OneSpaWorld (OSW) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Since a changing ...

Group 1 - Walt Disney (DIS) is a notable stock within the Consumer Discretionary sector, which consists of 255 companies and currently ranks 9 in the Zacks Sector Rank [2] - The Zacks Rank system indicates that Walt Disney has a Zacks Rank of 2 (Buy), with a consensus estimate for full-year earnings increasing by 5.9% over the past quarter, reflecting improved analyst sentiment [3] - Year-to-date, Walt Disney has returned 7.2%, outperforming the average return of 6.8% for the Consumer Discretionary sector [4] Group 2 - Walt Disney is categorized under the Media Conglomerates industry, which includes 17 companies and is currently ranked 182 in the Zacks Industry Rank; this industry has seen an average gain of 8% this year, indicating that DIS is slightly underperforming its industry [5] - Another stock in the Consumer Discretionary sector, OneSpaWorld (OSW), has performed better with a year-to-date return of 12.3% and a Zacks Rank of 2 (Buy) [4][5] - The Leisure and Recreation Services industry, to which OneSpaWorld belongs, is ranked 177 and has increased by 7% this year [6]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of OneSpaWorld Holdings Limited [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for OneSpaWorld Holdings Limited and its subsidiaries, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes explaining significant accounting policies, intangible assets, long-term debt, equity, revenue recognition, segment information, fair value measurements, income taxes, commitments, and subsequent events [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $35,028 | $57,439 | | Total current assets | $153,408 | $161,505 | | Total assets | $731,818 | $746,423 | | LIABILITIES (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current liabilities | $81,390 | $79,405 | | Total liabilities | $183,490 | $191,926 | | Total shareholders' equity | $548,328 | $554,497 | - Total assets decreased from **$746.4 million** at December 31, 2024, to **$731.8 million** at June 30, 2025. Cash and cash equivalents saw a notable decrease from **$57.4 million** to **$35.0 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net income over specific reporting periods | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $240,726 | $224,891 | $460,356 | $436,117 | | Income from operations | $22,127 | $18,839 | $38,964 | $35,816 | | Net income | $19,940 | $15,759 | $35,211 | $36,925 | | Basic EPS | $0.19 | $0.15 | $0.34 | $0.36 | | Diluted EPS | $0.19 | $0.15 | $0.34 | $0.35 | - For the three months ended June 30, 2025, total revenues increased by **7.0% YoY to $240.7 million**, and net income increased by **26.5% YoY to $19.9 million**. For the six months ended June 30, 2025, total revenues increased by **5.6% YoY to $460.4 million**, but net income decreased by **4.6% YoY to $35.2 million**[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income or loss, reflecting all non-owner changes in equity | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $19,940 | $15,759 | $35,211 | $36,925 | | Total other comprehensive loss, net of tax | $(180) | $(947) | $(856) | $(1,665) | | Total comprehensive income | $19,760 | $14,812 | $34,355 | $35,260 | - Total comprehensive income for the three months ended June 30, 2025, increased to **$19.8 million** from **$14.8 million** in the prior year. For the six months, it decreased slightly to **$34.4 million** from **$35.3 million**, primarily due to higher other comprehensive loss[14](index=14&type=chunk) [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This statement outlines changes in shareholders' equity, including net income, stock-based compensation, share repurchases, and dividends | (in thousands) | Balance, December 31, 2024 | Net Income (6M 2025) | Stock-based Compensation (6M 2025) | Repurchase and Retirement of Common Shares (6M 2025) | Dividends (6M 2025) | Balance, June 30, 2025 | | :------------- | :------------------------- | :------------------- | :--------------------------------- | :--------------------------------------------------- | :------------------ | :--------------------- | | Total Shareholders' equity | $554,497 | $35,211 | $5,672 | $(37,901) | $(8,295) | $548,328 | - Total shareholders' equity decreased from **$554.5 million** at December 31, 2024, to **$548.3 million** at June 30, 2025, primarily due to share repurchases (**$37.9 million**) and dividend payments (**$8.3 million**), partially offset by net income and stock-based compensation[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement reports the cash generated and used by operating, investing, and financing activities | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $30,401 | $33,642 | | Net cash used in investing activities | $(4,426) | $(2,322) | | Net cash (used in) provided by financing activities | $(48,705) | $3,542 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(22,411) | $34,764 | | Cash, cash equivalents and restricted cash, End of period | $36,226 | $63,666 | - Net cash provided by operating activities decreased to **$30.4 million** for the six months ended June 30, 2025, from **$33.6 million** in the prior year. Financing activities shifted from providing **$3.5 million** in 2024 to using **$48.7 million** in 2025, driven by share repurchases and dividend payments[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [1. Description of Business](index=11&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS) This section outlines OneSpaWorld Holdings Limited's core business as a global provider of health, wellness, fitness, and beauty services - OneSpaWorld Holdings Limited is a global provider of health, wellness, fitness, and beauty services and products, primarily operating on cruise ships and in land-based destination resorts. The predominant business, based on revenues, is sales of services and products on cruise ships and in destination resorts[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section details the accounting principles and methods used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with certain information omitted or condensed per SEC rules. Management believes disclosures are adequate and reflect all necessary adjustments[31](index=31&type=chunk) - Deferred contract costs, related to fees accrued to cruise line partners, increased to **$22.4 million** as of June 30, 2025, from **$21.0 million** as of December 31, 2024. Amortization expense for these costs was **$0.9 million** for each of the three-month periods ended June 30, 2025 and 2024[34](index=34&type=chunk)[35](index=35&type=chunk) Earnings Per Share Calculation (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $19,940 | $15,759 | $35,211 | $36,925 | | Weighted average shares outstanding – Basic | 103,211 | 105,123 | 103,903 | 103,292 | | Basic EPS | $0.19 | $0.15 | $0.34 | $0.36 | | Diluted EPS | $0.19 | $0.15 | $0.34 | $0.35 | - The FASB issued ASU No. 2023-09 (Income Taxes) effective for annual periods beginning after December 15, 2024, requiring enhanced disclosures for income tax reconciling items and taxes paid. ASU No. 2024-03 (Expense Disaggregation Disclosures) was issued in November 2024, effective for annual reporting periods beginning after December 15, 2026, requiring more detailed expense disclosures[40](index=40&type=chunk)[41](index=41&type=chunk) [3. Intangible Assets](index=14&type=section&id=3.%20INTANGIBLE%20ASSETS) This section details the company's intangible assets, including retail concession and destination resort agreements, and their amortization Intangible Assets (in thousands) | Intangible Asset | Net Balance (June 30, 2025) | Net Balance (December 31, 2024) | | :----------------- | :-------------------------- | :------------------------------ | | Retail concession agreements | $507,257 | $515,009 | | Destination resort agreements | $9,008 | $9,523 | | Trade name | $5,500 | $5,500 | | Licensing agreement | $- | $- | | Total | $521,765 | $530,032 | - Total net intangible assets decreased from **$530.0 million** at December 31, 2024, to **$521.8 million** at June 30, 2025. Amortization expense was **$4.1 million** for each of the three-month periods and **$8.3 million** for each of the six-month periods ended June 30, 2025 and 2024[42](index=42&type=chunk) [4. Long-Term Debt](index=16&type=section&id=4.%20LONG-TERM%20DEBT) This section provides details on the company's long-term debt, including the term loan facility, interest rates, and compliance with covenants Long-Term Debt (in thousands) | Debt Component | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Term loan facility | $97,500 | $100,000 | | Less: unamortized debt issuance cost | $(1,298) | $(1,443) | | Total debt, net | $96,202 | $98,557 | | Less: current portion | $(5,000) | $(5,000) | | Long-term debt, net | $91,202 | $93,557 | - The Company's Term Loan Facility, part of a **$100 million** senior secured credit facility, had an outstanding balance of **$97.5 million** as of June 30, 2025, down from **$100 million** at December 31, 2024. The facility matures on September 20, 2029, and accrues interest at Term SOFR plus a margin of **1.90%** (with step-ups)[43](index=43&type=chunk)[44](index=44&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2025, including maintaining a maximum consolidated total leverage ratio of **4.00 to 1.00** and a minimum fixed charge coverage ratio of **1.25 to 1.00**[47](index=47&type=chunk) Scheduled Principal Repayments on Long-Term Debt (in thousands) | Year | Amount | | :-------------- | :-------- | | Remainder of 2025 | $2,500 | | 2026 | $5,000 | | 2027 | $5,000 | | 2028 | $5,000 | | 2029 | $80,000 | | Total | $97,500 | [5. Equity](index=18&type=section&id=5.%20EQUITY) This section covers changes in equity, including dividend declarations and share repurchase programs - The Board of Directors declared quarterly dividends of **$0.04 per common share** on February 12, 2025, and April 23, 2025, which were subsequently paid[52](index=52&type=chunk)[53](index=53&type=chunk) - During Q1 2025, the Company repurchased **2,094,498 common shares** for **$37.9 million** under the 2024 Share Repurchase Program. A new **$75.0 million** share repurchase program (2025 Share Repurchase Program) was approved on April 23, 2025, replacing the prior program, with no repurchases made under it as of the filing date[54](index=54&type=chunk)[55](index=55&type=chunk) [6. Stock-Based Compensation](index=18&type=section&id=6.%20STOCK-BASED%20COMPENSATION) This section details the stock-based compensation expense, including impacts from accelerated vesting - Stock-based compensation expense was **$2.1 million** for each of the three-month periods ended June 30, 2025 and 2024. For the six months ended June 30, 2025, it was **$5.7 million**, an increase from **$4.2 million** in the prior year, partly due to a **$1.4 million** incremental expense from accelerated vesting of RSUs and PSUs related to an executive departure[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [7. Revenue Recognition](index=20&type=section&id=7.%20REVENUE%20RECOGNITION) This section explains the company's policies for recognizing service and product revenues - Service revenues are recognized upon completion of services, primarily health and wellness, aesthetics, and fitness services on cruise ships and in destination resorts. Product revenues are recognized when customers obtain control of products, either at the point of sale or time of shipping for online sales[60](index=60&type=chunk)[61](index=61&type=chunk) Disaggregated Revenues by Source and Segment (in thousands) | Revenue Source/Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Maritime Service Revenues | $185,349 | $172,060 | $354,860 | $333,773 | | Destination Resorts Service Revenues | $8,009 | $8,786 | $17,017 | $19,282 | | Total Service Revenues | $193,358 | $180,846 | $371,877 | $353,055 | | Maritime Product Revenues | $46,369 | $42,872 | $86,309 | $80,602 | | Destination Resorts Product Revenues | $510 | $634 | $1,172 | $1,345 | | Timetospa.com Product Revenues | $489 | $539 | $998 | $1,115 | | Total Product Revenues | $47,368 | $44,045 | $88,479 | $83,062 | | Total Revenues | $240,726 | $224,891 | $460,356 | $436,117 | [8. Segment and Geographical Information](index=23&type=section&id=8.%20SEGMENT%20AND%20GEOGRAPHICAL%20INFORMATION) This section explains the company's single reportable segment and disaggregates revenues by geographic region - The Company aggregates its Maritime and Destination Resorts operating segments into a single reportable segment due to similar economic characteristics, products, services, customers, and delivery methods. The Chief Executive Officer reviews financial results and makes decisions on a consolidated basis[66](index=66&type=chunk) Geographic Revenues (in thousands) | Geographic Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | U.S. | $4,025 | $4,476 | $8,159 | $9,559 | | Other countries | $5,214 | $5,633 | $11,425 | $12,509 | | Not connected to a country | $231,487 | $214,782 | $440,772 | $414,049 | | Total | $240,726 | $224,891 | $460,356 | $436,117 | [9. Changes in Accumulated Other Comprehensive Income (Loss)](index=24&type=section&id=9.%20CHANGES%20IN%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) This section tracks the changes in accumulated other comprehensive income or loss over the reporting periods Changes in Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Beginning balance | $397 | $1,455 | | Net current period other comprehensive income (loss) | $(856) | $(1,665) | | Ending balance | $(459) | $(210) | - Accumulated other comprehensive income (loss) shifted from a gain of **$397 thousand** at the beginning of 2025 to a loss of **$459 thousand** by June 30, 2025, primarily due to a net current period other comprehensive loss of **$856 thousand**[69](index=69&type=chunk) [10. Fair Value Measurements and Derivatives](index=24&type=section&id=10.%20FAIR%20VALUE%20MEASUREMENTS%20AND%20DERIVATIVES) This section discusses the fair value of financial instruments and the use of interest rate swaps for hedging Fair Value of Financial Instruments (in thousands) | Instrument | Carrying Value (June 30, 2025) | Estimated Fair Value (June 30, 2025) | Carrying Value (December 31, 2024) | Estimated Fair Value (December 31, 2024) | | :--------- | :----------------------------- | :----------------------------------- | :--------------------------------- | :--------------------------------------- | | Cash | $35,028 | $35,028 | $57,439 | $57,439 | | Restricted cash | $1,198 | $1,198 | $1,198 | $1,198 | | Term loan facility | $97,500 | Approximates carrying amount | $100,000 | $100,740 | - The Company uses floating-to-fixed interest rate swap agreements with a notional amount of **$97.5 million** as of June 30, 2025, to hedge exposure to changes in cash flows from its variable rate Term Loan Facility. These derivatives are designated as cash flow hedges and are categorized as Level 2 in the fair value hierarchy[74](index=74&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) Effect of Interest Rate Swap on Financial Statements (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | (Loss) Gain recognized in AOCI | $(186) | $75 | $(745) | $342 | | Amounts reclassified from AOCI to interest expense | $(228) | $(945) | $(456) | $(1,892) | [11. Income Taxes](index=27&type=section&id=11.%20INCOME%20TAXES) This section outlines the income tax expense and factors influencing its changes - Income tax expense was **$0.8 million** for both three-month periods ended June 30, 2025 and 2024. For the six-month periods, it decreased to **$1.2 million** in 2025 from **$1.4 million** in 2024, primarily due to a mix of income earned in lower-taxed jurisdictions[81](index=81&type=chunk) [12. Commitments and Contingencies](index=27&type=section&id=12.%20COMMITMENTS%20AND%20CONTINGENCIES) This section addresses the company's legal proceedings, disputes, and related accruals - The Company is involved in routine legal proceedings and disputes, most of which are covered by insurance. An accrual of **$1.2 million** has been recorded for a **$1.9 million** VAT assessment from a foreign tax authority, which the Company is disputing[82](index=82&type=chunk)[83](index=83&type=chunk) [13. Subsequent Events](index=27&type=section&id=13.%20SUBSEQUENT%20EVENTS) This section reports significant events that occurred after the reporting period but before the financial statements were issued - On July 30, 2025, the Board of Directors approved a quarterly dividend payment of **$0.04 per common share**, payable on September 3, 2025[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key performance indicators, revenue drivers, and a detailed comparison of financial results for the three and six months ended June 30, 2025, versus 2024. It also discusses liquidity, capital resources, seasonality, and critical accounting policies [Overview](index=28&type=section&id=Overview) This section provides a high-level description of OneSpaWorld's business as a global leader in health and wellness services - OneSpaWorld is a global leader in operating health and wellness centers on cruise ships and in destination resorts, leveraging its staff expertise, broad service offerings, and extensive global recruitment, training, and logistics platform[86](index=86&type=chunk)[87](index=87&type=chunk) [Key Performance Indicators](index=28&type=section&id=Key%20Performance%20Indicators) This section presents crucial metrics used to evaluate the company's operational and financial performance Key Performance Indicators | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Average Ship Count | 191 | 188 | 192 | 188 | | Period End Ship Count | 200 | 197 | 200 | 197 | | Average Weekly Revenue Per Ship | $92,936 | $88,034 | $88,560 | $84,859 | | Average Revenue Per Shipboard Staff Per Day | $608 | $586 | $585 | $567 | | Revenue Days | 17,426 | 17,074 | 34,827 | 34,150 | | Average Resort Count | 50 | 52 | 50 | 52 | | Period End Resort Count | 51 | 52 | 51 | 52 | | Average Weekly Revenue Per Resort | $13,019 | $14,028 | $14,116 | $15,405 | - Average Weekly Revenue Per Ship increased by **5.6%** for the three months ended June 30, 2025, to **$92,936**, and Average Revenue Per Shipboard Staff Per Day increased by **3.7%** to **$608**, indicating improved productivity[91](index=91&type=chunk) [Revenue Drivers and Business Trends](index=32&type=section&id=Revenue%20Drivers%20and%20Business%20Trends) This section discusses factors influencing revenue and strategic initiatives for growth and profitability - Revenue and financial performance are influenced by factors such as the number and size of health and wellness centers, expansion of value-added services (e.g., medi-spa, advanced facial techniques), pricing increases, mix of ship categories and itineraries, and collaboration with cruise line partners for targeted marketing and pre-booking technologies[101](index=101&type=chunk) - The Company is focusing on innovating and implementing higher value-added and price point services, which require specific equipment and trained staff, driving a shift towards a more profitable service mix[101](index=101&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance over the reporting periods [Comparison of Results for the three months ended June 30, 2025 compared to three months ended June 30, 2024](index=33&type=section&id=Comparison%20of%20Results%20for%20the%20three%20months%20ended%20June%2030,%202025%20compared%20to%20three%20months%20ended%20June%2030,%202024) This section compares the financial performance for the three-month periods, highlighting revenue, income, and expense changes Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :------------ | :------------ | :------------ | | Total revenues | $240,726 | $224,891 | $15,835 | 7% | | Service revenues | $193,358 | $180,846 | $12,512 | 7% | | Product revenues | $47,368 | $44,045 | $3,323 | 8% | | Income from operations | $22,127 | $18,839 | $3,288 | 17% | | Interest expense, net | $(1,395) | $(2,221) | $826 | (37)% | | Net income | $19,940 | $15,759 | $4,181 | 27% | - Revenue growth was driven by a **4% increase in average guest spend ($8.5 million)**, **1% increase in Revenue Days ($4.5 million)**, and fleet expansion (**$3.5 million**), partially offset by a **$0.9 million** decrease in the destination resorts business[103](index=103&type=chunk) - Administrative expenses decreased by **$0.3 million (7%)** due to non-recurrence of expenses associated with a secondary offering and warrants conversion in 2024. Salaries, benefits, and payroll taxes decreased by **$0.4 million (4%)** primarily due to lower incentive-based compensation[106](index=106&type=chunk)[107](index=107&type=chunk) [Comparison of Results for the six months ended June 30, 2025 compared to six months ended June 30, 2024](index=35&type=section&id=Comparison%20of%20Results%20for%20the%20six%20months%20ended%20June%2030,%202025%20compared%20to%20six%20months%20ended%20June%2030,%202024) This section compares the financial performance for the six-month periods, detailing revenue, income, and expense trends Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :------------ | :------------ | :------------ | | Total revenues | $460,356 | $436,117 | $24,239 | 6% | | Service revenues | $371,877 | $353,055 | $18,822 | 5% | | Product revenues | $88,479 | $83,062 | $5,417 | 7% | | Income from operations | $38,964 | $35,816 | $3,148 | 9% | | Interest expense, net | $(2,542) | $(5,176) | $2,634 | (51)% | | Change in fair value of warrant liabilities | $0 | $7,677 | $(7,677) | (100)% | | Net income | $35,211 | $36,925 | $(1,714) | (5)% | - Revenue growth was driven by a **3% increase in average guest spend ($13.2 million)**, **2% increase in Revenue Days ($9.6 million)**, and fleet expansion (**$3.8 million**), partially offset by a **$2.4 million** decrease in the destination resorts business[113](index=113&type=chunk) - Salaries, benefits, and payroll taxes increased by **$2.1 million (12%)** due to **$1.1 million** severance expense and **$1.4 million** expense related to accelerated vesting of stock units for a former Chief Commercial Officer[118](index=118&type=chunk) - Net income decreased by **$1.7 million**, primarily due to the non-recurrence of a **$7.7 million** gain from the change in fair value of warrant liabilities in the prior year, partially offset by a **$2.6 million** decrease in interest expense and a **$3.2 million** improvement in income from operations[122](index=122&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash, including funding sources and uses - The Company funds operations primarily through cash flow from operations, with principal uses including funding health and wellness centers, technology and infrastructure investments, debt service (**$2.5 million** repayment), dividend payments (**$8.3 million**), and share repurchases (**$37.9 million**)[123](index=123&type=chunk) - Management expects sufficient liquidity to meet capital requirements and comply with debt covenants over the next twelve months and beyond[124](index=124&type=chunk) Summary Cash Flow Information (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $30,401 | $33,642 | | Net cash used in investing activities | $(4,426) | $(2,322) | | Net cash (used in) provided by financing activities | $(48,705) | $3,542 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(22,411) | $34,764 | - The **$3.2 million** decrease in net cash from operating activities was due to a **$10.4 million** change in working capital, partially offset by a **$7.2 million** increase in net income (net of non-cash items). Working capital outflows in 2025 were driven by increased inventories (**$9.7 million**), accrued expenses (**$8.5 million**), and other non-current assets (**$3.2 million**)[127](index=127&type=chunk)[128](index=128&type=chunk) - Net cash used in investing activities increased to **$4.4 million** in 2025 from **$2.3 million** in 2024, reflecting continued investments in technology hardware, software (including AI), and medi-spa equipment[130](index=130&type=chunk) - Financing activities shifted from providing **$3.5 million** in 2024 to using **$48.7 million** in 2025, primarily due to **$37.9 million** in share repurchases and **$8.3 million** in dividend payments in 2025, compared to **$51.7 million** from warrant exercises in 2024[131](index=131&type=chunk)[132](index=132&type=chunk) [Seasonality](index=39&type=section&id=Seasonality) This section explains how seasonal demand for cruises and holidays impacts the company's revenues - Revenues are subject to seasonality, with stronger demand for cruises in the Northern Hemisphere during summer months and holidays, typically resulting in the highest revenue yields in the third quarter and holiday periods. Hurricanes, particularly from August through October, can negatively impact cruise and destination resort operations[133](index=133&type=chunk) [Contractual Obligations](index=39&type=section&id=Contractual%20Obligations) This section refers to the company's 2024 Form 10-K for details on future contractual obligations - As of June 30, 2025, the Company's future contractual obligations have not significantly changed from the amounts disclosed in its 2024 Form 10-K[134](index=134&type=chunk) [Critical Accounting Policies](index=39&type=section&id=Critical%20Accounting%20Policies) This section discusses the significant accounting policies and estimates that require management's judgment - Management reevaluates its judgments and estimates quarterly, which are based on historical experience, current trends, and reasonable assumptions. No significant changes to critical accounting policies disclosed in the 2024 Form 10-K occurred during the six months ended June 30, 2025[135](index=135&type=chunk)[136](index=136&type=chunk) [Inflation and Economic Conditions](index=39&type=section&id=Inflation%20and%20Economic%20Conditions) This section assesses the impact of inflation and general economic conditions on the company's business - While inflation has not materially affected revenues or operations, public demand for cruises and hospitality services is influenced by general economic conditions. Severe adverse economic conditions, increased inflation, interest rates, or fuel prices could materially impact the Company's business[137](index=137&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=39&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises that the report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially. These statements reflect current views and should not be relied upon as representing views as of any subsequent date, with no obligation to update except as required by law[138](index=138&type=chunk)[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the Company's 2024 Form 10-K for a discussion of market risks, stating that there have been no material changes to its exposure to market risks since the date of that filing - There have been no material changes to the Company's exposure to market risks since the date of its 2024 Form 10-K[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Disclosure Controls and Procedures](index=41&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - As of June 30, 2025, management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective[143](index=143&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting - There has been no material change in the Company's internal control over financial reporting during the three months ended June 30, 2025[144](index=144&type=chunk) [PART II - OTHER INFORMATION](index=42&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers additional information not included in the financial statements, such as legal proceedings and exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report - There are no legal proceedings to report[147](index=147&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's 2024 Form 10-K - There have been no material changes in the risk factors previously disclosed in the Company's 2024 Form 10-K[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds to disclose - There were no unregistered sales of equity securities or use of proceeds to disclose[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable[150](index=150&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - There is no other information to report[151](index=151&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, and XBRL-related documents - Exhibits include Rule 13a-14(a)/15d-14(a) Certifications of the CEO and CFO, Section 1350 Certifications of the CEO and CFO, and Inline XBRL Instance and Taxonomy Extension Schema Documents[153](index=153&type=chunk)[155](index=155&type=chunk)

Financial Data and Key Metrics Changes - Total revenues increased by 7% to a record $240.7 million compared to $224.9 million in 2024 [6][16] - Income from operations rose by 17% to a record $22.1 million compared to $18.8 million in 2024 [7] - Net income increased by 27% to $19.9 million compared to $15.8 million in 2024 [7][18] - Adjusted EBITDA increased by 13% to a record $30.5 million compared to $27.1 million in 2024 [8][18] - Net income per diluted share was $0.19 compared to $0.15 in 2024 [18] Business Line Data and Key Metrics Changes - The company operated health and wellness centers on 200 ships, with an average ship count of 101 for the quarter, compared to 197 ships and an average count of 188 at the end of 2024 [8] - MediSpa services were available on 147 ships, up from 144 ships at the end of the second quarter of 2024 [10] - Higher value services, including MediSpa, IV therapy, and acupuncture, contributed to sales productivity growth [9] Market Data and Key Metrics Changes - The average guest spend increased by 4%, positively impacting revenue by $8.5 million [17] - Prebooking revenue as a percentage of services remained strong at 23% [11] Company Strategy and Development Direction - The company is focused on expanding higher value services and products, enhancing health and wellness center productivity, and leveraging AI technologies for operational efficiency [9][12][15] - The introduction of seven new health and wellness centers on cruise ships is planned for the second half of the year [12][20] - The company aims to maintain a disciplined execution of its asset-light business model to deliver strong results [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's favorable momentum and strong consumer demand, with no deterioration in consumer spending observed in the first half of the year [12][33] - The company expects total revenue for fiscal 2025 to increase in the high single-digit range, with adjusted EBITDA guidance increased to reflect productivity gains [20] Other Important Information - The company ended the quarter with total cash of $36.2 million after paying a quarterly dividend of $4.1 million [19] - Total debt net of deferred financing costs was $96.2 million, down from $98.6 million at the end of 2024 [19] Q&A Session Summary Question: Insights on AI-driven strategies for profitability enhancement - Management discussed initiatives focused on yield improvement and operational efficiency through AI and machine learning, with initial results being optimistic [22][23][24] Question: Revenue guidance maintenance despite strong metrics - Management clarified that the timing of new vessels coming into service in the fourth quarter influenced the decision to maintain revenue guidance [28][29] Question: Consumer state and onboard spending indicators - Management indicated that operational and financial metrics remain positive, reflecting strong consumer demand and spending [32][33] Question: Capital allocation strategy regarding stock repurchases and dividends - Management reiterated a focus on stock buybacks, dividends, and debt repurchase, with an increase in dividends expected next quarter [34][36] Question: Gross margin trends and expectations - Management noted that gross margin remained flat year-over-year, with expectations for EBITDA margin improvement [40][43] Question: Trends in thermal suites and onboard spending behavior - Management confirmed steady demand for thermal suites, with geographic variations in utilization [46] Question: Commentary on new brands and market trends - Management provided insights on the early performance of new brands like Arroya and Mitsui, indicating a need for broader market outreach [48][50] Question: Importance of occupancy to revenue generation - Management acknowledged that while occupancy is important, the quality of passengers and their spending behavior also significantly impacts revenue [53][56] Question: AI's impact on cost efficiencies and revenue opportunities - Management clarified that measurable impacts from AI initiatives are expected to begin in the second quarter of the following year [61]

Financial Data and Key Metrics Changes - Total revenues increased by 7% to a record $240.7 million compared to $224.9 million in 2024 [6][15] - Income from operations rose by 17% to a record $22.1 million compared to $18.8 million in 2024 [7] - Net income increased by 27% to $19.9 million compared to $15.8 million in 2024 [7][18] - Adjusted EBITDA increased by 13% to a record $30.5 million compared to $27.1 million in 2024 [7][18] - Net income per diluted share was $0.19 compared to $0.15 in 2024 [18] Business Line Data and Key Metrics Changes - Health and wellness centers operated on 200 ships, with an average ship count of 101 for the quarter, compared to 197 ships and an average of 188 in 2024 [7] - MediSpa services were available on 147 ships, up from 144 ships at the end of 2024 [10] - Higher value services, including MediSpa, IV therapy, and acupuncture, contributed to sales productivity growth [9] Market Data and Key Metrics Changes - The company experienced a 4% increase in average guest spend, contributing $8.5 million to revenue [16] - Prebooking revenue as a percentage of services remained strong at 23% [11] Company Strategy and Development Direction - The company is focused on expanding higher value services and products, enhancing health and wellness center productivity, and leveraging AI technologies for operational efficiency [12][15] - Plans to introduce health and wellness centers on an additional seven new ship builds in the second half of the year [12] - The company maintains a disciplined asset-light business model to drive profitability and shareholder value [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's favorable momentum and affirmed annual revenue guidance while increasing adjusted EBITDA guidance for 2025 [12][20] - The company remains optimistic about consumer spending and demand on board, with no signs of deterioration in the first half of the year [35][36] Other Important Information - The company ended the quarter with total cash of $36.2 million after paying a quarterly dividend of $4.1 million [19] - Total debt was $96.2 million at quarter end, down from $98.6 million at the end of 2024 [19] Q&A Session Summary Question: Strategies for enhancing profitability - Management discussed AI-driven initiatives focused on yield improvement and operational efficiency, with expectations for material improvements over time [22][23][25] Question: Revenue guidance maintenance - Management explained that the timing of new vessels coming into service in the fourth quarter influenced the decision to maintain revenue guidance [30] Question: State of consumer and onboard spend - Management indicated that operational and financial metrics remain positive, reflecting a strong consumer onboard [34][35] Question: Capital allocation and dividend growth - Management reiterated a focus on stock buybacks, dividends, and debt repurchase, with potential for a dividend increase in the next quarter [36][39] Question: Gross margin trends - Management noted that gross margin was flat year-over-year, with expectations for EBITDA margin improvement [42][45] Question: Thermal suites demand - Management confirmed steady demand for thermal suites, with geographic variations in utilization [48] Question: AI impact on revenue and cost efficiencies - Management clarified that AI initiatives are still in the testing phase, with measurable impacts expected in the future [63] Question: Precruise booking opportunities - Management acknowledged opportunities to improve precruise bookings, emphasizing collaboration with cruise lines [66]

Core Insights - OneSpaWorld (OSW) reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and showing an increase from $0.20 per share a year ago, resulting in an earnings surprise of +4.17% [1] - The company achieved revenues of $240.73 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.13% and up from $224.89 million year-over-year [2] - OneSpaWorld has outperformed the S&P 500, with shares increasing about 9.3% since the beginning of the year compared to the S&P 500's gain of 8.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $256.52 million, and for the current fiscal year, it is $0.99 on revenues of $952.31 million [7] - The estimate revisions trend for OneSpaWorld was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which OneSpaWorld belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges in overall industry performance [8] - Norwegian Cruise Line, another company in the same industry, is expected to report quarterly earnings of $0.51 per share, reflecting a year-over-year change of +27.5%, with revenues anticipated to be $2.56 billion, up 7.8% from the previous year [9][10]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) This section covers Q2 2025 financial performance, operational network, liquidity, and management's strategic commentary [Second Quarter Fiscal 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Performance%20Overview) OneSpaWorld reported strong second-quarter fiscal 2025 results, exceeding guidance with total revenues of $240.7 million, net income of $19.9 million, and adjusted EBITDA of $30.5 million. The company reaffirmed its annual total revenues guidance and increased its annual adjusted EBITDA guidance, while also introducing positive third-quarter guidance and declaring a quarterly dividend Second Quarter Fiscal 2025 Key Financial Results | Metric | Q2 2025 (Millions) | Change YoY | Source | | :------------------- | :----------------- | :--------- | :----- | | Total Revenues | $240.7 | +7% | [2, 6] | | Net Income | $19.9 | +27% | [2, 6] | | Adjusted EBITDA | $30.5 | +13% | [2, 6] | Fiscal 2025 Guidance Updates | Metric | Q3 2025 Guidance (Millions) | FY 2025 Guidance (Millions) | Source | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenues | $255 - $260 | $950 - $970 (Reaffirmed) | [2, 11] | | Adjusted EBITDA | $33 - $35 | $117 - $127 (Increased) | [2, 11] | - The Board declared a quarterly dividend of **$0.04** per share[2](index=2&type=chunk) [Operational Network and Liquidity Update](index=1&type=section&id=Operational%20Network%20and%20Liquidity%20Update) The company maintained a robust operational network, ending Q2 2025 with 200 cruise ships and 51 destination resorts, supported by 4,365 cruise ship personnel. Liquidity remained strong with $36.2 million in cash and $86.2 million total liquidity, including an undrawn credit facility Q2 2025 Operating Network Statistics | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Period End Cruise Ship Count | 200 | 197 | +3 | | Average Cruise Ship Count | 191 | 188 | +3 | | Period End Resort Count | 51 | 52 | -1 | | Average Resort Count | 50 | 52 | -2 | | Period End Cruise Ship Personnel | 4,365 | 4,300 | +65 | Q2 2025 Liquidity Position | Metric | Amount (Millions) | | :-------------------- | :---------------- | | Cash at June 30, 2025 | $36.2 | | Undrawn Credit Facility | $50.0 | | Total Liquidity | $86.2 | [Management Commentary](index=1&type=section&id=Management%20Commentary) Executive Chairman and CEO, Leonard Fluxman, highlighted exceeding guidance, solidifying market leadership with new partnerships, and leveraging AI technologies for enhanced guest experiences. President, CFO, and COO, Stephen Lazarus, emphasized strong financial performance, capital-efficient business model, and increased Adjusted EBITDA guidance reflecting profitability enhancement strategies - CEO Leonard Fluxman noted exceeding guidance, solidifying market leadership through renewing partnership with Windstar Cruises and initiating operations aboard the newly launched Oceania Allura, and developing initiatives with emerging AI technologies to enhance guest experiences[3](index=3&type=chunk) - CFO Stephen Lazarus highlighted strong financial and operating metrics, producing increases of **7%** in Total revenues and **13%** in Adjusted EBITDA, driven by a capital-efficient, asset-light business model generating strong free cash flow[3](index=3&type=chunk) - The company returned **$4.1 million** to shareholders through quarterly dividends and ended the quarter with a strong balance sheet and **$86 million** of total liquidity, with **$75 million** share repurchase availability[3](index=3&type=chunk) - Management expects fiscal 2025 Total revenues within guidance, reflecting high-single digit growth, and increased Adjusted EBITDA guidance to reflect mid-teens growth, benefiting from strategies to enhance profitability[3](index=3&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section provides a comparative analysis of the company's financial results for the second quarter and year-to-date periods of fiscal 2025 versus 2024 [Second Quarter Ended June 30, 2025 Compared to June 30, 2024](index=3&type=section&id=Second%20Quarter%20Ended%20June%2030,%202025%20Compared%20to%20June%2030,%202024) In Q2 2025, total revenues grew 7% to $240.7 million, primarily driven by a 4% increase in average guest spend, increased revenue days, and fleet expansion. Net income rose 27% to $19.9 million, and Adjusted EBITDA increased 13% to $30.5 million, benefiting from higher operating income and lower interest expense, despite increases in cost of services and products Q2 2025 vs. Q2 2024 Financial Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :-------------------------- | :----------------- | :----------------- | :---------------- | :------- | | Total Revenues | $240.7 | $224.9 | $15.8 | 7% | | Income from Operations | $22.1 | $18.8 | $3.3 | 17% | | Net Income | $19.9 | $15.8 | $4.2 | 27% | | Net Income per Diluted Share | $0.19 | $0.15 | $0.04 | 27% | | Adjusted Net Income | $25.8 | $21.7 | $4.1 | 19% | | Adjusted Net Income per Diluted Share | $0.25 | $0.20 | $0.05 | 25% | | Adjusted EBITDA | $30.5 | $27.1 | $3.4 | 13% | - Revenue growth was driven by a **4%** increase in average guest spend (**+$8.5 million**), **1%** increase in revenue days (**+$4.5 million**), and fleet expansion (**+$3.5 million**), along with **$2.7 million** in increased pre-booked revenues. This was partially offset by a **$0.9 million** decrease in land-based spa business due to hotel closures[9](index=9&type=chunk) - Cost of services increased by **$10.4 million**, and cost of products increased by **$2.8 million**, attributable to corresponding increases in service and product revenues[9](index=9&type=chunk) - Salaries, benefits, and payroll taxes decreased by **$0.4 million**, primarily due to a **$0.7 million** lower incentive-based compensation expense. Interest expense, net, decreased by **$0.8 million** due to lower debt balances and effective interest rates[9](index=9&type=chunk) [Year-to-Date June 30, 2025 Compared to June 30, 2024](index=3&type=section&id=Year-to-Date%20June%2030,%202025%20Compared%20to%20June%2030,%202024) For the first six months of fiscal 2025, total revenues increased 6% to $460.4 million, driven by a 3% increase in average guest spend and a 2% increase in revenue days. Net income saw a slight decrease of 5% to $35.2 million, primarily due to a prior year benefit from warrant liabilities, while Adjusted EBITDA grew 9% to $57.1 million YTD June 30, 2025 vs. YTD June 30, 2024 Financial Performance | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (Millions) | % Change | | :-------------------------- | :------------------ | :------------------ | :---------------- | :------- | | Total Revenues | $460.4 | $436.1 | $24.2 | 6% | | Income from Operations | $39.0 | $35.8 | $3.1 | 9% | | Net Income | $35.2 | $36.9 | $(1.7) | (5)% | | Net Income per Diluted Share | $0.34 | $0.35 | $(0.01) | (3)% | | Adjusted Net Income | $48.4 | $41.0 | $7.4 | 18% | | Adjusted Net Income per Diluted Share | $0.46 | $0.39 | $0.07 | 18% | | Adjusted EBITDA | $57.1 | $52.4 | $4.7 | 9% | - Revenue growth was driven by a **3%** increase in average guest spend (**+$13.2 million**), **2%** increase in revenue days (**+$9.6 million**), and fleet expansion (**+$3.8 million**), along with **$5.0 million** in increased pre-booked revenues. This was partially offset by a **$2.4 million** decrease in land-based spa business[9](index=9&type=chunk) - Salaries, benefits, and payroll taxes increased by **$2.1 million**, primarily due to **$1.1 million** severance expense and **$1.4 million** related to vesting treatment for the former Chief Commercial Officer's termination[9](index=9&type=chunk) - Net income decreased primarily due to a **$7.7 million** benefit from the change in fair value of warrant liabilities in the prior year, partially offset by a **$3.1 million** increase in Income from operations and a **$2.6 million** decrease in Interest expense, net, in the current period[9](index=9&type=chunk) [Financial Position & Capital Allocation](index=5&type=section&id=Financial%20Position%20%26%20Capital%20Allocation) This section details the company's balance sheet highlights, including cash and debt, and announces the quarterly dividend declaration [Balance Sheet Highlights](index=5&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, OneSpaWorld reported a cash balance of $36.2 million and total debt, net of deferred financing costs, of $96.2 million. The reduction in cash from year-end 2024 was primarily due to common share repurchases Balance Sheet Highlights (June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Cash | $36.2 | | Total Debt, net of financing costs | $96.2 | - The cash balance decreased from **$58.6 million** at December 31, 2024, primarily due to **$37.9 million** used for common share repurchases during the first quarter[16](index=16&type=chunk) - Total debt, net of deferred financing costs, was **$96.2 million** after repaying **$1.3 million** in debt during the second quarter[16](index=16&type=chunk) [Dividend Announcement](index=5&type=section&id=Dividend%20Announcement) The Board of Directors declared a quarterly dividend of $0.04 per common share, payable on September 3, 2025, to shareholders of record as of August 20, 2025 Quarterly Dividend Details | Detail | Value | | :------------------ | :------ | | Dividend Per Share | $0.04 | | Payment Date | Sep 3, 2025 | | Record Date | Aug 20, 2025 | [Outlook and Guidance](index=5&type=section&id=Outlook%20and%20Guidance) This section outlines the company's financial projections for the third quarter and full fiscal year 2025, including revenue and Adjusted EBITDA guidance, along with forecasted operating network statistics [Third Quarter and Fiscal Year 2025 Guidance](index=5&type=section&id=Third%20Quarter%20and%20Fiscal%20Year%202025%20Guidance) OneSpaWorld provided guidance for Q3 2025, projecting total revenues between $255-$260 million and Adjusted EBITDA between $33-$35 million. For the full fiscal year 2025, the company reaffirmed total revenues guidance of $950-$970 million and increased Adjusted EBITDA guidance to $117-$127 million, reflecting mid-teens growth at the midpoint Q3 2025 and Fiscal Year 2025 Guidance | Metric | Q3 2025 (Millions) | FY 2025 (Millions) | | :---------------- | :----------------- | :----------------- | | Total Revenues | $255 - $260 | $950 - $970 | | Adjusted EBITDA | $33 - $35 | $117 - $127 | Forecasted Operating Network | Metric | Q3 2025 Forecast | FY 2025 Forecast | | :-------------------- | :--------------- | :--------------- | | Period End Ship Count | 205 | 207 | | Average Ship Count | 198 | 195 | | Period End Resort Count | 50 | 50 | | Average Resort Count | 51 | 50 | [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) This section provides an overview of OneSpaWorld's business, market position, and headquarters, along with standard disclosures regarding forward-looking statements and associated risks [About OneSpaWorld](index=5&type=section&id=About%20OneSpaWorld) OneSpaWorld Holdings Limited is a leading global provider of health and wellness services and products on cruise ships and in destination resorts. Headquartered in Nassau, Bahamas, the company operates on 202 cruise ships and at 51 destination resorts, holding a dominant market position in the cruise industry segment due to its extensive service, global platforms, and operating infrastructure - OneSpaWorld is a pre-eminent global provider of health and wellness services and products on-board cruise ships and in destination resorts, headquartered in Nassau, Bahamas[2](index=2&type=chunk)[13](index=13&type=chunk) - The company currently operates health and wellness centers on **202 cruise ships** and at **51 destination resorts** worldwide[13](index=13&type=chunk) - OneSpaWorld holds the leading market position within the cruise industry segment, earned over six decades through exceptional service, expansive global recruitment, training and logistics platforms, and irreplicable operating infrastructure[13](index=13&type=chunk) - On March 19, 2019, OneSpaWorld completed a series of mergers, including with Haymaker Acquisition Corp., making OSW Predecessor an indirect wholly owned subsidiary[14](index=14&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements disclosure, cautioning investors that expectations, estimates, and projections may differ from actual results due to various risks and uncertainties, including economic factors, changes in consumer preferences, regulatory changes, and the impact of illnesses. The company disclaims any obligation to update these statements - The press release includes 'forward-looking statements' regarding future performance, projected financial information, and operational plans, which are based on current management expectations and involve significant risks and uncertainties[15](index=15&type=chunk) - Factors that may cause actual results to differ materially include the impact of outbreaks of illnesses, demand for services, economic/business/competitive factors, changes in consumer preferences, regulatory changes, and difficulties of managing growth[15](index=15&type=chunk) - The company cautions against undue reliance on these statements and does not undertake any obligation to publicly update or revise them, except as required by law[15](index=15&type=chunk)[17](index=17&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines non-GAAP financial measures like Adjusted Net Income and Adjusted EBITDA, explains their purpose and limitations, and provides detailed reconciliations to GAAP figures [Note Regarding Non-GAAP Financial Information](index=7&type=section&id=Note%20Regarding%20Non-GAAP%20Financial%20Information) This section defines non-GAAP financial measures, including Adjusted Net Income and Adjusted EBITDA, and explains their utility to investors for performance comparison. It also highlights their limitations, such as not including total interest expense, income taxes, capital expenditures, or non-cash stock-based compensation, emphasizing that the company primarily relies on GAAP results - Adjusted net income is defined as Net income, adjusted for items including Change in fair value of warrant liabilities; increase in Depreciation and amortization resulting from the Business Combination; Long-lived assets impairment; and Stock-based compensation[24](index=24&type=chunk) - Adjusted EBITDA is defined as Net income adjusted for items including Income tax expense; Interest expense, net; Change in fair value of warrant liabilities; Depreciation and amortization; and Stock-based compensation[25](index=25&type=chunk) - These non-GAAP measures are useful for investors to gain insight into profitability and compare performance, but they have limitations as they do not include total amounts for interest expense, income taxes, capital assets expenditures, and non-cash stock-based compensation[26](index=26&type=chunk) - The company relies primarily on its GAAP results and cautions that future results may still be affected by extraordinary, unusual, or nonrecurring items[26](index=26&type=chunk)[27](index=27&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Information](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) This section provides detailed tables reconciling GAAP Net Income to Adjusted Net Income and Adjusted EBITDA for both the second quarter and year-to-date periods ended June 30, 2025 and 2024, outlining specific adjustments made for each non-GAAP measure Reconciliation of Net Income to Adjusted Net Income | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2025 (Thousands) | Six Months Ended June 30, 2024 (Thousands) | | :------------------------------------ | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income | $19,940 | $15,759 | $35,211 | $36,925 | | Change in fair value of warrant liabilities | — | 46 | — | (7,677) | | Depreciation and amortization (a) | 3,761 | 3,761 | 7,522 | 7,522 | | Stock-based compensation | 2,112 | 2,094 | 5,672 | 4,188 | | **Adjusted net income** | **$25,813** | **$21,660** | **$48,405** | **$40,958** | | Adjusted net income per diluted share | $0.25 | $0.20 | $0.46 | $0.39 | | Diluted weighted average shares outstanding | 103,620 | 105,767 | 104,345 | 104,346 | Reconciliation of Net Income to Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2025 (Thousands) | Six Months Ended June 30, 2024 (Thousands) | | :------------------------------------ | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income | $19,940 | $15,759 | $35,211 | $36,925 | | Income tax expense | 792 | 813 | 1,211 | 1,392 | | Interest expense | 1,395 | 2,221 | 2,542 | 5,176 | | Change in fair value of warrant liabilities | — | 46 | — | (7,677) | | Depreciation and amortization | 6,251 | 5,870 | 12,430 | 12,079 | | Stock-based compensation | 2,112 | 2,094 | 5,672 | 4,188 | | Business combination costs (b) | — | 293 | — | 293 | | **Adjusted EBITDA** | **$30,490** | **$27,096** | **$57,066** | **$52,376** | [Condensed Consolidated Financial Statements & Operating Statistics](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20%26%20Operating%20Statistics) This section presents the company's condensed consolidated statements of operations and key operating statistics for the reported periods [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations present the company's revenues, costs, and expenses, leading to income from operations, other income/expense, and ultimately net income for the three and six months ended June 30, 2025 and 2024, along with per share data Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | | | | | Three Months Ended June 30, | | | | Six Months Ended June 30, | | | :------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 2025 | | 2024 | Inc/(Dec) | % Inc/(Dec) | 2025 | | 2024 | Inc/(Dec) | % Inc/(Dec) | | **REVENUES:** | | | | | | | | | | | | Service revenues | $193,358 | | $180,846 | $12,512 | 7% | $371,877 | | $353,055 | $18,822 | 5% | | Product revenues | 47,368 | | 44,045 | 3,323 | 8% | 88,479 | | 83,062 | 5,417 | 7% | | **Total revenues** | **240,726** | | **224,891** | **15,835** | **7%** | **460,356** | | **436,117** | **24,239** | **6%** | | **COST OF REVENUES AND OPERATING EXPENSES:** | | | | | | | | | | | | Cost of services | 161,250 | | 150,801 | 10,449 | 7% | 309,404 | | 294,826 | 14,578 | 5% | | Cost of products | 39,984 | | 37,138 | 2,846 | 8% | 75,281 | | 70,668 | 4,613 | 7% | | Administrative | 4,410 | | 4,740 | (330) | (7)% | 8,623 | | 8,797 | (174) | (2)% | | Salaries, benefits and payroll taxes | 8,821 | | 9,230 | (409) | (4)% | 19,816 | | 17,723 | 2,093 | 12% | | Amortization of intangible assets | 4,134 | | 4,143 | (9) | (0)% | 8,268 | | 8,287 | (19) | (0)% | | **Total cost of revenues and operating expenses** | **218,599** | | **206,052** | **12,547** | **6%** | **421,392** | | **400,301** | **21,091** | **5%** | | **Income from operations** | **22,127** | | **18,839** | **3,288** | **17%** | **38,964** | | **35,816** | **3,148** | **9%** | | **OTHER (EXPENSE), INCOME, NET:** | | | | | | | | | | | | Interest expense, net | (1,395) | | (2,221) | 826 | 37% | (2,542) | | (5,176) | 2,634 | 51% | | Change in fair value of warrant liabilities | — | | (46) | 46 | 100% | — | | 7,677 | (7,677) | (100)% | | **Total other (expense) income, net** | **(1,395)** | | **(2,267)** | **872** | **38%** | **(2,542)** | | **2,501** | **(5,043)** | **(202)%** | | **Income before income tax expense** | **20,732** | | **16,572** | **4,160** | **25%** | **36,422** | | **38,317** | **(1,895)** | **(5)%** | | **INCOME TAX EXPENSE** | **792** | | **813** | **(21)** | **(3)%** | **1,211** | | **1,392** | **(181)** | **(13)%** | | **Net income** | **$19,940** | | **$15,759** | **$4,181** | **27%** | **$35,211** | | **$36,925** | **$(1,714)** | **(5)%** | | **Net income per share:** | | | | | | | | | | | | Basic | $0.19 | | $0.15 | | | $0.34 | | $0.36 | | | | Diluted | $0.19 | | $0.15 | | | $0.34 | | $0.35 | | | | **Weighted average shares outstanding:** | | | | | | | | | | | | Basic | 103,211 | | 105,123 | | | 103,903 | | 103,292 | | | | Diluted | 103,620 | | 105,767 | | | 104,345 | | 104,346 | | | [Selected Operating Statistics](index=8&type=section&id=Selected%20Operating%20Statistics) This section provides key operational metrics, including period-end and average ship and resort counts, average weekly revenue per ship and resort, average revenue per shipboard staff per day, revenue days, and capital expenditures for the second quarter and year-to-date periods Selected Operating Statistics | Selected Statistics | June 30, 2025 (Q2) | June 30, 2024 (Q2) | June 30, 2025 (YTD) | June 30, 2024 (YTD) | | :-------------------------------- | :------------------- | :------------------- | :------------------ | :------------------ | | Period End Ship Count | 200 | 197 | 200 | 197 | | Average Ship Count (1) | 191 | 188 | 192 | 188 | | Average Weekly Revenue Per Ship | $92,936 | $88,034 | $88,560 | $84,859 | | Average Revenue Per Shipboard Staff Per Day | $608 | $586 | $585 | $567 | | Revenue Days (2) | 17,426 | 17,074 | 34,827 | 34,150 | | Period End Resort Count | 51 | 52 | 51 | 52 | | Average Resort Count (3) | 50 | 52 | 50 | 52 | | Average Weekly Revenue Per Resort | $13,019 | $14,028 | $14,116 | $15,405 | | Capital Expenditures (in thousands) | $2,729 | $1,116 | $4,426 | $2,322 | - Average Ship Count reflects the total number of days each ship generated revenue during the period, divided by the number of calendar days[21](index=21&type=chunk) - Revenue Days reflect a day on which health and wellness centers are open onboard a revenue-generating cruise with passengers[22](index=22&type=chunk) - Average Resort Count reflects the total number of days each destination resort health and wellness center generated revenue, divided by the number of calendar days[22](index=22&type=chunk)

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: OneSpaWorld (OSW) - OneSpaWorld currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [2][3] - The stock has shown strong performance, with a 4.98% increase over the past week, compared to a 2.69% increase in the Zacks Leisure and Recreation Services industry [5] - Over the last month, OSW shares have risen by 8.19%, outperforming the industry's 4.39% [5] - In the last three months, OSW shares have increased by 38.27%, and by 33.63% over the past year, while the S&P 500 has only moved 10.42% and 14.64%, respectively [6] Trading Volume - OSW's average 20-day trading volume is 571,121 shares, which serves as a price-to-volume baseline for assessing stock momentum [7] Earnings Outlook - Over the past two months, two earnings estimates for OSW have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $0.97 to $0.99 [9] - For the next fiscal year, two estimates have also moved upwards without any downward revisions [9] Conclusion - Given the positive momentum indicators and earnings outlook, OSW is positioned as a promising investment opportunity with a Momentum Score of B [11]

Technical Analysis - OneSpaWorld Holdings Limited (OSW) has reached an important support level and is considered a good stock pick from a technical perspective due to a recent "golden cross" event [1] - A golden cross occurs when a stock's short-term moving average (50-day) breaks above its long-term moving average (200-day), indicating a potential bullish breakout [2] - The successful golden cross event consists of three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and maintaining upward momentum [3] Stock Performance - OSW shares have increased by 8% over the past four weeks, indicating positive momentum [4] - The company currently holds a 3 (Hold) rating on the Zacks Rank, suggesting potential for a breakout [4] - Positive earnings outlook for the current quarter is supported by three upward revisions in earnings estimates, with no estimates decreasing in the past two months [4] Investment Consideration - Given the positive technical indicators and the upward movement in earnings estimates, OSW may present a favorable investment opportunity for potential gains in the near future [6]

Company Highlights - OneSpaWorld holds over 90% outsourced spa market share on cruise ships[10, 14, 17] - The company is approximately 20x larger than its nearest maritime competitor[10, 17] - OneSpaWorld boasts approximately 89% unlevered after-tax free cash flow conversion[17] Financial Performance & Growth - Q3 2024 saw record total revenues, income from operations, and adjusted EBITDA[19] - FY 2024 revenue is projected to grow by 12% at the mid-point versus FY 2023, reaching $888 million - $893 million[20] - FY 2024 adjusted EBITDA is expected to grow by 24% at the mid-point versus FY 2023, reaching $110 million - $112 million[20] Industry & Market Dynamics - The company has access to approximately 23 million annual captive audience[13, 41] - Cruise industry passenger bookings are rebounding, with Q4 2023 passenger cruise days at 130%+ of Q4 2019 levels and bookings approximately 51% above Q4 2019[35] - Onboard spend per passenger cruise day was up approximately 19% in 2023 versus 2019[35]