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Good morning, and welcome to Norwegian Cruise Line Holdings Ltd. Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Rob, and I will be your operator. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions for the session will follow at that time. As a reminder to all participants, this conference call is being recorded. I would now like to turn the conference over to your host, Sarah Inmon. Sarah, please proceed.

Good morning, everyone. Thank you for joining us for our fourth quarter and full year 2025 earnings call. I am joined today by John Chidze, President and CEO of Norwegian Cruise Line Holdings Ltd., and Mark A. 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 this 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 event. Before we begin, I would like to cover a few items. Our press release with fourth quarter and full year 2025 results was issued this morning and is also available on our 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 and 2026 net yield and adjusted net cruise cost excluding fuel per capacity day are on a constant currency basis and comparisons are to the same period in the prior year. With that, I would like to turn the call over to our CEO, John Chidze. John?

Thank you, Sarah, and good morning, everyone. It is my pleasure to be here with you today. I would like to thank my Norwegian Cruise Line Holdings Ltd. colleagues for their warm welcome and Mark for his partnership. There are many reasons that I agreed to join the Board last February, and now become CEO. This is a special company. It founded the modern cruise industry. We have iconic brands, an extremely loyal guest base, and a dedicated team. At the same time, Norwegian Cruise Line Holdings Ltd. has clearly not been performing to its full potential. Over the past two weeks since becoming CEO, I have been moving quickly to immerse myself in all aspects of our business and culture. I have begun a deep review of operations, spending time with our leadership and beginning to engage across the organization to better understand where we are performing well and where we are not. As someone who has built a career at consumer-focused companies, I share the team's passion for delivering an unbeatable guest experience. I have seen our company at moments of real strength, as well as through some of its most challenging periods, including the pandemic. I have experienced firsthand the resilience of this company and its people. I bring deep familiarity with the cruise industry from my prior years on the Norwegian Cruise Line Holdings Ltd. Board of Directors. We span transportation, hospitality, entertainment, construction, logistics, revenue management, touring, and more. We do this while managing various distribution channels and regulatory frameworks around the world. Our industry relies on guests booking their voyages months, sometimes even years, in advance. I have also successfully led a number of yield-driven, asset-intensive businesses through periods of transformation and performance improvement. Those experiences have reinforced a simple lesson. Sustainable improvement comes from disciplined execution, operational rigor, and a clear focus on the fundamentals. This is the approach I intend to bring to Norwegian Cruise Line Holdings Ltd. We are operating a capital-intensive business with a balance sheet that is overly levered and a cost structure that must continue to be streamlined. Indeed, we have some challenges that need to be addressed immediately, and others that will take more time. We also have strengths to leverage. My takeaway after these first two weeks: we have to create a burning platform sense of urgency balanced against optimism and excitement for the opportunities ahead of us. Let me be clear, our strategy is sound, our execution and coordination have not been. And a culture of accountability is essential and necessary going forward. The good news is that we have the assets, we have the brands, and we now have the right focus. Job one is fixing execution and driving accountability and urgency. This comes from optimizing the organization and eliminating bureaucracy. There were clear failures in the basics of developing coordinated plans and a clear operating cadence around key enterprise-wide initiatives. The culture was very siloed, with the lack of a one-team mentality, which fed into this lack of cohesion. And I found that while there was work being done, the alignment and focus was not where it needed to be. Job two is improving efficiency and return on invested capital, ensuring that our capital allocation decisions are grounded in measurable returns. The company invested heavily in our ships, and as a result, our product is strong. However, we underinvested in technology, revenue management capabilities, and customer-facing systems. Correcting this imbalance is one of our top priorities. And job three is unlocking operational upside in revenue management, itinerary optimization, and monetization of our private destinations. There is important work ahead to return our company to sustained growth and value creation. It is the combination of my turnaround experience and tenure leading consumer-focused companies and industry understanding that provides me with the confidence that we can deliver for our shareholders, guests, and team members. What will make this possible is our leadership team. As of the past few months, we have put in place essentially an all-new leadership team in most of our critical functions with a skill set and experience level that is well suited for the work ahead. Now, this group needs to bond. We need to create a culture of accountability and empowerment. The pieces are definitely here, and I am already encouraged by the team's excitement and commitment to this turnaround. Some actions are already underway, and you will see further announcements over coming quarters as we streamline and reorganize the business to better execute. To that end, I am working closely with our brand and executive leadership teams to take a fresh look at how we can improve day-to-day execution and drive more consistent results. Mark Keslauskas was named President of Norwegian Cruise Lines in December, bringing more than three decades of experience across sales, operations, and innovation in the global travel industry. Mark has a strong track record of driving commercial performance and enhancing the guest experience, and his leadership will be instrumental at the brand level. I am also working closely with Jason Montague, our Chief Luxury Officer, as he continues to lead Regent Seven Seas Cruises, and Oceana cruises. Together, we are focused on ensuring that each of our brands continues to deliver distinctive, high-quality experiences that resonate with our guests. Our executive leadership team brings together experienced company and industry veterans alongside new seasoned leaders from outside the industry, particularly in areas like technology and strategy. At the Norwegian brand, we recently onboarded a seasoned industry veteran to lead that brand's revenue management function along with a Chief Marketing Officer that is honing our brand messaging and the way we engage with our guests. Going forward, our decisions will be driven with a focus on revenue management. We will work with and direct sales and marketing to better align our resources. This is just one example of our teams coming together across the company around a common goal of improving performance. My priorities are straightforward: improve execution, strengthen financial discipline, reduce leverage, and focus the organization on the areas that will drive sustainable value creation over time. Once we complete our review and finalize our operating plan, progress will require patience, discipline, and consistent execution. I look forward to sharing more detail on these priorities as we progress. With that, I will turn it over to Mark to walk through our fourth quarter results and our outlook for 2026. Mark?

Thank you, John, and good morning, everyone. I will begin with our fourth quarter results on slide five, which were ahead of or in line with our expectations. Net yields in the fourth quarter grew 3.8%, while adjusted net cruise cost ex fuel of $158 was below guidance, increasing only 0.2%, driven by strong cost controls, which ultimately drove adjusted EBITDA of $564,000,000, exceeding our guidance. Adjusted net income for the quarter was $130,000,000, and adjusted EPS of $0.28, which excludes an approximately $95,000,000, or $0.20, write-off related to certain information technology assets included in depreciation and amortization expense. Now moving to our full year 2025 results on slide six. Starting with our top line performance, net yields rose 2.4% compared to the prior year as expected. We continue to have a disciplined cost management approach, and our adjusted net cruise costs ex fuel per capacity day rose only 0.7%, slightly better than our guidance and well below inflation. Overall, we made important strides in 2025. Our adjusted EBITDA increased 11% to $2,730,000,000, our adjusted operational EBITDA margin improved 160 basis points to 37.1%, and our adjusted EPS increased 19% to $2.11. Moving to slide seven, I will touch on a few operational highlights since our last earnings call. At the Norwegian brand, under the leadership of our new Chief Marketing Officer, we launched a refreshed brand platform, reintroducing our iconic 1990s tagline “It’s Different Out Here,” and anchoring the brand in the values that have always set Norwegian apart: freedom and flexibility. Norwegian also opened bookings for Norwegian Aura, the largest of our Prima-class ships, with her first voyages setting sail in 2027. At Oceana, we continue to sharpen the brand's policy fleet wide, positioning in the luxury space, announcing an adults-only. The shift is already yielding results. The sales of Oceana Sonata delivered a record-breaking opening day with bookings surpassing the launch of Oceana Laura by 45%. Strength in our luxury portfolio was also evident at Region VII Cs, where January bookings were up 20% year over year with robust demand across the destination portfolio. In addition, we recently announced new ship orders across all three brands, one for Norwegian Cruise Line, one Sonata-class ship for Oceana Cruises, and one Prestige-class ship for Region. We now have 17 ships on order slots through 2037, securing coveted shipyard buildings and locking in our long-term growth plan. Importantly, given the timing of the deliveries for these new ship orders, they require only modest initial capital outlays. We do not expect them to have a material impact on our near-term leverage. Turning to Great Stirrup Cay on slide eight. We are very encouraged by the early results following the opening of the pier, a new expansive pool, and enhanced guest amenities on the island. Initial guest feedback has been incredibly positive with strong guest satisfaction scores across the board. The early feedback reinforces our confidence that our investments are improving the guest experience and will drive strong returns. Importantly, we remain on track to open the Great Tides Waterpark later this summer, which will further elevate the island's offering and strengthen demand as we move into 2027. Great Stirrup Cay is a central pillar of our Caribbean strategy. We remain highly confident in the long-term opportunity in the region, which delivers strong financial returns, attracts a broad and growing guest base, provides a stable operating environment, and allows us to target more new-to-cruise and premium family guests. While our Caribbean strategy required a shift in deployment, in hindsight, it is clear that this shift, which resulted in a 40% capacity increase in Q1, was executed without the necessary enterprise-wide coordination, as John referenced. In addition, the capacity increase was premature as the supporting infrastructure and commercial initiatives around Great Stirrup Cay were not yet ready to support and accommodate the additional capacity. While phase one of the enhancements opened at the end of 2025, we increased capacity into the region ahead of the full build-out at Great Stirrup Cay, which includes the Great Tides Waterpark. Importantly, we did not sufficiently align revenue management, sales, marketing, itinerary planning, and on-island monetization strategies to support that deployment shift. The individual components were moving forward, but they were not integrated under a single cohesive operating plan designed to absorb the capacity at the right yield. As a result, the headwinds we are experiencing in the first quarter are more pronounced than we anticipated last quarter, which I will address in more detail shortly. As we stepped back and evaluated our 2026 deployment, it became clear that our commercial strategy, including our sales, marketing, pricing strategy, and revenue management tools, were not aligned with our deployment. As a result, certain itineraries did not receive the coordinated commercial support required to maximize performance and yields, which is weighing on our expected performance for the full year. We entered 2026 slightly behind our ideal booking curve in certain itineraries, creating near-term pressure on pricing and yield which is evident in our guidance. Moving forward, we expect that creating tight integration between deployment planning and commercial execution will ensure itineraries are fully supported by a cohesive plan around revenue management, pricing, and marketing from day one. We are embarking on a disciplined business review to ensure full alignment across our deployment, marketing, and pricing, and look forward to sharing more with you on this process in the coming quarters. As John mentioned earlier, we are moving with a sense of urgency to overcome these challenges. However, given the booking lead times, the benefits will phase in over time. We are confident that these steps will position us for stronger, more sustainable performance over the long term. This leads me to our 2026 guidance on slide 10. Let us start with net yields. As a result of the headwinds I discussed earlier, we expect net yield growth in the first quarter to decline approximately 1.6% as higher occupancy was more than offset by pricing pressure. Looking to the balance of the year, we expect net yields to stabilize and modestly improve, growing at approximately 0.6%, bringing our full-year net yields to approximately flat. However, we do not expect this gradual improvement to be symmetrical across all three quarters. At our Norwegian brand, we are experiencing pricing headwinds in select markets as a result of certain execution missteps, including sailings in the Caribbean and Bahamas and itineraries out of our new home port of Philadelphia. In Europe, the tailwinds we had expected to occur in Q3 are not as strong as previously anticipated, given the aforementioned execution missteps. Outside of these markets, we note that heightened competitive activity in Alaska has also pressured yields due to elevated industry capacity levels. That said, we remain focused on improving our commercial strategy and expect these headwinds to fade as we better align our strategy with deployment. We recognize that this level of top-line performance falls short of our expectations and our long-term objectives. As I mentioned earlier, we are undertaking a disciplined business review to fully assess the drivers of this underperformance and to ensure we realign deployment, pricing, and marketing to restore sustainable net yield growth. Turning to costs, our discipline on the expense side remains firmly intact, and this marks the third consecutive year of strong cost control. In the first quarter, we expect adjusted net cruise cost ex fuel to decrease approximately 0.8%. Looking to the remaining nine months of the year, we expect unit cost to grow approximately 1.4%, bringing full-year unit cost growth to approximately 0.9%, well below inflation. Our cost savings program represents a structural change in culture. We are building the muscle to continuously identify efficiencies, remove waste, and improve processes. That work will continue throughout 2026 and beyond as we remain focused on driving sustainable margin expansion. As a result, we expect first quarter adjusted operational EBITDA margin to improve to approximately 29.1% compared to 28.4% in 2025, and adjusted EBITDA of $515,000,000. For the full year, we expect margins to remain essentially flat year over year at approximately 37%, while adjusted EBITDA increases approximately 8% to $2,950,000,000. Adjusted EPS is expected to be approximately $0.16 in the first quarter, and for the full year we expect adjusted EPS to increase approximately 13% to $2.38. Deleveraging remains a top financial priority, and for the full year 2026, we expect net leverage to remain approximately flat at 5.2 times. Keep in mind, this reflects the delivery of Norwegian Luna in March and Seven Seas Prestige in December, which temporarily increases reported leverage by approximately a quarter turn as the associated EBITDA contribution phases in. While we continue to grow capacity at a healthy pace, we are focused on driving stronger top-line performance and margin expansion to support further net leverage reduction over time. As these new ships ramp and contribute meaningfully to EBITDA, we expect net leverage to resume its downward trajectory. At the holding company level and at the brand level, we are taking an appropriately disciplined approach to guidance. Rebuilding credibility with the market starts with setting clear, realistic expectations and delivering on them consistently. We are acting with urgency to strengthen the business execution, but we are also realistic that meaningful improvement requires deliberate effort over time. Our focus is on building a stronger, more durable foundation and restoring performance in a way that is sustainable and credible. Before I turn the call back over to John, I want to take a moment to highlight the progress we have made on our cost savings initiatives over the past several years on slide 11. We expect 2026 to mark another year of sub-inflationary adjusted net cruise cost ex fuel growth. That would represent nearly three consecutive years of essentially flat unit cost growth while we deliver on our $300,000,000-plus savings target. These results are the product of the disciplined work of our transformation office, which has methodically reviewed cost structures across the business, identifying efficiencies and removing waste, all without compromising the guest experience. While much of the early focus was on shipboard efficiencies, we are now expanding and accelerating the program to drive further operating leverage by optimizing SG&A. Importantly, this is not a one-time program. We have embedded cost discipline into our culture, and we intend to continue driving efficiencies and margin expansion well beyond 2026. With that, I will turn it back to John for closing remarks.

Thank you, Mark. Before opening the call to questions, I want to underscore our focus going forward. Together with our Board and executive leadership team, we are focused on improving execution, strengthening financial performance, and reducing leverage over time, while remaining firmly committed to delivering the exceptional vacation experiences our guests have come to expect across our three incredible brands. As I said before, we have the assets, we have the brands, and we now have the focus. I recognize that our 2026 outlook is below the long-term aspirations we previously communicated. Closing that gap requires focus, rigor, and accountability, and that is exactly what we are bringing to this next phase. We look forward to keeping you apprised of our progress.

Before we move to Q&A, I want to briefly address the current conflict in the Middle East. We are closely monitoring the situation in Iran and the broader region. The safety of our guests and crew is always our top priority. At this time, we are not operating in the affected areas, and there are no impacts to our scheduled itineraries. As it relates to fuel, the longer-term impact remains uncertain. However, we are currently approximately 51% hedged for 2026 and 27% hedged for 2027, which helps mitigate near-term volatility. We will continue to monitor developments closely and will adjust as necessary. With that, operator, please open the line for questions.

Thank you. At this time, we will now be conducting a question-and-answer session. Our first question comes from the line of Steven Moyer Wieczynski with Stifel. Please proceed with your questions.

John, welcome in and congratulations on the CEO appointment. So I have two questions that I am going to try to ask here in one. So, John, obviously, you have only been in your seat for a very short period of time, but you noted and Mark commented in his prepared remarks that there have been execution missteps with aligning your commercial strategy with your deployment. So I guess my first question is about these Caribbean deployments and maybe how you address these capacity overhangs moving forward? I mean, or if you start to pivot away from decisions that previous management implemented in the Caribbean. And then second question is probably for you, Mark. But if we look at slide 10 and look at the implied guidance for 2Q–4Q, you obviously have a negative yield-cost spread. But from our seat, that seems somewhat conservative even with your deployment headwind. So, Mark, not sure what you would say about that, but any comments would be helpful, especially given the fact Caribbean capacity starts to ease after the first quarter and maybe it is more about Alaska and Europe that you called out in your prepared remarks, but any comments there would be super helpful. Thanks, guys.

Yes. So in terms of your question about Caribbean deployments, clearly, I think the Caribbean is the place to be. I think it really ties back to when I said it was a very siloed effort organization, not a cohesive plan. So I think clearly, as we said in our remarks, our timing was off. I think we got a little ahead of ourselves. Again, there was not a great cohesive plan. Marketing was going in one direction. Topping of the island was going in a different direction. So I think in the intermediate to long term, we are very confident about the Caribbean. Again, I just think this is where we have got to do a better job running a very well-coordinated, well-executed plan. I think we will be fine. It is just a lot of short-term misfires too, if that is kind of how I think I would describe it.

Yes, Steve. So strategy around the Caribbean is sound. We said that our private island Great Stirrup Cay is a central pillar of that. I think this squarely reflects the pretty dramatic shift in capacity toward the region without the right commercial apparatus working in sync as a cohesive unit across the board, hence why we have seen some changes over the last few months of our various leadership. So I think going forward, as we correct those missteps and we align our strategies as one unit, I think we will continue to see improved performance around that. I think, Steve, on your second portion, there was a mouthful, but I think you are referencing the implied guidance of Q2 to Q4 as well as maybe a negative spread there. Apart from the Caribbean and Bahamas where we have had a capacity increase, I think when we referenced some of the commercial missteps or execution, that is also affecting us in Europe. While Europe as a whole, the market is fine, we are not seeing the expected tailwinds that we expected to harvest over the summer as a result of some of our own missteps. So we are in the process of, again, working on that and correcting that. Apart from that, I think we are seeing softness in Alaska. I think Alaska has seen mid-single-digit increase in capacity across the industry, and I think that is putting pressure on the broader industry around that. So that is a little bit of a drag for us this year.

Okay. Thanks, guys. Appreciate it.

Next question comes from the line of Benjamin Nicolas Chaiken with Mizuho. Please proceed with your question.

Hey, thanks for taking my questions. Just to maybe follow up on Europe. So last year, you kind of did these long-duration immersed strategies into Europe in 3Q and you did that on the heels of April 2, which seems like an obvious formula for weakness. But as you were kind of suggesting in the previous comment, that you were not expecting 3Q this year to be a tailwind as a result of your own missteps. I guess I am just—can we flush this out? Can we unpack that a little more? I believe Caribbean should be either your lowest or close to your lowest from a capacity mix standpoint. Yes. So help us unpack how the missteps in the Caribbean impact that 3Q kind of year-over-year comparison versus last year?

Yes. Thank you, Ben. Look, you are absolutely right. We did have a shift in itinerary or deployment that was already pre-planned for 2026 prior to any events last year in March, April. I think the issue around Europe is we in fact did decrease our longer deployment itineraries. In fact, as a stat, I think we had about 160 voyages last year which were nine to fourteen days. This year, those same voyages are down to the low 60s. So we did, in fact, reduce it by 50% to 60%. Where we are seeing some pressure is on a good portion of those sailings we do have quite a bit of open-jaw itineraries. And as a result of that, we are seeing a little bit of pressure from our consumers around those open jaws. And that is something, again, that goes back to what I would call commercial misalignment in terms of our deployment and commercial strategy. So while we cannot correct that for 2026, it is something that we are focusing on in the future that we believe is very correctable, but of course, we will not see the fruits of that until 2027 and beyond.

Okay. And then, John, in your prepared remarks, I believe you spoke about either a mix of my words and your words, but I believe you spoke about a culture of inefficiency and bureaucracy. Maybe you could expand on this. How did this manifest in results? Was this a cost headwind or more of a strategy and capacity allocation related? And then what are you doing specifically to change this culture? Thanks.

Yes. I think it was a little bit of both. I think, as I said, it was very siloed and not—I hate to keep using the word cohesive, but cohesive strategy and cohesive execution, which allowed a lot of these sort of missteps. I find a culture that really has no sense—not no sense, but it needs a much greater sense of urgency and accountability. I think both of those were missing. And yes, there are clearly, as we said in our remarks, I think the company has done a great job ship side in terms of looking at costs, but I think we have definite opportunities on the shore side to optimize the company. And so what am I doing to get after it? Again, to create that culture—one, trying to create cohesive plans. Trying to go after the costs. I also think the other huge opportunity is revenue because it was so disjointed, underinvested, as I said, in technology, in revenue management, sales going in one direction, marketing in another, itinerary planning in another, lack of real focus on revenue management. I think pulling all that together, I actually think our biggest opportunity is revenue. And while you might not see that one immediately given the nature of our industry and people are already fairly well booked in 2026, you should definitely start to see the fruits of that in 2027. So kind of look at it as a tale of two cities. I think both sides of the coin are opportunities for us. The culture is what will drive both of those at the end of the day.

Our next questions come from the line of Conor T. Cunningham with Melius Research. Please proceed with your question.

Hi, everyone. Thank you. John, maybe we could just stick with you on maybe following up to Ben's comments a little bit there. You mentioned that you are going through a full review process now. Just curious on when that will actually be—you know, understand a lot of it is culture and more of a broader strategy as you kind of take the reins.

Well, as I said, I think our strategy is correct. I like—as Mark noted, we have as a company invested a lot in our ships. So I think our ships and our guest experience, our sort of crew enthusiasm and crew dedication is good. Whether it takes three months, four months, five months to kind of really dig in to where we have gotten a little bloated, where we are not efficient, where should we be looking to invest short term, I cannot tell you exactly, but it is not a one-year process by any stretch of the imagination to kind of pull together what do we want to do immediately, what do we want to do but for certain reasons maybe we cannot get after until 2027, sort of racking and stacking those priorities. So I would say in the next couple of quarters, we should have that pretty buttoned up. But I do not know—I cannot give you an exact date by any stretch. I have been here all of two weeks, so—

Yeah. No. I realize that you have been there for a short period of time. Just—okay. So just as a follow-up, maybe, have you guys actually been in contact with Elliott? And then when you look at their presentation, what would you actually agree with, as you kind of digest it?

The answer is yes. We have been in touch with Elliott like we have with all of our shareholders. And we are actually headed out for a two-week road show basically with investors, which we are literally hitting the road this week and next week. So that was already set up. That is one of the first things I wanted to do when I stepped in, is go talk to shareholders and get their perspective on what we have done well and clearly what we have not done well. So that is all underway, and obviously hearing from Elliott is just like any other shareholder, meaning we are very interested in what they have to say, their thoughts on how we better drive long-term shareholder value. So yes, that is what I would say.

And Conor, I think as John has said, I think there is a huge opportunity here as we focus on the revenue side. We brought in a top-notch commercial revenue officer who is an industry veteran, who has significant experience in other areas of the industry of correcting this issue. And while that is going to take some time to harvest, we believe that, again, we are putting in the right structural components underneath that to really drive the top line as well.

Appreciate it. Thank you.

Our next questions come from the line of Matthew Robert Boss with JPMorgan. Please proceed with your question.

Great, thanks. So, John, you enter 2026 slightly below your optimal booking range. Could you speak to actions maybe more in the immediate term to support improvement in booking trends? Maybe specifically your mindset on preserving price relative to load factors?

I think, again, having been here two weeks, I am going to defer to Mark on that one. I am not that deep in the weeds yet, to be honest.

Yes, Matt, great question. So yes, we are slightly behind the optimal book curve as we mentioned. And as a result, when you look at our guidance, I think that is reflective of both the first quarter as well as the remaining three quarters. It is always a delicate balance between price and load, but I think when you step back and you think about our longer-term strategy of a central pillar around the Caribbean, getting more premium families on board, monetizing our island, we will continue to focus on load factor. And in fact, I think our load factor this year is increasing by over 200 basis points. So the balance is going to be finding that right price together with the right yield and load factor. I think, again, if we align all of our commercial departments rowing in one direction, I think you are naturally going to see increases in both.

Great. And then maybe, Mark, to that point, could you elaborate on your cost growth outlook for this year? Meaning, I know this has been a strong area of focus in particular for you personally over the last couple of years. But any areas of incremental low-hanging fruit that you see to further rationalize the cost structure? Or maybe on the flip side, investments needed to drive yields multi-year in your view? Just what is the best way to think about the balance that we should consider here?

Yes, I think as John mentioned, one of the areas that we have not invested in enough is customer-facing systems, technology, and both marketing and revenue management technology. I think as you all recall, we started investing in a new revenue management system last year. It has just started up and running over the last six to eight weeks. So that will take some time. I think, again, when you step back and you look at where our cost culture over the last two to three years has been, yes, we have made good progress. We have always said this is a $300,000,000-plus program. But a lot of that was focused on shipboard efficiencies. And now our eyes are squarely turning on the SG&A component using that same muscle. So while—when you dig down, there is never any low-hanging fruit, but I think you are going to see us taking much more methodical, urgent actions around that side of the equation going forward to right-size that piece of the business.

Great color. Best of luck.

Our next question is from the line of Brandt Antoine Montour with Barclays. Please proceed with your questions.

Good morning, everybody. Thanks for taking my questions. So, John, I want to get your sense—I mean, in your prepared remarks, you touched on technology and revenue management, customer-facing systems. Do you, these together, do you think that there is a disadvantage at Norwegian of scale? And the reason I ask is, you said that this would require patience. How long in your experience does it take to see these types of turnarounds start to come to fruition?

Yes, I do not think we are at a disadvantage at scale. I think, again, if we showed the same discipline on the shore side, the SG&A side, that we have done on the ship side, I think we can definitely see some improvements over 2026 and 2027 because costs you can go after faster than the revenue side given, again, how far out people book. But I think our investments in revenue management, as Mark said, in some of our guest-facing technology, the island coming online, better monetization of that island. I think the revenue side, again, you are going to see more 2027–2028. So they kind of go at slightly different paces, just given how our industry sets up. But I think we are all going—Mark might not say it is low-hanging fruit, but I would say there are lots of opportunities. So I will quibble with him a little bit there. And that is our job to go after that and go get it, again, focus on it as much as we did on ship-side costs.

Thanks for that. And then just a follow-up question. It has been all of one and a half days since the geopolitical events unfolded in the Middle East, understanding that you do not have direct exposure there. But have you seen or do you expect to see near-term bookings pressure on other international itineraries, namely Europe, from Americans? And have you baked anything for that into your guidance?

Yes, good morning, Brandt. So, so far we are, what, a day or two into this and I cannot say that we have seen anything noticeable around that. In terms of the guidance, our guidance is our best view of how we see the world. But I would certainly not say we have baked anything in for the last two days of geopolitical issues. As I think John noted in his prepared remarks, we will see—obviously, we could see a little bit of pressure on fuel. The good news is that we are over 50% hedged for the year. And the one thing that we can control is fuel consumption. And I think when you look at this year, where we are heading, about 3%, our implied forecast implies that we are going to be down fuel consumption per capacity day, and that comes off of 2025, where we were down 6% per capacity day. So we are controlling what we can control, and, you know, we are hopeful that this unrest in the Middle East area settles soon.

Thanks, everyone. Our next question is from the line of James Hardiman with Citi. Please proceed with your questions.

Hey, good morning. Thanks for taking my questions. And John, welcome aboard and good luck. So we have talked a lot today about some of the missteps—investors very much appreciate, along the way, misalignment. And I think sort of the ownership on that front. I maybe wanted to dig into if there might be other factors also at play here, namely sort of the cyclicality piece, right, the strength of the consumer broadly and then maybe the competitive piece, right? Your relative positioning within the industry. Obviously, you guys have some really impressive peers. And so just trying to dig in a little bit more—do you think the consumer is slowing? Do you think that you have lost any credibility with consumers as we think about, you know, fixing this going forward? Just trying to make sure we understand all the pieces. Thanks.

Yes. So I would start out by saying—I am going to let Mark get a little more granular. But I think the other thing besides our missteps, I think the other thing investors really need to focus on is that, as we talked about, it really is a whole new team, which I was lucky. I mean a lot of people have been brought in, not just the head of Norwegian; we have a new head of technology who came from two Fortune 500 companies and a new head of strategy and a new revenue management. I would say, even having been on the Board—kind of back on the Board about a year ago—the quality of the team is instantly better, but the downside, which turns into an opportunity, is most of them have only been here three or four months. So yes, we had missteps, but I think we have much higher-caliber people in the key roles. So now we have just got to gel, as I said, and become one team, and I think they are equally excited about what we can accomplish. I would say, you know, yes, missteps, but also in some of my previous turnarounds, you have to go in and kind of clear the field, spend three to four months going to find the right people to put in place. I think for the most part, we have that here. I think in terms of what Mark is seeing with the consumer, he can give you a little more color on that.

Yes, James, good morning. Look, I think overall, we are not seeing issues with the consumer. The consumer continues to be strong relative to cruise and relative to our space. I think what we are seeing in terms of our specific results throughout the areas are really as a result of some of the missteps that we have taken. Equally as important, our luxury brands continue to do very, very strong, and we are very happy with that. I think the big focus is really on our mass brand, Norwegian, aligning our commercial strategy and getting much, much sharper on our execution. So I would say from our standpoint, a good portion of this is probably self-inflicted wounds that we can correct—of course, correct over time.

Got it. That is really helpful color. And then, maybe staying with you, Mark. You touched on a little bit of this, but as we think about the phasing of the year, I guess particularly on the top line, I think most of us were bracing for a pretty rough first quarter. As we think about that 0.6% yield growth in the back of the year, obviously, 2Q, you are still not going to have the benefit of Great Tides. So I am assuming we should maybe still be modeling February to be down in terms of yields before we get maybe some relief in the back half of the year? Also, just really just trying to get an understanding as to what the exit rate looks like and how that might influence 2027. And then anything to call out in terms of cost phasing as well. Thanks.

Yes, James. So look, I think when you look at the balance of the year, as we have said, Q2 is for the most part pretty well sold. As we did mention, we are seeing some pressure in Europe as a result of our own missteps. Alaska is seeing pressure from the broader industry. But I think when you start to look toward the fourth quarter and where we are, given that we will have our full island amenities as well as the water park, we will have about a third of our passengers touching the island in the fourth quarter. That is where I think we are going to really start to see some of the turnaround starting to occur. So I do not want to get too far ahead of our skis here, but we have got some work to do over the next couple of quarters.

The next questions are from the line of Vince Ciepiel with Cleveland Research. Please proceed with your questions.

Hi, thanks for taking my question. Obviously, the old target for low- to mid-single-digit yield growth in '26 versus the flat today. There has been some degradation in the last 90-plus days, and just trying to understand kind of the shape and pace of it. Is it—when you look at your bookings, is it just things overall have been a little bit worse versus plan? Or when you look at it by month, has there been anything encouraging, discouraging, that when you kind of look at the more recent trend line in bookings, how it has informed kind of your perspective on the year? And when you think about kind of this starting negative and moving towards—it sounded like more positive yield growth in the fourth quarter. Does that require an improvement in bookings trajectory that you are seeing right now or just kind of assume more of the same?

Hi, Vince. Good morning. So look, I think when you think about bookings, it all starts with momentum. And as you start to see some changes in the momentum, you start to get slightly behind the booking curve. That has—as we all know—that has ramifications down the line over the next few quarters. The positive news is, again, we have made some organizational changes, more of which you are going to see, I think, over the course of the next few weeks. We are aligning our organization to ensure that they are operating as one cohesive unit. And we have got some good industry talent that are now running the key areas. So yes, it is going to take some time, but it takes time to turn the ship, so to speak. But we are seeing some positive green shoots. It is just—time is needed. And we have got a lot of opportunities on the horizon.

And I think, Mark, as noted on, I think, the last question, the luxury brands are performing very well. So I think, again, our missteps, our lack of cohesion, are really with the Norwegian brand, but because that is the largest brand by far, that is where you are seeing it pull the overall Norwegian Cruise Line Holdings Ltd. down. So I am actually encouraged by the fact that we are executing well with two out of three. I think I know our opportunity is really around the Norwegian brand as well as all the other things we talked about. We can do better on revenue across all three brands. We can optimize SG&A across all three, but specifically, I think our big opportunity on the revenue side is Norwegian.

Great. And maybe digging in a little bit more there, when you step back and think about flat yield for the year, Caribbean is 40% of the mix and it is probably safe to assume that is negative. But based on some of your other commentary, it does not sound like Europe and Alaska are kind of hitting it out of the park for you. So I do not know. I feel like going into this call, there was probably more concern that Caribbean would be even more negative than maybe what this overall guidance implies. So can you just talk about how you have managed price in the region, what you are seeing overall? And I think in years past, you have talked about how price matters a lot more and it takes a lot longer to go earn it back. So just how you are navigating the pricing side in the Caribbean through this reshuffling?

Yes. Hi. So as I said earlier, it is always a balance between price and load factor. And as we continue to build our presence in the Caribbean, we are going to continue to balance that. Obviously, we are seeing some pricing pressure as a result of our missteps, and we are working on correcting that. When you think about Europe, I thought I was clear earlier. Europe as a whole is not—we do not see issues with the market. We see issues with our execution in the market. And again, there are opportunities around the margin to fix that for 2026. But we certainly can fix that for 2027. It is just a matter of not seeing the expected tailwinds that we would have thought year over year on that, that we had expected earlier. And Alaska, again, is a little bit of a soft spot. We are seeing some pressure there just from a broad industry standpoint. So again, these are all things that we believe are fixable. And it is going to take time, but with the right alignment, the right leadership, I think we have a huge opportunity in front of us.

Our next questions come from the line of Elizabeth Dove with Goldman Sachs. Please proceed with your questions.

Hi, thanks for taking the question. John, as you are stepping into this new role as CEO and taking a bit of a fresh look at things, I am curious as you think about the portfolio long term, how are you defining what is strategically core versus maybe non-core within the brand portfolio? And I will ask my second question at the same time, which is, obviously, Oceania and Regent have a different profile as Norwegian—yield, margins, etcetera. Any way that you can help us think about those relative margins or return profile of those brands versus the Norwegian brand?

Yes. So I think we absolutely—as I said, I like the strategy. I like the assets and the brands we have. I think the quickest and most predictable way to get back on the right track and deliver long-term shareholder value is, again, to execute, work on revenue management, work on making sure we have an aligned cohesive plan, going after where we need to optimize the business. So I am actually very pleased with the portfolio we have. I just think there is lots of work to do around all three brands. And I could not begin to tell you about the margins on the three brands. I really have not dug in that much. I do not really think we go into that kind of level of detail anyway. But I look at them all as core is my honest answer.

Thank you.

Thank you. Our last question comes from the line of Trey Bowers with Wells Fargo. Please proceed with your question.

Hey, guys. Thanks for the question. I guess just quickly getting back to the Elliott from before. They have obviously proposed one named new Board member and would like to have a few more. How open are you guys to some fresh set of eyes on the Board? Yeah. I will just stop there.

Yeah. I would say like any company you would expect to say, we are always looking at renewing our Board. I think we have added three or four Board members over the last couple of years. So I think that is a constant process. The non-gov—governance committee goes over. So I would just say all kinds of people throw us suggestions, and we will definitely look at those as a Board and go from there.

I guess just following up on Lizzie’s question. If someone was to approach you guys and were interested in one of the brands, would you explore that? Or you feel like everything is so devalued right now that that would not be an option?

Yes. I think, again, I believe in these three brands. I think the best way to drive shareholder value is to go execute well, take out the excesses, and let this team coalesce because, again, it is pretty brand new. And to me, that is the best path to go down. Obviously, you always reevaluate things like any company over a longer time period, but I am pretty confident in what our plan is here.