Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Norwegian Cruise lunch stares
Speaker 1: are struggling today, but that is despite record bookings in
Speaker 1: the first quarter. Investor expectations are sky high following that
Speaker 1: strong report. We're going to bring in Norwegian Cruise Line
Speaker 1: CEO Harry Summer to talk about what's going on in
Speaker 1: his business. Harry, you know, if you look at what
Speaker 1: you've given the street, you've hiped your guidance here and
Speaker 1: you're still not seeing investors react to the extent that
Speaker 1: you would think if you were saying things are going
Speaker 1: to be better in the future. How do you meet
Speaker 1: investor expectations at this point?
Speaker 2: You know? Well, first off, thank you for having me
Speaker 2: on this show today. We are really thrilled with our
Speaker 2: performance in Q one. We saw a revenue of twenty percent,
Speaker 2: yields up sixteen percent, great demand both in ticket revenue
Speaker 2: and onboard revenue, and we doubled our IVIDA from last year.
Speaker 2: So these are all great indicators of the performance that
Speaker 2: the company did in Q one. I think anything that
Speaker 2: happened with the stock today perhaps just a small time reaction,
Speaker 2: but we are super focused on the long term. We
Speaker 2: raised our EPs guidance for the year. We raised our
Speaker 2: yield guidance for the year. We are super happy with
Speaker 2: the Cruise Guest and the cruz Guest and.
Speaker 1: NCLH speak through now what the competition looks like at
Speaker 1: this point for cruise goers When you look at your
Speaker 1: customer base, are you finding that more people are coming
Speaker 1: in that are new either to the cruise industry or
Speaker 1: new to Norwegian? What do the numbers say?
Speaker 2: Sure, we so to answer the first your question. First,
Speaker 2: our competitive set is really hotel chains. You know, if
Speaker 2: you think about the North American market for vacations, cruises
Speaker 2: makes up barely two percent of it. So I know
Speaker 2: you had the quote from my friend Jason on the
Speaker 2: top of the show, He's not really our competitor, our
Speaker 2: competitor or the Hilton, Marriott's, Piot's ihds of the world,
Speaker 2: because that's really where the guest has choice. And we
Speaker 2: believe that cruising represents both in edible value compared to
Speaker 2: hotels and also a much better guest experience. Our ships
Speaker 2: are always well maintained, they give a consistent product. We
Speaker 2: go to fantastic places around the world, both close to
Speaker 2: home and far away, and we really see guests continuing
Speaker 2: to favor cruising as vacation, so new to cruises up
Speaker 2: a few points, new To and cl is up a
Speaker 2: few points. We're definitely seeing record interest in a cruise location.
Speaker 1: It's interesting because it's not just this idea of Royal
Speaker 1: Caribbean and you guys versus the hotel chains as you've
Speaker 1: been saying. Actually today is an interesting day. There's another
Speaker 1: cruise operator going public as well in one of the
Speaker 1: biggest IPOs of the year. How do you see more
Speaker 1: entrance into this space, particularly when it comes to dollars
Speaker 1: from public investors.
Speaker 2: You know, I think VIK has done a great job
Speaker 2: over there at their last few decades, and both the
Speaker 2: river cruise space and the ocean cruise space, and I
Speaker 2: think anything that elevates the cruise experience is good for
Speaker 2: the industry. I think at the end of the day,
Speaker 2: the cruising industry is healthiest what it has good participants
Speaker 2: with great product and great guests experiences on board. Certainly
Speaker 2: biking delivers that. Of course NCLH does as well, and
Speaker 2: we very much look forward to these new entrants continuing
Speaker 2: to build demand for the industry in public from a
Speaker 2: financial investment community, I think any good financial performer in
Speaker 2: the industry raises the perception, if you will, of cruising
Speaker 2: in the financial markets. So we're thrilled from that perspective
Speaker 2: as well.
Speaker 1: It's interesting because when we look at your numbers versus
Speaker 1: the estimates compiled by Bloomberg, a lot of beats there
Speaker 1: or as we've been talking about Harry passengers carried, and
Speaker 1: even on operating capacity as well, But the revenue is
Speaker 1: where things felt slightly short of expectations. What do you
Speaker 1: think was the biggest contributor there?
Speaker 2: You know, really I emphasize what you said. We beat
Speaker 2: on pretty much every key metric you know, net revenue, margins,
Speaker 2: ibita aps across the board, so we were very pleased
Speaker 2: with our performance. We beat both guidance and consensus.
Speaker 3: YEA.
Speaker 2: Revenue really talks to some of the items that we
Speaker 2: make a small margin on, like air and I talked
Speaker 2: about that in the coll this morning, that we sold
Speaker 2: guests slightly fewer air tickets. Now, air tickets isn't a
Speaker 2: high margin item for us, so actually selling slightly few
Speaker 2: of them is better overall for the company. So it
Speaker 2: impacted gross revenue, but it didn't impact net revenue. Our
Speaker 2: net revenue exceeded guidance and exceeded consensus.
Speaker 1: How sensitive is the consumer that you have to the
Speaker 1: environment that we're living in, Harry, Even if you're kind
Speaker 1: of excited about this kind of record bookings environment, do
Speaker 1: you worry about consumer sentiment at this point is very fragile.
Speaker 2: You know, we're not seeing any cracks and consumer sentiment
Speaker 2: in our core demographics. You know, we really sell cruises
Speaker 2: between our three brands and our Reegian Cruise Line, Oceanic
Speaker 2: Cruises and Region seven seat cruises across all demographic fronts,
Speaker 2: but mostly to higher net worth individuals, and sentiment within
Speaker 2: the higher net worth individuals it continues to be really high.
Speaker 2: Couple that with the huge gap invocation experience between us
Speaker 2: and the alternative ications, plus a value gap that creases
Speaker 2: our price less than hotels in spite having a better experience,
Speaker 2: and we're really seeing demand continue to outperform our expectations
Speaker 2: despite any cracks that we see in other parts of
Speaker 2: the economy.
Speaker 1: Harry, we thank you so very much for joining us
Speaker 1: on a very busy earnings period for you. That is
Speaker 1: Norwegian Cruise Line CEO, Harry Summer. Now it's another stock
Speaker 1: moving Amazon it's cloud unit posted its strongest sales growth
Speaker 1: in a year, a sign that the retailer's most profitable
Speaker 1: unit is recovering from a slump in certain businesses. We're
Speaker 1: going to break it down with John Arlcmann from BNN
Speaker 1: Bloomberg joining us from Toronto and Encyclopedic. As we know
Speaker 1: as ever about technology, John, you also spoke earlier, I believe,
Speaker 1: to an Amazon executive as well. What are they saying
Speaker 1: about their potential and the exciting stuff in cloud in AI?
Speaker 3: Yeah, so much to talk about, Shanali and I guess
Speaker 3: we'll start with the market reaction to these latest Amazon numbers.
Speaker 3: You could make the argument if we hadn't seen the
Speaker 3: success we saw from AWS, maybe there'd be a slightly
Speaker 3: different narrative just because of the guidance from the second
Speaker 3: quarter overall. But if you think about where we were
Speaker 3: a year ago, just as contact Sanale, when a lot
Speaker 3: of business customers were starting to be a little bit
Speaker 3: uncertain about the economic spending environment, there were questions about
Speaker 3: what that would mean for Amazon Web services, and yet
Speaker 3: here we are with AI and full effect right now,
Speaker 3: and that being reflected in these quarterly results. The numbers
Speaker 3: that really stood out to me Shonali, the fact that
Speaker 3: on the revenue side, AWS clearing twenty five billion dollars,
Speaker 3: so an annual run right now of one hundred billion
Speaker 3: dollars for this business. You're going to be hard pressed
Speaker 3: to find any corporate software business outside of Microsoft to
Speaker 3: that size and scale. And that's just one part of
Speaker 3: the Amazon business. And then the profit story, the fact
Speaker 3: that the operating margins are already north of thirty eight
Speaker 3: percent Bloomberg Intelligence seeing that heading towards forty percent, but
Speaker 3: during an earning season where companies in technology are continuing
Speaker 3: to SPA and on AI. Maybe one of the lessons
Speaker 3: from the Meta conference call when Mark Zuckerberg obviously committed
Speaker 3: to some big numbers and that raised concerns on Wall Street.
Speaker 3: By comparison Andy Jasse talking about the need to spend
Speaker 3: but also the need to monetize quickly on that spending.
Speaker 3: That seemed to resonate with the streets. So Amazon getting
Speaker 3: a lot of check marks, it feels like from the
Speaker 3: Wall Street community so far.
Speaker 1: Johnny, thank you so much for your time. We had
Speaker 1: to leave it there for now,