LIND earnings call transcript, November 3, 2026

Hello, everyone. Thank you for joining us and welcome to the Lindblad Expeditions 3rd Quarter 2026 Financial Results.

After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Rick Goldberg, Chief Financial Officer. Rick, please go ahead. Thank you, operator. Good morning, everyone. And thank you for joining us for Lindblad's third quarter 2026 earnings call. With me on today's call is Natalia Leahy, our Chief Executive Officer. Natalia will begin with some opening comments, and I will follow with details on our Q3 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 release. Thank you so much for joining us. Please see the company's SEC filings. In addition, 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. Well, this has been a fun and exciting

quarter for us. We welcomed two extraordinary brands, YD. Desert and Echo Charlie to our global experiential travel platform, expanding our ability to take guests to some of the world's most remarkable places by sea, by land, and now by air. At the same time, we continue to deliver strong business momentum. Combined, these developments gave us the confidence to raise our guidance mid-quarter and again today. We delivered the number. Another outstanding quarter with double-digit growth in both revenue and adjusted EBITDA. Total company revenue reached $269 million, up 12% from a year ago, while adjusted EBITDA increased 12% to $64 million, despite fuel prices rising approximately 50% year-over-year. We also generated approximately $27 million in net income available. to stakeholders. Our year-to-date revenue, adjusted EBITDA, and net income are all at record levels. These results are especially meaningful against the backdrop of a challenging geopolitical environment and significantly elevated fuel prices. They demonstrate the strength and resilience of our business model, the effectiveness of our strategy, and our team's ability to execute. I'm incredibly I'm incredibly We'll be right back. I'm proud of what we continue to accomplish and very confident in the opportunities ahead. Occupancy increased 310 basis points to 91% on a 4% increase in capacity. It was our third consecutive quarter with occupancy above 90% consistent with our long-term stated goal.

Net yields increased 6% year over year to 1,000. $1,398 per guest night, the highest third quarter net yield in the company's history. Lean blood segment revenue increased 12% to $153 million, and our land experiences segment revenue increased 13% to $116 million. Our disciplined commercial execution, revenue management, and improved marketing strategies continue to drive strong bookings momentum. I am pleased to share that our 2027 bookings continue to outpace the prior year for both our expedition and land segments, and our 2027 booked position is at record high. Our 2028 bookings are also pasting ahead of 2027. Given our continued momentum, we are rising our 2026 full year guidance again. Specific. We're increasing our revenue guidance to a range of 870 to 885 million from our previous guidance of 850 to 880 million. We now expect net yields for the full year to increase in the range of 6 to 7 percent, and we're updating our full year adjusted EBITDA guidance to a range of 142 million to 148 million. Before I walk you through our three strategic pillars, I wanted to highlight the significant growth opportunity ahead of us and how our increasingly diversified experiential travel platform positions us to capture it. We continue to benefit from powerful macro trends as affluent travelers increasingly seek authentic immersive experiences in extraordinary places.

Excellent. Expedition cruising is one of the fastest growing and most under penetrated segments of leisure travel while expedition capacity has more than doubled over the past decade. It still represents less than 1% of total cruise capacity with fewer than half a million guests traveling on expedition cruises annually to put the broader opportunity in perspective our approximately 60,000 annual guests across eight brands. represent less than 0.1% of global travelers with financial means to experience our journeys. This gives us an enormous runway for growth. And importantly, with the additional white desert and echo Charlie, we have further strengthened our position as a truly global experiential travel platform. Our eight complimentary brands now offer extraordinary experiences by sea, and we'll see you next week. By land, and by air, creating more opportunities for guests to explore the world with us across multiple brands and destinations, while further diversifying our portfolio and expanding our addressable market. I believe this combination of strong market tailwinds, an exceptionally large untapped opportunity, and our expanded platform positions us extremely well for sustainable long-term wealth. value creation. Now, let me walk you through the progress we made across our three strategic pillars. First, maximizing revenue through higher occupancy pricing and deployment optimization. Second, optimizing financial performance through cost innovation and fixed asset utilization. And third, pursuing accretive growth opportunities. Beginning with our first pillar, maximizing revenue, we continue to execute

and we continue to execute. Again, several revenue levers we have discussed previously. Dynamic pricing, improved marketing communication, maximizing sales channels, and optimizing revenue management. These initiatives continue to deliver on their objectives as evidenced by our results and forward-booked position. We stated several times that one of our goals over the past 18 months was to expand booking curves, which drives better revenue predictability, and stronger price elasticity. I'm happy to share that our average booking window increased from 9.5 months to 11.9 months. We also continue to see strong momentum in onboard and extension revenues, delivering 27% growth year-to-date. And with a robust pipeline of initiatives ahead, I believe we have significant room to further unlock the full potential of this revenue stream. Moving to our second pillar, cost innovation and fixed asset utilization. We have a culture of continuous improvement and we continue executing several efficiency initiatives across the company. To give you a few examples, we outsourced our warehouse operations and completely overhauled our accounts payable processes. We are also building out our supply chain and inventory for a minute. management capabilities and exploring AI to drive further efficiencies. Fuel costs remain a significant headwind, but I'm particularly proud of the partnership between our shoreside and shipboard teams that work together to deliver year-over-year improvements in fuel consumption this quarter, despite 4% capacity growth.

We have a strong pipeline of process improvements and cost initiatives. And we see more opportunities ahead to capture efficiencies and improved margins. That brings me to our third pillar, accretive growth, which I'm most excited to discuss today. On our last few calls, we talked about evaluating opportunities to add to our portfolio of brands. On September 15th, we announced the acquisition of a majority stake in White Desert and Echo Charlie. It is the law. The largest transaction in the company's history and the beginning of an incredible new chapter in our 60-year legacy of exploration. If you aren't yet familiar with White Desert, you're in for something truly special. Founded in 2005 by the record-breaking polar explorer Patrick Woodhead, White Desert slides guests deep into the interior of Antarctica on private aircraft to other worldly camps in place. very few people will ever see. In one of a kind, bucket list itineraries range from a journey to the geographic South Pole to visit with Emperor Penguin colony of more than 20,000 birds. When I experienced White Desert, I immediately felt a shared spirit of curiosity and innovation and a mutual desire to keep pushing the boundaries of what travel can be. White Desert adds a description. This is a distinctive new offering to our platform that we are actively working on growing, including the addition of a fourth camp. I'm equally excited about what Echo Charlie brings to our portfolio. Echo Charlie is a new expedition travel brand we're launching together with Patrick.

It combines White Desert's aviation expertise with our knowledge of extraordinary places to create journeys into some of the world's most remote. The kinds of adventures many of us grew up reading about, dreaming about, and never stopped hoping to experience ourselves. We see a strong long-term value creation opportunity here. We just introduced three inaugural 2027 itineraries, each offering multiple departure dates exclusively to our past guests, and we are planning to launch publicly over the coming days. Echo Charlie gives past guests of Lindblad and White Deserts new reason to travel with us. Our Chief Expedition Officer, our Head of Corporate Development, and I just returned from Cape Town, where we spent time with White Desert team brainstorming our future together. What an amazing group of people. They are incredibly innovative, talented, and let me tell you, really fun. I came away even more convinced that we are a great cultural feat and even more excited what we can build together and the growth opportunities ahead. We are also very pleased that Patrick Woodhead will serve as a strategic innovation advisor to Lindblad. This acquisition reinforces our view that Lindblad experiential travel platform provides an exceptional opportunity to drive value creation by enabling affluent travelers to explore by air, land, and sea. As we talk about our why and commitment to sustainability, I would like to highlight that White Desert shares the same commitment to our mission. White Desert flies hundreds of scientists to research stations across Antarctica each season. And it has long been a trusted partner for the scientific community. Additionally, White Desert recently announced the first commercial agreement in Africa to supply sustainable aviation fuel in partnership with SASL.

This will help lower the carbon emissions of our flight and support our carbon upset program. Before I turn the call over to Rick, let me leave you with three key takeaways. First, our revenue maximization efforts are working. Net yields increased 6%, occupancy rose to 91%, and our 27 and 28 bookings continue to pace ahead. Second, we are becoming a more efficient organization,

and we are becoming a more efficient organization. and that discipline is showing up in adjusted EBITDA margins and growth. Third, our creative growth initiatives give us multiple ways to capture a large and still underpenetrated market. With White Desert and Echo Charlie, we have added air to our cruise expeditions and land journeys, making us a comprehensive experiential travel platform. Lastly, this year has had its share of challenges. From to the end of the year, we are going to be able to get to the end of the year. Thank you very much. Fuel political risks to significantly higher fuel prices. I'm very proud of our operating results in the face of them. And I want to thank every member of our team for their focus, their resilience, and their unwavering commitment to the guest experience. And to our new colleagues at White Desert and Echo Charlie, we're delighted to have you with us. With that, I am turning it to you, Rick.

I'm particularly proud of the team's work to bring this transaction to completion, reflecting the capabilities we've built to identify, evaluate, and execute strategic acquisitions. With that, let me walk through our third quarter results in more detail. Total company revenue for the third quarter was $269.2 million, an increase of $29 million, or 12.1% compared to the prior year. Segment revenues were 153.4 million, an increase of 15.8 million, or 11.5% compared to the prior year. Despite a 4.3% increase in available guest nights, occupancy increased 3.1 percentage points from 88.1% to 91.2%, and net yield per an available guest night increased 6.4% to $1,398, the highest Q3 net yield in company history. LAND experiences segment revenues were $115.8 million, an increase of $13.2 million, or 12.8% compared to Q3 2025, primarily driven by a 12% growth in guests. Turning now to the cost side of the business. Operating expenses before stock-based compensation, transaction and reorganization expenses, and depreciation and amortization increased 22.1 million, or 12.1%, versus Q3 2025. Specifically, cost of tours increased 11.6 million, or 9.3%, driven by additional voyages and trips, as well as higher fuel costs. Despite higher fuel prices, revenue growth outpaced the increase in costs, resulting in gross margin expansion of 130 basis points to 49.5%. We remain focused on reducing fuel consumption through technology and operational improvements, while preserving the flexibility for our captains and experts.

We also encourage expedition leaders to adjust itineraries in real time to optimize the guest experience. These efforts are delivering tangible results. Despite a 4.3% increase in capacity, we reduced total fuel consumption year over year. However, higher fuel prices resulted in a 1.3 million, or 22% increase in fuel expense, with fuel costs representing 4.9% of Lindblad segment revenue compared to 4.5% in the prior year quarter. Selling and marketing costs increased 7.7 million, or 25.5%, primarily due to the final royalty rate step up under our National Geographic agreement. And general and administrative costs, excluding stock-based compensation, transaction-related expenses, and reorganization costs, increased 2.9 million, or 10.2%. Approximately two-thirds of this increase, or 1.8 million, was attributable to a one-time employee retention tax credit benefit recognized in the third quarter of the year. of 2025. Excluding this prior-year benefit, G&A as a percentage of revenue declined approximately one percentage point year-over-year, reflecting disciplined cost management and improving operating leverage as we scale the business. Adjusted EBITDA for the quarter was 64.1 million, an increase of 6.9 million, or 12%, compared to the third quarter of 2025. Lindblad's segment-adjusted EBITDA increased 4.3 million, or 13.2%, to 37%. 0.1 million, while land experiences segment-adjusted EBITDA increased 2.5 million, or 10.3%, to 27 million. And despite higher fuel costs and the final royalty rate step up under our National Geographic Agreement, we maintained adjusted EBITDA margins of 23.8%, consistent with the prior year quarter. Net income available to stockholders reached 24.2 million, or 36 cents per diluted share, compared to a slight loss in the prior year quarter.

Importantly, this represents the highest quarterly net income in our company's history, a significant milestone that underscores the progress we're making in driving profitable growth. Through the first nine months of the year, net income available to stockholders totaled 28.8 million, or 44 cents per diluted share. Turning to the balance sheet, we ended the quarter with total cash of 308.2 million, an increase of 18.4 million since year-end 2025. This reflects strong operating cash flow of 111.3 million, driven primarily by solid business performance and increased bookings for future travel. Cash used in investing activities totaled 73.4 million, including 18.8 million in capital expenditures, primarily for maintenance of our own fleet, and approximately 54.6 million for the acquisition of 60% controlling interest in White Desert and Echo Charlie. Net cash acquired and subject to customary... close closing accounting reconciliations. Year-to-date free cash flow reached 92.5 million, an increase of 32.1 million, or 53%, compared to the prior year quarter. Following the acquisitions of White Desert and Echo Charlie, net leverage stood at 2.5 times at quarter end, compared to 2.2 times at the end of the second quarter. Our balance sheet remains strong, and we believe we are well positioned to continue pursuing accretive growth opportunities, including fleet expansion through new builds, acquisitions, and charters, as well as additional land experience acquisitions. Turning now to our full year outlook. When we announced the acquisition of White Desert on September 15th, we raised our full year guidance to reflect both the addition of White Desert and the continued strength of our core business. Since then, our core business has continued to demonstrate strong momentum, and I'm pleased to share that we are once again raising our outlook. As Natalia mentioned, booking momentum remains strong.

With continued strength in booking for travel during the remainder of 2026, and both 2027 and 2028 are pacing ahead of the prior year. Reflecting this momentum, we now expect net yield per an available guest night to increase 6% to 7% year-over-year, up from our previous guidance of 5.5% to 6.5%. We are also raising our full-year revenue guidance to a range of $870 million to $885 million. compared to our prior range of $850 million to $880 million. While higher fuel prices continue to present a headwind, the strength of our underlying business is helping offset these pressures. Accordingly, we are raising the low end of our full-year adjusted EBITDA guidance by $2 million, resulting in an updated range of $142 million to $148 million, compared to our previous range of $140 million to $148 million. In closing, we're... ...out of the progress we've made this year, delivering record financial results while continuing to invest in the long-term growth of our business. With strong booking momentum, a healthy balance sheet, and an expanded portfolio of differentiated travel experiences, we're more confident than ever in Lindblad's future. Thank you for your interest in the company. With that, Natalia and I would be happy to answer any questions you may have.

We will now begin the question and answer session. Please limit yourself to two questions. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

We're not ready to share yet, but we are very close to finalizing our plans. On that regard, and I just ask us all to be a little patient with that. Rick, anything to add? No, I think you covered it, Natalia. Okay, guys. Appreciate the color. Thank you so much.

Your next question comes from the line of Ian Zafino with Oppenheimer. Your line is open. Please go ahead.

Okay. Thank you very much.

Your next question comes from the line of Chris Waronka with Deutsche Bank. Your line is open. Please go ahead.

Okay. Your next question is from Eric Deloriers with Craig Hallam Capital Group. Your line is open. Please go ahead.

And again, we have Anthony Burney with Jeffries. Your line is open. Please go ahead.

Hi. Good morning. Can you hear me now?

Good morning. Yes, we can, Anthony.

Hey, sorry about that before. Thank you for taking our questions. Congrats on a great quarter. Apologies if this was asked before, but just following up on the capacity question. I think I heard charters will increase cruise capacity by mid-single digits next year. One, is that correct? And are there any other factors to consider? And then also on the land side, appreciate that you can flex your capacity up and down with demand pretty easily, but can you give us any color on how much volume you expect next year in that segment as well? Thank you. Well, I think, Anthony, we are going to provide them next year guidance in upcoming calls, so I'm not going to share an exact numbers. But you are hearing correctly the fact that we will continue to grow our charter business in some of the most unique destinations. We expanded our Amazon offerings. We have Greg Mortimer expanding our Alaska business and growing, and we continue to develop this long-term partnership. You heard about European river cruises, et cetera. So, yes, that will. We continue to be our moderate capacity cross lever, and yes, our land businesses are growing both in geographies that they are offering, but also in adding additional departures or various different products within their current destinations. Last time we talked about Oblivet and Path launching a new grant product in Alaska that sold out within days. So, we continue to.

innovate in places where we already are strong. Perfect. And then last one for me. In the past, you've called out dozens of cost innovation initiatives that you have available. Can you quantify how much you intend to save with those and which cost buckets you think should see the biggest benefits? So, Rick will answer a more detailed question. What I want to stress here, we continue to see thousands on cost innovation initiatives. And what I would say while we have seen significant results translate into March and this year, we're still in pretty early innings on that work, given some of the investments in technology we're making and capabilities. I mentioned today inventory management as one of the areas that I think we're going to really see some results coming in upcoming years, given our investments in technology and people and capabilities in that space. Rick, anything to add? Yeah, I just say that of the initiatives that we have launched here in 2026, we won't see the full benefit of those hit the P&L until 2027, just given the long lead time that many of them have. And if you think about what lines on the P&L are most impacted, it's cost of tours, it's G&A, and it's CapEx. Great. Thank you very much.

Your last question comes from the line of Steven Grambling with Morgan Stanley. Your line is open. Please go ahead.

Yes, thank you. You're welcome.

There are no further questions at this time. I will now turn the call back. To Rick Goldberg for closing remarks. Thanks so much. Really appreciate everyone taking the time to join today's call and your continued interest in Lindblad Expeditions. Thanks so much, everyone. Bye now. This concludes today's call. Thank you for attending. You may now disconnect.