Aureus
FRed Flag

Royal Caribbean Cruises Ltd.(RCL)

F

Financial data as of Dec 31, 2025Improving · Consumer Discretionary

FCF Margin5.9%Free Cash Flow / Revenue
Cash Conversion151.5%Operating CF / Net Income
Free Cash Flow$1.2B
Revenue$17.9B
Net Cash-$21.2BNet debt position
Debt / FCF20.8xElevated debt burden
Current Ratio0.18Tight short-term liquidity
YoY FCF Growth+13.1%4 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseD
→
-2Extreme debt-to-FCF ratio (20.8x)
→
-1Current ratio below 1.0 (0.18)
→
+0.5Modest YoY FCF growth (13.1% YoY)
→
-0.5Highly volatile FCF (consistency: 1.83)
→
FinalF

Analysis Summary

Strengths

  • Excellent cash conversion (151%)
  • FCF trend is improving

Concerns

  • Low FCF margin (5.9%)
  • Heavy debt position ($21.2B net debt, 20.8x FCF)
  • High debt-to-FCF ratio (20.8x)
  • Current ratio below 1.0 — tight short-term liquidity
  • Highly volatile quarterly FCF
SBC-adjusted FCF used — $0.2B stock-based compensation (14% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin5.9%
Net Margin23.8%
Operating CF Margin36.0%
CapEx Ratio29.2%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$21.2BNet debt position
Debt / FCF20.8xElevated debt burden
Current Ratio0.18Tight liquidity
Debt / Equity2.20High leverage

Quarterly FCF Trend

+13.1% YoYImproving (+13.1%)

Free cash flow per quarter

Sector Comparison — Consumer Discretionary

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameRoyal Caribbean Cruises Ltd.
SectorConsumer Discretionary
Free Cash Flow$1.2B
Revenue$17.9B
Net Income$4.3B
Operating Cash Flow$6.5B
Capital Expenditure$5.2B
FCF Margin5.9%
Cash Conversion Rate151.5%
Net Margin23.8%
Total Debt$22.0B
Total Cash$825.0M
Net Cash-$21.2B
Current Ratio0.18
Debt / Equity2.20
Debt / FCF20.8x
YoY FCF Growth+13.1%
Positive Quarters4 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeF
Data SourceYahoo Finance

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