the Caribbean of interest. We've talked about the shift in both our branding and our marketing communications in my prepared remarks, so I won't repeat them again here. But between the new CMO and the new Chief Commercial Officer that we onboard over the last few months, we're definitely making progress along those fronts. I think things like the build-out of GSC is absolutely going to help. I'll mention that about 1/3 of our guests next year on the NCL brand will visit GSC. It will be our most -- what sort I'm looking for, the destination we go to the most of any destination of the world. So clearly, our investments there are important. I think I mentioned that everything that we're hoping to launch over the holiday period, which is just about a month away is on track. I just personally visited the island about a week ago, and it really looks spectacular. I remind the analyst community that the footprint that we have on GSC is far greater and some of the competitive set, and we plan to utilize it. I think the next phase with the water park coming in the summer of next year, should be a second milestone and an additional game changer in terms of demand. But I think ultimately, between the brand, the marketing vehicle and then the thousands, the tens of thousands of guests that will be visiting at least the initial set of amenities that come online in the holiday period we expect to get pretty good word of mouth. I want to address the second question you asked about marketing. So we have increased marketing spend this year. I want to get the analyst comfort that this flat cost year-over-year was not at the expense of cutting marketing. If anything, we've increased marketing by well over the 75 basis points that our overall cost structure increase, and we were able to save money through efficiencies elsewhere to fund that, and we plan to continue spending on marketing. Marketing is an important part of driving consumer demand. We think we're spending about the right amount now relative to our revenue generation and our goals for next year, and we will continue to spend at these levels into next year, while having strong cost control throughout the P&L, which will enable us to continue the tremendous margin expansion, the 600 basis points we've seen over last year, an additional 200 basis points that we're planning to do margin expansion next year will all be possible even with this increased marketing spend.

Our next question is from Steve Wieczynski with Stifel.

Okay, Mark, you'll probably hit this question. But if we think about next year, you basically just said you expect to grow yields kind of in that low- to mid-single-digit range. And if I look at Slide 14 and I get my handy dandy ruler out to kind of gauge where costs are projected based on that bar chart. They look like they're going to be higher, but not anything crazy. So if we put all that together, it seems like there would be maybe a good bit of upside to your charting the course EPS targets, I'd say, especially now also including your recent capital market transaction. So I'm not sure what you can say or not say about that, but any comments there would be super helpful.

So first, I love all questions from you. Second, yes, when you get your ruler out on that chart, I want to reiterate through the broader constituency that our target, as we've been maintaining is to deliver sub-inflationary or better unit cost growth. And we've been very successful at doing that now for 2 years in a row. And we certainly maintain and have a clear line of sight on that for 2026. Look, I think when it comes to the charting the course targets as you've heard today, we are reiterating our confidence in hitting those targets. We are executing on our strategy. Of course, it's early in the year. We do have a lot more Caribbean sailings. So bookings are naturally a little bit closer in. But everything we're seeing today indicates that we're well on our way. So we have confidence on our path. We have confidence in executing our strategy, and that's what we're maintaining. And we'll continue to deliver on that path.

Okay. Got you. And then second question, if we think about the fourth quarter yield guide, Harry and Mark, you kind of -- you obviously called out the yield headwind from adding the third and the fourth and the higher Load Factors. But did you guys embed any impact from things like -- obviously, we've seen an uptick in weather in the fourth quarter or things like the government shutdown? I'm just trying to figure out maybe what that like-for-like yield would look like, excluding the Load Factor lift.

It's hard to sort of break things down into their components. So I'll start out by saying that we believe a 3.5% to 4% yield growth on a year-over-year basis is strong, and we're very happy with it. If you're asking whether they were modest impacts by the government shutdown, hard not to believe that, that's a modest headwind to the business. I wouldn't necessarily say the weather was a big deal. It was actually a relatively a modest hurricane season as these go, we only had an impact to a handful of Bermuda cruises and 1 or 2 now to Jamaica, none of which had to be canceled, just re-routed. But maybe on the government shut down a little bit. But the macro environment continues to be strong, economy continues to grow, unemployment rates continue to be low. The things that we measure, cruise intent, future cruise sales onboard to ship are all at or near record levels. So we're pleased. And of course, the proof is in the pudding, I've gone out not just for Q3, but for the actual month of October, the month that just ended, that bookings were up over 20% year-over-year across all 3 brands. We think that's a pretty good setup, but we'll continue to move forward.

Our next question is from Robin Farley with UBS.

I think we lost Robin. Sorry.

Our next question will now be from Matthew Boss with JPMorgan.

So Harry, maybe a 2-part question. If you could elaborate on the progression of booking trends that you saw through the third quarter and into October. And then if you parse through the mix impact that you cited in the Caribbean, could you speak to underlying pricing trends across itineraries that you're seeing across both family and luxury?

Well, I don't think there's been a material change. If you're asking whether we saw an acceleration July, August, September, October, they were all 4 of them were good months. I wouldn't necessarily say that one of them stood up or that things have decelerated in any way, maybe a modest acceleration coming into October, but nothing that material. All 4 months were very good months for us. And on the pricing side, I'd make a similar comment. There's nothing that stands out, if you will. I think across the board, we've seen strength. I just want to echo Mark's comments on pricing, you just have to think about NCL a little bit different. We're seeing good pricing increases on the first and second in the cabin as we increase third and fourth, that naturally is a modest headwind to overall average price but still a benefit to yield margin and profitability. So I just want to emphasize that point. But across the board, nothing that stands out one way or another, we're seeing good strength everywhere.

And then maybe, Mark, as a follow-up, could you help break down the drivers of Load Factors in 2026 that you're expecting to exceed 2024. What you're embedding for the Caribbean relative to opportunity you see year-over-year in Europe?

Look, thanks, Matt. I think it's a couple of things. Obviously, when we look at '26, we've said we've clearly stated today that we expect to be at least 105% or better. That's clearly being driven by the increased family dynamic, which we have been very clear that we continue to go after. So I think you'll see some significant tailwinds in the first quarter, where we called out at least a 200 to 300 basis point improvement. And then I think as we transition into the latter part of the year, when GSC launch comes online fully, you're going to start to see that accelerate in the latter part of Q3 and Q4 of next year. That, combined with, I think, some further opportunity in Q3, all should contribute to a healthy increase in Load Factor year-over-year. We've said, we've committed, we want to get back to historical Load Factors better. We're doing that not only organically but by expanding our segment into the premium families, and we're starting to see evidence of that.

And I just want to provide just a little bit more color because while the Caribbean is certainly the headline of the story for Q4 and Q1, when you go into the rest of the year, there are a few other modest tailwinds that will be helping us. On the NCL brand, we shifted from longer European itineraries to shorter European itineraries, primarily 7 nights in the Med, which should allow for a slightly larger family market as well, which is consistent, of course, with the brand strategy. And we're also focused on, if you will, minimizing the number of single cabins that we take across all 3 brands, not just for NCL, but Oceania and Regent. I think '26 will certainly be a year where the entire cycle of the booking curve was booked under what we consider to be good booking conditions. And I think we're just going to -- we're looking for modest benefits in every single aspect of the business. So again, while the Caribbean certainly the headline for Q4 and Q1, it is not the only initiative we're working on to improve occupancy Load Factor for next year.

Our next question is from Conor Cunningham with Melius Research.

Maybe to just follow up on that a little bit more. So I understand that the customer dynamic kind of lingers into the first half of 2026. But it seems like the mix headwind becomes a tailwind when Great Stirrup Cay comes online, like the Water Park comes online. So one, is that even right? And then two, can you just talk about the ramp around Great Stirrup Cay as all the new investments start to come online in general?

Yes. Look, Conor, I think you're absolutely right. When we look at the second half, as we bring on GSC fully, we absolutely believe that's going to be a tailwind. And as a reminder, we -- in our last call -- prepared remarks on our last call, I think we had said that GSC was going to be at least around a 25-point tailwind to yield next year, in part and at a full point on 2027. Recall that although we're passing about 1/3 of our overall system-wide customers through the island next year, by the time the water park gets on, about 2/3 of that base will have already gone through the island. So we're not getting the full benefit in 2026, but we will certainly start to see that ramp up in the latter half. I think when you look -- when you think about Great Stirrup Cay and the announcements about the new amenities in the park, we have certainly seen and -- seen a heightened level of interest from the consumer. We've seen more website bookings, more intent to travel. I think that in part is why we've seen the 20% bookings increase as well. So it's creating excitement. That said, we view what's happening in the latter part of December as the first soft opening. Certainly, we're opening great amenities with one of the largest pools. In fact, I think it's about as large as an entire cruise ship, if I recall correctly. So we are getting buzz. We're getting momentum. And I think as Harry said, as we start to see more word of mouth, on that to the latter part of this year into early next year, I think we're going to continue to see strength and momentum build out of that.

Okay. And then maybe I can ask a question on the cost side of the mix dynamics. So it seems like that as occupancy moves up, you get economies of scale, I mean, that naturally makes sense to me. But like are you seeing the cost offset that you would expect? Because at the end of the day, I think you really got -- you're out your whole thought process is around the spread between unit costs and in net yield. So just are you seeing the cost offset as yields are kind of partially -- there's a modest headwind from the ship, the mix dynamic?

Yes, Conor. I think it's across the board. We continue to see margin expansion. We've expanded margin this year by more than 150 basis points or 200 points of 600 basis points in 2023. That's in part to almost everything we're doing. It's not only the mix, the better and more efficient, closer to home itineraries. But more importantly, it's also the muscle and the scale that we continue to get that we've been demonstrating over the last 2 years. So I think when you put all that together, we continue to flex that muscle. We continue to improve. And of course, in part to some of that is the mix, but that's starting to come into play now. When you look at the last 18 to 24 months, that has not been a mix issue. That just means we've simply been better at delivering a better unit cost overall system-wide. So we certainly are seeing the fruits of that. We're bearing fruit, and we expect to continue to see that into 2026 and beyond.

And I just want to emphasize, not cost at the extensive product, our guest satisfaction scores and our future onboard bookings continue at record levels that it is super critical to get that message across.

[Operator Instructions] Our question is from Ben Chaiken with Mizuho Securities.

Maybe the first question is maybe a 3-parter. Maybe remind us to refresh us. You mentioned '26 costs are sub-inflation. What are -- I guess, part one, what are some of the specific opportunities you see next year. I remember at one point during the Investor Day, you went through a couple of kind of like critical examples, I'm not sure if there's anything you can share next year. Part 2, is higher Caribbean exposure on net benefit to cost? Or how should we think about it? And then part 3, how should we think about the impact of occupancy as there should be around, I think it's like 200, 250 basis points of growth. I guess, mechanically, is there any rule of thumb you have on the translation between occupancy to net cruise cost?

All right. And I'm going to see if I can get all 3 of these. I think the first was on the 2026 detail larger and the larger opportunity. Look, Ben, we've been clear. In this business, there is no silver bullet to just snap your fingers and find a large cost. It is a deliberate and methodical way of looking at the business from the entire process -- development process to the product delivery. So we are focused on a lot of little things and over time, that flywheel starts to turn, and we find more efficiencies across the board. So it's -- we're focused on everything. But again, we've been doing this in a very disciplined and methodical manner. I think when you said -- when you talked about Caribbean capacity, is that a tailwind to cost? Absolutely, sailing closer to home -- sailing closer to home, obviously, gives you some benefits in terms of the ability to deliver the product at a better scale and at a better unit cost. But again, that's all just part of the broader mix. And I think on the last part in terms of the occupancy, when we think about increased occupancy from thirds and fourth, that's typically children or some or the teenage set, there's very little marginal cost related to that. Obviously, that brings in a higher revenue. But I think even when you look at our third quarter, where increased -- were occupant increased by 1 point, fourth quarter, our occupancy is increasing by 1 point, we're not seeing any significant shifts in the cost base for that. So I think that's just another benefit in overall tailwind as we bring more of that third and fourth guest to our mix, we'll continue to improve on our overall unit cost.

Okay. Got it. That's very helpful. And then just for '26, a quick one. Obviously, capacity growth is higher in '26 than '25. Is there anything abnormal on the D&A side specific to the island investments we should consider?

No. I think when you look at D&A, and I think when you look at it historically, whether you're doing it on a gross or a net percentage of revenue, I think it's going to be pretty consistent. We've been very clear that our investments in Great Stirrup Cay generally have been modest. Our largest investment, obviously, is the pier where that was around $150 million plus, and I think that gets depreciated probably over at least 30 to 40 years, I don't have the exact number on. So I don't think you would expect to see any sort of uptick in D&A as a result of the Island investments. I will remind you, we do take on -- we do have 7% capacity growth next year. So we will be taking on 2 new ships, Luna in March, April and then Prestige in the latter part of December of '26.

Our next question is from Vince Ciepiel with Cleveland Research.

I wanted to dig into the yield set up a little bit more for next year. And there's been a lot of helpful commentary so far. But I guess I wanted to take it in parts. First, I imagine you have close to half of next year booked a good amount of the first half. Like the core trend line that you're seeing in like-for-like, any way to describe it? And then the second part, there's obviously some moving pieces. You already laid out GSC should be accretive, which is great and helpful. But the 2 other ones I just wanted to clarify. The first new hardware, like accretive, dilutive or probably somewhat neutral -- and then finally, the shift to the Caribbean, a lot of helpful commentary on occupancy should benefit, maybe some cosmetic dilutive impact to per diem. But at the end of the day, like does the shift to the Caribbean a tailwind, a headwind or neutral to yield in '26 as you sit here today?

So try to get through all 3 parts, if I remember everything, Vince. And by the way, good morning, thanks for joining us today. So you are right. We are about half booked for next year. That's about where we would be at the cycle at this time. When you ask about core trends, we have come out with our algorithm that on this type of measured capacity growth, we're looking for low- to mid-single-digit yield growth, and I believe that our book position right now confirms that, that will be attainable, which, of course, we need to attain in order to hit our target in the core targets, which we forcefully reiterate again today that we'll obtain. In terms of the accretiveness of new hardware, listen, any time a new ship comes on board, we saw it with Aqua this year. We're seeing it with Luna next year on the NCL fleet, we absolutely see a modest tailwind. But keep in mind, it's one ship in a 34 ship fleet. So it's not going to be a tremendous tailwind at the NCLH level. Certainly, on the Oceania and Regent side. We have a new ship for Oceania this year Allura, a new ship for Regent coming on the very end of next year won't really impact 26 months -- 26 months, excuse me, those also function as a modest tailwind. So overall, yes, new ships are accretive. But again, it's just 1 ship in the overall fleet. On Caribbean, we absolutely view this. When you say a tailwind or headwind to yield, I'll make the question a bit broader. We viewed it a tailwind to margin, which is more important to us than a tailwind to yield. So yes, we believe Caribbean are good yielding cruises, but the more important thing is that we can deliver Caribbean at a higher margin than we can deliver some of the exotic itineraries in places like Africa and South America and Asia that these ships have replaced, especially the shorter 3- and 4-day cruises.

It's a really helpful overview there. And then maybe one final one. Just as you shift more Caribbean in the business, probably looks a little bit closer in, I would imagine. And when you watch that trend line in close-in bookings over the last 60, 90 days. How would you characterize it?

So yes, these Caribbean cruises both in general and certainly the 3- and 4-day cruises, do book closer in. And I think that was one of the factors why we've seen record bookings in Q3 in October, clearly not the only factor, but one of the factors. I'd say the bookings have been nothing short of incredible. I mean, the demand we're seeing for close-in up until a week of sailing even has been unprecedented from at least recent history. So we're very, very pleased with the strength of the consumer and their ability to book across the entire length of the booking curve, including up to the day before cruise.

Our next question is from Patrick Scholes with Truist Securities.

Two questions. One, can you give us an update on the progress of finding a new Brand President? And then secondly, can you talk a little bit about the changes in selling strategy with the Oceania brand, specifically recent unbundlings.

Yes. Thank you, Patrick, and listen, on the Brand President, we are conducting an extensive search. We have been very pleased with the caliber of world-class talent. We've been able to attract for the search, I'll say we're pretty deep into it now. No announcement today or probably the next week or two. But I hope we're going to be able to see someone soon. The most important thing for us is to attract a world-class leader that can continue on with the brand promise as we've been evolving it certainly over the last few quarters. On top of the other wonderful talent we have with our new CMO, new Chief Commercial Officer, new Head of Technology and other excellent internal and external candidates that we've brought into the brand to help evolve and make things -- make NCL even greater in the future. In terms of the promo strategy for Oceania, it was a -- I saw a lot of write-ups on it, but honestly, it was a relatively modest change. We've run a series, let's -- I'll call them different promotions over the last year. And we've gotten very good data on what it is that customers value and are willing to pay for, which is one of the core strategies to provide guests with things they value and are willing to pay for. So the promotion we aligned with on Oceania, not really different that much in nature to what we've been doing recently, but really allows us to optimize the construct for our guests and maximize yields and margins. I will say, I've been incredibly pleased both with the level of bookings and the consistency we've been seeing on Oceania. I mean it's become almost like clockwork, that in the Regent brand in terms of their weekly bookings and revenue. So I find that as encouraging as anything else.

Our next question is from Andrew Didora with Bank of America.

Maybe Harry thinking about these brand changes a little bit more strategically. When you think about -- how do you think about the time line for repositioning these brands? I guess I think about particularly for Norwegian, how long do you think it takes to change that the way you describe it the brand familiarity with families? How long until you reach your targeted run rate?

So I think with Regent, we're already there. I think -- because the brand changes there were relatively minor. I'd say with Oceania, we're probably about 2/3 along the journey with the evolution of the Oceania brand to luxury and to focus not just on food, but on destination service experiences things that our guests truly value. I think it still is a slightly longer runway. I think I mentioned in my prepared remarks that we're going to be launching some new brand campaigns in Q1 that will certainly help us along. Clearly, the shift to families and the reliance or the focus, I should say, on GSC has already come forward as witnessed [Audio Gap] by our Q4 in '26 occupancy. So it's already beginning to take hold. My guess is on NCL by the middle of next year, I think we would have reached the...

Andrew, first and foremost, what we've been -- what we've said is reducing leverage is our #1 priority. And we continue to look for ways to do that. Of course, margin expansion is the #1 driver of that, which results in a significant free cash flow. And we continue to see that -- expect to see that to ramp up over the course of the next 24 months. So of course, as we look at the remainder of our capital structure in terms of what's left on the debt side, we're always looking to be opportunistic and we'll continue to do so and we'll continue to strategically make opportunistic trades where it makes sense and improves our overall structure and ratings.

All right. So with that, I want to thank everyone for today's earnings call. For those of you listening, for those of you who have participated, particularly pleased with our record earnings, our record revenue, our record EBITDA, our record future book position, in terms of new bookings, and all the other wonderful tailwinds that the brand is undertaking. We look forward to sharing the journey ahead with all of you. Thank you all very much. Have a great day.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.