RCL
Royal Caribbean Cruises Ltd.
Consumer Cyclical · Travel Services · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong growth and profitability scores anchor the composite: revenue grew +8.8% and net income +48.3% in FY2025, while operating and net margins were 27.4% and 23.8% respectively [growth.revenue.yoy, growth.net_income.yoy, profitability.operating_margin_pct, profitability.net_margin_pct].
- Quarterly momentum is solid, with a clear seasonal pattern and a meaningful recovery in 2026Q1 across revenue, operating income, and net income [momentum.revenue_quarterly, momentum.operating_income_quarterly, momentum.net_income_quarterly].
- The composite is held back by a below-average financial health score driven by the 2.13 debt-to-equity ratio and by zero contribution from the theme factor, both of which weigh on the 60.9/100 total [financial_health.debt_to_equity, theme.none].
Why Not Higher
- The heavily leveraged balance sheet, with a debt-to-equity ratio of 2.13, resulted in a significantly penalized financial health score that drags on the overall composite [financial_health.debt_to_equity].
- No macro theme assignment means the theme factor contributes nothing to the score, and the dividend's short track record — reinstated only in FY2024 — limits the dividend score despite the rapid increase to $3.50 per share in FY2025 [theme.none, dividend.dps_trend].
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $16,484,000,000 to FY2025's $17,935,000,000, a gain of +8.8%. Net income expanded more sharply, rising +48.3% from FY2024 to FY2025, while diluted EPS climbed +42.7% over the same period, from $10.94 to $15.61.
The model rewarded the substantial bottom-line acceleration relative to top-line growth, reflecting improving operating leverage. The high but not perfect score suggests the model may weight revenue growth pace alongside earnings growth.
In FY2025, RCL posted an operating margin of 27.4%, a net margin of 23.8%, and a return on assets of 10.3%.
These figures indicate that the company converts a substantial share of revenue into both operating and net income while generating meaningful returns on its asset base, which the model rewarded with a near-top profitability score.
In FY2025, RCL carried a debt-to-equity ratio of 2.13 against total assets of $41,619,000,000.
A debt-to-equity ratio of 2.13 in FY2025 signals a heavily leveraged balance sheet, which the model penalized significantly, resulting in a below-average financial health score despite the company's large asset base.
Over the last four reported quarters, revenue moved from $4,538,000,000 in 2025Q2 to $5,139,000,000 in 2025Q3, then pulled back to $4,259,000,000 in 2025Q4 before recovering to $4,452,000,000 in 2026Q1. Operating income followed a similar pattern: $1,329,000,000 in 2025Q2, $1,702,000,000 in 2025Q3, $934,000,000 in 2025Q4, and $1,162,000,000 in 2026Q1. Net income tracked the same arc at $1,210,000,000, $1,575,000,000, $753,000,000, and $941,000,000 respectively.
The quarterly data show a seasonal peak in 2025Q3 followed by a trough in 2025Q4 and a meaningful rebound in 2026Q1 across all three metrics, a pattern the model interpreted as sustained underlying momentum despite the mid-cycle dip.
RCL paid no dividends in FY2022 or FY2023, initiated a dividend of $0.95 per share in FY2024, and increased it to $3.50 per share in FY2025, with a payout ratio of 19.3% in FY2025.
The rapid reinstatement and near-fourfold increase in dividends per share from FY2024 to FY2025 signals a commitment to returning capital, while the relatively modest 19.3% payout ratio in FY2025 suggests the dividend remains well covered but the short track record limits a higher score.
RCL is not currently assigned to any of the 24 tracked macro themes.
The absence of a macro theme assignment means the model awarded no theme-based score; this reflects the current classification status and should not be read as a commentary on the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Royal Caribbean Cruises Ltd. delivered strong FY2025 results, with revenue rising +8.8% to $17,935,000,000 and net income surging +48.3%, reflecting meaningful operating leverage [growth.revenue.yoy, growth.net_income.yoy]. Profitability metrics were standout, with a 27.4% operating margin, 23.8% net margin, and 10.3% return on assets [profitability.operating_margin_pct, profitability.net_margin_pct, profitability.roa_pct]. However, a debt-to-equity ratio of 2.13 signals a heavily leveraged balance sheet that constrains the financial health score [financial_health.debt_to_equity], and the absence of a macro theme assignment means no theme-based contribution to the composite [theme.none]. The result is a total model score of 60.9/100 with a High risk rating.
Plain English
Royal Caribbean is making a lot more money than before — earnings grew much faster than sales in FY2025 — but the company carries a heavy debt load relative to its equity, which makes it riskier than its profit numbers alone might suggest [growth.net_income.yoy, financial_health.debt_to_equity].
Bull Case vs. Bear Case
Bull Case
- Earnings growth dramatically outpaced revenue growth in FY2025, with net income up +48.3% and diluted EPS climbing from $10.94 to $15.61, pointing to strong and improving operating leverage [growth.net_income.yoy, growth.eps_diluted.yoy].
- Profitability is exceptional, with a 27.4% operating margin and 23.8% net margin in FY2025, indicating the business converts a large share of revenue into income [profitability.operating_margin_pct, profitability.net_margin_pct].
- Quarterly momentum shows a healthy rebound pattern: after a seasonal trough in 2025Q4, revenue recovered to $4,452,000,000 and net income to $941,000,000 in 2026Q1, suggesting sustained underlying demand [momentum.revenue_quarterly, momentum.net_income_quarterly].
Bear Case
- A debt-to-equity ratio of 2.13 in FY2025 reflects a heavily leveraged balance sheet, which the model penalized significantly and which amplifies financial risk in adverse conditions [financial_health.debt_to_equity].
- RCL is not assigned to any of the 24 tracked macro themes, meaning it receives no theme-based score contribution, which weighs on the composite [theme.none].
- The dividend track record is short — no dividends were paid in FY2022 or FY2023, with reinstatement only beginning in FY2024 — limiting confidence in the sustainability of capital returns despite the recent rapid increase [dividend.dps_trend].
What Could Change the Picture
Bullish Triggers
- A meaningful reduction in the debt-to-equity ratio from its current 2.13 level would signal balance sheet deleveraging and could improve the financial health score substantially [financial_health.debt_to_equity].
- Assignment to one or more of the 24 tracked macro themes would add a previously absent score component and could lift the composite rating [theme.none].
Bearish Triggers
- A reversal of the earnings growth trend — particularly if net income growth decelerates sharply from the +48.3% pace seen in FY2025 — would undermine the core bull case [growth.net_income.yoy].
- If the seasonal 2025Q4 trough deepens or the 2026Q1 rebound stalls, it would call into question the momentum narrative that currently supports a near-top momentum score [momentum.revenue_quarterly, momentum.net_income_quarterly].
Risk Profile
High RiskRCL carries a debt-to-equity ratio of 2.13 against total assets of $41,619,000,000, indicating a heavily leveraged capital structure that elevates financial risk [financial_health.debt_to_equity, financial_health.total_assets]. Quarterly results also exhibit meaningful seasonal swings — net income fell to $753,000,000 in 2025Q4 before rebounding to $941,000,000 in 2026Q1 — underscoring the cyclical variability inherent in the business [momentum.net_income_quarterly].
Key Catalysts to Watch
The rapid reinstatement and near-fourfold increase in dividends per share from $0.95 in FY2024 to $3.50 in FY2025, against a still-modest 19.3% payout ratio, could signal further capital return capacity as earnings grow [dividend.dps_trend, dividend.payout_ratio].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.