DAC — Danaos Corporation

DAC Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Adjusted EPS: $6.72 per share, up from $6.04 in Q1 2025.
• Adjusted Net Income: $122.5 million, an increase of $9.1 million year-over-year.
• Operating Revenues: Decreased by $6.6 million in the containership fleet, but dry bulk fleet revenues increased by $7 million.
• Adjusted EBITDA: Rose by 5.2% to $180.6 million from $171.7 million in Q1 2025.
• Net Debt: $170 million, resulting in a net debt to adjusted EBITDA ratio of 0.2x.
• Liquidity: Total liquidity stood at $1.3 billion, including $0.9 billion in cash.
• Dividend Declared: $0.90 per share.
• Contracted Revenue Backlog: $4.1 billion with a 4.2-year average charter duration.

2. Strategic Updates and Business Highlights:

• The company expanded its order book with 4 Newcastlemaxes for 2028 delivery and 2 container ships for 2027, both backed by 3-year charters.
• The dry bulk market is showing significant improvement, with time charter equivalent earnings averaging $24,825 per day, compared to $10,500 in Q1 2025.
• The company maintains a disciplined expansion strategy, focusing on the midsized containership segment, which is expected to benefit from multilateral trade dynamics.

3. Forward Guidance and Outlook:

• Management expressed optimism regarding the resolution of geopolitical tensions in the Gulf and Ukraine, which could stabilize markets.
• The company anticipates continued profitability improvements driven by its strategic investments and favorable market conditions.
• Contract coverage is strong, with 100% for the remainder of 2026, 88% for 2027, and 65% for 2028.

4. Bad News, Challenges, or Points of Concern:

• Operating revenues for the containership fleet decreased due to lower contracted charter rates and noncash revenue recognition accounting.
• The revenue backlog has slightly declined from $4.3 billion in the previous quarter, raising concerns about future charter coverage.
• The company is cautious about share buybacks due to the stock reaching all-time highs, despite believing it remains undervalued.

5. Notable Q&A Insights:

• Management is exploring deeper investments in the LNG sector, indicating a strategic shift towards energy amidst geopolitical changes.
• There is limited availability for new charters in the immediate future, with most capacity for 2026 and 2027 already fixed.
• The significant scheduled off-hire for Capesize vessels was attributed to dry dockings, with no further dry dockings expected for the remainder of the year.

Overall, Danaos Corporation reported solid financial performance in Q1 2026, driven by strategic expansions and a strong liquidity position, while navigating challenges in the containership market and geopolitical uncertainties.