Financial Data and Key Metrics Changes - Total revenues increased by 7% to $258.5 million compared to $241.7 million in Q3 2024 [5][15] - Income from operations rose by 5% to $26.3 million compared to $25 million in Q3 2024 [5] - Net income increased by 13% to $24.3 million compared to $21.6 million in Q3 2024 [5][16] - Adjusted EBITDA grew by 6% to $35 million compared to $33 million in Q3 2024 [5][17] - Service margin was 17.3%, slightly below the previous year but higher than the first and second quarters of 2025 [16][30] Business Line Data and Key Metrics Changes - Health and wellness centers operated on 204 ships, up from 196 ships in Q3 2024 [5][6] - Medi-Spa services were available on 150 ships, an increase from 144 ships in the previous year [7][8] - Higher value services such as Medi-Spa, IV Therapy, and acupuncture saw strong double-digit sales growth [7] Market Data and Key Metrics Changes - The average ship count for the quarter was 199, compared to 195 in Q3 2024 [5] - The company reported a 4% increase in average guest spend, contributing to revenue growth [15] Company Strategy and Development Direction - The company continues to execute an asset-light business model, generating strong free cash flow and returning value to shareholders through dividends and share repurchases [4][10] - Plans to introduce two additional health and wellness centers on new ship builds in Q4 2025, totaling eight new centers for the year [6][10] - The company is focusing on enhancing productivity through AI initiatives aimed at revenue enhancement and operational efficiency [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's favorable momentum and positive outlook for Q4 2025 [10][20] - The board approved a 25% increase in the quarterly dividend payment, reflecting strong cash flow generation [10][12] - Management noted no material changes in guest spending patterns, maintaining strong attachment rates and pre-cruise revenue [26] Other Important Information - The company repurchased $17.6 million worth of common shares during the quarter and paid down $11.3 million in debt [12][19] - Total cash at quarter end was $30.8 million, with total debt reduced to $85.2 million [18][19] Q&A Session Summary Question: Benefits from AI technology implementation - Management indicated that it is too early to commit to specific improvements from AI initiatives, with expectations for more clarity by Q2 next year [22][23] Question: Guest spending patterns - Management reported positive trends in revenue per passenger per day and consistent pre-cruise revenue, with no material reduction in guest spending observed [26] Question: Service margin mix - The slight decrease in service margin was attributed to the mix of cruise lines rather than a shift in passenger spending behavior [30][32] Question: Global minimum tax impact - Management expects no impact from the global minimum income tax due to ongoing organizational changes [34] Question: Increase in guest count and average spend - The increase in guest count and spending was attributed to new ships entering service and improved facility utilization [38] Question: Cash management strategy - The company aims to maintain around $25 million in cash while prioritizing share repurchases and dividends in its capital allocation strategy [40] Question: Staffing and talent management changes - The company is redesigning its talent management process to enhance staff utilization across different service modalities [44][45] Question: Impact of hurricane season - Management reported no tangible or material impact from the hurricane season on operations [50] Question: CapEx related to AI initiatives - The increase in CapEx was primarily related to investments in AI projects [51]

Financial Data and Key Metrics Changes - Total revenues increased by 7% to $258.5 million compared to $241.7 million in Q3 2024 [6][17] - Income from operations rose by 5% to $26.3 million from $25 million in Q3 2024 [6] - Net income increased by 13% to $24.3 million compared to $21.6 million in Q3 2024 [6][19] - Adjusted EBITDA grew by 6% to $35 million from $33 million in Q3 2024 [6][19] - Service margin was 17.3%, slightly down from the previous year but higher than the first and second quarters of 2025 [18] Business Line Data and Key Metrics Changes - The company operated health and wellness centers on 204 ships, up from 196 ships in Q3 2024 [6][7] - Medi-Spa services were available on 150 ships, an increase from 144 ships in the previous year [9][10] - Higher value services, including Medi-Spa, IV Therapy, and acupuncture, saw strong double-digit sales increases [9] Market Data and Key Metrics Changes - The average ship count for the quarter was 199, compared to 195 in Q3 2024 [6] - The company had 4,466 cruise ship personnel, up from 4,204 in Q3 2024 [7] Company Strategy and Development Direction - The company continues to execute an asset-light business model, generating strong free cash flow and returning value to shareholders through dividends and share repurchases [5][12] - The board approved a 25% increase in the quarterly dividend to $0.05 per share, reflecting consistent cash flow generation [12][14] - The company is focused on enhancing health and wellness center productivity and expanding higher value services [10][11] - AI initiatives are being implemented to enhance revenue and operational efficiencies [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's favorable momentum and outlook for Q4 2025, expecting continued growth [12][21] - The company anticipates total revenue for fiscal 2025 to increase in the high single-digit range, with adjusted EBITDA expected to rise by 10% [22] Other Important Information - The company repurchased $17.6 million worth of common shares during the quarter and an additional $15 million post-quarter [14][20] - Total cash at quarter end was $30.8 million, with total debt reduced to $85.2 million [19][20] Q&A Session Summary Question: Benefits from AI technology implementation - Management indicated that it is too early to commit to specific improvements from AI initiatives, with expectations for more clarity by Q2 next year [25][26] Question: Guest spending patterns - Management reported positive trends in revenue per passenger per day and consistent spending, with no material changes observed [28][30] Question: Service margin mix - The slight decrease in service margin was attributed to ship mix rather than a shift to lower-priced services [34][36] Question: Global minimum tax impact - Management expects no impact from the global minimum tax due to ongoing organizational changes [39] Question: Increase in guest count and average spend - The increase in guest count and average spend was attributed to new ships coming into service and improved facility utilization [44] Question: Cash management strategy - The company aims to maintain around $25 million in cash while prioritizing share repurchases and dividends [46] Question: Staffing and talent management changes - The company is redesigning its talent management process to enhance staff utilization across different service modalities [51][52] Question: CapEx related to AI initiatives - The increase in CapEx was primarily related to investments in AI projects [60]

Core Viewpoint - OneSpaWorld reported quarterly earnings of $0.29 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.26 per share a year ago [1]. Financial Performance - The company posted revenues of $258.52 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.18%, and up from $241.7 million year-over-year [2]. - Over the last four quarters, OneSpaWorld has surpassed consensus revenue estimates four times [2]. Stock Performance and Outlook - OneSpaWorld shares have increased approximately 7% since the beginning of the year, while the S&P 500 has gained 17.2% [3]. - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4]. Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $241.55 million, and for the current fiscal year, it is $1.01 on revenues of $959.98 million [7]. - The estimate revisions trend for OneSpaWorld was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]. Industry Context - The Leisure and Recreation Services industry, to which OneSpaWorld belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8].

Financial Performance - Total revenues for Q3 2025 reached $258.5 million, a 7% increase from $241.7 million in Q3 2024[6] - Net income for Q3 2025 was $24.3 million, up 13% from $21.6 million in Q3 2024, resulting in a net income per diluted share of $0.23[6][11] - Adjusted EBITDA for Q3 2025 increased 6% to $35.0 million compared to $33.0 million in Q3 2024[6][11] - Total revenues for the three months ended September 30, 2025, increased by 7% to $258.5 million compared to $241.7 million for the same period in 2024[24] - Net income for the three months ended September 30, 2025, was $24.3 million, reflecting a 13% increase from $21.6 million in the same period of 2024[24] - Adjusted net income for the three months ended September 30, 2025, was $30.4 million, compared to $27.3 million for the same period in 2024[33] - Year-to-date net income for 2025 was $59,556,000, compared to $58,476,000 in the same period of 2024, reflecting a growth of 1.8%[34] - Year-to-date Adjusted EBITDA for 2025 was $92,037,000, an increase of 7.8% from $85,375,000 in 2024[34] Cash and Liquidity - The company ended Q3 2025 with $30.8 million in cash and total liquidity of $80.8 million[8][20] - Total debt at the end of Q3 2025 was $85.2 million after repaying $11.3 million during the quarter[20] Shareholder Returns - The board declared a quarterly dividend of $0.05 per share, marking a 25% increase from previous payments[14][15] - The company repurchased 816,028 shares for $17.6 million during Q3 2025, with an additional $15 million in share repurchases in Q4 2025[15] Revenue Growth Drivers - Average guest spend increased by 4%, contributing significantly to revenue growth[11] - Service revenues rose by 7% to $208.0 million, while product revenues also increased by 7% to $50.5 million for the three months ended September 30, 2025[24] Operational Metrics - Average weekly revenue per ship for the forecasted Q4 2025 is expected to be $95,675, up from $91,019 in Q4 2024[25] - Average revenue per shipboard staff per day increased to $622 in Q4 2025 from $602 in Q4 2024[25] - Capital expenditures for the three months ended September 30, 2025, were $5.6 million, compared to $1.1 million in the same period of 2024[25] - The period-end ship count for Q4 2025 is forecasted to be 206, with an average ship count of 198[25] - The company anticipates maintaining a period-end resort count of 48 for FY 2025[25] Expense Management - The company reported a 45% decrease in interest expense, net, for the three months ended September 30, 2025, amounting to $1.4 million compared to $2.5 million in the same period of 2024[24] - Depreciation and amortization expenses for Q3 2025 were $6,410,000, slightly higher than $6,011,000 in Q3 2024[34] - Stock-based compensation for Q3 2025 amounted to $2,079,000, compared to $1,974,000 in Q3 2024, indicating a rise of 5.3%[34] - Interest expense for Q3 2025 was $1,379,000, down 44.8% from $2,496,000 in Q3 2024[34] - Income tax expense for Q3 2025 was $578,000, a decrease from $966,000 in Q3 2024, reflecting a reduction of 40.2%[34] - Long-lived assets impairment for Q3 2025 was $180,000, with no impairment recorded in Q3 2024[34] - Business combination costs for the year-to-date period in 2025 were $0, compared to $293,000 in the same period of 2024[34] Strategic Initiatives - The company launched wellness centers on four new ship builds during the quarter and plans to launch on two additional ships by year-end[2]

Core Insights - OneSpaWorld reported record financial results for the third quarter of fiscal 2025, with total revenues of $258.5 million, net income of $24.3 million, and adjusted EBITDA of $35.0 million, marking the 18th consecutive quarter of year-over-year growth in these metrics [1][2][4]. Financial Performance - Total revenues increased by 7% compared to the third quarter of 2024, driven by a 4% rise in average guest spend, fleet expansion from new ship builds, and a 1% increase in revenue days [7][8]. - Net income rose by 13% to $24.3 million, with adjusted net income reaching $30.4 million, reflecting a 11% increase year-over-year [17][31]. - Adjusted EBITDA increased by 6% to $35.0 million compared to the same quarter last year [7][31]. Operational Highlights - The company ended the quarter with health and wellness centers on 204 ships, an increase from 196 ships in the previous year, and 49 destination resort health and wellness centers [7][20]. - The average ship count for the quarter was 199, up from 195 in the third quarter of 2024 [21]. - The company launched wellness centers on four new ship builds during the quarter and plans to launch additional centers on two more ships by year-end [2][3]. Capital Allocation and Shareholder Returns - OneSpaWorld returned $4.1 million to shareholders through dividends and repurchased $17.6 million worth of shares during the quarter [3][12]. - The board approved a 25% increase in the quarterly dividend to $0.05 per share, payable on December 3, 2025 [11][12]. - The company ended the quarter with $30.8 million in cash and total liquidity of $80.8 million, positioning it well for future growth [5][17]. Guidance and Outlook - The company expects total revenues for fiscal 2025 to increase by 8% and adjusted EBITDA to rise by 10% at the mid-point of guidance ranges compared to fiscal 2024 results [3][10].

Core Viewpoint - OneSpaWorld Holdings Limited is set to release its Third Quarter Fiscal 2025 earnings on October 29th before the market opens, indicating a focus on transparency and communication with investors [1] Financial Performance - The earnings release will be followed by a conference call on the same day at 10:00 am ET to discuss the quarterly results, highlighting the company's commitment to engaging with stakeholders [1]

Core Viewpoint - OneSpaWorld (OSW) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook for the company's earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Performance and Outlook - For the fiscal year ending December 2025, OneSpaWorld is expected to earn $1.01 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.6% over the past three months [8]. - The upgrade to Zacks Rank 2 reflects an improvement in OneSpaWorld's underlying business, suggesting that investor sentiment may drive the stock price higher [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating [9][10]. - The system has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7].

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]