1
00:00:02,400 --> 00:00:08,559
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Norwegian Cruise lunch stares

2
00:00:08,640 --> 00:00:11,760
Speaker 1: are struggling today, but that is despite record bookings in

3
00:00:11,800 --> 00:00:16,560
Speaker 1: the first quarter. Investor expectations are sky high following that

4
00:00:16,640 --> 00:00:19,239
Speaker 1: strong report. We're going to bring in Norwegian Cruise Line

5
00:00:19,280 --> 00:00:21,680
Speaker 1: CEO Harry Summer to talk about what's going on in

6
00:00:21,680 --> 00:00:24,440
Speaker 1: his business. Harry, you know, if you look at what

7
00:00:24,480 --> 00:00:28,200
Speaker 1: you've given the street, you've hiped your guidance here and

8
00:00:28,320 --> 00:00:31,720
Speaker 1: you're still not seeing investors react to the extent that

9
00:00:32,080 --> 00:00:33,640
Speaker 1: you would think if you were saying things are going

10
00:00:33,680 --> 00:00:35,520
Speaker 1: to be better in the future. How do you meet

11
00:00:35,520 --> 00:00:37,680
Speaker 1: investor expectations at this point?

12
00:00:38,200 --> 00:00:40,720
Speaker 2: You know? Well, first off, thank you for having me

13
00:00:40,760 --> 00:00:44,000
Speaker 2: on this show today. We are really thrilled with our

14
00:00:44,040 --> 00:00:47,400
Speaker 2: performance in Q one. We saw a revenue of twenty percent,

15
00:00:47,479 --> 00:00:51,519
Speaker 2: yields up sixteen percent, great demand both in ticket revenue

16
00:00:51,520 --> 00:00:54,800
Speaker 2: and onboard revenue, and we doubled our IVIDA from last year.

17
00:00:55,040 --> 00:00:57,720
Speaker 2: So these are all great indicators of the performance that

18
00:00:57,760 --> 00:01:00,760
Speaker 2: the company did in Q one. I think anything that

19
00:01:00,840 --> 00:01:04,759
Speaker 2: happened with the stock today perhaps just a small time reaction,

20
00:01:05,240 --> 00:01:07,800
Speaker 2: but we are super focused on the long term. We

21
00:01:07,959 --> 00:01:10,800
Speaker 2: raised our EPs guidance for the year. We raised our

22
00:01:10,840 --> 00:01:13,880
Speaker 2: yield guidance for the year. We are super happy with

23
00:01:13,959 --> 00:01:16,200
Speaker 2: the Cruise Guest and the cruz Guest and.

24
00:01:16,280 --> 00:01:20,280
Speaker 1: NCLH speak through now what the competition looks like at

25
00:01:20,280 --> 00:01:22,840
Speaker 1: this point for cruise goers When you look at your

26
00:01:22,840 --> 00:01:25,639
Speaker 1: customer base, are you finding that more people are coming

27
00:01:25,680 --> 00:01:28,720
Speaker 1: in that are new either to the cruise industry or

28
00:01:28,760 --> 00:01:30,959
Speaker 1: new to Norwegian? What do the numbers say?

29
00:01:31,880 --> 00:01:35,760
Speaker 2: Sure, we so to answer the first your question. First,

30
00:01:36,080 --> 00:01:38,640
Speaker 2: our competitive set is really hotel chains. You know, if

31
00:01:38,680 --> 00:01:43,040
Speaker 2: you think about the North American market for vacations, cruises

32
00:01:43,080 --> 00:01:45,720
Speaker 2: makes up barely two percent of it. So I know

33
00:01:45,800 --> 00:01:48,120
Speaker 2: you had the quote from my friend Jason on the

34
00:01:48,120 --> 00:01:50,720
Speaker 2: top of the show, He's not really our competitor, our

35
00:01:50,720 --> 00:01:54,440
Speaker 2: competitor or the Hilton, Marriott's, Piot's ihds of the world,

36
00:01:54,600 --> 00:01:57,080
Speaker 2: because that's really where the guest has choice. And we

37
00:01:57,160 --> 00:02:01,720
Speaker 2: believe that cruising represents both in edible value compared to

38
00:02:01,800 --> 00:02:05,560
Speaker 2: hotels and also a much better guest experience. Our ships

39
00:02:05,560 --> 00:02:08,720
Speaker 2: are always well maintained, they give a consistent product. We

40
00:02:08,800 --> 00:02:11,440
Speaker 2: go to fantastic places around the world, both close to

41
00:02:11,480 --> 00:02:15,919
Speaker 2: home and far away, and we really see guests continuing

42
00:02:16,000 --> 00:02:19,160
Speaker 2: to favor cruising as vacation, so new to cruises up

43
00:02:19,200 --> 00:02:21,400
Speaker 2: a few points, new To and cl is up a

44
00:02:21,400 --> 00:02:25,280
Speaker 2: few points. We're definitely seeing record interest in a cruise location.

45
00:02:25,960 --> 00:02:28,840
Speaker 1: It's interesting because it's not just this idea of Royal

46
00:02:28,880 --> 00:02:31,880
Speaker 1: Caribbean and you guys versus the hotel chains as you've

47
00:02:31,880 --> 00:02:34,880
Speaker 1: been saying. Actually today is an interesting day. There's another

48
00:02:34,960 --> 00:02:37,040
Speaker 1: cruise operator going public as well in one of the

49
00:02:37,080 --> 00:02:39,960
Speaker 1: biggest IPOs of the year. How do you see more

50
00:02:40,240 --> 00:02:44,080
Speaker 1: entrance into this space, particularly when it comes to dollars

51
00:02:44,080 --> 00:02:45,799
Speaker 1: from public investors.

52
00:02:46,320 --> 00:02:49,400
Speaker 2: You know, I think VIK has done a great job

53
00:02:49,480 --> 00:02:51,480
Speaker 2: over there at their last few decades, and both the

54
00:02:51,600 --> 00:02:54,400
Speaker 2: river cruise space and the ocean cruise space, and I

55
00:02:54,480 --> 00:02:57,360
Speaker 2: think anything that elevates the cruise experience is good for

56
00:02:57,400 --> 00:02:59,400
Speaker 2: the industry. I think at the end of the day,

57
00:02:59,520 --> 00:03:02,919
Speaker 2: the cruising industry is healthiest what it has good participants

58
00:03:02,960 --> 00:03:06,800
Speaker 2: with great product and great guests experiences on board. Certainly

59
00:03:06,800 --> 00:03:10,240
Speaker 2: biking delivers that. Of course NCLH does as well, and

60
00:03:10,280 --> 00:03:13,640
Speaker 2: we very much look forward to these new entrants continuing

61
00:03:14,040 --> 00:03:17,240
Speaker 2: to build demand for the industry in public from a

62
00:03:17,280 --> 00:03:20,840
Speaker 2: financial investment community, I think any good financial performer in

63
00:03:20,840 --> 00:03:25,280
Speaker 2: the industry raises the perception, if you will, of cruising

64
00:03:25,320 --> 00:03:28,079
Speaker 2: in the financial markets. So we're thrilled from that perspective

65
00:03:28,120 --> 00:03:28,480
Speaker 2: as well.

66
00:03:28,639 --> 00:03:30,760
Speaker 1: It's interesting because when we look at your numbers versus

67
00:03:30,800 --> 00:03:33,600
Speaker 1: the estimates compiled by Bloomberg, a lot of beats there

68
00:03:33,680 --> 00:03:37,240
Speaker 1: or as we've been talking about Harry passengers carried, and

69
00:03:37,280 --> 00:03:41,320
Speaker 1: even on operating capacity as well, But the revenue is

70
00:03:41,360 --> 00:03:44,280
Speaker 1: where things felt slightly short of expectations. What do you

71
00:03:44,280 --> 00:03:45,800
Speaker 1: think was the biggest contributor there?

72
00:03:46,920 --> 00:03:50,000
Speaker 2: You know, really I emphasize what you said. We beat

73
00:03:50,040 --> 00:03:53,240
Speaker 2: on pretty much every key metric you know, net revenue, margins,

74
00:03:53,320 --> 00:03:56,600
Speaker 2: ibita aps across the board, so we were very pleased

75
00:03:56,840 --> 00:03:59,600
Speaker 2: with our performance. We beat both guidance and consensus.

76
00:04:00,040 --> 00:04:00,160
Speaker 3: YEA.

77
00:04:00,280 --> 00:04:03,280
Speaker 2: Revenue really talks to some of the items that we

78
00:04:03,320 --> 00:04:05,880
Speaker 2: make a small margin on, like air and I talked

79
00:04:05,880 --> 00:04:08,080
Speaker 2: about that in the coll this morning, that we sold

80
00:04:08,120 --> 00:04:11,480
Speaker 2: guests slightly fewer air tickets. Now, air tickets isn't a

81
00:04:11,560 --> 00:04:14,440
Speaker 2: high margin item for us, so actually selling slightly few

82
00:04:14,440 --> 00:04:16,719
Speaker 2: of them is better overall for the company. So it

83
00:04:16,800 --> 00:04:19,440
Speaker 2: impacted gross revenue, but it didn't impact net revenue. Our

84
00:04:19,440 --> 00:04:22,800
Speaker 2: net revenue exceeded guidance and exceeded consensus.

85
00:04:23,320 --> 00:04:26,560
Speaker 1: How sensitive is the consumer that you have to the

86
00:04:26,680 --> 00:04:29,280
Speaker 1: environment that we're living in, Harry, Even if you're kind

87
00:04:29,320 --> 00:04:32,560
Speaker 1: of excited about this kind of record bookings environment, do

88
00:04:32,640 --> 00:04:36,600
Speaker 1: you worry about consumer sentiment at this point is very fragile.

89
00:04:37,560 --> 00:04:40,600
Speaker 2: You know, we're not seeing any cracks and consumer sentiment

90
00:04:40,640 --> 00:04:43,240
Speaker 2: in our core demographics. You know, we really sell cruises

91
00:04:43,480 --> 00:04:46,000
Speaker 2: between our three brands and our Reegian Cruise Line, Oceanic

92
00:04:46,080 --> 00:04:49,840
Speaker 2: Cruises and Region seven seat cruises across all demographic fronts,

93
00:04:50,000 --> 00:04:53,920
Speaker 2: but mostly to higher net worth individuals, and sentiment within

94
00:04:53,960 --> 00:04:57,599
Speaker 2: the higher net worth individuals it continues to be really high.

95
00:04:57,720 --> 00:05:01,920
Speaker 2: Couple that with the huge gap invocation experience between us

96
00:05:01,960 --> 00:05:05,360
Speaker 2: and the alternative ications, plus a value gap that creases

97
00:05:05,400 --> 00:05:08,839
Speaker 2: our price less than hotels in spite having a better experience,

98
00:05:09,080 --> 00:05:12,920
Speaker 2: and we're really seeing demand continue to outperform our expectations

99
00:05:13,240 --> 00:05:15,359
Speaker 2: despite any cracks that we see in other parts of

100
00:05:15,360 --> 00:05:16,000
Speaker 2: the economy.

101
00:05:16,520 --> 00:05:18,560
Speaker 1: Harry, we thank you so very much for joining us

102
00:05:18,560 --> 00:05:20,800
Speaker 1: on a very busy earnings period for you. That is

103
00:05:20,880 --> 00:05:24,400
Speaker 1: Norwegian Cruise Line CEO, Harry Summer. Now it's another stock

104
00:05:24,480 --> 00:05:27,719
Speaker 1: moving Amazon it's cloud unit posted its strongest sales growth

105
00:05:27,760 --> 00:05:30,360
Speaker 1: in a year, a sign that the retailer's most profitable

106
00:05:30,440 --> 00:05:34,120
Speaker 1: unit is recovering from a slump in certain businesses. We're

107
00:05:34,120 --> 00:05:36,159
Speaker 1: going to break it down with John Arlcmann from BNN

108
00:05:36,160 --> 00:05:39,880
Speaker 1: Bloomberg joining us from Toronto and Encyclopedic. As we know

109
00:05:39,960 --> 00:05:43,280
Speaker 1: as ever about technology, John, you also spoke earlier, I believe,

110
00:05:43,360 --> 00:05:46,480
Speaker 1: to an Amazon executive as well. What are they saying

111
00:05:47,000 --> 00:05:50,799
Speaker 1: about their potential and the exciting stuff in cloud in AI?

112
00:05:52,240 --> 00:05:54,479
Speaker 3: Yeah, so much to talk about, Shanali and I guess

113
00:05:54,520 --> 00:05:58,040
Speaker 3: we'll start with the market reaction to these latest Amazon numbers.

114
00:05:58,360 --> 00:06:00,640
Speaker 3: You could make the argument if we hadn't seen the

115
00:06:00,680 --> 00:06:03,960
Speaker 3: success we saw from AWS, maybe there'd be a slightly

116
00:06:03,960 --> 00:06:06,640
Speaker 3: different narrative just because of the guidance from the second

117
00:06:06,720 --> 00:06:09,040
Speaker 3: quarter overall. But if you think about where we were

118
00:06:09,080 --> 00:06:12,000
Speaker 3: a year ago, just as contact Sanale, when a lot

119
00:06:12,000 --> 00:06:14,440
Speaker 3: of business customers were starting to be a little bit

120
00:06:14,560 --> 00:06:18,720
Speaker 3: uncertain about the economic spending environment, there were questions about

121
00:06:18,720 --> 00:06:21,800
Speaker 3: what that would mean for Amazon Web services, and yet

122
00:06:21,880 --> 00:06:24,680
Speaker 3: here we are with AI and full effect right now,

123
00:06:24,720 --> 00:06:27,320
Speaker 3: and that being reflected in these quarterly results. The numbers

124
00:06:27,360 --> 00:06:29,640
Speaker 3: that really stood out to me Shonali, the fact that

125
00:06:29,880 --> 00:06:33,280
Speaker 3: on the revenue side, AWS clearing twenty five billion dollars,

126
00:06:33,279 --> 00:06:35,760
Speaker 3: so an annual run right now of one hundred billion

127
00:06:35,800 --> 00:06:38,000
Speaker 3: dollars for this business. You're going to be hard pressed

128
00:06:38,000 --> 00:06:41,560
Speaker 3: to find any corporate software business outside of Microsoft to

129
00:06:41,640 --> 00:06:44,200
Speaker 3: that size and scale. And that's just one part of

130
00:06:44,240 --> 00:06:47,520
Speaker 3: the Amazon business. And then the profit story, the fact

131
00:06:47,560 --> 00:06:50,760
Speaker 3: that the operating margins are already north of thirty eight

132
00:06:50,800 --> 00:06:55,320
Speaker 3: percent Bloomberg Intelligence seeing that heading towards forty percent, but

133
00:06:55,440 --> 00:06:59,680
Speaker 3: during an earning season where companies in technology are continuing

134
00:06:59,680 --> 00:07:02,720
Speaker 3: to SPA and on AI. Maybe one of the lessons

135
00:07:02,720 --> 00:07:05,840
Speaker 3: from the Meta conference call when Mark Zuckerberg obviously committed

136
00:07:05,839 --> 00:07:08,360
Speaker 3: to some big numbers and that raised concerns on Wall Street.

137
00:07:08,400 --> 00:07:13,520
Speaker 3: By comparison Andy Jasse talking about the need to spend

138
00:07:14,000 --> 00:07:16,840
Speaker 3: but also the need to monetize quickly on that spending.

139
00:07:17,000 --> 00:07:20,480
Speaker 3: That seemed to resonate with the streets. So Amazon getting

140
00:07:20,480 --> 00:07:22,120
Speaker 3: a lot of check marks, it feels like from the

141
00:07:22,120 --> 00:07:23,400
Speaker 3: Wall Street community so far.

142
00:07:24,360 --> 00:07:26,640
Speaker 1: Johnny, thank you so much for your time. We had

143
00:07:26,640 --> 00:07:27,720
Speaker 1: to leave it there for now,