Lindblad Expeditions Holdings Inc. Common Stock 2026 Q2 Earnings Call

Good morning, everyone, and thank you for joining us for Lindblad's second quarter 2026 earnings call. With me on today's call is Natalya Leahy, our chief executive officer. Natalia will begin with some opening comments. I will follow with details on our Q2 results and expectations for the full year before we open the call for Q&A. As always, you can find our latest earnings release in the investor relations section of our website. Before we get to all of that, I'd like to remind everyone that the company's comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates. We undertake no obligation to update any such forward-looking statements.

If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings. Our comments may reference non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company's earnings release. With that out of the way, I'll turn the call over to Natalia.

Thank you, Rick. Good morning, everyone, and welcome to our second quarter earnings call. I'm excited to share our results with you today, as this quarter once again demonstrates the strength of our strategic approach and execution. We delivered double-digit revenue growth in the second quarter with total company revenue growth of 19% to $199 million, compared to $168 million in the second quarter of last year. Our Lindblad segment revenue increased 16% to $129 million, and our Land Experiences segment grew 23% to $70 million. Adjusted EBITDA increased 31% to $32.5 million, compared to $24.8 million a year ago. Adjusted EBITDA margins improved 150 basis points to 16.3%, despite continued significant challenges from fuel prices. We delivered both occupancy and yield improvement despite a 12% increase in capacity.

As you recall, we've consistently said we expect to achieve 90% occupancy this year, I'm very pleased to report that this is the second consecutive quarter we've hit the 90-plus target. Occupancy increased to 91%, up from 86% in the second quarter of 2025, our highest second quarter occupancy rate in 10 years and slightly ahead of our expectations. net yield increased 4% to $1,294 per guest night compared with $1,241 in the prior year period, a record for the second quarter. This marks the sixth consecutive quarter of delivering record net yields. Our 2026 bookings, both for our land and expedition segments, remained above the prior year, even last-minute availability is booking at a healthy pace. Our adjusted demand generation strategy helped us minimize risk and preserve booking momentum in 2026.

Because of our strong booking trends, we are raising our 2026 revenue guidance to a range of $830 million-$860 million, up from our previous guidance of $800 million-$850 million. We are also increasing our net yield guidance by 50 basis points from a range of 4%-5% to a range of 4.5%-5.5%. We are reforming our full year EBITDA guidance. I'm also pleased that our 2027 bookings continue to pace ahead of 2026 in both segments. Before I walk you through our progress against our three strategic pillars, I would like to take a step back and talk about the opportunity in front of us. Expedition travel sits in the intersection of three powerful trends. Consumers increasingly value experiences over material possessions. Affluent travelers are looking for authentic, immersive experiences rather than traditional luxury.

People are seeking belonging, purpose, and human connection in how they travel. Expedition travel is one of the fastest-growing segments in leisure travel, yet it still represents less than 1% of the global cruise market. Our addressable market remains very large. There are over 20 million U.S. households with more than $1 million in net worth. While major expedition-focused cruise lines serve less than 1 million travelers annually, we believe we're still in the early stages of a long growth trajectory. We as a company are uniquely able to capitalize on this opportunity. Every voyage we operate today is built on six decades of learning, relationships, and operational expertise, our partnership with National Geographic continues to be a unique competitive advantage, both in enhancing the guest experience and in introducing Lindblad to new audiences around the world.

Now let me walk you through the progress we made across our three strategic pillars. First, maximizing revenue generation through higher occupancy pricing and deployment optimization. Second, optimizing financial performance through cost innovation and fixed asset optimization. Third, exploring and capitalizing on accretive growth opportunities, including additions to our brand portfolio. Beginning with our first pillar, maximizing revenue. A few weeks ago, we launched our 2028 deployment, I'm excited about the early results. For this launch, we took our demand generation efforts up a notch through an integrated approach, proactively engaging past guests, working with our travel partners and onboard sales teams to maximize visibility for the launch. Our guests have clearly responded. The first few weeks of our 2028 launch generated twice the revenue of the same period last year.

Our 2028 lineup also includes an exceptional set of experiences, including our return to French Polynesia, where one- and two-week journeys combine iconic destinations such as Bora Bora and Moorea with remote Makatea, a rarely visited island offering unique cultural and exploration experiences beyond traditional itineraries. We are also expanding into destinations where we're seeing strong demand, including European river cruises and the Amazon. We also continue to expand our international presence. I joined our sales team on a major market engagement trip to Australia and New Zealand a couple months ago, meeting with more than 60 travel partners and engaging with journalists and media. Early data suggests bookings from the region have accelerated meaningfully since the trip, with bookings up 44% in the six weeks post our visit compared to the same period prior to our trip.

This builds on the momentum we're seeing in the U.K. market, which we launched last year. Our outbound sales program continues to gain traction, increasing 44% versus the second quarter of last year, supported by strong lead generation. We are also seeing strong growth in onboard and extension revenue, up 28%, driven by continued expansion of our product and service offerings, as well as pre-voyage initiatives. Our National Geographic partnership continues to deepen and enrich the guest experience. In May, Sven and I had the privilege of attending the opening of the new National Geographic Explorers Museum and hosting a group of National Geographic explorers who regularly sail with us.

It was very inspiring to discuss new ways to create even more meaningful guest experiences through exclusive access to world-class explorers, immersive storytelling, and opportunities for guests to engage with the important research and conservation work taking place in the destinations we visit. Moving to our second strategic pillar, which focuses on operational excellence and productivity improvements. As we have previously mentioned, we continue to build a deep pipeline of cost innovation initiatives that are driving efficiencies and generating healthy returns. In addition, our execution against our dry dock and deployment optimization strategies has generated 92 fewer non-revenue days for our 2028 deployment compared to 2026. In response to high fuel prices, we reduced fuel consumption year-over-year despite increase in capacity through a combination of ship-level cost innovation initiatives.

We also completed several contract renegotiations that are delivering meaningful run rate savings by leveraging the scale of our entire brand portfolio. As we become a more scientific and data-driven organization, we believe we will continue to unlock additional opportunities going forward. Turning to our third pillar, accretive growth. This time, I would like to highlight a few land initiatives that allow us to capitalize on consumer trends and build on our core competencies. Our new Off the Beaten Path Alaska Grand Slam itinerary, which covers all eight Alaska National Parks, sold out both its initial deployment and added departures within weeks. This is a great example of our guests' willingness to engage with us for truly differentiated, premium, once-in-a-lifetime experiences. DuVine's expanded offering of hiking plus cycling itineraries have been very well-received with very promising sales trends.

We also launched Women-Only Walks, WOW, across 20 destinations on Classic Journeys, which dovetails with the success of our Natural Habitat Adventures women's only journeys. We also continue to evaluate fleet expansion and other opportunities to add to our portfolio of brands, as I mentioned during last couple calls. As we talk about our why and our commitment to sustainability, I am very proud of our entire food and beverage team for delivering programs centered on sustainable local sourcing, food waste reduction, and unique educational guest experiences. We are honored to have been recognized with the Most Sustainable F&B Program Award at the 2026 Seatrade Cruise Awards. Before I turn the call to Rick, let me leave you with three key takeaways. Our revenue maximization efforts are working.

Strong second quarter occupancy, record net yields, and accelerating booking momentum across 2026, 2027, and 2028 shows that guests continue to choose Lindblad for differentiated premium experiences. We are becoming a more efficient, data-driven organization, and that discipline is showing up in our margins even as we invest in growth. Our creative growth initiatives across both Land Experiences and expeditions give us multiple paths to capture a large and still under-penetrated market. We are well-positioned for growth and actively pursuing new avenues through existing product expansions and acquisitions. We recently spent a few days with our executive leadership team reflecting on how proud we are of every member of our team for driving significant operational changes across so many areas of our business. I want to thank our teams for their humility, growth mindset, focus and resilience, and above all, for their unwavering commitment to the guest experience.