Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Group Second Quarter 2025 Earnings Call. [Operator Instructions] I would now like to introduce Blake Vanier, Vice President of Investor Relations. Mr. Vanier, the floor is yours.

Good morning, everyone, and thank you for joining us today for our second quarter 2025 earnings call. Joining me here in Miami are Jason Liberty, our Chief Executive Officer; Naftali Holtz, our Chief Financial Officer; and Michael Bayley, President and CEO of the Royal Caribbean brand. Before we get started, I'd like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release issued this morning as well as our filings with the SEC for a description of these factors. We do not undertake to update any forward- looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of all non-GAAP items can be found on our investor website and in our earnings release. Unless we state otherwise, all metrics are on a constant currency adjusted basis. Jason will begin the call by providing a strategic overview and update on the business. Naftali will follow with a recap of our second quarter, the current booking environment and our outlook for 2025. We will then open the call for your questions. With that, I'm pleased to turn the call over to Jason.

Thank you, Blake, and good morning, everyone. I am thrilled to share our strong second-quarter results and updated outlook for the year. Our world-class brands and the exceptional experiences they offer continue to resonate deeply with consumers, driving both strong demand and excellent financial results. Our second quarter results exceeded expectations, mainly driven by stronger- than-expected close-in demand, a shift in the timing of some expenses and favorability below the line that was mainly driven by the outperformance of our TUI Cruises joint venture and lower interest costs. We are also increasing our earnings guidance for the year and now expect adjusted earnings per share to grow 31% year-over-year. We are delivering exceptional value to our guests while continuously raising the bar with a powerful pipeline of industry and segment- leading new ships, a growing portfolio of meaningfully differentiated land-based private destinations, adding new experiences to our ecosystem like river cruising and deploying unmatched digital and AI innovation to enhance the guest experience and maximize margins. These key differentiators and accelerators are resulting in another significant increase to this year's earnings estimates and accelerating our path to achieving our Perfecta financial targets by 2027 as we continue to win share on the rapidly growing $2 trillion global vacation market. Like we have said before, our ambitions go well beyond Perfecta as our strategic initiatives are designed to drive significant growth for years to come. In 2028 alone, we expect significant benefits from our current strategies, which, among many others, include the launches of Oasis 7 and Edge 6 as well as full-year benefit of Icon 4, the full-year operation of Perfect Day Mexico, Royal Beach Club Lelepa at full capacity and the first complete operational year of Celebrity River. As we advance our journey to help our guests turn the…

Thank you, Jason, and good morning, everyone. I will start by reviewing second-quarter results. Net yields grew 5.2% in constant currency compared to the second quarter of last year, 70 basis points above the midpoint of our guidance. Yields grew across all key products and were evenly split between new and existing hardware. The yield outperformance was driven by stronger-than-expected closing demand. Onboard revenue was higher than last year across all key categories as we continue to see very engaged consumers. In the second quarter, approximately half of our onboard spend was booked before the sailing with 3 out of 4 guests making pre-cruise purchases to reserve onboard experiences. In the second quarter, we delivered 2.3 million incredible vacations, new-to-cruise or new-to-brand accounted for approximately 60% of our guests, of which more than half were millennials or younger. Net cruise costs, excluding fuel, increased 2.1% in constant currency, 180 basis points lower than our initial guidance, driven by shifting of the timing of spend that will roll into the second half of the year. Adjusted EBITDA margin was 41%, 300 basis points better than last year, and operating cash flow was $1.7 billion. Adjusted earnings per share were $4.38, 36% higher than last year and 8% higher than the midpoint of our guidance. Earnings outperformance was driven by the strong close-in demand, shifting timing of spend and favorability below the line. $0.10 per share of favorable timing of spend is expected to roll into the second half of 2025. As Jason mentioned, demand for our portfolio of brands and industry-leading experiences continues to be very strong. Bookings have accelerated since the last earnings call, particularly for close-in sailings, leading to the second-quarter outperformance. Our book load factor is in line with prior years and higher APDs. Capacity is expected to…

[Operator Instructions] Our first question will come from the line of Matthew Boss with JPMorgan.

Congrats on another great quarter. So Jason, could you elaborate on the continued acceleration in demand that you cited for your brands and experiences? Have you seen any change in July booking trends? And maybe could you speak to the playbook for offense that it seems like you're laying out with investments and initiatives to stay ahead of where demand is going in that $2 trillion growing global vacation market?

Sure. Well, thanks, Matt, and I hope you're doing well. I think just to first start off, one of the things that we have seen of late is just this kind of overall acceleration in close-in demand, which is a little bit different. We've seen close-in demand acceleration -- but we have seen that kind of further shift in behavior, which I commented is not something we typically contemplate in our forward-looking guidance. And that's -- it's not just on the ticket side, it's also what we're seeing on onboard spend. So we -- holistically, as we get to see millions of spending activities per day, we see a very healthy customer. When we dig into that customer, they have strong -- they have great jobs. They have strong balance sheets, and they're confident in spending and making sure that they're receiving the vacation experience that they're looking for. So again, I think all turns are green on the customer at this point in time. And they're traveling all over the world. We're seeing that not just in North America, but we're also seeing that in European travel activity. I think as we think about going on the offense, I think first, just grounding that ultimately, what we're trying to do and what we always do is we orbit ourselves around our guests, around our customer. We focused on this. I know it's a tagline of going from a vacation of a lifetime to a lifetime of vacation. But it's very important for us as we think about how do we increase our repetition with our customers. And you're already starting to see signs of that offense coming forward here with an increase in the number of loyalty members that are sailing with us that has now inched up to…

That's great color. Maybe as a follow-up, Naftali, near term, what have you embedded for close-in demand in the back half relative to the outperformance that you saw in the first half? And then with more than 30% earnings growth now forecasted for this year, that's well above your Analyst Day CAGR. Just any puts and takes to consider as it relates to the phasing of investments multiyear beyond this year?

Yes. So as we said in the prepared remarks, we gave guidance based on what we've seen in terms of bookings. But as we said, we have seen acceleration. And so to the extent that there is further acceleration of the mail of closing demand, obviously, that creates an upside for the second half of the year. Also remember, we're fairly booked for the year. So we're kind of closing out a very successful year and now obviously focusing into next year towards in a couple of months. In terms of what's embedded in our plans, so as you know, we've announced Perfecta, and this is a 20% annual compounding growth of earnings through 2027. And everything that Jason just mentioned in terms of investments in ships, destinations, technology, modernization of our ships is really what's driving that moat and differentiated performance. Now this year is obviously higher than that 20% CAGR. And so this positions us very well to achieve our Perfecta targets. And so the formula is working, and that's really what we're focused on, moderate capacity growth, moderate yield growth, strong cost control that obviously drives earnings, drive cash flow and allows us to execute on our plans. One of the things that is important, and we said that also when we announced Perfecta, when we put out these targets, we did not embed any share buybacks into those plans. And so as we get the balance sheet to the range and it is already within the range, obviously, we will be focused on capital return as a supplement to that growth. And that is in the form of share buybacks, which we will opportunistically do and, of course, dividends. And we're very focused on competitive dividend. Now competitive dividend brings value to the shareholders, but obviously does not factor in into earnings per share itself. But as you kind of look at it together, that's another area of that. And at the end of it, as Jason mentioned in his prepared remarks, Perfecta is just, for us, another milestone, but definitely not our ambition. And we laid out just in 2028, tremendous tailwinds that we have from all the new ships and destinations that are coming online. So we're very much focused on building the moat and long-term shareholder value.

Our next question comes from the line of Steven Wieczynski with Stifel.

So Jason, I want to go back to the second half of the year guidance, which obviously, you talked a lot about, it doesn't incorporate any benefit from close-in booking momentum or kind of what you've seen in terms of onboard spend. So let me try to ask this question a little bit differently than Matt just kind of asked. But let's say, Jason, hypothetically, if close-in demand stays as strong as what you've seen recently, and it sounds like given the feedback that you guys have gotten from your customer base, that's not going to change and onboard kind of stays the same way as well. Is there a way to think about what that would mean to yields in the back half of the year? And I guess I'm probably just a little bit surprised that when you think of the third quarter, being able to grow, let's call it, 4% on a like-for-like basis when you include the Star of the Seas impact off of a plus 8% last year. To us, that's kind of impressive. But I guess what I'm trying to figure out here is what could that mean for yields if everything kind of stays status quo? Hopefully, that kind of makes sense.

Yes. Yes. well, thanks for the question, Steve. And of course, it's -- even if you look at the third quarter, I do this from memory, but I think 2023 was close to 17% and last year it was close to 8% on a yield improvement standpoint. And we do have -- we try to articulate if you had a full quarter of Star, I mean what that would have looked like for us as all the Q3 is being driven by like-for-like demand generation. So I mean, the answer is that if we see similar patterns, the answer is that the back half of the year will be better. As Naf just commented, I mean, we are very well sold into the year. And so there's always the opportunity as we think about even in the third quarter, a couple of points of load factor that we still have left to build, there's opportunity there and then that opportunity would be larger in the fourth quarter. But we typically -- when we think about our forecast, we do try to do a 50-50 forecast. Also, when we put a forecast together, we typically want to look more than just a couple of months of demand points to kind of set that going forward. So we do see similar demand patterns. The answer is it's better. It's tough to actually quantify. If I could have quantified it, then we probably would have put that into our guidance for the year. But I think the main takeaway is that the consumer is strong. There's strong demand for our brands. We're -- I think we have a very strong handle on cost and on our capital where we're investing. I think it's very clear on where that is, and it's there to not just support the business, but to continue to differentiate the business -- and 30-plus percent earnings growth year-over-year is pretty spectacular, I think. And it's just another, I think, testament to how we keep finding opportunities to do better, and we're never satisfied as our investors are never satisfied, I'm sure. So we're always looking to do more. And I think all these investments that will play itself out here over the coming years, especially on the destination side, really has an opportunity to have a really significant step change in earnings power.

Okay. That's great color, Jason. And then second question, going back to Perfecta. Obviously, you've talked about how that's on track at this point. But those targets obviously end in 2027. So you mentioned all these positive things that are going to be coming online in '28 that are going to help you guys out, whether that's Perfect Day Mexico, Oasis Class, Icon river cruising, other private islands, I mean, the list kind of goes on. So I guess my question actually is, as you guys are sitting here today, should we think that 2028 could see earnings growth at least in line with your Perfecta targets? I'd probably even say maybe if not higher than that.

Well, I think it's -- I appreciate you pointing it out. Obviously, a lot of these investments take time to design and build and bring them online. And of course, when we bring these things online, we're very thoughtful in the ramp-up because we only have one chance as my mom said, you only have one chance to make a good impression on somebody. And so we're really thoughtful about that. And so I think to your point, when you look into 2028 and you see basically -- I mean, we've all seen the power of Perfect Day in the Bahamas wait until we see Perfect Day Mexico come to life and the World Beach Clubs come to life. And now we have a river. And of course, we ramp up from 2 ships in '27 to 4 ships in 2028. And of course, it's probably too early to talk about exactly what that all means, but it is -- it should result in a significant step-up in earnings power as we think about that. And none of that, of course, takes into account when we think about capital allocation, Naf mentioned us obviously not significantly -- I mean, we first, of course, are investing in growing our business, but we take very seriously shareholder returns through a competitive dividend and buyback shares. And any share buyback consideration is not something that is contemplated, which will just be another, I think, significant tailwind to earnings per share growth.

Our next question comes from the line of Conor Cunningham with Melius Research.

Just on loyalty, you've been talking about a lot more. And obviously, one of your competitors is speaking about it a little bit as well. When I look -- when we're talking about closing the gap to land-based competitors and whatnot, a big gap, I think, is on the co- branded credit card program and then maybe the loyalty program optimization in general. So if you could just talk about the opportunity set there and how you envision it? I don't think your credit card is tied to your loyalty program currently. So just -- if you could just talk about that a little bit, I think that could be helpful.

Sure. Well, we do have a co-branded credit card. It is tied today to our loyalty program, but not in the way that fits our ambition. And so we're very closely working with our co-branded credit card provider. And I think you're going to see something very meaningful coming out of that very, very soon. At the end of the day, we have this great opportunity that we sit on a lot of quality data. We have a lot of interactions with our guests. Our guests are telling us what are important to them. We don't have a business consumer here, right? So we don't have that frequency of a business consumer in the world of you earn and you burn, you earn on the business side, you burn on the consumer side. And our guests are very focused on recognition and also being incentivized for the spend and the loyalty that they provide. And so we are -- I mean, if you've spent time in our app and if you've spent time seeing how we're interacting with our guests, especially in the loyalty program side, we are very tuned into and have a lot of plans on what are things in which our guests, our brands feel is a value to them that would result in them behaving even more loyal to us. And we've already seen a shift of a couple of months just -- in their behavior with us, which is why there was a 40% of our guests in the third quarter that were loyalty members. So loyalty, I think, is very important. I think people want to be recognized. They want to -- and not just recognized for their spend today, but recognized for all that they have done in the past. And then we need to make sure we're creating an environment across our brands to make sure that in their lifetime of vacations that we have the right vacation experience that is relevant to them and that they're benefiting from continuing to stay inside of our ecosystem. At the end of the day, I look at loyalty as I look at loyalty with our employees and everyone else is it's a 2-way street. And our guests should feel that they always want to stay inside of our ecosystem. And if somebody goes outside of our ecosystem to another cruise competitor or to somebody else on land, then we should look at that as a fail. And I think our teams have done such an exceptional job at engaging and putting things in front of our guests that they value and incentivizing them, which is now resulting in even more and more repetitions with our guests.

Okay. Appreciate it. And then maybe I could ask just for a clarification on the drag from the timing of Star of the Seas. So is there anything embedded in the fourth quarter from Celebrity Xcel, Star? Does anything linear from Star of the Seas there from a load factor perspective? The only reason why I ask is if you strip out a lot of the noise, I think that's kind of happening, like core pricing is actually exiting very, very strong. So I'm just trying to understand where core is versus some of these timing issues that are kind of out there.

Yes, you're right, Conor. So most of the impact of Star is really in the third quarter. In the fourth quarter, we have 2 things that I pointed out. One is Celebrity Xcel starts in mid-November. So that's obviously just mid-quarter. So you have that and you have to get it ready. And so that -- and obviously, rents are up. So similar to what happened with Star in the third quarter. But also recall that last year, we had a pretty heavy dry dock year. And so we usually take our dry docks in the lower-yielding period. And so last year, in the fourth quarter, we had more dry docks than this year. So that's actually a drag on yield as well. And so together, we quantify that as roughly 90 basis points between the timing of new ships as well as dry dock days.

Our next question comes from the line of Robin Farley with UBS.

Just looking at the full year guide, I mean, Q2, great results. Your commentary is very positive. Why you at the top end of the yield range? What's your change in thinking there that the top end of the yield range came down a little for the year?

Yes. I would just say, Robin, when we gave guidance last, we expanded the range. There was a lot of noise in the system geopolitically that resulted in us just widening that range to give kind of investors a sense of what that could be. Obviously, there were others in Travel + Leisure that pulled their guidance. We expanded our range just to give kind of where potential outcomes could be. So really, what you see in our range is a reflection of our historical practices. At this point in the year, we're typically plus or minus 7 points there. And that's what we provided Yes, 70 points 70 basis points.

So if we think about kind of that, obviously, in April, it's a very active sort of geopolitical headlines all going on. I guess I'm just trying to think how we should interpret the -- that you're -- how you're feeling at the sort of most optimistic end versus a quarter ago because it seems like some of the hotel companies have called out things improving in July relative to where they were in that sort of April, May period. So just trying to think how we should view your commentary or your yield change at the top end.

Yes. Well, one, I think that one of the differences between owning crews and hotel and even airlines is just what percent booked we are within a period. So I don't think it's -- in terms of the opportunity, it's probably not necessarily the same on hotel and airlines because of how sold we are in the quarter and how sold we are for the end of the year. But as I said with that range, that range is a reflection of a 50-50 on our forecast. And there could be -- if you want to take the optimistic side, if we continue to see strengthening and close-in demand, that would be likely the optimistic side of why it could be towards the top end or better.

Yes. I think I don't recall exactly, but I think most of the -- some of the hotel companies also may have reduced their guidance in the first quarter. We kind of -- regardless, we kept it the same. We actually increased it, if you recall. And we really widened this to account for the geopolitical outcomes, the noise that was there and the outcomes it could have. And really now, we're just going back to normal, right? This is typically what we do throughout the year.

And just one quick follow-up. Would you say that your onboard spend because I know some of the way it's reported can be impacted by sort of how you allocate accounting things. Just broadly speaking, is growth in onboard spend still higher than growth in ticket price? Or how should we think about that relationship?

I would say that we're seeing very similar trends on ticket as well as on onboard. Obviously, both of them are competing against very, very significant comps. But what we're seeing in terms of where the consumer is spending while they're on the ship looks very similar, except that it's stronger. We're also benefiting that every day, we get more and more pre-cruise sales activities. And we're still in the very early innings of being effective in curating that and getting our guests to book -- to plan their vacation experiences earlier and earlier. And that, as I mentioned in my comments, you then typically see a significant increase in overall spend because they basically have paid that bill and they moved on to new activities and new memories they want to create on the ship.

Our next question comes from the line of Brandt Montour with Barclays.

So the first question is on the Royal Beach Club. Maybe you could just talk a little bit about the operational expectation for that destination out of the gate. You guys gave prices out to the market a little bit ago. Wondering maybe if the feedback from the travel agent community as well as the prebookings you're seeing, if that sort of points to full utilization potential out of the gate, I know prices are dynamic. Or if that's even the goal? How should we think about the ramp-up for the destination?

Thank you, Brandt. I'm so happy you asked that question. We opened for sale in a few weeks ago. Sales are very strong. Interest is very high. Our first sailing will be in December 21, which will be great timing for the holiday period. Construction is all on target. It's looking great, and we send drones over and share that with the team on a regular basis. It's really looking impressive, especially the world's largest swim-up bar. So it's going to be a winning product, a great destination, and we're very excited about what we're seeing in terms of activity. Prices start from around $139. It is dynamic because we've got a lot of capacity coming into Nassau and some days will be different from others in terms of the overall Royal Caribbean capacity in the port. So we've got dynamic pricing. We've got different packages available, and we've been extremely pleased with the sales to date. I do have to share one interesting story, which is in the first hour when we opened for sale, we sold our Ultimate Family Cabana for one day at $10,000, which was quite remarkable. And subsequently, we've sold a lot of days in the Ultimate Family Cabana at $10,000. So we really do think we've got the product right, and we think it's going to deliver very high levels of guest satisfaction. So we're excited for the Royal Beach Club Paradise Island, and we're equally excited for the Beach Club in Mexico, Lelepa and of course, the really big thing, which is, of course, Perfect Day Mexico in full year '28.

Yes. And Brandt, I just want to add in terms of on the ramp-up side, we have a very, I think, thoughtful formula for this, where it's not about a question of demand. It's a question of operational excellence. And so it will be -- in terms of the actual number of people we take will be meaningfully less as we start and then build up into the first quarter and then into the second quarter, right? We want to make sure the experience is flawless in what we're doing. So it's -- while we could probably make more money, the trust that we establish with our customers is a high priority. And so it will be a slow ramp-up like they typically are in any new experience or destination or ship that we bring online.

That's super helpful, both. A second question, Jason, I feel like you covered the close-in demand strength from a number of different angles this morning. I'm struggling between 2 different narratives on that. Is that -- one, is that maybe at the expense of longer-term bookings and potentially compressing booked lead times? And would that be sort of a function of either mix, younger consumer or residual effects from the tariffs and the macro impacts over the last few months? Or is it just, again, more incremental demand that you're seeing from that younger consumer and at the same time, you're seeing '26 bookings sort of plot along as planned. I don't know if those 2 things are -- if there's a third, but if you can help me sort of understand what you guys are trying to get at with that commentary.

Yes. Well, Brandt, as I've said this in the past, we never get our yield management perfect. Even with all the technology, we always -- there's always money we leave on the table. And I think one of the things is just -- I think the reality of what we have left to sell is little. And I think because we are -- half of our guests are millennials or younger, there is a reality that they do book closer in. We have more of the shorter product going to great places like Perfect Day and soon Royal Beach Club, which will have them lean a little bit more closer in. But in my remarks, just commentary around 2026, right, we're in line with same time last year at higher rates. I think should give you an indication that demand is actually quite healthy and is keeping pace and guests willing to pay more is certainly there. So I would -- I think it's really 2 different things. I think it is a little bit of a younger consumer. And the second piece of it is that confidence in making sure that people are getting the vacation experiences that they want that people are willing to plan thoughtfully out into the future.

I think also -- this is Michael again. I think also another consideration is the increase in the short capacity that we've seen, particularly that goes to Perfect Day. And for the Royal brand, which we have a lot of short cruise capacity, we've got Utopia now sailing out of Port Canaveral in the 3- and 4-day market. And now Wonder of the Seas, so the second Oasis-class ship will be starting soon out of Miami doing the same thing. That takes -- those 2 ships alone in terms of just volume is around 30,000 guests a week just on those 2 ships that they're going to Perfect Day. So I think that also is beginning to skew the how people perceive their booking window because it's kind of a -- it's a great weekend. We call it the big weekend and people just decide later on to jump on board and have a great time, and we see a lot of repeat on those products as well. It's a great weekend. When we open up the Beach Club, which complements Perfect Day, that big weekend is getting even bigger. So we think that, that's part of the kind of the evolution of the business.

Our next question comes from the line of Ben Chaiken with Mizuho.

One on Nassau quickly. You've previously given us some preliminary kind of targets or expectations for volume. But how do you think about the attach rate using Royal Nassau visitors in the denominator, if you will? Meaning is this 25% adoption, 50% adoption? And I asked this in the context of Coco is seeing 3.5 million guests or more, presumably a lot of them going to Nassau. So understanding there's a ramp kind of as you get going, just any way to frame the attach rate based on the volume numbers you've given us the last few quarters?

Yes. I think our current thinking is when you look at the volume we're going to bring in '26 into Nassau, which is, give or take, around 3 million guests and the overall capacity of the Beach Club will be around, give or take, 1 million, then you're looking at 33% of our guests, we think will be more than happy. And I mean, I think what we may experience is more demand than supply with the Beach Club in Nassau. We're going to have to -- and obviously, that's why dynamic pricing is going to play a very important role in that product. But we think we've got the numbers perfectly right.

Understood. Very helpful. And then, Jason, you kind of made a pretty interesting comment earlier in the call. You mentioned that Costa Maya is going to be the same size as Magic Kingdom in Orlando, if I caught that right. Presumably, you meant that in terms of acreage. I mean, to the extent you have anything to share on amenities, you can kind of like flow to us, understanding this is still several years away. I don't know if that was like a little bit of metaphor or whatnot.

Well, I think it is in terms of like the actual footprint of Perfect Day in Mexico. And I think it's to have people understand the -- ultimately, the scale of what's going to be there. Of course, we're going to deliver that with much, much fewer guests than the guests that visit the Magic Kingdom, right? Because it's -- we're super focused on that everybody has this Perfect Day. And I would very much point everybody to just go on to YouTube and watch the videos that we put out from our event in last May on what Perfect Day Mexico is going to look like. And it delivers a perfect day I think, for pretty much everybody, whether you're looking to go down the world's largest lazy river, whether you're looking for kind of that Vegas beach party, just some fun in the sun, relaxation, family and incredible pools and so forth. There's so much that's going to be done and it's curated like we do very well on our ships into different neighborhoods so people can kind of experience with who they would like to experience that with. And that's what we do, right? I mean, Michael and his team are heavily focused on designing that perfect day. We've clearly delivered that in the Bahamas, and we're going to do that in Mexico for even more people. Lastly, I'll just say, I mean, it also opens up this incredible catchment area or deeper into markets like Texas and the West Coast and even the Midwest that we'll be able to lessen where they spend their share of wallet on potential air travel and other travel to shift to make it more affordable for them and potentially more wallet share for us.

And more importantly, it has the world's largest umbrella.

That's definitely important. Did 3Q have Costa Maya cost in the NCC number?

Yes, it does. And so we just closed on it. And obviously, we'll operate it for quite some time until we start development. So yes, and that's part of the headwind. We didn't really call it out in the release or in our prepared remarks, but there is an extra cost for that. And obviously, for Paradise as well as we ramp up the Beach Club to open up in December, there are some costs there with obviously no APCDs.

Our final question will come from the line of Vince Ciepiel with Cleveland Research Company.

I wanted to unpack the river a little bit more. I know it's still a ways away, but I think at some point in the second half of this year, we have a little bit more clarity on what the itineraries and offering might look like. And as you're 90 days further into exploring what that could look like for you, any big picture thoughts on just the conviction level of getting to 35, 40 ships, river capacity to do so and being able to curate a great experience shoreside for guests when considering birthing rights, et cetera.

Yes. Well, thanks for the question, Vince. I wish Laura was here because she can probably talk a little bit about it more in detail. I should also tell you that I bother her every single day on how do we get as many ships up as soon as possible. And that's not just a reflection on us now getting comfortable with it operationally, having a very strong idea of all the different destinations, not just in Europe, but around the world where we can go out and deliver this incredible river experience. We're pretty well baked with the ship design, which we are very confident will be a meaningful differentiator to what is currently available out there. And there's a lot of like space. This is -- we think a very underpenetrated marketplace. And so there's room for everybody to grow and grow successfully, but we're going to elevate this. So I would say that we feel very good about the destination experience that Celebrity is going to offer here, not just on the ship itself, but also on land. And I think it's just -- I'm probably more focused on how do we get it done faster. And -- but our teams are being very thoughtful about that. It's going to be a -- I mean, a great vacation experience for our guests. And I think the last point I just want to make about the -- what brings such confidence is when we announce this and we kind of get our customers coming forward with wanting to be on it as soon as possible and us starting to kind of build up list of customers who want to go on, it's going to -- it will take us a long time to satisfy that level of demand. And so we want to make sure that we can deliver these experiences to our guests, and we have to challenge ourselves not just because we can make some more money on it, but we need to meet that demand for our guests who are looking to have that river experience from our Celebrity brand.

Great. One other just kind of housekeeping question. Thinking about CapEx, $5 billion for the year, I think $1.6 billion of it is non- newbuild with some Costa Maya in there as well. When you think about the Perfecta plan, is that $5 billion like a good annual number to use for '26 and '27 and a similar mix of non-newbuild and new build as we're thinking about the path ahead?

Yes. So we're not providing guidance, obviously, for the next couple of years. But on the shipbuilding side, it really depends on the ship deliveries. And so this year, we have 2 fairly large ships, right, both Star of the Seas and Celebrity Xcel. You can go and see kind of what '26 and '27 are or there are only one ship, right, there. And on the non-ship CapEx, we -- there are a couple of elements there, and obviously, we'll provide more guidance as we get closer to '26. But we have kind of our core investments in maintenance and other initiatives that are typically very stable in a way. And then you have the destination. So that ramps up depending on the year. This year, obviously, is Paradise Next, we'll have Cozumel and Costa Maya and obviously, '27 will be heavily on Costa Maya. We have modernization programs. And so there are other elements to make sure that we are getting through to Perfecta in kind of our long-term targets. But I think the most important thing is the company now is very large. We're generating a lot of cash flow. So even after CapEx, we have excess cash flow that obviously will be focused on getting -- making sure that the balance sheet is intact and then supplementing all that growth with capital shareholder returns.

And I will now turn the conference back over to Naftali Holtz, CFO, for closing remarks.

Thank you. We thank you all for your participation and interest in the company. Blake will be available for any follow-ups. We wish you all a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.